Exhibit 99.2
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
Segment Data
The Company is providing unaudited quarterly segment information for the nine months ended September 30, 2018, and the years ended December 31, 2017 and December 31, 2016, which are recast to include the results of our Slovenian business, which were previously classified as discontinued operations in our consolidated statements of operations and comprehensive income with respect to such periods. These changes have no effect on net income / loss for such periods, as reported in our Quarterly Report on Form 10-Q for the nine months ended September 30, 2018, filed with the SEC on October 18, 2018, our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 8, 2018, and our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 9, 2017. Segment net revenue and OIBDA have been recast to present the results of continuing operations inclusive of our Slovenian business. We believe that the unaudited recast financial information will be helpful to users of our financial statements to better understand the recent performance of the business, including our Slovenia operations, and our full year 2018 financial results once they are reported by the Company.
We manage our business on a geographical basis, with five operating segments: Bulgaria, the Czech Republic, Romania, the Slovak Republic and Slovenia, which are also our reportable segments and our main operating countries. These segments reflect how CME Ltd.’s operating performance is evaluated by our chief operating decision makers, who we have identified as our co-Chief Executive Officers; how operations are managed by segment managers; and the structure of our internal financial reporting.
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 that carry our channels on their platforms and from revenues through the sale of distribution rights to third parties. We do not rely on any single major customer or group of major customers. Intersegment revenues and profits have been eliminated in consolidation.
We evaluate our consolidated results and the performance of our segments based on net revenues and OIBDA (as defined below). We believe OIBDA is useful to investors because it provides a 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.
OIBDA includes amortization and impairment of program rights and is calculated as operating income / loss before depreciation, amortization of intangible assets, impairments of assets and certain unusual or infrequent items that are not considered by our chief operating decision makers when evaluating our performance. From January 1, 2018, stock-based compensation and certain operating costs incurred on behalf of our segments at the corporate level have been allocated to our segments for purposes of evaluating their performance.
Our key performance measure of the efficiency of our segments is OIBDA margin. OIBDA margin is the ratio of OIBDA to net revenues. 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 nine months ended September 30, 2018 and twelve months ended December 31, 2017 and December 31, 2016, as well as each quarterly period thereof.
|
| | | | | | | | | | | | | | | |
| | (unaudited) |
| | For the Three Months Ended, (US$ 000’s) | | For the Nine Months Ended, (US$ 000’s) |
| Net revenues | March 31,
2018 |
| | June 30,
2018 |
| | September 30,
2018 |
| | September 30,
2018 |
|
| Bulgaria | $ | 19,433 |
| | $ | 23,427 |
| | $ | 16,348 |
| | $ | 59,208 |
|
| Czech Republic | 51,534 |
| | 61,028 |
| | 45,489 |
| | 158,051 |
|
| Romania | 45,961 |
| | 49,594 |
| | 41,128 |
| | 136,683 |
|
| Slovak Republic | 22,953 |
| | 26,770 |
| | 20,867 |
| | 70,590 |
|
| Slovenia | 17,530 |
| | 22,367 |
| | 13,586 |
| | 53,483 |
|
Intersegment revenues (1) | (702 | ) | | (1,278 | ) | | (380 | ) | | (2,360 | ) |
| Total net revenues | $ | 156,709 |
| | $ | 181,908 |
| | $ | 137,038 |
| | $ | 475,655 |
|
(1) Reflects revenues earned from the sale of content to other country segments. All other revenues are third party revenues.
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
(US$ 000’s)
|
| | | | | | | | | | | | | | | | | | | |
| | (unaudited) |
| | For the Three Months Ended, | | For the Year Ended, |
| Net revenues | March 31,
2017 |
| | June 30,
2017 |
| | September 30,
2017 |
| | December 31,
2017 |
| | December 31,
2017 |
|
| Bulgaria | $ | 15,305 |
| | $ | 20,774 |
| | $ | 16,039 |
| | $ | 25,223 |
| | $ | 77,341 |
|
| Czech Republic | 39,474 |
| | 53,371 |
| | 42,681 |
| | 73,515 |
| | 209,041 |
|
| Romania | 38,944 |
| | 48,570 |
| | 40,469 |
| | 63,261 |
| | 191,244 |
|
| Slovak Republic | 18,340 |
| | 24,624 |
| | 20,384 |
| | 34,373 |
| | 97,721 |
|
| Slovenia | 12,217 |
| | 18,453 |
| | 12,890 |
| | 25,136 |
| | 68,696 |
|
Intersegment revenues (1) | (335 | ) | | (453 | ) | | (159 | ) | | (228 | ) | | (1,175 | ) |
| Total net revenues | $ | 123,945 |
| | $ | 165,339 |
| | $ | 132,304 |
| | $ | 221,280 |
| | $ | 642,868 |
|
(1) Reflects revenues earned from the sale of content to other country segments. All other revenues are third party revenues.
|
| | | | | | | | | | | | | | | | | | | |
| | (unaudited) |
| | For the Three Months Ended, | | For the Year Ended, |
| Net revenues | March 31,
2016 |
| | June 30,
2016 |
| | September 30,
2016 |
| | December 31,
2016 |
| | December 31,
2016 |
|
| Bulgaria | $ | 15,859 |
| | $ | 20,455 |
| | $ | 13,789 |
| | $ | 22,548 |
| | $ | 72,651 |
|
| Czech Republic | 38,608 |
| | 50,919 |
| | 39,031 |
| | 61,814 |
| | 190,372 |
|
| Romania | 32,370 |
| | 48,929 |
| | 36,970 |
| | 54,682 |
| | 172,951 |
|
| Slovak Republic | 19,062 |
| | 22,540 |
| | 17,864 |
| | 31,083 |
| | 90,549 |
|
| Slovenia | 11,653 |
| | 16,116 |
| | 9,555 |
| | 19,588 |
| | 56,912 |
|
Intersegment revenues (1) | (87 | ) | | (40 | ) | | (135 | ) | | (167 | ) | | (429 | ) |
| Total net revenues | $ | 117,465 |
| | $ | 158,919 |
| | $ | 117,074 |
| | $ | 189,548 |
| | $ | 583,006 |
|
(1) Reflects revenues earned from the sale of content to other country segments. All other revenues are third party revenues.
|
| | | | | | | | | | | | | | | |
| | (unaudited) |
| | For the Three Months Ended, | | For the Nine Months Ended, |
| OIBDA and reconciliation of OIBDA to Income before tax | March 31,
2018 |
| | June 30,
2018 |
| | September 30,
2018 |
| | September 30,
2018 |
|
| Bulgaria | $ | 2,981 |
| | $ | 5,622 |
| | $ | 4,481 |
| | $ | 13,084 |
|
| Czech Republic | 15,370 |
| | 28,251 |
| | 15,388 |
| | 59,009 |
|
| Romania | 18,893 |
| | 24,196 |
| | 15,607 |
| | 58,696 |
|
| Slovak Republic | 1,103 |
| | 3,906 |
| | 5,032 |
| | 10,041 |
|
| Slovenia | 4,653 |
| | 5,199 |
| | 2,158 |
| | 12,010 |
|
| Elimination | 16 |
| | 17 |
| | (15 | ) | | 18 |
|
| Total Operating Segments | 43,016 |
| | 67,191 |
| | 42,651 |
| | 152,858 |
|
| Corporate | (7,692 | ) | | (6,346 | ) | | (6,884 | ) | | (20,922 | ) |
| Total OIBDA | 35,324 |
| | 60,845 |
| | 35,767 |
| | 131,936 |
|
| Depreciation of property, plant and equipment | (8,387 | ) | | (8,561 | ) | | (8,202 | ) | | (25,150 | ) |
| Amortization of broadcast licenses and other intangibles | (2,356 | ) | | (2,267 | ) | | (2,216 | ) | | (6,839 | ) |
Other items (1) | — |
| | — |
| | (3,152 | ) | | (3,152 | ) |
| Operating income | 24,581 |
| | 50,017 |
| | 22,197 |
| | 96,795 |
|
| Interest expense | (17,818 | ) | | (12,411 | ) | | (9,977 | ) | | (40,206 | ) |
| Non-operating income / (expense), net | 4,208 |
| | (6,926 | ) | | 1,574 |
| | (1,144 | ) |
| Income before tax | $ | 10,971 |
| | $ | 30,680 |
| | $ | 13,794 |
| | $ | 55,445 |
|
| |
(1) | Other items consists solely of expense related to the accelerated vesting of RSUs with performance conditions in accordance with the terms of the corresponding award agreement following the completion of sale of the Company's Croatian operations. |
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
(US$ 000’s)
|
| | | | | | | | | | | | | | | | | | | |
| | (unaudited) |
| | For the Three Months Ended, | | For the Year Ended, |
| OIBDA and reconciliation of OIBDA to (Loss) / income before tax | March 31,
2017 |
| | June 30,
2017 |
| | September 30,
2017 |
| | December 31,
2017 |
| | December 31,
2017 |
|
| Bulgaria | $ | 1,258 |
| | $ | 2,985 |
| | $ | 2,425 |
| | $ | 9,573 |
| | $ | 16,241 |
|
| Czech Republic | 10,747 |
| | 25,377 |
| | 12,397 |
| | 34,131 |
| | 82,652 |
|
| Romania | 14,460 |
| | 22,071 |
| | 15,259 |
| | 21,628 |
| | 73,418 |
|
| Slovak Republic | 748 |
| | 7,409 |
| | 2,809 |
| | 12,879 |
| | 23,845 |
|
| Slovenia | (25 | ) | | 4,351 |
| | 1,149 |
| | 8,788 |
| | 14,263 |
|
| Elimination | (4 | ) | | 31 |
| | 12 |
| | (42 | ) | | (3 | ) |
| Total Operating Segments | 27,184 |
| | 62,224 |
| | 34,051 |
| | 86,957 |
| | 210,416 |
|
| Corporate | (6,122 | ) | | (6,220 | ) | | (7,767 | ) | | (10,540 | ) | | (30,649 | ) |
| Total OIBDA | 21,062 |
| | 56,004 |
| | 26,284 |
| | 76,417 |
| | 179,767 |
|
| Depreciation of property, plant and equipment | (7,053 | ) | | (7,538 | ) | | (8,031 | ) | | (8,639 | ) | | (31,261 | ) |
| Amortization of broadcast licenses and other intangibles | (2,109 | ) | | (2,053 | ) | | (2,187 | ) | | (2,243 | ) | | (8,592 | ) |
| Operating income | 11,900 |
| | 46,413 |
| | 16,066 |
| | 65,535 |
| | 139,914 |
|
| Interest expense | (22,252 | ) | | (20,494 | ) | | (21,667 | ) | | (18,775 | ) | | (83,188 | ) |
| Non-operating income, net | 2,319 |
| | 7,087 |
| | 3,751 |
| | 3,684 |
| | 16,841 |
|
| (Loss) / income before tax | $ | (8,033 | ) | | $ | 33,006 |
| | $ | (1,850 | ) | | $ | 50,444 |
| | $ | 73,567 |
|
|
| | | | | | | | | | | | | | | | | | | |
| | (unaudited) |
| | For the Three Months Ended, | | For the Year Ended, |
| OIBDA and reconciliation of OIBDA to (Loss) / income before tax | March 31,
2016 |
| | June 30,
2016 |
| | September 30,
2016 |
| | December 31,
2016 |
| | December 31,
2016 |
|
| Bulgaria | $ | 1,032 |
| | $ | 5,870 |
| | $ | 1,864 |
| | $ | 3,238 |
| | $ | 12,004 |
|
| Czech Republic | 10,011 |
| | 22,933 |
| | 13,031 |
| | 30,491 |
| | 76,466 |
|
| Romania | 9,376 |
| | 22,778 |
| | 12,440 |
| | 16,800 |
| | 61,394 |
|
| Slovak Republic | 2,347 |
| | 3,055 |
| | (476 | ) | | 10,672 |
| | 15,598 |
|
| Slovenia | (745 | ) | | 1,586 |
| | (772 | ) | | 4,605 |
| | 4,674 |
|
| Elimination | (2 | ) | | 25 |
| | 7 |
| | (5 | ) | | 25 |
|
| Total Operating Segments | 22,019 |
| | 56,247 |
| | 26,094 |
| | 65,801 |
| | 170,161 |
|
| Corporate | (6,289 | ) | | (7,028 | ) | | (7,547 | ) | | (7,750 | ) | | (28,614 | ) |
| Total OIBDA | 15,730 |
| | 49,219 |
| | 18,547 |
| | 58,051 |
| | 141,547 |
|
| Depreciation of property, plant and equipment | (6,647 | ) | | (6,973 | ) | | (6,871 | ) | | (7,038 | ) | | (27,529 | ) |
| Amortization of broadcast licenses and other intangibles | (2,060 | ) | | (2,114 | ) | | (2,073 | ) | | (2,023 | ) | | (8,270 | ) |
| Operating income | 7,023 |
| | 40,132 |
| | 9,603 |
| | 48,990 |
| | 105,748 |
|
| Interest expense | (47,819 | ) | | (28,100 | ) | | (26,141 | ) | | (24,318 | ) | | (126,378 | ) |
| Loss on extinguishment of debt | — |
| | (150,158 | ) | | — |
| | — |
| | (150,158 | ) |
| Non-operating income / (expense), net | 1,268 |
| | 23 |
| | 358 |
| | (3,901 | ) | | (2,252 | ) |
| (Loss) / income before tax | $ | (39,528 | ) | | $ | (138,103 | ) | | $ | (16,180 | ) | | $ | 20,771 |
| | $ | (173,040 | ) |
