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 S
|
Accelerated
filer £
|
Non-accelerated
filer £
|
Smaller
reporting company £
|
Class
|
Outstanding as of
April 25, 2008
|
Class
A Common Stock, par value $0.08
|
36,004,823
|
Class
B Common Stock, par value $0.08
|
6,312,839
|
Page
|
|
Part
I. Financial information
|
|
2
|
|
4
|
|
6
|
|
7
|
|
8
|
|
38
|
|
69
|
|
70
|
|
Part
II. Other Information
|
|
71
|
|
73
|
|
81
|
|
81
|
|
82
|
March
31,
2008
|
December
31,
2007
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 594,556 | $ | 142,826 | ||||
Restricted
cash (Note 5)
|
1,396 | 1,286 | ||||||
Accounts
receivable (net of allowance) (Note 6)
|
226,106 | 225,037 | ||||||
Income
taxes receivable
|
3,832 | 1,234 | ||||||
Program
rights
|
93,562 | 77,112 | ||||||
Other
current assets (Note 7)
|
83,933 | 82,329 | ||||||
Total
current assets
|
1,003,385 | 529,824 | ||||||
Non-current
assets
|
||||||||
Investments
|
16,559 | 16,559 | ||||||
Property,
plant and equipment (Note 8)
|
209,741 | 180,311 | ||||||
Program
rights
|
129,209 | 108,362 | ||||||
Goodwill
(Note 3)
|
1,253,880 | 1,114,347 | ||||||
Broadcast
licenses (Note 3)
|
262,317 | 237,926 | ||||||
Other
intangible assets (Note 3)
|
152,603 | 135,732 | ||||||
Other
non-current assets (Note 7)
|
24,942 | 15,374 | ||||||
Total
non-current assets
|
2,049,251 | 1,808,611 | ||||||
Total
assets
|
$ | 3,052,636 | $ | 2,338,435 |
March
31,
2008
|
December
31,
2007
|
|||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued liabilities (Note 9)
|
$ | 180,225 | $ | 156,324 | ||||
Duties
and other taxes payable
|
35,663 | 29,945 | ||||||
Income
taxes payable
|
25,046 | 27,705 | ||||||
Credit
facilities and obligations under capital leases (Note 10)
|
16,381 | 15,090 | ||||||
Dividends
payable to minority shareholders in subsidiaries
|
- | 1,226 | ||||||
Deferred
consideration – Romania
|
2,372 | 2,208 | ||||||
Deferred
tax
|
289 | 272 | ||||||
Total
current liabilities
|
259,976 | 232,770 | ||||||
Non-current
liabilities
|
||||||||
Credit
facilities and obligations under capital leases (Note 10)
|
6,236 | 5,862 | ||||||
Senior
Debt (Note 4)
|
1,099,574 | 581,479 | ||||||
Income
taxes payable
|
2,362 | 2,495 | ||||||
Deferred
tax
|
82,024 | 73,340 | ||||||
Other
non-current liabilities
|
33,081 | 19,527 | ||||||
Total
non-current liabilities
|
1,223,277 | 682,703 | ||||||
Commitments
and contingencies (Note 17)
|
||||||||
Minority
interests in consolidated subsidiaries
|
24,179 | 23,155 | ||||||
SHAREHOLDERS'
EQUITY:
|
||||||||
Nil
shares of Preferred Stock of $0.08 each (December 31, 2007 –
nil)
|
- | - | ||||||
36,003,323
shares of Class A Common Stock of $0.08 each (December 31, 2007 –
36,003,198)
|
2,880 | 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
|
989,883 | 1,051,336 | ||||||
Retained earnings
|
68,514 | 53,619 | ||||||
Accumulated
other comprehensive income
|
483,422 | 291,467 | ||||||
Total
shareholders’ equity
|
1,545,204 | 1,399,807 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 3,052,636 | $ | 2,338,435 |
For
the Three Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Net
revenues
|
$ | 223,470 | $ | 147,912 | ||||
Operating
expenses:
|
||||||||
Operating
costs
|
33,262 | 25,657 | ||||||
Cost
of programming
|
94,754 | 66,353 | ||||||
Depreciation
of station property, plant and equipment
|
12,340 | 6,899 | ||||||
Amortization
of broadcast licenses and other intangibles (Note 3)
|
7,666 | 5,162 | ||||||
Cost
of revenues
|
148,022 | 104,071 | ||||||
Station
selling, general and administrative expenses
|
20,755 | 15,781 | ||||||
Corporate
operating costs
|
10,017 | 14,773 | ||||||
Operating
income
|
44,676 | 13,287 | ||||||
Interest
income
|
2,180 | 1,414 | ||||||
Interest
expense
|
(14,250 | ) | (11,396 | ) | ||||
Foreign
currency exchange loss, net
|
(17,430 | ) | (3,136 | ) | ||||
Change
in fair value of derivatives (Note 11)
|
(10,258 | ) | 4,524 | |||||
Other
income / (expense)
|
660 | (244 | ) | |||||
Income
before provision for income taxes and minority interest
|
5,578 | 4,449 | ||||||
Income
tax credit / (expense)
|
10,342 | (5,059 | ) | |||||
Income
/ (loss) before minority interest
|
15,920 | (610 | ) | |||||
Minority
interest in (income) / loss of consolidated subsidiaries
|
(1,025 | ) | 360 | |||||
Net
income / (loss)
|
$ | 14,895 | $ | (250 | ) | |||
Currency
translation adjustment
|
191,467
|
(5,635 | ) | |||||
Obligation
to repurchase shares
|
488
|
-
|
||||||
Total
comprehensive income / (loss)
|
$ | 206,850 | $ | (5,885 | ) |
For
the Three Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
PER
SHARE DATA (Note 14):
|
||||||||
Net
income / (loss) per share:
|
||||||||
Net
income / (loss) – Basic
|
$ | 0.35 | $ | (0.01 | ) | |||
Net
income / (loss) – Diluted
|
0.35 | (0.01 | ) | |||||
Weighted
average common shares used in computing per share amounts
(000’s):
|
||||||||
Basic
|
42,316 | 40,793 | ||||||
Diluted
|
42,732 | 40,793 |
Class
A Common Stock
|
Class
B Common Stock
|
Additional
Paid-In Capital
|
Retained
Earnings
|
Accumulated
Other Comprehensive Income
|
Total
Shareholders' Equity
|
|||||||||||||||||||||||||||
Number
of shares
|
Par
value
|
Number
of shares
|
Par
value
|
|||||||||||||||||||||||||||||
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
|
- | - | - | - | 1,856 | - | - | 1,856 | ||||||||||||||||||||||||
Stock
options exercised
|
125 | - | - | - | 9 | - | - | 9 | ||||||||||||||||||||||||
Purchase
of capped call options
|
- | - | - | - | (63,318 | ) | - | - | (63,318 | ) | ||||||||||||||||||||||
Net
income
|
- | - | - | - | - | 14,895 | - | 14,895 | ||||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | - | 191,467 | 191,467 | |||||||||||||||||||||||||
Obligation
to repurchase shares
|
- | - | - | - | - | - | 488 | 488 | ||||||||||||||||||||||||
BALANCE,
March 31, 2008
|
36,003,323 | $ | 2,880 | 6,312,839 | $ | 505 | $ | 989,883 | $ | 68,514 | $ | 483,422 | $ | 1,545,204 |
Class
A Common Stock
|
Class
B Common Stock
|
Additional
Paid-In Capital
|
Accumulated
Deficit
|
Accumulated
Other Comprehensive Income
|
Total
Shareholders' Equity
|
|||||||||||||||||||||||||||
Number
of shares
|
Par
value
|
Number
of shares
|
Par
value
|
|||||||||||||||||||||||||||||
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
|
- | - | - | - | 1,797 | - | - | 1,797 | ||||||||||||||||||||||||
Stock
options exercised
|
210,200 | 17 | - | - | 1,999 | - | - | 2,016 | ||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (250 | ) | - | (250 | ) | ||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | - | - | (5,635 | ) | (5,635 | ) | ||||||||||||||||||||||
BALANCE,
March 31, 2007
|
34,622,338 | $ | 2,770 | 6,312,839 | $ | 505 | $ | 934,904 | $ | (35,199 | ) | $ | 127,495 | $ | 1,030,475 |
For
the Three Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income / (loss)
|
$ | 14,895 | $ | (250 | ) | |||
Adjustments
to reconcile net loss to net cash generated from operating
activities:
|
||||||||
Depreciation
and amortization
|
73,588 | 51,762 | ||||||
Loss
on disposal of fixed assets
|
- | 7 | ||||||
Stock-based
compensation (Note 13)
|
1,813 | 1,262 | ||||||
Minority
interest in income / (loss) of consolidated subsidiaries
|
1,025 | (360 | ) | |||||
Change
in fair value of derivatives (Note 11)
|
10,258 | (4,524 | ) | |||||
Foreign
currency exchange loss, net
|
17,430 | 3,136 | ||||||
Net
change in (net of effects of acquisitions and disposals of
businesses):
|
||||||||
Accounts
receivable
|
16,203 | 10,226 | ||||||
Program
rights
|
(79,433 | ) | (48,123 | ) | ||||
Other
assets
|
(6,379 | ) | (3,973 | ) | ||||
Other
accounts payable and accrued liabilities
|
27,887 | 14,540 | ||||||
Income
taxes payable
|
(6,075 | ) | (2,299 | ) | ||||
Deferred
taxes
|
8,946 | 766 | ||||||
VAT
and other taxes payable
|
3,933 | 9,743 | ||||||
Net
cash generated from continuing operating activities
|
84,091 | 31,913 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Net
change in restricted cash
|
- | (440 | ) | |||||
Purchase
of property, plant and equipment
|
(23,842 | ) | (11,995 | ) | ||||
Disposal
of property, plant and equipment
|
99 | 19 | ||||||
Investments
in subsidiaries and unconsolidated affiliates
|
- | (8,585 | ) | |||||
Repayment
of loans and advances to related parties
|
- | 100 | ||||||
Net
cash used in continuing investing activities
|
(23,743 | ) | (20,901 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net
proceeds from issuance of Convertible Notes
|
463,812 | - | ||||||
Proceeds
from credit facilities
|
- | 200 | ||||||
Payment
of credit facilities and capital leases
|
(1,046 | ) | (1,255 | ) | ||||
Purchase
of capped call option
|
(63,318 | ) | - | |||||
Excess
tax benefits from share-based payment arrangements
|
43 | - | ||||||
Proceeds
from exercise of stock options
|
9 | 2,016 | ||||||
Dividends
paid to minority shareholders
|
(1,230 | ) | (152 | ) | ||||
Net
cash received from continuing financing activities
|
398,270 | 809 | ||||||
NET
CASH USED IN DISCONTINUED OPERATING ACTIVITIES
|
(1,710 | ) | (1,624 | ) | ||||
Impact
of exchange rate fluctuations on cash
|
(5,178 | ) | 1,239 | |||||
Net
increase in cash and cash equivalents
|
451,730 | 11,436 | ||||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
142,826 | 145,904 | ||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ | 594,556 | $ | 157,340 |
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
|
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
|
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
|
Music
Television System S.R.L. (“MTS”)
|
95.0%
|
Romania
|
Subsidiary
|
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)
|
Media
Invest, spol s.r.o.
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate
|
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”)
|
60.0%
|
Bermuda
|
Subsidiary
|
CME
Ukraine Holding GmbH
|
100.0%
|
Austria
|
Subsidiary
|
Innova
Film GmbH (“Innova”)
|
60.0%
|
Germany
|
Subsidiary
|
CME
Cyprus Holding Ltd.
|
100.0%
|
Cyprus
|
Subsidiary
|
TV
Media Planet Ltd. (“TV Media Planet”)
|
60.0%
|
Cyprus
|
Subsidiary
|
Foreign
Enterprise “Inter-Media” (“Inter-Media”)
|
60.0%
|
Ukraine
|
Subsidiary
|
Studio
1+1 LLC (“Studio 1+1”)
|
60.0%
|
Ukraine
|
Subsidiary
|
Ukraine
Media Services LLC (“UMS”)
|
99.9%
|
Ukraine
|
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
|
CME
Czech Republic II B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
Balance
December 31,
2007
|
Additions
/ Allocations
|
Foreign
currency
movement
|
Balance
March 31,
2008
|
|||||||||||||
Croatia
|
$ | 773 | $ | - | $ | 64 | $ | 837 | ||||||||
Czech
Republic
|
951,286 | - | 121,939 | 1,073,225 | ||||||||||||
Romania
(1)
|
74,667 | (525 | ) | 10,540 | 84,682 | |||||||||||
Slovak
Republic
|
57,635 | - | 6,211 | 63,846 | ||||||||||||
Slovenia
|
18,393 | - | 1,363 | 19,756 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
4,096 | - | - | 4,096 | ||||||||||||
Ukraine
(KINO, CITI)
|
7,497 | (59 | ) | - | 7,438 | |||||||||||
Total
|
$ | 1,114,347 | $ | (584 | ) | $ | 140,117 | $ | 1,253,880 |
Indefinite-Lived
Broadcast
Licenses
|
Amortized
Broadcast
Licenses
|
Total
|
||||||||||
Balance,
December 31, 2007
|
$ | 50,748 | $ | 187,178 | $ | 237,926 | ||||||
Additions
|
- | - | - | |||||||||
Amortization
|
- | (5,415 | ) | (5,415 | ) | |||||||
Foreign
currency movements
|
6,542 | 23,264 | 29,806 | |||||||||
Balance,
March 31, 2008
|
$ | 57,290 | $ | 205,027 | $ | 262,317 |
March
31,
2008
|
December
31,
2007
|
|||||||
Gross
value
|
$ | 271,286 | $ | 241,100 | ||||
Accumulated
amortization
|
(66,259 | ) | (53,922 | ) | ||||
Total
net book value
|
$ | 205,027 | $ | 187,178 |
Trademarks
|
Customer
Relationships
|
Other
|
Total
|
|||||||||||||
Balance,
December 31, 2007
|
$ | 60,084 | $ | 73,267 | $ | 2,381 | $ | 135,732 | ||||||||
Reallocation
(1)
|
- | - | 624 | 624 | ||||||||||||
Amortization
|
(84 | ) | (2,011 | ) | (156 | ) | (2,251 | ) | ||||||||
Foreign
currency movements
|
9,599 | 8,770 | 129 | 18,498 | ||||||||||||
Balance,
March 31, 2008
|
$ | 69,599 | $ | 80,026 | $ | 2,978 | $ | 152,603 |
March
31,
2008
|
December
31,
2006
|
|||||||
Gross
value
|
$ | 168,664 | $ | 147,514 | ||||
Accumulated
amortization
|
(16,061 | ) | (11,782 | ) | ||||
Total
net book value
|
$ | 152,603 | $ | 135,732 |
Carrying
Value
|
Fair
Value
|
|||||||||||||||
March
31,
2008
|
December
31,
2007
|
March
31,
2008
|
December
31,
2007
|
|||||||||||||
EUR
245.0 million 8.25% Senior Notes
|
$ | 387,394 | $ | 360,664 | $ | 376,741 | $ | 366,976 | ||||||||
EUR
150.0 million Floating Rate Senior Notes
|
237,180 | 220,815 | 190,930 | 204,806 | ||||||||||||
USD
475.0 million 3.5% Senior Convertible Notes
|
475,000 | - | 517,156 | - | ||||||||||||
$ | 1,099,574 | $ | 581,479 | $ | 1,084,827 | $ | 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
|
|||
November
15, 2007 to May 14, 2008
|
102.000 | % | ||
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 |
March
31,
2008
|
December
31,
2007
|
|||||||
Croatia
|
$ | 470 | $ | 424 | ||||
Slovenia
|
870 | 810 | ||||||
Ukraine
|
56 | 52 | ||||||
Total
restricted cash
|
$ | 1,396 | $ | 1,286 |
March
31,
2008
|
December
31,
2007
|
|||||||
Trading:
|
||||||||
Third-party
customers
|
$ | 234,790 | $ | 231,467 | ||||
Less:
allowance for bad debts and credit notes
|
(15,596 | ) | (13,908 | ) | ||||
Related
parties
|
7,434 | 7,978 | ||||||
Less:
allowance for bad debts and credit notes
|
(637 | ) | (656 | ) | ||||
Total
trading
|
$ | 225,991 | $ | 224,881 | ||||
Other:
|
||||||||
Third-party
customers
|
$ | 116 | $ | 57 | ||||
Less:
allowance for bad debts and credit notes
|
(27 | ) | (27 | ) | ||||
Related
parties
|
87 | 187 | ||||||
Less:
allowance for bad debts and credit notes
|
(61 | ) | (61 | ) | ||||
Total
other
|
$ | 115 | $ | 156 | ||||
Total
accounts receivable
|
$ | 226,106 | $ | 225,037 |
March
31,
2008
|
December
31,
2007
|
|||||||
Current:
|
||||||||
Prepaid
programming
|
$ | 42,106 | $ | 50,914 | ||||
Other
prepaid expenses
|
15,553 | 11,785 | ||||||
Deferred
tax
|
3,873 | 3,652 | ||||||
VAT
recoverable
|
5,233 | 4,520 | ||||||
Loan
to related party
|
1,961 | 1,924 | ||||||
Capitalized
debt costs
|
5,194 | 3,104 | ||||||
Other
|
10,013 | 6,430 | ||||||
Total
other current assets
|
$ | 83,933 | $ | 82,329 | ||||
Non-current:
|
||||||||
Capitalized
debt costs
|
$ | 18,554 | $ | 10,310 | ||||
Deferred tax
|
1,838 | 2,147 | ||||||
Other
|
4,550 | 2,917 | ||||||
Total
other non-current assets
|
$ | 24,942 | $ | 15,374 |
March
31,
2008
|
December
31,
2007
|
|||||||
Land
and buildings
|
$ | 95,078 | $ | 84,515 | ||||
Station
machinery, fixtures and equipment
|
198,653 | 173,123 | ||||||
Other
equipment
|
35,605 | 31,512 | ||||||
Software
licenses
|
24,214 | 21,517 | ||||||
Construction
in progress
|
11,948 | 11,406 | ||||||
Total
cost
|
365,498 | 322,073 | ||||||
Less: Accumulated
depreciation
|
(155,757 | ) | (141,762 | ) | ||||
Total
net book value
|
$ | 209,741 | $ | 180,311 | ||||
Assets
held under capital leases (included above)
|
||||||||
Land
and buildings
|
$ | 6,652 | $ | 6,193 | ||||
Station
machinery, fixtures and equipment
|
1,458 | 800 | ||||||
Total
cost
|
8,110 | 6,993 | ||||||
Less:
Accumulated depreciation
|
(1,686 | ) | (1,368 | ) | ||||
Net
book value
|
$ | 6,424 | $ | 5,625 |
March
31,
2008
|
December
31,
2007
|
|||||||
Accounts
payable
|
$ | 31,302 | $ | 37,977 | ||||
Programming
liabilities
|
42,735 | 49,457 | ||||||
Deferred
income
|
29,040 | 7,126 | ||||||
Accrued
staff costs
|
20,636 | 29,202 | ||||||
Accrued
production costs
|
9,407 | 4,982 | ||||||
Accrued
interest payable
|
19,107 | 5,930 | ||||||
Accrued
legal costs
|
2,533 | 2,475 | ||||||
Accrued
rent costs
|
1,386 | 999 | ||||||
Authors’
rights
|
5,105 | 5,522 | ||||||
Onerous
contracts
|
2,995 | 2,832 | ||||||
Obligation
to repurchase shares
|
- | 488 | ||||||
Other
accrued liabilities
|
15,979 | 9,334 | ||||||
Total
accounts payable and accrued liabilities
|
$ | 180,225 | $ | 156,324 |
March
31,
2008
|
December
31,
2007
|
||||||||
Credit
facilities:
|
|||||||||
Corporate
|
(a)
|
$ | - | $ | - | ||||
Czech
Republic
|
(b)
– (d)
|
15,602 | 13,829 | ||||||
Romania
|
(e)
|
- | 683 | ||||||
Slovenia
|
(f)
|
- | - | ||||||
Ukraine
(KINO, CITI)
|
(g)
|
1,700 | 1,700 | ||||||
Total
credit facilities
|
$ | 17,302 | $ | 16,212 | |||||
Capital
leases:
|
|||||||||
Croatia
operations, net of interest
|
$ | - | $ | - | |||||
Romania
operations, net of interest
|
583 | 242 | |||||||
Slovak
Republic operations, net of interest
|
79 | 86 | |||||||
Slovenia
operations, net of interest
|
4,653 | 4,412 | |||||||
Total
capital leases
|
$ | 5,315 | $ | 4,740 | |||||
Total
credit facilities and capital leases
|
$ | 22,617 | $ | 20,952 | |||||
Less
current maturities
|
(16,381 | ) | ( 15,090 | ) | |||||
Total
non-current maturities
|
$ | 6,236 | $ | 5,862 |
2008
|
$ | 15,602 | ||
2009
|
1,700 | |||
2010
|
- | |||
2011
|
- | |||
2012
|
387,394 | |||
2013
and thereafter
|
712,180 | |||
Total
|
$ | 1,116,876 |
2008
|
$ | 870 | ||
2009
|
1,054 | |||
2010
|
602 | |||
2011
|
538 | |||
2012
|
722 | |||
2013
and thereafter
|
3,731 | |||
$ | 7,517 | |||
Less:
amount representing interest
|
(2,202 | ) | ||
Present
value of net minimum lease payments
|
$ | 5,315 |
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 March 31,
|
||||||||
2008
|
2007
|
|||||||
Stock-based
compensation charged under SFAS 123(R)
|
$ | 1,813 | $ | 1,262 |
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
|
- | - | ||||||||||||||
Exercised
|
(125 | ) | 72.05 | |||||||||||||
Forfeited
|
(9,125 | ) | 75.08 | |||||||||||||
Outstanding
at March 31, 2008
|
1,166,867 | $ | 56.58 | 6.78 | $ | 39,112 | ||||||||||
Vested
or expected to vest
|
1,077,859 | 55.56 | 6.72 | 31,976 | ||||||||||||
Exercisable
at March 31, 2008
|
486,117 | $ | 30.92 | 6.43 | $ | 26,403 |
For
the Three Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Net
income / (loss) available for common shareholders
|
$ | 14,895 | $ | (250 | ) | |||
Weighted
average outstanding shares of Common Stock (000’s)
|
42,316 | 40,793 | ||||||
Dilutive
effect of employee stock options (000’s)
|
416 | - | ||||||
Common
Stock and Common Stock equivalents (000’s)
|
42,732 | 40,793 | ||||||
Income
/ (loss) per share:
|
||||||||
Basic
|
$ | 0.35 | $ | (0.01 | ) | |||
Diluted
|
$ | 0.35 | $ | (0.01 | ) |
·
|
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 March 31,
|
||||||||||||||||
Segment
Net Revenues (1)
|
Segment
EBITDA
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Country:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 11,534 | $ | 7,232 | $ | (2,730 | ) | $ | (4,652 | ) | ||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
85,558 | 51,519 | 43,845 | 25,667 | ||||||||||||
Romania
(2)
|
57,996 | 39,342 | 23,376 | 15,136 | ||||||||||||
Slovak
Republic (TV MARKIZA)
|
26,234 | 18,677 | 9,137 | 5,756 | ||||||||||||
Slovenia
(POP TV and KANAL A)
|
17,951 | 12,669 | 4,340 | 3,001 | ||||||||||||
Ukraine
(STUDIO 1+1)
|
23,219 | 18,075 | (2,063 | ) | (2,370 | ) | ||||||||||
Ukraine
(KINO, CITI)
|
978 | 398 | (1,206 | ) | (2,417 | ) | ||||||||||
Total
segment data
|
$ | 223,470 | $ | 147,912 | $ | 74,699 | $ | 40,121 | ||||||||
Reconciliation
to condensed consolidated statement of operations:
|
||||||||||||||||
Consolidated
net revenues / income before provision for income taxes and
minority interest
|
$ | 223,470 | $ | 147,912 | $ | 5,578 | $ | 4,449 | ||||||||
Corporate
operating costs
|
- | - | 10,017 | 14,773 | ||||||||||||
Depreciation
of station property, plant and equipment
|
- | - | 12,340 | 6,899 | ||||||||||||
Amortization
of broadcast licenses and other intangibles
|
- | - | 7,666 | 5,162 | ||||||||||||
Interest
income
|
- | - | (2,180 | ) | (1,414 | ) | ||||||||||
Interest
expense
|
- | - | 14,250 | 11,396 | ||||||||||||
Change
in fair value of derivatives
|
- | - | 10,258 | (4,524 | ) | |||||||||||
Foreign
currency exchange loss, net
|
- | - | 17,430 | 3,136 | ||||||||||||
Other
expense / (income)
|
- | - | (660 | ) | 244 | |||||||||||
Total
segment data
|
$ | 223,470 | $ | 147,912 | $ | 74,699 | $ | 40,121 |
For
the Three Months Ended March 31,
|
||||||||
Depreciation
of station property, plant and equipment and amortization of broadcast
licenses and other intangibles:
|
2008
|
2007
|
||||||
Croatia
|
$ | 1,410 | $ | 785 | ||||
Czech
Republic
|
10,146 | 6,461 | ||||||
Romania
|
3,540 | 1,747 | ||||||
Slovak
Republic
|
2,576 | 1,187 | ||||||
Slovenia
|
1,283 | 986 | ||||||
Ukraine
(STUDIO 1+1)
|
791 | 745 | ||||||
Ukraine
(KINO, CITI)
|
260 | 150 | ||||||
Total
|
$ | 20,006 | $ | 12,061 | ||||
Represented
as follows:
|
||||||||
Depreciation
of station property, plant & equipment
|
12,340 | 6,899 | ||||||
Amortization
of broadcast licenses and other intangibles
|
7,666 | 5,162 |
Total
assets (1):
|
March
31,
2008
|
December
31,
2007
|
||||||
Croatia
|
$ | 56,925 | $ | 44,787 | ||||
Czech
Republic
|
1,621,136 | 1,429,256 | ||||||
Romania
|
395,484 | 360,144 | ||||||
Slovak
Republic
|
227,166 | 203,302 | ||||||
Slovenia
|
101,738 | 89,984 | ||||||
Ukraine
(STUDIO 1+1)
|
93,358 | 90,064 | ||||||
Ukraine
(KINO, CITI)
|
18,288 | 17,854 | ||||||
Total
segment assets
|
$ | 2,514,095 | $ | 2,235,391 | ||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
538,541 | 103,044 | ||||||
Total
assets
|
$ | 3,052,636 | $ | 2,338,435 |
Long-lived
assets (1):
|
March
31,
2008
|
December
31,
2007
|
||||||
Croatia
|
$ | 18,561 | $ | 12,144 | ||||
Czech
Republic
|
70,905 | 58,809 | ||||||
Romania
|
51,435 | 44,808 | ||||||
Slovak
Republic
|
32,120 | 29,345 | ||||||
Slovenia
|
23,495 | 21,524 | ||||||
Ukraine
(STUDIO 1+1)
|
7,056 | 7,380 | ||||||
Ukraine
(KINO, CITI)
|
4,896 | 5,003 | ||||||
Total
long-lived assets
|
$ | 208,468 | $ | 179,013 | ||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
1,273 | 1,298 | ||||||
Total
long-lived assets
|
$ | 209,741 | $ | 180,311 |
(1)
Reflects property, plant and
equipment
|
March
31, 2008
|
||||
Croatia
|
$ | 6,424 | ||
Czech
Republic
|
33,130 | |||
Romania
|
26,478 | |||
Slovak
Republic
|
13,513 | |||
Slovenia
|
3,681 | |||
Ukraine
(STUDIO 1+1)
|
7,256 | |||
Ukraine
(KINO, CITI)
|
162 | |||
Total
|
$ | 90,644 |
March
31,
2008
|
||||
2008
|
$ | 3,322 | ||
2009
|
4,741 | |||
2010
|
2,283 | |||
2011
|
867 | |||
2012
|
306 | |||
2013
and thereafter
|
10 | |||
Total
|
$ | 11,529 |
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 NOVA
Cinema license expires in November 2019. The GALAXIE SPORT license expires
in March 2014.
|
Romania
|
Licenses
expire on dates ranging from November 2008 to February
2016.
|
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 held by Ukrpromtorg
expire on dates ranging from November 2008 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 March 31,
(US$
000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Net
revenues
|
$ | 223,470 | $ | 147,912 | 51.1 | % | ||||||
Operating
income
|
44,676 | 13,287 | 236.2 | % | ||||||||
Net
income / (loss)
|
$ | 14,895 | $ | (250 | ) | 6,058.0 | % |
·
|
Performance: In
the three months ended March 31, 2008, we reported growth in both Segment
Net Revenues and Segment EBITDA of 51% and 86%, respectively compared to
the three months ended March 31, 2007, delivering a Segment EBITDA margin
of 33% compared to the 27% margin reported in the three months ended March
31, 2007 (Segment EBITDA is defined and reconciled to our consolidated
results in Item 1, Note 15, “Segment
Data”).
|
·
|
Each
of our stations reported revenue growth in excess of 28% compared to the
three months ended March 31, 2007, with particularly strong growth
reported in Croatia and the Czech
Republic.
|
·
|
Acquisition: On
January 31, 2008, we entered into agreements with Igor Kolomoisky to
assign options over certain interests on the Studio 1+1 group held by him
and with Boris Fuchsmann and Alexander Rodnyansky to acquire their 40%
interest in the Studio 1+1 group. Upon completion of the initial purchase,
we will own 90.0% of the Studio 1+1 group and Messrs. Fuchsmann and
Rodnyansky will have the right to put to us, and we will have the right to
call from them, their remaining 10.0%
interest.
|
·
|
Financing: On March 10,
2008 we issued US$ 475.0 million of 3.50% Convertible Notes, maturing on
March 15, 2013. In order to increase the effective conversion price of our
Convertible Notes, on March 4, 2008 we purchased, for aggregate
consideration of US$ 63.3 million, capped call options over 4,523,809
shares of our Common Stock (see Item 1, Note 4, “Senior
Debt”).
|
·
|
Debt Ratings: On March
19, 2008, Moody’s Investors Services upgraded our senior unsecured debt
rating for our Senior Notes and our corporate credit rating from Ba3 to
Ba2.
|
·
|
Acquisition: On April 17, 2008
we acquired the assets of Compania de Radio Pro s.r.l. (“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). Radio Pro is 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 I, Note 18, “Subsequent
Events”).
|
·
|
Debt Rating: On April
23, 2008, Standard & Poor’s upgraded the rating of our Senior Notes
from BB- to BB and assigned a BB debt rating to our US$ 475.0 million of
3.5% Convertible Notes.
|
·
|
completing
the buyout of our partners in the Studio 1+1 group and restructuring 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;
|
·
|
expanding
our capabilities in production and the development of local content;
and
|
·
|
achieving
EBITDA break even in our Croatia operations during the fourth quarter of
2008.
|
·
|
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).
|
2008
|
(1 | ) |
2007
|
(1 | ) | |||||||||||
Segment
Net Revenues
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | 11,534 | 5 | % | $ | 7,232 | 5 | % | ||||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
85,558 | 38 | % | 51,519 | 34 | % | ||||||||||
Romania
(2)
|
57,996 | 26 | % | 39,342 | 27 | % | ||||||||||
Slovak
Republic (TV MARKIZA)
|
26,234 | 12 | % | 18,677 | 13 | % | ||||||||||
Slovenia
(POP TV and KANAL A)
|
17,951 | 8 | % | 12,669 | 9 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
23,219 | 10 | % | 18,075 | 12 | % | ||||||||||
Ukraine
(KINO, CITI)
|
978 | 1 | % | 398 | - | % | ||||||||||
Total
Segment Net Revenues
|
$ | 223,470 | 100 | % | $ | 147,912 | 100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ | 221,497 | 99 | % | $ | 147,422 | 100 | % | ||||||||
Non-broadcast
operations
|
1,973 | 1 | % | 490 | - | % | ||||||||||
Total
Segment Net Revenues
|
$ | 223,470 | 100 | % | $ | 147,912 | 100 | % | ||||||||
Segment
EBITDA
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | (2,730 | ) | (4 | )% | $ | (4,652 | ) | (12 | )% | ||||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
43,845 | 59 | % | 25,667 | 65 | % | ||||||||||
Romania
(2)
|
23,376 | 32 | % | 15,136 | 38 | % | ||||||||||
Slovak
Republic (TV MARKIZA)
|
9,137 | 12 | % | 5,756 | 14 | % | ||||||||||
Slovenia
(POP TV and KANAL A)
|
4,340 | 6 | % | 3,001 | 7 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
(2,063 | ) | (3 | )% | (2,370 | ) | (6 | )% | ||||||||
Ukraine
(KINO, CITI)
|
(1,206 | ) | (2 | )% | (2,417 | ) | (6 | )% | ||||||||
Total
Segment EBITDA
|
$ | 74,699 | 100 | % | $ | 40,121 | 100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ | 76,177 | 102 | % | $ | 40,714 | 101 | % | ||||||||
Non-broadcast
operations
|
(1,478 | ) | (2 | )% | (593 | ) | (1 | )% | ||||||||
Total
Segment EBITDA
|
$ | 74,699 | 100 | % | $ | 40,121 | 100 | % | ||||||||
Segment
EBITDA Margin (3)
|
33 | % | 27 | % |
CROATIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 9,662 | $ | 5,020 | 92.5 | % | ||||||
Non-spot
revenues
|
1,872 | 2,212 | (15.4 | )% | ||||||||
Segment
Net Revenues
|
$ | 11,534 | $ | 7,232 | 59.5 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 11,405 | $ | 7,227 | 57.8 | % | ||||||
Non-broadcast
operations
|
129 | 5 | 2,480.0 | % | ||||||||
Segment
Net Revenues
|
$ | 11,534 | $ | 7,232 | 59.5 | % | ||||||
Segment
EBITDA
|
$ | (2,730 | ) | $ | (4,652 | ) | 41.3 | % | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (2,587 | ) | $ | (4,623 | ) | 44.0 | % | ||||
Non-broadcast
operations
|
(143 | ) | (29 | ) | (393.1 | )% | ||||||
Segment
EBITDA
|
$ | (2,730 | ) | $ | (4,652 | ) | 41.3 | % | ||||
Segment
EBITDA Margin
|
(24 | )% | (64 | )% | 40 | % |
·
|
Segment Net Revenues for
the three months ended March 31, 2008 increased by 60% compared to the
three months ended March 31, 2007. In local currency, Segment
Net Revenues grew by 37%. Spot revenues for the three months
ended March 31, 2008 increased by 93% compared to the same period in 2007
because our ratings improvement in 2007 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 three months ended March
31, 2008 decreased by 15% compared to the same period in 2007, primarily
due to lower sponsorship revenue as a result of broadcasting fewer
programs suited to sponsorship and also lower revenue arising from ‘Nova
Lova’ (‘Call TV’).
|
·
|
Segment EBITDA losses
for the three months ended March 31, 2008 fell by 41% compared to the
three months ended March 31, 2007. In local currency, Segment
EBITDA losses fell by 50%.
|
CZECH REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 77,603 | $ | 46,664 | 66.3 | % | ||||||
Non-spot
revenues
|
7,955 | 4,855 | 63.9 | % | ||||||||
Segment
Net Revenues
|
$ | 85,558 | $ | 51,519 | 66.1 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 85,383 | $ | 51,480 | 65.9 | % | ||||||
Non-broadcast
operations
|
175 | 39 | 348.7 | % | ||||||||
Segment
Net Revenues
|
$ | 85,558 | $ | 51,519 | 66.1 | % | ||||||
Segment
EBITDA
|
$ | 43,845 | $ | 25,667 | 70.8 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 44,236 | $ | 25,937 | 70.6 | % | ||||||
Non-broadcast
operations
|
(391 | ) | (270 | ) | 44.8 | % | ||||||
Segment
EBITDA
|
$ | 43,845 | $ | 25,667 | 70.8 | % | ||||||
Segment
EBITDA Margin
|
51 | % | 50 | % | 1 | % |
·
|
Segment Net Revenues for
the three months ended March 31, 2008 increased by 66% compared to the
three months ended March 31, 2007. In local currency, Segment
Net Revenues increased by 32%. Spot revenues increased by 66%,
primarily due to an increase in the volume of GRPs sold, as well as
increased average revenue per GRP sold. This increase in volume
was partially due to a change in sales policy, which incentivized both
clients and agencies to spend more of their budgets during the low season.
We expect this change to have pulled spending forward from the high season
months of the second quarter. Non-spot revenue for the three
months ended March 31, 2008 increased by 64% compared to the same period
in 2007, primarily due to increased
sponsorship.
|
·
|
Segment EBITDA for the
three months ended March 31, 2008 increased by 71% compared to the three
months ended March 31, 2007, resulting in an EBITDA margin of 51% compared
to 50% for the same period in 2007. In local currency, Segment EBITDA
increased by 36%.
|
ROMANIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 53,032 | $ | 36,535 | 45.2 | % | ||||||
Non-spot
revenues
|
4,964 | 2,807 | 76.8 | % | ||||||||
Segment
Net Revenues
|
$ | 57,996 | $ | 39,342 | 47.4 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 57,799 | $ | 39,342 | 46.9 | % | ||||||
Non-broadcast
operations
|
197 | - | - | % | ||||||||
Segment
Net Revenues
|
$ | 57,996 | $ | 39,342 | 47.4 | % | ||||||
Segment
EBITDA
|
$ | 23,376 | $ | 15,136 | 54.4 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 23,566 | $ | 15,274 | 54.3 | % | ||||||
Non-broadcast
operations
|
(190 | ) | (138 | ) | (37.7 | %) | ||||||
Segment
EBITDA
|
$ | 23,376 | $ | 15,136 | 54.4 | % | ||||||
Segment
EBITDA Margin
|
40 | % | 38 | % | 2 | % |
·
|
Segment Net Revenues for
the three months ended March 31, 2008 increased by 47% compared to the
three months March 31, 2007. Spot revenues increased by 45% and
non-spot revenues increased by 77% over comparable periods. The
increase in spot revenues was driven by increases in the average revenue
per GRP sold on our Romanian channels. 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 March 31, 2008 increased by 54% compared to the three
months ended March 31, 2007, resulting in an EBITDA margin of 40%,
compared to 38% for the same period in
2007.
|
SLOVAK REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 24,479 | $ | 18,075 | 35.4 | % | ||||||
Non-spot
revenues
|
1,755 | 602 | 191.5 | % | ||||||||
Segment
Net Revenues
|
$ | 26,234 | $ | 18,677 | 40.5 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 26,213 | $ | 18,662 | 40.5 | % | ||||||
Non-broadcast
operations
|
21 | 15 | 40.0 | % | ||||||||
Segment
Net Revenues
|
$ | 26,234 | $ | 18,677 | 40.5 | % | ||||||
Segment
EBITDA
|
$ | 9,137 | $ | 5,756 | 58.7 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 9,380 | $ | 5,859 | 60.1 | % | ||||||
Non-broadcast
operations
|
(243 | ) | (103 | ) | (135.9 | )% | ||||||
Segment
EBITDA
|
$ | 9,137 | $ | 5,756 | 58.7 | % | ||||||
Segment
EBITDA Margin
|
35 | % | 31 | % | 4 | % |
·
|
Segment Net Revenues for
the three months ended March 31, 2008 increased by 41% compared to the
three months ended March 31, 2007. In local currency, Segment
Net Revenues increased by 20%. The increase in Segment Net
Revenues was due to increases of 35% in spot revenues and 192% in non-spot
revenues. The increase in spot revenues is mainly due to
increases in the average revenue per GRP sold, as well as an increase in
the volume of GRPs sold, partially as a result of some advertisers pulling
spending forward from the high season months of the second
quarter. The increase in non-spot revenues was due to
sponsorship revenue generated from the music show ‘Elan Je Elan’, whereas
no programs suitable for sponsorship were broadcast during the comparable
period in 2007.
|
·
|
Segment EBITDA for the
three months ended March 31, 2008 increased by 59% compared to the three
months ended March 31, 2007, and the EBITDA margin increased to 35% from
31% over comparable periods. In local currency, Segment EBITDA
increased by 36%.
|
SLOVENIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 15,307 | $ | 11,325 | 35.2 | % | ||||||
Non-spot
revenues
|
2,644 | 1,344 | 96.7 | % | ||||||||
Segment
Net Revenues
|
$ | 17,951 | $ | 12,669 | 41.7 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 16,500 | $ | 12,238 | 34.8 | % | ||||||
Non-broadcast
operations
|
1,451 | 431 | 236.7 | % | ||||||||
Segment
Net Revenues
|
$ | 17,951 | $ | 12,669 | 41.7 | % | ||||||
Segment
EBITDA
|
$ | 4,340 | $ | 3,001 | 44.6 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 4,652 | $ | 3,022 | 53.9 | % | ||||||
Non-broadcast
operations
|
(312 | ) | (21 | ) | 1385.7 | % | ||||||
Segment
EBITDA
|
$ | 4,340 | $ | 3,001 | 44.6 | % | ||||||
Segment
EBITDA Margin
|
24 | % | 24 | % | - | % |
●
|
Segment
Net Revenues for the three months ended
March 31, 2008 increased by 42% compared to the three months ended March
31, 2007. In local currency Segment Net Revenues increased by
24%.
|
●
|
Segment
EBITDA for the three months ended March
31, 2008 increased by 45% compared to the three months ended March 31,
2007. In local currency, Segment EBITDA increased by
26%.
|
UKRAINE (STUDIO 1+1)
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 18,376 | $ | 14,821 | 24.0 | % | ||||||
Non-spot
revenues
|
4,843 | 3,254 | 48.8 | % | ||||||||
Segment
Net Revenues
|
$ | 23,219 | $ | 18,075 | 28.5 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 23,219 | $ | 18,075 | 28.5 | % | ||||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
Net Revenues
|
$ | 23,219 | $ | 18,075 | 28.5 | % | ||||||
Segment
EBITDA
|
$ | (2,063 | ) | $ | (2,370 | ) | 13.0 | % | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (1,864 | ) | $ | (2,338 | ) | 20.3 | % | ||||
Non-broadcast
operations
|
(199 | ) | (32 | ) | (521.9 | )% | ||||||
Segment
EBITDA
|
$ | (2,063 | ) | $ | (2,370 | ) | 13.0 | % | ||||
Segment
EBITDA Margin
|
(9 | )% | (13 | )% | 4 | % |
·
|
Segment Net Revenues for
the three months ended March 31, 2008 increased by 29% compared to the
three months ended March 31, 2007. Spot revenues increased by 24%, driven
by an increase in the average revenue per GRP sold, as well as an increase
in the volume of GRPs sold, partially as a result of some advertisers
pulling spending forward from the high season months of the second
quarter. Non-spot revenues increased by 49% over comparable
periods primarily due to the sale of surplus
programming.
|
·
|
Segment EBITDA losses
for the three months ended March 31, 2008 decreased by 13% compared to the
three months ended March 31, 2007, resulting in an EBITDA margin of (9)%
compared to an EBITDA margin of (13)% in the three months ended 31,
2007.
|
UKRAINE (KINO, CITI)
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Spot
revenues
|
$ | 377 | $ | 143 | 163.6 | % | ||||||
Non-spot
revenues
|
601 | 255 | 135.7 | % | ||||||||
Segment
Net Revenues
|
$ | 978 | $ | 398 | 145.7 | % | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | 978 | $ | 398 | 145.7 | % | ||||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
Net Revenues
|
$ | 978 | $ | 398 | 145.7 | % | ||||||
Segment
EBITDA
|
$ | (1,206 | ) | $ | (2,417 | ) | 50.1 | % | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (1,206 | ) | $ | (2,417 | ) | 50.1 | % | ||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
EBITDA
|
$ | (1,206 | ) | $ | (2,417 | ) | 50.1 | % | ||||
Segment
EBITDA Margin
|
(123 | )% | (607 | )% | 484 | % |
●
|
Segment Net Revenues for
the three months ended March 31, 2008 increased by 146% compared to the
three months ended March 31, 2007. Spot revenues increased by 164% as a
result of an increase in the volume of GRPs sold. Non-spot revenues
increased by 136%, primarily due to increased
sponsorship.
|
●
|
Segment EBITDA losses
for the three months ended March 31, 2008 decreased by 50% compared to the
three months ended March 31, 2007.
|
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||
2008
|
2007
|
|||||||
Production
expenses
|
$ | 42,169 | $ | 27,558 | ||||
Program
amortization
|
52,585 | 38,795 | ||||||
Cost
of programming
|
$ | 94,754 | $ | 66,353 |
|
·
|
US$
10.1 million of additional programming costs from our Czech Republic
operations;
|
|
·
|
US$
6.5 million of additional programming costs from our Romania
operations;
|
|
·
|
US$
3.9 million of additional programming costs from our Slovak Republic
operations;
|
|
·
|
US$
3.9 million of additional programming costs from our Ukraine (STUDIO 1+1)
operations;
|
|
·
|
US$
2.7 million of additional programming costs from our Slovenia
operations;
|
|
·
|
US$
1.8 million of additional programming costs from our Croatia operations;
and
|
|
·
|
US$
0.5 million of reduced programming costs from our Ukraine (KINO, CITI)
operations.
|
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||
2008
|
2007
|
|||||||
Program
amortization:
|
||||||||
Croatia
(NOVA TV)
|
$ | 5,855 | $ | 5,399 | ||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
13,055 | 6,556 | ||||||
Romania
(1)
|
11,988 | 9,429 | ||||||
Slovak
Republic (TV MARKIZA)
|
3,963 | 3,207 | ||||||
Slovenia
(POP TV and KANAL A)
|
2,956 | 2,196 | ||||||
Ukraine
(STUDIO 1+1)
|
14,171 | 10,927 | ||||||
Ukraine
(KINO, CITI)
|
597 | 1,081 | ||||||
$ | 52,585 | $ | 38,795 | |||||
Cash
paid for programming:
|
||||||||
Croatia
(NOVA TV)
|
$ | 7,423 | $ | 905 | ||||
Czech
Republic (TV NOVA, NOVA CINEMA and GALAXIE SPORT)
|
11,869 | 6,579 | ||||||
Romania
(1)
|
13,866 | 10,046 | ||||||
Slovak
Republic (TV MARKIZA)
|
5,568 | 3,699 | ||||||
Slovenia
(POP TV and KANAL A)
|
2,242 | 2,172 | ||||||
Ukraine
(STUDIO 1+1)
|
7,052 | 10,484 | ||||||
Ukraine
(KINO, CITI)
|
279 | 742 | ||||||
$ | 48,299 | $ | 34,627 |
Consolidated
Net Revenues
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Croatia
|
$ | 11,534 | $ | 7,232 | 59,5 | % | ||||||
Czech
Republic
|
85,558 | 51,519 | 66.1 | % | ||||||||
Romania
|
57,996 | 39,342 | 47.4 | % | ||||||||
Slovak
Republic
|
26,234 | 18,677 | 40.5 | % | ||||||||
Slovenia
|
17,951 | 12,669 | 41.7 | % | ||||||||
Ukraine
(Studio 1+1)
|
23,219 | 18,075 | 28.5 | % | ||||||||
Ukraine
(KINO, CITI)
|
978 | 398 | 145.7 | % | ||||||||
Total
Consolidated Net Revenues
|
$ | 223,470 | $ | 147,912 | 51.1 | % |
Consolidated
Cost of Revenues
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Operating
costs
|
$ | 33,262 | $ | 25,657 | 29.6 | % | ||||||
Cost
of programming
|
94,754 | 66,353 | 42.8 | % | ||||||||
Depreciation
of station property, plant and equipment
|
12,340 | 6,899 | 78.9 | % | ||||||||
Amortization
of broadcast licenses and other intangibles
|
7,666 | 5,162 | 48.5 | % | ||||||||
Total
Consolidated Cost of Revenues
|
$ | 148,022 | $ | 104,071 | 42.2 | % |
Consolidated
Station Selling, General and Administrative Expenses
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Croatia
|
$ | 1,559 | $ | 1,726 | (9.7 | )% | ||||||
Czech
Republic
|
7,775 | 5,093 | 52.7 | % | ||||||||
Romania
|
3,813 | 2,425 | 57.2 | % | ||||||||
Slovak
Republic
|
2,398 | 1,939 | 23.7 | % | ||||||||
Slovenia
|
2,193 | 1,704 | 28.7 | % | ||||||||
Ukraine
(Studio 1+1)
|
2,757 | 2,467 | 11.8 | % | ||||||||
Ukraine
(KINO, CITI)
|
260 | 427 | (39.1 | )% | ||||||||
Total
Consolidated Station Selling, General and Administrative
Expenses
|
$ | 20,755 | $ | 15,781 | 31.5 | % |
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Corporate
operating costs (excluding stock-based compensation)
|
$ | 8,204 | $ | 13,511 | (39.3 | )% | ||||||
Stock-based
compensation
|
1,813 | 1,262 | 43.7 | % | ||||||||
Corporate
Operating Costs (including stock-based
compensation)
|
$ | 10,017 | $ | 14,773 | (32.2 | )% |
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Operating
Income
|
$ | 44,676 | $ | 13,287 | 236.2 | % |
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2008
|
2007
|
Movement
|
||||||||||
Interest
income
|
$ | 2,180 | $ | 1,414 | 54.2 | % | ||||||
Interest
expense
|
(14,250 | ) | (11,396 | ) | 25.0 | % | ||||||
Foreign
currency exchange loss, net
|
(17,430 | ) | (3,136 | ) | 455.8 | % | ||||||
Change
in fair value of derivatives
|
(10,258 | ) | 4,524 | (326.7 | )% | |||||||
Other
income / (expense)
|
660 | (244 | ) | (370.5 | )% | |||||||
Provision
for income taxes
|
10,342 | (5,059 | ) | (304.4 | )% | |||||||
Minority
interest in (income) / loss of consolidated subsidiaries
|
(1,025 | ) | 360 | (384.7 | )% |
March
31,
2008
|
December 31,
2007
|
Movement
|
||||||||||
Current
assets
|
$ | 1,003,385 | $ | 529,824 | 89.4 | % | ||||||
Non-current
assets
|
2,049,251 | 1,808,611 | 13.3 | % | ||||||||
Current
liabilities
|
259,976 | 232,770 | 11.7 | % | ||||||||
Non-current
liabilities
|
1,223,277 | 682,703 | 79.2 | % | ||||||||
Minority
interests in consolidated subsidiaries
|
24,179 | 23,155 | 4.4 | % | ||||||||
Shareholders’
equity
|
$ | 1,545,204 | $ | 1,399,807 | 10.4 | % |
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||
2008
|
2007
|
|||||||
Net
cash generated from continuing operating activities
|
$ | 84,091 | $ | 31,913 | ||||
Net
cash used in continuing investing activities
|
(23,743 | ) | (20,901 | ) | ||||
Net
cash received from financing activities
|
398,270 | 809 | ||||||
Net
cash used in discontinued operations – operating
activities
|
(1,710 | ) | (1,624 | ) | ||||
Net
increase in cash and cash equivalents
|
$ | 451,730 | $ | 11,436 |
Operating
segment (US$ 000’s)
|
March
31,
2008
|
December 31,
2007
|
||||||
Croatia
|
$ | 143,167 | $ | 119,910 | ||||
Czech
Republic
|
666,950 | 604,474 | ||||||
Romania
|
92,763 | 105,540 | ||||||
Slovak
Republic
|
15 | 5,164 | ||||||
Slovenia
|
42,895 | 39,162 | ||||||
Ukraine
(STUDIO 1+1)
|
- | - | ||||||
Ukraine
(KINO, CITI)
|
18,055 | 16,040 | ||||||
Total
|
$ | 963,845 | $ | 890,290 |
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
|
$ | 1,116,876 | $ | 15,602 | $ | 1,700 | $ | 862,394 | $ | 237,180 | ||||||||||
Long-Term
Debt – interest (1)
|
321,938 | 64,545 | 126,696 | 109,259 | 21,438 | |||||||||||||||
Capital
Lease Obligations
|
7,517 | 1,143 | 1,523 | 1,280 | 3,571 | |||||||||||||||
Operating
Leases
|
11,529 | 4,416 | 6,488 | 625 | - | |||||||||||||||
Unconditional
Purchase Obligations
|
101,723 | 84,938 | 10,822 | 4,591 | 1,372 | |||||||||||||||
Other
Long-Term Obligations
|
2,502 | 1,752 | 750 | - | - | |||||||||||||||
FIN
48 Obligations
|
2,330 | 435 | 1,895 | - | - | |||||||||||||||
Total
Contractual Obligations
|
$ | 1,564,415 | $ | 172,831 | $ | 149,874 | $ | 978,149 | $ | 263,561 |
March
31, 2008
(US$
000’s)
|
||||||||
Corporate
|
(1 | ) – (3) | $ | 1,099,574 | ||||
Czech
Republic operations
|
(4 | ) – (6) | 15,602 | |||||
Slovenia
operations
|
(7)
|
- | ||||||
Ukraine
(KINO, CITI) operations
|
(8)
|
1,700 | ||||||
Total
|
$ | 1,116,876 |
(1)
|
As at March 31, 2008 we had EUR 395.0 million
(approximately US$ 624.6 million) of Senior Notes outstanding, comprising
EUR 245.0 million (approximately US$ 387.4 million) of 8.25% senior notes
due May 2012 (the “Fixed Rate Notes”) and EUR 150.0 million (approximately
US$ 237.2 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% (6.198% was applicable at March 31,
2008). .
|
(2)
|
As
at March 31, 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$ 158.1 million) arranged by EBRD and
on August 22, 2007, we entered into a second revolving loan agreement for
EUR 50.0 million (approximately US$ 79.1 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$ 74.9
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., a
subsidiary of CS. As at March 31, 2008, there were no drawings
under this facility.
|
(5)
|
CET
21 has a working capital credit facility of CZK 250.0 million
(approximately US$ 15.6 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
Factoring Ceska Sporitelna, a.s. As at March 31, 2008, the full
CZK 250.0 million (approximately US$ 15.6 million) was drawn under this
facility bearing interest at an aggregate 5.58% (the applicable
three-month PRIBOR rate at March 31, 2008 was
3.93%).
|
(6)
|
As
at March 31, 2008, there were no drawings under a CZK 300.0 million
(approximately US$ 18.7 million) factoring facility with Factoring Ceska
Sporitelna, a.s., a subsidiary of CS. This facility is
available until June 30, 2011 2010 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$ 59.3 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 March 31, 2008, EUR 30.0 million (approximately US$
47.4 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 March 31, 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%.
|
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 (%)
|
- | - | - | - | - | 6.20 | % | |||||||||||||||||
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 (%)
|
5.58 | % | - | - | - | - | - |
Yearly
interest charge if interest rates increase by (US$
000s):
|
||||||||||||||||||||||||||
Value
of Debt as at March 31, 2008
(US$ 000's)
|
Interest
Rate as at March 31, 2008
|
Yearly
Interest Charge
(US$ 000’s)
|
1%
|
2%
|
3%
|
4%
|
5%
|
|||||||||||||||||||
237,180
(EUR
150.0 million)
|
6.20%
|
14,700 | 17,072 | 19,444 | 21,816 | 24,188 | 26,559 | |||||||||||||||||||
15,602
(CZK
250.0 million)
|
5.58%
|
871 | 1,027 | 1,183 | 1,339 | 1,495 | 1,651 | |||||||||||||||||||
Total
|
15,571 | 18,099 | 20,627 | 23,155 | 25,683 | 28,210 |
·
|
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.
|
4.1
|
Registration
Rights Agreement among the Company, Lehman Brothers Inc., J.P. Morgan
Securities Inc., Deutsche Bank Securities Inc., BNP Paribas and ING Bank
N.V., London Branch, dated March 10, 2008.
|
4.2
|
Indenture
among the Company, Central European Media Enterprises N.V., CME Media
Enterprises B.V. and The Bank of New York, dated March 10,
2008.
|
10.1
|
Purchase
Agreement among the Company, Lehman Brothers Inc., J.P. Morgan Securities
Inc., Deutsche Bank Securities Inc., BNP Paribas and ING Bank N.V., London
Branch, dated March 4, 2008.
|
10.2
|
Deed
of Amendment to the Intercreditor Agreement dated July 21, 2006, as
amended, among the Company, Central European Media Enterprises N.V., CME
Media Enterprises B.V., The Bank of New York, BNY Corporate Trustee
Services Limited and European Bank for Reconstruction and Development,
dated March 10, 2008.
|
10.3
|
Security
Assignment between the Company, CME Media Enterprises B.V. and The Bank of
New York, dated March 10, 2008.
|
10.4
|
Pledge
Agreement among the Company, Central European Media Enterprises N.V. and
The Bank of New York, dated March 10, 2008.
|
10.5
|
Deed
of Pledge of Shares among Central European Media Enterprises N.V., CME
Media Enterprises B.V. and the Bank of New York, dated March 10,
2008.
|
10.6
|
Capped
Call Transaction between the Company and Lehman Brothers OTC Derivatives
Inc., dated March 4, 2008.
|
10.7
|
Capped
Call Transaction between the Company, Deutsche Bank AG, London Branch and
Deutsche Bank Securities Inc., dated March 4, 2008.
|
10.8
|
Capped
Call Transaction between the Company and BNP Paribas, dated March 4,
2008.
|
31.01
|
Sarbanes-Oxley
Certification s. 302 CEO, dated April 30, 2008.
|
31.02
|
Sarbanes-Oxley
Certification s. 302 CFO, dated April 30, 2008.
|
32.01
|
Sarbanes-Oxley
Certification – CEO and CFO, dated April 30, 2008 (furnished
only).
|
Date:
April 30, 2008
|
/s/ Michael Garin
|
Michael
Garin
|
|
Chief
Executive Officer
|
|
(Duly
Authorized Officer)
|
|
Date:
April 30, 2008
|
/s/ Wallace Macmillan
|
Wallace
Macmillan
|
|
Chief
Financial Officer
|
|
(Principal
Financial Officer and Accounting
Officer)
|
Registration
Rights Agreement among the Company, Lehman Brothers Inc., J.P. Morgan
Securities Inc., Deutsche Bank Securities Inc., BNP Paribas and ING Bank
N.V., London Branch, dated March 10, 2008.
|
|
Indenture
among the Company, Central European Media Enterprises N.V., CME Media
Enterprises B.V. and The Bank of New York, dated March 10,
2008.
|
|
Purchase
Agreement among the Company, Lehman Brothers Inc., J.P. Morgan Securities
Inc., Deutsche Bank Securities Inc., BNP Paribas and ING Bank N.V., London
Branch, dated March 4, 2008.
|
|
Deed
of Amendment to the Intercreditor Agreement dated July 21, 2006, as
amended, among the Company, Central European Media Enterprises N.V., CME
Media Enterprises B.V., The Bank of New York, BNY Corporate Trustee
Services Limited and European Bank for Reconstruction and Development,
dated March 10, 2008.
|
|
Security
Assignment between the Company, CME Media Enterprises B.V. and The Bank of
New York, dated March 10, 2008.
|
|
Pledge
Agreement among the Company, Central European Media Enterprises N.V. and
The Bank of New York, dated March 10, 2008.
|
|
Deed
of Pledge of Shares among Central European Media Enterprises N.V., CME
Media Enterprises B.V. and the Bank of New York, dated March 10,
2008.
|
|
Capped
Call Transaction between the Company and Lehman Brothers OTC Derivatives
Inc., dated March 4, 2008.
|
|
Capped
Call Transaction between the Company, Deutsche Bank AG, London Branch and
Deutsche Bank Securities Inc., dated March 4, 2008.
|
|
Capped
Call Transaction between the Company and BNP Paribas, dated March 4,
2008.
|
|
s.
302 Sarbanes-Oxley Certification - CEO, dated April 30,
2008.
|
|
s.
302 Sarbanes-Oxley Certification - CFO, dated April 30,
2008.
|
|
s.
906 Sarbanes-Oxley Certification - CEO and CFO, dated April 30, 2008
(furnished only).
|