BERMUDA
|
0-24796
|
98-0438382
|
(State
or other jurisdiction of incorporation and organisation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
Clarendon
House, Church Street, Hamilton
|
|
HM
CX Bermuda
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
2.01.
|
Completion
of Acquisition or Disposition of Significant
Assets.
|
Item
9.01.
|
Financial
Statements and Exhibits.
|
(a)
|
Financial
Statements of businesses
acquired
|
(b)
|
Pro
forma financial information
|
1.
|
The
acquisition of 85% of PPF’s ownership interest in the TV Nova Group on May
2, 2005 (the ‘’TV Nova Initial
Acquisition’’);
|
2.
|
The
issuance to PPF of 3.5 million shares of our Class A Common Stock,
valued
at US$120.9 million, as part of the purchase price for the TV Nova
Initial
Acquisition;
|
3.
|
The
sale of Euro 245 million (US$317.5 million) 8.25% senior notes and
Euro
125 million (US$162.0 million) floating rate senior notes at an interest
rate of 180 day EURIBOR (which was 2.17% at May 5, 2005) plus 5.5%,
each
due 2012, and the use of the net proceeds from the sale, to finance
the TV
Nova Initial Acquisition;
|
4.
|
The
issuance in a registered public offering of 5.405 million shares
of our Class A Common Stock, valued at US$231.8 million (net of
underwriting discounts and commissions) and the use of the majority
of the
net proceeds from the issuance to finance the acquisition of PPF’s
remaining 15% interest in the TV Nova
Group;
|
5.
|
The
acquisition of Mr Krsak’s 16.67% minority interest in CET 21 on May 27,
2005, which represents 23.4% voting and economic interest in CET 21
as CET 21 itself holds an undistributed 28.755% interest that is
not
entitled to voting rights or dividends;
and
|
6.
|
The
acquisition of PPF’s remaining 15% interest in the TV Nova Group on
May 31, 2005 (together with the TV Nova Initial Acquisition and the
purchase of the Krsak interest, the ‘’TV Nova
Acquisition’’).
|
(i)
|
Final
calculation of the TV Nova Group purchase price, including adjustments
for
movements in working capital and indebtedness;
and
|
(ii)
|
Final
fair valuation of tangible and intangible assets including the TV
Nova
license, trademark, customer relationships and program
libraries.
|
|
Unaudited
Historical
CME
|
Unaudited
Historical
TV
Nova
Group
|
Pro
Forma Adjustments for TV Nova Initial Acquisition
|
Pro
Forma Adjustments for Additional Interest
Acquisitions
|
Pro
forma Total
|
|||||||||||
|
|
|
|
|
|
|||||||||||
Assets
|
|
|
|
|
|
|||||||||||
Cash
and cash equivalents
|
144,138
|
26,814
|
(15,090)
|
(c)
|
(35,302)
|
(c)
|
120,560
|
|||||||||
Accounts
receivable (net of allowances)
|
45,041
|
50,234
|
-
|
-
|
95,275
|
|||||||||||
Other
current assets
|
66,701
|
24,356
|
(18,368)
|
(d)
|
(125)
|
(d)
|
72,564
|
|||||||||
Total
Current Assets
|
255,880
|
101,404
|
(33,458
|
)
|
(35,427
|
)
|
288,399
|
|||||||||
|
||||||||||||||||
Goodwill
|
60,771
|
5,585
|
550,710
|
(b)
|
214,514
|
(b)
|
831,580
|
|||||||||
Other
intangibles
|
28,769
|
21,325
|
81,761
|
(b)
|
31,025
|
(b)
|
162,880
|
|||||||||
Other
assets
|
96,002
|
29,103
|
(10,770)
|
(e)
|
(792)
|
(e)
|
113,543
|
|||||||||
Total
Assets
|
441,422
|
157,417
|
588,243
|
209,320
|
1,396,402
|
|||||||||||
|
||||||||||||||||
Liabilities
& Shareholders' Equity
|
||||||||||||||||
Accounts
payable and accrued liabilities
|
68,786
|
12,447
|
(10,770)
|
(e)
|
(793)
|
(e)
|
69,670
|
|||||||||
Credit
facilities and obligations under capital leases
|
10,195
|
10,264
|
491,703
|
(a)
|
-
|
512,162
|
||||||||||
Other
current liabilities
|
31,713
|
15,031
|
1,650
|
(b)
|
(1,051)
|
(b)
|
47,343
|
|||||||||
Current
liabilities
|
110,694
|
37,742
|
482,583
|
(1,844
|
)
|
629,175
|
||||||||||
Accounts
payable and accrued liabilities
|
822
|
-
|
-
|
-
|
822
|
|||||||||||
Credit
facilities and obligations under capital leases
|
11,279
|
55,858
|
-
|
-
|
67,137
|
|||||||||||
Other
non-current liabilities
|
9,299
|
1,434
|
21,243
|
(b)
|
7,483
|
(b)
|
39,459
|
|||||||||
Total
non-current liabilities
|
21,400
|
57,292
|
21,243
|
7,483
|
107,418
|
|||||||||||
Minority
interests in consolidated subsidiaries
|
5,315
|
10,082
|
5,813
|
(f)
|
(14,584)
|
(f)
|
6,626
|
|||||||||
|
||||||||||||||||
Shareholder's
Equity
|
||||||||||||||||
Class
A Common Stock, $0.08 par value
|
1,684
|
18,956
|
(18,676)
|
(b)
|
432
|
(g)
|
2,396
|
|||||||||
Class
B Common Stock, $0.08 par value
|
587
|
-
|
-
|
-
|
587
|
|||||||||||
Additional
paid-in capital
|
390,450
|
-
|
120,603
|
(b)
|
231,383
|
(g)
|
742,436
|
|||||||||
Other
reserves
|
-
|
2,465
|
(2,465)
|
(a)
|
-
|
-
|
||||||||||
Retained
earnings/(accumulated deficit)
|
(95,417
|
)
|
30,024
|
(18,612)
|
(a)
|
(14,940)
|
(a)
|
(98,945
|
)
|
|||||||
Accumulated
other comprehensive income/(loss)
|
6,709
|
856
|
(2,246)
|
(a)
|
1,390
|
(a)
|
6,709
|
|||||||||
Total
shareholders' equity
|
304,013
|
52,301
|
78,604
|
218,265
|
653,183
|
|||||||||||
Total
liabilities and shareholders' equity
|
441,422
|
157,417
|
588,243
|
209,320
|
1,396,402
|
|
Unaudited
Historical
CME
|
Unaudited
Historical
TV
Nova
Group
|
Pro
Forma
Adjustments
for TV Nova Initial
Acquisition
|
Pro
Forma
Adjustments
for Additional Interest Acquisitions
|
Pro
forma
Total
|
|||||||||||
Net
revenues
|
48,304
|
55,681
|
-
|
-
|
103,985
|
|||||||||||
Operating
costs
|
11,285
|
3,793
|
-
|
-
|
15,078
|
|||||||||||
Cost
of programming
|
22,322
|
13,728
|
-
|
-
|
36,050
|
|||||||||||
Depreciation
of station fixed assets and other intangibles
|
2,213
|
1,454
|
-
|
-
|
3,667
|
|||||||||||
Total
station operating costs and expenses
|
35,820
|
18,975
|
-
|
-
|
54,795
|
|||||||||||
Station
selling, general and administrative expenses
|
6,928
|
10,934
|
-
|
-
|
17,862
|
|||||||||||
Corporate
operating costs (including non-cash stock based
compensation)
|
7,731
|
0
|
-
|
-
|
7,731
|
|||||||||||
Amortization
of intangibles
|
77
|
606
|
1,473
|
(b)
|
733
|
(b)
|
2,889
|
|||||||||
Operating
income/(loss)
|
(2,252
|
)
|
25,166
|
(1,473
|
)
|
(733
|
)
|
20,708
|
||||||||
Interest
income
|
1,079
|
110
|
-
|
-
|
1,189
|
|||||||||||
Interest
expense
|
(307
|
)
|
(1,233
|
)
|
(10,163)
|
(a)
|
-
|
(11,703
|
)
|
|||||||
Other
income/(expense)
|
(4,730
|
)
|
710
|
-
|
-
|
(4,020
|
)
|
|||||||||
Income
from continuing operations before provision for income taxes, minority
interest and equity in income of unconsolidated
affiliates
|
(6,210
|
)
|
24,753
|
(11,636
|
)
|
(733
|
)
|
6,174
|
||||||||
Provision
for income taxes
|
(2,341
|
)
|
(6,176
|
)
|
2,370
|
(b)
|
(403)
|
(b)
|
(6,550
|
)
|
||||||
Income
from continuing operations before minority interests, equity in income
of
unconsolidated affiliates
|
(8,551
|
)
|
18,577
|
(9,266
|
)
|
(1,136
|
)
|
(376
|
)
|
|||||||
Minority
interest in income of consolidated subsidiaries
|
(577
|
)
|
(3,636
|
)
|
(2,358)
|
(f)
|
5,457
|
(f)
|
(1,114
|
)
|
||||||
Equity
in income of unconsolidated affiliates
|
834
|
-
|
-
|
-
|
834
|
|||||||||||
Net
income/(loss) from continuing operations
|
(8,294
|
)
|
14,941
|
(11,624
|
)
|
4,321
|
(656
|
)
|
||||||||
|
||||||||||||||||
EPS
- Basic
|
(0.29
|
)
|
(0.02
|
)
|
||||||||||||
EPS
- Diluted
|
(0.29
|
)
|
(0.02
|
)
|
||||||||||||
Weighted
average common shares - Basic
|
28,385
|
3,500
|
(h)
|
5,405
|
(h)
|
37,290
|
||||||||||
Weighted
average common shares - Diluted
|
28,385
|
3,500
|
(h)
|
5,405
|
(h)
|
37,290
|
|
Audited
Historical CME
|
Audited
Historical TV Nova Group
|
Pro
Forma Adjustments for TV Nova Initial Acquisition
|
Pro
Forma Adjustments for Additional Interest
Acquisitions
|
Pro
forma Total
|
|||||||||||
Net
revenues
|
182,339
|
207,800
|
-
|
-
|
390,139
|
|||||||||||
Operating
costs
|
33,615
|
33,212
|
-
|
-
|
66,827
|
|||||||||||
Cost
of programming
|
71,793
|
60,039
|
-
|
-
|
131,832
|
|||||||||||
Depreciation
of station fixed assets and other intangibles
|
6,663
|
4,374
|
-
|
-
|
11,037
|
|||||||||||
Total
station operating costs and expenses
|
112,071
|
97,625
|
-
|
-
|
209,696
|
|||||||||||
Station
selling, general and administrative expenses
|
22,112
|
15,152
|
-
|
-
|
37,264
|
|||||||||||
Corporate
operating costs (including non-cash stock based
compensation)
|
29,185
|
-
|
-
|
-
|
29,185
|
|||||||||||
Amortization
of intangibles
|
231
|
2,306
|
5,893
|
(b)
|
3,180
|
(b)
|
11,610
|
|||||||||
Operating
income/(loss)
|
18,740
|
92,717
|
(5,893
|
)
|
(3,180
|
)
|
102,384
|
|||||||||
Interest
income
|
4,318
|
662
|
-
|
-
|
4,980
|
|||||||||||
Interest
expense
|
(1,203
|
)
|
(8,785
|
)
|
(40,021)
|
(a)
|
70
|
(a)
|
(49,939
|
)
|
||||||
Other
income/(expense)
|
(1,272
|
)
|
103
|
-
|
-
|
(1,169
|
)
|
|||||||||
Income
from continuing operations before provision for income taxes, minority
interest and equity in income of unconsolidated
affiliates
|
20,583
|
84,697
|
(45,914
|
)
|
(3,110
|
)
|
56,256
|
|||||||||
Provision
for income taxes
|
(11,089
|
)
|
(23,815
|
)
|
9,480
|
(b)
|
(936)
|
(b)
|
(26,360
|
)
|
||||||
Income
from continuing operations before minority interests, equity in income
of
unconsolidated affiliates
|
9,494
|
60,882
|
(36,434
|
)
|
(4,046
|
)
|
29,896
|
|||||||||
Minority
interest in income of consolidated subsidiaries
|
(4,106
|
)
|
(5,838
|
)
|
(9,431)
|
(f)
|
13,840
|
(f)
|
(5,535
|
)
|
||||||
Equity
in income of unconsolidated affiliates
|
10,619
|
-
|
-
|
-
|
10,619
|
|||||||||||
Net
income/(loss) from continuing operations
|
16,007
|
55,044
|
(45,865
|
)
|
9,794
|
34,980
|
||||||||||
|
||||||||||||||||
EPS
- Basic
|
0.57
|
0.95
|
||||||||||||||
EPS
- Diluted
|
0.55
|
0.92
|
||||||||||||||
Weighted
average common shares - Basic
|
27,871
|
3,500
|
(h)
|
5,405
|
(h)
|
36,776
|
||||||||||
Weighted
average common shares - Diluted
|
29,100
|
3,500
|
(h)
|
5,405
|
(h)
|
38,005
|
(a)
|
The
unaudited condensed pro forma consolidated balance sheet reflects
the
incurrence of US$491.7 million of short-term indebtedness to PPF
used to
complete the TV Nova Initial Acquisition on May 2, 2005. The unaudited
condensed pro forma consolidated income statement has used the rates
of
interest that apply to the Euro 370 million (US$479.5 million) of
fixed
and floating rate notes issued on May 5, 2005 rather than the interest
rate on the indebtedness to PPF due to the short-term and non-recurring
nature of this indebtedness. The notes have been used to repay the
indebtedness to PPF and to pay other costs associated with the TV
Nova
Initial Acquisition.
|
Interest
Expense
|
Euro'000
|
Euro'000
|
|||||
Euro
senior fixed rate notes
|
245,000
|
||||||
Interest
expense
|
5,053
|
||||||
Euro
senior floating rate notes
|
125,000
|
||||||
Interest
expense
|
|
2,397
|
|||||
Total
interest expense
|
Euro
7,450
|
||||||
Converted
to US$’000 as below
|
$
|
9,750
|
(b)
|
The
following is a summary of the preliminary purchase price allocation
relating to the TV Nova Acquisition. This is based on the TV Nova
Acquisition occurring on a pro forma basis at March 31,
2005.
|
|
$'000
|
$'000
|
|||||
Cash
|
757,468
|
||||||
Class
A Common Stock
|
120,883
|
(i)
|
|||||
Cancellation
of PPF Receivable
|
18,493
|
|
|||||
Total
consideration
|
896,844
|
||||||
|
|||||||
Transaction
costs
|
12,913
|
||||||
Total
purchase price
|
909,757
|
||||||
|
|||||||
Preliminary
net assets acquired (as of March 31, 2005)
|
61,071
|
||||||
Estimated
fair value adjustments to intangible assets
|
|||||||
License
|
102,500
|
(ii)
|
|||||
Trademark
|
17,769
|
(ii)
|
|||||
Customer
relationships
|
2,551
|
(ii)
|
|||||
|
122,820
|
||||||
Deferred
tax liability on fair value adjustments
|
(31,933
|
)(iv)
|
|||||
|
|||||||
Fair
value adjustment to AQS program libraries
|
(10,034 | )(iii) | |||||
Deferred
tax benefit on AQS fair value adjustment
|
2,609
|
(iv)
|
|||||
|
|
||||||
Estimated
fair value of net assets acquired
|
144,533
|
||||||
|
|
|
|||||
Goodwill
arising on acquisition
|
765,224
|
(i)
|
The
fair value of the shares of our Class A Common Stock issued to
PPF as part
of the consideration for the TV Nova Initial Acquisition is based
on the
average closing price of a share of our Class A Common Stock before
and
after the terms of the TV Nova Initial Acquisition were agreed
in the
Framework Agreement dated December 13, 2004. Utilizing the closing
price
three days before and two days after the December 13, 2004 measurement
date results in an average closing price of US$34.538,
which
has been used to determine the total value of the consideration
paid in
shares of our Class A Common Stock.
|
Share
capital
|
Actual
|
At
par value
|
|
|||||||
Class
A Common Stock to PPF ('000)
|
3,500
|
3,500
|
||||||||
Measurement
value per share ($)
|
34.538
|
0.08
|
||||||||
Share
consideration ($'000)
|
120,883
|
280
|
|
|||||||
Additional
paid in capital ($’000)
|
120,603
|
(ii)
|
We
estimated the fair values of the intangible assets as listed below.
We
also indicate the range of possible values within which the eventual
fair
value to be determined post the TV Nova Acquisition may lie:
|
Broadcasting
License amortization
|
|
$'000
|
|
$'000
|
|||
Additional
value to amortize
|
102,500
|
||||||
Amortize
over (yrs)
|
12
|
|
|||||
Annual
amortization charge to income statement
|
|
8,542
|
|||||
|
|||||||
Customer
Relationships amortization
|
|||||||
Additional
value to amortize
|
2,551
|
||||||
Amortize
over (yrs)
|
9
|
|
|||||
Annual
amortization charge to income statement
|
283
|
||||||
|
|
|
|||||
Amortization
for the 3 month period ended March 31, 2005
|
2,206
|
(iii)
|
The
TV Nova Group acquired the program library and liabilities of AQS
prior to
the TV Nova Initial Acquisition. The library contained a wide range
of
titles and a significant number of hours of program rights, well
in excess
of available broadcasting time. The fair value of the acquired
assets and
liabilities of AQS resulted in an increase to goodwill of US$7.4
million
(which also resulted in a reduction in other intangibles of US$10.0
million and a reduction in deferred tax liability of US$2.6 million).
The
AQS program library adjustments have been presented in the Additional
Interest Acquisitions pro forma adjustment column as the fair valuation
of
the program libraries and liabilities of AQS was not finalised
at the time
of the Report on Form 8-K of July 15, 2005 in respect of the TV
Nova
Initial Acquisition, amending the Report on Form 8-K dated May
6,
2005.
|
(iv)
|
Deferred
tax relating to the fair value adjustments described above has
been
computed as follows:
|
|
Deferred
tax
liability/
(asset)
|
Current
|
Non-
Current
|
||||||||||
CET21
broadcasting license
|
|
$’000
|
|
$’000
|
|
$’000
|
|
$’000
|
|||||
Increase
in value attributable to CME
|
102,500
|
||||||||||||
Czech
Republic statutory tax rate
|
26.0
|
%
|
|||||||||||
|
26,650
|
2,221
|
24,429
|
||||||||||
CET
21 TV Nova trademarks
|
|||||||||||||
Increase
in value attributable to CME
|
17,769
|
||||||||||||
Czech
Republic statutory tax rate
|
26.0
|
%
|
|||||||||||
|
4,620
|
0
|
4,620
|
||||||||||
Mag
Media 99 customer relationships
|
|||||||||||||
Increase
in value attributable to CME
|
2,551
|
||||||||||||
Czech
Republic statutory tax rate
|
26.0
|
%
|
|||||||||||
|
663
|
74
|
589
|
||||||||||
CP
2000 AQS program library
|
|||||||||||||
Decrease
in value attributable to CME
|
(10,034
|
)
|
|||||||||||
Czech
Republic statutory tax rate
|
26.0
|
%
|
|||||||||||
|
(2,609
|
)
|
(1,696
|
)
|
(913
|
)
|
|||||||
TOTAL
|
29,324
|
599
|
28,725
|
Deferred
tax amortization broadcast license
|
$'000
|
$'000
|
|||||
Additional
value to amortize
|
26,650
|
||||||
Amortize
over (yrs)
|
12
|
||||||
|
2,221
|
||||||
Deferred
tax amortization customer relationships
|
|||||||
Additional
value to amortize
|
663
|
||||||
Amortize
over (yrs)
|
9
|
||||||
|
74
|
||||||
|
|||||||
Amortization
tax credit to income statement for the 3 month period to March 31,
2005
|
|
574
|
Provision
for income taxes
|
$'000
|
$'000
|
|||||
Intercompany
indebtedness
|
329,000
|
||||||
Interest
payment
|
8.50
|
%
|
|
||||
Interest
expense
|
27,965
|
||||||
Czech
Republic statutory tax rate
|
26
|
%
|
|
||||
Annual
tax relief
|
|
7,271
|
1.
|
The
Czech tax rate is only 26%;
|
2.
|
The
thin capitalization rules in the Czech Republic would prevent us
from
claiming full relief on 100% of our borrowings.
|
(c)
|
The
TV Nova Initial Acquisition pro forma adjustment to cash and cash
equivalents of US$15.1 million represents the payment of transaction
fees
up to March 31, 2005 (US$11.6 million) and bridge financing commitment
costs (US$3.5 million).
|
(d)
|
The
TV Nova Initial Acquisition pro forma adjustment to other current
assets
of US$18.4 million represents the cancellation of an US$18.4 million
receivable due from PPF as at December 31, 2005 as part of the purchase
consideration for the TV Nova Initial Acquisition.
|
(e)
|
The
TV Nova Initial Acquisition pro forma adjustment to other assets
of
US$10.8 million reflects the inclusion of acquisition costs in the
goodwill calculation that we incurred up to December 31, 2004 and
capitalized on our balance sheet at December 31, 2004. The reduction
in
current liabilities of US$10.8 million represents the payment of
those
acquisition costs.
|
(f)
|
The
TV Nova Initial Acquisition pro forma adjustment to minority interests
in
consolidated subsidiaries of US$5.8 million represents PPF’s remaining 15%
interest in the TV Nova Group as at December 31, 2004 following the
TV
Nova Initial Acquisition.
|
(g)
|
The
fair value of the shares of our Class A Common Stock issued in a
registered public offering, and the use of the majority of the net
proceeds from the issuance to finance the acquisition of PPF’s remaining
15% interest in the TV Nova Group on May 31, 2005, is based on the
closing
price of $42.889 (net of underwriting discounts and commissions)
of a
share of our Class A Common Stock on April 28,
2005.
|
Share
capital
|
Actual
|
At
par value
|
||||||||
Class
A Common Stock in a registered public offering
('000)
|
5,405
|
5,405
|
||||||||
Measurement
value per share ($)
|
42.889
|
0.08
|
||||||||
Share
consideration ($'000)
|
231,815
|
432
|
|
|||||||
Additional
paid in capital ($’000)
|
231,383
|
(h)
|
Earnings
per share
|
(a)
|
The
unaudited condensed pro forma consolidated income statement has used
the
rates of interest that apply to the Euro 370 million (US$479.5 million)
of
fixed and floating rate notes issued on May 5, 2005 rather than the
interest rate on the indebtedness to PPF due to the short-term and
non-recurring nature of this indebtedness. The notes have been used
to
repay the indebtedness to PPF and to pay other costs associated with
the
TV Nova Initial Acquisition.
|
Interest
Expense
|
Euro'000
|
Euro'000
|
|||||
Euro
senior fixed rate notes
|
245,000
|
||||||
Interest
expense
|
20,212
|
||||||
Euro
senior floating rate notes
|
125,000
|
||||||
Interest
expense
|
|
9,588
|
|||||
Total
interest expense
|
Euro
29,800
|
||||||
Converted
to US$’000 as below
|
$
|
38,381
|
(b)
|
(i)
|
We
estimated the fair values of the intangible assets as listed below.
We
also indicate the range of possible values within which the eventual
fair
value to be determined post the TV Nova Acquisition may
lie:
|
Broadcasting
License amortization
|
|
$'000
|
|
$'000
|
|||
Additional
value to amortize
|
105,500
|
||||||
Amortize
over (yrs)
|
12
|
|
|||||
Annual
amortization charge to income statement
|
8,792
|
||||||
|
|||||||
Customer
Relationships amortization
|
|||||||
Additional
value to amortize
|
2,533
|
||||||
Amortize
over (yrs)
|
9
|
|
|||||
Annual
amortization charge to income statement
|
281
|
||||||
|
|
|
|||||
Amortization
for the year ended December 31, 2004
|
9,073
|
(ii)
|
The
TV Nova Group acquired the program library and liabilities of AQS
prior to
the TV Nova Initial Acquisition. The library contained a wide range
of
titles and a significant number of hours of program rights, well
in excess
of available broadcasting time. The fair value of the acquired assets
and
liabilities of AQS resulted in a reduction in other intangibles of
US$10.0
million and a reduction in deferred tax liability of US$2.8 million
as at
December 31, 2004.
|
(iii)
|
Deferred
tax relating to the fair value adjustments described above has been
computed as follows:
|
Deferred
tax
liability/
(asset)
|
Current
|
Non-
Current
|
|||||||||||
CET21
broadcasting license
|
|
$’000
|
|
$’000
|
|
$’000
|
|
$’000
|
|||||
Increase
in value attributable to CME
|
105,500
|
||||||||||||
Czech
Republic statutory tax rate
|
28.0
|
%
|
|||||||||||
29,540
|
2,462
|
27,078
|
|||||||||||
CET
21 TV Nova trademarks
|
|||||||||||||
Increase
in value attributable to CME
|
18,301
|
||||||||||||
Czech
Republic statutory tax rate
|
28.0
|
%
|
|||||||||||
5,124
|
0
|
5,124
|
|||||||||||
Mag
Media 99 customer relationships
|
|||||||||||||
Increase
in value attributable to CME
|
2,533
|
||||||||||||
Czech
Republic statutory tax rate
|
28.0
|
%
|
|||||||||||
709
|
79
|
630
|
|||||||||||
CP
2000 AQS program library
|
|||||||||||||
Decrease
in value attributable to CME
|
(10,034
|
)
|
|||||||||||
Czech
Republic statutory tax rate
|
28.0
|
%
|
|||||||||||
(2,809
|
)
|
(1,827
|
)
|
(982
|
)
|
||||||||
TOTAL
|
32,564
|
714
|
31,850
|
Deferred
tax amortization broadcast license
|
|
$'000
|
|
$'000
|
|||
Additional
value to amortize
|
29,540
|
||||||
Amortize
over (yrs)
|
12
|
||||||
|
2,462
|
||||||
Deferred
tax amortization customer relationships
|
|||||||
Additional
value to amortize
|
709
|
||||||
Amortize
over (yrs)
|
9
|
||||||
|
79
|
||||||
|
|
||||||
Annual
amortization tax credit to income statement
|
|
2,541
|
Provision
for income taxes
|
|
$'000
|
|
$'000
|
|||
Intercompany
indebtedness
|
329,000
|
||||||
Interest
payment
|
8.50
|
%
|
|||||
Interest
expense
|
27,965
|
||||||
Czech
Republic statutory tax rate
|
28
|
%
|
|
||||
Tax
relief
|
7,830
|
1.
|
The
Czech tax rate is only 28%;
|
2.
|
The
thin capitalization rules in the Czech Republic would prevent us
from
claiming full relief on 100% of our borrowings.
|
(f)
|
The
income statement charge for the year ended December 31, 2004 of US$9.4
million in respect of the TV Nova Initial Acquisition pro forma adjustment
to minority interest in income of consolidated subsidiaries represents
the
15% interest held by PPF in the TV Nova Group (following the TV Nova
Initial Acquisition) net income adjusted for the minority interest
impact
on the tax relief on intercompany indebtedness pro forma
adjustment.
|
(h)
|
Earnings
per share
|
Date:
August 5, 2005
|
/s/
Wallace Macmillan
|
|
Wallace Macmillan | ||
Vice President - Finance | ||
|
(Principal
Financial Officer and Duly Authorized
Officer)
|