~~CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular amounts in US$ 000’s, except share and per share data)~~

~~(Unaudited)~~

13. CONVERTIBLE REDEEMABLE PREFERRED SHARES

200,000 shares of our Series B Convertible Redeemable Preferred Stock, par value US$ 0.08 per share (the “Series B Preferred Shares”) were issued and outstanding as at June 30, ~~2018~~2019 and December 31, ~~2017. As at June 30, 2018 and December 31, 2017, the accreted value of the Series B Preferred Shares was US$ 269.4 million and US$ 264.6 million, respectively.~~2018. The Series B Preferred Shares are held by Time Warner Media Holdings B.V. ("TW Investor"), a wholly owned subsidiary of AT&T. As at June 30, 2019 and December 31, 2018, the accreted value of the Series B Preferred Shares was US$ 269.4 million. The Series B Preferred Shares have a stated value of US$ 1,000 per share and no longer accrete subsequent to June 24, 2018. As of June 30, ~~2018,~~2019, the 200,000 shares of Series B preferred stock were convertible into approximately 111.1 million shares of Class A common stock.

The stated value of the Series B Preferred Shares of US$ 1,000 per share accreted at an annual rate of 3.75%, compounded quarterly, from June 25, 2016 until June 24, 2018. The Series B Preferred Shares will not accrete further. Each Series B Preferred Share may, at the holder's option, be converted into the number of shares of our Class A common stock determined by dividing (i) the accreted stated value plus accrued but unpaid dividends, if any, in each case as of the conversion date, by (ii) the conversion price, which was approximately US$ 2.42 at June 30, ~~2018,~~2019, but is subject to adjustment from time to time pursuant to customary weighted-average anti-dilution provisions with respect to our issuances of equity or equity-linked securities at a price below the then-applicable conversion price (excluding any securities issued under our benefit plans at or above fair market value). We have the right to redeem the Series B Preferred Shares in whole or in part upon 30 days' written notice. The redemption price of each outstanding Series B Preferred Share is equal to its accreted stated value plus accrued but unpaid dividends, if any, in each case as of the redemption date specified in the redemption notice. After receipt of a redemption notice, each holder of Series B Preferred Shares will have the right to convert, prior to the date of redemption, all or part of such Series B Preferred Shares to be redeemed by us into shares of our Class A common stock in accordance with the terms of conversion described above.

Index

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in US$ 000’s, except share and per share data)

(Unaudited)

Holders of the Series B Preferred Shares have no voting rights on any matter presented to holders of any class of our capital stock, with the exception that they may vote with holders of shares of our Class A common stock (i) with respect to a change of control event or (ii) as provided by our Bye-laws or applicable Bermuda law. Holders of Series B Preferred Shares will participate in any dividends declared or paid on our Class A common stock on an as-converted basis. The Series B Preferred Shares will rank pari passu with our Series A Convertible Preferred Stock and senior to all other equity securities of the Company in respect of payment of dividends and distribution of assets upon liquidation. The Series B Preferred Shares have such other rights, powers and preferences as are set forth in the Certificate of Designation for the Series B Preferred Shares.

The Series B Preferred Shares are not considered a liability and the embedded conversion feature does not require bifurcation. The Series B Preferred Shares are classified outside of permanent equity at redemption value which includes accreted changes in the redemption value since issuance. For the three and six months ended June 30, 2018 and 2017, we recognized accretion on the Series B Preferred Shares of US$ 2.3 million and US$ 4.8 million; and US$ 2.4 million and US$ 4.8 million, respectively, with corresponding decreases in additional paid-in capital.value.

14. EQUITY

Preferred Stock

5,000,000 shares of Preferred Stock were authorized as at June 30, ~~2018~~2019 and December 31, ~~2017~~2018.

One share of Series A Convertible Preferred Stock (the "Series A Preferred Share") was issued and outstanding as at June 30, ~~2018~~2019 and December 31, ~~2017~~2018. The Series A Preferred Share is convertible into 11,211,449 shares of Class A common stock on the date that is 61 days after the date on which the ownership of our outstanding shares of Class A common stock by a group that includes TW Investor and its affiliates would not be greater than 49.9%. The Series A Preferred Share is entitled to one vote per each share of Class A common stock into which it is convertible and has such other rights, powers and preferences, including potential adjustments to the number of shares of Class A common stock to be issued upon conversion, as are set forth in the Certificate of Designation for the Series A Preferred Share.

200,000 shares of Series B Preferred Shares were issued and outstanding as at June 30, ~~2018~~2019 and December 31, ~~2017~~2018 (see Note 13, "Convertible Redeemable Preferred Shares"). As of June 30, ~~2018,~~2019, the 200,000 Series B Preferred Shares were convertible into approximately 111.1 million shares of Class A common stock.

Class A and Class B Common Stock

440,000,000 shares of Class A common stock and 15,000,000 shares of Class B common stock were authorized as at June 30, ~~2018~~2019 and December 31, ~~2017~~2018. The rights of the holders of Class A common stock and Class B common stock are identical except for voting rights. The shares of Class A common stock are entitled to one vote per share and the shares of Class B common stock are entitled to ten votes per share. Shares of Class B common stock are convertible into shares of Class A common stock on a one-for-one basis for no additional consideration and automatically convert into shares of Class A common stock on a one-for-one basis when the number of shares of Class B common stock is less than 10% of the total number of shares of common stock outstanding. Holders of each class of shares are entitled to receive dividends and upon liquidation or dissolution are entitled to receive all assets available for distribution to holders of our common stock. Under our bye-laws, the holders of each class have no ~~preemptive~~pre-emptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares.

There were ~~252.1~~253.6 million and ~~145.5~~252.9 million shares of Class A common stock outstanding at June 30, ~~2018~~2019 and December 31, ~~2017~~2018, respectively, and no shares of Class B common stock outstanding at June 30, ~~2018~~2019 or December 31, ~~2017~~2018.

As at June 30, ~~2018~~2019, TW Investor owns ~~64.4%~~64.0% of the outstanding shares of Class A common stock. In connection with the exercise of warrants by Warner Media and TW Investor ~~(described below),~~in April 2018, each of them issued standing proxies to the independent directors of the Company, pursuant to which itthey granted the right to vote the approximately 100.9 million shares of Class A common stock received on the exercise of those warrants (the “Warrant Shares”) on all matters other than a transaction resulting in a change in control. In accordance with these proxies, the Warrant Shares will be voted in proportion to votes cast at a general meeting of the Company, excluding such Warrant Shares. Warner Media and TW Investor have undertaken to maintain this proxy arrangement in effect until April 2020 and may at their option extend it for an additional year from that date. As a result of the standing proxies, after giving effect to its ownership of the Series A Preferred Share, TW Investor has a ~~44.7%~~44.3% voting interest in the Company.

Index

CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in US$ 000’s, except share and per share data)

(Unaudited)

~~Warrants~~

On May 2, 2014, we issued 114,000,000 warrants in connection with a rights offering. Each warrant was exercisable until May 2, 2018 and entitled the holder thereof to receive one share of our Class A common stock at an exercise price of US$ 1.00 per share in cash. During the six months ended June 30, 2018, 105,652,401 warrants were exercised, including 100,926,996 by Warner Media (formerly Time Warner, Inc. at date of exercise) and TW Investor, resulting in net proceeds to us of approximately US$ 105.7 million. Of the 114,000,000 issued warrants, 202,175 expired unexercised on May 2, 2018.

Accumulated Other Comprehensive Loss

The movement in accumulated other comprehensive loss during the three and six months ended June 30, 2019 and 2018 comprised the following:

Currency translation adjustment, net
Unrealized (loss) / gain on derivative instruments designated as hedging instruments

TOTAL
Accumulated Other Comprehensive Loss

BALANCE December 31, 2017 $ (184,256 ) $ (3,182 ) $ (187,438 )
Other comprehensive (loss) / income before reclassifications:
Foreign exchange loss on intercompany loans ⁽¹⁾
(3,524 ) —
(3,524 )
Foreign exchange loss on the Series B Preferred Shares (7,677 ) —
(7,677 )
Currency translation adjustment (11,867 ) —
(11,867 )
Change in the fair value of hedging instruments —
(5,595 ) (5,595 )
Amounts reclassified from accumulated other comprehensive loss:

Changes in fair value reclassified to interest expense —
1,231
1,231
Changes in fair value reclassified to other non-operating income, net ⁽²⁾
—
1,436
1,436
Net other comprehensive income (23,068 ) (2,928 ) (25,996 )
BALANCE June 30, 2018 $ (207,324 ) $ (6,110 ) $ (213,434 )



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018
BALANCE, beginning of period	$	(235,961	)	$	(175,254	)	$	(216,650	)	$	(187,438	)

Currency translation adjustment, net
Balance, beginning of period	$	(223,648	)	$	(172,263	)	$	(207,668	)	$	(184,256	)
Foreign exchange gain / (loss) on intercompany loans ⁽¹⁾	2,868			(5,055		)	2,256			(3,524		)
Foreign exchange gain / (loss) on the Series B Preferred Shares	3,455			(14,828		)	(1,651		)	(7,677		)
Currency translation adjustment	10,770			(15,178		)	508			(11,867		)
Balance, end of period	$	(206,555	)	$	(207,324	)	$	(206,555	)	$	(207,324	)

Unrealized loss on derivative instruments designated as hedging instruments
Balance, beginning of period	$	(12,313	)	$	(2,991	)	$	(8,982	)	$	(3,182	)
Change in the fair value of hedging instruments	(1,700		)	(4,864		)	(5,402		)	(5,595		)
Amounts reclassified from accumulated other comprehensive loss:
Changes in fair value of hedging instruments reclassified to interest expense	480			610			851			1,231
Changes in fair value of hedging instruments reclassified to other non-operating income / expense, net	—			1,135			—			1,436
Balance, end of period	$	(13,533	)	$	(6,110	)	$	(13,533	)	$	(6,110	)

BALANCE, end of period	$	(220,088	)	$	(213,434	)	$	(220,088	)	$	(213,434	)


⁽¹⁾	Represents foreign exchange ~~losses~~gains on intercompany loans that are of a long-term investment nature which are reported in the same manner as translation adjustments.

⁽²⁾

We expect to repay a portion of the 2021 Euro Loan with the expected proceeds from the Divestment Transaction (see Note 5, "Long-term Debt and Other Financing Arrangements"). This anticipated reduction of principal amounts owing in respect of the 2021 Euro Loan will reduce future interest payments that the interest rate swap maturing on November 1, 2019 is designed to hedge. To maintain the effectiveness of the interest rate swap, we have de-designated a portion of the notional amount to align with the principal balance of the 2021 Euro Loan principal that will remain after the application of Divestment Transaction proceeds. For the portion de-designated, all related fair value adjustments including those previously recognized in accumulated other comprehensive income / loss are recognized in other non-operating income, net in our condensed consolidated statements of operations and comprehensive income / loss (see Note 12, "Financial Instruments and Fair Value Measurements").

15. INTEREST EXPENSE

Interest expense comprised the following for the three and six months ended June 30, ~~2018~~2019 and ~~2017:~~2018:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017		2019		2018		2019		2018
Interest on long-term debt and other financing arrangements	$	9,374	$	16,012	$	22,829	$	33,641	$	6,882	$	11,306	$	14,250	$	27,515
Amortization of capitalized debt issuance costs	1,067		1,416		2,624		2,780		853		1,105		1,727		2,714
Total interest expense	$	10,441	$	17,428	$	25,453	$	36,421	$	7,735	$	12,411	$	15,977	$	30,229

~~Index~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

General

Litigation

We are from time to time party to legal proceedings, arbitrations and regulatory proceedings arising in the normal course of our business operations, including the proceeding described below. 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 condensed consolidated financial statements.

In the fourth quarter of 2016, our Slovak subsidiary MARKIZA-SLOVAKIA, spol. s.r.o. ~~(“Markiza”~~("Markiza") was notified of claims that were filed in June 2016 in a court of first instance in Bratislava, the Slovak Republic to collect amounts allegedly owing under four promissory notes that have a collective face value of approximately EUR 69.0 million. These four promissory notes were purportedly issued in June 2000 by Pavol Rusko in his personal capacity and were purportedly guaranteed by Markiza under the signature of Mr. Rusko, who was an executive director of Markiza at that time as well as one of its shareholders. ~~The~~Two of the notes purport to be issued in favor of Marian Kocner, a controversial Slovak businessman, and the other two to a ~~former~~long-time associate of Mr. ~~Kocner, and~~Kocner. All four notes were supposedly assigned several times, for no apparent consideration, to companies owned by or associated with Mr. Kocner and ultimately to Sprava a inkaso zmeniek, s.r.o., a company owned by Mr. Kocner that isinitiated the ~~plaintiff~~claims for payment in these proceedings.

Two of the notes, each of which purportedly has a face value of approximately EUR 8.3 million, allegedly matured in 2015; and the other two, each of which purportedly has a face value of approximately EUR 26.2 million, allegedly matured in 2016. The four notes accrue interest from their purported maturity dates. Although Mr. Rusko has asserted ~~both~~ in ~~written responses to active claims filed~~testimony in ~~respect of three of~~ the ~~promissory notes as well as in subsequent oral testimony,~~civil proceedings that he signed the notes in June 2000, we do not believe that the notes were signed in June 2000 or that any of the notes are authentic.

~~Civil Proceedings~~

Despite a random case assignment system in the Slovak Republic, claims in respect of three of the notes were initially assigned to the same judge. One of those claims, concerning one of the promissory notes having a face value of approximately EUR 8.3 million (the ~~“First~~"First PN ~~Case”~~Case"), was subsequently reassigned. Proceedings on the claim in respect of the fourth promissory note (in the amount of approximately EUR 26.2 million) (the “Fourth PN Case”) were terminated in January 2017 by the presiding judge because the plaintiff failed to pay court fees and were terminated a second time by a different presiding judge in September 2017 after the plaintiff refiled but failed to pay court fees a second time.

During the first quarter of 2018, the court of first instance began to schedule hearings in respect of the First PN Case as well asin respect of the claims relating to the second promissory note having a face value of approximately EUR 8.3 million (the ~~“Second~~"Second PN ~~Case”~~Case") and one of the promissory notes having a face value of approximately EUR 26.2 million (the ~~“Third~~"Third PN ~~Case”~~Case").

On April 26, 2018, the judge in the First PN Case ruled in favor of the plaintiff. Markiza ~~has~~ appealed that decision.

~~Criminal Proceedings~~

On May 14, 2018, Markiza filed a criminal complaint with the ~~Office of the~~ Special ~~Prosecutor~~Prosecutor's Office of the Slovak Republic (the ~~“Special~~"Special Prosecutor’s ~~Office”~~Office") alleging that Mr. Kocner and Mr. Rusko committed the offenses of (1) counterfeiting, falsification, and illegal production of money and securities and (2) obstruction or perversion of justice. The Special Prosecutor’s Office opened criminal proceedings in the matter at that time.

On June 20, 2018, the Special Prosecutor’s Office issued a decision to formally charge Mr. Kocner and Mr. Rusko with counterfeiting, falsification, and illegal production of money and securities and with obstruction or perversion of justice. ~~Subsequently,~~Following this decision, Mr. Kocner has been taken into pre-trial custody by the Slovak ~~authorities.~~authorities, where he remains. Subsequently, the Special Prosecutor’s Office has charged Mr. Kocner’s long-time associate, who received two of the alleged promissory notes as the original beneficial owner and purported to endorse those notes to a company controlled by Mr. Kocner, with counterfeiting, falsification, and illegal production of money and securities.

~~Following~~On October 12, 2018, the ~~initiation~~court of ~~these~~first instance terminated proceedings in respect of the Second PN Case because the plaintiff failed to pursue the claim, which the plaintiff appealed.

On December 14, 2018, the appellate court suspended proceedings in respect of the First PN Case until a final and enforceable decision has been rendered in the criminal proceedings.

On December 21, 2018, the appellate court reversed the decision of the court of first instance to terminate the Second PN Case and directed the case be tried on the merits.

On March 19, 2019, following the conclusion of the pre-trial investigation, the Special Prosecutor’s Office formally indicted Mr. Kocner and Mr. Rusko with counterfeiting, falsification, and illegal production of money and securities and with obstruction or perversion of justice and filed the indictment with the Special Criminal Court of the Slovak Republic.

On May 14, 2019, the court of first instance decided to suspend proceedings in respect of the Second PN Case until a ~~hearing scheduled~~final and enforceable decision has been rendered in the criminal proceedings.

Index

There have been no hearings held in respect of the Third PN Case ~~was canceled and to date no further hearing has been scheduled. No hearings in~~since the ~~Second PN Case have been held.~~

~~Markiza is seeking to have the civil proceedings suspended until the conclusion~~initiation of the criminal proceedings. On May 14, 2019, the court of first instance decided to suspend proceedings in respect of the Third PN Case until a final and enforceable decision has been rendered in the criminal proceedings.

The plaintiff re-filed its claim with respect to the Fourth PN Case, which purportedly has a face value of approximately EUR 26.2 million, on May 13, 2019 and subsequently paid the requisite court fees. On June 6, 2019, the court of first instance decided to suspend proceedings in respect of the Fourth PN Case until a final and enforceable decision has been rendered in the criminal proceedings.

Accordingly, civil proceedings in respect of all four promissory notes have now been suspended until a final and enforceable decision is rendered in the criminal proceedings. The Special Criminal Court overseeing the criminal proceedings has scheduled initial hearings for the end of July 2019.

In the event any of the civil proceedings are not ~~suspended,~~dismissed as a result of the successful conclusion of the criminal proceedings, Markiza will continue to vigorously defend the claims.

Based on the facts and circumstances of these cases, we have not accrued any amounts in respect of these claims.

Item 1A. Risk Factors

This report and the following discussion of risk factors contain forward-looking statements as discussed in Part I, 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.

~~Index~~

Risks Relating to Our Financial Position

Changes in global or regional economic conditions may adversely affect our financial position and 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. Our markets have experienced overall growth in real GDP (as adjusted for inflation) and advertising spending since 2014; however, we cannot predict if the current growth trends will continue in the future. Recessions or periods of low or negative growth in the region or globally in the future may cause a deterioration of general economic conditions in one or more of our markets, which would have an adverse economic impact on our advertising revenues. ~~Trade~~The United States has imposed tariffs on certain products from many of its trading partners, including Europe and China, and has threatened to impose additional tariffs. If trade tensions ~~have been increasing~~ between the United States and Europe ~~which~~escalate, this may result in the imposition of tariffs on cars and auto part exports from Europe. Such tariffs could have a significant adverse impact on the economies of our countries of operation. Additionally, a slowdown in China resulting from existing or increased tariffs on Chinese products may have an adverse impact on the global economy, which may ultimately reduce demand for European exports and the rate of GDP growth in the countries in which we operate. Other factors that may affect general economic conditions in our markets include defaults by sovereigns or systemically important companies, austerity programs, natural disasters, acts of terrorism, civil or military conflicts or general political instability and responses to it, any of which may also reduce advertising spending. In addition, although we believe the advertising spend per capita of the countries in which we operate and advertising intensity (the ratio of total advertising spend per capita to nominal GDP per capita) will eventually converge with developed markets in Europe, such convergence may not occur in the time frame we expect, or at all. Any of these developments would have a significant negative effect on our financial position, results of operations and cash flows.

~~Changes to~~The impact of ending the quantitative easing program implemented by the European Central Bank ("ECB") and the impact on the region of the United Kingdom’s exit from the European Union ~~(“EU”~~("EU") may adversely affect our financial position and results of operations.

The ECB embarked upon quantitative easing in 2015 to address economic softness and a slowdown in growth of consumer prices in the Eurozone. The ECB also created funding and stability mechanisms to provide liquidity and financial assistance to Eurozone member states and financial institutions. Economic growth in recent years in the Eurozone, including strong growth in 2017, has been helped by the ECB’s quantitative easing program which was recalibrated in January 2018. Citing improved economic conditions, the ECB ~~has confirmed plans to reduce and then end~~ended its quantitative easing program byat the end of December 2018. The ~~tapering~~cessation of quantitative easing may adversely impact future growth in Eurozone countries, including the countries we operate in which would negatively impact our business.

~~On March 29, 2017,~~At present, the period during which the United Kingdom ~~formally initiated~~is to finalize the terms and process ~~to leave~~for leaving the EU, commonly referred to as "Brexit", ~~triggering a two-year period to finalize~~will expire on October 31, 2019. There is significant uncertainty regarding the specific timing and the terms ~~for its leaving~~on which the ~~EU. It~~United Kingdom will leave the EU, and it is expected that economic conditions in the EU will be impacted by Brexit. ~~While~~Given the ongoing uncertainty over the final terms of Brexit, the overall economic impact of Brexit on the EU and the Euro iscontinues to be difficult to estimate ~~at present,~~as 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 EU, in particular those countries that are significant exporters to the United Kingdom. There is also significant uncertainty regarding the terms on which the United Kingdom will 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, if other countries seek to leave the EU, that would increase 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 further affect the budgetary contributions and allocations among the EU member states in the medium term, including the countries in which we operate, which ~~are~~have historically been net recipients of EU funding. Economic uncertainty caused by Brexit or other instability in the EU resulting from Brexit could cause significant volatility in EU markets and reduce economic growth rates in the countries in which we operate, which would negatively impact the demand for advertising and consequently our ~~business.~~financial position, results of operation and cash flows.

Index

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. While we have implemented pricing strategies to increase sales and television advertising spending, 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 above), competition from other broadcasters and operators of other distribution platforms, changes in programming strategy, changes in distribution strategy, our ability to secure distribution on cable, satellite or IPTV operators, 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. This requires us to have a distribution strategy that reaches a significant audience as well as to maintain investments in programming at a sufficient level to continue to attract audiences. Changes in the distribution of our channels, such as our decision to cease broadcasting on ~~DTT~~digital terrestrial television ("DTT") in the Slovak Republic and Slovenia in 2017, 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 had and, if repeated, may have an adverse impact on our television viewing levels. Reductions in advertising spending in our markets and resistance to price increases as well as competition for ratings from broadcasters seeking to attract similar audiences may 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.

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

We have a substantial amount of indebtedness. Under the Reimbursement Agreement and the 2023 Revolving Credit Facility (when drawn), we can incur only limited amounts of additional indebtedness, other than indebtedness incurred to refinance existing indebtedness. In addition, all commitments under the 2023 Revolving Credit Facility also terminate on the refinancing of any Euro Loan. 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. Furthermore, pursuant to the Reimbursement Agreement, the all-in rates on each of the Euro Loans increase to a maximum of 10.0% (or 3.5% above the then-current all-in rate, if lower), on the date that is 365 days following a change of control of CME Ltd. (as defined therein); and pursuant to the 2023 Revolving Credit Facility, all commitments terminate following a change of control (as defined therein) and the interest rate on amounts outstanding increases to 10% plus LIBOR or 9% plus the alternate base rate on the date that is 365 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.

Our debt service obligations and covenants may restrict our ability to conduct our operations.

We have significant debt service obligations under the Euro Loans as well as the 2023 Revolving Credit Facility (when drawn), including the Guarantee Fees to Warner Media as consideration for its guarantees of the Euro Loans (collectively, the "WM Guarantees"). In addition, if ~~the Divestment Transaction does not close and~~ cash flows from operations do not meet our forecasts, we would not be able to reduce our indebtedness as planned and would continue to bear higher average borrowing costs on our senior debt and pay more interest and Guarantee Fees. 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 2023 Revolving Credit Facility (when drawn) 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 and debt service obligations 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 or our industry. For additional information regarding the Reimbursement Agreement, the 2023 Revolving Credit Facility and the WM Guarantees, see Part I, Item 1, Note 5,4, "Long-term Debt and Other Financing Arrangements" ~~and Note 22, "Subsequent Events".~~

~~Index~~

~~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. Under the Reimbursement Agreement and the 2023 Revolving Credit Facility (when drawn), 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 each of the Euro Loans increase to a maximum of 10.0% (or 3.5% above the then-current all-in rate, if lower), on the date that is 365 days following a change of control of CME Ltd. (as defined therein); and pursuant to the 2023 Revolving Credit Facility, all commitments terminate following a change of control (as defined therein) and the interest rate on amounts outstanding increases to 10% plus LIBOR or 9% plus the alternate base rate on the date that is 365 days following such change of control. Following the repayment of a portion of the outstanding principal of the 2019 Euro Loan with proceeds from the warrant exercises, we intend to repay the remainder of the 2019 Euro Loan at or prior to its maturity on May 1, 2019 with cash flows from operations and the expected proceeds from the Divestment Transaction. Pursuant to the Reimbursement Agreement, all commitments under the 2023 Revolving Credit Facility terminate on the refinancing of any Euro Loan. 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. 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.

~~If the Divestment Transaction fails to complete or is terminated, we may need to find alternative sources of funds to repay certain of our indebtedness~~

On July 9, 2017, we entered into a framework agreement (the “Framework Agreement”) with Slovenia Broadband S.à r.l. (the "Purchaser"), a wholly owned subsidiary of United Group B.V., relating to the sale of our Croatia and Slovenia operations (the "Divestment Transaction") for cash consideration of EUR 230.0 million (approximately US$ 268.1 million), subject to customary working capital adjustments as well as the receipt of regulatory approvals and the satisfaction of other customary closing conditions. On July 5, 2018, the terms of the Framework Agreement were amended and restated (the “Restated Framework Agreement”) to provide that the sale of our Croatia operations (the "Croatian Transaction") is independent from the sale of our Slovenia operations (the "Slovenian Transaction"). In addition, the date after which we and the Purchaser may terminate the Restated Framework Agreement if neither transaction has closed has been extended until September 13, 2018 (the "Long Stop Date"). There is no guarantee that all necessary regulatory approvals required to close the sale of our Slovenia operations will be obtained by the Long Stop Date. In the event the Croatian Transaction has not closed by the Long Stop Date, the required regulatory approvals for the Slovenian Transaction are not obtained by the Long Stop Date or the parties have not otherwise agreed to extend that date, both we and the Purchaser have the right to terminate the Restated Framework Agreement on notice to the other party. If the Croatian Transaction or the Slovenian Transaction does not close or is terminated, we would not be able to repay indebtedness we planned to repay with expected proceeds of such transactions (see "We may be unable to refinance our existing indebtedness and may not be able to obtain favorable refinancing terms" above).

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 transactions and calculations where the ultimate tax determination is unknown. 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 Reimbursement Agreement and the 2023 Revolving Credit Facility, we pledged all of the shares of CME NV and of CME BV, which together own all of our interests in our operating subsidiaries, in favor of Warner Media as security for this indebtedness. If we or these subsidiaries were to default under the terms of any of the relevant agreements, Warner Media would have the ability to sell all or a portion of the assets pledged to it in order to pay amounts outstanding under such debt instruments. This could result in our inability to conduct our business.

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. Any strengthening of the dollar will 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 relates 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.

Index

Our strategies to enhance our carriage fees and 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 television 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, satellite and IPTV operators for carriage of our channels as well as continuing to seek improvements in advertising pricing. Agreements with operators generally have a term of one or more 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 negotiations to implement our carriage fees strategy in prior years, 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, which would temporarily reduce the reach of those channels and may result in clients withdrawing advertising from our channels. The occurrence of any of 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.

~~Index~~

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

Moody’s Investors Service rates our corporate credit as B1 with a positive outlook. Standard & Poor’s rates our corporate credit B+ ~~(currently with~~(with a positive outlook). Our ratings show each agency's opinion of our financial strength, operating performance and ability to meet our debt obligations as they become due. These ratings take into account the particular emphasis the ratings agencies place on metrics such as leverage ratio and cash flow, which they use as measurements of a company's liquidity and financial strength. They also reflect an emphasis placed by the ratings agencies on ~~a track record of~~the historically strong financial support from Warner Media. We may be subject to downgrades if our operating performance deteriorates or we fail to maintain adequate levels of liquidity. In addition, our ratings may be downgraded if the agencies form a view that material support from Warner Media is not as strong, or the strategic importance of CME to Warner Media is not as significant as it has been in the past. In the event our corporate credit ratings are lowered by the rating agencies, we may not be able to refinance our existing indebtedness or raise new indebtedness that may be permitted under the Reimbursement Agreement and the 2023 Revolving Credit Facility (when drawn), and we will have to pay higher interest rates, all of 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 1, Note 4,3, "Goodwill and Intangible Assets" for the carrying amounts of goodwill in each of our reporting units.

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. The cost of acquiring content attractive to our viewers, such as feature films and popular television series and formats, is likely to 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 or cash flows.

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.

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. The cost of acquiring content attractive to our viewers, such as feature films and popular television series and formats, is likely to increase in the future. Our expenditures in respect of locally produced programming may also increase due to competition for talent and other resources, wage inflation, 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 or 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 assurance 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.

~~Index~~

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 (including the Economic Substance Act in Bermuda which came into force in July 2019), employment laws, data protection requirements including the ~~new~~ EU General Data Protection Regulation, 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. A failure or alleged failure to comply with applicable laws and regulations, whether inadvertent or otherwise, may result in legal or regulatory proceedings being initiated against us and fines or other penalties being levied against us.

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, in~~ 2016 the prosecuting authorities in Romania 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 have cooperated with the authorities in responding to the information request. In Slovenia, the competition law authorities launched an investigation in 2017 into whether our Slovenia subsidiary is dominant and abused its dominant position when concluding carriage fee agreements with platform operators in connection with its decision to cease broadcasting on DTT there. To date there has been no determination that a breach of competition has occurred. If these or other contingencies result in legal or regulatory proceedings being initiated against us, or if developments occur in respect of our compliance with existing laws or regulations, or there are changes in the interpretation or application of such laws or regulations, we may incur substantial costs, be required to change our business practices (including on what terms and conditions we offer our channels under carriage agreements), our reputation may be damaged or we may be exposed 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.

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, changes in local regulatory requirements including restrictions on foreign ownership, inconsistent regulatory or judicial practice, corruption 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, as well as to the influence of commercial and governmental actors. This may result in inconsistent application of tax and legal regulations, arbitrary or biased treatment, and other general business risks as well as social or political instability or disruptions and the potential for political influence on the media. The relative level of development of our markets, the risk of corruption, and the influence of local commercial and governmental actors also present a potential for biased or unfair treatment of us before regulators or courts in the event of disputes. If such a dispute occurs, those regulators or courts may not act with integrity or may favor local interests over our interests. 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. Ultimately, the occurrence of any of these could have a material adverse impact 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.

We rely on network and information systems and other technology that may be subject to disruption, security breaches 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 if we are required to expend resources to remedy such a security breach or if they result in legal claims or proceedings or our reputation is harmed. In addition, improper disclosure of personal data could subject us to liability under laws, including the ~~new~~ EU General Data Protection Regulation, 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 and cash flows.

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 the Slovak Republic and Slovenia are valid for indefinite time periods, our other broadcasting licenses expire at various times from November 2019 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.

~~Index~~

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.

Risks Relating to our Common Stock

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

~~Following the completion of the AT&T and Time Warner, Inc. merger on June 14, 2018,~~ AT&T, through its wholly owned subsidiaries Warner Media and TW Investor, is the largest beneficial owner of shares of our Class A common stock, holding 162,334,771 unregistered shares of Class A common stock, one share of Series A preferred stock ("Series A Preferred Share"), and 200,000 shares of Series B preferred stock ("Series B Preferred Shares") ~~and on April 25, 2018, Warner Media (formerly Time Warner, Inc. at date of exercise) exercised warrants to acquire 100,926,996 shares of our Class A common stock.~~. The share of Series A Preferred Shares is convertible into 11,211,449 shares of Class A common stock and the Series B Preferred Shares are convertible into approximately 111.1 million shares of Class A common stock at the option of Warner Media (subject to certain exceptions). ~~As of June 30, 2018, the 200,000 Series B Preferred Shares were convertible into approximately 111.1 million shares of Class A common stock.~~ Warner Media has registration rights with respect to all its shares of Class A common stock now held or hereafter acquired. For additional information on the Series A Preferred Shares, Series B Preferred Shares and warrants, see Part I, Item 1, Note 13, "Convertible Redeemable Preferred Shares" and Note 14, "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 Warner Media, the economic interests of current shareholders may be diluted and the price of our shares may be adversely affected.

The interests of AT&T may conflict with the interests of other investors.

Through its wholly owned subsidiaries Warner Media and TW Investor, the aggregate beneficial ownership interest of AT&T in the Company is approximately ~~76.0%~~75.7%. In connection with the exercise of the warrants by Warner Media and TW Investor in April 2018, each of them issued standing proxies to the independent directors of the Company, pursuant to which it granted the right to vote the 100,926,996 shares received on the exercise of those warrants (the “Warrant Shares”) on all matters other than any transaction resulting in a change in control. In accordance with these proxies, the Warrant Shares will be voted in proportion to votes cast at a general meeting of the Company, excluding such Warrant Shares. ~~In addition~~Warner Media and TW Investor have undertaken to ~~the Warrant Shares subject to~~maintain this proxy arrangement until April 2020 and may extend it for an additional year at their option. As a result of the standing proxies, ~~AT&T beneficially owns 61,407,775 shares of Class A common stock and one share~~after giving effect to its ownership of the Series A Preferred ~~Stock, which is entitled to one vote for each of~~Share, AT&T has a 44.3% voting interest in the ~~11,211,449 shares of Class A common stock underlying it.~~Company. Furthermore, AT&T has the right to appoint one less than the number required to constitute a majority of our board of directors, provided that AT&T continues to own not less than 40% of the voting power of the Company. As such, AT&T is in a position to exercise significant influence over the outcome of corporate actions requiring shareholder approval, such as the election of directors, amendments to our Bye-laws, or certain ~~transactions.~~transactions, including transactions resulting in a change of control.

Index

We are also party to an amended investor rights agreement with Warner Media and the other parties thereto under which, among other things, Warner Media was granted a contractual ~~preemptive~~pre-emptive 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~~publicly held shares. Warner Media is also our largest secured creditor, as it guarantees 100% of our outstanding senior indebtedness and is the lender under the 2023 Revolving Credit Facility. The 2023 Revolving Credit Facility (when drawn) 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, Warner Media 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. Furthermore, in certain circumstances, the interests of AT&T as our largest beneficial owner could be in conflict with the interests of minority ~~shareholders.~~shareholders

~~Index~~

We are subject to risk and uncertainties related to our review of strategic alternatives that may adversely affect our business.

On March 25, 2019, we announced that our Board of Directors, working with the Company's management team and its legal and financial advisors, commenced a process to explore and evaluate potential strategic alternatives for the Company focused on maximizing shareholder value. Our Board has formed a committee of independent directors to lead this process. The potential alternatives may include, among others, the sale of part or all of the Company, a merger with another strategic partner, a recapitalization or the Company's continuing to execute on the long-term business plan.

The process of exploring strategic alternatives involves the dedication of significant resources and the incurrence of fees and expenses and will likely result in the incurrence of significant fees and expenses if we determine to move forward with any of the strategic alternatives. In addition, our exploration of strategic alternatives may expose our business to other risks and uncertainties, including the diversion of management and employee attention and time; difficulty in recruiting, hiring, and retaining necessary personnel; and disruption to our relationships with clients and suppliers as well as to other commercial and strategic relationships. Furthermore, speculation regarding any developments related to the review of strategic alternatives and or uncertainty regarding the outcome could cause our share price to fluctuate significantly. There is no timeline for the completion of the strategic review and we do not intend to provide updates or further information on developments related to the strategic review unless we determine that additional disclosure is necessary or appropriate. There can be no assurance that our exploration of strategic alternatives will result in the Company determining to proceed with any transaction and it is not possible to predict the impact of the conclusion of the strategic review on our business or share price. If we are unable to effectively mitigate the risks related to the strategic review, it may disrupt our business and adversely impact our financial results, results of operations and cash flows.

The price of our Class A common stock ~~is likely to remain~~may be 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 in the Risk Factor above ”We are subject to risk and uncertainties related to our review of strategic alternatives that may adversely affect our business” and under ~~“Risks~~"Risks Relating to Our ~~Operations”~~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~~impact 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.

In January 2017, TCS Capital Management, LLC ("TCS Capital"), filed an amendment to its Schedule 13D in which it disclosed its opinion that the Company should hire an investment bank to run a process to sell the Company as well as replace the Company's Board of Directors with new directors recommended by TCS Capital. In recent years, shareholder activists have become involved in numerous public companies. Shareholder activists frequently propose to involve themselves in the governance, strategic direction and operations of the ~~Company.~~Company, as occurred when TCS Capital Management, LLC ("TCS Capital"), filed an amendment to its Schedule 13D in January 2017 in which it disclosed its opinions on the Company’s governance and strategic direction. 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 INDEX



Exhibit Number		Description
10.01*3.01		~~Amended & Restated Framework Agreement, dated July 5, 2018, between CME~~Bye-Laws of Central European Media Enterprises ~~B.V. and Slovenia Broadband S.à r.l. (incorporated by reference to Exhibit 10.1 to the Company's Current Form 8-K filed~~Ltd., as amended on ~~July 11, 2018).~~May 20, 2019.

10.01		Central European Media Enterprises Ltd. 2015 Stock Incentive Plan, as amended on May 20, 2019.

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 exhibit.

+ 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 ~~24, 2018~~23, 2019	/s/ David Sturgeon David Sturgeon Executive Vice President and Chief Financial Officer Principal Financial Officer and Principal Accounting Officer

4852



BERMUDA		98-0438382
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.08	CETV	NASDAQ Global Select Market



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



Class	Outstanding as of July 19, ~~2018~~2019
Class A Common Stock, par value $0.08	~~252,121,007~~253,607,026



			Page
Part I Financial Information
	Item 1. Financial Statements		1
		Condensed Consolidated Balance Sheets as at June 30, ~~2018~~2019 and December 31, ~~2017~~2018	1
		Condensed Consolidated Statements of Operations and Comprehensive Income / Loss for the Three and Six Months Ended June 30, ~~2018~~2019 and ~~2017~~2018	2
		Condensed Consolidated ~~Statement~~Statements of Equity for the Three and Six Months Ended June 30, 2019 and 2018	3
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, ~~2018~~2019 and ~~2017~~2018	45
		Notes to the Condensed Consolidated Financial Statements	6
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		26
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		3943
	Item 4. Controls and Procedures		3944
Part II Other Information
	Item 1. Legal Proceedings		4044
	Item 1A. Risk Factors		4045
	Item 6. Exhibits		4751
Signatures			4852



	June 30, 2018		December 31, 2017
ASSETS
Current assets
Cash and cash equivalents	$	40,447	$	54,903
Accounts receivable, net (Note 7)	146,374		158,903
Program rights, net (Note 6)	71,437		69,706
Other current assets (Note 8)	35,022		33,106
Assets held for sale (Note 3)	142,623		148,156
Total current assets	435,903		464,774
Non-current assets
Property, plant and equipment, net (Note 9)	96,781		103,648
Program rights, net (Note 6)	154,842		182,170
Goodwill (Note 4)	682,555		712,359
Other intangible assets, net (Note 4)	138,272		148,235
Other non-current assets (Note 8)	13,939		16,869
Total non-current assets	1,086,389		1,163,281
Total assets	$	1,522,292	$	1,628,055



	June 30, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	74,639	$	62,031
Accounts receivable, net (Note 6)	175,846		193,371
Program rights, net (Note 5)	77,606		77,624
Other current assets (Note 7)	32,872		41,067
Total current assets	360,963		374,093
Non-current assets
Property, plant and equipment, net (Note 8)	110,627		117,604
Program rights, net (Note 5)	164,587		171,871
Goodwill (Note 3)	676,730		676,333
Other intangible assets, net (Note 3)	132,483		136,052
Other non-current assets (Note 7)	23,136		12,408
Total non-current assets	1,107,563		1,114,268
Total assets	$	1,468,526	$	1,488,361


LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities (Note 10)	$	114,800		$	143,893
Current portion of long-term debt and other financing arrangements (Note 5)	51,015			2,960
Other current liabilities (Note 11)	25,853			9,280
Liabilities held for sale (Note 3)	31,583			32,131
Accounts payable and accrued liabilities (Note 9)							$	130,671		$	120,468
Current portion of long-term debt and other financing arrangements (Note 4)							6,089			5,545
Other current liabilities (Note 10)							32,653			13,679
Total current liabilities	223,251			188,264			169,413			139,692
Non-current liabilities
Long-term debt and other financing arrangements (Note 5)	821,657			1,085,714
Other non-current liabilities (Note 11)	104,097			95,254
Long-term debt and other financing arrangements (Note 4)							664,110			782,685
Other non-current liabilities (Note 10)							82,121			67,293
Total non-current liabilities	925,754			1,180,968			746,231			849,978
Commitments and contingencies (Note 20)
TEMPORARY EQUITY
200,000 shares of Series B Convertible Redeemable Preferred Stock of $0.08 each (December 31, 2017 - 200,000) (Note 13)	269,370			264,593
200,000 shares of Series B Convertible Redeemable Preferred Stock of $0.08 each (December 31, 2018 - 200,000) (Note 13)							269,370			269,370
EQUITY
CME Ltd. shareholders’ equity (Note 14):
One share of Series A Convertible Preferred Stock of $0.08 each (December 31, 2017 – one)	—			—
252,121,007 shares of Class A Common Stock of $0.08 each (December 31, 2017 – 145,486,497)	20,170			11,639
Nil shares of Class B Common Stock of $0.08 each (December 31, 2017 – nil)	—			—
One share of Series A Convertible Preferred Stock of $0.08 each (December 31, 2018 – one)							—			—
253,559,298 shares of Class A Common Stock of $0.08 each (December 31, 2018 – 252,853,554)							20,285			20,228
Nil shares of Class B Common Stock of $0.08 each (December 31, 2018 – nil)							—			—
Additional paid-in capital	1,999,610			1,905,779			2,005,215			2,003,518
Accumulated deficit	(1,702,477		)	(1,735,768		)	(1,522,359		)	(1,578,076		)
Accumulated other comprehensive loss	(213,434		)	(187,438		)	(220,088		)	(216,650		)
Total CME Ltd. shareholders’ equity / (deficit)	103,869			(5,788		)
Total CME Ltd. shareholders’ equity							283,053			229,020
Noncontrolling interests	48			18			459			301
Total equity / (deficit)	103,917			(5,770		)
Total equity							283,512			229,321
Total liabilities and equity	$	1,522,292		$	1,628,055		$	1,468,526		$	1,488,361


PER SHARE DATA (Note 18):
Net income / (loss) per share:
Net income per share:
Continuing operations — basic	$	0.05	$	0.09	$	0.07	$	0.06		$	0.12	$	0.06	$	0.15	$	0.08
Continuing operations — diluted	0.05		0.07		0.06		0.04			0.12		0.06		0.15		0.07
Discontinued operations — basic	0.02		0.01		0.02		(0.01		)	—		0.01		—		0.01
Discontinued operations — diluted	0.01		0.00		0.02		0.00			—		0.00		—		0.01
Net income attributable to CME Ltd. — basic	0.07		0.10		0.09		0.05
Net income attributable to CME Ltd. — diluted	0.06		0.07		0.08		0.04
Attributable to CME Ltd. — basic										0.12		0.07		0.15		0.09
Attributable to CME Ltd. — diluted										0.12		0.06		0.15		0.08

Weighted average common shares used in computing per share amounts (000’s):
Basic	235,148		155,738		196,807		155,269			264,570		235,148		264,385		196,807
Diluted	258,783		235,952		250,515		230,872			265,932		258,783		265,628		250,515


	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 (Deficit) / Equity			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
BALANCE December 31, 2017	1	$	—	145,486,497	$	11,639	—	$	—	$	1,905,779		$	(1,735,768	)	$	(187,438	)	$	18		$	(5,770	)
BALANCE March 31, 2019																									1	$	—	253,279,975	$	20,262	—	$	—	$	2,004,188		$	(1,566,318	)	$	(235,961	)	$	431		$	222,602
Stock-based compensation																									—	—		—	—		—	—		1,124			—			—			—			1,124
Share issuance, stock-based compensation																									—	—		279,323	23		—	—		(23		)	—			—			—			—
Withholding tax on net share settlement of stock-based compensation																									—	—		—	—		—	—		(74		)	—			—			—			(74		)
Net income																									—	—		—	—		—	—		—			43,959			—			119			44,078
Unrealized loss on derivative instruments																									—	—		—	—		—	—		—			—			(1,220		)	—			(1,220		)
Currency translation adjustment																									—	—		—	—		—	—		—			—			17,093			(91		)	17,002
BALANCE June 30, 2019																									1	$	—	253,559,298	$	20,285	—	$	—	$	2,005,215		$	(1,522,359	)	$	(220,088	)	$	459		$	283,512

																									CME Ltd.
																									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
BALANCE March 31, 2018																									1	$	—	148,235,428	$	11,858	—	$	—	$	1,905,969		$	(1,728,518	)	$	(175,254	)	$	(368	)	$	13,687
Stock-based compensation	—	—		—	—		—	—		2,240			—			—			—			2,240			—	—		—	—		—	—		1,128			—			—			—			1,128
Exercise of warrants (Note 14)	—	—		105,652,401	8,452		—	—		97,200			—			—			—			105,652			—	—		103,371,465	8,270		—	—		95,101			—			—			—			103,371
Share issuance, stock-based compensation	—	—		982,109	79		—	—		(79		)	—			—			—			—			—	—		514,114	42		—	—		(42		)	—			—			—			—
Withholding tax on net share settlement of stock-based compensation	—	—		—	—		—	—		(753		)	—			—			—			(753		)	—	—		—	—		—	—		(216		)	—			—			—			(216		)
Preferred dividend paid in kind	—	—		—	—		—	—		(4,777		)	—			—			—			(4,777		)	—	—		—	—		—	—		(2,330		)	—			—			—			(2,330		)
Net income / (loss)	—	—		—	—		—	—		—			33,291			—			(194		)	33,097			—	—		—	—		—	—		—			26,041			—			(16		)	26,025
Unrealized loss on derivative instruments	—	—		—	—		—	—		—			—			(2,928		)	—			(2,928		)	—	—		—	—		—	—		—			—			(3,119		)	—			(3,119		)
Currency translation adjustment	—	—		—	—		—	—		—			—			(23,068		)	224			(22,844		)	—	—		—	—		—	—		—			—			(35,061		)	432			(34,629		)
BALANCE June 30, 2018	1	$	—	252,121,007	$	20,170	—	$	—	$	1,999,610		$	(1,702,477	)	$	(213,434	)	$	48		$	103,917		1	$	—	252,121,007	$	20,170	—	$	—	$	1,999,610		$	(1,702,477	)	$	(213,434	)	$	48		$	103,917



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest (including Guarantee Fees)	$	14,017	$	26,630
Cash paid for income taxes, net of refunds	11,348		18,203

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Accretion on Series B Convertible Redeemable Preferred Stock	$	—	$	(4,777	)



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest (including mandatory cash-pay Guarantee Fees)	$	21,531	$	18,191
Cash paid for Guarantee Fees that may be paid in kind	—		1,411
Cash paid for income taxes, net of refunds	18,444		7,034

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Accretion on Series B Convertible Redeemable Preferred Stock	$	4,777	$	4,762



	June 30, 2018		December 31, 2017
Assets held for sale
Cash and cash equivalents	$	8,222	$	8,784
Accounts receivable, net	40,055		43,540
Program rights, net	60,872		62,017
Property, plant and equipment, net	21,279		22,870
Other assets	12,195		10,945
Total assets held for sale	$	142,623	$	148,156

Liabilities held for sale
Accounts payable and accrued liabilities	$	26,935	$	30,073
Other liabilities	4,648		2,058
Total liabilities held for sale	$	31,583	$	32,131



	Bulgaria			Czech Republic			Romania			Slovak Republic			Total
Gross Balance, December 31, 2017	$	175,071		$	837,732		$	90,305		$	52,463		$	1,155,571
Accumulated impairment losses	(144,639		)	(287,545		)	(11,028		)	—			(443,212		)
Balance, December 31, 2017	30,432			550,187			79,277			52,463			712,359
Foreign currency	(849		)	(25,293		)	(2,190		)	(1,472		)	(29,804		)
Balance, June 30, 2018	29,583			524,894			77,087			50,991			682,555
Accumulated impairment losses	(144,639		)	(287,545		)	(11,028		)	—			(443,212		)
Gross Balance, June 30, 2018	$	174,222		$	812,439		$	88,115		$	50,991		$	1,125,767



	June 30, 2018			December 31, 2017
Long-term debt	$	862,287		$	1,079,187
Other credit facilities and capital leases	10,385			9,487
Total long-term debt and other financing arrangements	872,672			1,088,674
Less: current maturities	(51,015		)	(2,960		)
Total non-current long-term debt and other financing arrangements	$	821,657		$	1,085,714


	June 30, 2018							December 31, 2017							June 30, 2019							December 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Indefinite-lived:
Trademarks	$	85,066	$	—		$	85,066	$	87,900	$	—		$	87,900	$	86,770	$	—		$	86,770	$	87,356	$	—		$	87,356
Amortized:
Broadcast licenses	210,563		(158,806		)	51,757		220,194		(161,820		)	58,374		211,117		(167,310		)	43,807		210,447		(162,936		)	47,511
Trademarks	409		(409		)	—		421		(421		)	—		621		(621		)	—		631		(631		)	—
Customer relationships	56,888		(55,595		)	1,293		58,771		(56,996		)	1,775		55,639		(55,071		)	568		56,024		(55,158		)	866
Other	1,698		(1,542		)	156		1,753		(1,567		)	186		3,036		(1,698		)	1,338		1,868		(1,549		)	319
Total	$	354,624	$	(216,352	)	$	138,272	$	369,039	$	(220,804	)	$	148,235	$	357,183	$	(224,700	)	$	132,483	$	356,326	$	(220,274	)	$	136,052


	Principal Amount of Liability Component		Debt Issuance Costs ⁽¹⁾			Net Carrying Amount		Principal Amount of Liability Component		Debt Issuance Costs ⁽¹⁾			Net Carrying Amount
2019 Euro Loan	$	47,565	$	(55	)	$	47,510
2021 Euro Loan	274,354		(721		)	273,633		$	125,562	$	(231	)	$	125,331
2023 Euro Loan	546,527		(5,383		)	541,144		533,494		(4,153		)	529,341
2023 Revolving Credit Facility	—		—			—		—		—			—
Total long-term debt and credit facilities	$	868,446	$	(6,159	)	$	862,287	$	659,056	$	(4,384	)	$	654,672



Consolidated Net Leverage				2019 Euro Loan		2021 Euro Loan		2023 Euro Loan
≥	7.0x			6.00	%	6.00	%	6.50	%
<	7.0x	-	6.0x	5.00	%	5.00	%	5.50	%
<	6.0x	-	5.0x	4.25	%	4.25	%	4.75	%
<	5.0x	-	4.0x	3.75	%	3.75	%	4.25	%
<	4.0x	-	3.0x	3.25	%	3.25	%	3.75	%
<	3.0x			3.25	%	3.25	%	3.50	%



Consolidated Net Leverage				2021 Euro Loan		2023 Euro Loan
≥	7.0x			6.00	%	6.50	%
<	7.0x	-	6.0x	5.00	%	5.50	%
<	6.0x	-	5.0x	4.25	%	4.75	%
<	5.0x	-	4.0x	3.75	%	4.25	%
<	4.0x	-	3.0x	3.25	%	3.75	%
<	3.0x			3.25	%	3.50	%



2019	$	—
2020	—
2021	125,562
2022	—
2023	533,494
2024 and thereafter	—
Total long-term debt and credit facilities	659,056
Debt issuance costs	(4,384		)
Carrying amount of long-term debt and credit facilities	$	654,672


	Carrying Amount				Fair Value				Carrying Amount				Fair Value
	June 30, 2018		December 31, 2017		June 30, 2018		December 31, 2017		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
2019 Euro Loan	$	47,510	$	240,545	$	47,103	$	236,337
2021 Euro Loan	273,633		281,871		256,999		268,858		$	125,331	$	240,296	$	126,864	$	233,058
2023 Euro Loan	541,144		556,771		487,110		510,882		529,341		532,043		540,469		502,617
	$	862,287	$	1,079,187	$	791,212	$	1,016,077	$	654,672	$	772,339	$	667,333	$	735,675


	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
2019 Euro Loan	1.28	%		0.14	%		2.33	%	3.75	%
2021 Euro Loan	1.28	%		0.31	%	⁽¹⁾	2.16	%	3.75	%	1.28	%		0.31	%	⁽¹⁾	1.66	%	3.25	%
2023 Euro Loan	1.28	%		0.28	%	⁽²⁾	2.69	%	4.25	%	1.28	%		0.28	%	⁽²⁾	2.19	%	3.75	%
2023 Revolving Credit Facility ⁽³⁾	6.34	%	⁽⁴⁾	—	%		—	%	6.34	%
2023 Revolving Credit Facility (if drawn)											5.82	%	⁽³⁾	—	%		—	%	5.82	%


⁽¹⁾	Effective until November 1, 2019. From November 1, 2019 through maturity on November 1, 2021, the rate fixed pursuant to interest rate hedges will increase to 0.47%, with a corresponding decrease in the Guarantee Fee rate, such that the all-in borrowing rate remains ~~3.75%~~3.25% if our net leverage ratio remains unchanged.


⁽²⁾	Effective until February 19, 2021. From February 19, 2021 through maturity on April 26, 2023, the rate fixed pursuant to interest rate hedges will increase to 0.97%, with a corresponding decrease in the Guarantee Fee rate, such that the all-in borrowing rate remains ~~4.25%~~3.75% if our net leverage ratio remains unchanged.


⁽³⁾	~~As at June 30, 2018, the 2023 Revolving Credit Facility was undrawn.~~


⁽⁴⁾	Based on the ~~three month~~three-month LIBOR of ~~2.34%~~2.32% as at June 30, ~~2018.~~2019.



Consolidated Net Leverage				Alternate Base Rate Loans		Eurodollar Loans
≥	7.0x			5.25	%	6.25	%
<	7.0x	-	6.0x	4.25	%	5.25	%
<	6.0x	-	5.0x	3.50	%	4.50	%
<	5.0x	-	4.0x	3.00	%	4.00	%
<	4.0x	-	3.0x	2.50	%	3.50	%
<	3.0x			2.25	%	3.25	%



	June 30, 2018			December 31, 2017
Credit facilities ^{(1) – (3)}	$	—		$	—
Capital leases	10,385			9,487
Total credit facilities and capital leases	10,385			9,487
Less: current maturities	(3,505		)	(2,960		)
Total non-current credit facilities and capital leases	$	6,880		$	6,527



	June 30, 2019			December 31, 2018
Credit facilities ^{(1) – (4)}	$	—		$	—
Finance leases (Note 11)	15,527			15,891
Total credit facilities and finance leases	15,527			15,891
Less: current maturities	(6,089		)	(5,545		)
Total non-current credit facilities and finance leases	$	9,438		$	10,346


⁽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 throughout 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.


⁽⁴⁾	Under a factoring framework agreement with Global Funds IFN S.A., receivables from certain customers in Romania may be factored on a non-recourse basis. The facility has a factoring fee of 4.0% of any factored receivable and bears interest at 6.0% per annum from the date the receivables are factored to the due date of the factored receivable.



2018	$	1,912
2019	3,466
2020	3,152
2021	1,969
2022	259
2023 and thereafter	—
Total undiscounted payments	10,758
Less: amount representing interest	(373		)
Present value of net minimum lease payments	$	10,385



	June 30, 2019			December 31, 2018
Program rights:
Acquired program rights, net of amortization	$	147,704		$	153,761
Less: current portion of acquired program rights	(77,606		)	(77,624		)
Total non-current acquired program rights	70,098			76,137
Produced program rights – Feature Films:
Released, net of amortization	589			653
Produced program rights – Television Programs:
Released, net of amortization	54,503			55,220
Completed and not released	12,921			8,347
In production	25,976			30,904
Development and pre-production	500			610
Total produced program rights	94,489			95,734
Total non-current acquired program rights and produced program rights	$	164,587		$	171,871



	June 30, 2019			December 31, 2018
Third-party customers	$	185,711		$	203,068
Less: allowance for bad debts and credit notes	(9,865		)	(9,697		)
Total accounts receivable	$	175,846		$	193,371



	June 30, 2019			December 31, 2018
Land and buildings	$	100,849		$	100,574
Machinery, fixtures and equipment	211,346			206,491
Other equipment	36,098			35,022
Software	68,305			68,239
Construction in progress	1,523			4,663
Total cost	418,121			414,989
Less: accumulated depreciation	(307,494		)	(297,385		)
Total net book value	$	110,627		$	117,604

Assets held under finance leases (included in the above)
Land and buildings	$	3,965		$	3,989
Machinery, fixtures and equipment	28,507			25,414
Total cost	32,472			29,403
Less: accumulated depreciation	(13,302		)	(10,705		)
Total net book value	$	19,170		$	18,698


⁽¹⁾	Includes assets acquired under finance leases of US$ 2.7 million and US$ 2.1 million for the six months ended June 30, 2019 and 2018, respectively.


⁽¹⁾	~~Includes assets acquired under capital leases of US$ 4.0 million and US$ 4.0 million for the six months ended June 30, 2018 and 2017, respectively.~~



	June 30, 2019		December 31, 2018
Current:
Deferred revenue	$	28,278	$	9,906
Legal provisions	673		1,978
Operating lease liability (Note 11)	3,325		—
Other	377		1,795
Total other current liabilities	$	32,653	$	13,679

	June 30, 2019		December 31, 2018
Non-current:
Deferred tax	$	22,397	$	22,545
Derivative instruments	13,678		9,817
Operating lease liability (Note 11)	8,553		—
Related party Guarantee Fee payable (Note 4)	33,465		33,465
Other	4,028		1,466
Total other non-current liabilities	$	82,121	$	67,293



	For the Three Months Ended June 30,		For the Six Months Ended June 30,
Operating lease cost:
Short-term operating lease cost	$	1,128	$	2,812
Long-term operating lease cost	1,149		2,299
Total operating lease cost	$	2,277	$	5,111

Finance lease cost:
Amortization of right-of-use asset	$	1,464	$	2,719
Interest on lease liabilities	88		196
Total finance lease cost	$	1,552	$	2,915