~~Index~~

V. Critical Accounting Policies and Estimates

Our accounting policies that have a material effect on our financial condition and results of operations are more fully described in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission ("SEC") on February 22, 2016. The preparation of these financial statements requires us to make judgments in selecting appropriate assumptions for calculating financial estimates, which inherently contain some degree of uncertainty. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. Using these estimates we make judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe our critical accounting policies are as follows: program rights, goodwill and intangible assets, impairment or disposal of long-lived assets, revenue recognition, income taxes, foreign exchange, determination of the fair value of financial instruments, contingencies and discontinued operations. These critical accounting policies affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. See Item 1, Note 2, "Basis of Presentation" for a discussion of accounting standards adopted in the period, and recently issued accounting standards not yet adopted.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We engage in activities that expose us to various market risks, including the effect of changes in foreign currency exchange rates and interest rates. We do not engage in speculative transactions, nor do we hold or issue financial instruments for trading purposes. The table below sets forth our market risk sensitive instruments as at the following dates:

~~June~~September 30, 2016:



Expected Maturity Dates	2016	2017		2018			2019		2020	Thereafter
Long-term Debt (000's):
Variable rate (EUR)	—	—		250,800			235,335		—	468,800
Average interest rate ⁽¹⁾	—	—		1.50	%		1.50	%	—	1.50	%

Interest Rate Swaps (000's):
Variable to fixed (EUR)	—	250,800		250,800		⁽²⁾	235,335		—	468,800
Average pay rate	—	0.21	%	0.14	%		0.31	%	—	0.28	%
Average receive rate	—	—	%	—	%		—	%	—	—	%

⁽¹⁾

As discussed in Item 1, Note 4, "Long-term Debt and Other Financing Arrangements", as consideration for Time Warner's guarantee of the Euro Term Loans, we pay Guarantee Fees to Time Warner based on the amounts outstanding on the Euro Term Loans, each calculated such that the all-in borrowing rate on each the 2018 Euro Term Loan and the 2019 Euro Term Loan is 8.5% per annum and the all-in borrowing rate on the 2021 Euro Term Loan is 10.0% per annum.


⁽²⁾	The interest rate swaps maturing in 2018 are forward starting to coincide with the maturity date of the interest rate swaps maturing in 2017. See Item 1, Note 11, "Financial Instruments and Fair Value Measurements".

December 31, 2015:



Expected Maturity Dates	2016	2017		2018	2019		2020	Thereafter
Long-term Debt (000's):
Variable rate (EUR)¹	—	250,800		—	235,335		—	—
Average interest rate	—	1.50	%	—	1.50	%	—	—
Fixed rate (US$)	—	540,698		—	—		—	—
Average interest rate	—	15.00	%	—	—		—	—

Interest Rate Swaps (000's):
Variable to fixed (EUR)	—	250,800		—	235,335		—	—
Average pay rate	—	0.21	%	—	0.31	%	—	—
Average receive rate	—	—	%	—	—	%	—	—


⁽¹⁾	As discussed in Item 8,1, Note 4, "Long-term Debt and Other Financing Arrangements", as consideration for Time Warner's guarantee of the Euro Term Loans, we pay Guarantee Fees to Time Warner based on the amounts outstanding on the 2018 Euro Term Loan and the 2019 Euro Term Loan, each calculated such that the all-in borrowing rate on each is 8.5%.

Foreign Currency Exchange Risk Management

We conduct business in a number of currencies other than our functional currencies. As a result, we are subject to foreign currency exchange rate risk due to the effects that foreign exchange rate movements of these currencies have on our costs and on the cash flows we receive from our subsidiaries. In limited instances, including the transactions noted below, we enter into forward foreign exchange contracts to minimize foreign currency exchange rate risk.

~~Index~~

On December 3, 2015, we entered into two forward foreign exchange contracts to reduce our exposure to movements in the USD to EUR exchange rates related to contractual payments under dollar-denominated agreements to be made during 2016. At September 30, 2016, forward foreign exchange contracts with aggregate notional amount of approximately US$ $10.6 million were outstanding.

On February 11, 2016, we entered into forward foreign exchange contracts to reduce our exposure to movements in the USD to EUR exchange rates related to contractual payments under dollar-denominated agreements to be made during 2016. At ~~June~~September 30, 2016, forward foreign exchange contracts with an aggregate notional amount of approximately US$ ~~32.9~~17.7 million were outstanding.

On February 17, 2016, we entered into five USD to EUR forward exchange contracts with an aggregate notional amount of US$ 557.0 million, to reduce our exposure to USD to EUR exchange rate fluctuations in connection with the refinancing of the dollar-denominated 2017 PIK Notes and 2017 Term Loan with the 2021 Euro Term Loan. The forwards were settled on April 7, 2016.

Interest Rate Risk Management

The Euro Term Loans each bear interest at a variable rate based on EURIBOR plus an applicable margin. We are party to a number of interest rate swap agreements intended to reduce our exposure to interest rate movements (see Item 1, Note 11, "Financial Instruments and Fair Value Measurements").

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Item 4. Controls and Procedures

We have established disclosure controls and procedures designed to ensure that information required to be disclosed in our Quarterly Report on Form 10-Q is recorded, processed, summarized and reported within the specified time periods and is designed to ensure that information required to be disclosed is accumulated and communicated to management, including the co-Principal Executive Officers and the Principal Financial Officer, to allow timely decisions regarding required disclosure.

Our co-Principal Executive Officers and our Principal Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of ~~June~~September 30, 2016 and concluded that our disclosure controls and procedures were effective as of that date. There has been no change in our internal control over financial reporting during the three months ended ~~June~~September 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

General

We are from time to time party to legal proceedings, arbitrations and regulatory proceedings arising in the normal course of our business operations. We evaluate, on a quarterly basis, developments in such matters and provide accruals for such matters, as appropriate. In making such decisions, we consider the degree of probability of an unfavorable outcome and our ability to make a reasonable estimate of the amount of a loss. An unfavorable outcome in any such proceedings, if material, could have an adverse effect on our business or consolidated financial statements.

Item 1A. Risk Factors

This report and the following discussion of risk factors contain forward-looking statements as discussed in Part 1, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations". Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks and uncertainties described below and elsewhere in this report. These risks and uncertainties are not the only ones we may face. Additional risks and uncertainties of which we are not aware, or that we currently deem immaterial, may also become important factors that affect our financial condition, results of operations and cash flows.

Risks Relating to Our Financial Position

Global or regional economic conditions and the credit crisis have adversely affected our financial position and results of operations. We cannot predict if ~~or when economic conditions~~the recovery in ~~the~~our operating countries ~~in which we operate~~ will ~~recover~~continue or how long ~~any recovery~~it may last. A failure to achieve lasting recoveries will continue to adversely affect our results of operations.

The results of our operations depend heavily on advertising revenue, and demand for advertising is affected by general economic conditions in the region and globally. The economic uncertainty affecting the global financial markets and banking system at the beginning of 2009 following the onset of the global financial crisis had a sustained adverse impact on ~~economic growth in our operating countries. Furthermore, the economic downturn has adversely affected~~ consumer and business spending, access to credit, liquidity, investment spending, asset values and employment rates. These adverse economic conditions ~~have~~ had a material negative impact on ~~the~~ advertising spending in our markets, ~~leading our customers to continue to spend less on advertising than at the peak period in 2008. This has~~which negatively impacted our ~~financial position, results of operations and cash flows since 2008. While~~advertising revenues in the periods that followed. Since 2014, our markets have experienced overall growth in real GDP (as adjusted for inflation) ~~is estimated to have improved in our markets since 2014,~~and advertising spending; however we cannot predict if ~~this represents~~ the ~~start of a sustained~~ recovery that has begun will continue or how long it will last. Any significant deterioration of general economic conditions in our markets would have an adverse economic impact on our advertising revenues. In addition, although we believe the economies of the countries in which we operate and advertising intensity (the ratio of total advertising spend per capita to nominal GDP per capita) will converge with developed nations, such convergence may not occur in the time frame we expect, or at all. ~~In addition,~~Moreover, the occurrence of disasters, acts of terrorism, civil or military conflicts or general political instability and responses to it, such as the imposition of economic sanctions against Russia, may also cause a deterioration in general economic conditions that may reduce advertising spending. Any of these developments would have a significant negative effect on our financial position, results of operations and cash flows.

Concerns regarding ~~the stability of~~ the Eurozone and the impact on the region of the outcome of the United Kingdom’s referendum to exit from the European Union (“EU”) may adversely affect our financial position and results of operations.

Continued economic softness in the Eurozone, including a slowdown in the growth of consumer prices, prompted the European Central Bank to embark upon quantitative easing in 2015. Economic events related to the sovereign debt crisis in several EU countries have also highlighted issues relating to the strength of the banking sector in Europe and the Euro. Though the EU has created external funding and stability mechanisms to provide liquidity and financial assistance to Eurozone member states and financial institutions, there can be no assurance that the market disruptions in Europe related to sovereign debt and the banking sector or otherwise, including the increased cost of funding for certain governments and financial institutions, will not continue and there can be no assurance that funding and stability packages utilized previously will be available or, if provided, will be sufficient to stabilize affected economies or institutions.

Economic conditions in the EU will be further impacted by the results of the referendum held in the United Kingdom on June 23, 2016 whereby the United Kingdom electorate voted in favor of the United Kingdom leaving the EU, commonly referred to as “Brexit”. While the overall economic impact of Brexit on the EU and the Euro is difficult to estimate at present, decisions to conserve cash and reduce spending by consumers and businesses in the United Kingdom would have a negative impact on economic growth rates in the United Kingdom and, to a lesser extent, in the ~~European Union,~~EU, in particular those countries that are significant exporters to the United Kingdom. There is also significant uncertainty regarding the timing and terms on which the United Kingdom would leave the EU, and it is expected that a more protracted process to set those terms would have a more prolonged economic impact. In addition, there is concern that other countries may seek to leave the EU following the Brexit decision, increasing uncertainty in the region, which may have a further negative impact on investment and economic growth rates. Furthermore, the departure of the United Kingdom from the EU may affect the budgetary contributions and allocations among the EU member states in the medium term, including the countries in which we operate, which are net recipients of EU funding. Economic uncertainty caused by Brexit or other instability in the EU could cause significant volatility in EU markets and reduce economic growth rates in the countries in which we operate, which would negatively impact our business.

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Our operating results will be adversely affected if we cannot generate strong advertising sales.

We generate the majority of our revenues from the sale of advertising airtime on our television channels. The reduction in advertising spending in our markets following the onset of the global financial crisis at the beginning of 2009 and the sustained recessionary period that followed had a negative effect on television advertising prices. While we have attempted to combat this fall in prices by implementing new pricing strategies, the success of these strategies has varied from market to market and continues to be challenged by pressure from advertisers and discounting by competitors.

In addition to advertising pricing, other factors that may affect our advertising sales include general economic conditions (described ~~below)~~above), competition from other broadcasters and operators of other distribution platforms, changes in programming strategy, changes in distribution strategy, our channels’ technical reach, technological developments relating to media and broadcasting, seasonal trends in the advertising market, changing audience preferences and in how and when people view content and the accompanying advertising, increased competition for the leisure time of audiences and shifts in population and other demographics. Our advertising revenues also depend on our ability to maintain audience ratings and to generate ~~GRPs, which~~GRPs. This requires us to have a distribution strategy that reaches a significant audience as well as maintaining investments in ~~television~~ programming ~~and productions~~ at a sufficient level to continue to attract audiences. ~~Significant~~Changes in the distribution of our channels, such as our decision not to broadcast in DTT in the Slovak Republic, may reduce the number of people who can view our channels, which may negatively impact our audience share and GRPs generated. Furthermore, significant or sustained reductions in investments in programming or other operating costs in response to reduced advertising revenues ~~have~~ had and, if continued or repeated, may ~~continue to~~ have an adverse impact on our television viewing levels. Reductions in advertising spending in our markets, resistance to price increases and discounting of television advertising prices as well as competition for ratings from broadcasters seeking to attract similar audiences have had and may continue to have an adverse impact on our ability to maintain our advertising sales. A failure to maintain and increase advertising sales could have a material adverse effect on our financial position, results of operations and cash flows.

Fluctuations in exchange rates may continue to adversely affect our results of operations.

Our reporting currency is the dollar and CME Ltd.'s functional currency is the Euro. Our consolidated revenues and costs are divided across a range of European currencies. The strengthening of the dollar had a negative impact on reported revenues in 2015 when translated from the functional currencies of our operations. While we expect our revenues will continue to increase in 2016 in our operating currencies, a strong dollar would have a negative impact on our reported revenues. Furthermore, fluctuations in exchange rates may negatively impact programming costs. While local programming is generally purchased in local currencies, a significant portion of our content costs relate to foreign programming purchased pursuant to dollar-denominated agreements. If the dollar appreciates against the functional currencies of our operating segments, the cost of acquiring such content would be adversely affected, which could have a material adverse effect on our results of operations and cash flows.

Our liquidity constraints and debt service obligations may restrict our ability to fund our operations.

We have significant debt service obligations under the Euro Term Loans as well as the 2021 Revolving Credit Facility (when drawn). Furthermore, we are paying Guarantee Fees to Time Warner as consideration for its guarantees of the Euro Term Loans (collectively, the "TW Guarantees"). Although the entire Guarantee Fee in respect of the 2018 Euro Term Loan and the 2019 Euro Term Loan are, and a portion of the Guarantee Fee in respect of the 2021 Euro Term Loan can be, non-cash pay at our option, accruing such fees will further increase the amounts to be repaid at the maturity of these facilities. Accordingly, the payment of Guarantee Fees in kind will increase our already significant leverage. As a result of our debt service obligations and covenants contained in the related loan agreements, we are restricted under the Reimbursement Agreement and the 2021 Revolving Credit Facility (when drawn) ~~and the Reimbursement Agreement~~ in the manner in which our business is conducted, including but not limited to our ability to obtain additional debt financing to refinance existing indebtedness or to fund future working capital, capital expenditures, business opportunities or other corporate requirements. We may have a proportionally higher level of debt than our competitors, which may put us at a competitive disadvantage by limiting our flexibility in planning for, or reacting to, changes in our business, economic conditions and our industry. For additional information regarding the Reimbursement Agreement and the TW Guarantees, see Part I, Item I, Note 4, "Long-term Debt and Other Financing Arrangements".

We may be unable to refinance our existing indebtedness and may not be able to obtain favorable refinancing terms.

We have a substantial amount of indebtedness and we face the risk that we will not be able to renew, repay or refinance our indebtedness when due, or that the terms of any renewal or refinancing will not be on better terms than those of such indebtedness being refinanced. Under the Reimbursement Agreement and the 2021 Revolving Credit Facility (when drawn) ~~and the Reimbursement Agreement,~~, we can incur only limited amounts of additional indebtedness, other than indebtedness incurred to refinance existing indebtedness. In addition, pursuant to the Reimbursement Agreement, the all-in rates on the 2021 Euro Term Loan and the 2018 Euro Term Loan increase to 13% and 11%, respectively, on the date that is 180 days following a change of control (as defined therein); and pursuant to the 2021 Revolving Credit Facility, all commitments terminate following a change of control (as defined therein) and the interest rate on amounts outstanding increases to 13% on the date that is 180 days following such change of control. In the event we are not able to refinance our indebtedness, we might be forced to dispose of assets on disadvantageous terms or reduce or suspend operations, any of which would materially and adversely affect our financial condition, results of operations and cash flows.

We may be subject to changes in tax rates and exposure to additional tax liabilities.

We are subject to taxes in a number of foreign jurisdictions, including in respect of our operations as well as capital transactions undertaken by us. We are subject to regular review and audit by tax authorities, and in the ordinary course of our business there are many transactions and calculations where the ultimate tax determination is uncertain. Significant judgment is required in determining our provision for taxes. The final determination of our tax liabilities resulting from tax audits, related proceedings or otherwise could be materially different from our tax provisions. Economic and political pressures to increase receipts in various jurisdictions may make taxation and tax rates subject to significant change and the satisfactory resolution of any tax disputes more difficult. The occurrence of any of these events could have a material adverse effect on our financial position, results of operations and cash flows.

A default by us in connection with our obligations under our outstanding indebtedness could result in our inability to continue to conduct our business.

Pursuant to the terms of the agreements governing the Reimbursement Agreement and the 2021 Revolving Credit Facility, ~~(when drawn) and the Reimbursement Agreement,~~ we pledged all of the shares of CME NV and of CME BV, which together own substantially all of the interests in our operating subsidiaries, as security for this indebtedness. If we or these subsidiaries were to default under the terms of any of the relevant indentures or agreements, the secured parties under such indentures and agreements would have the ability to sell all or a portion of the assets pledged to them in order to pay amounts outstanding under such debt instruments. This could result in our inability to conduct our business.

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Our strategies to ~~diversify~~enhance our carriage fees and ~~enhance~~diversify our revenues may not be successful.

We are focused on creating additional revenue streams from our broadcast operations as well as increasing revenues generated from broadcast advertising, which is how we generate most of our revenues. Our main efforts with respect to this strategy are on increasing carriage fees from cable and satellite operators for carriage of our channels as well as continuing to seek improvements in advertising pricing. ~~We are also working to build-out our offerings~~Agreements with operators generally have a term of ~~advertising video-on-demand products and other opportunities for advertising online.~~several years, at which time agreements must be renewed. There can be no assurance that we will be successful in renewing carriage fee agreements on similar or better terms. During prior negotiations to implement our carriage fees strategy, some cable and satellite operators suspended the broadcast of our channels, which negatively affected the reach and audience shares of those operations and as a result, advertising revenues. There is a risk that operators may refuse to carry our channels while carriage fee negotiations are ongoing, ~~or that~~which may result in clients ~~will withdraw~~withdrawing advertising from our ~~channels or reduce spending as a result~~channels. The occurrence of ~~reduced coverage, or that going forward we will not be successful in renewing carriage fee agreements on the same or better terms,~~ any of ~~which~~these events may have an adverse impact on our financial position, results of operations and cash flows. If we are ineffective in negotiations with carriers or in achieving further carriage fee increases, our profitability will continue to be dependent primarily on television advertising revenues, which increases the importance placed on our ability to improve advertising pricing and generate advertising revenues. In addition to carriage fees, we are also working to build-out our offerings of advertising video-on-demand products and other opportunities for advertising online. There can be no assurances that our revenue diversification initiatives will ultimately be successful, and if unsuccessful, this may have an adverse impact on our financial position, results of operations and cash flows.

A downgrading of our ratings may adversely affect our ability to raise additional financing.

Moody’s Investors Service rates our corporate credit as B2 with a stable outlook. Standard & Poor’s rates our corporate credit B+ with a stable outlook. These ratings reflect each agency’s opinion of our financial strength, operating performance and ability to meet our debt obligations as they become due. Credit rating agencies view liquidity and the key ratios associated with it, such as gross leverage ratio, as a particular priority. We may be subject to downgrades if we fail to maintain adequate levels of liquidity. In the event our debt or corporate credit ratings are lowered by the rating agencies, it will be more difficult for us to refinance our existing indebtedness or raise new indebtedness that may be permitted under the 2021 Revolving Credit Facility (when drawn) and the Reimbursement Agreement, and we will have to pay higher interest rates, which would have an adverse effect on our financial position, results of operations and cash flows.

If our goodwill, other intangible assets and long-lived assets become impaired, we may be required to record significant charges to earnings.

We review our long-lived assets for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. Goodwill and indefinite-lived intangible assets are required to be assessed for impairment at least annually. Factors that may be considered a change in circumstances indicating that the carrying amount of our goodwill, indefinite-lived intangible assets or long-lived assets may not be recoverable include slower growth rates in our markets, reduced expected future cash flows, increased country risk premium as a result of political uncertainty and a decline in stock price and market capitalization. We consider available current information when calculating our impairment charge. If there are indicators of impairment, our long-term cash flow forecasts for our operations deteriorate or discount rates increase, we may be required to recognize additional impairment charges in later periods. See Part I, Item I, Note 3, "Goodwill and Intangible Assets" for the carrying amounts of goodwill in each of our reporting units.

Changes to our business could result in future costs or charges.

We periodically adjust our business strategy in response to particular events and circumstances, including economic conditions, industry changes and technological developments. In connection with the implementation of new strategies, we may decide to restructure certain of our operations, businesses or assets in order to optimize our cost structure and capture operating efficiencies. Such events in the future could result in restructuring and other charges and the incurrence of additional costs or may require significant management time to implement. If any such charges are material, they could have an adverse impact on our results of operations and cash flows.

Risks Relating to Our Operations

Content may become more expensive to produce or acquire or we may not be able to develop or acquire content that is attractive to our audiences.

Television programming is one of the most significant components of our operating costs. The ability of our programming to generate advertising revenues depends substantially on our ability to develop, produce or acquire programming that matches audience tastes and attracts high audience shares, which is difficult to predict. The commercial success of a program depends on several tangible and intangible factors, including the impact of competing programs, the availability of alternate forms of entertainment and leisure time activities, our ability to anticipate and adapt to changes in consumer tastes and behavior, and general economic conditions. While we have been successful in reducing content costs compared to prior periods, the cost of acquiring content attractive to our viewers, such as feature films and popular television series and formats, may increase in the future. Our expenditures in respect of locally produced programming may also increase due to competition for talent and other resources, changes in audience tastes in our markets or from the implementation of any new laws and regulations mandating the broadcast of a greater number of locally produced programs. In addition, we typically acquire syndicated programming rights under multi-year commitments before knowing how such programming will perform in our markets. In the event any such programming does not attract adequate audience share, it may be necessary to increase our expenditures by investing in additional programming, subject to the availability of adequate financial resources, as well as to write down the value of any underperforming programming. Any material increase in content costs could have a material adverse effect on our financial condition, results of operations ~~and~~or cash flows.

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Our operations are vulnerable to significant changes in viewing habits and technology that could adversely affect us.

The television broadcasting industry is affected by rapid innovations in technology. The implementation of these new technologies and the introduction of non-traditional content distribution systems have increased competition for audiences and advertisers. Platforms such as direct-to-home cable and satellite distribution systems, the Internet, subscription and advertising video-on-demand, user-generated content sites and the availability of content on portable digital devices have changed consumer behavior by increasing the number of entertainment choices available to audiences and the methods for the distribution, storage and consumption of content. This development has fragmented television audiences in more developed markets and could adversely affect our ability to retain audience share and attract advertisers as such technologies penetrate our markets. As we adapt to changing viewing patterns, it may be necessary to expend substantial financial and managerial resources to ensure necessary access to new technologies or distribution systems. Such initiatives may not develop into profitable business models. Furthermore, technologies that enable viewers to choose when, how, where and what content to watch, as well as to fast-forward or skip advertisements, may cause changes in consumer behavior that could have a negative impact on our advertising revenues. In addition, compression techniques and other technological developments allow for an increase in the number of channels that may be broadcast in our markets and expanded programming offerings that may be offered to highly targeted audiences. Reductions in the cost of launching new channels could lower entry barriers and encourage the development of increasingly targeted niche programming on various distribution platforms. This could increase the competitive demand for popular programming, resulting in an increase in content costs as we compete for audiences and advertising revenues. A failure to successfully adapt to changes in our industry as a result of technological advances may have an adverse effect on our financial position, results of operations and cash flows.

~~Index~~

Our operating results are dependent on the importance of television as an advertising medium.

We generate most of our revenues from the sale of our advertising airtime on television channels in our markets. Television competes with various other media, such as print, radio, the internet and outdoor advertising, for advertising spending. In all of the countries in which we operate, television constitutes the single largest component of all advertising spending. There can be no assurances that the television advertising market will maintain its current position among advertising media in our markets. Furthermore, there can be no assurances that changes in the regulatory environment or improvements in technology will not favor other advertising media or other television broadcasters. Increases in competition among advertising media arising from the development of new forms of advertising media and distribution could result in a decline in the appeal of television as an advertising medium generally or of our channels specifically. A decline in television advertising spending as a component of total advertising spending in any period or in specific markets would have an adverse effect on our financial position, results of operations and cash flows.

We are subject to legal compliance risks and the risk of legal or regulatory proceedings being initiated against us.

We are required to comply with a wide variety of laws and other regulatory obligations in the jurisdictions in which we operate and compliance by our businesses is subject to scrutiny by regulators and other government authorities in these jurisdictions. Compliance with foreign as well as applicable U.S. laws and regulations related to our businesses, such as broadcasting content and advertising regulations, competition regulations, tax laws, employment laws, data protection requirements, and anti-corruption laws, increases the costs and risks of doing business in these jurisdictions. We believe we have implemented appropriate risk management and compliance policies and procedures that are designed to ensure our employees, contractors and agents comply with these laws and regulations; however, a violation of such laws and regulations or the Company’s policies and procedures could occur. In addition, a failure or alleged failure to comply with applicable laws and regulations, whether inadvertent or otherwise, may result in legal or regulatory proceedings. We have become aware of provisions in the tax regulations of one of our markets that shift the liability for taxes on gains resulting from certain capital transactions from the seller to the buyer. This provision may have been applicable to an acquisition made by us, although we do not believe we have any liability connected to this transaction. In addition, the prosecuting authorities in Romania have requested information in respect of an investigation into certain transactions entered into by Pro TV in 2014 primarily with certain related parties. We believe that the transactions under review are fully supported and are cooperating with the authorities in responding to the information request. However, these or other contingencies may result in legal or regulatory proceedings being initiated against us. Any such legal and regulatory proceedings or developments in respect of our compliance with, or changes in the interpretation or application of, existing laws or regulations, may require us to incur substantial costs, cause us to change our business practices, damage our reputation or expose us to unanticipated civil or criminal liability, including fines and other penalties that may be substantial. This could have a material adverse effect on our business, financial position, results of operations and cash flows.

Piracy of our content may decrease revenues we can earn from our content and adversely impact our business and profitability.

Piracy of our content poses significant challenges in our markets. Technological developments, including digital copying, file compressing, the use of international proxies and the growing penetration of high bandwidth internet connections, have made it easier to create, transmit and distribute high quality unauthorized copies of content in unprotected digital formats. Furthermore, there are a growing number of video streaming sites, increasing the risk of online transmission of our content without consent. The proliferation of such sites broadcasting content pirated from us could result in a reduction of revenues that we receive from the legitimate distribution of our content, including through video-on-demand and other services. Protection of our intellectual property is in large part dependent on the manner in which applicable intellectual property laws in the countries in which we operate are construed and enforced. We seek to limit the threat of content piracy. However, detecting and policing the unauthorized use of our intellectual property is often difficult and remedies may be limited under applicable law. Steps we take may not prevent the infringement by third parties. There can be no assurance that our efforts to enforce our rights and protect our intellectual property will be successful in preventing piracy, which limits our ability to generate revenues from our content.

Our operations are in developing markets where there are additional risks related to political and economic uncertainty, biased treatment and compliance with evolving legal and regulatory systems.

Our revenue-generating operations are located in Central and Eastern Europe and we may be significantly affected by risks that may be different to those posed by investments in more developed markets. These risks include, but are not limited to, social and political instability, inconsistent regulatory or judicial practice, and increased taxes and other costs. The economic and political systems, legal and tax regimes, regulatory practices, standards of corporate governance and business practices of countries in this region continue to develop. Policies and practices may be subject to significant adjustments, including following changes in political leadership. This may result in social or political instability or disruptions and the potential for political influence on the media as well as inconsistent application of tax and legal regulations, arbitrary treatment before regulatory or judicial authorities and other general business risks. Other potential risks inherent in markets with evolving economic and political environments include exchange controls, higher taxes, tariffs and other levies as well as longer payment cycles. The relative level of development of our markets and the influence of local politics also present a potential for biased treatment of us before regulators or courts in the event of disputes. If such a dispute occurs, those regulators or courts might favor local interests over our interests. Ultimately, this could have a material adverse impact on our business, financial position, results of operations and cash flows.

Furthermore, we must comply with a wide variety of laws and other regulatory obligations in these jurisdictions. Compliance with foreign as well as applicable U.S. laws and regulations related to our businesses, such as broadcasting content and advertising regulations, competition regulations, tax laws, employment laws, data protection requirements, and anti-corruption laws, increases the costs and risks of doing business in these jurisdictions. We have implemented policies and procedures that are designed to ensure our employees, contractors and agents comply with these laws and regulations; however, a violation of such laws and regulations or the Company’s policies and procedures could occur. For example, we have become aware of provisions in the tax regulations of one of our markets that shift the liability for taxes on gains resulting from certain capital transactions from the seller to the buyer, which may have been applicable to an acquisition made by us. While we do not believe we have any liability connected to this transaction, any failure to comply with applicable laws and regulations, whether inadvertent or otherwise, may result in legal or regulatory proceedings being initiated against us. Any legal and regulatory proceedings or developments in respect of our compliance with, or changes in the interpretation or application of, existing laws or regulations, may require us to incur substantial costs, cause us to change our business practices, damage our reputation or expose us to unanticipated civil or criminal liability, including fines and other penalties that may be substantial. This could have a material adverse effect on our business, financial position, results of operations and cash flows.

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We may not be aware of all related party transactions, which may involve risks of conflicts of interest and result in transactions being concluded on less favorable terms than could be obtained in arm’s-length transactions.

In our markets, the officers, general directors, other members of management or employees of our operating companies may have other business interests, including interests in television and other media-related companies. We may not be aware of all business interests or relationships that exist with respect to entities with which our operating companies enter into transactions. Transactions with related parties, whether or not we are aware of any such relationships between our employees and third parties, may present conflicts of interest and may result in the conclusion of transactions on terms that are not arm’s-length. It is likely that we and our subsidiaries will continue to enter into related party transactions in the future. In the event there are transactions with persons who subsequently are determined to be related parties or affiliates, we may be required to make additional disclosure and, if such contracts are material, may not be in compliance with certain covenants under the 2021 Revolving Credit Facility (when drawn) or the Reimbursement Agreement. Any related party transaction that is entered into on terms that are not arm’s-length may result in a negative impact on our financial position, results of operations and cash flows.

We rely on network and information systems and other technology that may be subject to disruption or misuse, which could harm our business or our reputation.

We make extensive use of network and information systems and other technologies, including those related to our internal network management as well as our broadcasting operations. These systems are central to many of our business activities. Network and information systems-related events, such as computer hackings, computer viruses, worms or other destructive or disruptive software, process breakdowns, malicious activities or other security breaches could result in a disruption or degradation of our services, the loss of information or the improper disclosure of personal data. The occurrence of any of these events could negatively impact our business by requiring us to expend resources to remedy such a security breach or by harming our reputation. In addition, improper disclosure of personal data could subject us to liability under laws that protect personal data in the countries in which we operate. The development and maintenance of systems to prevent these events from occurring requires ongoing monitoring and updating as efforts to overcome security measures become more sophisticated. As technologies evolve, we will need to expend additional resources to protect our technology and information systems, which could have an adverse impact on our results of operations.

~~Index~~

Our broadcasting licenses may not be renewed and may be subject to revocation.

We require broadcasting and, in some cases, other operating licenses as well as other authorizations from national regulatory authorities in our markets in order to conduct our broadcasting business. While our broadcasting licenses for our operations in Slovenia and the Slovak Republic are valid for indefinite time periods, our other broadcasting licenses expire at various times through 2028. While we expect that our material licenses and authorizations will be renewed or extended as required to continue to operate our business, we cannot guarantee that this will occur or that they will not be subject to revocation, particularly in markets where there is relatively greater political risk as a result of less developed political and legal institutions. The failure to comply in all material respects with the terms of broadcasting licenses or other authorizations or with applications filed in respect thereto may result in such licenses or other authorizations not being renewed or otherwise being terminated. Furthermore, no assurances can be given that renewals or extensions of existing licenses will be issued on the same terms as existing licenses or that further restrictions or conditions will not be imposed in the future. Any non-renewal or termination of any other broadcasting or operating licenses or other authorizations or material modification of the terms of any renewed licenses may have a material adverse effect on our financial position, results of operations and cash flows.

Our success depends on attracting and retaining key personnel.

Our success depends partly upon the efforts and abilities of our key personnel and our ability to attract and retain key personnel. Our management teams have significant experience in the media industry and have made important contributions to our growth and success. Although we have been successful in attracting and retaining such people in the past, competition for highly skilled individuals is intense. There can be no assurance that we will continue to be successful in attracting and retaining such individuals in the future. The loss of the services of any of these individuals could have an adverse effect on our businesses, results of operations and cash flows.

Risks Relating to Enforcement Rights

We are a Bermuda company and enforcement of civil liabilities and judgments may be difficult.

We are a Bermuda company. Substantially all of our assets and all of our operations are located, and all of our revenues are derived, outside the United States. In addition, several of our directors and officers are non-residents of the United States, and all or a substantial portion of the assets of such persons are or may be located outside the United States. As a result, investors may be unable to effect service of process within the United States upon such persons, or to enforce against them judgments obtained in the United States courts, including judgments predicated upon the civil liability provisions of the United States federal and state securities laws. There is uncertainty as to whether the courts of Bermuda and the countries in which we operate would enforce (a) judgments of United States courts obtained against us or such persons predicated upon the civil liability provisions of the United States federal and state securities laws or (b) in original actions brought in such countries, liabilities against us or such persons predicated upon the United States federal and state securities laws.

Our Bye-laws restrict shareholders from bringing legal action against our officers and directors.

Our Bye-laws contain a broad waiver by our shareholders of any claim or right of action in Bermuda, both individually and on our behalf, against any of our officers or directors. The waiver applies to any action taken or concurred in by an officer or director, or the failure of an officer or director to take any action, in the performance of his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the officer or director. This waiver limits the right of shareholders to assert claims against our officers and directors unless the act or failure to act involves fraud or dishonesty.

Index

Risks Relating to our Common Stock

Our share price may be adversely affected by sales of unregistered shares or future issuances of our shares.

Time Warner is the largest holder of shares of our Class A common stock, holding 61,407,775 unregistered shares of Class A common stock, one share of Series A preferred stock, 200,000 shares of Series B preferred stock and warrants to acquire 100,926,996 shares of our Class A common stock (the "TW Warrants"). The share of Series A preferred stock is convertible into 11,211,449 shares of Class A common stock and the shares of Series B preferred stock are convertible into shares of Class A common stock at the option of Time Warner (subject to certain exceptions). As of ~~June~~September 30, 2016, the 200,000 shares of Series B preferred stock were convertible into approximately ~~103.2~~104.2 million shares of Class A common stock. The TW Warrants are exercisable for shares of Class A common stock until May 2, 2018 at an exercise price of US$ 1.00 per share. Time Warner has registration rights with respect to all its shares of Class A common stock now held or hereafter acquired. Furthermore, there are additional unregistered shares of our Class A common stock outstanding that we may be obligated to register and shares of Class A common stock underlying other warrants that may enter into trading. For additional information on the Series A preferred stock, Series B preferred stock and TW Warrants, see Part I, Item I, Note 12, "Convertible Redeemable Preferred Shares" and Note 13, "Equity".

We cannot predict what effect, if any, the entry into trading of previously issued unregistered shares of Class A common stock will have on the market price of our shares. We may also issue additional shares of Class A common stock or securities convertible into our equity in the future. If more shares of our Class A common stock (or securities convertible into or exchangeable for shares of our Class A common stock) are issued to Time Warner, the economic interests of current shareholders may be diluted and the price of our shares may be adversely affected.

The interests of Time Warner may conflict with the interests of other investors.

Time Warner is able to exercise voting power in us with respect to ~~47.6%~~47.3% of our outstanding shares of Class A common stock. As such, Time Warner is in a position to exercise significant influence over the outcome of corporate actions requiring shareholder approval, such as the election of directors or certain transactions. Following the issuance of the TW Warrants, the aggregate economic interest of Time Warner in us is approximately 75.9% (without giving effect to the accretion of the Series B preferred stock after ~~June~~September 30, 2016). Furthermore, Time Warner has the right to appoint one less than the number required to constitute a majority of our board of directors, provided that Time Warner continues to own not less than 40% of the voting power of the Company. In addition, we are party to an amended investor rights agreement with Time Warner and the other parties thereto under which, among other things, Time Warner was granted a contractual preemptive right (subject to certain exclusions) with respect to issuances of the Company’s equity securities, which permits it to maintain its pro rata economic interest as well as a right to top any offer that would result in a change of control of the Company. Under Bermuda law, there is no takeover code or similar legislation requiring an acquirer of a certain percentage of our Class A common stock to tender for the remaining publically held shares. In certain circumstances, the interests of Time Warner as our largest shareholder could be in conflict with the interests of minority shareholders.

~~Index~~

Furthermore, in addition to being our largest shareholder, Time Warner is our largest secured creditor, as it guarantees 100% of our outstanding senior indebtedness and is the lender under the 2021 Revolving Credit Facility. The 2021 Revolving Credit Facility and the Reimbursement Agreement contain maintenance covenants in respect of interest cover, cash flow cover and total leverage ratios and includes covenants in respect of the incurrence of indebtedness (including refinancing indebtedness), the provision of guarantees, acquisitions and disposal and granting security. As such, Time Warner may be in a position to determine whether to permit transactions, waive defaults or accelerate such indebtedness or take other steps in its capacity as a secured creditor in a manner that might not be consistent with the interests of the holders of our Class A common stock.

The price of our Class A common stock is likely to remain volatile.

The market price of shares of our Class A common stock may be influenced by many factors, some of which are beyond our control, including but not limited to those described above under “Risks Relating to Our Operations” as well as the following: general economic and business trends, variations in quarterly operating results, license renewals, regulatory developments in our operating countries and the European Union, the condition of the media industry in our operating countries, the volume of trading in shares of our Class A common stock, future issuances of shares of our Class A common stock and investors’ and securities analysts’ perception of us and other companies that investors or securities analysts deem comparable in the television broadcasting industry. In addition, stock markets in general have experienced extreme price and volume fluctuations that have often been unrelated to and disproportionate to the operating performance of broadcasting companies. These broad market and industry factors may materially reduce the market price of shares of our Class A common stock, regardless of our operating performance.

Our business could be negatively impacted as a result of shareholder activism.

On November 18, 2015, TCS Capital Management, LLC ("TCS Capital"), a beneficial owner of more than 10% of our shares, submitted a letter to the Board of Directors and filed a Schedule 13D disclosing its ownership interest. In recent years, shareholder activists, such as TCS Capital, have become involved in numerous public companies. Shareholder activists frequently propose to involve themselves in the governance, strategic direction and operations of the Company. Such proposals may disrupt our business and divert the attention of our management and employees, and any perceived uncertainties as to our future direction resulting from such a situation could result in the loss of potential business opportunities, be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified personnel and business partners, all of which could adversely affect our business. In addition, actions of activist shareholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Index

Item 6. Exhibits



Exhibit Number		Description
~~10.01*+~~		Amended and Restated Contract of Employment between CME Media Services Limited and Michael Del Nin, dated July 1, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 1, 2016).

~~10.02*+~~		Amended and Restated Contract of Employment between CME Media Services Limited and Christoph Mainusch, dated July 1, 2016 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 1, 2016).

31.01		Certification of Co-Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of Co-Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.03		Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01		Certifications of co-Principal Executive Officers and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only).

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Schema Document

101.CAL		XBRL Taxonomy Calculation Linkbase Document

101.DEF		XBRL Taxonomy Definition Linkbase Document

101.LAB		XBRL Taxonomy Label Linkbase Document

101.PRE		XBRL Taxonomy Presentation Linkbase Document

* Previously filed exhibits.

~~+ Exhibit is a management contract or compensatory plan.~~

Index

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		Central European Media Enterprises Ltd.
Date:	~~July 26,~~October 25, 2016	/s/ David Sturgeon David Sturgeon Executive Vice President and Chief Financial Officer Principal Financial Officer and Principal Accounting Officer

Index

EXHIBIT INDEX



Exhibit Number		Description
~~10.01*+~~		Amended and Restated Contract of Employment between CME Media Services Limited and Michael Del Nin, dated July 1, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 1, 2016).

~~10.02*+~~		Amended and Restated Contract of Employment between CME Media Services Limited and Christoph Mainusch, dated July 1, 2016 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 1, 2016).

31.01		Certification of Co-Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of Co-Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.03		Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01		Certifications of co-Principal Executive Officers and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only).

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Schema Document

101.CAL		XBRL Taxonomy Calculation Linkbase Document

101.DEF		XBRL Taxonomy Definition Linkbase Document

101.LAB		XBRL Taxonomy Label Linkbase Document

101.PRE		XBRL Taxonomy Presentation Linkbase Document

* Previously filed exhibits.

~~+ Exhibit is a management contract or compensatory plan.~~

5255



BERMUDA		98-0438382
(State or other jurisdiction of incorporation ~~and~~or organization)		(IRS Employer Identification No.)

O'Hara House, 3 Bermudiana Road, Hamilton, Bermuda		HM 08
(Address of principal executive offices)		(Zip Code)



Large accelerated filer £	Accelerated filer T	Non-accelerated filer £	Smaller reporting company £



Class	Outstanding as of ~~July 22,~~October 21, 2016
Class A Common Stock, par value $0.08	~~142,355,060~~142,799,769



			Page
Part I Financial Information
	Item 1. Financial Statements		2
		Condensed Consolidated Balance Sheets as at ~~June~~September 30, 2016 and December 31, 2015	2
		Condensed Consolidated Statements of Operations and Comprehensive Income / Loss for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2016 and 2015	3
		Condensed Consolidated Statement of Equity for the ~~Six~~Nine Months Ended ~~June~~September 30, 2016	4
		Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2016 and 2015	5
		Notes to the Condensed Consolidated Financial Statements	7
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		2426
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		4346
	Item 4. Controls and Procedures		4447
Part II Other Information
	Item 1. Legal Proceedings		4447
	Item 1A. Risk Factors		4447
	Item 6. Exhibits		5053
Signatures			5154
Exhibit Index			5255


	June 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
ASSETS
Current assets
Cash and cash equivalents	$	46,442	$	61,679	$	64,229	$	61,679
Accounts receivable, net (Note 6)	167,704		167,427		138,567		167,427
Program rights, net (Note 5)	89,238		85,972		98,604		85,972
Other current assets (Note 7)	29,999		43,206		31,327		43,206
Total current assets	333,383		358,284		332,727		358,284
Non-current assets
Property, plant and equipment, net (Note 8)	105,644		108,522		109,424		108,522
Program rights, net (Note 5)	179,342		169,073		193,678		169,073
Goodwill (Note 3)	632,740		622,243		639,073		622,243
Broadcast licenses and other intangible assets, net (Note 3)	149,675		151,162		148,989		151,162
Other non-current assets (Note 7)	21,169		31,133		20,345		31,133
Total non-current assets	1,088,570		1,082,133		1,111,509		1,082,133
Total assets	$	1,421,953	$	1,440,417	$	1,444,236	$	1,440,417


LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities (Note 9)	$	137,378		$	134,705		$	172,110		$	134,705
Current portion of long-term debt and other financing arrangements (Note 4)	1,157			1,155			1,258			1,155
Other current liabilities (Note 10)	24,664			10,448			23,210			10,448
Total current liabilities	163,199			146,308			196,578			146,308
Non-current liabilities
Long-term debt and other financing arrangements (Note 4)	1,053,443			908,521			1,059,670			908,521
Other non-current liabilities (Note 10)	56,857			65,749			51,820			65,749
Total non-current liabilities	1,110,300			974,270			1,111,490			974,270
Commitments and contingencies (Note 19)
TEMPORARY EQUITY
200,000 shares of Series B Convertible Redeemable Preferred Stock of $0.08 each (December 31, 2015 - 200,000) (Note 12)	250,148			241,198			252,512			241,198
EQUITY
CME Ltd. shareholders’ equity (Note 13):
One share of Series A Convertible Preferred Stock of $0.08 each (December 31, 2015 – one)	—			—			—			—
141,454,534 shares of Class A Common Stock of $0.08 each (December 31, 2015 – 135,804,221)	11,316			10,864
142,398,021 shares of Class A Common Stock of $0.08 each (December 31, 2015 – 135,804,221)							11,392			10,864
Nil shares of Class B Common Stock of $0.08 each (December 31, 2015 – nil)	—			—			—			—
Additional paid-in capital	1,911,425			1,914,050			1,910,620			1,914,050
Accumulated deficit	(1,786,997		)	(1,605,245		)	(1,806,624		)	(1,605,245		)
Accumulated other comprehensive loss	(238,483		)	(242,409		)	(232,545		)	(242,409		)
Total CME Ltd. shareholders’ (deficit) / equity	(102,739		)	77,260			(117,157		)	77,260
Noncontrolling interests	1,045			1,381			813			1,381
Total (deficit) / equity	(101,694		)	78,641			(116,344		)	78,641
Total liabilities and equity	$	1,421,953		$	1,440,417		$	1,444,236		$	1,440,417


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015			2016			2015			2016			2015
Net revenues	$	175,206		$	166,834		$	304,206		$	292,967		$	126,706		$	117,322		$	430,912		$	410,289
Operating expenses:
Content costs	77,282			73,437			149,260			144,727			64,487			58,983			213,747			203,710
Other operating costs	17,939			17,422			34,393			34,460			17,024			17,180			51,417			51,640
Depreciation of property, plant and equipment	7,627			6,936			14,912			13,937			7,557			6,974			22,469			20,911
Amortization of broadcast licenses and other intangibles	2,114			3,434			4,174			6,933			2,073			2,695			6,247			9,628
Cost of revenues	104,962			101,229			202,739			200,057			91,141			85,832			293,880			285,889
Selling, general and administrative expenses	26,353			28,712			49,813			72,613			27,181			2,403			76,994			75,016
Restructuring costs	—			452			—			1,095			—			234			—			1,329
Operating income	43,891			36,441			51,654			19,202			8,384			28,853			60,038			48,055
Interest expense (Note 14)	(29,545		)	(41,746		)	(78,699		)	(81,864		)	(27,636		)	(43,998		)	(106,335		)	(125,862		)
Loss on extinguishment of debt (Note 4)	(150,158		)	—			(150,158		)	—			—			—			(150,158		)	—
Non-operating (expense) / income, net (Note 15)	(167		)	(2,904		)	1,249			(15,645		)
Non-operating income / (expense), net (Note 15)													387			(6,477		)	1,636			(22,122		)
Loss before tax	(135,979		)	(8,209		)	(175,954		)	(78,307		)	(18,865		)	(21,622		)	(194,819		)	(99,929		)
Provision for income taxes	(5,270		)	(3,460		)	(5,989		)	(3,605		)
(Provision) / credit for income taxes													(958		)	112			(6,947		)	(3,493		)
Loss from continuing operations	(141,249		)	(11,669		)	(181,943		)	(81,912		)	(19,823		)	(21,510		)	(201,766		)	(103,422		)
Income / (loss) from discontinued operations, net of tax	—			2,684			—			(604		)
Loss from discontinued operations, net of tax													—			(265		)	—			(869		)
Net loss	(141,249		)	(8,985		)	(181,943		)	(82,516		)	(19,823		)	(21,775		)	(201,766		)	(104,291		)
Net (income) / loss attributable to noncontrolling interests	(68		)	307			191			564
Net loss attributable to noncontrolling interests													196			253			387			817
Net loss attributable to CME Ltd.	$	(141,317	)	$	(8,678	)	$	(181,752	)	$	(81,952	)	$	(19,627	)	$	(21,522	)	$	(201,379	)	$	(103,474	)

Net loss	$	(141,249	)	$	(8,985	)	$	(181,943	)	$	(82,516	)	$	(19,823	)	$	(21,775	)	$	(201,766	)	$	(104,291	)
Other comprehensive income / (loss):
Currency translation adjustment	(11,056		)	39,581			8,002			(64,183		)	7,262			5,546			15,264			(58,637		)
Unrealized (loss) / gain on derivative instruments (Note 11)	(2,973		)	533			(4,221		)	(74		)
Total other comprehensive (loss) / income	(14,029		)	40,114			3,781			(64,257		)
Comprehensive (loss) / income	(155,278		)	31,129			(178,162		)	(146,773		)
Comprehensive (income) / loss attributable to noncontrolling interests	(237		)	639			336			(210		)
Comprehensive (loss) / income attributable to CME Ltd.	$	(155,515	)	$	31,768		$	(177,826	)	$	(146,983	)
Unrealized loss on derivative instruments (Note 11)													(1,360		)	(522		)	(5,581		)	(596		)
Total other comprehensive income / (loss)													5,902			5,024			9,683			(59,233		)
Comprehensive loss													(13,921		)	(16,751		)	(192,083		)	(163,524		)
Comprehensive loss attributable to noncontrolling interests													232			316			568			106
Comprehensive loss attributable to CME Ltd.													$	(13,689	)	$	(16,435	)	$	(191,515	)	$	(163,418	)


PER SHARE DATA (Note 17):
Net (loss) / income per share:
Net loss per share:
Continuing operations attributable to CME Ltd. - Basic and diluted	$	(0.98	)	$	(0.11	)	$	(1.29	)	$	(0.61	)	$	(0.14	)	$	(0.17	)	$	(1.42	)	$	(0.79	)
Discontinued operations attributable to CME Ltd. - Basic and diluted	0.00			0.02			0.00			(0.01		)	0.00			(0.01		)	0.00			(0.00		)
Net loss attributable to CME Ltd. - Basic and diluted	(0.98		)	(0.09		)	(1.29		)	(0.62		)	(0.14		)	(0.18		)	(1.42		)	(0.79		)

Weighted average common shares used in computing per share amounts (000’s):
Basic and diluted	149,083			146,743			148,080			146,675			153,494			147,054			149,898			146,803


	CME Ltd.																								CME Ltd.
	Series A Convertible Preferred Stock			Class A Common Stock			Class B Common Stock																		Series A Convertible Preferred Stock			Class A Common Stock			Class B Common Stock
	Number of shares	Par value		Number of shares	Par value		Number of shares	Par value		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total Equity / (Deficit)			Number of shares	Par value		Number of shares	Par value		Number of shares	Par value		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total Equity / (Deficit)
BALANCE December 31, 2015	1	$	—	135,804,221	$	10,864	—	$	—	$	1,914,050		$	(1,605,245	)	$	(242,409	)	$	1,381		$	78,641		1	$	—	135,804,221	$	10,864	—	$	—	$	1,914,050		$	(1,605,245	)	$	(242,409	)	$	1,381		$	78,641
Stock-based compensation	—	—		—	—		—	—		1,717			—			—			—			1,717			—	—		—	—		—	—		2,465			—			—			—			2,465
Exercise of warrants (Note 13)	—	—		5,059,639	405		—	—		4,655			—			—			—			5,060			—	—		5,947,010	476		—	—		5,471			—			—			—			5,947
Share issuance, stock-based compensation	—	—		590,674	47		—	—		(47		)	—			—			—			—			—	—		646,790	52		—	—		(52		)	—			—			—			—
Preferred dividend paid in kind	—	—		—	—		—	—		(8,950		)	—			—			—			(8,950		)	—	—		—	—		—	—		(11,314		)	—			—			—			(11,314		)
Net loss	—	—		—	—		—	—		—			(181,752		)	—			(191		)	(181,943		)	—	—		—	—		—	—		—			(201,379		)	—			(387		)	(201,766		)
Unrealized loss on derivative instruments	—	—		—	—		—	—		—			—			(4,221		)	—			(4,221		)	—	—		—	—		—	—		—			—			(5,581		)	—			(5,581		)
Currency translation adjustment	—	—		—	—		—	—		—			—			8,147			(145		)	8,002			—	—		—	—		—	—		—			—			15,445			(181		)	15,264
BALANCE June 30, 2016	1	$	—	141,454,534	$	11,316	—	$	—	$	1,911,425		$	(1,786,997	)	$	(238,483	)	$	1,045		$	(101,694	)
BALANCE September 30, 2016																									1	$	—	142,398,021	$	11,392	—	$	—	$	1,910,620		$	(1,806,624	)	$	(232,545	)	$	813		$	(116,344	)


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	35,712	$	9,264
Cash paid for Guarantee Fees	20,000		—
Cash paid for interest (including mandatory cash-pay Guarantee Fees)					$	40,877	$	10,712
Cash paid for Guarantee Fees previously paid in kind					27,502		—

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Accretion on Series B Convertible Redeemable Preferred Stock	$	8,950	$	8,405	$	11,314	$	12,796



	Bulgaria			Croatia			Czech Republic			Romania			Slovak Republic		Slovenia			Total
Gross Balance, December 31, 2015	$	172,365		$	11,005		$	759,491		$	85,443		$	47,605	$	19,400		$	1,095,309
Accumulated impairment losses	(144,639		)	(10,454		)	(287,545		)	(11,028		)	—		(19,400		)	(473,066		)
Balance, December 31, 2015	27,726			551			471,946			74,415			47,605		—			622,243
Foreign currency	447			16			7,549			1,544			941		—			10,497
Balance, June 30, 2016	28,173			567			479,495			75,959			48,546		—			632,740
Accumulated impairment losses	(144,639		)	(10,454		)	(287,545		)	(11,028		)	—		(19,400		)	(473,066		)
Gross Balance, June 30, 2016	$	172,812		$	11,021		$	767,040		$	86,987		$	48,546	$	19,400		$	1,105,806


	Principal Amount of Liability Component		Debt Issuance Costs ⁽¹⁾			Net Carrying Amount		Principal Amount of Liability Component		Debt Issuance Costs ⁽¹⁾			Net Carrying Amount
2018 Euro Term Loan	$	278,438	$	(850	)	$	277,588	$	279,918	$	(764	)	$	279,154
2019 Euro Term Loan	261,269		(586		)	260,683		262,658		(545		)	262,113
2021 Euro Term Loan	520,462		(7,416		)	513,046		523,228		(7,053		)	516,175
2021 Revolving Credit Facility	—		—			—		—		—			—
Total long-term debt and credit facilities	$	1,060,169	$	(8,852	)	$	1,051,317	$	1,065,804	$	(8,362	)	$	1,057,442


	Carrying Amount				Fair Value				Carrying Amount
	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
2017 PIK Notes	$	—	$	359,789	$	—	$	552,338	$	—	$	359,789
2017 Term Loan	—		27,592		—		41,525		—		27,592
2018 Euro Term Loan	277,588		272,189		278,438		273,046		279,154		272,189
2019 Euro Term Loan	260,683		246,458		261,269		256,210		262,113		246,458
2021 Euro Term Loan	513,046		—		520,462		—		516,175		—
	$	1,051,317	$	906,028	$	1,060,169	$	1,123,119	$	1,057,442	$	906,028


	Base Rate		Rate Fixed Pursuant to Interest Rate Hedges			Guarantee Fee Rate		All-in Borrowing Rate		Base Rate		Rate Fixed Pursuant to Interest Rate Hedges			Guarantee Fee Rate			All-in Borrowing Rate
2018 Euro Term Loan	1.50	%	0.21	%	⁽¹⁾	6.79	%	8.50	%	1.50	%	0.21	%	⁽¹⁾	6.79	%		8.50	%
2019 Euro Term Loan	1.50	%	0.31	%		6.69	%	8.50	%	1.50	%	0.31	%		6.69	%		8.50	%
2021 Euro Term Loan	1.50	%	0.28	%		8.22	%	10.00	%	1.50	%	0.28	%		8.22	%	⁽²⁾	10.00	%	⁽²⁾
2021 Revolving Credit Facility ⁽²⁾⁽³⁾	10.00	%	—	%		—	%	10.00	%	10.00	%	—			—			10.00	%


⁽¹⁾	Effective until November 1, 2017. From November 1, 2017 through maturity on November 1, 2018, the rate fixed pursuant to interest rate hedges will decrease to 0.14%, with a corresponding increase in the guarantee fee rate, such that the all-in borrowing rate remains 8.50%.


	June 30, 2016							December 31, 2015							September 30, 2016							December 31, 2015
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Indefinite-lived:
Trademarks	$	84,641	$	—		$	84,641	$	83,188	$	—		$	83,188	$	85,439	$	—		$	85,439	$	83,188	$	—		$	83,188
Amortized:
Broadcast licenses	194,951		(133,266		)	61,685		191,860		(127,613		)	64,247		196,641		(136,200		)	60,441		191,860		(127,613		)	64,247
Trademarks	627		(627		)	—		614		(614		)	—		636		(636		)	—		614		(614		)	—
Customer relationships	54,099		(51,112		)	2,987		53,120		(49,672		)	3,448		54,617		(51,856		)	2,761		53,120		(49,672		)	3,448
Other	1,762		(1,400		)	362		2,138		(1,859		)	279		1,612		(1,264		)	348		2,138		(1,859		)	279
Total	$	336,080	$	(186,405	)	$	149,675	$	330,920	$	(179,758	)	$	151,162	$	338,945	$	(189,956	)	$	148,989	$	330,920	$	(179,758	)	$	151,162


	June 30, 2016			December 31, 2015			September 30, 2016			December 31, 2015
Land and buildings	$	94,087		$	92,237		$	95,153		$	92,237
Machinery, fixtures and equipment	173,275			164,503			180,244			164,503
Other equipment	28,477			32,314			29,469			32,314
Software licenses	58,887			55,656			61,019			55,656
Construction in progress	1,386			3,001			1,525			3,001
Total cost	356,112			347,711			367,410			347,711
Less: accumulated depreciation	(250,468		)	(239,189		)	(257,986		)	(239,189		)
Total net book value	$	105,644		$	108,522		$	109,424		$	108,522

Assets held under capital leases (included in the above)
Land and buildings	$	3,880		$	3,805		$	3,901		$	3,805
Machinery, fixtures and equipment	4,584			4,646			5,163			4,646
Total cost	8,464			8,451			9,064			8,451
Less: accumulated depreciation	(3,893		)	(3,556		)	(4,220		)	(3,556		)
Total net book value	$	4,571		$	4,895		$	4,844		$	4,895


⁽²⁾	As at ~~June~~September 30, 2016. With effect from October 27, 2016 the guarantee fee rate and the all-in borrowing rate will decrease to 7.22% and 9.00%, respectively.


⁽³⁾	As at September 30, 2016, the aggregate principal amount available under the 2021 Revolving Credit Facility was undrawn.


⁽¹⁾	We have a cash pooling arrangement with Bank Mendes Gans (“BMG”), a subsidiary of ING Bank N.V. (“ING”), which enables us to receive credit across the group in respect of cash balances which our subsidiaries deposit with BMG. Cash deposited by our subsidiaries with BMG is pledged as security against the drawings of other subsidiaries up to the amount deposited.



2016	$	631
2017	1,186
2018	919
2019	574
2020	83
2021 and thereafter	—
Total undiscounted payments	3,393
Less: amount representing interest	(110		)
Present value of net minimum lease payments	$	3,283



	June 30, 2016			December 31, 2015
Program rights:
Acquired program rights, net of amortization	$	184,431		$	179,632
Less: current portion of acquired program rights	(89,238		)	(85,972		)
Total non-current acquired program rights	95,193			93,660
Produced program rights – Feature Films:
Released, net of amortization	1,183			1,298
Produced program rights – Television Programs:
Released, net of amortization	58,453			56,125
Completed and not released	1,488			3,500
In production	21,636			13,783
Development and pre-production	1,389			707
Total produced program rights	84,149			75,413
Total non-current acquired program rights and produced program rights	$	179,342		$	169,073



2016	$	353
2017	1,304
2018	1,034
2019	699
2020	196
2021 and thereafter	6
Total undiscounted payments	3,592
Less: amount representing interest	(106		)
Present value of net minimum lease payments	$	3,486



	June 30, 2016			December 31, 2015
Unrelated customers	$	176,653		$	176,628
Less: allowance for bad debts and credit notes	(8,949		)	(9,201		)
Total accounts receivable	$	167,704		$	167,427



	June 30, 2016		December 31, 2015
Current:
Prepaid acquired programming	$	18,934	$	22,761
Other prepaid expenses	7,825		6,941
Deferred tax	—		10,425
VAT recoverable	476		733
Income taxes recoverable	253		249
Other	2,511		2,097
Total other current assets	$	29,999	$	43,206

	June 30, 2016		December 31, 2015
Non-current:
Capitalized debt costs	$	17,735	$	27,060
Deferred tax	208		124
Other	3,226		3,949
Total other non-current assets	$	21,169	$	31,133


⁽¹⁾	Other is comprised of property, plant and equipment which were classified as assets held for sale in the third quarter of 2015 and subsequently sold in the fourth quarter of 2015.


⁽¹⁾	Amount represents accrued Guarantee Fees for which we have not yet paid in cash or made an election to pay in kind. See Note 4, "Long-term Debt and Other Financing Arrangements".


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.


Trade Date	Number of Contracts	Description	Aggregate Notional Amount		Maturity Date	Objective	Fair Value as at June 30, 2016			Number of Contracts	Description	Aggregate Notional Amount		Maturity Date	Objective	Fair Value as at September 30, 2016
April 5, 2016	5	Interest rate swap	€	468,800	February 21, 2021	Interest rate hedge underlying 2021 Euro Term Loan	$	(2,534	)	5	Interest rate swap	€	468,800	February 21, 2021	Interest rate hedge underlying 2021 Euro Term Loan	$	(3,817	)
April 5, 2016	4	Interest rate swap	€	250,800	November 1, 2018	Interest rate hedge underlying 2018 Euro Term Loan, forward starting on November 1, 2017	$	(216	)	4	Interest rate swap	€	250,800	November 1, 2018	Interest rate hedge underlying 2018 Euro Term Loan, forward starting on November 1, 2017	$	(308	)
November 10, 2015	3	Interest rate swap	€	235,335	November 1, 2019	Interest rate hedge underlying 2019 Euro Term Loan	$	(2,041	)	3	Interest rate swap	€	235,335	November 1, 2019	Interest rate hedge underlying 2019 Euro Term Loan	$	(2,182	)
November 14, 2014	2	Interest rate swap	€	250,800	November 1, 2017	Interest rate hedge underlying 2018 Euro Term Loan	$	(767	)	2	Interest rate swap	€	250,800	November 1, 2017	Interest rate hedge underlying 2018 Euro Term Loan	$	(646	)


	Accumulated Other Comprehensive Loss			Accumulated Other Comprehensive Loss
BALANCE December 31, 2015	$	(1,420	)	$	(1,420	)
Loss on interest rate swaps	(5,217		)	(7,302		)
Reclassified to interest expense	996			1,721
BALANCE June 30, 2016	$	(5,641	)
BALANCE September 30, 2016				$	(7,001	)


	Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value		Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at December 31, 2015	1,666,000		$	3.53	9.07	$	640	1,666,000		$	3.53	9.07	$	640
Granted	411,392		2.46					411,392		2.46
Expired	(63,000	)	32.62					(63,000	)	32.62
Outstanding at June 30, 2016	2,014,392		$	2.40	9.07	$	—
Outstanding at September 30, 2016								2,014,392		$	2.40	8.82	$	32
Vested and expected to vest	2,014,392		2.40		9.07	—		2,014,392		2.40		8.82	32
Exercisable at June 30, 2016	403,000		$	2.69	8.87	$	—
Exercisable at September 30, 2016								403,000		$	2.69	8.61	$	8


	Number of Shares / Units		Weighted Average Grant Date Fair Value		Number of Shares / Units		Weighted Average Grant Date Fair Value
Unvested at December 31, 2015	2,554,597		$	2.72	2,554,597		$	2.72
Granted	705,166		2.41		705,166		2.41
Vested	(626,126	)	2.83		(626,126	)	2.83
Unvested at June 30, 2016	2,633,637		$	2.61
Unvested at September 30, 2016					2,633,637		$	2.61


Net revenues:	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015			2016			2015			2016			2015
Bulgaria	$	20,455		$	19,420		$	36,314		$	36,204		$	13,789		$	14,673		$	50,103		$	50,877
Croatia	16,559			16,242			28,204			28,235			9,833			9,949			38,037			38,184
Czech Republic	50,919			52,131			89,527			87,096			39,031			35,575			128,558			122,671
Romania	48,929			44,034			81,299			77,556			36,970			32,005			118,269			109,561
Slovak Republic	22,540			20,236			41,602			37,774			17,864			17,223			59,466			54,997
Slovenia	16,116			15,063			27,769			26,543			9,555			8,606			37,324			35,149
Intersegment revenues ⁽¹⁾	(312		)	(292		)	(509		)	(441		)	(336		)	(709		)	(845		)	(1,150		)
Total net revenues	$	175,206		$	166,834		$	304,206		$	292,967		$	126,706		$	117,322		$	430,912		$	410,289


⁽¹⁾	Reflects revenues earned from the sale of content to other country segments in CME Ltd. All other revenues are third party revenues.


OIBDA and reconciliation of OIBDA to condensed consolidated statements of operations and comprehensive income / loss:	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015			2016			2015			2016			2015
Bulgaria	$	5,954		$	4,045		$	7,023		$	6,243		$	1,943		$	2,223		$	8,966		$	8,466
Croatia	4,501			4,972			5,902			6,834			(516		)	(909		)	5,386			5,925
Czech Republic	23,099			24,238			33,173			34,329			13,180			9,483			46,353			43,812
Romania	22,962			15,419			32,424			18,780			12,606			6,953			45,030			25,733
Slovak Republic	3,158			3,627			5,551			3,482			(383		)	358			5,168			3,840
Slovenia	1,624			963			916			1,323			(746		)	(1,556		)	170			(233		)
Elimination	(62		)	15			(68		)	(35		)	11			(225		)	(57		)	(260		)
Total operating segments	61,236			53,279			84,921			70,956			26,095			16,327			111,016			87,283
Corporate	(7,604		)	(6,468		)	(14,181		)	(12,697		)	(8,081		)	(7,974		)	(22,262		)	(20,671		)
Total OIBDA	53,632			46,811			70,740			58,259			18,014			8,353			88,754			66,612
Depreciation of property, plant and equipment	(7,627		)	(6,936		)	(14,912		)	(13,937		)	(7,557		)	(6,974		)	(22,469		)	(20,911		)
Amortization of broadcast licenses and other intangibles	(2,114		)	(3,434		)	(4,174		)	(6,933		)	(2,073		)	(2,695		)	(6,247		)	(9,628		)
Other items ⁽¹⁾	—			—			—			(18,187		)	—			30,169			—			11,982
Operating income	43,891			36,441			51,654			19,202			8,384			28,853			60,038			48,055
Interest expense (Note 14)	(29,545		)	(41,746		)	(78,699		)	(81,864		)	(27,636		)	(43,998		)	(106,335		)	(125,862		)
Loss on extinguishment of debt (Note 4)	(150,158		)	—			(150,158		)	—			—			—			(150,158		)	—
Non-operating (expense) / income, net (Note 15)	(167		)	(2,904		)	1,249			(15,645		)
Non-operating income / (expense), net (Note 15)													387			(6,477		)	1,636			(22,122		)
Loss before tax	$	(135,979	)	$	(8,209	)	$	(175,954	)	$	(78,307	)	$	(18,865	)	$	(21,622	)	$	(194,819	)	$	(99,929	)