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 £
|
Class
|
Outstanding
as of April 27, 2007
|
Class
A Common Stock, par value $0.08
|
34,622,338
|
Class
B Common Stock, par value $0.08
|
6,312,839
|
Page
|
|||
Part
I. Financial information
|
|||
2
|
|||
4
|
|||
6
|
|||
7
|
|||
8
|
|||
38
|
|||
67
|
|||
68
|
|||
Part
II. Other Information
|
|||
69
|
|||
72
|
|||
80
|
|||
80
|
|||
81
|
March
31,
2007
|
December
31,
2006
|
|||||||
ASSETS
|
|
|||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ |
157,340
|
$ |
145,904
|
||||
Restricted
cash (Note 6)
|
5,485
|
4,954
|
||||||
Accounts
receivable (net of allowance) (Note 7)
|
144,412
|
152,505
|
||||||
Income
taxes receivable
|
3,831
|
3,053
|
||||||
Program
rights
|
63,943
|
59,645
|
||||||
Other
current assets (Note 8)
|
49,704
|
47,555
|
||||||
Total
current assets
|
424,715
|
413,616
|
||||||
Non-current
assets
|
||||||||
Investments
|
16,563
|
19,214
|
||||||
Property,
plant and equipment (Note 9)
|
122,004
|
115,805
|
||||||
Program
rights
|
84,198
|
76,638
|
||||||
Goodwill
(Note 4)
|
903,597
|
905,580
|
||||||
Broadcast
licenses (Note 4)
|
202,409
|
198,730
|
||||||
Other
intangible assets (Note 4)
|
76,038
|
71,942
|
||||||
Other
non-current assets (Note 8)
|
18,767
|
17,475
|
||||||
Total
non-current assets
|
1,423,576
|
1,405,384
|
||||||
Total
assets
|
$ |
1,848,291
|
$ |
1,819,000
|
March
31,
2007
|
December
31,
2006
|
|||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued liabilities (Note 10)
|
$ |
141,232
|
$ |
119,717
|
||||
Duties
and other taxes payable
|
41,480
|
31,707
|
||||||
Income
taxes payable
|
10,043
|
12,434
|
||||||
Credit
facilities and obligations under capital leases (Note 11)
|
12,650
|
13,057
|
||||||
Deferred
consideration – Croatia (Note 6)
|
4,055
|
4,010
|
||||||
Deferred
consideration – Ukraine
|
-
|
200
|
||||||
Deferred
tax
|
4,268
|
1,836
|
||||||
Total
current liabilities
|
213,728
|
182,961
|
||||||
Non-current
liabilities
|
||||||||
Credit
facilities and obligations under capital leases (Note 11)
|
5,795
|
6,359
|
||||||
Senior
Notes (Note 5)
|
492,742
|
487,291
|
||||||
Income
taxes payable
|
5,515
|
3,000
|
||||||
Deferred
tax
|
59,310
|
58,092
|
||||||
Other
non-current liabilities
|
14,777
|
19,342
|
||||||
Total
non-current liabilities
|
578,139
|
574,084
|
||||||
Commitments
and contingencies (Note 18)
|
||||||||
Minority
interests in consolidated subsidiaries
|
25,949
|
26,189
|
||||||
SHAREHOLDERS'
EQUITY:
|
||||||||
Nil
shares of Preferred Stock of $0.08 each (December 31, 2006
–
nil)
|
-
|
-
|
||||||
34,622,338
shares of Class A Common Stock of $0.08 each (December
31, 2006 –
34,412,138)
|
2,770
|
2,753
|
||||||
6,312,839
shares of Class B Common Stock of $0.08 each (December
31, 2006 –
6,312,839)
|
505
|
505
|
||||||
Additional
paid-in capital
|
934,904
|
931,108
|
||||||
Accumulated
deficit
|
(35,199 | ) | (31,730 | ) | ||||
Accumulated
other comprehensive income
|
127,495
|
133,130
|
||||||
Total
shareholders’ equity
|
1,030,475
|
1,035,766
|
||||||
Total
liabilities and shareholders’ equity
|
$ |
1,848,291
|
$ |
1,819,000
|
For
the Three Months Ended March 31,
|
||||||||
2007
|
2006
|
|||||||
Net
revenues
|
$ |
147,912
|
$ |
119,754
|
||||
Operating
expenses:
|
||||||||
Operating
costs
|
25,657
|
22,972
|
||||||
Cost
of programming
|
66,353
|
48,418
|
||||||
Depreciation
of station property, plant and equipment
|
6,899
|
5,702
|
||||||
Amortization
of broadcast licenses and other intangibles (Note
4)
|
5,162
|
4,332
|
||||||
Cost
of revenues
|
104,071
|
81,424
|
||||||
Station
selling, general and administrative expenses
|
15,781
|
14,166
|
||||||
Corporate
operating costs
|
8,804
|
7,981
|
||||||
Operating
income
|
19,256
|
16,183
|
||||||
Interest
income
|
1,414
|
1,453
|
||||||
Interest
expense
|
(11,396 | ) | (10,518 | ) | ||||
Foreign
currency exchange loss, net
|
(3,136 | ) | (10,862 | ) | ||||
Change
in fair value of derivatives (Note 12)
|
4,524
|
-
|
||||||
Other
expense
|
(6,213 | ) | (548 | ) | ||||
Income
/ (loss) before provision for income taxes, minority
interest, equity in
income of unconsolidated affiliates and discontinued
operations
|
4,449
|
(4,292 | ) | |||||
Provision
for income taxes
|
(5,059 | ) | (3,994 | ) | ||||
Loss
before minority interest, equity in income of unconsolidated
affiliates
and discontinued operations
|
(610 | ) | (8,286 | ) | ||||
Minority
interest in (loss) / income of consolidated subsidiaries
|
360
|
(5,441 | ) | |||||
Equity
in income / (loss) of unconsolidated affiliates
|
-
|
(730 | ) | |||||
Net
loss from continuing operations
|
(250 | ) | (14,457 | ) | ||||
Discontinued
operations (Note 17):
|
||||||||
Tax
on disposal of discontinued operations (Czech Republic)
|
-
|
(3,807 | ) | |||||
Net
loss from discontinued operations
|
-
|
(3,807 | ) | |||||
Net
loss
|
$ | (250 | ) | $ | (18,264 | ) | ||
Currency
translation adjustment, net
|
(5,635 | ) |
32,459
|
|||||
Total
comprehensive (loss) / income
|
$ | (5,885 | ) | $ |
14,195
|
For
the Three Months Ended March 31,
|
||||||||
2007
|
2006
|
|||||||
PER
SHARE DATA (Note 15):
|
||||||||
Net
loss per share:
|
||||||||
Continuing
operations – Basic
|
$ | (0.01 | ) | $ | (0.38 | ) | ||
Continuing
operations – Diluted
|
(0.01 | ) | (0.38 | ) | ||||
Discontinued
operations – Basic
|
-
|
(0.10 | ) | |||||
Discontinued
operations – Diluted
|
-
|
(0.10 | ) | |||||
Net
loss – Basic
|
(0.01 | ) | (0.48 | ) | ||||
Net
loss – Diluted
|
$ | (0.01 | ) | $ | (0.48 | ) | ||
Weighted
average common shares used in computing per share amounts
(000’s):
|
||||||||
Basic
|
40,793
|
38,100
|
||||||
Diluted
|
40,793
|
38,100
|
Class
A Common Stock
|
Class
B Common Stock
|
|||||||||||||||||||||||||||||||
Number
of shares
|
Par
value
|
Number
of shares
|
Par
value
|
Additional
Paid-In Capital
|
Accumulated
Deficit
|
Accumulated
Other Comprehensive Income / (Loss)
|
Total
Shareholders' Equity
|
|||||||||||||||||||||||||
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
|
|
|
Class
A Common Stock
|
|
|
Class
B Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Number
of shares
|
|
|
Par
value
|
|
|
Number
of shares
|
|
|
Par
value
|
|
|
Additional
Paid-In Capital
|
|
|
Accumulated
Deficit
|
|
|
Accumulated
Other Comprehensive Income / (Loss)
|
|
|
Total
Shareholders' Equity
|
|
||||||||
BALANCE,
December 31, 2005
|
|
|
31,032,994
|
|
|
$
|
2,482
|
|
|
|
6,966,533
|
|
|
$
|
558
|
|
|
$
|
754,061
|
|
|
$
|
(52,154
|
)
|
|
$
|
(24,394
|
)
|
|
$
|
680,553
|
|
Stock-based
compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
688
|
|
|
|
-
|
|
|
|
-
|
|
|
|
688
|
|
Stock
options exercised
|
|
|
63,000
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
911
|
|
|
|
-
|
|
|
|
-
|
|
|
|
916
|
|
Shares
issued, net of fees
|
|
|
2,530,000
|
|
|
|
202
|
|
|
|
-
|
|
|
|
-
|
|
|
|
168,397
|
|
|
|
-
|
|
|
|
-
|
|
|
|
168,599
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(18,264
|
)
|
|
|
-
|
|
|
|
(18,264
|
)
|
Currency
translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
32,459
|
|
|
|
32,459
|
|
BALANCE,
March 31, 2006 as restated (see note 2)
|
|
|
33,625,994
|
|
|
$
|
2,689
|
|
|
|
6,966,533
|
|
|
$
|
558
|
|
|
$
|
924,057
|
|
|
$
|
(70,418
|
)
|
|
$
|
8,065
|
|
|
$
|
864,951
|
|
For
the Three Months Ended March 31,
|
||||||||
2007
|
2006
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (250 | ) | $ | (18,264 | ) | ||
Adjustments
to reconcile net loss to net cash generated from operating
activities:
|
||||||||
Loss
from discontinued operations (Note 17)
|
-
|
3,807
|
||||||
Equity
in (income) / loss of unconsolidated affiliates, net
of dividends
received
|
-
|
730
|
||||||
Depreciation
and amortization
|
51,762
|
36,764
|
||||||
Loss
on disposal of fixed asset
|
7
|
821
|
||||||
Interest
receivable, net
|
-
|
(47 | ) | |||||
Stock-based
compensation (Note 14)
|
1,262
|
688
|
||||||
Minority
interest in (loss) / income of consolidated subsidiaries
|
(360 | ) |
5,441
|
|||||
Change
in fair value of derivatives (Note 12)
|
(4,524 | ) |
-
|
|||||
Foreign
currency exchange loss, net
|
3,136
|
10,861
|
||||||
Net
change in (net of effects of acquisitions and disposals
of
businesses):
|
||||||||
Accounts
receivable
|
10,226
|
7,567
|
||||||
Program
rights
|
(48,123 | ) | (40,104 | ) | ||||
Other
assets
|
(3,973 | ) |
2,901
|
|||||
Settlement
liability
|
-
|
(10,007 | ) | |||||
Other
accounts payable and accrued liabilities
|
14,540
|
12,373
|
||||||
Income
taxes payable
|
(2,299 | ) |
2,300
|
|||||
Deferred
taxes
|
766
|
3,574
|
||||||
VAT
and other taxes payable
|
9,743
|
12,288
|
||||||
Net
cash generated from continuing operating
activities
|
31,913
|
31,693
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Net
change in restricted cash
|
(440 | ) | (4,068 | ) | ||||
Purchase
of property, plant and equipment
|
(11,995 | ) | (10,397 | ) | ||||
Disposal
of property, plant and equipment
|
19
|
-
|
||||||
Investments
in subsidiaries and unconsolidated affiliates
|
(8,585 | ) | (53,153 | ) | ||||
Repayment
of loans and advances to related parties
|
100
|
100
|
||||||
Net
cash used in continuing investing activities
|
(20,901 | ) | (67,518 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from credit facilities
|
200
|
28,491
|
||||||
Payment
of credit facilities and capital leases
|
(1,255 | ) | (508 | ) | ||||
Proceeds
from issuance of stock options
|
-
|
916
|
||||||
Issuance
of shares of Class A Common Stock
|
2,016
|
168,599
|
||||||
Dividends
paid to minority shareholders
|
(152 | ) | (517 | ) | ||||
Net
cash received from continuing financing
activities
|
809
|
196,981
|
||||||
NET
CASH USED IN DISCONTINUED OPERATING ACTIVITIES
|
(1,624 | ) | (1,690 | ) | ||||
Impact
of exchange rate fluctuations on cash
|
1,239
|
1,817
|
||||||
Net
increase in cash and cash equivalents
|
11,436
|
161,283
|
||||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
145,904
|
71,658
|
||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ |
157,340
|
$ |
232,941
|
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate (1)
|
Nova
TV d.d. (“Nova TV (Croatia)”)
|
100.0%
|
Croatia
|
Subsidiary
|
Media
House d.o.o.
|
100.0%
|
Croatia
|
Subsidiary
|
CME
Media Investments s r.o.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
VILJA
a.s. (“Vilja”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
CET
21 spol. S r.o. (“CET 21”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
ERIKA, a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
MEDIA
CAPITOL, a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
NOVA-V.I.P.,
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
(in liquidation)
|
HARTIC
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
Galaxie
sport, s r.o. (“Galaxie Sport”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
Media
Pro International S.A. (“MPI”)
|
90.0%
|
Romania
|
Subsidiary
|
Media
Vision SRL. (“Media Vision”)
|
75.0%
|
Romania
|
Subsidiary
|
MPI
Romania B.V.
|
90.0%
|
Netherlands
|
Subsidiary
|
Pro
TV S.A. (“Pro TV”)
|
90.0%
|
Romania
|
Subsidiary
|
Sport
Radio TV Media SRL (“TV Sport”)
|
90.0%
|
Romania
|
Subsidiary
|
Mediapro
B.V.
|
10.0%
|
Netherlands
|
Cost
investment
|
Media
Pro Management S.A.
|
10.0%
|
Romania
|
Cost
investment
|
A.R.J.,
a.s. (“ARJ”)
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
MARKIZA-SLOVAKIA,
spol. S r.o. (“Markiza”)
|
80.0%
|
Slovak
Republic
|
Subsidiary
|
GAMATEX,
spol. S r.o.
|
80.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
A.D.A.M.
a.s.
|
80.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
|
|||
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
|
MTC
Holding d.o.o.
|
24.0%
|
Slovenia
|
Equity-Accounted
Affiliate (in
liquidation)
|
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate (1)
|
International
Media Services Ltd. (“IMS”)
|
60.0%
|
Bermuda
|
Subsidiary
|
Innova
Film GmbH (“Innova”)
|
60.0%
|
Germany
|
Subsidiary
|
Foreign
Enterprise “Inter-Media” (“Inter-Media”)
|
60.0%
|
Ukraine
|
Subsidiary
|
TV
Media Planet Ltd.
|
60.0%
|
Cyprus
|
Subsidiary
|
Studio
1+1 LLC (“Studio 1+1”)
|
18.0%
|
Ukraine
|
Consolidated
Variable Interest Entity
|
Ukrainian
Media Services LLC
|
99.0%
|
Ukraine
|
Subsidiary
|
Ukrpromtorg
-2003 LLC (“Ukrpromtorg”)
|
65.5%
|
Ukraine
|
Subsidiary
|
Gravis
LLC
|
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
|
CME
Media Enterprises B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
CME
Czech Republic II B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
CME
Romania B.V.
|
100.0%
|
Netherlands
|
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
SR d.o.o.
|
100.0%
|
Serbia
|
Subsidiary
|
CME
Ukraine Holding GmbH
|
100.0%
|
Austria
|
Subsidiary
|
CME
Cyprus Holding Ltd.
|
100.0%
|
Cyprus
|
Subsidiary
|
CME
Development Corporation
|
100.0%
|
Delaware
|
Subsidiary
|
(1)
|
All
subsidiaries have been consolidated in our Consolidated Financial
Statements. All equity-accounted affiliates have been accounted for
using
the equity method. All cost investments have been accounted for using
the
cost method.
|
Jurisdiction
|
Year
|
Croatia
|
2003
|
Czech
Republic
|
2003
|
Germany
|
2000
|
Netherlands
|
2004
|
Romania
|
2002
|
Slovak
Republic
|
2001
|
Slovenia
|
2001
|
Ukraine
|
2003
|
United
States
|
2001
|
As
reported
previously
|
Adjustment
|
As
restated
|
||||||||||
Balance
Sheet (as of March 31, 2006)
|
||||||||||||
Additional
paid-in capital at March 31, 2006
|
916,876
|
7,181
|
924,057
|
|||||||||
Accumulated
deficit at March 31, 2006
|
(63,237 | ) | (7,181 | ) | (70,418 | ) |
Fair
Value on
Acquisition
|
||||
Property,
plant and equipment
|
$ |
35
|
||
Intangible
assets subject to amortization (1)
|
4,784
|
|||
Intangible
assets not subject to amortization (2)
|
8,974
|
|||
Other
assets
|
2,904
|
|||
Goodwill
|
2,311
|
|||
Deferred
tax liability
|
(1,575 | ) | ||
Other
liabilities
|
(6,398 | ) | ||
Total
purchase price
|
$ |
11,035
|
|
Balance
December 31,
2006
|
Additions
|
Foreign
Currency
movement
|
Balance
March
31,
2007
|
||||||||||||
|
||||||||||||||||
Croatia
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||||
Czech
Republic
|
823,786
|
-
|
(5,760 | ) |
818,026
|
|||||||||||
Romania
|
31,130
|
2,311
|
-
|
33,441
|
||||||||||||
Slovak
Republic
|
25,483
|
-
|
1,284
|
26,767
|
||||||||||||
Slovenia
|
16,458
|
-
|
182
|
16,640
|
||||||||||||
Ukraine
(STUDIO 1+1)
|
4,096
|
-
|
-
|
4,096
|
||||||||||||
Ukraine
(KINO, CITI)
|
4,627
|
-
|
-
|
4,627
|
||||||||||||
Total
|
$ |
905,580
|
$ |
2,311
|
$ | (4,294 | ) | $ |
903,597
|
Indefinite-Lived
Broadcast
Licenses
|
Amortized
Broadcast
Licenses
|
Total
|
||||||||||
Balance,
December 31, 2006
|
$ |
26,344
|
$ |
172,386
|
$ |
198,730
|
||||||
Additions
|
8,974
|
-
|
8,974
|
|||||||||
Amortization
|
-
|
(4,198 | ) | (4,198 | ) | |||||||
Foreign
currency movements
|
99
|
(1,196 | ) | (1,097 | ) | |||||||
Balance,
March 31, 2007
|
$ |
35,417
|
$ |
166,992
|
$ |
202,409
|
March 31,
2007
|
December 31,
2006
|
|||||||
Gross
value
|
$ |
200,655
|
$ |
201,994
|
||||
Accumulated
amortization
|
(33,663 | ) | (29,608 | ) | ||||
Total
net book value
|
$ |
166,992
|
$ |
172,386
|
Trademarks
|
Customer
Relationships
|
Other
|
Total
|
|||||||||||||
Balance,
December 31, 2006
|
$ |
44,026
|
$ |
27,213
|
$ |
703
|
$ |
71,942
|
||||||||
Additions
|
637
|
4,147
|
-
|
4,784
|
||||||||||||
Amortization
|
(26 | ) | (925 | ) | (13 | ) | (964 | ) | ||||||||
Foreign
currency movements
|
(75 | ) |
329
|
22
|
276
|
|||||||||||
Balance,
March 31, 2007
|
$ |
44,562
|
$ |
30,764
|
$ |
712
|
$ |
76,038
|
March
31,
2007
|
December 31,
2006
|
|||||||
Gross
value
|
$ |
81,780
|
$ |
76,695
|
||||
Accumulated
amortization
|
(5,742 | ) | (4,753 | ) | ||||
Total
net book value
|
$ |
76,038
|
$ |
71,942
|
Carrying
Value
|
Fair
Value
|
|||||||||||||||
March
31,
2007
|
December 31,
2006
|
March
31,
2007
|
December 31,
2006
|
|||||||||||||
EUR
245.0 million 8.25% Senior Notes
|
$ |
326,275
|
$ |
322,666
|
$ |
355,640
|
$ |
353,722
|
||||||||
EUR
125.0 million floating rate Senior Notes
|
166,467
|
164,625
|
171,253
|
170,181
|
||||||||||||
$ |
492,742
|
$ |
487,291
|
$ |
526,893
|
$ |
523,903
|
From:
|
EUR
245.0 Million 8.25%
Senior
Notes
Redemption
Price
|
From:
|
EUR
125.0 Million Floating
Rate
Senior Notes
Redemption
Price
|
May
15, 2009 to May 14, 2010
|
104.125%
|
May
15, 2007 to May 14, 2008
|
102.000%
|
May
15, 2010 to May 14, 2011
|
102.063%
|
May
15, 2008 to May 14, 2009
|
101.000%
|
May
15, 2011 and thereafter
|
100.000%
|
May
15, 2009 and thereafter
|
100.000%
|
March
31,
2007
|
December 31,
2006
|
|||||||
Croatia
– held in escrow
|
$ |
4,265
|
$ |
4,183
|
||||
Other
|
1,220
|
771
|
||||||
Total
restricted cash
|
$ |
5,485
|
$ |
4,954
|
March
31,
2007
|
December 31,
2006
|
|||||||
Trading:
|
||||||||
Third-party
customers
|
$ |
149,105
|
$ |
156,701
|
||||
Less:
allowance for bad debts and credit notes
|
(12,093 | ) | (11,472 | ) | ||||
Related
parties
|
7,246
|
7,655
|
||||||
Less:
allowance for bad debts and credit notes
|
(345 | ) | (798 | ) | ||||
Total
trading
|
$ |
143,913
|
$ |
152,086
|
||||
Other:
|
||||||||
Third-party
customers
|
$ |
437
|
$ |
359
|
||||
Less:
allowance for bad debts and credit notes
|
(104 | ) | (103 | ) | ||||
Related
parties
|
456
|
454
|
||||||
Less:
allowance for bad debts and credit notes
|
(290 | ) | (291 | ) | ||||
Total
other
|
$ |
499
|
$ |
419
|
||||
Total
accounts receivable
|
$ |
144,412
|
$ |
152,505
|
March
31,
2007
|
December 31,
2006
|
|||||||
Current:
|
||||||||
Prepaid
programming
|
$ |
22,210
|
$ |
23,072
|
||||
Other
prepaid expenses
|
15,793
|
13,177
|
||||||
Deferred
tax
|
2,094
|
2,124
|
||||||
VAT
recoverable
|
2,516
|
2,562
|
||||||
Loan
to related party
|
600
|
600
|
||||||
Capitalized
debt costs
|
2,809
|
2,908
|
||||||
Other
|
3,682
|
3,112
|
||||||
Total
other current assets
|
$ |
49,704
|
$ |
47,555
|
||||
Non-current:
|
||||||||
Capitalized
debt costs
|
$ |
10,567
|
$ |
11,264
|
||||
Loan
to related party
|
1,548
|
1,603
|
||||||
Deferred
tax
|
4,738
|
3,443
|
||||||
Advances
|
109
|
102
|
||||||
Capitalized
development costs
|
703
|
294
|
||||||
Other
|
1,102
|
769
|
||||||
Total
other non-current assets
|
$ |
18,767
|
$ |
17,475
|
March
31,
2007
|
December 31,
2006
|
|||||||
Land
and buildings
|
$ |
53,093
|
$ |
56,212
|
||||
Station
machinery, fixtures and equipment
|
108,988
|
115,238
|
||||||
Other
equipment
|
17,586
|
21,980
|
||||||
Software
licenses
|
16,880
|
15,495
|
||||||
Construction
in progress
|
10,431
|
4,070
|
||||||
Total
cost
|
206,978
|
212,995
|
||||||
Less: Accumulated
depreciation
|
(84,974 | ) | (97,190 | ) | ||||
Total
net book value
|
$ |
122,004
|
$ |
115,805
|
||||
Assets
held under capital leases (included above)
|
||||||||
Land
and buildings
|
$ |
5,078
|
$ |
5,541
|
||||
Station
machinery, fixtures and equipment
|
2,019
|
2,330
|
||||||
Total
cost
|
7,097
|
7,871
|
||||||
Less:
Accumulated depreciation
|
(1,458 | ) | (1,877 | ) | ||||
Net
book value
|
$ |
5,639
|
$ |
5,994
|
March
31,
2007
|
December 31,
2006
|
|||||||
Accounts
payable
|
$ |
28,439
|
$ |
47,447
|
||||
Programming
liabilities
|
36,265
|
32,316
|
||||||
Accrued
interest payable
|
16,102
|
5,375
|
||||||
Deferred
income
|
19,030
|
3,212
|
||||||
Accrued
staff costs
|
10,402
|
12,947
|
||||||
Accrued
production costs
|
11,067
|
7,435
|
||||||
Accrued
legal costs
|
8,947
|
3,619
|
||||||
Accrued
rent costs
|
1,124
|
1,163
|
||||||
Authors’
rights
|
1,663
|
943
|
||||||
Onerous
contracts
|
1,620
|
-
|
||||||
Other
accrued liabilities
|
6,573
|
5,260
|
||||||
Total
accounts payable and accrued liabilities
|
$ |
141,232
|
$ |
119,717
|
March
31,
2007
|
December 31,
2006
|
||||||||
Credit
facilities:
|
|||||||||
Corporate
|
(a)
|
$ |
-
|
$ |
-
|
||||
Croatia
|
(b)
|
-
|
847
|
||||||
Czech
Republic
|
(c)
– (e)
|
11,892
|
11,975
|
||||||
Romania
|
(f)
|
94
|
-
|
||||||
Slovenia
|
(g)
|
-
|
-
|
||||||
Ukraine
(KINO, CITI)
|
(h)
|
1,705
|
1,703
|
||||||
Total
credit facilities
|
$ |
13,691
|
$ |
14,525
|
|||||
Capital
leases:
|
|||||||||
Croatia
operations, net of
interest
|
$ |
-
|
$ |
19
|
|||||
Romania
operations, net of
interest
|
408
|
495
|
|||||||
Slovak
Republic operations,
net of interest
|
146
|
154
|
|||||||
Slovenia
operations, net of
interest
|
4,200
|
4,223
|
|||||||
Total
capital leases
|
$ |
4,754
|
$ |
4,891
|
|||||
Total
credit facilities and
capital leases
|
$ |
18,445
|
$ |
19,416
|
|||||
Less
current maturities
|
(12,650 | ) | (13,057 | ) | |||||
Total
non-current maturities
|
$ |
5,795
|
$ |
6,359
|
2007
|
$ |
11,991
|
||
2008
|
-
|
|||
2009
|
1,700
|
|||
2010
|
-
|
|||
2011
|
-
|
|||
2012
and thereafter
|
492,742
|
|||
Total
|
$ |
506,433
|
2007
|
$ |
867
|
||
2008
|
860
|
|||
2009
|
593
|
|||
2010
|
594
|
|||
2011
|
593
|
|||
2012
and thereafter
|
3,035
|
|||
6,542
|
||||
Less:
amount representing interest
|
(1,788 | ) | ||
Present
value of net minimum lease payments
|
$ |
4,754
|
For
the Three Months
Ended
March 31,
|
||||||||
2007
|
2006
|
|||||||
Stock-based
compensation charged under SFAS 123(R)
|
$ |
1,262
|
$ |
688
|
Shares
|
Weighted
Average
Exercise
Price
per Share
|
Weighted
Average
Remaining
Contractual
Term
(years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding
at January 1, 2007
|
1,288,575
|
$ |
35.51
|
7.45
|
$ |
44,443
|
||||||||||
Granted
|
-
|
-
|
||||||||||||||
Exercised
|
(210,200 | ) |
9.59
|
|||||||||||||
Forfeited
|
(5,000 | ) |
47.36
|
|||||||||||||
Outstanding
at March 31, 2007
|
1,073,375
|
$ |
40.53
|
7.46
|
$ |
51,435
|
||||||||||
Vested
or expected to vest at March 31, 2007
|
1,015,647
|
39.52
|
7.39
|
49,697
|
||||||||||||
Exercisable
at March 31, 2007
|
364,200
|
$ |
21.92
|
6.50
|
$ |
24,230
|
For
the Three Months Ended March 31,
|
||||||||
2007
|
2006
|
|||||||
Net
loss available for common shareholders
|
$ | (250 | ) | $ | (18,264 | ) | ||
Weighted
average outstanding shares of common stock
(000’s)
|
40,793
|
38,100
|
||||||
Dilutive
effect of employee stock options (000’s)
|
-
|
-
|
||||||
Common
stock and common stock equivalents (000’s)
|
40,793
|
38,100
|
||||||
Loss
per share:
|
||||||||
Basic
|
$ | (0.01 | ) | $ | (0.48 | ) | ||
Diluted
|
$ | (0.01 | ) | $ | (0.48 | ) |
·
|
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
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Country:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ |
7,232
|
$ |
3,810
|
$ | (4,652 | ) | $ | (4,442 | ) | ||||||
Czech
Republic (TV
NOVA, GALAXIE
SPORT)
|
51,519
|
40,549
|
25,667
|
12,826
|
||||||||||||
Romania
(2)
|
39,342
|
29,871
|
15,136
|
11,613
|
||||||||||||
Slovak
Republic (MARKIZA
TV)
|
18,677
|
11,206
|
5,756
|
(977 | ) | |||||||||||
Slovenia
(POP TV and
KANAL A)
|
12,669
|
10,227
|
3,001
|
3,033
|
||||||||||||
Ukraine
(STUDIO 1+1)
|
18,075
|
25,478
|
(2,370 | ) |
10,988
|
|||||||||||
Ukraine
(KINO, CITI)
(3)
|
398
|
374
|
(2,417 | ) | (126 | ) | ||||||||||
Total
segment data
|
$ |
147,912
|
$ |
121,515
|
$ |
40,121
|
$ |
32,915
|
||||||||
Reconciliation
to condensed
consolidated
statement of
operations:
|
||||||||||||||||
Consolidated
net revenues
/ income /
(loss) before
provision for
income taxes,
minority
interest, equity
in income of
unconsolidated
affiliates
and discontinued
operations
|
$ |
147,912
|
$ |
119,754
|
$ |
4,449
|
$ | (4,292 | ) | |||||||
Corporate
operating costs
|
-
|
-
|
8,804
|
7,981
|
||||||||||||
Unconsolidated
equity affiliates
(4)
|
-
|
1,761
|
-
|
(1,283 | ) | |||||||||||
Depreciation
of station
property, plant
and equipment
|
-
|
-
|
6,899
|
5,702
|
||||||||||||
Amortization
of broadcast
licenses and
other intangibles
|
-
|
-
|
5,162
|
4,332
|
||||||||||||
Interest
income
|
-
|
-
|
(1,414 | ) | (1,453 | ) | ||||||||||
Interest
expense
|
-
|
-
|
11,396
|
10,518
|
||||||||||||
Change
in fair value
of derivatives
|
-
|
-
|
(4,524 | ) |
-
|
|||||||||||
Foreign
currency exchange
loss, net
|
-
|
-
|
3,136
|
10,862
|
||||||||||||
Other
expense
|
-
|
-
|
6,213
|
548
|
||||||||||||
Total
segment data
|
$ |
147,912
|
$ |
121,515
|
$ |
40,121
|
$ |
32,915
|
For
the Three Months Ended March 31,
|
||||||||
Depreciation
of station property, plant and equipment and amortization
of broadcast
licenses and other intangibles:
|
2007
|
2006
|
||||||
Croatia
|
$ |
785
|
$ |
529
|
||||
Czech
Republic
|
6,461
|
5,525
|
||||||
Romania
|
1,747
|
1,227
|
||||||
Slovak
Republic
|
1,187
|
1,471
|
||||||
Slovenia
|
986
|
730
|
||||||
Ukraine
(STUDIO 1+1)
|
745
|
572
|
||||||
Ukraine
(KINO, CITI)
|
150
|
157
|
||||||
Total
|
$ |
12,061
|
$ |
10,211
|
||||
Reconciliation
to condensed consolidated statement of
operations:
|
||||||||
Unconsolidated
equity affiliates
|
-
|
(177 | ) | |||||
Total
consolidated depreciation and amortization
|
$ |
12,061
|
$ |
10,034
|
||||
Represented
as follows:
|
||||||||
Depreciation
of station property, plant & equipment
|
6,899
|
5,702
|
||||||
Amortization
of broadcast licenses and other intangibles
|
5,162
|
4,332
|
Total
assets (1):
|
March
31,
2007
|
December 31,
2006
|
||||||
Croatia
|
$ |
35,179
|
$ |
30,394
|
||||
Czech
Republic
|
1,182,875
|
1,200,894
|
||||||
Romania
|
235,736
|
206,850
|
||||||
Slovak
Republic
|
100,943
|
86,872
|
||||||
Slovenia
|
73,941
|
67,919
|
||||||
Ukraine
(STUDIO 1+1)
|
71,297
|
75,020
|
||||||
Ukraine
(KINO, CITI)
|
17,844
|
13,293
|
||||||
Total
segment assets
|
$ |
1,717,815
|
$ |
1,681,242
|
||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
130,476
|
137,758
|
||||||
Total
assets
|
$ |
1,848,291
|
$ |
1,819,000
|
Long-lived
assets (1):
|
March
31,
2007
|
December 31,
2006
|
||||||
Croatia
|
$ |
8,484
|
$ |
6,804
|
||||
Czech
Republic
|
29,943
|
28,002
|
||||||
Romania
|
34,057
|
32,312
|
||||||
Slovak
Republic
|
20,140
|
19,498
|
||||||
Slovenia
|
16,379
|
15,595
|
||||||
Ukraine
(STUDIO 1+1)
|
7,551
|
7,965
|
||||||
Ukraine
(KINO, CITI)
|
3,657
|
3,674
|
||||||
Total
long-lived assets
|
$ |
120,211
|
$ |
113,850
|
||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
1,793
|
1,955
|
||||||
Total
long-lived assets
|
$ |
122,004
|
$ |
115,805
|
For
the Three Months Ended March 31,
|
||||||||
2007
|
2006
|
|||||||
Tax
on disposal of discontinued operations
|
-
|
(3,807 | ) | |||||
Net
loss from discontinued operations
|
$ |
-
|
$ | (3,807 | ) |
March 31,
2007
|
||||
Croatia
|
$ |
6,492
|
||
Czech
Republic
|
30,923
|
|||
Romania
|
19,704
|
|||
Slovak
Republic
|
19,709
|
|||
Slovenia
|
4,695
|
|||
Ukraine
(STUDIO 1+1)
|
18,895
|
|||
Ukraine
(KINO, CITI)
|
777
|
|||
Total
|
$ |
101,195
|
March
31,
2007
|
||||
2007
|
$ |
2,849
|
||
2008
|
1,421
|
|||
2009
|
1,155
|
|||
2010
|
824
|
|||
2011
|
394
|
|||
2012
and thereafter
|
-
|
|||
Total
|
$ |
6,643
|
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 August 2007 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)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Net
revenues
|
$ |
147,912
|
$ |
119,754
|
$ |
28,158
|
||||||
Operating
income
|
19,256
|
16,183
|
3,073
|
|||||||||
Net
loss from continuing operations
|
(250 | ) | (14,457 | ) |
14,207
|
|||||||
Net
loss
|
$ | (250 | ) | $ | (18,264 | ) | $ |
18,014
|
·
|
In
the three months ended March 31, 2007, we reported growth in both
Segment
Net Revenues and Segment EBITDA of 22% compared to the three months
ended
March 31, 2006, delivering a Segment EBITDA margin of 27%, in line
with
that reported in the three months ended March 31, 2006 (Segment
EBITDA is
defined and reconciled to our consolidated results in Item 1, Note
16).
|
·
|
Other
than our operations in Ukraine each of our stations reported revenue
growth in excess of 20% compared to the three months ended March
31, 2006,
with particularly strong growth reported in Croatia and the Slovak
Republic. Our operations in Ukraine experienced a decline in Segment
Net
Revenues and Segment EBITDA because the results for the three months
ended
March 31, 2006 reflected a windfall from the level of political
advertising ahead of the Ukrainian parliamentary elections in March
2006.
|
·
|
On
February 20, 2007, we acquired control of TV Sport, an
operator of a sports-oriented channel focusing on local and international
football, international boxing and a number of local Romanian sports
(see
Item 1, Note 3). In April 2007 we rebranded TV SPORT as
Sport.ro.
|
·
|
On
April 11, 2007 we issued a notice to redeem our floating rate Senior
Notes
on May 15, 2007 at a cost of EUR 127.5 million (see Item 1, Note
19).
|
·
|
On
April 18, 2007 we drew down the entire EUR 100.0 million available
under
our facility with the European Bank of Reconstruction and Development
(see
Item 1, Note 19).
|
·
|
Pursuing
sub-regional efficiencies, especially in the area of local programming
between Slovenia and Croatia and between the Czech and Slovak
Republics;
|
·
|
Supporting
the growth of television advertising in our markets through increased
development and through the launch or acquisition of additional channels
to expand our advertising inventory and target niche
audiences;
|
·
|
Leveraging
our existing brands and assets to develop new revenue opportunities,
including in the creation and distribution of programming and in
the new
media sectors; and
|
·
|
Continuing
to expand our footprint into additional Central and Eastern European
markets when financially prudent opportunities
arise.
|
·
|
Continuing
to improve the effectiveness of our operations in the Czech Republic
and
the Slovak Republic.
|
·
|
Continuing
the development of our new Ukraine channels KINO and CITI which were
launched in 2006.
|
·
|
Further
development of our non-broadcast activities, particularly in new
media,
which is being coordinated across our
markets.
|
·
|
Acquisition
of additional shares in our operations in Romania, the Slovak Republic
and
Ukraine if the opportunity arises;
and
|
·
|
Continuing
to invest in the development of our Croatia
operations.
|
·
|
expenses
presented as corporate operating costs in our condensed consolidated
statement 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 March 31, (US$ 000's)
|
||||||||||||||||
2007
|
(1 | ) |
2006
|
(1 | ) | |||||||||||
Segment
Net Revenues
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ |
7,232
|
5 | % | $ |
3,810
|
3 | % | ||||||||
Czech
Republic (TV NOVA, GALAXIE SPORT)
|
51,519
|
34 | % |
40,549
|
34 | % | ||||||||||
Romania
(2)
|
39,342
|
27 | % |
29,871
|
25 | % | ||||||||||
Slovak
Republic (MARKIZA TV) (3)
|
18,677
|
13 | % |
11,206
|
9 | % | ||||||||||
Slovenia
(POP TV and KANAL A)
|
12,669
|
9 | % |
10,227
|
8 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
18,075
|
12 | % |
25,478
|
21 | % | ||||||||||
Ukraine
(KINO, CITI) (4)
|
398
|
- | % |
374
|
- | % | ||||||||||
Total
Segment Net Revenues
|
$ |
147,912
|
100 | % | $ |
121,515
|
100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ |
147,422
|
100 | % | $ |
121,073
|
100 | % | ||||||||
Non-broadcast
operations
|
490
|
- | % |
442
|
- | % | ||||||||||
Total
Segment Net Revenues
|
$ |
147,912
|
100 | % | $ |
121,515
|
100 | % | ||||||||
Segment
EBITDA
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | (4,652 | ) | (12 | )% | $ | (4,442 | ) | (13 | )% | ||||||
Czech
Republic (TV NOVA)
|
25,667
|
65 | % |
12,826
|
39 | % | ||||||||||
Romania
(2)
|
15,136
|
38 | % |
11,613
|
35 | % | ||||||||||
Slovak
Republic (MARKIZA TV) (3)
|
5,756
|
14 | % | (977 | ) | (3 | )% | |||||||||
Slovenia
(POP TV and KANAL A)
|
3,001
|
7 | % |
3,033
|
9 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
(2,370 | ) | (6 | )% |
10,988
|
33 | % | |||||||||
Ukraine
(KINO, CITI) (4)
|
(2,417 | ) | (6 | )% | (126 | ) | - | % | ||||||||
Total
Segment EBITDA
|
$ |
40,121
|
100 | % | $ |
32,915
|
100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ |
40,714
|
101 | % | $ |
32,947
|
100 | % | ||||||||
Non-broadcast
operations
|
(593 | ) | (1 | )% | (32 | ) | - | % | ||||||||
Total
Segment EBITDA
|
$ |
40,121
|
100 | % | $ |
32,915
|
100 | % | ||||||||
Segment
EBITDA Margin (5)
|
27 | % | 27 | % |
CROATIA
SEGMENT FINANCIAL INFORMATION
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
5,020
|
$ |
3,053
|
$ |
1,967
|
||||||
Non-spot
revenues
|
2,212
|
757
|
1,455
|
|||||||||
Segment
Net Revenues
|
$ |
7,232
|
$ |
3,810
|
$ |
3,422
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
7,227
|
$ |
3,810
|
$ |
3,417
|
||||||
Non-broadcast
operations
|
5
|
-
|
5
|
|||||||||
Segment
Net Revenues
|
$ |
7,232
|
$ |
3,810
|
$ |
3,422
|
||||||
Segment
EBITDA
|
$ | (4,652 | ) | $ | (4,442 | ) | $ | (210 | ) | |||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (4,623 | ) | $ | (4,442 | ) | $ | (181 | ) | |||
Non-broadcast
operations
|
(29 | ) |
-
|
(29 | ) | |||||||
Segment
EBITDA
|
$ | (4,652 | ) | $ | (4,442 | ) | $ | (210 | ) | |||
Segment
EBITDA Margin
|
(64 | )% | (117 | )% | 53 | % |
·
|
Segment
Net Revenues for the three months ended March 31, 2007 increased
by US$ 3.4 million, or 90%, compared to the three months ended March
31,
2006. In local currency, Segment Net Revenues increased by
73%. Spot revenues increased by US$ 2.0 million, or 64%, as a
result of a significant increase in the volume of GRPs sold, particularly
in prime time, augmented by increased prices. Non-spot revenues
increased by US$ 1.5 million, or 192%, as a result of increased levels
of
sponsorship.
|
·
|
Segment
EBITDA for the three months ended March 31, 2007 was a loss of
US$ 4.7 million compared to a loss of US$ 4.4 million in the three
months
ended March 31, 2006.
|
CZECH
REPUBLIC SEGMENT FINANCIAL INFORMATION
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
46,664
|
$ |
33,443
|
$ |
13,221
|
||||||
Non-spot
revenues
|
4,855
|
7,106
|
(2,251 | ) | ||||||||
Segment
Net Revenues
|
$ |
51,519
|
$ |
40,549
|
$ |
10,970
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
51,480
|
$ |
40,402
|
$ |
11,078
|
||||||
Non-broadcast
operations
|
39
|
147
|
(108 | ) | ||||||||
Segment
Net Revenues
|
$ |
51,519
|
$ |
40,549
|
$ |
10,970
|
||||||
Segment
EBITDA
|
$ |
25,667
|
$ |
12,826
|
$ |
12,841
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
25,937
|
$ |
12,856
|
$ |
13,081
|
||||||
Non-broadcast
operations
|
(270 | ) | (30 | ) | (240 | ) | ||||||
Segment
EBITDA
|
$ |
25,667
|
$ |
12,826
|
$ |
12,841
|
||||||
Segment
EBITDA Margin
|
50 | % | 32 | % | 18 | % |
·
|
Segment
Net Revenues for the three months ended March 31, 2007 increased
by US$ 11.0 million, or 27%, compared to the three months ended March
31,
2006. In local currency, Segment Net Revenues increased by
14%. Spot revenues increased by $13.2 million, or 40%,
primarily due to an increase in the volume of GRPs sold, particularly
in
off-prime time, as well as increased average revenue per rating point
sold. Non-spot revenue decreased by US$ 2.3 million, or 32%, primarily
due
to a reduction in the number of shows generating voting revenue in
the
three months ended March 31, 2007 compared to those programs broadcast
in
the three months ended March 31,
2006.
|
·
|
Segment
EBITDA for the three months ended March 31, 2007 increased by US$
12.8 million, or 100%, compared to the three months ended March 31,
2006,
resulting in an EBITDA margin of 50% compared to 32% in the three
months
ended March 31, 2006. Costs charged in arriving at Segment
EBITDA for the three months ended March 31, 2007 decreased by US$
1.9
million, or 7%, compared to the three months ended March 31,
2006. Cost of programming decreased by US$ 2.2 million, or 14%,
due to better cost control in production and the cancellation of
several
expensive one-off programs broadcast during the three months ended
March
31, 2006 as part of TV Nova’s operational restructuring. Other
operating costs increased by US$ 1.0 million, or 16%, primarily due
to
exchange rate movements. Selling, general and administrative
expenses decreased by US$ 0.7 million, or 10%, primarily due to reductions
in marketing and research costs.
|
ROMANIA
SEGMENT FINANCIAL INFORMATION
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
36,535
|
$ |
28,135
|
$ |
8,400
|
||||||
Non-spot
revenues
|
2,807
|
1,736
|
1,071
|
|||||||||
Segment
Net Revenues
|
$ |
39,342
|
$ |
29,871
|
$ |
9,471
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
39,342
|
$ |
29,871
|
$ |
9,471
|
||||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
Net Revenues
|
$ |
39,342
|
$ |
29,871
|
$ |
9,471
|
||||||
Segment
EBITDA
|
$ |
15,136
|
$ |
11,613
|
$ |
3,523
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
15,274
|
$ |
11,613
|
$ |
3,661
|
||||||
Non-broadcast
operations
|
(138 | ) |
-
|
(138 | ) | |||||||
Segment
EBITDA
|
$ |
15,136
|
$ |
11,613
|
$ |
3,523
|
||||||
Segment
EBITDA Margin
|
38 | % | 39 | % | (1 | )% |
·
|
Segment
Net Revenues for the three months ended March 31, 2007 increased
by US$ 9.5 million, or 32%, compared to the three months ended March
31,
2006. Spot revenues increased by US$ 8.4 million, or 30%, driven
primarily
by increases in the average revenue per rating point sold in each
of our
three existing channels, which more than offset a slight decline
in the
volume of GRPs sold. Non-spot revenues increased by US$ 1.1 million,
or
62%, primarily due to increased cable tariff revenue. The acquisition
of
TV Sport added approximately US$ 0.4 million to our revenues for
the three
months ended March 31, 2007.
|
·
|
Segment
EBITDA for the three months ended March 31, 2007 increased by US$
3.5 million, or 30%, compared to the three months ended March 31,
2006,
with an EBITDA margin of 38% compared to 39% in the three months
ended
March 31, 2006. Costs charged in arriving at Segment EBITDA for
the three months ended March 31, 2007 increased by US$ 5.9 million,
or
33%, compared to the three months ended March 31, 2006. Cost of
programming grew by US$ 5.8 million, or 50%, due partially to the
inclusion of the salary-related costs of production staff within
cost of
programming rather than operating costs; excluding the impact of
this
change in classification, cost of programming increased by US$ 4.0
million, or 34%, as a result of increased market competition and
investment in quality programming. Other operating costs
decreased by US$ 0.1 million, or 2%, after the difference in
classification described above; excluding the impact of this change
in
classification, other operating costs increased by US$ 1.7 million,
or
38%, primarily due to increased staffing costs. Selling,
general and administrative expenses increased by US$ 0.2 million,
or 13%,
primarily due to increased office running costs. The
acquisition of TV Sport did not have a significant impact on our
Segment
EBITDA for the three months ended March 31,
2007.
|
SLOVAK
REPUBLIC SEGMENT FINANCIAL INFORMATION
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
18,075
|
$ |
10,314
|
$ |
7,761
|
||||||
Non-spot
revenues
|
602
|
892
|
(290 | ) | ||||||||
Segment
Net Revenues
|
$ |
18,677
|
$ |
11,206
|
$ |
7,471
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
18,662
|
$ |
11,206
|
$ |
7,456
|
||||||
Non-broadcast
operations
|
15
|
-
|
15
|
|||||||||
Segment
Net Revenues
|
$ |
18,677
|
$ |
11,206
|
$ |
7,471
|
||||||
Segment
EBITDA
|
$ |
5,756
|
$ | (977 | ) | $ |
6,733
|
|||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
5,859
|
$ | (951 | ) | $ |
6,810
|
|||||
Non-broadcast
operations
|
(103 | ) | (26 | ) | (77 | ) | ||||||
Segment
EBITDA
|
$ |
5,756
|
$ | (977 | ) | $ |
6,733
|
|||||
Segment
EBITDA Margin
|
31 | % | (9 | )% | 40 | % |
·
|
Segment
Net Revenues for the three months ended March 31, 2007 increased
by US$ 7.5 million, or 67%, compared to the three months ended March
31,
2006. In local currency, Segment Net Revenues increased by
61%. The increase in Segment Net Revenues was due to an
increase of US$ 7.8 million, or 75%, in spot revenues partially offset
by
a decline of US$ 0.3 million, or 33%, in non-spot revenues. The
increase in spot revenues is mainly due to increases in the average
revenue per rating point sold, particularly in prime time, as well
as an
increase in the volume of advertising spots sold . Our
advertising revenues benefited from the launch of a new mobile phone
operator during the three months ended March 31, 2007, as well as
increased spending from existing customers, particularly in the
pharmaceutical sector. Segment Net Revenues for the three
months ended March 31, 2006 included approximately US$ 1.8 million
in
respect of the period prior to acquisition on January 23, 2006 when
Markiza was accounted for as an equity
affiliate.
|
·
|
Segment
EBITDA
for
the
three months ended March 31, 2007 increased by US$ 6.7 million, or
689%,
compared to the three months ended March 31, 2006, resulting in an
EBITDA
margin of 31% compared to (9)% in the three months ended March 31,
2006. Costs charged in arriving at Segment EBITDA for the three
months ended March 31, 2007 increased by US$ 0.7 million, or 6%,
compared
to the three months ended March 31, 2006. Cost of programming
decreased by US$ 0.4 million, or 6%; the amount charged in the three
months ended March 31, 2006 included a charge of US$ 0.7 million
to write
off an unsuccessful show. Other operating costs increased by
US$ 0.6 million, or 16%, primarily due to increased staff costs of
US$ 0.4
million and increased broadcast and operating expenses of US$ 0.2
million. Selling, general and administrative expenses increased
by US$ 0.5 million, or 36%, primarily due to increased office running
costs and increased marketing and research costs. Costs charged
in arriving at Segment EBITDA for the three months ended March 31,
2006
included US$ 1.7 million of programming costs, US$ 0.9 million of
other
operating costs and US$ 0.4 million of selling, general and administrative
expenses in respect of the period prior to acquisition on January
23,
2006.
|
SLOVENIA
SEGMENT FINANCIAL INFORMATION
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
11,325
|
$ |
9,741
|
$ |
1,584
|
||||||
Non-spot
revenues
|
1,344
|
486
|
858
|
|||||||||
Segment
Net Revenues
|
$ |
12,669
|
$ |
10,227
|
$ |
2,442
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
12,238
|
$ |
9,932
|
$ |
2,306
|
||||||
Non-broadcast
operations
|
431
|
295
|
136
|
|||||||||
Segment
Net Revenues
|
$ |
12,669
|
$ |
10,227
|
$ |
2,442
|
||||||
Segment
EBITDA
|
$ |
3,001
|
$ |
3,033
|
$ | (32 | ) | |||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
3,022
|
$ |
3,009
|
$ |
13
|
||||||
Non-broadcast
operations
|
(21 | ) |
24
|
(45 | ) | |||||||
Segment
EBITDA
|
$ |
3,001
|
$ |
3,033
|
$ | (32 | ) | |||||
Segment
EBITDA Margin
|
24 | % | 30 | % | (6 | )% |
·
|
Segment
Net Revenues for the three months ended March 31, 2007 increased
by US$ 2.4 million, or 24%, compared to the three months ended March
31,
2006. Spot revenues increased by US$ 1.6 million, or 16%, as
our operations benefited from an increase in the average revenue
per
thirty-second advertising spot, particularly in prime time, which
more
than offset a decline in the volume of GRPs sold. Non-spot
revenues increased by US$ 0.9 million, or 177%, due to an increased
level
of sponsorship and an increase in non-broadcast advertising
revenue.
|
·
|
Segment
EBITDA for the three months ended March 31, 2007 was in line with
the three months ended March 31, 2006, resulting in an EBITDA margin
of
24% compared to 30% in the three months ended March 31,
2006. Costs charged in arriving at Segment EBITDA for the three
months ended March 31, 2007 increased by US$ 2.5 million, or 34%,
compared
to the three months ended March 31, 2006. Cost of programming
grew by US$ 2.3 million, or 75%, due to increased investment in
programming in a more competitive market environment. Other
operating costs decreased by US$ 0.3 million, or 10%, primarily due
to
lower salary and freelance costs, partially offset by higher transmitter
and associated maintenance costs. Selling, general and
administrative expenses increased by US$ 0.5 million, or 41%, primarily
due to higher marketing and promotion
costs.
|
UKRAINE
(STUDIO 1+1) SEGMENT FINANCIAL INFORMATION
For
the Three Months Ended March 31, (US$
000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
14,821
|
$ |
22,887
|
$ | (8,066 | ) | |||||
Non-spot
revenues
|
3,254
|
2,591
|
663
|
|||||||||
Segment
Net Revenues
|
$ |
18,075
|
$ |
25,478
|
$ | (7,403 | ) | |||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
18,075
|
$ |
25,478
|
$ | (7,403 | ) | |||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
Net Revenues
|
$ |
18,075
|
$ |
25,478
|
$ | (7,403 | ) | |||||
Segment
EBITDA
|
$ | (2,370 | ) | $ |
10,988
|
$ | (13,358 | ) | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (2,338 | ) | $ |
10,988
|
$ | (13,326 | ) | ||||
Non-broadcast
operations
|
(32 | ) |
-
|
(32 | ) | |||||||
Segment
EBITDA
|
$ | (2,370 | ) | $ |
10,988
|
$ | (13,358 | ) | ||||
Segment
EBITDA Margin
|
(13 | )% | 43 | % | (56 | )% |
·
|
Segment
Net Revenues for the three months ended March 31, 2007 decreased
by US$ 7.4 million, or 29%, compared to the three months ended March
31,
2006. Spot revenues decreased by US$ 8.1 million, or 35%. There
was an increase in the volume of GRPs sold in the three months ended
March
31, 2007 compared to the three months ended March 31, 2006. This
was
offset by a decrease in the average revenue per thirty-second
advertising. Non-spot revenues increased by US$ 0.7 million, or
26%, primarily due to the sale of surplus programming and increased
gameshow and short message service (“SMS”)
revenues.
|
·
|
Segment
EBITDA
for
the
three months ended March 31, 2007 decreased by US$ 13.4 million,
or 122%,
compared to the three months ended March 31, 2006, resulting in an
EBITDA
margin of (13)% compared to 43% in the three months ended March 31,
2006. Costs charged in arriving at Segment EBITDA for the three
months ended March 31, 2007 increased by US$ 6.0 million, or 41%,
compared
to the three months ended March 31, 2006. Cost of programming
grew by US$ 5.3 million, or 63%, due to price inflation for Russian
programming, which is essential to maintaining strong ratings, as
well as
improvements to our programming schedule. Other operating costs
increased by US$ 0.5 million, or 14%, due to increased broadcast
operating
expenses and increased salary costs. Selling, general and
administrative expenses increased by US$ 0.1 million, or
6%.
|
UKRAINE
(KINO, CITI) SEGMENT FINANCIAL INFORMATION
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006(1)
|
Movement
|
||||||||||
Spot
revenues
|
$ |
143
|
$ |
215
|
$ | (72 | ) | |||||
Non-spot
revenues
|
255
|
159
|
96
|
|||||||||
Segment
Net Revenues
|
$ |
398
|
$ |
374
|
$ |
24
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
398
|
$ |
374
|
$ |
24
|
||||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
Net Revenues
|
$ |
398
|
$ |
374
|
$ |
24
|
||||||
Segment
EBITDA
|
$ | (2,417 | ) | $ | (126 | ) | $ | (2,291 | ) | |||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (2,417 | ) | $ | (126 | ) | $ | (2,291 | ) | |||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
EBITDA
|
$ | (2,417 | ) | $ | (126 | ) | $ | (2,291 | ) | |||
Segment
EBITDA Margin
|
(607 | )% | (34 | )% | (573 | )% |
·
|
Segment
Net Revenues for the three months ended March 31, 2007 were in
line with the three months ended March 31, 2006. Spot revenues decreased
by US$ 0.1 million, or 33%, primarily due to the level of political
advertising aired in 2006 ahead of the parliamentary elections on
March
26, 2006. Non-spot revenues increased by US$ 0.1 million, or
60%, primarily due to increased program
sponsorship.
|
·
|
Segment
EBITDA for the three months ended March 31, 2007 decreased by US$
2.3 million, or 1,818%, compared to the three months ended March
31, 2006,
resulting in an EBITDA margin of (607)% compared to (34)% in the
three
months ended March 31, 2006. Costs charged in arriving at
Segment EBITDA for the three months ended March 31, 2007 increased
by US$
2.3 million, or 462%, compared to the three months ended March 31,
2006. Cost of programming grew by US$ 1.7 million, or
3162%. Other operating costs increased by US$ 0.4 million, or
165%. Selling, general and administrative expenses increased by
US$ 0.2 million, or 107%.
|
For
the Three Months Ended
March
31, (US$ 000's)
|
||||||||
2007
|
2006
|
|||||||
Production
expenses
|
$ |
27,558
|
$ |
22,975
|
||||
Program
amortization
|
38,795
|
25,443
|
||||||
Cost
of programming
|
$ |
66,353
|
$ |
48,418
|
|
·
|
US$
5.8 million of additional programming costs from our Romania
operations;
|
|
·
|
US$
5.3 million of additional programming costs from our Ukraine (STUDIO
1+1)
operations;
|
|
·
|
US$
3.8 million of additional programming costs from our Croatia
operations;
|
|
·
|
US$
2.3 million of additional programming costs from our Slovenia
operations;
|
|
·
|
US$
1.7 million of additional programming costs from our Ukraine (KINO,
CITI)
operations;
|
|
·
|
US$
1.2 million of additional programming costs from our Slovak Republic
operations, which have been consolidated for the entire three-month
period
in 2007. Programming costs incurred in the three
months ended March 31, 2006, including the pre-acquisition period
prior to
January 23, 2006, were US$ 1.7 million;
and,
|
|
·
|
US$
2.2 million of reduced programming costs from our Czech Republic
operations.
|
For
the Three Months Ended March 31,
(US$
000's)
|
||||||||
2007
|
2006
|
|||||||
Program
amortization:
|
||||||||
Croatia
(NOVA TV)
|
$ |
5,399
|
$ |
3,418
|
||||
Czech
Republic (TV NOVA)
|
6,556
|
7,383
|
||||||
Romania
(PRO TV, ACASA, PRO CINEMA, PRO TV INTERNATIONAL and
Sport.ro)
|
9,429
|
6,716
|
||||||
Slovak
Republic (MARKIZA TV) (post-acquisition)
|
3,207
|
436
|
||||||
Slovenia
(POP TV and KANAL A)
|
2,196
|
1,417
|
||||||
Ukraine
(STUDIO 1+1)
|
10,927
|
6,046
|
||||||
Ukraine
(KINO, CITI)
|
1,081
|
27
|
||||||
$ |
38,795
|
$ |
25,443
|
|||||
Cash
paid for programming:
|
||||||||
Croatia
(NOVA TV)
|
$ |
905
|
$ |
4,366
|
||||
Czech
Republic (TV NOVA)
|
6,579
|
11,936
|
||||||
Romania
(PRO TV, ACASA, PRO CINEMA, PRO TV INTERNATIONAL)
|
10,046
|
6,606
|
||||||
Slovenia
(POP TV and KANAL A)
|
2,172
|
1,819
|
||||||
Ukraine
(STUDIO 1+1)
|
10,484
|
7,972
|
||||||
Ukraine
(KINO, CITI)
|
742
|
115
|
||||||
$ |
30,928
|
$ |
32,814
|
|||||
Slovak
Republic (MARKIZA TV)
|
3,699
|
3,279
|
||||||
$ |
34,627
|
$ |
36,093
|
Consolidated
Net Revenues
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Croatia
|
$ |
7,232
|
$ |
3,810
|
$ |
3,422
|
||||||
Czech
Republic
|
51,519
|
40,549
|
10,970
|
|||||||||
Romania
|
39,342
|
29,871
|
9,471
|
|||||||||
Slovak
Republic
|
18,677
|
9,445
|
9,232
|
|||||||||
Slovenia
|
12,669
|
10,227
|
2,442
|
|||||||||
Ukraine
(Studio 1+1)
|
18,075
|
25,478
|
(7,403 | ) | ||||||||
Ukraine
(KINO, CITI)
|
398
|
374
|
24
|
|||||||||
Total
Consolidated Net Revenues
|
$ |
147,912
|
$ |
119,754
|
$ |
28,158
|
Consolidated
Cost of Revenues
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Operating
costs
|
$ |
25,657
|
$ |
22,972
|
$ |
2,685
|
||||||
Cost
of programming
|
66,353
|
48,418
|
17,935
|
|||||||||
Depreciation
of station property, plant and equipment
|
6,899
|
5,702
|
1,197
|
|||||||||
Amortization
of broadcast licenses and other intangibles
|
5,162
|
4,332
|
830
|
|||||||||
Total
Consolidated Cost of Revenues
|
$ |
104,071
|
$ |
81,424
|
$ |
22,647
|
Consolidated
Station Selling, General and Administrative
Expenses
|
||||||||||||
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Croatia
|
$ |
1,726
|
$ |
1,542
|
$ |
184
|
||||||
Czech
Republic
|
5,093
|
5,682
|
(589 | ) | ||||||||
Romania
|
2,425
|
2,164
|
261
|
|||||||||
Slovak
Republic
|
1,939
|
1,020
|
919
|
|||||||||
Slovenia
|
1,704
|
1,213
|
491
|
|||||||||
Ukraine
(Studio 1+1)
|
2,467
|
2,324
|
143
|
|||||||||
Ukraine
(KINO, CITI)
|
427
|
221
|
206
|
|||||||||
Total
Consolidated Station Selling, General and Administrative
Expenses
|
$ |
15,781
|
$ |
14,166
|
$ |
1,615
|
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Corporate
operating costs (excluding non-cash stock-based
compensation)
|
$ |
7,542
|
$ |
7,293
|
$ |
249
|
||||||
Non-cash
stock-based compensation
|
1,262
|
688
|
574
|
|||||||||
Corporate
Operating Costs (including non-cash stock-based
compensation)
|
$ |
8,804
|
$ |
7,981
|
$ |
823
|
·
|
Increased
staff related costs; and
|
·
|
Increased
business development expenses incurred in researching potential
acquisition targets.
|
·
|
Included
within corporate operating costs is a lease-exit charge of approximately
US$ 1.6 million (including additional depreciation of US$ 0.3 million)
incurred following relocation of our London office during the first
quarter of 2006.
|
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Operating
Income
|
$ |
19,256
|
$ |
16,183
|
$ |
3,073
|
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Interest
income
|
$ |
1,414
|
$ |
1,453
|
$ | (39 | ) | |||||
Interest
expense
|
(11,396 | ) | (10,518 | ) | (878 | ) | ||||||
Foreign
currency exchange loss, net
|
(3,136 | ) | (10,862 | ) |
7,726
|
|||||||
Change
in fair value of derivatives
|
4,524
|
-
|
4,524
|
|||||||||
Other
expense
|
(6,213 | ) | (548 | ) | (5,665 | ) | ||||||
Provision
for income taxes
|
(5,059 | ) | (3,994 | ) | (1,065 | ) | ||||||
Minority
interest in loss / (income) of consolidated subsidiaries
|
360
|
(5,441 | ) |
5,801
|
||||||||
Equity
in income / (loss) of unconsolidated affiliates
|
-
|
(730 | ) |
730
|
||||||||
Discontinued
operations
|
-
|
(3,807 | ) |
3,807
|
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Markiza
(Slovak Republic)
|
$ |
-
|
$ | (737 | ) | $ |
737
|
|||||
Radio
Pro (Romania)
|
-
|
7
|
(7 | ) | ||||||||
Equity
in Income / (Loss) of Unconsolidated Affiliates
|
$ |
-
|
$ | (730 | ) | $ | (730 | ) |
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Tax
on disposal of discontinued operations
|
$ |
-
|
$ | (3,807 | ) | $ |
3,807
|
|||||
Discontinued
operations
|
$ |
-
|
$ | (3,807 | ) | $ |
3,807
|
Summarized
Condensed Consolidated Balance Sheet (US$ 000’s)
|
||||||||||||
March
31, 2007
|
December
31, 2006
|
Movement
|
||||||||||
Current
assets
|
$ |
424,715
|
$ |
413,616
|
$ |
11,099
|
||||||
Non-current
assets
|
1,423,576
|
1,405,384
|
18,192
|
|||||||||
Current
liabilities
|
213,728
|
182,961
|
30,767
|
|||||||||
Non-current
liabilities
|
578,139
|
574,084
|
4,055
|
|||||||||
Minority
interests in consolidated subsidiaries
|
25,949
|
26,189
|
(240 | ) | ||||||||
Shareholders’
equity
|
$ |
1,030,475
|
$ |
1,035,766
|
$ | (5,291 | ) |
For
the Three Months Ended March 31, (US$ 000's)
|
||||||||
2007
|
2006
|
|||||||
Net
cash generated from continuing operating activities
|
$ |
31,913
|
$ |
31,693
|
||||
Net
cash used in continuing investing activities
|
(20,901 | ) | (67,518 | ) | ||||
Net
cash received from financing activities
|
809
|
196,981
|
||||||
Net
cash used in discontinued operations – operating
activities
|
(1,624 | ) | (1,690 | ) | ||||
Net
increase in cash and cash equivalents
|
$ |
11,436
|
$ |
161,283
|
·
|
Payments
of EUR 6.7 million (approximately US$ 8.4 million) in connection
with our
acquisition of TV Sport (for further information, see Part I, Item
1, Note
3);
|
·
|
Payment
of the final US$ 0.2 million of deferred consideration due on our
acquisition of a 65.5% stake in Ukrpromtorg;
and
|
·
|
Capital
expenditure of US$ 12.0 million.
|
Operating
segment (US$ 000’s)
|
March
31, 2007
|
December
31, 2006
|
||||||
Croatia
|
$ |
77,998
|
$ |
67,623
|
||||
Czech
Republic
|
418,446
|
434,897
|
||||||
Romania
|
39,053
|
25,620
|
||||||
Slovak
Republic
|
24,069
|
23,670
|
||||||
Slovenia
|
-
|
-
|
||||||
Ukraine
(STUDIO 1+1)
|
87
|
-
|
||||||
Ukraine
(KINO, CITI)
|
9,368
|
4,621
|
||||||
Total
|
$ |
569,021
|
$ |
556,431
|
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
|
$ |
506,433
|
$ |
11,991
|
$ |
1,700
|
$ |
-
|
$ |
492,742
|
||||||||||
Long-Term
Debt – interest
|
231,268
|
42,473
|
84,862
|
84,556
|
19,377
|
|||||||||||||||
Capital
Lease Obligations
|
6,542
|
943
|
1,377
|
1,187
|
3,035
|
|||||||||||||||
Operating
Leases
|
6,643
|
3,218
|
2,473
|
952
|
-
|
|||||||||||||||
Unconditional
Purchase Obligations
|
103,170
|
95,240
|
7,784
|
-
|
146
|
|||||||||||||||
Other
Long-Term Obligations
|
18,023
|
15,459
|
2,564
|
-
|
-
|
|||||||||||||||
Total
Contractual Obligations
|
$ |
872,079
|
$ |
169,324
|
$ |
100,760
|
$ |
86,695
|
$ |
515,300
|
March
31, 2007
(US$
000’s)
|
||||||||
Corporate
|
(1 | )–(2) | $ |
492,742
|
||||
Croatia
operations
|
(3)
|
-
|
||||||
Czech
Republic operations
|
(4 | )–(6) |
11,892
|
|||||
Romania
operations
|
(7)
|
94
|
||||||
Slovenia
operations
|
(8)
|
-
|
||||||
Ukraine
(KINO, CITI) operations
|
(9)
|
1,705
|
||||||
Total
|
$ |
506,433
|
(1)
|
In
May 2005, we issued Senior Notes in the aggregate principal amount
of EUR
370.0 million consisting of EUR 245.0 million of 8.25% Senior Notes
due
May 2012 and EUR 125.0 million of floating rate Senior Notes due
May 2012,
which bear interest at six-month Euro Inter-Bank Offered Rate (“EURIBOR”)
plus 5.50% (9.23% was applicable at March 31, 2007). Interest
is payable semi-annually in arrears on each May 15 and November
15.
|
(2)
|
On
July 21, 2006, we entered into a five-year revolving loan agreement
for
EUR 100.0 million (approximately US$ 133.2 million) arranged by the
European Bank for Reconstruction and Development (the
“Loan”). ING Bank N.V. (“ING”) and Ceska Sporitelna, a.s.
(“CS”) are participating in the facility for up to EUR 50.0 million in
aggregate.
|
(3)
|
On
March 28, 2007, we repaid EUR 0.6 million (approximately US$ 0.8
million)
which had been drawn by our Croatia operations under two loan agreements
with Hypo Alpe-Adria Bank d.d. The security held by the bank was
also
released.
|
(4)
|
CET
21 has a four-year credit facility of CZK 1.2 billion (approximately
US$
57.1 million) with Ceska Sporitelna, a.s. (“CS”). The final
repayment date is October 31, 2009. 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”) rate plus
1.95%. 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, 2007,
there were no drawings under this
facility.
|
(5)
|
CET
21 has a working capital credit facility of CZK 250.0 million
(approximately US$ 11.9 million) with CS, which matures on April
30,
2007. This working capital facility bears interest at the
three-month PRIBOR rate plus 1.65%. On April 7, 2007 this facility
was
extended to April 30, 2008. 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, 2007, the full
CZK 250.0 million (approximately US$ 11.9 million) was drawn under
this
facility bearing interest at an aggregate 4.22% (the applicable
three-month PRIBOR rate at March 31, 2007 was
2.57%).
|
(6)
|
As
at March 31, 2007, there were no drawings under a CZK 600.0 million
(approximately US$ 28.5 million) factoring facility with Factoring
Ceska
Sporitelna, a.s., a subsidiary of CS. This facility is
available until March 31, 2010 and bears interest at the rate of
one-month
PRIBOR plus 1.40% for the period that actively assigned accounts
receivable are outstanding. On April 11, 2007 the size of this facility
was reduced from CZK 600.0 million to CZK 300.0
million.
|
(7)
|
As
at March 31, 2007, an amount of RON 242,739 (approximately US$ 0.1
million) was outstanding under a loan agreement from one of the founding
shareholders of TV Sport. The loan is interest free and is repayable
in
equal monthly instalments by August 31,
2007.
|
(8)
|
A
revolving five-year facility agreement was entered into by Pro Plus
for up
to EUR 37.5 million (approximately US$ 49.9 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, 2007, EUR 33.8 million (approximately US$
45.0 million) was available for drawing under this revolving
facility; there were no drawings
outstanding.
|
(9)
|
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, 2007, 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%.
|
Jurisdiction
|
Year
|
Croatia
|
2003
|
Czech
Republic
|
2003
|
Germany
|
2000
|
Netherlands
|
2004
|
Romania
|
2002
|
Slovak
Republic
|
2001
|
Slovenia
|
2001
|
Ukraine
|
2003
|
United
States
|
2001
|
Expected
Maturity Dates
|
2007
|
2008
|
2009
|
2010
|
2011
|
Thereafter
|
||||||||||||||||||
Total
debt in Euro (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
-
|
-
|
-
|
-
|
-
|
245,000
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
-
|
-
|
-
|
8.25 | % | |||||||||||||||||
Variable
rate
|
-
|
-
|
-
|
-
|
-
|
125,000
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
-
|
-
|
-
|
9.23 | % | |||||||||||||||||
Total
debt in US$ (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
-
|
-
|
1,700
|
-
|
-
|
-
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
9.00 | % |
-
|
-
|
-
|
|||||||||||||||||
Total
debt in CZK (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Variable
rate
|
250,000
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Average
interest rate (%)
|
4.22 | % |
-
|
-
|
-
|
-
|
-
|
Yearly
interest charge if interest rates increase by
(US$
000s):
|
|||||||
Value
of Debt as at
March
31, 2007 (US$
000's)
|
Interest
Rate
as
at March
31,
2007
|
Yearly
Interest
Charge
(US$
000’s)
|
1%
|
2%
|
3%
|
4%
|
5%
|
166,467
(EUR
125.0 million)
|
9.23%
|
15,360
|
17,025
|
18,689
|
20,354
|
22,019
|
23,683
|
11,892
(CZK
250.0 million)
|
4.22%
|
502
|
621
|
740
|
859
|
978
|
1,096
|
Total
|
15,862
|
17,645
|
19,429
|
21,212
|
22,996
|
24,780
|
|
·
|
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
content providers or other 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 and the EBRD Loan
Agreement.
|
31.01
|
Sarbanes-Oxley
Certification s. 302 CEO, dated May 3, 2007
|
31.02
|
Sarbanes-Oxley
Certification s. 302 CFO, dated May 3, 2007
|
32.01
|
Sarbanes-Oxley
Certification – CEO and CFO, dated May 3, 2007 (furnished
only)
|
Date:
May 3, 2007
|
/s/
Michael Garin
|
Michael
Garin
|
|
Chief
Executive Officer
|
|
(Duly
Authorized Officer)
|
|
Date:
May 3, 2007
|
/s/
Wallace Macmillan
|
Wallace
Macmillan
|
|
Vice
President – Finance
|
|
(Principal
Financial Officer and Accounting
Officer)
|