Exhibit 99.2
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(US$ 000’s, except per share data)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | For the Twelve Months Ended |
| | March 31
2012 |
| | June 30
2012 |
| | September 30
2012 |
| | December 31
2012 |
| | December 31
2012 |
|
| Net revenues | $ | 167,433 |
| | 211,222 |
| | $ | 140,092 |
| | $ | 253,338 |
| | $ | 772,085 |
|
| Operating expenses: | | | | | | | | | |
| Content costs | 86,931 |
| | 89,823 |
| | 75,584 |
| | 115,918 |
| | 368,256 |
|
| Other operating costs | 29,987 |
| | 37,771 |
| | 33,340 |
| | 37,937 |
| | 139,035 |
|
| Depreciation of property, plant and equipment | 11,880 |
| | 10,747 |
| | 11,711 |
| | 10,160 |
| | 44,498 |
|
| Amortization of broadcast licenses and other intangibles | 12,483 |
| | 12,715 |
| | 10,198 |
| | 11,231 |
| | 46,627 |
|
| Cost of revenues | 141,281 |
| | 151,056 |
| | 130,833 |
| | 175,246 |
| | 598,416 |
|
| Selling, general and administrative expenses | 36,455 |
| | 36,516 |
| | 27,660 |
| | 38,741 |
| | 139,372 |
|
| Impairment charge | — |
| | — |
| | — |
| | 522,490 |
| | 522,490 |
|
| Operating (loss) / income | (10,303 | ) | | 23,650 |
| | (18,401 | ) | | (483,139 | ) | | (488,193 | ) |
| Interest income | 214 |
| | 171 |
| | 213 |
| | 181 |
| | 779 |
|
| Interest expense | (31,824 | ) | | (31,129 | ) | | (32,492 | ) | | (32,325 | ) | | (127,770 | ) |
| Gain / (loss) on extinguishment of debt | — |
| | 448 |
| | — |
| | (646 | ) | | (198 | ) |
| Foreign currency exchange gain / (loss), net | 23,394 |
| | (40,312 | ) | | 16,755 |
| | 5,085 |
| | 4,922 |
|
| Change in fair value of derivatives | 927 |
| | 47,398 |
| | 559 |
| | 143 |
| | 49,027 |
|
| Other income / (expense) | 209 |
| | (158 | ) | | 108 |
| | 742 |
| | 901 |
|
| (Loss) / income before tax | (17,383 | ) | | 68 |
| | (33,258 | ) | | (509,959 | ) | | (560,532 | ) |
| Credit for income taxes | 3,570 |
| | 3,073 |
| | 621 |
| 621 |
| 6,875 |
| | 14,139 |
|
| Net (loss) / income | (13,813 | ) | | 3,141 |
| | (32,637 | ) | | (503,084 | ) | | (546,393 | ) |
| Net loss attributable to noncontrolling interests | 421 |
| | 815 |
| | 588 |
| | 8,889 |
| | 10,713 |
|
| Net (loss) / income attributable to CME Ltd. | $ | (13,392 | ) | | $ | 3,956 |
| | $ | (32,049 | ) | | $ | (494,195 | ) | | $ | (535,680 | ) |
| | | | | | | | | | |
| Net (loss) / income | (13,813 | ) | | 3,141 |
| | (32,637 | ) | | (503,084 | ) | | (546,393 | ) |
| Currency translation adjustment | 67,090 |
| | (98,552 | ) | | 41,246 |
| | 18,867 |
| | 28,651 |
|
| Comprehensive income / (loss) | $ | 53,277 |
| | $ | (95,411 | ) | | $ | 8,609 |
| | $ | (484,217 | ) | | $ | (517,742 | ) |
| Comprehensive loss attributable to noncontrolling interests | 427 |
| | 750 |
| | 605 |
| | 8,835 |
| | 10,617 |
|
| Comprehensive income / (loss) attributable to CME Ltd. | $ | 53,704 |
| | $ | (94,661 | ) | | $ | 9,214 |
| | $ | (475,382 | ) | | $ | (507,125 | ) |
Segment Data
In the first quarter of 2013, the Company changed the composition of its operating segments. From January 1, 2013, we manage our business on a geographical basis, with six operating segments: Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic and Slovenia, which are also our reportable segments and our main operating countries. These new operating segments reflect how CME Ltd.’s operations are managed by segment managers, how operating performance within the Company is evaluated by senior management and the structure of our internal financial reporting. We have recast all periods from the year ended December 31, 2012 to conform to the new segment presentation. The change in composition of our operating segments had no effect on previously reported net revenue or net loss for the year ended December 31, 2012 or for net revenue and net loss / income for any of the three-month periods within the twelve months ended December 31, 2012.
Our segments generate revenues primarily from the sale of advertising and sponsorship on our channels. This is supplemented by revenues from cable and satellite television service providers to carry our channels on their platforms. The segments also generate third party revenues through the sale of broadcast and distribution rights to third parties, the sale of DVD and Blu-ray discs to wholesale and retail clients primarily in Romania and the Czech Republic, display and video advertising on our websites, and subscriptions on Voyo.
We evaluate the performance of our segments based on net revenues and OIBDA. OIBDA, which includes program rights amortization costs, is determined as operating income / (loss) before depreciation, amortization of intangible assets and impairments of assets. Items that are not allocated to our segments for purposes of evaluating their performance and therefore are not included in their OIBDA, include stock-based compensation and certain other items.
Our key performance measure of the efficiency of our segments is OIBDA margin. OIBDA margin is the ratio of OIBDA to net revenues.
We believe OIBDA is useful to investors because it provides a more meaningful representation of our performance as it excludes certain items that either do not impact our cash flows or the operating results of our operations. OIBDA is also used as a component in determining management bonuses. Intersegment revenues and profits have been eliminated in consolidation.
OIBDA may not be comparable to similar measures reported by other companies.
Below are tables showing our recast net revenues and OIBDA by segment for the three months ended March 31, 2012, June 30, 2012, September 30, 2012, and December 31, 2012 as well as the twelve months ended December 31, 2012.
|
| | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | For the Twelve Months Ended |
| Net revenues | March 31,
2012 |
| | June 30,
2012 |
| | September 30,
2012 |
| | December 31,
2012 |
| | December 31,
2012 |
|
| | | | | | | | | | |
| Bulgaria | $ | 19,331 |
| | $ | 22,955 |
| | $ | 15,128 |
| | $ | 27,827 |
| | $ | 85,241 |
|
| Croatia | 12,879 |
| | 16,858 |
| | 9,827 |
| | 19,735 |
| | 59,299 |
|
| Czech Republic | 58,958 |
| | 76,853 |
| | 51,566 |
| | 90,720 |
| | 278,097 |
|
| Romania | 43,351 |
| | 51,777 |
| | 39,847 |
| | 60,576 |
| | 195,551 |
|
| Slovak Republic | 19,372 |
| | 24,590 |
| | 17,633 |
| | 34,579 |
| | 96,174 |
|
| Slovenia | 15,524 |
| | 20,903 |
| | 10,013 |
| | 22,455 |
| | 68,895 |
|
Intersegment revenues(1) | (1,982 | ) | | (2,714 | ) | | (3,922 | ) | | (2,554 | ) | | (11,172 | ) |
| Total net revenues | $ | 167,433 |
| | $ | 211,222 |
| | $ | 140,092 |
| | $ | 253,338 |
| | $ | 772,085 |
|
(1) Reflects revenues earned from the sale of content to other country segments in CME. All other revenues are third party revenues.
|
| | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | For the Twelve Months Ended |
| OIBDA | March 31,
2012 |
| | June 30,
2012 |
| | September 30,
2012 |
| | December 31,
2012 |
| | December 31,
2012 |
|
| | | | | | | | | | |
| Bulgaria | $ | (1,221 | ) | | $ | 3,376 |
| | $ | 498 |
| | $ | 10,468 |
| | $ | 13,121 |
|
| Croatia | 1,568 |
| | 5,391 |
| | (717 | ) | | 1,682 |
| | 7,924 |
|
| Czech Republic | 23,264 |
| | 31,403 |
| | 11,232 |
| | 40,366 |
| | 106,265 |
|
| Romania | 1,152 |
| | 9,476 |
| | 3,881 |
| | 3,107 |
| | 17,616 |
|
| Slovak Republic | (498 | ) | | 2,371 |
| | (3,061 | ) | | 9,792 |
| | 8,604 |
|
| Slovenia | 2,770 |
| | 6,083 |
| | (1,606 | ) | | 7,686 |
| | 14,933 |
|
| Elimination | (478 | ) | | (158 | ) | | (192 | ) | | 69 |
| | (759 | ) |
| Total Operating Segments | 26,557 |
| | 57,942 |
| | 10,035 |
| | 73,170 |
| | 167,704 |
|
| Corporate | (12,497 | ) | | (10,830 | ) | | (6,527 | ) | | (12,428 | ) | | (42,282 | ) |
| Total OIBDA | $ | 14,060 |
| | $ | 47,112 |
| | $ | 3,508 |
| | $ | 60,742 |
| | $ | 125,422 |
|
|
| | | | | | | | | | | | | | | | | | | |
Reconciliation to consolidated statements of operations and comprehensive income:
| For the Three Months Ended | | For the Twelve Months Ended |
| | March 31,
2012 |
| | June 30,
2012 |
| | September 30,
2012 |
| | December 31,
2012 |
| | December 31,
2012 |
|
| Total OIBDA | $ | 14,060 |
| | $ | 47,112 |
| | $ | 3,508 |
| | $ | 60,742 |
| | $ | 125,422 |
|
| Depreciation of property, plant and equipment | (11,880 | ) | | (10,747 | ) | | (11,711 | ) | | (10,160 | ) | | (44,498 | ) |
| Amortization of intangible assets | (12,483 | ) | | (12,715 | ) | | (10,198 | ) | | (11,231 | ) | | (46,627 | ) |
| Impairment charge | — |
| | — |
| | — |
| | (522,490 | ) | | (522,490 | ) |
| Operating loss | (10,303 | ) | | 23,650 |
| | (18,401 | ) | | (483,139 | ) | | (488,193 | ) |
| Interest expense, net | (31,610 | ) | | (30,958 | ) | | (32,279 | ) | | (32,144 | ) | | (126,991 | ) |
| Gain / (loss) on extinguishment of debt | — |
| | 448 |
| | — |
| | (646 | ) | | (198 | ) |
| Foreign currency exchange gain / (loss), net | 23,394 |
| | (40,312 | ) | | 16,755 |
| | 5,085 |
| | 4,922 |
|
| Change in fair value of derivatives | 927 |
| | 47,398 |
| | 559 |
| | 143 |
| | 49,027 |
|
| Other income / (expense) | 209 |
| | (158 | ) | | 108 |
| | 742 |
| | 901 |
|
| Credit for income taxes | 3,570 |
| | 3,073 |
| | 621 |
| | 6,875 |
| | 14,139 |
|
| Net (loss) / income | $ | (13,813 | ) | | $ | 3,141 |
| | $ | (32,637 | ) | | $ | (503,084 | ) | | $ | (546,393 | ) |
|
| | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | For the Twelve Months Ended |
| Revenue by type: | March 31,
2012 |
| | June 30,
2012 |
| | September 30,
2012 |
| | December 31,
2012 |
| | December 31,
2012 |
|
| TV advertising revenue | $ | 134,199 |
| | $ | 170,157 |
| | $ | 103,024 |
| | $ | 208,853 |
| | $ | 616,233 |
|
| Subscription and carriage fees | 10,090 |
| | 10,808 |
| | 10,893 |
| | 11,566 |
| | 43,357 |
|
| Other | 23,144 |
| | 30,257 |
| | 26,175 |
| | 32,919 |
| | 112,495 |
|
| Total net revenues | $ | 167,433 |
| | $ | 211,222 |
| | $ | 140,092 |
| | $ | 253,338 |
| | $ | 772,085 |
|
