BERMUDA
|
98-0438382
|
|
(State
or other jurisdiction of incorporation and organization)
|
(IRS
Employer Identification No.)
|
|
Clarendon
House, Church Street, Hamilton
|
HM
11 Bermuda
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer T
|
Accelerated
filer £
|
Non-accelerated
filer £
|
Smaller
reporting company £
|
Class
|
Outstanding as of July
28, 2008
|
|
Class
A Common Stock, par value $0.08
|
36,019,073
|
|
Class
B Common Stock, par value $0.08
|
6,312,839
|
Page
|
||
Part
I. Financial information
|
||
2
|
||
2
|
||
4
|
||
|
||
6
|
||
7
|
||
8
|
||
44
|
||
87
|
||
89
|
||
Part
II. Other Information
|
||
90
|
||
91
|
||
99
|
||
100
|
||
100
|
||
101
|
||
102
|
June
30,
2008
|
December 31,
2007
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 375,752 | $ | 142,826 | ||||
Restricted
cash (Note 6)
|
1,008 | 1,286 | ||||||
Accounts
receivable (net of allowance) (Note 7)
|
264,567 | 225,037 | ||||||
Income
taxes receivable
|
1,834 | 1,234 | ||||||
Program
rights
|
90,061 | 77,112 | ||||||
Other
current assets (Note 8)
|
85,178 | 82,329 | ||||||
Total
current assets
|
818,400 | 529,824 | ||||||
Non-current
assets
|
||||||||
Investments
|
16,559 | 16,559 | ||||||
Property,
plant and equipment (Note 9)
|
228,572 | 180,311 | ||||||
Program
rights
|
134,240 | 108,362 | ||||||
Goodwill
(Note 4)
|
1,533,020 | 1,114,347 | ||||||
Broadcast
licenses (Note 4)
|
323,941 | 237,926 | ||||||
Other
intangible assets (Note 4)
|
205,052 | 135,732 | ||||||
Other
non-current assets (Note 8)
|
21,692 | 15,374 | ||||||
Total
non-current assets
|
2,463,076 | 1,808,611 | ||||||
Total
assets
|
$ | 3,281,476 | $ | 2,338,435 |
June
30,
2008
|
December 31,
2007
|
|||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued liabilities (Note 10)
|
$ | 179,120 | $ | 156,324 | ||||
Duties
and other taxes payable
|
31,802 | 29,945 | ||||||
Income
taxes payable
|
14,715 | 27,705 | ||||||
Credit
facilities and obligations under capital leases (Note 11)
|
17,274 | 15,090 | ||||||
Dividends
payable to minority shareholders in subsidiaries
|
2,662 | 1,226 | ||||||
Deferred
consideration – Romania
|
1,302 | 2,208 | ||||||
Deferred
tax
|
1,167 | 272 | ||||||
Total
current liabilities
|
248,042 | 232,770 | ||||||
Non-current
liabilities
|
||||||||
Credit
facilities and obligations under capital leases (Note 11)
|
6,042 | 5,862 | ||||||
Senior
Debt (Note 5)
|
1,097,678 | 581,479 | ||||||
Income
taxes payable
|
2,129 | 2,495 | ||||||
Deferred
tax
|
104,467 | 73,340 | ||||||
Other
non-current liabilities
|
46,933 | 19,527 | ||||||
Total
non-current liabilities
|
1,257,249 | 682,703 | ||||||
Commitments
and contingencies (Note 18)
|
||||||||
Minority
interests in consolidated subsidiaries
|
99,102 | 23,155 | ||||||
SHAREHOLDERS'
EQUITY:
|
||||||||
Nil
shares of Preferred Stock of $0.08 each (December 31, 2007 –
nil)
|
- | - | ||||||
36,019,073
shares of Class A Common Stock of $0.08 each (December 31, 2007 –
36,003,198)
|
2,882 | 2,880 | ||||||
6,312,839
shares of Class B Common Stock of $0.08 each (December 31, 2007 –
6,312,839)
|
505 | 505 | ||||||
Additional
paid-in capital
|
993,178 | 1,051,336 | ||||||
Retained earnings
|
103,517 | 53,619 | ||||||
Accumulated
other comprehensive income
|
577,001 | 291,467 | ||||||
Total
shareholders’ equity
|
1,677,083 | 1,399,807 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 3,281,476 | $ | 2,338,435 |
For
the Three Months Ended June 30,
|
For
the Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
revenues
|
$ | 305,391 | $ | 216,284 | $ | 528,861 | $ | 364,196 | ||||||||
Operating
costs
|
37,045 | 30,944 | 70,307 | 56,601 | ||||||||||||
Cost
of programming
|
117,609 | 82,773 | 212,363 | 149,126 | ||||||||||||
Depreciation
of station property, plant and equipment
|
13,178 | 7,680 | 25,518 | 14,579 | ||||||||||||
Amortization
of broadcast licenses and other intangibles (Note 4)
|
8,188 | 5,165 | 15,854 | 10,327 | ||||||||||||
Cost
of revenues
|
176,020 | 126,562 | 324,042 | 230,633 | ||||||||||||
Station
selling, general and administrative expenses
|
17,666 | 15,699 | 38,421 | 31,480 | ||||||||||||
Corporate
operating costs
|
13,708 | 7,444 | 23,725 | 22,217 | ||||||||||||
Operating
income
|
97,997 | 66,579 | 142,673 | 79,866 | ||||||||||||
Interest
income
|
3,781 | 1,732 | 5,961 | 3,146 | ||||||||||||
Interest
expense
|
(18,140 | ) | (19,438 | ) | (32,390 | ) | (30,834 | ) | ||||||||
Foreign
currency exchange gain / (loss), net
|
6,881 | (2,116 | ) | (10,549 | ) | (5,252 | ) | |||||||||
Change
in fair value of derivatives (Note 12)
|
(13,281 | ) | 7,528 | (23,539 | ) | 12,052 | ||||||||||
Other
income / (expense)
|
665 | (546 | ) | 1,325 | (790 | ) | ||||||||||
Income
before provision for income taxes and minority interest
|
77,903 | 53,739 | 83,481 | 58,188 | ||||||||||||
Income
tax credit / (expense)
|
(8,919 | ) | (13,419 | ) | 1,423 | (18,478 | ) | |||||||||
Income
before minority interest
|
68,984 | 40,320 | 84,904 | 39,710 | ||||||||||||
Minority
interest in income of consolidated subsidiaries
|
(1,380 | ) | (5,730 | ) | (2,405 | ) | (5,370 | ) | ||||||||
Net
income
|
$ | 67,604 | $ | 34,590 | $ | 82,499 | $ | 34,340 | ||||||||
Currency
translation adjustment, net
|
93,579 | (13,868 | ) | 285,046 | (19,503 | ) | ||||||||||
Obligation
to repurchase shares
|
- | - | 488 | -- | ||||||||||||
Total
comprehensive income
|
$ | 161,183 | $ | 20,722 | $ | 368,033 | $ | 14,837 |
For
the Three Months Ended June 30,
|
For
the Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
PER
SHARE DATA (Note 15):
|
||||||||||||||||
Net
income per share:
|
||||||||||||||||
Net
income – Basic
|
$ | 1.60 | $ | 0.84 | $ | 1.95 | $ | 0.84 | ||||||||
Net
income – Diluted
|
$ | 1.58 | $ | 0.83 | $ | 1.93 | $ | 0.83 | ||||||||
Weighted
average common shares used in computing per share amounts
(000’s):
|
||||||||||||||||
Basic
|
42,322 | 40,941 | 42,319 | 40,867 | ||||||||||||
Diluted
|
42,836 | 41,407 | 42,784 | 41,390 |
Class
A Common Stock
|
Class
B Common Stock
|
Accumulated
Other Comprehensive Income
|
Total
Shareholders' Equity
|
|||||||||||||||||||||||||||||
Number
of shares
|
Par
value
|
Number
of shares
|
Par
value
|
Additional
Paid-In Capital
|
Retained
Earnings
|
|||||||||||||||||||||||||||
BALANCE,
December 31, 2007
|
36,003,198 | $ | 2,880 | 6,312,839 | $ | 505 | $ | 1,051,336 | $ | 53,619 | $ | 291,467 | $ | 1,399,807 | ||||||||||||||||||
Stock-based
compensation
|
- | - | - | - | 4,072 | - | - | 4,072 | ||||||||||||||||||||||||
Stock
options exercised
|
15,875 | 2 | - | - | 1,088 | - | - | 1,090 | ||||||||||||||||||||||||
Redeemable
Minority Interest (Note 18)
|
- | - | - | - | - | (32,601 | ) | - | (32,601 | ) | ||||||||||||||||||||||
Purchase
of capped call options (Note 5)
|
- | - | - | - | (63,318 | ) | - | - | (63,318 | ) | ||||||||||||||||||||||
Net
income
|
- | - | - | - | - | 82,499 | - | 82,499 | ||||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | - | - | 285,046 | 285,046 | ||||||||||||||||||||||||
Obligation
to repurchase shares
|
- | - | - | - | - | - | 488 | 488 | ||||||||||||||||||||||||
BALANCE, June
30, 2008
|
36,019,073 | $ | 2,882 | 6,312,839 | $ | 505 | $ | 993,178 | $ | 103,517 | $ | 577,001 | $ | 1,677,083 |
Class
A Common Stock
|
Class
B Common Stock
|
Accumulated
Other Comprehensive Income / (Loss)
|
Total
Shareholders' Equity
|
|||||||||||||||||||||||||||||
Number
of shares
|
Par
value
|
Number
of shares
|
Par
value
|
Additional
Paid-In Capital
|
Accumulated
Deficit
|
|||||||||||||||||||||||||||
BALANCE,
December 31, 2006
|
34,412,138 | $ | 2,753 | 6,312,839 | $ | 505 | $ | 931,108 | $ | (31,730 | ) | $ | 133,130 | $ | 1,035,766 | |||||||||||||||||
Impact
of adoption of FIN 48
|
- | - | - | - | - | (3,219 | ) | - | (3,219 | ) | ||||||||||||||||||||||
BALANCE,
upon the adoption of FIN 48
|
34,412,138 | $ | 2,753 | 6,312,839 | $ | 505 | $ | 931,108 | $ | (34,949 | ) | $ | 133,130 | $ | 1,032,547 | |||||||||||||||||
Stock-based
compensation
|
- | - | - | - | 2,910 | - | - | 2,910 | ||||||||||||||||||||||||
Stock
options exercised
|
227,783 | 18 | - | - | 2,712 | - | - | 2,730 | ||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | 34,340 | - | 34,340 | ||||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | - | - | (19,503 | ) | (19,503 | ) | ||||||||||||||||||||||
BALANCE,
June 30, 2007
|
34,639,921 | $ | 2,771 | 6,312,839 | $ | 505 | $ | 936,730 | $ | (609 | ) | $ | 113,627 | $ | 1,053,024 |
For
the Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 82,499 | $ | 34,340 | ||||
Adjustments
to reconcile net income to net cash generated from operating
activities:
|
||||||||
Depreciation
and amortization
|
159,092 | 110,945 | ||||||
Gain
on disposal of fixed asset
|
(266 | ) | - | |||||
Stock-based
compensation (Note 14)
|
3,804 | 2,605 | ||||||
Minority
interest in income of consolidated subsidiaries
|
2,405 | 5,370 | ||||||
Change
in fair value of derivative instruments
|
23,539 | (12,052 | ) | |||||
Foreign
currency exchange loss, net
|
10,549 | 5,252 | ||||||
Net
change in (net of effects of acquisitions and disposals of
businesses):
|
||||||||
Accounts
receivable
|
(13,872 | ) | (25,572 | ) | ||||
Program
rights
|
(176,348 | ) | (100,593 | ) | ||||
Other
assets
|
(5,137 | ) | (8,018 | ) | ||||
Accounts
payable and accrued liabilities
|
43,825 | 5,723 | ||||||
Income
taxes payable
|
(15,092 | ) | (274 | ) | ||||
Deferred
taxes
|
11,446 | (458 | ) | |||||
VAT
and other taxes payable
|
1,071 | 4,333 | ||||||
Net
cash generated from continuing operating activities
|
127,515 | 21,601 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase
of property, plant and equipment
|
(42,034 | ) | (25,469 | ) | ||||
Proceeds
from disposal of property, plant and equipment
|
300 | 123 | ||||||
Investments
in subsidiaries and unconsolidated affiliates
|
(247,412 | ) | (63,017 | ) | ||||
Repayment
of loans and advances to related parties
|
1,990 | 250 | ||||||
Net
cash used in continuing investing activities
|
(287,156 | ) | (88,113 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net
proceeds from issuance of Convertible Notes
|
463,673 | - | ||||||
Purchase
of capped call option
|
(63,318 | ) | - | |||||
Proceeds
from credit facilities
|
- | 135,465 | ||||||
Payment
of credit facilities and capital leases
|
(1,240 | ) | (137,289 | ) | ||||
Net
proceeds from issuance of Senior Notes
|
- | 199,400 | ||||||
Redemption
of Senior Notes
|
- | (169,010 | ) | |||||
Proceeds
from exercise of stock options
|
1,090 | 2,730 | ||||||
Excess
tax benefits from share based payment arrangements
|
268 | 305 | ||||||
Dividends
paid to minority shareholders
|
(1,230 | ) | (476 | ) | ||||
Net
cash received from continuing financing activities
|
399,243 | 31,125 | ||||||
NET
CASH USED IN DISCONTINUED OPERATIONS – OPERATING
ACTIVITIES
|
(1,973 | ) | (1,624 | ) | ||||
Impact
of exchange rate fluctuations on cash
|
(4,703 | ) | 7,769 | |||||
Net
increase / (decrease) in cash and cash equivalents
|
232,926 | (29,242 | ) | |||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
142,826 | 145,904 | ||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ | 375,752 | $ | 116,662 |
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate
|
|||
Nova
TV d.d. (“Nova TV (Croatia)”)
|
100.0%
|
Croatia
|
Subsidiary
|
|||
Operativna
Kompanija d.o.o.
|
100.0%
|
Croatia
|
Subsidiary
|
|||
Media
House d.o.o.
|
100.0%
|
Croatia
|
Subsidiary
|
|||
Internet
Dnevnik d.o.o.
|
76.0%
|
Croatia
|
Subsidiary
|
|||
CME
Media Investments s. r.o.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
VILJA
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
CET
21 spol. s r.o. (“CET 21”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
MEDIA
CAPITOL, a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
HARTIC
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
Galaxie
sport, s. r.o. (“Galaxie Sport”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
Jyxo,
s.r.o. (“Jyxo”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
BLOG
Internet, s.r.o. (“Blog“)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|||
CME
Slovak Holdings B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
|||
CME
Romania B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
|||
Media
Pro International S.A. (“MPI”)
|
95.0%
|
Romania
|
Subsidiary
|
|||
Media
Vision SRL (“Media Vision”)
|
95.0%
|
Romania
|
Subsidiary
|
|||
MPI
Romania B.V.
|
95.0%
|
Netherlands
|
Subsidiary
|
|||
Music
Television System S.R.L. (“MTS”)
|
95.0%
|
Romania
|
Subsidiary
|
|||
Pro
TV S.A. (“Pro TV”)
|
95.0%
|
Romania
|
Subsidiary
|
|||
Sport
Radio TV Media SRL (“Sport.ro”)
|
95.0%
|
Romania
|
Subsidiary
|
|||
Media
Pro Management S.A.
|
8.7%
|
Romania
|
Cost
investment
|
|||
Media
Pro B.V.
|
10.0%
|
Netherlands
|
Cost
investment
|
|||
A.R.J.,
a.s.
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
|||
Markiza-Slovakia
spol. s r.o. (“Markiza”)
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
|||
GAMATEX
spol. s. r.o.
|
100.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
|||
A.D.A.M.
a.s.
|
100.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate
|
|||
Media
Invest, spol s.r.o.
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
|||
PMT,
s.r.o.
|
31.5%
|
Slovak
Republic
|
Cost
investment
|
|||
MMTV
1 d.o.o.
|
100.0%
|
Slovenia
|
Subsidiary
|
|||
Produkcija
Plus d.o.o. (“Pro Plus”)
|
100.0%
|
Slovenia
|
Subsidiary
|
|||
POP
TV d.o.o. (“Pop TV”)
|
100.0%
|
Slovenia
|
Subsidiary
|
|||
Kanal
A d.o.o. (“Kanal A”)
|
100.0%
|
Slovenia
|
Subsidiary
|
|||
Euro
3 TV d.o.o.
|
42.0%
|
Slovenia
|
Equity-Accounted
Affiliate
|
|||
Fit
& Fun d.o.o.
|
100.0%
|
Slovenia
|
Subsidiary
|
|||
Televideo
d.o.o. (trading as TV Pika)
|
20.0%
|
Slovenia
|
Equity-Accounted
Affiliate
|
|||
International
Media Services Ltd. (“IMS”)
|
90.0%
|
Bermuda
|
Subsidiary
|
|||
CME
Ukraine Holding GmbH
|
100.0%
|
Austria
|
Subsidiary
|
|||
Innova
Film GmbH (“Innova”)
|
83.4%
|
Germany
|
Subsidiary
|
|||
CME
Cyprus Holding Ltd.
|
100.0%
|
Cyprus
|
Subsidiary
|
|||
TV
Media Planet Ltd. (“TV Media Planet”)
|
90.0%
|
Cyprus
|
Subsidiary
|
|||
1+1
Media
|
83.4%
|
Ukraine
|
Subsidiary
|
|||
Studio
1+1 LLC (“Studio 1+1”)
|
90.0%
|
Ukraine
|
Subsidiary
|
|||
Ukraine
Media Services LLC (“UMS”)
|
99.9%
|
Ukraine
|
Subsidiary
|
|||
Grizard
Investments Ltd. (“Grizard”)
|
100.0%
|
Cyprus
|
Subsidiary
|
|||
CME
Ukraine Holding B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
|||
Ukrpromtorg-2003
LLC (“Ukpromrtorg”)
|
65.5%
|
Ukraine
|
Subsidiary
|
|||
Gravis
LLC (“Gravis”)
|
60.4%
|
Ukraine
|
Subsidiary
|
|||
Delta
JSC
|
60.4%
|
Ukraine
|
Subsidiary
|
|||
Nart
LLC
|
65.5%
|
Ukraine
|
Subsidiary
|
|||
TV
Stimul LLC
|
49.1%
|
Ukraine
|
Equity-Accounted
Affiliate
|
|||
Tor
LLC (“Tor”)
|
60.4%
|
Ukraine
|
Subsidiary
|
|||
Zhysa
LLC (“Zhysa”)
|
60.4%
|
Ukraine
|
Subsidiary
|
|||
Central
European Media Enterprises N.V.
|
100.0%
|
Netherlands
Antilles
|
Subsidiary
|
|||
Central
European Media Enterprises II B.V.
|
100.0%
|
Netherlands
Antilles
|
Subsidiary
|
|||
CME
Media Enterprises B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
|||
CME
Development Corporation
|
100.0%
|
Delaware
(USA)
|
Subsidiary
|
|||
CME
SR d.o.o.
|
100.0%
|
Serbia
|
Subsidiary
|
For
the Three Months Ended
|
For
the Six Months Ended
|
|||||||||||||||||||||||
US$ million
|
As
reported
|
Impact
of Adoption
|
As
Adjusted
|
As
reported
|
Impact
of Adoption
|
As
Adjusted
|
||||||||||||||||||
Consolidated
Statement of Operations:
|
||||||||||||||||||||||||
Interest
expense
|
(18.1 | ) | (4.3 | ) | (22.4 | ) | (32.4 | ) | (5.2 | ) | (37.6 | ) | ||||||||||||
As
at June 30, 2008
|
||||||||||||||||||||||||
US$ million |
As
reported
|
Impact
of Adoption
|
As
Adjusted
|
|||||||||||||||||||||
Consolidated
balance sheet:
|
||||||||||||||||||||||||
Other
current assets
|
85.2 | (0.7 | ) | 84.5 | ||||||||||||||||||||
Other
non-current assets
|
21.7 | (1.8 | ) | 19.9 | ||||||||||||||||||||
Senior
Debt
|
(1,097.7 | ) | 105.4 | (992.3 | ) | |||||||||||||||||||
Additional
paid-in capital
|
993.2 | 108.1 | 1,101.3 | |||||||||||||||||||||
Retained
Earnings
|
103.5 | (5.2 | ) | 98.3 |
Fair
Value on Acquisition
|
||||
Cash
and cash equivalents
|
$ | 727 | ||
Other
net assets
|
618 | |||
Property,
plant and equipment
|
3,744 | |||
Intangible
assets not subject to amortization (1)
|
9,124 | |||
Contingent
consideration liability (2)
|
(607 | ) | ||
Deferred
tax liability
|
(2,462 | ) | ||
Total
purchase price (3)
|
$ | 11,144 |
Fair
Value on Acquisition
|
||||
Property,
plant and equipment
|
$ | 2,561 | ||
Intangible
assets not subject to amortization (1)
|
15,892 | |||
Goodwill
(2)
|
2,394 | |||
Total
purchase price (3)
|
$ | 20,847 |
Fair
Value on Acquisition
|
||||
Intangible
assets subject to amortization (1)
|
$ | 41,480 | ||
Intangible
assets not subject to amortization (2)
|
35,652 | |||
Goodwill
|
208,964 | |||
Deferred
tax liability
|
(19,284 | ) | ||
Minority
interests (3)
|
14,398 | |||
Total
purchase price (4)
|
$ | 281,210 |
Balance
December
31, 2007
|
Additions
/ Allocations
|
Foreign
currency movement
|
Balance
June
30, 2008
|
|||||||||||||
Croatia
|
$ | 773 | - | $ | 67 | $ | 840 | |||||||||
Czech
Republic
|
951,286 | - | 183,328 | 1,134,614 | ||||||||||||
Romania
|
74,667 | 1,869 | 12,346 | 88,882 | ||||||||||||
Slovak
Republic
|
57,635 | - | 10,854 | 68,489 | ||||||||||||
Slovenia
|
18,393 | - | 1,304 | 19,697 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
4,096 | 208,964 | - | 213,060 | ||||||||||||
Ukraine
(KINO, CITI)
|
7,497 | (59 | ) | - | 7,438 | |||||||||||
Total
|
$ | 1,114,347 | $ | 210,774 | $ | 207,899 | $ | 1,533,020 |
Indefinite-Lived
Broadcast Licenses
|
Amortized
Broadcast Licenses
|
Total
|
||||||||||
Balance,
December 31, 2007
|
$ | 50,748 | $ | 187,178 | $ | 237,926 | ||||||
Additions
|
14,177 | 40,890 | 55,067 | |||||||||
Amortization
|
- | (11,184 | ) | (11,184 | ) | |||||||
Foreign
currency movements
|
7,365 | 34,767 | 42,132 | |||||||||
Balance,
June 30, 2008
|
$ | 72,290 | $ | 251,651 | $ | 323,941 |
June
30,
2008
|
December 31,
2007
|
|||||||
Gross
value
|
$ | 399,940 | $ | 241,100 | ||||
Accumulated
amortization
|
(75,999 | ) | (53,922 | ) | ||||
Total
net book value
|
$ | 323,941 | $ | 187,178 |
Trademarks
|
Customer
Relationships
|
Other
|
Total
|
|||||||||||||
Balance,
December 31, 2007
|
$ | 60,084 | $ | 73,267 | $ | 2,381 | $ | 135,732 | ||||||||
Reallocation
(1)
|
- | - | 624 | 624 | ||||||||||||
Additions
|
46,491 | 590 | - | 47,081 | ||||||||||||
Amortization
|
(170 | ) | (4,176 | ) | (324 | ) | (4,670 | ) | ||||||||
Foreign
currency movements
|
12,587 | 13,481 | 217 | 26,285 | ||||||||||||
Balance,
June 30, 2008
|
$ | 118,992 | $ | 83,162 | $ | 2,898 | $ | 205,052 |
June
30,
2008
|
December 31,
2007
|
|||||||
Gross
value
|
$ | 224,387 | $ | 147,514 | ||||
Accumulated
amortization
|
(19,335 | ) | (11,782 | ) | ||||
Total
net book value
|
$ | 205,052 | $ | 135,732 |
Carrying
Value
|
Fair
Value
|
|||||||||||||||
June
30 , 2008
|
December
31, 2007
|
June
30 , 2008
|
December
31, 2007
|
|||||||||||||
EUR
245.0 million 8.25% Senior Notes
|
$ | 386,218 | $ | 360,664 | $ | 388,149 | $ | 366,976 | ||||||||
EUR
150.0 million Floating Rate Senior Notes
|
236,460 | 220,815 | 217,543 | 204,806 | ||||||||||||
USD
475.0 million 3.50% Senior Convertible Notes
|
475,000 | - | 495,188 | - | ||||||||||||
$ | 1,097,678 | $ | 581,479 | $ | 1,100,880 | $ | 571,782 |
From:
|
Fixed
Rate Notes
Redemption
Price
|
|||
May
15, 2009 to May 14, 2010
|
104.125 | % | ||
May
15, 2010 to May 14, 2011
|
102.063 | % | ||
May
15, 2011 and thereafter
|
100.000 | % |
From:
|
Floating
Rate Notes
Redemption
Price
|
|||
May
15, 2008 to May 14, 2009
|
101.000 | % | ||
May
15, 2009 and thereafter
|
100.000 | % |
Stock
Price
|
Shares
issued on conversion of Convertible Notes
|
Shares
received on exercise of capped call options
|
Net
shares issued
|
Value
of shares issued (US$ ‘000)
|
||||||||||||
$105.00
and below
|
- | - | - | $ | - | |||||||||||
$
110.00
|
(205,628 | ) | 205,628 | - | - | |||||||||||
$
120.00
|
(565,476 | ) | 565,476 | - | - | |||||||||||
$
130.00
|
(869,963 | ) | 869,963 | - | - | |||||||||||
$
140.00
|
(1,130,951 | ) | 1,130,951 | - | - | |||||||||||
$
151.20
|
(1,382,274 | ) | 1,382,274 | - | - | |||||||||||
$
200.00
|
(2,148,807 | ) | 1,044,997 | (1,103,810 | ) | $ | 220,762 |
June
30,
2008
|
December 31,
2007
|
|||||||
Croatia
|
$ | - | $ | 424 | ||||
Romania
|
85 | - | ||||||
Slovenia
|
867 | 810 | ||||||
Ukraine
|
56 | 52 | ||||||
Total
restricted cash
|
$ | 1,008 | $ | 1,286 |
June
30,
2008
|
December 31,
2007
|
|||||||
Trading:
|
||||||||
Third-party
customers
|
$ | 271,475 | $ | 231,467 | ||||
Less:
allowance for bad debts and credit notes
|
(15,319 | ) | (13,908 | ) | ||||
Related
parties
|
8,316 | 7,978 | ||||||
Less:
allowance for bad debts and credit notes
|
(242 | ) | (656 | ) | ||||
Total
trading
|
$ | 264,230 | $ | 224,881 | ||||
Other:
|
||||||||
Third-party
customers
|
$ | 318 | $ | 57 | ||||
Less:
allowance for bad debts and credit notes
|
(32 | ) | (27 | ) | ||||
Related
parties
|
51 | 187 | ||||||
Less:
allowance for bad debts and credit notes
|
- | (61 | ) | |||||
Total
other
|
$ | 337 | $ | 156 | ||||
Total
accounts receivable
|
$ | 264,567 | $ | 225,037 |
June
30,
2008
|
December 31,
2007
|
|||||||
Current:
|
||||||||
Prepaid
programming
|
$ | 46,265 | $ | 50,914 | ||||
Other
prepaid expenses
|
13,813 | 11,785 | ||||||
Production
in progress
|
12,865 | 5,724 | ||||||
Deferred
tax
|
3,186 | 3,652 | ||||||
VAT
recoverable
|
3,130 | 4,520 | ||||||
Loan
to related party
|
- | 1,924 | ||||||
Capitalized
debt costs
|
5,239 | 3,104 | ||||||
Other
|
680 | 706 | ||||||
Total
other current assets
|
$ | 85,178 | $ | 82,329 | ||||
June
30,
2008
|
December
31,
2007
|
|||||||
Non-current:
|
||||||||
Capitalized
debt costs
|
$ | 17,372 | $ | 10,310 | ||||
Deferred tax
|
1,735 | 2,147 | ||||||
Other
|
2,585 | 2,917 | ||||||
Total
other non-current assets
|
$ | 21,692 | $ | 15,374 |
June
30,
2008
|
December 31,
2007
|
|||||||
Land
and buildings
|
$ | 101,918 | $ | 84,515 | ||||
Station
machinery, fixtures and equipment
|
216,990 | 173,123 | ||||||
Other
equipment
|
37,790 | 31,512 | ||||||
Software
licenses
|
30,195 | 21,517 | ||||||
Construction
in progress
|
17,134 | 11,406 | ||||||
Total
cost
|
404,027 | 322,073 | ||||||
Less: Accumulated
depreciation
|
(175,455 | ) | (141,762 | ) | ||||
Total
net book value
|
$ | 228,572 | $ | 180,311 | ||||
Assets
held under capital leases (included above)
|
||||||||
Land
and buildings
|
$ | 6,632 | $ | 6,193 | ||||
Station
machinery, fixtures and equipment
|
1,507 | 800 | ||||||
Total
cost
|
8,139 | 6,993 | ||||||
Less:
Accumulated depreciation
|
(1,942 | ) | (1,368 | ) | ||||
Net
book value
|
$ | 6,197 | $ | 5,625 |
June
30,
2008
|
December
31,
2007
|
|||||||
Accounts
payable
|
$ | 33,516 | $ | 37,977 | ||||
Programming
liabilities
|
35,723 | 49,457 | ||||||
Deferred
revenue
|
34,510 | 7,126 | ||||||
Accrued
staff costs
|
23,333 | 29,202 | ||||||
Accrued
production costs
|
9,174 | 4,982 | ||||||
Accrued
interest payable
|
11,574 | 5,930 | ||||||
Consideration
payable - Czech Republic
|
6,598 | - | ||||||
Accrued
legal costs
|
1,790 | 2,475 | ||||||
Accrued
rent costs
|
1,076 | 999 | ||||||
Authors’
rights
|
5,843 | 5,522 | ||||||
Onerous
contracts
|
1,743 | 2,832 | ||||||
Obligation
to repurchase shares
|
- | 488 | ||||||
Other
accrued liabilities
|
14,240 | 9,334 | ||||||
Total
accounts payable and accrued liabilities
|
$ | 179,120 | $ | 156,324 |
June
30,
2008
|
December 31,
2007
|
||||||||
Credit
facilities:
|
|||||||||
Corporate
|
(a)
|
$ | - | $ | - | ||||
Czech
Republic
|
(b)
– (d)
|
16,494 | 13,829 | ||||||
Romania
|
(e)
|
- | 683 | ||||||
Slovenia
|
(f)
|
- | - | ||||||
Ukraine
(KINO, CITI)
|
(g)
|
1,700 | 1,700 | ||||||
Total
credit facilities
|
$ | 18,194 | $ | 16,212 | |||||
Capital
leases:
|
|||||||||
Croatia
operations, net of interest
|
$ | - | $ | - | |||||
Romania
operations, net of interest
|
501 | 242 | |||||||
Slovak
Republic operations, net of interest
|
67 | 86 | |||||||
Slovenia
operations, net of interest
|
4,554 | 4,412 | |||||||
Total
capital leases
|
5,122 | $ | 4,740 | ||||||
Total
credit facilities and capital leases
|
$ | 23,316 | $ | 20,952 | |||||
Less
current maturities
|
(17,274 | ) | ( 15,090 | ) | |||||
Total
non-current maturities
|
$ | 6,042 | $ | 5,862 |
2008
|
$ | 16,494 | ||
2009
|
1,700 | |||
2010
|
- | |||
2011
|
- | |||
2012
|
386,218 | |||
2013
and thereafter
|
711,460 | |||
Total
|
$ | 1,115,872 |
2008
|
$ | 585 | ||
2009
|
1,153 | |||
2010
|
585 | |||
2011
|
532 | |||
2012
|
529 | |||
2013
and thereafter
|
3,837 | |||
$ | 7,221 | |||
Less:
amount representing interest
|
(2,099 | ) | ||
Present
value of net minimum lease payments
|
$ | 5,122 |
Level
1
|
Unadjusted
quoted prices in active markets that are accessible at the measurement
date for identical, unrestricted
instruments.
|
Level
2
|
Quoted
prices in markets that are not considered to be active or financial
instruments for which all significant inputs are observable, either
directly or indirectly.
|
Level
3
|
Prices
or valuations that require inputs that are both significant to the fair
value measurement and
unobservable.
|
For
the Three Months Ended June 30,
|
For
the Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Stock-based
compensation charged under SFAS 123(R)
|
$ | 1,991 | $ | 1,343 | $ | 3,804 | $ | 2,605 |
Date
of Option Grant
|
Number
of Options Granted
|
Risk-free
interest rate (%)
|
Expected
term (years)
|
Expected
volatility (%)
|
Dividend
yield (%)
|
Weighted-average
fair value ($/share)
|
||||||||||||||||||
April
1, 2008 (Class A)
|
12,500 | 2.65 | 5.25 | 34.98 | 0.00 | $ | 31.85 | |||||||||||||||||
June
3, 2008 (Class A)
|
40,000 | 2.75 | 3.0 | 31.70 | 0.00 | 26.03 | ||||||||||||||||||
June
3, 2008 (Class B)
|
5,000 | 2.75 | 3.0 | 31.70 | 0.00 | $ | 27.33 |
Shares
|
Weighted
Average Exercise Price per Share
|
Weighted
Average Remaining Contractual Term (years)
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding
at January 1, 2008
|
1,176,117 | $ | 56.72 | 7.04 | $ | 69,693 | ||||||||||
Granted
|
57,500 | 101.37 | - | - | ||||||||||||
Exercised
|
(15,875 | ) | 68.63 | - | - | |||||||||||
Forfeited
|
(14,375 | ) | 79.75 | - | - | |||||||||||
Outstanding
at June 30, 2008
|
1,203,367 | $ | 58.42 | 6.43 | $ | 43,679 | ||||||||||
Vested
or expected to vest at June 30, 2008
|
1,148,823 | 57.23 | 6.38 | 42,811 | ||||||||||||
Exercisable
at June 30, 2008
|
618,617 | $ | 35.72 | 6.03 | $ | 34,016 |
For
the Three Months Ended June 30,
|
For
the Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
income available for common shareholders
|
$ | 67,604 | $ | 34,590 | $ | 82,499 | $ | 34,340 | ||||||||
Weighted
average outstanding shares of common stock (000’s)
|
42,322 | 40,941 | 42,319 | 40,867 | ||||||||||||
Dilutive
effect of employee stock options (000’s)
|
514 | 466 | 465 | 523 | ||||||||||||
Common
stock and common stock equivalents (000’s)
|
42,836 | 41,407 | 42,784 | 41,390 | ||||||||||||
Net
income per share:
|
||||||||||||||||
Basic
|
$ | 1.60 | $ | 0.84 | $ | 1.95 | $ | 0.84 | ||||||||
Diluted
|
$ | 1.58 | $ | 0.83 | $ | 1.93 | $ | 0.83 |
·
|
expenses
presented as corporate operating costs in our condensed consolidated
statements of operations and comprehensive
income;
|
·
|
stock-based
compensation charges;
|
·
|
foreign
currency exchange gains and losses;
|
·
|
changes
in fair value of derivatives;
and
|
·
|
certain
unusual or infrequent items (e.g., extraordinary gains and losses,
impairments of assets or
investments).
|
For
the Three Months Ended June 30,
|
||||||||||||||||
Segment
Net Revenues (1)
|
Segment
EBITDA
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Country:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 18,094 | $ | 10,414 | $ | 1,683 | $ | (2,167 | ) | |||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
112,570 | 80,544 | 71,204 | 47,595 | ||||||||||||
Romania
(2)
|
79,842 | 52,224 | 38,293 | 22,530 | ||||||||||||
Slovak
Republic (TV MARKIZA)
|
37,097 | 29,652 | 13,974 | 11,712 | ||||||||||||
Slovenia
(POP TV and KANAL A)
|
26,210 | 20,095 | 10,866 | 8,388 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
30,254 | 22,701 | (1,894 | ) | 565 | |||||||||||
Ukraine
(KINO, CITI)
|
1,324 | 654 | (1,055 | ) | (1,755 | ) | ||||||||||
Total
segment data
|
$ | 305,391 | $ | 216,284 | $ | 133,071 | $ | 86,868 | ||||||||
Reconciliation
to condensed consolidated statement of operations:
|
||||||||||||||||
Consolidated
net revenues / income before provision for income taxes and minority
interest
|
$ | 305,391 | $ | 216,284 | $ | 77,903 | $ | 53,739 | ||||||||
Corporate
operating costs
|
- | - | 13,708 | 7,444 | ||||||||||||
Depreciation
of station property, plant and equipment
|
- | - | 13,178 | 7,680 | ||||||||||||
Amortization
of broadcast licenses and other intangibles
|
- | - | 8,188 | 5,165 | ||||||||||||
Interest
income
|
- | - | (3,781 | ) | (1,732 | ) | ||||||||||
Interest
expense
|
- | - | 18,140 | 19,438 | ||||||||||||
Foreign
currency exchange (gain)/ loss, net
|
- | - | (6,881 | ) | 2,116 | |||||||||||
Change
in fair value of derivatives
|
- | - | 13,281 | (7,528 | ) | |||||||||||
Other
(income)/ expense
|
- | - | (665 | ) | 546 | |||||||||||
Total
segment data
|
$ | 305,391 | $ | 216,284 | $ | 133,071 | $ | 86,868 |
For
the Six Months Ended June 30,
|
||||||||||||||||
Segment
Net Revenues (1)
|
Segment
EBITDA
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Country:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 29,628 | $ | 17,646 | $ | (1,047 | ) | $ | (6,819 | ) | ||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
198,128 | 132,063 | 115,049 | 73,262 | ||||||||||||
Romania
(2)
|
137,838 | 91,566 | 61,669 | 37,666 | ||||||||||||
Slovak
Republic (TV MARKIZA)
|
63,331 | 48,329 | 23,111 | 17,468 | ||||||||||||
Slovenia
(POP TV and KANAL A)
|
44,161 | 32,764 | 15,206 | 11,389 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
53,473 | 40,776 | (3,957 | ) | (1,805 | ) | ||||||||||
Ukraine
(KINO, CITI)
|
2,302 | 1,052 | (2,261 | ) | (4,172 | ) | ||||||||||
Total
segment data
|
$ | 528,861 | $ | 364,196 | $ | 207,770 | $ | 126,989 | ||||||||
Reconciliation
to condensed consolidated statement of operations:
|
||||||||||||||||
Consolidated
net revenues / income before provision for income taxes and minority
interest
|
$ | 528,861 | $ | 364,196 | $ | 83,481 | $ | 58,188 | ||||||||
Corporate
operating costs
|
- | - | 23,725 | 22,217 | ||||||||||||
Depreciation
of station property, plant and equipment
|
- | - | 25,518 | 14,579 | ||||||||||||
Amortization
of broadcast licenses and other intangibles
|
- | - | 15,854 | 10,327 | ||||||||||||
Interest
income
|
- | - | (5,961 | ) | (3,146 | ) | ||||||||||
Interest
expense
|
- | - | 32,390 | 30,834 | ||||||||||||
Foreign
currency exchange loss, net
|
- | - | 10,549 | 5,252 | ||||||||||||
Change
in fair value of derivatives
|
- | - | 23,539 | (12,052 | ) | |||||||||||
Other
(income)/ expense
|
- | - | (1,325 | ) | 790 | |||||||||||
Total
segment data
|
$ | 528,861 | $ | 364,196 | $ | 207,770 | $ | 126,989 |
For
the Three Months Ended June 30,
|
For
the Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Depreciation
of station property, plant and equipment and amortization of broadcast
licenses and other intangibles:
|
||||||||||||||||
Croatia
|
$ | 1,696 | $ | 947 | $ | 3,106 | $ | 1,732 | ||||||||
Czech
Republic
|
10,417 | 6,689 | 20,562 | 13,150 | ||||||||||||
Romania
|
3,826 | 2,180 | 7,367 | 3,927 | ||||||||||||
Slovak
Republic
|
2,879 | 947 | 5,455 | 2,134 | ||||||||||||
Slovenia
|
1,512 | 1,110 | 2,795 | 2,096 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
767 | 799 | 1,558 | 1,544 | ||||||||||||
Ukraine
(KINO, CITI)
|
269 | 173 | 529 | 323 | ||||||||||||
Total
|
$ | 21,366 | $ | 12,845 | $ | 41,372 | $ | 24,906 | ||||||||
Represented
as follows:
|
||||||||||||||||
Depreciation
of station property, plant & equipment
|
13,178 | 7,680 | 25,518 | 14,579 | ||||||||||||
Amortization
of broadcast licenses and other intangibles
|
8,188 | 5,165 | 15,854 | 10,327 |
Total
assets (1):
|
June
30,
2008
|
December 31,
2007
|
||||||
Croatia
|
$ | 58,609 | $ | 44,787 | ||||
Czech
Republic
|
1,713,562 | 1,429,256 | ||||||
Romania
|
448,393 | 360,144 | ||||||
Slovak
Republic
|
258,832 | 203,302 | ||||||
Slovenia
|
103,039 | 89,984 | ||||||
Ukraine
(STUDIO 1+1)
|
372,522 | 90,064 | ||||||
Ukraine
(KINO, CITI)
|
17,040 | 17,854 | ||||||
Total
segment assets
|
$ | 2,971,997 | $ | 2,235,391 | ||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
309,479 | 103,044 | ||||||
Total
assets
|
$ | 3,281,476 | $ | 2,338,435 |
Long-lived
assets (1):
|
June
30,
2008
|
December 31,
2007
|
||||||
Croatia
|
$ | 17,366 | $ | 12,144 | ||||
Czech
Republic
|
78,754 | 58,809 | ||||||
Romania
|
56,871 | 44,808 | ||||||
Slovak
Republic
|
39,123 | 29,345 | ||||||
Slovenia
|
23,275 | 21,524 | ||||||
Ukraine
(STUDIO 1+1)
|
6,973 | 7,380 | ||||||
Ukraine
(KINO, CITI)
|
4,972 | 5,003 | ||||||
Total
long-lived assets
|
$ | 227,334 | $ | 179,013 | ||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
1,238 | 1,298 | ||||||
Total
long-lived assets
|
$ | 228,572 | $ | 180,311 |
June
30,
2008
|
||||
Croatia
|
$ | 3,841 | ||
Czech
Republic
|
48,616 | |||
Romania
|
36,048 | |||
Slovak
Republic
|
11,518 | |||
Slovenia
|
4,475 | |||
Ukraine
(STUDIO 1+1)
|
9,397 | |||
Ukraine
(KINO, CITI)
|
121 | |||
Total
|
$ | 114,016 |
June
30,
2008
|
||||
2008
|
$ | 3,054 | ||
2009
|
5,147 | |||
2010
|
2,707 | |||
2011
|
914 | |||
2012
|
320 | |||
2013
and thereafter
|
- | |||
Total
|
$ | 12,142 |
Croatia
|
The
license of NOVA TV (Croatia) expires in April 2010.
|
|
Czech
Republic
|
The
license of TV NOVA (Czech Republic) expires in January 2017. The GALAXIE
SPORT license expires in March 2014.
|
|
Romania
|
Licenses
expire on dates ranging from October 2008 to May 2017.
|
|
Slovak
Republic
|
The
license of MARKIZA TV in the Slovak Republic expires in September
2019.
|
|
Slovenia
|
The
licenses of POP TV and KANAL A expire in August 2012.
|
|
Ukraine
|
The
15-hour prime time and off prime time license of STUDIO 1+1 expires in
December 2016. The license to broadcast for the remaining nine hours in
off prime expires in August 2014. Licenses used for the KINO
and CITI channels expire on dates ranging April 2009 to July
2016.
|
I.
|
Forward-looking
Statements
|
|
II.
|
Executive
Summary
|
|
III.
|
Analysis
of Segment Results
|
|
IV.
|
Analysis
of the Results of Consolidated Operations
|
|
V.
|
Liquidity
and Capital Resources
|
|
VI.
|
Critical
Accounting Policies and Estimates
|
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Net
revenues
|
$ | 305,391 | $ | 216,284 | 41.2 | % | ||||||
Operating
income
|
97,997 | 66,579 | 47.2 | % | ||||||||
Net
income
|
$ | 67,604 | $ | 34,590 | 95.4 | % | ||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Net
revenues
|
$ | 528,861 | $ | 364,196 | 45.2 | % | ||||||
Operating
income
|
142,673 | 79,866 | 78.6 | % | ||||||||
Net
income
|
$ | 82,499 | $ | 34,340 | 140.2 | % |
·
|
In
the three months ended June 30, 2008, we reported growth in Segment Net
Revenues and Segment EBITDA of 41% and 53%, respectively compared to the
three months ended June 30, 2007, delivering a Segment EBITDA margin of
44% compared to the 40% margin reported in the three months ended June 30,
2007 (Segment EBITDA is defined and reconciled to our consolidated results
in Item 1, Note 16, “Segment
Data”).
|
·
|
Each
of our stations reported revenue growth in excess of 25% compared to the
three months ended June 30, 2007, with particularly strong growth reported
in Croatia and Romania.
|
·
|
On
April 17, 2008 we acquired the assets of Radio Pro, which owns two leading
radio channels in Romania. Total consideration was RON 47.2
million, (approximately US$ 20.6 million at the date of
payment). These assets were owned by Media Pro Management S.A.,
in which we hold an 8.7% interest and the remainder is owned by Adrian
Sarbu, our Chief Operating Officer. See Item 1, Note 3
“Acquisitions and Disposals” for further
information.
|
·
|
On
May 27, 2008 we acquired Jyxo, the information technology provider and
operator of the leading blog site in the Czech Republic, blog.cz, and
Jyxo's affiliate Blog. See Item 1, Note 3 “Acquisitions and
Disposals” for further information.
|
·
|
On
June 30, 2008 we completed the acquisition of an additional 30.0% interest
in the Studio 1+1 group in Ukraine. Total cash consideration
was approximately US$ 219.6 million. See Item 1, Note 3
“Acquisitions and Disposals” for further
information.
|
|
·
|
developing
our Ukraine operations in order to secure consistent performance and a
leading position in the Ukrainian
market;
|
|
·
|
ensuring
that our leading position in our operating countries is secured during the
transition to digital terrestrial broadcasting and the anticipated growth
of DTH offerings;
|
|
·
|
launching
or acquiring additional channels in our markets in order to expand our
offerings, target niche audiences and increase our advertising
inventory;
|
|
·
|
improving
margins by leveraging expertise from our best-performing operations;
and
|
|
·
|
expanding
our capabilities in production and the development of local
content.
|
·
|
expenses
presented as corporate operating costs in our condensed consolidated
statements of operations and comprehensive
income;
|
·
|
stock-based
compensation charges;
|
·
|
foreign
currency exchange gains and losses;
|
·
|
change
in fair value of derivatives; and
|
·
|
certain
unusual or infrequent items (e.g., extraordinary gains and losses,
impairments of assets or
investments).
|
SEGMENT
FINANCIAL INFORMATION
|
||||||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||||||
2008
|
(1 | ) |
2007
|
(1 | ) | |||||||||||
Segment
Net Revenue
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 18,094 | 6 | % | $ | 10,414 | 5 | % | ||||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
112,570 | 37 | % | 80,544 | 37 | % | ||||||||||
Romania
(2)
|
79,842 | 26 | % | 52,224 | 24 | % | ||||||||||
Slovak
Republic (TV MARKIZA)
|
37,097 | 12 | % | 29,652 | 14 | % | ||||||||||
Slovenia
(POP TV and KANAL A)
|
26,210 | 9 | % | 20,095 | 9 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
30,254 | 10 | % | 22,701 | 11 | % | ||||||||||
Ukraine
(KINO, CITI)
|
1,324 | - | 654 | - | ||||||||||||
Total
Segment Net Revenues
|
$ | 305,391 | 100 | % | $ | 216,284 | 100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ | 302,611 | 99 | % | $ | 214,987 | 99 | % | ||||||||
Non-broadcast
operations
|
2,780 | 1 | % | 1,297 | 1 | % | ||||||||||
Total
Segment Revenues
|
$ | 305,391 | 100 | % | $ | 216,284 | 100 | % | ||||||||
Segment
EBITDA
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 1,683 | 1 | % | $ | (2,167 | ) | (2 | )% | |||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
71,204 | 54 | % | 47,595 | 55 | % | ||||||||||
Romania
(2)
|
38,293 | 29 | % | 22,530 | 26 | % | ||||||||||
Slovak
Republic (TV MARKIZA)
|
13,974 | 11 | % | 11,712 | 13 | % | ||||||||||
Slovenia
(POP TV and KANAL A)
|
10,866 | 8 | % | 8,388 | 9 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
(1,894 | ) | (1 | )% | 565 | 1 | % | |||||||||
Ukraine
(KINO, CITI)
|
(1,055 | ) | (1 | )% | (1,755 | ) | (2 | )% | ||||||||
Total
Segment EBITDA
|
$ | 133,071 | 100 | % | $ | 86,868 | 100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ | 134,964 | 101 | % | $ | 87,175 | 100 | % | ||||||||
Non-broadcast
operations
|
(1,893 | ) | (1 | )% | (307 | ) | - | |||||||||
Total
Segment EBITDA
|
$ | 133,071 | 100 | % | $ | 86,868 | 100 | % | ||||||||
Segment
EBITDA Margin (3)
|
44 | % | 40 | % |
SEGMENT
FINANCIAL INFORMATION
|
||||||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||||||
2008
|
(1 | ) |
2007
|
(1 | ) | |||||||||||
Segment
Net Revenue
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 29,628 | 6 | % | $ | 17,646 | 5 | % | ||||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
198,128 | 38 | % | 132,063 | 37 | % | ||||||||||
Romania
(2)
|
137,838 | 26 | % | 91,566 | 25 | % | ||||||||||
Slovak
Republic (TV MARKIZA)
|
63,331 | 12 | % | 48,329 | 13 | % | ||||||||||
Slovenia
(POP TV and KANAL A)
|
44,161 | 8 | % | 32,764 | 9 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
53,473 | 10 | % | 40,776 | 11 | % | ||||||||||
Ukraine
(KINO, CITI) (4)
|
2,302 | - | 1,052 | - | ||||||||||||
Total
Segment Net Revenues
|
$ | 528,861 | 100 | % | $ | 364,196 | 100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ | 524,108 | 99 | % | $ | 362,409 | 100 | % | ||||||||
Non-broadcast
operations
|
4,753 | 1 | % | 1,787 | - | |||||||||||
Total
Segment Revenues
|
$ | 528,861 | 100 | % | $ | 364,196 | 100 | % | ||||||||
Segment
EBITDA
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | (1,047 | ) | (1 | )% | $ | (6,819 | ) | (5 | )% | ||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
115,049 | 56 | % | 73,262 | 58 | % | ||||||||||
Romania
(2)
|
61,669 | 30 | % | 37,666 | 29 | % | ||||||||||
Slovak
Republic (TV MARKIZA)
|
23,111 | 11 | % | 17,468 | 13 | % | ||||||||||
Slovenia
(POP TV and KANAL A)
|
15,206 | 7 | % | 11,389 | 9 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
(3,957 | ) | (2 | )% | (1,805 | ) | (1 | )% | ||||||||
Ukraine
(KINO, CITI)
|
(2,261 | ) | (1 | )% | (4,172 | ) | (3 | )% | ||||||||
Total
Segment EBITDA
|
$ | 207,770 | 100 | % | $ | 126,989 | 100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ | 211,141 | 102 | % | $ | 127,889 | 101 | % | ||||||||
Non-broadcast
operations
|
(3,371 | ) | (2 | )% | (900 | ) | (1 | )% | ||||||||
Total
Segment EBITDA
|
$ | 207,770 | 100 | % | $ | 126,989 | 100 | % | ||||||||
Segment
EBITDA Margin (3)
|
39 | % | 35 | % |
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
All
day audience share
|
22.9 | % | 18.3 | % | 4.6 | % | ||||||
All
day ratings
|
3.6 | % | 3.0 | % | 0.6 | % | ||||||
Prime
time audience share
|
26.4 | % | 19.2 | % | 7.2 | % | ||||||
Prime
time ratings
|
9.7 | % | 7.3 | % | 2.4 | % |
CROATIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 15,050 | $ | 8,482 | 77.4 | % | ||||||
Non-spot
revenues
|
3,044 | 1,932 | 57.6 | % | ||||||||
Segment
Net Revenues
|
$ | 18,094 | $ | 10,414 | 73.7 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 17,909 | $ | 10,389 | 72.4 | % | ||||||
Non-broadcast
operations
|
185 | 25 | 640.0 | % | ||||||||
Segment
Net Revenues
|
$ | 18,094 | $ | 10,414 | 73.7 | % | ||||||
Segment
EBITDA
|
$ | 1,683 | $ | (2,167 | ) | 177.7 | % | |||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 2,157 | $ | (2,144 | ) | 200.6 | % | |||||
Non-broadcast
operations
|
(474 | ) | (23 | ) | (1,960.9 | )% | ||||||
Segment
EBITDA
|
$ | 1,683 | $ | (2,167 | ) | 177.7 | % | |||||
Segment
EBITDA Margin
|
9 | % | (21 | )% | 30 | % |
·
|
Segment Net Revenues for
the three months ended June 30, 2008 increased by 74% compared to the
three months ended June 30, 2007. In local currency, Segment
Net Revenues grew by 48%. Spot revenues for the three months
ended June 30, 2008 increased by 77% compared to the same period in
2007. This increase resulted from our ratings improvement in
2007 and 2008, which has improved our position in the market and
consequently supported the sale of significantly higher volumes of GRPs at
increased prices. Non-spot revenues for the three months ended June 30,
2008 increased by 58% compared to the same period in 2007, primarily due
to increased sponsorship revenue generated from our locally produced
program ‘The Farm’.
|
·
|
Segment EBITDA for the
three months ended June 30, 2008 was US$ 1.7 million compared to a loss of
US$ 2.2 million for the three months ended June 30, 2007. This has been
the first quarter in which our Croatia operations have generated positive
EBITDA.
|
CROATIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 24,712 | $ | 13,503 | 83.0 | % | ||||||
Non-spot
revenues
|
4,916 | 4,143 | 18.7 | % | ||||||||
Segment
Net Revenues
|
$ | 29,628 | $ | 17,646 | 67.9 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 29,314 | $ | 17,616 | 66.4 | % | ||||||
Non-broadcast
operations
|
314 | 30 | 946.7 | % | ||||||||
Segment
Net Revenues
|
$ | 29,628 | $ | 17,646 | 67.9 | % | ||||||
Segment
EBITDA
|
$ | (1,047 | ) | $ | (6,819 | ) | 84.6 | % | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (430 | ) | $ | (6,767 | ) | 93.6 | % | ||||
Non-broadcast
operations
|
(617 | ) | (52 | ) | 1086.5 | % | ||||||
Segment
EBITDA
|
$ | (1,047 | ) | $ | (6,819 | ) | 84.6 | % | ||||
Segment
EBITDA Margin
|
(4 | )% | (39 | )% | 35 | % |
·
|
Segment Net Revenues for
the six months ended June 30, 2008 increased by 68% compared to the six
months ended June 30, 2007. In local currency, Segment Net
Revenues grew by 43%. Spot revenues for the six months ended
June 30, 2008 increased by 83% compared to the same period in 2007 because
our ratings improvement in 2007 and 2008 has improved our position in the
market and this supported the sale of significantly higher volumes of GRPs
at increased prices. Non-spot revenues for the six months ended June 30,
2008 increased by 19% compared to the same period in 2007, primarily due
to increased sponsorship revenue generated from our locally produced
program ‘The Farm’.
|
·
|
Segment EBITDA losses
for the six months ended June 30, 2008 fell by 85% compared to the six
months ended June 30, 2007. In local currency, Segment EBITDA
losses fell by 87%.
|
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
All
day audience share
|
41.9 | % | 43.6 | % | (1.7 | )% | ||||||
All
day ratings
|
4.8 | % | 4.9 | % | (0.1 | )% | ||||||
Prime
time audience share
|
45.8 | % | 48.1 | % | (2.3 | )% | ||||||
Prime
time ratings
|
13.8 | % | 14.8 | % | (1.0 | )% |
CZECH
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 104,070 | $ | 74,048 | 40.5 | % | ||||||
Non-spot
revenues
|
8,500 | 6,496 | 30.8 | % | ||||||||
Segment
Net Revenues
|
$ | 112,570 | $ | 80,544 | 39.8 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 112,040 | $ | 80,489 | 39.2 | % | ||||||
Non-broadcast
operations
|
530 | 55 | 863.6 | % | ||||||||
Segment
Net Revenues
|
$ | 112,570 | $ | 80,544 | 39.8 | % | ||||||
Segment
EBITDA
|
$ | 71,204 | $ | 47,595 | 49.6 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 72,057 | $ | 47,822 | 50.7 | % | ||||||
Non-broadcast
operations
|
(853 | ) | (227 | ) | 275.8 | % | ||||||
Segment
EBITDA
|
$ | 71,204 | $ | 47,595 | 49.6 | % | ||||||
Segment
EBITDA Margin
|
63 | % | 59 | % | 4 | % |
·
|
Segment Net Revenues for
the three months ended June 30, 2008 increased by 40% compared to the
three months ended June 30, 2007. In local currency, Segment
Net Revenues increased by 7%. Spot revenues increased by 41%,
with an increase in the average revenue per GRP sold. There was
a decrease in the volume of GRPs sold due to a change in sales policy,
which encouraged clients to spend more of their budgets during the low
season of the first quarter. Non-spot revenue for the three months ended
June 30, 2008 increased by 31% compared to the same period in 2007,
primarily due to increased
sponsorship.
|
·
|
Segment EBITDA for the
three months ended June 30, 2008 increased by 50% compared to the three
months ended June 30, 2007, resulting in an EBITDA margin of 63% compared
to 59% for the same period in 2007. In local currency, Segment EBITDA
increased by 14%.
|
CZECH
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 181,673 | $ | 120,712 | 50.5 | % | ||||||
Non-spot
revenues
|
16,455 | 11,351 | 45.0 | % | ||||||||
Segment
Net Revenues
|
$ | 198,128 | $ | 132,063 | 50.0 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 197,423 | $ | 131,969 | 49.6 | % | ||||||
Non-broadcast
operations
|
705 | 94 | 650.0 | % | ||||||||
Segment
Net Revenues
|
$ | 198,128 | $ | 132,063 | 50.0 | % | ||||||
Segment
EBITDA
|
$ | 115,049 | $ | 73,262 | 57.0 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 116,293 | $ | 73,759 | 57.7 | % | ||||||
Non-broadcast
operations
|
(1,244 | ) | (497 | ) | (150.3 | )% | ||||||
Segment
EBITDA
|
$ | 115,049 | $ | 73,262 | 57.0 | % | ||||||
Segment
EBITDA Margin
|
58 | % | 55 | % | 3 | % |
·
|
Segment Net Revenues for
the six months ended June 30, 2008 increased by 50% compared to the six
months ended June 30, 2007. In local currency, Segment Net
Revenues increased by 17%. Spot revenues increased by 51%,
primarily due to an increase in the average revenue per GRP sold, as well
as a slight increase in the volume of GRPs sold. Non-spot
revenue for the six months ended June 30, 2008 increased by 45% compared
to the same period in 2007, primarily due to increased
sponsorship.
|
·
|
Segment EBITDA for the
six months ended June 30, 2008 increased by 57% compared to the six months
ended June 30, 2007, resulting in an EBITDA margin of 58% compared to 55%
for the same period in 2007. In local currency, Segment EBITDA increased
by 10%.
|
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
All
day audience share
|
29.1 | % | 29.5 | % | (0.4 | )% | ||||||
All
day ratings
|
4.6 | % | 4.2 | % | 0.4 | % | ||||||
Prime
time audience share
|
32.8 | % | 31.7 | % | 1.1 | % | ||||||
Prime
time ratings
|
11.3 | % | 9.8 | % | 1.5 | % |
ROMANIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 73,864 | $ | 49,069 | 50.5 | % | ||||||
Non-spot
revenues
|
5,978 | 3,155 | 89.5 | % | ||||||||
Segment
Net Revenues
|
$ | 79,842 | $ | 52,224 | 52.9 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 79,229 | $ | 52,168 | 51.9 | % | ||||||
Non-broadcast
operations
|
613 | 56 | 994.6 | % | ||||||||
Segment
Net Revenues
|
$ | 79,842 | $ | 52,224 | 52.9 | % | ||||||
Segment
EBITDA
|
$ | 38,293 | $ | 22,530 | 70.0 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 38,184 | $ | 22,625 | 68.8 | % | ||||||
Non-broadcast
operations
|
109 | (95 | ) | 214.7 | % | |||||||
Segment
EBITDA
|
$ | 38,293 | $ | 22,530 | 70.0 | % | ||||||
Segment
EBITDA Margin
|
48 | % | 43 | % | 5 | % |
·
|
Segment Net Revenues for
the three months ended June 30, 2008 increased by 53% compared to the
three months June 30, 2007. The functional currency of our
Romanian operations changed from the US dollar to the New Romanian lei
with effect from January 1, 2008; for comparative purposes Segment Net
Revenues increased by 47% in New Romanian lei for the three months ended
June 30, 2008 compared to the six months June 30, 2007. Spot
revenues increased by 51% and non-spot revenues increased by 90% over
comparable periods. The increase in spot revenues was driven by
increases in the average revenue per GRP sold. In addition US$ 1.5 million
of spot revenue was generated from RADIO PRO, acquired on April 17, 2008
and US$ 1.1 million was generated from MTV ROMANIA, for which we acquired
a license to operate on December 20, 2007. The increase in
non-spot revenue was primarily due to increased cable tariff revenue, as
SPORT.RO and MTV ROMANIA benefited from an increased channel offering to
generate income from this revenue
stream.
|
·
|
Segment EBITDA for the
three months ended June 30, 2008 increased by 70% compared to the three
months ended June 30, 2007, resulting in an EBITDA margin of 48%, compared
to 43% for the same period in 2007.
|
ROMANIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 126,896 | $ | 85,604 | 48.2 | % | ||||||
Non-spot
revenues
|
10,942 | 5,962 | 83.5 | % | ||||||||
Segment
Net Revenues
|
$ | 137,838 | $ | 91,566 | 50.5 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 137,028 | $ | 91,510 | 49.7 | % | ||||||
Non-broadcast
operations
|
810 | 56 | 1346.4 | % | ||||||||
Segment
Net Revenues
|
$ | 137,838 | $ | 91,566 | 50.5 | % | ||||||
Segment
EBITDA
|
$ | 61,669 | $ | 37,666 | 63.7 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 61,750 | $ | 37,899 | 62.9 | % | ||||||
Non-broadcast
operations
|
(81 | ) | (233 | ) | 65.2 | % | ||||||
Segment
EBITDA
|
$ | 61,669 | $ | 37,666 | 63.7 | % | ||||||
Segment
EBITDA Margin
|
45 | % | 41 | % | 4 | % |
·
|
Segment Net Revenues for
the six months ended June 30, 2008 increased by 51% compared to the six
months June 30, 2007. The functional currency of our Romanian
operations changed from the US dollar to the New Romanian lei with effect
from January 1, 2008; for comparative purposes Segment Net Revenues
increased by 44% in New Romanian lei for the six months ended June 30,
2008 compared to the six months ended June 30,
2007. Spot revenues increased by 48% and non-spot
revenues increased by 84% over comparable periods. The increase
in spot revenues was driven by increases in the average revenue per GRP
sold. In addition US$ 1.7 million of spot revenue was generated from MTV
ROMANIA, for which we acquired a license to operate on December 20, 2007
and US$ 1.5 million generated from RADIO PRO which we acquired on April
17, 2008. The increase in non-spot revenue was primarily due to
increased cable tariff revenue, as SPORT.RO and MTV ROMANIA benefited from
an increased channel offering to generate income from this revenue
stream.
|
·
|
Segment EBITDA for the
six months ended June 30, 2008 increased by 64% compared to the six months
ended June 30, 2007, resulting in an EBITDA margin of 45%, compared to 41%
for the same period in 2007.
|
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
All
day audience share
|
35.8 | % | 34.4. | % | 1.4 | % | ||||||
All
day ratings
|
4.7 | % | 4.7 | % | - | |||||||
Prime
time audience share
|
38.2 | % | 38.3 | % | (0.1 | )% | ||||||
Prime
time ratings
|
14.0 | % | 14.6 | % | (0.6 | )% |
SLOVAK
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 33,723 | $ | 28,494 | 18.4 | % | ||||||
Non-spot
revenues
|
3,374 | 1,158 | 191.4 | % | ||||||||
Segment
Net Revenues
|
$ | 37,097 | $ | 29,652 | 25.1 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 36,993 | $ | 29,563 | 25.1 | % | ||||||
Non-broadcast
operations
|
104 | 89 | 16.9 | % | ||||||||
Segment
Net Revenues
|
$ | 37,097 | $ | 29,652 | 25.1 | % | ||||||
Segment
EBITDA
|
$ | 13,974 | $ | 11,712 | 19.3 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 14,201 | $ | 11,894 | 19.4 | % | ||||||
Non-broadcast
operations
|
(227 | ) | (182 | ) | 24.7 | % | ||||||
Segment
EBITDA
|
$ | 13,974 | $ | 11,712 | 19.3 | % | ||||||
Segment
EBITDA Margin
|
38 | % | 39 | % | (1 | )% |
·
|
Segment Net Revenues for
the three months ended June 30, 2008 increased by 25% compared to the
three months ended June 30, 2007. In local currency, Segment
Net Revenues decreased by 1%. The increase in Segment Net
Revenues was due to increases of 18% in spot revenues and 191% in non-spot
revenues. The increase in spot revenues is mainly due to
increases in the average revenue per GRP sold, offsetting a fall in the
volume of GRPs sold, reflecting a change in sales policy which encouraged
clients to spend more of their budgets during the low season of the first
quarter. The increase in non-spot revenues was due to
sponsorship revenue generated from the shows ‘Elan Je Elan’ and ‘Lets
Dance’.
|
·
|
Segment EBITDA for the
three months ended June 30, 2008 increased by 19% compared to the three
months ended June 30, 2007, and the EBITDA margin decreased to 38% from
39% over comparable periods. In local currency, Segment EBITDA
decreased by 6%.
|
SLOVAK
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 58,202 | $ | 46,569 | 25 | % | ||||||
Non-spot
revenues
|
5,129 | 1,760 | 191.4 | % | ||||||||
Segment
Net Revenues
|
$ | 63,331 | $ | 48,329 | 31.0 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 63,206 | $ | 48,225 | 31.1 | % | ||||||
Non-broadcast
operations
|
125 | 104 | 20.2 | % | ||||||||
Segment
Net Revenues
|
$ | 63,331 | $ | 48,329 | 31.0 | % | ||||||
Segment
EBITDA
|
$ | 23,111 | $ | 17,468 | 32.3 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 23,581 | $ | 17,753 | 32.8 | % | ||||||
Non-broadcast
operations
|
(470 | ) | (285 | ) | 64.9 | % | ||||||
Segment
EBITDA
|
$ | 23,111 | $ | 17,468 | 32.3 | % | ||||||
Segment
EBITDA Margin
|
36 | % | 36 | % | - |
·
|
Segment Net Revenues for
the six months ended June 30, 2008 increased by 31% compared to the six
months ended June 30, 2007. In local currency, Segment Net
Revenues increased by 7%. The increase in Segment Net Revenues
was due to increases of 25% in spot revenues and 191% in non-spot
revenues. The increase in spot revenues is mainly due to
increases in the average revenue per GRP sold, offsetting a slight
decrease in the volume of GRPs sold. The increase in non-spot
revenues was due to sponsorship revenue generated from the shows ‘Elan Je
Elan’ and ‘Lets Dance’.
|
·
|
Segment EBITDA for the
six months ended June 30, 2008 increased by 32% compared to the six months
ended June 30, 2007, with the EBITDA margin remaining stable at
36%. In local currency, Segment EBITDA increased by
8%.
|
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
All
day audience share
|
40.0 | % | 40.3 | % | (0.3 | )% | ||||||
All
day ratings
|
4.6 | % | 4.7 | % | (0.1 | )% | ||||||
Prime
time audience share
|
46.2 | % | 47.8 | % | (1.6 | )% | ||||||
Prime
time ratings
|
11.9 | % | 12.2 | % | (0.3 | )% |
SLOVENIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 22,511 | $ | 17,435 | 29.1 | % | ||||||
Non-spot
revenues
|
3,699 | 2,660 | 39.1 | % | ||||||||
Segment
Net Revenues
|
$ | 26,210 | $ | 20,095 | 30.4 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 24,911 | $ | 19,023 | 31.0 | % | ||||||
Non-broadcast
operations
|
1,299 | 1,072 | 21.2 | % | ||||||||
Segment
Net Revenues
|
$ | 26,210 | $ | 20,095 | 30.4 | % | ||||||
Segment
EBITDA
|
$ | 10,866 | $ | 8,388 | 29.5 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 11,123 | $ | 8,017 | 38.7 | % | ||||||
Non-broadcast
operations
|
(257 | ) | 371 | (169.3 | )% | |||||||
Segment
EBITDA
|
$ | 10,866 | $ | 8,388 | 29.5 | % | ||||||
Segment
EBITDA Margin
|
41 | % | 42 | % | (1 | )% |
·
|
Segment Net Revenues for
the three months ended June 30, 2008 increased by 30% compared to the
three months ended June 30, 2007. In local currency Segment Net
Revenues increased by 12%.
|
·
|
Segment EBITDA for the
three months ended June 30, 2008 increased by 30% compared to the three
months ended June 30, 2007. In local currency, Segment EBITDA increased by
12%.
|
SLOVENIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 37,818 | $ | 28,760 | 31.5 | % | ||||||
Non-spot
revenues
|
6,343 | 4,004 | 58.4 | % | ||||||||
Segment
Net Revenues
|
$ | 44,161 | $ | 32,764 | 34.8 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 41,411 | $ | 31,261 | 32.5 | % | ||||||
Non-broadcast
operations
|
2,750 | 1,503 | 83.0 | % | ||||||||
Segment
Net Revenues
|
$ | 44,161 | $ | 32,764 | 34.8 | % | ||||||
Segment
EBITDA
|
$ | 15,206 | $ | 11,389 | 33.5 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 15,775 | $ | 11,039 | 42.9 | % | ||||||
Non-broadcast
operations
|
(569 | ) | 350 | (262.2 | )% | |||||||
Segment
EBITDA
|
$ | 15,206 | $ | 11,389 | 33.5 | % | ||||||
Segment
EBITDA Margin
|
34 | % | 35 | % | (1 | )% |
·
|
Segment Net Revenues for
the six months ended June 30, 2008 increased by 35% compared to the six
months ended June 30, 2007. In local currency Segment Net
Revenues increased by 17%.
|
·
|
Segment EBITDA for the
six months ended June 30, 2008 increased by 34% compared to the six months
ended June 30, 2007. In local currency, Segment EBITDA increased by
16%.
|
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
All
day audience share
|
12.8 | % | 15.8 | % | (3.0 | )% | ||||||
All
day ratings
|
1.9 | % | 2.3 | % | (0.4 | )% | ||||||
Prime
time audience share
|
14.1 | % | 18.3 | % | (4.2 | )% | ||||||
Prime
time ratings
|
5.1 | % | 6.6 | % | (1.5 | )% |
UKRAINE
(STUDIO 1+1) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 23,485 | $ | 18,285 | 28.4 | % | ||||||
Non-spot
revenues
|
6,769 | 4,416 | 53.3 | % | ||||||||
Segment
Net Revenues
|
$ | 30,254 | $ | 22,701 | 33.3 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 30,205 | $ | 22,701 | 33.1 | % | ||||||
Non-broadcast
operations
|
49 | - | - | |||||||||
Segment
Net Revenues
|
$ | 30,254 | $ | 22,701 | 33.3 | % | ||||||
Segment
EBITDA
|
$ | (1,894 | ) | $ | 565 | (435.2 | )% | |||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (1,703 | ) | $ | 716 | (337.8 | )% | |||||
Non-broadcast
operations
|
(191 | ) | (151 | ) | 26.5 | % | ||||||
Segment
EBITDA
|
$ | (1,894 | ) | $ | 565 | (435.2 | )% | |||||
Segment
EBITDA Margin
|
(6 | )% | 2 | % | (8 | )% |
·
|
Segment Net Revenues for
the three months ended June 30, 2008 increased by 33% compared to the
three months ended June 30, 2007. Spot revenues increased by 28%, driven
by an increase in the average revenue per GRP sold, offsetting a decrease
in the volume of GRPs sold as a result of our decline in
ratings. Non-spot revenues increased by 53% over comparable
periods primarily due to the sale of surplus programming. Political
advertising in connection with the election for the Mayor of Kiev on May
25, 2008 contributed US$ 2.2 million to Segment Net
Revenues.
|
·
|
Segment EBITDA for the
three months ended June 30, 2008 decreased by 435% compared to the three
months ended June 30, 2007, resulting in an EBITDA margin of negative 6%
compared to a positive 2% in the three months ended June 30,
2007.
|
UKRAINE
(STUDIO 1+1) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 41,861 | $ | 33,106 | 26.4 | % | ||||||
Non-spot
revenues
|
11,612 | 7,670 | 51.4 | % | ||||||||
Segment
Net Revenues
|
$ | 53,473 | $ | 40,776 | 31.1 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 53,424 | $ | 40,776 | 31.0 | % | ||||||
Non-broadcast
operations
|
49 | - | - | |||||||||
Segment
Net Revenues
|
$ | 53,473 | $ | 40,776 | 31.1 | % | ||||||
Segment
EBITDA
|
$ | (3,957 | ) | $ | (1,805 | ) | (119.2 | )% | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (3,567 | ) | $ | (1,622 | ) | (119.9 | )% | ||||
Non-broadcast
operations
|
(390 | ) | (183 | ) | (113.1 | )% | ||||||
Segment
EBITDA
|
$ | (3,957 | ) | $ | (1,805 | ) | (119.2 | )% | ||||
Segment
EBITDA Margin
|
(7 | )% | (4 | )% | (3 | )% |
·
|
Segment Net Revenues for
the six months ended June 30, 2008 increased by 31% compared to the six
months ended June 30, 2007. Spot revenues increased by 26%, driven by an
increase in the average revenue per GRP sold, offsetting a decrease in the
volume of GRPs sold as a result of our decline in
ratings. Non-spot revenues increased by 51% over comparable
periods primarily due to the sale of surplus programming. Political
advertising in connection with the election for the Mayor of Kiev on May
25, 2008 contributed US$ 2.2 million to Segment Net
Revenues.
|
·
|
Segment EBITDA losses
for the six months ended June 30, 2008 increased by 3% compared to the six
months ended June 30, 2007, resulting in an EBITDA margin of (7)% compared
to an EBITDA margin of (4)% in the six months ended June 30,
2007.
|
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
KINO:
Target (15-50 national) prime time audience share
|
0.5 | % | 0.6 | % | (0.1 | )% | ||||||
CITI:
Target (15-50 Kiev) prime time audience share
|
1.7 | % | 2.0 | % | (0.3 | )% |
UKRAINE
(KINO, CITI) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 635 | $ | 334 | 90.1 | % | ||||||
Non-spot
revenues
|
689 | 320 | 115.3 | % | ||||||||
Segment
Net Revenues
|
$ | 1,324 | $ | 654 | 102.4 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 1,324 | $ | 654 | 102.4 | % | ||||||
Non-broadcast
operations
|
- | - | 0 | % | ||||||||
Segment
Net Revenues
|
$ | 1,324 | $ | 654 | 102.4 | % | ||||||
Segment
EBITDA
|
$ | (1,055 | ) | $ | (1,755 | ) | 39.9 | % | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (1,055 | ) | $ | (1,755 | ) | 39.9 | % | ||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
EBITDA
|
$ | (1,055 | ) | $ | (1,755 | ) | 39.9 | % | ||||
Segment
EBITDA Margin
|
(80 | )% | (268 | )% | 188 | % |
·
|
Segment Net Revenues for
the three months ended June 30, 2008 increased by 102% compared to the
three months ended June 30, 2007. Spot revenues increased by 90%. Non-spot
revenues increased by 115%, primarily due to increased
sponsorship.
|
·
|
Segment EBITDA losses
for the three months ended June 30, 2008 decreased by 40% compared to the
three months ended June 30, 2007.
|
UKRAINE
(KINO, CITI) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 1,012 | $ | 477 | 112.2 | % | ||||||
Non-spot
revenues
|
1,290 | 575 | 124.3 | % | ||||||||
Segment
Net Revenues
|
$ | 2,302 | $ | 1,052 | 118.8 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 2,302 | $ | 1,052 | 118.8 | % | ||||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
Net Revenues
|
$ | 2,302 | $ | 1,052 | 118.8 | % | ||||||
Segment
EBITDA
|
$ | (2,261 | ) | $ | (4,172 | ) | 45.8 | % | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (2,261 | ) | $ | (4,172 | ) | 45.8 | % | ||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
EBITDA
|
$ | (2,261 | ) | $ | (4,172 | ) | 45.8 | % | ||||
Segment
EBITDA Margin
|
(98 | )% | (397 | )% | 299 | % | ||||||
·
|
Segment Net Revenues for
the six months ended June 30, 2008 increased by 119% compared to the six
months ended June 30, 2007. Spot revenues increased by 112%. Non-spot
revenues increased by 124%, primarily due to increased
sponsorship.
|
·
|
Segment EBITDA losses
for the six months ended June 30, 2008 decreased by 46% compared to the
six months ended June 30, 2007.
|
COST
OF PROGRAMMING
|
||||||||||||||||
For
the Three Months Ended June 30,
(US$
000’s)
|
For
the Six Months Ended June 30,
(US$
000’s)
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Production
expenses
|
$ | 55,073 | $ | 40,778 | $ | 97,240 | $ | 68,334 | ||||||||
Program
amortization
|
62,536 | 41,995 | 115,123 | 80,792 | ||||||||||||
Cost
of programming
|
$ | 117,609 | $ | 82,773 | $ | 212,363 | $ | 149,126 |
|
·
|
US$
2.9 million of additional programming costs from our Croatia
operations;
|
|
·
|
US$
8.9 million of additional programming costs from our Czech Republic
operations;
|
|
·
|
US$
8.7 million of additional programming costs from our Romania
operations;
|
|
·
|
US$
5.5 million of additional programming costs from our Slovak Republic
operations;
|
|
·
|
US$
3.0 million of additional programming costs from our Slovenia
operations;
|
|
·
|
US$
6.0 million of additional programming costs from our Ukraine (STUDIO 1+1)
operations; partially offset by
|
|
·
|
US$
(0.2) million of reduced programming costs from our Ukraine (KINO, CITI)
operations.
|
|
·
|
US$
4.7 million of additional programming costs from our Croatia
operations;
|
|
·
|
US$
18.9 million of additional programming costs from our Czech Republic
operations;
|
|
·
|
US$
15.2 million of additional programming costs from our Romania
operations;
|
|
·
|
US$
9.3 million of additional programming costs from our Slovak Republic
operations;
|
|
·
|
US$
5.9 million of additional programming costs from our Slovenia
operations;
|
|
·
|
US$
10.0 million of additional programming costs from our Ukraine (STUDIO 1+1)
operations; partially offset by
|
|
·
|
US$
(0.8) million of reduced programming costs from our Ukraine (KINO, CITI)
operations.
|
PROGRAM
AMORTIZATION AND CASH PAID FOR PROGRAMMING
|
||||||||||||||||
For
the Three Months Ended June 30, (US$ 000’s)
|
For
the Six Months Ended June 30, (US$ 000’s)
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Program
amortization:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 4,949 | $ | 5,234 | $ | 10,804 | $ | 10,634 | ||||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
14,023 | 7,295 | 27,080 | 13,851 | ||||||||||||
Romania
(1)
|
14,029 | 9,906 | 26,017 | 19,335 | ||||||||||||
Slovak
Republic (TV MARKIZA)
|
6,818 | 2,969 | 10,781 | 6,176 | ||||||||||||
Slovenia
(POP TV and KANAL A)
|
3,002 | 2,246 | 5,958 | 4,442 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
19,140 | 13,561 | 33,312 | 24,489 | ||||||||||||
Ukraine
(KINO, CITI)
|
575 | 784 | 1,171 | 1,865 | ||||||||||||
$ | 62,536 | $ | 41,995 | $ | 115,123 | $ | 80,792 | |||||||||
Cash
paid for programming:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 7,638 | $ | 10,002 | $ | 15,061 | $ | 10,907 | ||||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
7,370 | 4,269 | 19,239 | 10,846 | ||||||||||||
Romania
(1)
|
17,529 | 12,931 | 31,395 | 22,977 | ||||||||||||
Slovak
Republic (TV MARKIZA)
|
4,672 | 4,466 | 10,240 | 8,165 | ||||||||||||
Slovenia
(POP TV and KANAL A)
|
3,714 | 2,480 | 5,956 | 4,652 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
15,101 | 16,075 | 22,153 | 26,559 | ||||||||||||
Ukraine
(KINO, CITI)
|
250 | 375 | 529 | 1,117 | ||||||||||||
$ | 56,274 | $ | 50,598 | $ | 104,573 | $ | 85,223 |
CONSOLIDATED
NET REVENUES
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Croatia
|
$ | 18,094 | $ | 10,414 | 73.7 | % | ||||||
Czech
Republic
|
112,570 | 80,544 | 39.8 | % | ||||||||
Romania
|
79,842 | 52,224 | 52.9 | % | ||||||||
Slovak
Republic
|
37,097 | 29,652 | 25.1 | % | ||||||||
Slovenia
|
26,210 | 20,095 | 30.4 | % | ||||||||
Ukraine
(STUDIO 1+1)
|
30,254 | 22,701 | 33.3 | % | ||||||||
Ukraine
(KINO, CITI)
|
1,324 | 654 | 102.4 | % | ||||||||
Total
Consolidated Net Revenues
|
$ | 305,391 | $ | 216,284 | 41.2 | % |
CONSOLIDATED
NET REVENUES
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Croatia
|
$ | 29,628 | $ | 17,646 | 67.9 | % | ||||||
Czech
Republic
|
198,128 | 132,063 | 50.0 | % | ||||||||
Romania
|
137,838 | 91,566 | 50.5 | % | ||||||||
Slovak
Republic
|
63,331 | 48,329 | 31.0 | % | ||||||||
Slovenia
|
44,161 | 32,764 | 34.8 | % | ||||||||
Ukraine
(STUDIO 1+1)
|
53,473 | 40,776 | 31.1 | % | ||||||||
Ukraine
(KINO, CITI)
|
2,302 | 1,052 | 118.9 | % | ||||||||
Total
Consolidated Net Revenues
|
$ | 528,861 | $ | 364,196 | 45.2 | % |
CONSOLIDATED
COST OF REVENUES
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Operating
costs
|
$ | 37,045 | $ | 30,944 | 19.7 | % | ||||||
Cost
of programming
|
117,609 | 82,773 | 42.1 | % | ||||||||
Depreciation
of station property, plant and equipment
|
13,178 | 7,680 | 71.6 | % | ||||||||
Amortization
of broadcast licenses and other intangibles
|
8,188 | 5,165 | 58.5 | % | ||||||||
Total
Consolidated Cost of Revenues
|
$ | 176,020 | $ | 126,562 | 39.1 | % |
CONSOLIDATED
COST OF REVENUES
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Operating
costs
|
$ | 70,307 | $ | 56,601 | 24.2 | % | ||||||
Cost
of programming
|
212,363 | 149,126 | 42.4 | % | ||||||||
Depreciation
of station property, plant and equipment
|
25,518 | 14,579 | 75.0 | % | ||||||||
Amortization
of broadcast licenses and other intangibles
|
15,854 | 10,327 | 53.5 | % | ||||||||
Total
Consolidated Cost of Revenues
|
$ | 324,042 | $ | 230,633 | 40.5 | % |
CONSOLIDATED
STATION SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Croatia
|
$ | 1,745 | $ | 2,013 | (13.3 | )% | ||||||
Czech
Republic
|
4,225 | 4,908 | (13.9 | )% | ||||||||
Romania
|
3,470 | 2,918 | 18.9 | % | ||||||||
Slovak
Republic
|
2,554 | 2,321 | 10.0 | % | ||||||||
Slovenia
|
1,738 | 1,770 | 2.0 | % | ||||||||
Ukraine
(STUDIO 1+1)
|
3,593 | 1,417 | 153.6 | % | ||||||||
Ukraine
(KINO, CITI)
|
341 | 352 | (3.1 | )% | ||||||||
Total
Consolidated Station Selling, General and Administrative
Expenses
|
$ | 17,666 | $ | 15,699 | 12.5 | % |
CONSOLIDATED
STATION SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Croatia
|
$ | 3,304 | $ | 3,739 | (11.6 | )% | ||||||
Czech
Republic
|
12,001 | 10,000 | 20.0 | % | ||||||||
Romania
|
7,284 | 5,342 | 36.4 | % | ||||||||
Slovak
Republic
|
4,951 | 4,259 | 16.2 | % | ||||||||
Slovenia
|
3,931 | 3,477 | 13.1 | % | ||||||||
Ukraine
(STUDIO 1+1)
|
6,348 | 3,883 | 63.5 | % | ||||||||
Ukraine
(KINO, CITI)
|
602 | 780 | (22.8 | )% | ||||||||
Total
Consolidated Station Selling, General and Administrative
Expenses
|
$ | 38,421 | $ | 31,480 | 22.0 | % |
CORPORATE
OPERATING COSTS
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Corporate
operating costs (excluding stock-based compensation)
|
$ | 11,717 | $ | 6,101 | 92.1 | % | ||||||
Stock-based
compensation
|
1,991 | 1,343 | 48.3 | % | ||||||||
Corporate
Operating Costs
|
$ | 13,708 | $ | 7,444 | 84.1 | % |
·
|
the
effect of our appointment of Adrian Sarbu as our Chief Operating Officer
in October 2007 and the resulting increase in salary and travel
costs;
|
·
|
increased
corporate headcount following our establishment of a centralized planning
and development function to manage our initiatives to improve operational
efficiencies and expand our
footprint;
|
·
|
increased
accruals for staff bonuses as a result of our improvement in performance;
partially offset by
|
·
|
decreased
legal and professional fees as a result of the conclusion of legal
proceedings in respect of our Ukraine and Croatia operations;
and
|
·
|
decreased
business development expenses
incurred.
|
CORPORATE
OPERATING COSTS
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Corporate
operating costs (excluding stock-based compensation)
|
$ | 19,921 | $ | 19,612 | 1.6 | % | ||||||
Stock-based
compensation
|
3,804 | 2,605 | 46.0 | % | ||||||||
Corporate
Operating Costs
|
$ | 23,725 | $ | 22,217 | 6.8 | % |
OPERATING
INCOME
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Operating
Income
|
$ | 97,997 | $ | 66,579 | 47.2 | % |
OPERATING
INCOME
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Operating
Income
|
$ | 142,673 | $ | 79,866 | 78.6 | % |
OTHER
INCOME / (EXPENSE) ITEMS
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Interest
income
|
$ | 3,781 | $ | 1,732 | 118.3 | % | ||||||
Interest
expense
|
(18,140 | ) | (19,438 | ) | (6.7 | )% | ||||||
Foreign
currency exchange gain / (loss), net
|
6,881 | (2,116 | ) | 425.2 | % | |||||||
Change
in fair value of derivatives
|
(13,281 | ) | 7,528 | (276.4 | )% | |||||||
Other
income / (expense)
|
665 | (546 | ) | 221.8 | % | |||||||
Income
tax credit/ (expense)
|
(8,919 | ) | (13,419 | ) | (33.5 | )% | ||||||
Minority
interest in income of consolidated subsidiaries
|
(1,380 | ) | (5,730 | ) | (75.9 | )% |
OTHER
INCOME / (EXPENSE) ITEMS
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Interest
income
|
$ | 5,961 | $ | 3,146 | 89.5 | % | ||||||
Interest
expense
|
(32,390 | ) | (30,834 | ) | 5.0 | % | ||||||
Foreign
currency exchange loss, net
|
(10,549 | ) | (5,252 | ) | 100.9 | % | ||||||
Change
in fair value of derivatives
|
(23,539 | ) | 12,052 | (295.3 | )% | |||||||
Other
income / (expense)
|
1,325 | (790 | ) | 267.7 | % | |||||||
Income
tax credit/ (expense)
|
1,423 | (18,478 | ) | 107.7 | % | |||||||
Minority
interest in income of consolidated subsidiaries
|
(2,405 | ) | (5,370 | ) | (55.2 | )% |
SUMMARIZED
CONDENSED CONSOLIDATED BALANCE SHEET (US$ 000’s)
|
||||||||||||
June
30, 2008
|
December
31, 2007
|
Movement
|
||||||||||
Current
assets
|
$ | 818,400 | $ | 529,824 | 54.5 | % | ||||||
Non-current
assets
|
2,463,076 | 1,808,611 | 36.2 | % | ||||||||
Current
liabilities
|
248,042 | 232,770 | 6.6 | % | ||||||||
Non-current
liabilities
|
1,257,249 | 682,703 | 84.2 | % | ||||||||
Minority
interests in consolidated subsidiaries
|
99,102 | 23,155 | 328.0 | % | ||||||||
Shareholders’
equity
|
$ | 1,677,083 | $ | 1,399,807 | 19.8 | % |
SUMMARY
OF CASH FLOWS
|
||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||
2008
|
2007
|
|||||||
Net
cash generated from continuing operating activities
|
$ | 127,515 | $ | 21,601 | ||||
Net
cash used in continuing investing activities
|
(287,156 | ) | (88,113 | ) | ||||
Net
cash received from financing activities
|
399,243 | 31,125 | ||||||
Net
cash used in discontinued operations – operating
activities
|
(1,973 | ) | (1,624 | ) | ||||
Net
increase / (decrease) in cash and cash equivalents
|
$ | 232,926 | $ | (29,242 | ) |
·
|
payment
of US$ 222.8 million in connection with our acquisition of an additional
30.0% stake in Studio 1+1 (for further information, see Part I, Item 1,
Note 3, “Acquisitions and
Disposals”);
|
·
|
payments
of RON 47.2 million (approximately US$ 20.6 million at the date of
payment) in connection with our acquisition of the assets of Radio Pro
(for further information, see Part I, Item 1, Note 3, “Acquisitions and
Disposals”);
|
·
|
payments
of US$ 2.7 million in connection with our acquisition of Jyxo and Blog
(for further information, see Part I, Item 1, Note 3, “Acquisitions and
Disposals”) and
|
·
|
capital
expenditures of US$ 42.0 million.
|
Contractual
Obligations
|
Payments
due by period (US$ 000’s)
|
|||||||||||||||||||
Total
|
Less
than 1 year
|
1-3
years
|
3-5
years
|
More
than 5 years
|
||||||||||||||||
Long-Term
Debt – principal
|
$ | 1,115,872 | $ | 16,494 | $ | 1,700 | $ | 861,218 | $ | 236,460 | ||||||||||
Long-Term
Debt – interest (1)
|
305,606 | 72,004 | 127,783 | 91,081 | 14,738 | |||||||||||||||
Capital
Lease Obligations
|
7,221 | 1,124 | 1,323 | 1,171 | 3,603 | |||||||||||||||
Operating
Leases
|
12,142 | 5,246 | 6,183 | 713 | - | |||||||||||||||
Unconditional
Purchase Obligations
|
125,579 | 111,402 | 9,146 | 4,418 | 613 | |||||||||||||||
Other
Long-Term Obligations
|
2,211 | 1,711 | 500 | - | - | |||||||||||||||
FIN
48 obligations
|
2,377 | 464 | 1,913 | - | - | |||||||||||||||
Deferred
consideration
|
10,105 | 7,900 | 2,205 | - | - | |||||||||||||||
Total
Contractual Obligations
|
$ | 1,581,113 | $ | 216,345 | $ | 150,753 | $ | 958,601 | $ | 255,414 |
June
30, 2008
(US$
000’s)
|
||||||||
Corporate
|
(1) – (3) | $ | 1,097,678 | |||||
Czech
Republic operations
|
(4) – (6) | 16,494 | ||||||
Slovenia
operations
|
(7) | - | ||||||
Ukraine
(KINO, CITI) operations
|
(8) | 1,700 | ||||||
Total
|
$ | 1,115,872 |
(1)
|
As
at June 30, 2008 we had EUR 395.0 million (approximately US$ 622.7
million) of Senior Notes outstanding, comprising EUR 245.0 million
(approximately US$ 386.2 million) of 8.25% senior notes due May 2012 (the
“Fixed Rate Notes”) and EUR 150.0 million (approximately US$ 236.5
million) of floating rate Senior Notes due May 2014, (the “Floating Rate
Notes”, collectively the “Senior Notes”) which bear interest at six-month
Euro Inter-Bank Offered Rate (“EURIBOR”) plus 1.625% (6.504% was
applicable at June 30, 2008).
|
(2)
|
As
at June 30, 2008 we had US$ 475.0 million of 3.50% Convertible Notes
outstanding that mature on March 15, 2013 (the “Convertible
Notes”). Interest is payable semi-annually in arrears on each
March 15 and September 15.
|
(3)
|
On
July 21, 2006, we entered into a five-year revolving loan agreement for
EUR 100.0 million (approximately US$ 157.6 million) arranged by EBRD and
on August 22, 2007, we entered into a second revolving loan agreement for
EUR 50.0 million (approximately US$ 78.8 million) also arranged by EBRD
(collectively the “EBRD Loan”). ING Bank N.V. (“ING”) and Ceska
Sporitelna, a.s. (“CS”) are each participating in the EBRD Loan for EUR
37.5 million.
|
(4)
|
CET
21 has a credit facility of CZK 1.2 billion (approximately US$ 79.2
million) with Ceska Sporitelna, a.s. (“CS”). The final
repayment date is December 31, 2010. This facility may, at the
option of CET 21, be drawn in CZK, US$ or EUR and bears interest at the
three-month, six-month or twelve-month London Inter-Bank Offered Rate
(“LIBOR”), EURIBOR or Prague Inter-Bank Offered Rate (“PRIBOR”) plus
1.65%. A utilization interest of 0.25% is payable on the
undrawn portion of this facility. This percentage decreases to
0.125% of the undrawn portion if more than 50% of the loan is drawn. This
facility is secured by a pledge of receivables, which are also subject to
a factoring arrangement with Factoring Ceska Sporitelna, a.s.(“FCS”), a
subsidiary of CS. As at June 30, 2008, there were no drawings
under this facility.
|
(5)
|
CET
21 has a working capital credit facility of CZK 250.0 million
(approximately US$ 16.5 million) with CS, which matures on December 31,
2010. This working capital facility bears interest at the
three-month PRIBOR rate plus 1.65%. This facility is secured by a pledge
of receivables, which are also subject to a factoring arrangement with
FCS. As at June 30, 2008, the full CZK 250.0 million
(approximately US$ 16.5 million) was drawn under this facility bearing
interest at an aggregate 5.39% (the applicable three-month PRIBOR rate at
June 30, 2008 was 3.74%).
|
(6)
|
As
at June 30, 2008, there were no drawings under a CZK 300.0 million
(approximately US$ 19.8 million) factoring facility with
FCS. This facility is available until June 30, 2011 and bears
interest at the rate of one-month PRIBOR plus 1.40% for the period that
actively assigned accounts receivable are
outstanding.
|
(7)
|
A
revolving five-year facility agreement was entered into by Pro Plus for up
to EUR 37.5 million (approximately US$ 59.1 million) in aggregate
principal amount with ING Bank N.V., Nova Ljubljanska Banka d.d.,
Ljubljana and Bank Austria Creditanstalt d.d., Ljubljana. The
facility availability amortizes by 10.0% each year for four years
commencing one year after signing, with 60.0% repayable after five
years. This facility is secured by a pledge of the bank
accounts of Pro Plus, the assignment of certain receivables, a pledge of
our interest in Pro Plus and a guarantee of our wholly-owned subsidiary
CME Media Enterprises B.V. Loans drawn under this facility will
bear interest at a rate of EURIBOR for the period of drawing plus a margin
of between 2.10% and 3.60% that varies according to the ratio of
consolidated net debt to consolidated broadcasting cash flow for Pro
Plus. As at June 30, 2008, EUR 30.0 million (approximately US$
47.3 million) was available for drawing under this revolving
facility; there were no drawings
outstanding.
|
(8)
|
Our
Ukraine (KINO, CITI) operations have entered into a number of three-year
unsecured loans with Glavred-Media, LLC, the minority shareholder in
Ukrpromtorg. As at June 30, 2008, the total value of loans
drawn was US$ 1.7 million. The loans are repayable between
August 2009 and December 2009 and bear interest at
9.0%.
|
For
the Three Months Ended
|
For
the Six Months Ended
|
|||||||||||||||||||||||
US$ million
|
As
reported
|
Impact
of Adoption
|
As
Adjusted
|
As
reported
|
Impact
of Adoption
|
As
Adjusted
|
||||||||||||||||||
Consolidated
Statement of Operations:
|
||||||||||||||||||||||||
Interest
expense
|
(18.1 | ) | (4.3 | ) | (22.4 | ) | (32.4 | ) | (5.2 | ) | (37.6 | ) | ||||||||||||
As
at June 30, 2008
|
||||||||||||||||||||||||
US$ million |
As
reported
|
Impact
of Adoption
|
As
Adjusted
|
|||||||||||||||||||||
Consolidated
balance sheet:
|
||||||||||||||||||||||||
Other
current assets
|
85.2 | (0.7 | ) | 84.5 | ||||||||||||||||||||
Other
non-current assets
|
21.7 | (1.8 | ) | 19.9 | ||||||||||||||||||||
Senior
Debt
|
(1,097.7 | ) | 105.4 | (992.3 | ) | |||||||||||||||||||
Additional
paid-in capital
|
993.2 | 108.1 | 1,101.3 | |||||||||||||||||||||
Retained
Earnings
|
103.5 | (5.2 | ) | 98.3 |
Expected
Maturity Dates
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
||||||||||||||||||
Total
debt in Euro (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
- | - | - | - | 245,000 | - | ||||||||||||||||||
Average
interest rate (%)
|
- | - | - | - | 8.25 | % | - | |||||||||||||||||
Variable
rate
|
- | - | - | - | - | 150,000 | ||||||||||||||||||
Average
interest rate (%)
|
- | - | - | - | - | 6.50 | % | |||||||||||||||||
Total
debt in US$ (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
- | 1,700 | - | - | - | 475,000 | ||||||||||||||||||
Average
interest rate (%)
|
- | 9.00 | % | - | - | - | 3.5 | % | ||||||||||||||||
Total
debt in CZK (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
- | - | - | - | - | - | ||||||||||||||||||
Average
interest rate (%)
|
- | - | - | - | - | - | ||||||||||||||||||
Variable
rate
|
250,000 | - | - | - | - | - | ||||||||||||||||||
Average
interest rate (%)
|
5.39 | % | - | - | - | - | - |
Yearly
interest charge if interest rates increase by (US$
000s):
|
||||||||||||||||||||||||||||
Value
of Debt as at June 30, 2008 (US$ 000's)
|
Interest
Rate as at June 30, 2008
|
Yearly
Interest Charge
(US$
000’s)
|
1 | % | 2 | % | 3 | % | 4 | % | 5 | % | ||||||||||||||||
236,460
(EUR
150.0 million)
|
6.5 | % | 15,379 | 17,744 | 20,109 | 22,474 | 24,839 | 27,204 | ||||||||||||||||||||
16,494
(CZK
250.0 million)
|
5.39 | % | 889 | 1,054 | 1,219 | 1,384 | 1,549 | 1,714 | ||||||||||||||||||||
Total
|
16,268 | 18,798 | 21,328 | 23,858 | 26,388 | 28,918 |
·
|
additional
demands placed on our senior management, who are also responsible for
managing our existing operations;
|
·
|
increased
overall operating complexity of our business, requiring greater personnel
and other resources;
|
·
|
difficulties
of expanding beyond our core expertise in the event that we acquire
ancillary businesses;
|
·
|
significant
initial cash expenditures to acquire and integrate new businesses;
and
|
·
|
in
the event that debt is incurred to finance acquisitions, additional debt
service costs related thereto as well as limitations that may arise under
our Senior Notes, the Convertible Notes and the EBRD
Loan.
|
For
|
Withheld
|
|||||||
Ronald
S. Lauder
|
82,347,671 | 4,343,505 | ||||||
Michael
Garin
|
82,381,928 | 4,309,248 | ||||||
Charles
R. Frank, Jr.
|
86,603,582 | 87,594 | ||||||
Herbert
A. Granath
|
86,603,482 | 87,694 | ||||||
Dr.
Herbert Kloiber
|
82,776,268 | 3,914,908 | ||||||
Igor
Kolomoisky
|
79,815,555 | 6,875,621 | ||||||
Alfred
W. Langer
|
86,603,882 | 87,294 | ||||||
Bruce
Maggin
|
86,603,682 | 87,294 | ||||||
Ann
Mather
|
86,603,782 | 87,294 | ||||||
Christian
Stahl
|
82,270,592 | 4,420,584 | ||||||
Eric
Zinterhofer
|
82,270,592 | 4,420,584 |
31.01
|
Sarbanes-Oxley
Certification s. 302 CEO, dated July 30, 2008.
|
31.02
|
Sarbanes-Oxley
Certification s. 302 CFO, dated July 30, 2008.
|
32.01
|
Sarbanes-Oxley
Certification – CEO and CFO, dated July 30, 2008 (furnished
only).
|
Date:
July 30, 2008
|
/s/ Michael
Garin
Michael
Garin
Chief
Executive Officer
(Duly
Authorized Officer)
|
|
Date:
July 30, 2008
|
/s/ Wallace
Macmillan
Wallace
Macmillan
Chief
Financial Officer
(Principal
Financial Officer and Accounting
Officer)
|
Sarbanes-Oxley
Certification s. 302 CEO, dated July 30, 2008.
|
|
Sarbanes-Oxley
Certification s. 302 CFO, dated July 30, 2008.
|
|
Sarbanes-Oxley
Certification – CEO and CFO, dated July 30, 2008 (furnished
only).
|