BERMUDA
|
98-0438382
|
(State
or other jurisdiction of incorporation and organization)
|
(IRS
Employer Identification No.)
|
Clarendon
House, Church Street, Hamilton
|
HM
CX Bermuda
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer x
|
Accelerated
filer o
|
Non-accelerated
filer o
|
·
|
To
include Form 10-K, Part III information that we previously incorporated
by
reference to the Proxy Statement for our Annual General Meeting
of
Shareholders;
|
·
|
To
modify in Item 8. Financial Statements and Supplementary Data,
the
following:
|
(a)
|
Footnote
1 to the financial statements of Slovenska televizna spolocnost
s.r.o. and
the report of Deloitte Audit s.r.o. with respect thereto to reflect
the
extension of the broadcast license of Markiza-Slovakia, spol.
s.r.o.;
|
(b)
|
The
unaudited pro-forma data for the years ended December 31, 2004
and 2005
appearing in Note 3, “Acquisitions and Disposals” to our consolidated
Financial Statements under “Czech Republic - Acquisition - TV
Nova”.
|
Page
|
|||
PART
II
|
|||
2
|
|||
|
|||
PART
III
|
|||
71
|
|||
75
|
|||
79
|
|||
84
|
|||
85
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY
DATA
|
|
December
31,
2005
|
December
31,
2004
|
|||||
ASSETS
|
|
|
|||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
$
|
71,658
|
$
|
152,568
|
|||
Restricted
cash (Note 7)
|
34,172
|
15,574
|
|||||
Accounts
receivable (Note 8)
|
97,396
|
45,170
|
|||||
Income
taxes receivable
|
9,930
|
90
|
|||||
Program
rights
|
34,914
|
22,055
|
|||||
Other
current assets (Note 9)
|
38,856
|
29,592
|
|||||
Total
current assets
|
286,926
|
265,049
|
|||||
Non-current
assets
|
|||||||
Investments
(Note 6)
|
23,936
|
28,558
|
|||||
Acquisition
costs (Notes 3 and 21)
|
5,118
|
10,770
|
|||||
Property,
plant and equipment (Note 10)
|
58,897
|
31,548
|
|||||
Program
rights
|
33,081
|
18,299
|
|||||
Goodwill
(Note 4)
|
746,583
|
59,092
|
|||||
Broadcast
licenses (Note 4)
|
171,591
|
14,575
|
|||||
Other
intangible assets (Note 4)
|
47,658
|
12,756
|
|||||
Other
non-current assets (Note 9)
|
15,060
|
3,992
|
|||||
Total
non-current assets
|
1,101,924
|
179,590
|
|||||
Total
assets
|
$
|
1,388,850
|
$
|
444,639
|
December
31, 2005
|
December
31, 2004
|
||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|||||
Current
liabilities
|
|||||||
Accounts
payable and accrued liabilities (Note 11)
|
$
|
84,849
|
$
|
67,042
|
|||
Duties
and other taxes payable
|
27,654
|
20,243
|
|||||
Income
taxes payable (Note 14)
|
21,894
|
4,658
|
|||||
Credit
facilities and obligations under capital leases (Note 12)
|
43,566
|
10,472
|
|||||
Deferred
consideration - Croatia (Note 3)
|
3,591
|
6,384
|
|||||
Deferred
consideration - Czech Republic (Note 3)
|
24,402
|
-
|
|||||
Deferred
tax (Note 14)
|
1,005
|
946
|
|||||
Total
current liabilities
|
206,961
|
109,745
|
|||||
Non-current
liabilities
|
|||||||
Credit
facilities and obligations under capital leases (Note 12)
|
4,740
|
8,898
|
|||||
Senior
Notes (Note 5)
|
436,424
|
-
|
|||||
Income
taxes payable (Note 14)
|
681
|
3,120
|
|||||
Deferred
tax (Note 14)
|
42,149
|
6,213
|
|||||
Other
non-current liabilities
|
4,105
|
734
|
|||||
Total
non-current liabilities
|
488,099
|
18,965
|
|||||
Commitments
and contingencies (Note 19)
|
|||||||
Minority
interests in consolidated subsidiaries
|
13,237
|
4,861
|
|||||
SHAREHOLDERS'
EQUITY (Note 13):
|
|||||||
Nil
shares of Preferred Stock of $0.08 each (2004 - nil)
|
-
|
-
|
|||||
31,032,994
shares of Class A Common Stock of $0.08 each (2004 -
21,049,400)
|
2,482
|
1,684
|
|||||
6,966,533
shares of Class B Common Stock of $0.08 each (2004 -
7,334,768)
|
558
|
587
|
|||||
Additional
paid-in capital
|
746,880
|
387,305
|
|||||
Accumulated
deficit
|
(44,973
|
)
|
(87,468
|
)
|
|||
Accumulated
other comprehensive income / (loss)
|
(24,394
|
)
|
8,960
|
||||
Total
shareholders’ equity
|
680,553
|
311,068
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
1,388,850
|
$
|
444,639
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Net
revenues
|
$
|
400,978
|
$
|
182,339
|
$
|
124,978
|
||||
Operating
costs
|
65,138
|
33,615
|
26,608
|
|||||||
Cost
of programming
|
148,837
|
71,793
|
50,747
|
|||||||
Station
selling, general and administrative expenses
|
46,382
|
22,112
|
14,245
|
|||||||
Depreciation
of station property, plant & equipment
|
16,367
|
6,429
|
5,276
|
|||||||
Amortization
of broadcast licenses and other intangibles (Note 4)
|
11,180
|
465
|
-
|
|||||||
Corporate
operating costs
|
25,374
|
29,185
|
32,512
|
|||||||
Impairment
charge (Note 4)
|
35,331
|
-
|
-
|
|||||||
Total
operating expenses
|
348,609
|
163,599
|
129,388
|
|||||||
Operating
income/(loss)
|
52,369
|
18,740
|
(4,410
|
)
|
||||||
Interest
income
|
4,124
|
4,318
|
5,507
|
|||||||
Interest
expense
|
(29,387
|
)
|
(1,203
|
)
|
(12,010
|
)
|
||||
Foreign
currency exchange gain/(loss), net
|
37,968
|
(574
|
)
|
(10,023
|
)
|
|||||
Other
expense
|
(4,705
|
)
|
(698
|
)
|
(2,458
|
)
|
||||
Income/(loss)
before provision for income taxes, minority interest, equity in
income of
unconsolidated affiliates and discontinued
operations
|
60,369
|
20,583
|
(23,394
|
)
|
||||||
Provision
for income taxes (Note 14)
|
(16,691
|
)
|
(11,089
|
)
|
(3,760
|
)
|
||||
Income/(loss)
before minority interest, equity in income of unconsolidated affiliates
and discontinued operations
|
43,678
|
9,494
|
(27,154
|
)
|
||||||
Minority
interest in income of consolidated subsidiaries
|
(8,908
|
)
|
(4,106
|
)
|
(676
|
)
|
||||
Equity
in income of unconsolidated affiliates (Note 6)
|
8,238
|
10,619
|
3,629
|
|||||||
Net
income/(loss) from continuing operations
|
43,008
|
16,007
|
(24,201
|
)
|
||||||
Discontinued
operations (Note 18):
|
||||||||||
Pre-tax
income from discontinued operations (Czech Republic)
|
164
|
146
|
384,213
|
|||||||
Tax
on disposal of discontinued operations (Czech Republic)
|
(677
|
)
|
2,378
|
(14,000
|
)
|
|||||
Net
income/(loss) from discontinued operations
|
(513
|
)
|
2,524
|
370,213
|
||||||
Net
income
|
$
|
42,495
|
$
|
18,531
|
$
|
346,012
|
||||
Currency
translation adjustment, net
|
(33,354
|
)
|
4,228
|
10,056
|
||||||
Total
comprehensive income
|
$
|
9,141
|
$
|
22,759
|
$
|
356,068
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
PER
SHARE DATA (Note 16):
|
||||||||||
Net
income/(loss) per share:
|
||||||||||
Continuing
operations - Basic
|
$
|
1.24
|
$
|
0.57
|
$
|
(0.91
|
)
|
|||
Continuing
operations - Diluted
|
1.21
|
0.55
|
(0.91
|
)
|
||||||
Discontinued
operations - Basic
|
(0.01
|
)
|
0.09
|
13.97
|
||||||
Discontinued
operations - Diluted
|
(0.01
|
)
|
0.09
|
13.97
|
||||||
Net
income - Basic
|
1.23
|
0.66
|
13.06
|
|||||||
Net
income - Diluted
|
$
|
1.20
|
$
|
0.64
|
$
|
13.06
|
||||
Weighted
average common shares used in computing per share amounts
(000s):
|
||||||||||
Basic
|
34,664
|
27,871
|
26,492
|
|||||||
Diluted
|
35,430
|
29,100
|
26,492
|
Class
A Common Stock
|
Class
B Common Stock
|
Accumulated
|
|||||||||||||||||||||||
Number
of
shares
|
Par
value
|
Number
of
shares
|
Par
value
|
Additional
Paid-
In
Capital
|
Accumulated
Deficit
|
Other
Comprehensive
Income/(Loss)
|
Total
Shareholders'
Equity/
(Deficit)
|
||||||||||||||||||
BALANCE,
December 31, 2002
|
18,523,768
|
$
|
1,482
|
7,934,768
|
$
|
635
|
$ | 359,342 | $ | (452,011 | ) | $ | (5,324 | ) | $ | (95,876 | ) | ||||||||
Stock-based
Compensation
|
-
|
-
|
-
|
-
|
13,209
|
-
|
-
|
13,209
|
|||||||||||||||||
Stock
options exercised
|
145,998
|
12
|
-
|
-
|
111
|
-
|
-
|
123
|
|||||||||||||||||
Conversion
of Class B to Class A Common Stock
|
600,000
|
48
|
(600,000
|
)
|
(48
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
346,012
|
-
|
346,012
|
|||||||||||||||||
Currency
translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
10,056
|
10,056
|
|||||||||||||||||
BALANCE,
December 31, 2003
|
19,269,766
|
$
|
1,542
|
7,334,768
|
$
|
587
|
$
|
372,662
|
$
|
(105,999
|
)
|
$
|
4,732
|
$
|
273,524
|
||||||||||
Stock-based
Compensation
|
-
|
-
|
-
|
-
|
10,102
|
-
|
-
|
10,102
|
|||||||||||||||||
Stock
options exercised
|
1,083,634
|
87
|
-
|
-
|
2,853
|
-
|
-
|
2,940
|
|||||||||||||||||
Warrants
exercised
|
696,000
|
55
|
-
|
-
|
1,688
|
-
|
-
|
1,743
|
|||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
18,531
|
-
|
18,531
|
|||||||||||||||||
Currency
translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
4,228
|
4,228
|
|||||||||||||||||
BALANCE,
December 31, 2004
|
21,049,400
|
$
|
1,684
|
7,334,768
|
$
|
587
|
$
|
387,305
|
$
|
(87,468
|
)
|
$
|
8,960
|
$
|
311,068
|
||||||||||
Stock-based
Compensation
|
-
|
-
|
-
|
-
|
2,954
|
-
|
-
|
2,954
|
|||||||||||||||||
Shares
issued to PPF
|
3,500,000
|
280
|
-
|
-
|
120,603
|
-
|
-
|
120,883
|
|||||||||||||||||
Shares
issued, net of fees
|
5,405,000
|
432
|
-
|
-
|
230,172
|
-
|
-
|
230,604
|
|||||||||||||||||
Stock
options exercised
|
710,359
|
57
|
-
|
-
|
5,846
|
-
|
-
|
5,903
|
|||||||||||||||||
Conversion
of Class B to Class A Common Stock
|
368,235
|
29
|
(368,235
|
)
|
(29
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
42,495
|
-
|
42,495
|
|||||||||||||||||
Currency
translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
(33,354
|
)
|
(33,354
|
)
|
|||||||||||||||
BALANCE,
December 31, 2005
|
31,032,994
|
$
|
2,482
|
6,966,533
|
$
|
558
|
$
|
746,880
|
$
|
(44,973
|
)
|
$
|
(24,394
|
)
|
$
|
680,553
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|||||||||
Net
income
|
$
|
42,495
|
$
|
18,531
|
$
|
346,012
|
||||
Adjustments
to reconcile net income to net cash generated from/(used in) operating
activities:
|
||||||||||
(Income)/loss
from discontinued operations (Note 18)
|
513
|
(2,524
|
)
|
(370,213
|
)
|
|||||
Equity
in income of unconsolidated affiliates, net of dividends
received
|
3,454
|
(4,340
|
)
|
(243
|
)
|
|||||
Depreciation
and amortization
|
110,846
|
49,357
|
38,037
|
|||||||
Impairment
charge (Note 4)
|
35,331
|
-
|
-
|
|||||||
Interest
receivable
|
(185
|
)
|
(340
|
)
|
(344
|
)
|
||||
Loss
on disposal of fixed assets
|
685
|
18
|
-
|
|||||||
Stock-based
compensation (Note 15)
|
2,954
|
10,102
|
13,209
|
|||||||
Minority
interest in income of consolidated subsidiaries
|
8,908
|
4,106
|
676
|
|||||||
Foreign
currency exchange (gain)/loss, net
|
(37,968
|
)
|
574
|
10,023
|
||||||
Net
change in (net of effects of acquisitions and disposals of
businesses):
|
||||||||||
Accounts
receivable
|
1,693
|
(9,100
|
)
|
(3,547
|
)
|
|||||
Program
rights costs
|
(110,364
|
)
|
(45,446
|
)
|
(33,049
|
)
|
||||
Other
assets
|
12,174
|
(4,572
|
)
|
1,246
|
||||||
Settlement
liability (Note 11)
|
(41,606
|
)
|
-
|
-
|
||||||
Other
accounts payable and accrued liabilities
|
(13,642
|
)
|
(13,611
|
)
|
(7,642
|
)
|
||||
Income
and other taxes payable
|
(11,744
|
)
|
(340
|
)
|
(1,615
|
)
|
||||
Net
cash generated from/(used in) continuing operating
activities
|
3,544
|
2,415
|
(7,450
|
)
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Net
change in restricted cash
|
(19,521
|
)
|
(10,145
|
)
|
1,769
|
|||||
Purchase
of property, plant and equipment
|
(26,548
|
)
|
(10,808
|
)
|
(7,811
|
)
|
||||
Proceeds
from disposal of property, plant and equipment
|
125
|
72
|
-
|
|||||||
Investments
in subsidiaries and unconsolidated affiliates
|
(35,305
|
)
|
(35,800
|
)
|
(8
|
)
|
||||
Partial
consideration for acquisition of TV Nova (Czech Republic)
group
|
(218,054
|
)
|
-
|
-
|
||||||
Proceeds
from partial disposal of investment
|
-
|
42
|
-
|
|||||||
Repayment
of loans and advances to related parties
|
500
|
400
|
-
|
|||||||
License
costs, other assets and intangible assets
|
-
|
(770
|
)
|
(6,060
|
)
|
|||||
Net
cash used in continuing investing activities
|
(298,803
|
)
|
(57,009
|
)
|
(12,110
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Net
proceeds from issuance/(repurchase) of Senior Notes
|
465,120
|
-
|
(183,739
|
)
|
||||||
Proceeds
from other credit facilities
|
65,902
|
-
|
-
|
|||||||
Payment
of credit facilities and capital leases
|
(41,243
|
)
|
(2,275
|
)
|
(17,905
|
)
|
||||
Proceeds
from/(repayment) of loans from unconsolidated affiliates
|
(5,827
|
)
|
-
|
2,450
|
||||||
Repayment
of notes for acquisition of TV Nova (Czech Republic) group
|
(491,703
|
)
|
-
|
-
|
||||||
Repayment
of liabilities on acquisition of Galaxie Sport
|
(3,000
|
)
|
-
|
-
|
||||||
Issuance
of Class A Common Stock
|
236,507
|
4,161
|
123
|
|||||||
Dividends
paid to minority shareholders
|
(397
|
)
|
-
|
-
|
||||||
Repayment
of other non-current liabilities
|
-
|
-
|
(400
|
)
|
||||||
Net
cash received from/(used in) financing activities
|
225,359
|
1,886
|
(199,471
|
)
|
||||||
NET
CASH RECEIVED FROM/(USED IN) DISCONTINUED OPERATIONS-OPERATING
(Revised -
See Note 2)
|
(2,000
|
)
|
(9,463
|
)
|
343,358
|
|||||
NET
CASH RECEIVED FROM DISCONTINUED OPERATIONS-INVESTING (Revised -
See Note
2)
|
-
|
20,349
|
15,000
|
|||||||
Impact
of exchange rate fluctuations on cash
|
(9,010
|
)
|
2,144
|
1,146
|
||||||
Net
increase/(decrease) in cash and cash equivalents
|
(80,910
|
)
|
(39,678
|
)
|
140,473
|
|||||
CASH
AND CASH EQUIVALENTS, beginning of year
|
152,568
|
192,246
|
51,773
|
|||||||
CASH
AND CASH EQUIVALENTS, end of year
|
$
|
71,658
|
$
|
152,568
|
$
|
192,246
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||
Cash
paid for interest
|
$
|
19,402
|
$
|
581
|
$
|
16,658
|
||||
Cash
paid for income taxes (net of refunds)
|
$
|
10,066
|
$
|
18,920
|
$
|
4,938
|
||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH FINANCING AND INVESTING
ACTIVITIES:
|
||||||||||
Exchange
of 3.5 million shares of Class A Common Stock (Note 3)
|
$
|
120,883
|
$
|
-
|
$
|
-
|
||||
Notes
taken out for acquisition of TV Nova (Czech Republic) group (Note
3)
|
$
|
491,703
|
$
|
-
|
$
|
-
|
||||
Exchange
of Other receivable (Note 3)
|
$
|
18,541
|
$
|
-
|
$
|
-
|
||||
Purchase
of Krsak interest financed with payable (Note 3)
|
$
|
24,683
|
$
|
-
|
$
|
-
|
||||
Purchase
of share of Romania operations through settlement of loans receivable
(Note 3)
|
$
|
-
|
$
|
3,400
|
$
|
-
|
||||
Acquisition
of property, plant and equipment under capital lease
|
$
|
4,967
|
$
|
333
|
$
|
156
|
1.
|
ORGANIZATION
AND BUSINESS
|
Company
Name
|
Voting
Interest
|
Jurisdiction
of
Organization
|
Subsidiary
/ Equity-Accounted
Affiliate
(1)
|
|||
CME
Media Investments s.r.o.
|
100%
|
Czech
Republic
|
Subsidiary
|
|||
Vilja
a.s. (“Vilja”)
|
100%
|
Czech
Republic
|
Subsidiary
|
|||
CET
21 s.r.o. (“CET 21”)
|
96.5%
|
Czech
Republic
|
Subsidiary
|
|||
CME
Media Services s.r.o. (“CME Media Services”)
|
100%
|
Czech
Republic
|
Subsidiary
(2)
|
|||
ERIKA
a.s.
|
100%
|
Czech
Republic
|
Subsidiary
|
|||
Media
Capitol, a.s.
|
100%
|
Czech
Republic
|
Subsidiary
|
|||
NOVA
Consulting, a.s.
|
100%
|
Czech
Republic
|
Subsidiary
|
|||
HARTIC,
a.s.
|
100%
|
Czech
Republic
|
Subsidiary
|
|||
Galaxie
Sport s.r.o. (“Galaxie Sport”)
|
100%
|
Czech
Republic
|
Subsidiary
|
|||
Plejada
a.s.
|
96.5%
|
Czech
Republic
|
Subsidiary
(in liquidation)
|
|||
Media
Pro International S.A. (“MPI”)
|
85%
|
Romania
|
Subsidiary
|
|||
Media
Vision S.R.L. (“Media Vision”)
|
70%
|
Romania
|
Subsidiary
|
|||
MPI
Romania B.V.
|
85%
|
Netherlands
|
Subsidiary
|
|||
Pro
TV S.A. (“Pro TV”)
|
85%
|
Romania
|
Subsidiary
|
|||
Radio
Pro S.R.L (“Radio Pro”)
|
20%
|
Romania
|
Equity-Accounted
Affiliate
|
|||
International
Media Services Ltd. (“IMS”)
|
60%
|
Bermuda
|
Subsidiary
|
|||
Innova
Film GmbH (“Innova”)
|
60%
|
Germany
|
Subsidiary
|
|||
Enterprise
“Inter-Media” (“Inter-Media”)
|
60%
|
Ukraine
|
Subsidiary
|
|||
TV
Media Planet Ltd
|
60%
|
Cyprus
|
Subsidiary
|
|||
Broadcasting
Company “Studio 1+1” LLC (“Studio 1+1”)
|
18%
|
Ukraine
|
Consolidated
Variable Interest Entity (3)
|
|||
Ukraine
Media Services LLC
|
99%
|
Ukraine
|
Subsidiary
|
|||
Slovenska
Televizna Spolocnost s.r.o. (“STS”)
|
49%
|
Slovak
Republic
|
Equity-Accounted
Affiliate (4)
|
|||
Markiza-Slovakia
s.r.o. (“Markiza”)
|
34%
|
Slovak
Republic
|
Equity-Accounted
Affiliate (4)
|
|||
Gamatex
s.r.o.
|
49%
|
Slovak
Republic
|
Equity-Accounted
Affiliate (4)
|
|||
ADAM
a.s.
|
49%
|
Slovak
Republic
|
Equity-Accounted
Affiliate (4)
|
Company
Name
|
Voting
Interest
|
Jurisdiction
of
Organization
|
Subsidiary
/ Equity-Accounted
Affiliate
(1)
|
|||
MM
TV 1 d.o.o.
|
100%
|
Slovenia
|
Subsidiary
|
|||
Produkcija
Plus d.o.o. (“Pro Plus”)
|
100%
|
Slovenia
|
Subsidiary
|
|||
POP
TV d.o.o. (“Pop TV”)
|
100%
|
Slovenia
|
Subsidiary
|
|||
Kanal
A d.o.o. (“Kanal A”)
|
100%
|
Slovenia
|
Subsidiary
|
|||
Super
Plus Holding d.d.
|
100%
|
Slovenia
|
Subsidiary
(in liquidation)
|
|||
MTC
Holding d.o.o.
|
24%
|
Slovenia
|
Equity-Accounted
Affiliate
|
|||
Nova
TV d.d. (“Nova TV Croatia”)
|
100%
|
Croatia
|
Subsidiary
|
|||
Operativna
Kompanija d.o.o. (“OK”)
|
100%
|
Croatia
|
Subsidiary
|
|||
Media
House d.o.o.
|
100%
|
Croatia
|
Subsidiary
|
|||
CME
Media Enterprises B.V.
|
100%
|
Netherlands
|
Subsidiary
|
|||
CME
Czech Republic B.V.
|
100%
|
Netherlands
|
Subsidiary
|
|||
CME
Czech Republic II B.V.
|
100%
|
Netherlands
|
Subsidiary
|
|||
CME
Germany B.V.
|
100%
|
Netherlands
|
Subsidiary
|
|||
CME
Hungary B.V.
|
100%
|
Netherlands
|
Subsidiary
|
|||
CME
Poland B.V.
|
100%
|
Netherlands
|
Subsidiary
|
|||
CME
Romania B.V.
|
100%
|
Netherlands
|
Subsidiary
|
|||
CME
Ukraine Holding GmbH
|
100%
|
Austria
|
Subsidiary
|
|||
CME
Germany GmbH
|
100%
|
Germany
|
Subsidiary
(in liquidation)
|
|||
CME
Cyprus Holding Ltd
|
100%
|
Cyprus
|
Subsidiary
|
|||
CME
Development Corporation
|
100%
|
USA
|
Subsidiary
|
|||
Central
European Media Enterprises N.V.
|
100%
|
Netherlands
Antilles
|
Subsidiary
|
|||
Central
European Media Enterprises II B.V.
|
100%
|
Netherlands
Antilles
|
Subsidiary
|
(1)
|
All
subsidiaries have been consolidated in our Consolidated Financial
Statements. All equity-accounted affiliates have been accounted
for using
the equity method.
|
(2)
|
Ceska
Produkcni 2000 a.s. and Mag Media 99 a.s. were merged into CME
Media
Services s.r.o. on December 31, 2005.
|
(3)
|
For
further information, see Note 2, "Summary of Significant Accounting
Policies".
|
(4)
|
On
January 23, 2006, we acquired 100% of A.R.J. a.s., thereby increasing
our
effective voting interest in STS to 89.8% and in Markiza to 80%.
From
January 23, 2006 we consolidate these entities. See Note 21, “Subsequent
Events”.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
December
31, 2005
|
December
31, 2004
|
||||||
Balance
Sheet:
|
|||||||
Current
assets
|
$
|
18,475
|
$
|
10,711
|
|||
Non-current
assets
|
1,315
|
1,822
|
|||||
Current
liabilities
|
(9,678
|
)
|
(10,689
|
)
|
|||
Non-current
liabilities
|
(106
|
)
|
-
|
||||
Minority
interest
|
(4,002
|
)
|
(738
|
)
|
|||
Net
Assets
|
$
|
6,004
|
$
|
1,106
|
Statement
of Operations:
|
For
the Year Ended
December
31, 2005
|
For
the Year Ended
December
31, 2004
|
|||||
Net
revenues
|
$
|
62,586
|
$
|
43,903
|
|||
Operating
income
|
12,401
|
6,001
|
|||||
Net
income
|
$
|
5,423
|
$
|
2,985
|
Asset
category
|
Estimated
useful life
|
|
Land
|
Indefinite
|
|
Buildings
|
25
years
|
|
Station
machinery, fixtures and equipment
|
4
-
8 years
|
|
Other
equipment
|
3
-
8 years
|
|
Software
licenses
|
3
-
5 years
|
|
Amortization
%
|
|||||||||
Type
of programming
|
Run
1
|
Run
2
|
Run
3
|
Run
4
|
Run
5
|
|||||
Special
blockbuster
|
30%
|
25%
|
20%
|
15%
|
10%
|
|||||
Films
and series, 2 runs
|
65%
|
35%
|
-
|
-
|
-
|
|||||
Films
and series, 3 runs
|
60%
|
30%
|
10%
|
-
|
-
|
|||||
Concerts,
documentaries, film about film, etc.
|
100%
|
-
|
-
|
-
|
-
|
·
|
We
intend to renew the licenses into the foreseeable
future;
|
·
|
We
have precedents of renewals, or reasonable expectation of
renewals;
|
·
|
We
do not expect any substantial cost to be incurred as part of a
future
license renewal and no costs have been incurred in the renewals
to
date;
|
·
|
We
have not experienced any historical evidence of a compelling challenge
to
our holding these licenses; and
|
·
|
We
do not foresee that the technology used to exploit these licenses
will
undergo significant changes in the foreseeable
future.
|
For
the Years Ended December 31,
|
|||||||||||||
2005
|
2004
|
2003
|
|||||||||||
Net
Income
|
As
Reported
|
$
|
42,495
|
$
|
18,531
|
$
|
346,012
|
||||||
Add:
Stock-based compensation expense included in reported net income,
net of
related tax effects
|
As
Reported
|
2,954
|
10,102
|
13,209
|
|||||||||
Deduct:
Total stock-based compensation expense determined under fair value
based
method for all awards, net of related tax effects
|
Pro
Forma
|
(3,022
|
)
|
(10,315
|
)
|
(13,778
|
)
|
||||||
Net
Income
|
Pro
Forma
|
$
|
42,427
|
$
|
18,318
|
$
|
345,443
|
||||||
|
|||||||||||||
Net
Income - Basic:
|
As
Reported
|
$
|
1.23
|
$
|
0.66
|
$
|
13.06
|
||||||
|
Pro
Forma
|
$
|
1.23
|
$
|
0.66
|
$
|
13.04
|
||||||
|
|||||||||||||
Net
Income - Diluted:
|
As
Reported
|
$
|
1.20
|
$
|
0.64
|
$
|
13.06
|
||||||
|
Pro
Forma
|
$
|
1.20
|
$
|
0.63
|
$
|
13.04
|
3.
|
ACQUISITIONS
AND DISPOSALS
|
Fair
Value on
Acquisition
|
||||
Cash
|
$
|
35,592
|
||
Receivables
|
56,832
|
|||
Property,
plant and equipment
|
17,379
|
|||
Program
library
|
26,937
|
|||
Intangible
assets subject to amortization (1)
|
178,054
|
|||
Intangible
assets not subject to amortization (2)
|
17,979
|
|||
Goodwill
|
723,503
|
|||
Other
assets
|
23,562
|
|||
Liabilities
|
(122,249
|
)
|
||
Deferred
tax liability
|
(45,933
|
)
|
||
Minority
interest
|
(2,200
|
)
|
||
Total
purchaseprice (3)
|
$
|
909,456
|
Pro-forma
(unaudited)
|
For
the Years Ended December 31,
|
||||||
2005
|
2004
|
||||||
Net
revenues
|
$
|
483,102
|
$
|
390,139
|
|||
Net
income from continuing operations (as restated)
|
60,839
|
36,153
|
|||||
Net
income (as restated)
|
60,326
|
38,677
|
|||||
Per
Share Data:
|
|||||||
Net
income
-
Basic
(as restated)
|
$
|
1.60
|
$
|
1.05
|
|||
Net
income - Diluted (as restated)
|
$
|
1.57
|
$
|
1.02
|
4.
|
GOODWILL
AND INTANGIBLE ASSETS
|
Slovenia
|
Ukraine
|
Romania
|
Croatia
|
Czech
Republic
|
Total
|
||||||||||||||
Balance,
December 31, 2003
|
$
|
13,725
|
$
|
4,096
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
17,821
|
|||||||
Additions
|
-
|
-
|
8,826
|
29,260
|
-
|
38,086
|
|||||||||||||
Foreign
currency movements
|
999
|
-
|
-
|
2,186
|
-
|
3,185
|
|||||||||||||
Balance,
December 31, 2004
|
$
|
14,724
|
$
|
4,096
|
$
|
8,826
|
$
|
31,446
|
$
|
-
|
$
|
59,092
|
|||||||
Additions
|
2,300
|
-
|
10,928
|
-
|
727,282
|
740,510
|
|||||||||||||
Allocation
(1)
|
-
|
-
|
-
|
(18,817
|
)
|
-
|
(18,817
|
)
|
|||||||||||
Impairment
charge
|
-
|
-
|
-
|
(9,706
|
)
|
-
|
(9,706
|
)
|
|||||||||||
Foreign
currency movements
|
(1,936
|
)
|
-
|
-
|
(2,228
|
)
|
(20,332
|
)
|
(24,496
|
)
|
|||||||||
Balance,
December 31, 2005
|
$
|
15,088
|
$
|
4,096
|
$
|
19,754
|
$
|
695
|
$
|
706,950
|
$
|
746,583
|
Indefinite-lived
broadcast
licenses
|
Amortized
broadcast
licenses
|
Total
|
||||||||
Balance,
December 31, 2003
|
$
|
6,420
|
$
|
655
|
$
|
7,075
|
||||
Additions
|
6,552
|
784
|
7,336
|
|||||||
Amortization
|
-
|
(234
|
)
|
(234
|
)
|
|||||
Foreign
currency movements
|
428
|
(30
|
)
|
398
|
||||||
Balance,
December 31, 2004
|
$
|
13,400
|
$
|
1,175
|
$
|
14,575
|
||||
Additions
|
6,639
|
165,576
|
172,215
|
|||||||
Allocation
(1)
|
18,654
|
-
|
18,654
|
|||||||
Amortization
|
-
|
(9,316
|
)
|
(9,316
|
)
|
|||||
Impairment
charge
|
(18,604
|
)
|
-
|
(18,604
|
)
|
|||||
Foreign
currency movements
|
(1,153
|
)
|
(4,780
|
)
|
(5,933
|
)
|
||||
Balance,
December 31, 2005
|
$
|
18,936
|
$
|
152,655
|
$
|
171,591
|
December
31,
2005
|
December
31,
2004
|
||||||
Gross
value
|
$
|
163,628
|
$
|
2,753
|
|||
Accumulated
amortization
|
(10,973
|
)
|
(1,578
|
)
|
|||
Total
net book value
|
$
|
152,655
|
$
|
1,175
|
Trademarks
|
Customer
relationships
|
Total
|
||||||||
Balance,
December 31, 2003
|
$
|
2,479
|
$
|
-
|
$
|
2,479
|
||||
Additions
|
7,816
|
2,468
|
10,284
|
|||||||
Amortization
|
-
|
(231
|
)
|
(231
|
)
|
|||||
Foreign
currency movements
|
224
|
-
|
224
|
|||||||
Balance,
December 31, 2004
|
$
|
10,519
|
$
|
2,237
|
$
|
12,756
|
||||
Additions/Allocations
(1)
|
30,015
|
14,921
|
44,936
|
|||||||
Amortization
|
-
|
(1,864
|
)
|
(1,864
|
)
|
|||||
Impairment
charge
|
(7,021
|
)
|
-
|
(7,021
|
)
|
|||||
Foreign
currency movements
|
(953
|
)
|
(196
|
)
|
(1,149
|
)
|
||||
Balance,
December 31, 2005
|
$
|
32,560
|
$
|
15,098
|
$
|
47,658
|
December
31,
2005
|
December
31,
2004
|
||||||
Gross
value
|
$
|
17,038
|
$
|
2,468
|
|||
Accumulated
amortization
|
(1,940
|
)
|
(231
|
)
|
|||
Total
net book value
|
$
|
15,098
|
$
|
2,237
|
5.
|
SENIOR
NOTES
|
Carrying
value
|
Fair
value
|
||||||||||||
December
31,
2005
|
December
31,
2004
|
December
31,
2005
|
December
31,
2004
|
||||||||||
Euro
245 million 8.25% Senior Notes
|
$
|
288,984
|
$
|
-
|
$
|
323,737
|
$
|
-
|
|||||
Euro
125 million floating rate Senior Notes
|
147,440
|
-
|
156,324
|
-
|
|||||||||
$
|
436,424
|
$
|
-
|
$
|
480,061
|
$
|
-
|
From:
|
Euro
245 million 8.25%
Senior
Notes
Redemption
Price
|
From:
|
Euro
125 million floating
rate
Senior Notes
Redemption
Price
|
May
15, 2009 to May 14, 2010
|
104.125%
|
May
15, 2007 to May 14, 2008
|
102.000%
|
May
15, 2010 to May 14, 2011
|
102.063%
|
May
15, 2008 to May 14, 2009
|
101.000%
|
May
15, 2011 and thereafter
|
100.000%
|
May
15, 2009 and thereafter
|
100.000%
|
6.
|
INVESTMENTS
|
Voting
interest
|
December
31,
2005
|
December
31,
2004
|
||||||||
STS
|
49%
|
|
$
|
23,886
|
$
|
28,506
|
||||
Other
|
Various
|
50
|
52
|
|||||||
$
|
23,936
|
$
|
28,558
|
|
STS
(MARKIZA TV)
|
||||||
December
31, 2005
|
December
31, 2004
|
||||||
Current
assets
|
$
|
23,261
|
$
|
25,548
|
|||
Non-current
assets
|
18,612
|
16,919
|
|||||
Current
liabilities
|
(12,673
|
)
|
(15,445
|
)
|
|||
Non-current
liabilities
|
(125
|
)
|
(149
|
)
|
|||
Minority
interest
|
(635
|
)
|
(371
|
)
|
|||
Net
Assets
|
$
|
28,440
|
$
|
26,502
|
STS
(MARKIZA TV)
|
||||||||||
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Net
revenues
|
$
|
64,266
|
$
|
61,576
|
$
|
50,814
|
||||
Operating
income
|
14,641
|
15,790
|
10,579
|
|||||||
Net
income
|
11,771
|
13,868
|
8,523
|
|||||||
Currency
translation adjustment
|
$
|
(3,226
|
)
|
$
|
4,760
|
$
|
5,315
|
7.
|
RESTRICTED
CASH
|
December
31,
2005
|
December
31,
2004
|
||||||
Czech
Republic (Note 3)
|
$
|
24,554
|
$
|
-
|
|||
Croatia
(Note 3)
|
3,640
|
10,348
|
|||||
Directors’
and officers’ insurance
|
5,285
|
5,226
|
|||||
Other
|
693
|
-
|
|||||
Total
|
$
|
34,172
|
$
|
15,574
|
8.
|
ACCOUNTS
RECEIVABLE
|
December
31,
2005
|
December
31,
2004
|
||||||
Trading:
|
|||||||
Third-party
customers
|
$
|
103,921
|
$
|
49,813
|
|||
Less:
allowance for bad debts and credit notes
|
(8,612
|
)
|
(5,661
|
)
|
|||
Related
parties
|
2,034
|
757
|
|||||
Less:
allowance for bad debts and credit notes
|
(265
|
)
|
(189
|
)
|
|||
Total
trading
|
$
|
97,078
|
$
|
44,720
|
Other:
|
|||||||
Third-party
customers
|
$
|
257
|
$
|
18
|
|||
Less:
allowance for bad debts and credit notes
|
(83
|
)
|
-
|
||||
Related
parties
|
434
|
722
|
|||||
Less:
allowance for bad debts and credit notes
|
(290
|
)
|
(290
|
)
|
|||
Total
other
|
$
|
318
|
$
|
450
|
|||
Total
accounts receivable
|
$
|
97,396
|
$
|
45,170
|
9.
|
OTHER
ASSETS
|
December
31,
2005
|
December
31,
2004
|
||||||
Current:
|
|||||||
Prepaid
programming
|
$
|
17,534
|
$
|
2,837
|
|||
Other
prepaid expenses
|
6,009
|
6,189
|
|||||
Other
receivable
|
-
|
18,368
|
|||||
Deferred
tax
|
3,025
|
760
|
|||||
VAT
recoverable
|
7,888
|
664
|
|||||
Loan
to related party (Note 20)
|
600
|
300
|
|||||
Capitalized
debt costs
|
2,250
|
-
|
|||||
Assets
held-for-sale
|
341
|
-
|
|||||
Other
|
1,209
|
474
|
|||||
Total
other current assets
|
$
|
38,856
|
$
|
29,592
|
|||
Non-current:
|
|||||||
Capitalized
debt costs
|
$
|
11,618
|
$
|
-
|
|||
Loan
to related party (Note 20)
|
1,910
|
2,525
|
|||||
Deferred
tax
|
779
|
31
|
|||||
Other
|
753
|
1,436
|
|||||
Total
other non-current assets
|
$
|
15,060
|
$
|
3,992
|
10.
|
PROPERTY,
PLANT & EQUIPMENT
|
December
31,
2005
|
December
31,
2004
|
||||||
Land
and buildings
|
$
|
17,548
|
$
|
13,076
|
|||
Station
machinery, fixtures and equipment
|
72,017
|
62,117
|
|||||
Other
equipment
|
20,447
|
10,363
|
|||||
Software
licenses
|
8,360
|
5,028
|
|||||
Construction
in progress
|
5,180
|
4,846
|
|||||
Total
cost
|
123,552
|
95,430
|
|||||
Less:
Accumulated depreciation
|
(64,655
|
)
|
(63,882
|
)
|
|||
Total
net book value
|
$
|
58,897
|
$
|
31,548
|
|||
Assets
held under capital leases (included in the above)
|
|||||||
Land
and buildings
|
$
|
4,980
|
$
|
983
|
|||
Station
machinery, fixtures and equipment
|
1,434
|
393
|
|||||
Total
cost
|
6,414
|
1,376
|
|||||
Less:
Accumulated depreciation
|
(1,167
|
)
|
(463
|
)
|
|||
Net
book value
|
$
|
5,247
|
$
|
913
|
11.
|
ACCOUNTS
PAYABLE AND ACCRUED
LIABILITIES
|
December
31,
2005
|
December
31,
2004
|
||||||
Accounts
payable
|
$
|
21,533
|
$
|
16,642
|
|||
Programming
liabilities
|
18,891
|
22,156
|
|||||
Settlement
liability
|
10,007
|
-
|
|||||
Accrued
interest payable
|
4,483
|
-
|
|||||
Deferred
income
|
7,202
|
5,631
|
|||||
Accrued
wages
|
9,402
|
6,027
|
|||||
Other
accrued liabilities
|
13,331
|
16,586
|
|||||
$
|
84,849
|
$
|
67,042
|
12.
|
CREDIT
FACILITIES AND OBLIGATIONS UNDER CAPITAL
LEASES
|
December
31, 2005
|
December
31, 2004
|
|||||||||
Credit
facilities:
|
||||||||||
CME
Media Enterprises B.V.
|
(a)
|
|
$
|
-
|
$
|
7,687
|
||||
Croatian
operations
|
(b)
- (d)
|
|
1,135
|
1,668
|
||||||
Czech
Republic operations
|
(e)
- (f)
|
|
42,703
|
-
|
||||||
Slovenian
operations
|
(g)
- (h)
|
|
-
|
8,903
|
||||||
Total
credit facilities
|
$
|
43,838
|
$
|
18,258
|
||||||
Capital
leases
|
||||||||||
Croatian
operations, net of interest
|
$
|
132
|
$
|
381
|
||||||
Czech
operations, net of interest
|
6
|
-
|
||||||||
Romanian
operations, net of interest
|
290
|
44
|
||||||||
Slovenian
operations, net of interest
|
4,040
|
628
|
||||||||
Ukrainian
operations
|
-
|
59
|
||||||||
Total
capital leases
|
$
|
4,468
|
$
|
1,112
|
||||||
Total
credit facilities and capital leases
|
$
|
48,306
|
$
|
19,370
|
||||||
Less
current maturities
|
(43,566
|
)
|
(10,472
|
)
|
||||||
Total
non-current maturities
|
$
|
4,740
|
$
|
8,898
|
2006
|
$
|
43,081
|
||
2007
|
155
|
|||
2008
|
162
|
|||
2009
|
170
|
|||
2010
|
178
|
|||
2011
and thereafter
|
436,516
|
|||
Total
|
$
|
480,262
|
2006
|
$
|
694
|
||
2007
|
658
|
|||
2008
|
460
|
|||
2009
|
465
|
|||
2010
|
465
|
|||
2011
and thereafter
|
3,164
|
|||
5,906
|
||||
Less:
amount representing interest
|
(1,438
|
)
|
||
Present
value of net minimum lease payments
|
$
|
4,468
|
13.
|
SHAREHOLDERS’
EQUITY
|
14.
|
INCOME
TAXES
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Domestic
|
$
|
(2,270
|
)
|
$
|
5,127
|
$
|
(39,207
|
)
|
||
Foreign
|
62,639
|
15,456
|
15,813
|
|||||||
$
|
60,369
|
$
|
20,583
|
$
|
(23,394
|
)
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Income
tax expense from continuing operations
|
$
|
16,691
|
$
|
11,089
|
$
|
3,760
|
||||
Income
tax expense/(benefit) from discontinued operations
|
677
|
(2,378
|
)
|
14,000
|
||||||
Currency
translation adjustment in accumulated other comprehensive
loss
|
(3,266
|
)
|
-
|
-
|
||||||
Total
tax charge
|
$
|
14,102
|
$
|
8,711
|
$
|
17,760
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Current
Income tax expense:
|
||||||||||
Domestic
|
$
|
186
|
$
|
2,104
|
$
|
911
|
||||
Foreign
|
25,512
|
9,047
|
3,386
|
|||||||
$
|
25,698
|
$
|
11,151
|
$
|
4,297
|
|||||
Deferred
tax benefit:
|
||||||||||
Domestic
|
$
|
(1,467
|
)
|
$
|
-
|
$
|
-
|
|||
Foreign
|
(7,540
|
)
|
(62
|
)
|
(537
|
)
|
||||
$
|
(9,007
|
)
|
$
|
(62
|
)
|
$
|
(537
|
)
|
||
Provision
for income taxes
|
$
|
16,691
|
$
|
11,089
|
$
|
3,760
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Income
taxes at Netherlands rates (2005: 31.5%; 2004, 2003: 34.5%)
|
$
|
19,015
|
$
|
7,101
|
$
|
(8,071
|
)
|
|||
Jurisdictional
differences in tax rates
|
(15,685
|
)
|
393
|
6,141
|
||||||
Tax
effect of Croatian goodwill impairment
|
1,983
|
-
|
-
|
|||||||
Tax
effect of other permanent differences
|
4,867
|
6,186
|
1,667
|
|||||||
Effect
of change in tax rates
|
620
|
(858
|
)
|
68
|
||||||
Change
in valuation allowance
|
5,115
|
(1,366
|
)
|
3,192
|
||||||
Other
|
776
|
(367
|
)
|
763
|
||||||
Provision
for income taxes
|
$
|
16,691
|
$
|
11,089
|
$
|
3,760
|
December
31,
2005
|
December
31,
2004
|
||||||
Assets:
|
|||||||
Tax
benefit of loss carry-forwards and other tax credits
|
$
|
17,748
|
$
|
9,242
|
|||
Programming
rights
|
1,220
|
-
|
|||||
Property,
plant and equipment
|
527
|
127
|
|||||
Accrued
expense
|
2,807
|
1,285
|
|||||
Other
|
722
|
299
|
|||||
Gross
deferred tax assets
|
23,024
|
10,953
|
|||||
Valuation
allowance
|
(11,934
|
)
|
(8,011
|
)
|
|||
Net
deferred tax assets
|
$
|
11,090
|
$
|
2,942
|
|||
Liabilities:
|
|||||||
Broadcast
licenses, trademarks and customer relationships
|
$
|
(42,674
|
)
|
$
|
(4,406
|
)
|
|
Property,
plant and equipment
|
(4,057
|
)
|
-
|
||||
Investment
write-off
|
-
|
(1,763
|
)
|
||||
Undistributed
reserves not permanently reinvested
|
(1,944
|
)
|
(2,437
|
)
|
|||
Temporary
difference due to timing
|
(1,765
|
)
|
(704
|
)
|
|||
Total
deferred tax liabilities
|
$
|
(50,440
|
)
|
$
|
(9,310
|
)
|
|
Net
deferred income tax liability
|
$
|
(39,350
|
)
|
$
|
(6,368
|
)
|
December
31,
2005
|
December
31,
2004
|
||||||
Current
deferred tax assets
|
$
|
3,025
|
$
|
760
|
|||
Non-current
deferred tax assets
|
779
|
31
|
|||||
$
|
3,804
|
$
|
791
|
||||
Current
deferred tax liabilities
|
(1,005
|
)
|
(946
|
)
|
|||
Non-current
deferred tax liabilities
|
(42,149
|
)
|
(6,213
|
)
|
|||
$
|
(43,154
|
)
|
$
|
(7,159
|
)
|
||
Net
deferred income tax liability
|
$
|
(39,350
|
)
|
$
|
(6,368
|
)
|
Balance
at December 31, 2004
|
$
|
8,011
|
||
Companies
acquired
|
1,045
|
|||
Charged
to costs and expenses
|
5,115
|
|||
Charged
to other accounts
|
(1,230
|
)
|
||
Foreign
exchange
|
(1,007
|
)
|
||
Balance
at December 31, 2005
|
$
|
11,934
|
Year
|
Total
|
Netherlands
|
Austria
|
Croatia
|
Czech
Republic
|
Slovenia
|
|||||||||||||
2006
|
$
|
9,007
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
9,007
|
|||||||
2007
|
938
|
-
|
-
|
-
|
-
|
938
|
|||||||||||||
2008
|
150
|
-
|
-
|
-
|
18
|
132
|
|||||||||||||
2009
|
12,506
|
-
|
-
|
11,288
|
1,218
|
-
|
|||||||||||||
2010
|
42,735
|
-
|
-
|
18,089
|
24,646
|
-
|
|||||||||||||
Indefinite
|
11,689
|
4,956
|
6,733
|
-
|
-
|
-
|
|||||||||||||
$
|
77,025
|
$
|
4,956
|
$
|
6,733
|
$
|
29,377
|
$
|
25,882
|
$
|
10,077
|
15.
|
STOCK-BASED
COMPENSATION
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Stock-based
compensation charged under FIN 44
|
$
|
745
|
$
|
8,977
|
$
|
12,948
|
||||
Stock-based
compensation charged under FAS 123
|
2,209
|
1,125
|
261
|
|||||||
Total
stock-based compensation
|
$
|
2,954
|
$
|
10,102
|
$
|
13,209
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Risk-free
interest rate
|
4.00
|
%
|
3.50
|
%
|
1.90
|
%
|
||||
Expected
term (years)
|
6.25
|
6.00
|
6.00
|
|||||||
Expected
volatility
|
50.56
|
%
|
51.50
|
%
|
56.66
|
%
|
||||
Dividend
yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||
Weighted-average
fair value
|
$
|
26.29
|
$
|
12.51
|
$
|
5.71
|
2005
|
2004
|
2003
|
|||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
(US$)
|
Shares
|
Weighted
Average
Exercise
Price
(US$)
|
Shares
|
Weighted
Average
Exercise
Price
(US$)
|
||||||||||||||
Outstanding
at beginning of year
|
1,705,017
|
$
|
12.89
|
2,527,717
|
$
|
7.10
|
2,503,715
|
$
|
6.40
|
||||||||||
Awards
granted
|
194,500
|
49.23
|
419,500
|
23.84
|
252,000
|
10.64
|
|||||||||||||
Awards
exercised
|
(685,359
|
)
|
8.08
|
(1,083,634
|
)
|
2.74
|
(145,998
|
)
|
0.83
|
||||||||||
Awards
forfeited
|
(95,883
|
)
|
11.90
|
(158,566
|
)
|
19.11
|
(82,000
|
)
|
7.83
|
||||||||||
Outstanding
at end of year
|
1,118,275
|
$
|
22.23
|
1,705,017
|
$
|
12.89
|
2,527,717
|
$
|
7.10
|
Outstanding
options
|
Exercisable
|
|||||||||||||||
Range
of exercise
prices
|
Shares
|
Average
remaining
contractual
life
(years)
|
Weighted
average
exercise
price
(US$)
|
Shares
|
Weighted
average
exercise
price
(US$)
|
|||||||||||
$1.00-9.99
|
182,000
|
6.20
|
$
|
1.94
|
152,400
|
$
|
1.99
|
|||||||||
$10.00-19.99
|
374,400
|
7.73
|
15.03
|
139,300
|
13.62
|
|||||||||||
$20.00-29.99
|
275,000
|
4.47
|
22.78
|
184,300
|
22.87
|
|||||||||||
$30.00-39.99
|
92,375
|
8.92
|
32.95
|
21,600
|
32.93
|
|||||||||||
$40.00-49.99
|
122,000
|
9.42
|
44.61
|
-
|
-
|
|||||||||||
$50.00-59.99
|
72,500
|
10.00
|
57.00
|
-
|
-
|
|||||||||||
Total
|
1,118,275
|
7.11
|
$
|
22.23
|
497,600
|
$
|
14.31
|
16.
|
EARNINGS
PER SHARE
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Net
income available for common shareholders
|
$
|
42,495
|
$
|
18,531
|
$
|
346,012
|
||||
Weighted
average outstanding shares of common stock (000’s)
|
34,664
|
27,871
|
26,492
|
|||||||
Dilutive
effect of employee stock options (000’s)
|
766
|
1,229
|
-
|
|||||||
Common
stock and common stock equivalents
|
35,430
|
29,100
|
26,492
|
|||||||
Earnings
per share:
|
||||||||||
Basic
|
$
|
1.23
|
$
|
0.66
|
$
|
13.06
|
||||
Diluted
|
$
|
1.20
|
$
|
0.64
|
$
|
13.06
|
17.
|
SEGMENT
DATA
|
·
|
expenses
presented as corporate operating costs in our Consolidated Statements
of
Operations;
|
·
|
foreign
currency exchange gains and losses;
and
|
·
|
certain
unusual or infrequent items (e.g., extraordinary gains and losses,
impairments on assets or
investments).
|
SEGMENT
FINANCIAL INFORMATION
|
|||||||||||||||||||
For
the Years Ended December 31,
|
|||||||||||||||||||
Segment
Net Revenues (1)
|
Segment
EBITDA
|
||||||||||||||||||
2005
|
2004
|
2003
|
2005
|
2004
|
2003
|
||||||||||||||
Country
|
|
|
|
|
|
||||||||||||||
Croatia
(NOVA TV)
|
$
|
22,030
|
$
|
9,757
|
$
|
-
|
$
|
(15,866
|
)
|
$
|
(3,756
|
)
|
$
|
-
|
|||||
Czech
Republic (TV NOVA, GALAXIE SPORT)
|
154,010
|
-
|
-
|
71,544
|
-
|
-
|
|||||||||||||
Romania
(2)
|
103,321
|
76,463
|
51,177
|
43,803
|
25,198
|
12,206
|
|||||||||||||
Slovak
Republic (MARKIZA TV)
|
64,266
|
61,576
|
50,814
|
17,240
|
18,975
|
11,657
|
|||||||||||||
Slovenia
(POP TV and KANAL A)
|
48,770
|
45,388
|
37,168
|
19,337
|
19,077
|
13,173
|
|||||||||||||
Ukraine
(STUDIO 1+1)
|
72,847
|
53,351
|
36,633
|
21,803
|
14,729
|
7,999
|
|||||||||||||
Total
Segment Data
|
$
|
465,244
|
$
|
246,535
|
$
|
175,792
|
$
|
157,861
|
$
|
74,223
|
$
|
45,035
|
|||||||
Reconciliation
to Consolidated Statement of Operations and Comprehensive
Income:
|
|||||||||||||||||||
Consolidated
Net Revenues / Income/(loss) before provision for income taxes,
minority
interest, equity in income of unconsolidated affiliates and discontinued
operations
|
$
|
400,978
|
$
|
182,339
|
$
|
124,978
|
$
|
60,369
|
$
|
20,583
|
$
|
(23,394
|
)
|
||||||
Corporate
operating costs
|
-
|
-
|
-
|
25,374
|
29,185
|
32,512
|
|||||||||||||
Impairment
charge
|
-
|
-
|
-
|
35,331
|
-
|
-
|
|||||||||||||
Unconsolidated
equity affiliates (3)
|
64,266
|
64,196
|
50,814
|
17,240
|
19,404
|
11,657
|
|||||||||||||
Depreciation
of station property, plant & equipment
|
-
|
-
|
-
|
16,367
|
6,429
|
5,276
|
|||||||||||||
Amortization
of broadcast licenses and other intangibles
|
11,180
|
465
|
-
|
||||||||||||||||
Interest
income
|
-
|
-
|
-
|
(4,124
|
)
|
(4,318
|
)
|
(5,507
|
)
|
||||||||||
Interest
expense
|
-
|
-
|
-
|
29,387
|
1,203
|
12,010
|
|||||||||||||
Foreign
currency exchange (gain)/loss, net
|
-
|
-
|
-
|
(37,968
|
)
|
574
|
10,023
|
||||||||||||
Other
expense
|
-
|
-
|
-
|
4,705
|
698
|
2,458
|
|||||||||||||
Total
Segment Data
|
$
|
465,244
|
$
|
246,535
|
$
|
175,792
|
$
|
157,861
|
$
|
74,223
|
$
|
45,035
|
For
the Years Ended December 31,
|
||||||||||
Depreciation
of station property, plant & equipment and amortization of broadcast
licenses and other intangibles:
|
2005
|
2004
|
2003
|
|||||||
Croatia
|
$
|
2,951
|
$
|
1,173
|
$
|
-
|
||||
Czech
Republic
|
15,960
|
-
|
-
|
|||||||
Romania
|
3,829
|
2,843
|
3,144
|
|||||||
Slovak
Republic
|
2,599
|
1,735
|
1,805
|
|||||||
Slovenia
|
2,947
|
1,654
|
1,385
|
|||||||
Ukraine
|
1,860
|
1,224
|
747
|
|||||||
Total
|
$
|
30,146
|
$
|
8,629
|
$
|
7,081
|
||||
Reconciliation
to Consolidated Statement of Operations:
|
||||||||||
Unconsolidated
equity affiliates
|
(2,599
|
)
|
(1,735
|
)
|
(1,805
|
)
|
||||
Total
consolidated depreciation and amortization
|
27,547
|
6,894
|
5,276
|
|||||||
Represented
as follows:
|
||||||||||
Depreciation
of station property, plant & equipment
|
16,367
|
6,429
|
5,276
|
|||||||
Amortization
of broadcast licenses and other intangibles
|
11,180
|
465
|
-
|
As
at December 31,
|
|||||||
Total
assets (1):
|
2005
|
2004
|
|||||
Croatia
|
$
|
25,017
|
$
|
52,905
|
|||
Czech
Republic
|
1,018,253
|
-
|
|||||
Romania
|
123,699
|
79,622
|
|||||
Slovak
Republic
|
41,873
|
42,467
|
|||||
Slovenia
|
62,926
|
64,044
|
|||||
Ukraine
|
49,438
|
32,706
|
|||||
Total
segment assets
|
$
|
1,321,206
|
$
|
271,744
|
|||
Reconciliation
to Consolidated Balance Sheet:
|
|||||||
Unconsolidated
equity affiliates
|
(41,873
|
)
|
(42,467
|
)
|
|||
Corporate
|
109,517
|
215,362
|
|||||
Total
assets
|
$
|
1,388,850
|
$
|
444,639
|
As
at December 31,
|
|||||||
Long-lived
assets (1):
|
2005
|
2004
|
|||||
Croatia
|
$
|
6,264
|
$
|
6,775
|
|||
Czech
Republic
|
16,027
|
-
|
|||||
Romania
|
13,154
|
9,081
|
|||||
Slovak
Republic
|
14,245
|
12,818
|
|||||
Slovenia
|
15,523
|
11,834
|
|||||
Ukraine
|
7,127
|
3,153
|
|||||
Total
long-lived assets
|
$
|
72,340
|
$
|
43,661
|
|||
Reconciliation
to Consolidated Balance Sheet:
|
|||||||
Unconsolidated
equity affiliates
|
(14,245
|
)
|
(12,818
|
)
|
|||
Corporate
|
802
|
705
|
|||||
Total
Long-lived assets
|
$
|
58,897
|
$
|
31,548
|
18.
|
DISCONTINUED
OPERATIONS
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Net
revenues of discontinued operation
|
$
|
-
|
$
|
-
|
$
|
109
|
||||
Expenses
of discontinued operation
|
-
|
-
|
(1,197
|
)
|
||||||
Gain
on disposal of CNTS
|
-
|
-
|
41,421
|
|||||||
Arbitration
related proceeds
|
-
|
-
|
358,635
|
|||||||
Arbitration
related costs
|
164
|
146
|
(14,796
|
)
|
||||||
Other
income of discontinued operation
|
-
|
-
|
41
|
|||||||
Income
on disposal of discontinued operations
|
164
|
146
|
384,213
|
|||||||
Tax
on disposal of discontinued operations
|
(677
|
)
|
2,378
|
(14,000
|
)
|
|||||
Net
income/(loss) from discontinued operations
|
$
|
(513
|
)
|
$
|
2,524
|
$
|
370,213
|
19.
|
COMMITMENTS
AND CONTINGENCIES
|
a)
|
Station
Programming Rights Agreements
|
As
at December 31,
|
|||||||
2005
|
2004
|
||||||
Croatia
|
$
|
3,014
|
$
|
4,632
|
|||
Czech
Republic
|
22,812
|
-
|
|||||
Romania
|
14,073
|
9,114
|
|||||
Slovenia
|
3,080
|
445
|
|||||
Ukraine
|
8,864
|
3,862
|
|||||
Total
|
$
|
51,843
|
$
|
18,053
|
b)
|
Operating
Lease Commitments
|
December
31, 2005
|
||||
2005
|
$
|
7,841
|
||
2006
|
5,733
|
|||
2007
|
2,320
|
|||
2008
|
1,456
|
|||
2009
|
1,326
|
|||
2010
and thereafter
|
1,530
|
|||
Total
|
$
|
20,206
|
c)
|
Acquisition
of minority shareholdings
|
d)
|
Other
|
a)
|
Litigation
|
b)
|
Licenses
|
Croatia
|
The
license of NOVA TV (Croatia) expires in April 2010.
|
Czech
Republic
|
The
license of TV NOVA (Czech Republic) expires in January
2017.
|
Romania
|
Licenses
expire on dates ranging from July 2006 to February 2014.
|
Slovak
Republic
|
The
license of MARKIZA TV in the Slovak Republic expires in September
2007.
|
Slovenia
|
The
licenses of both our channels in Slovenia expire in August
2012.
|
Ukraine
|
The
15-hour license of STUDIO 1+1 expires in December 2006. The license
to
broadcast for the remaining nine hours in off prime expires in
August
2014.
|
c)
|
Restrictions
on dividends from Consolidated Subsidiaries and Unconsolidated
Affiliates
|
20.
|
RELATED
PARTY TRANSACTIONS
|
21.
|
SUBSEQUENT
EVENTS
|
December
31, 2005
|
December
31, 2004
|
||||||
ASSETS
|
|
|
|||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
$
|
5,253
|
$
|
4,601
|
|||
Accounts
receivable (Note 3)
|
9,452
|
18,043
|
|||||
Program
rights
|
5,509
|
1,815
|
|||||
Other
current assets (Note 4)
|
3,047
|
1,089
|
|||||
Total
current assets
|
23,261
|
25,548
|
|||||
Non-current
assets
|
|||||||
Investments
|
4
|
4
|
|||||
Property,
plant and equipment (Note 5)
|
14,245
|
12,818
|
|||||
Program
rights
|
4,156
|
2,722
|
|||||
Intangible
assets (Note 6)
|
46
|
132
|
|||||
Deferred
income tax, non-current (Note 4)
|
161
|
1,243
|
|||||
Total
non-current assets
|
18,612
|
16,919
|
|||||
Total
assets
|
$
|
41,873
|
$
|
42,467
|
December
31,
2005
|
December
31,
2004
|
||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable and accrued liabilities (Note 7)
|
$
|
11,481
|
$
|
10,874
|
|||
Duties
and other taxes payable
|
412
|
515
|
|||||
Income
taxes payable
|
-
|
917
|
|||||
Credit
facilities and obligations under capital leases (Note 8)
|
71
|
2,878
|
|||||
Other
current liabilities
|
709
|
261
|
|||||
Total
current liabilities
|
12,673
|
15,445
|
|||||
Non-current
liabilities
|
|||||||
Credit
facilities and obligations under capital leases (Note 8)
|
125
|
149
|
|||||
Total
non-current liabilities
|
125
|
149
|
|||||
Commitments
and contingencies (Note 10)
|
|||||||
Minority
interests in consolidated subsidiaries
|
635
|
371
|
|||||
SHAREHOLDERS'
EQUITY:
|
|||||||
Registered
capital
|
6
|
6
|
|||||
Additional
paid-in capital
|
24,242
|
24,242
|
|||||
Shareholder
loans (Note 11)
|
-
|
(11,061
|
)
|
||||
Retained
earnings
|
4,414
|
10,311
|
|||||
Accumulated
other comprehensive income/ (loss)
|
(222
|
)
|
3,004
|
||||
Total
shareholders’ equity
|
28,440
|
26,502
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
41,873
|
$
|
42,467
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Net
revenues
|
$
|
64,266
|
$
|
61,576
|
$
|
50,814
|
||||
Operating
costs
|
7,090
|
6,824
|
5,828
|
|||||||
Cost
of programming
|
22,445
|
20,902
|
19,276
|
|||||||
Depreciation
and amortization
|
2,599
|
1,735
|
1,805
|
|||||||
Selling,
general and administrative expenses
|
17,491
|
16,325
|
13,326
|
|||||||
Total
operating expenses
|
49,625
|
45,786
|
40,235
|
|||||||
Operating
income
|
14,641
|
15,790
|
10,579
|
|||||||
Interest
income
|
588
|
836
|
731
|
|||||||
Interest
expense
|
(134
|
)
|
(200
|
)
|
(285
|
)
|
||||
Foreign
currency exchange gain/(loss), net
|
(258
|
)
|
571
|
932
|
||||||
Other
income
|
245
|
405
|
436
|
|||||||
Income
before provision for income taxes, and minority
interest
|
15,082
|
17,402
|
12,393
|
|||||||
Provision
for income taxes (Note 9)
|
(3,276
|
)
|
(3,511
|
)
|
(3,870
|
)
|
||||
Income
before minority interest
|
11,806
|
13,891
|
8,523
|
|||||||
Minority
interest in income of consolidated subsidiaries
|
(35
|
)
|
(23
|
)
|
-
|
|||||
Net
income
|
11,771
|
13,868
|
8,523
|
|||||||
Currency
translation adjustment, net
|
(3,226
|
)
|
4,760
|
5,315
|
||||||
Total
comprehensive income
|
$
|
8,545
|
$
|
18,628
|
$
|
13,838
|
Registered
Capital
|
Additional
Paid-
In
Capital
|
Shareholders’
loans
|
Retained
Earnings
/
(Accumulated
Deficit)
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
Total
Shareholders'
Equity
|
||||||||||||||
BALANCE,
December 31, 2002
|
$
|
6
|
$
|
39,326
|
$
|
(4,694
|
)
|
$
|
(12,080
|
)
|
$
|
(7,071
|
)
|
$
|
15,487
|
||||
Shareholders’
loans granted
|
-
|
-
|
(4,298
|
)
|
-
|
-
|
(4,298
|
)
|
|||||||||||
Dividend
distribution
|
-
|
(4,678
|
)
|
-
|
-
|
-
|
(4,678
|
)
|
|||||||||||
Net
income
|
-
|
-
|
-
|
8,523
|
-
|
8,523
|
|||||||||||||
Currency
translation adjustment
|
-
|
-
|
-
|
-
|
5,315
|
5,315
|
|||||||||||||
BALANCE,
December 31, 2003
|
$
|
6
|
$
|
34,648
|
$
|
(8,992
|
)
|
$
|
(3,557
|
)
|
$
|
(1,756
|
)
|
$
|
20,349
|
||||
Shareholders’
loans granted
|
-
|
-
|
(2,069
|
)
|
-
|
-
|
(2,069
|
)
|
|||||||||||
Dividend
distribution
|
-
|
(10,406
|
)
|
-
|
-
|
-
|
(10,406
|
)
|
|||||||||||
Net
income
|
-
|
-
|
-
|
13,868
|
-
|
13,868
|
|||||||||||||
Currency
translation adjustment
|
-
|
-
|
-
|
-
|
4,760
|
4,760
|
|||||||||||||
BALANCE,
December 31, 2004
|
$
|
6
|
$
|
24,242
|
$
|
(11,061
|
)
|
$
|
10,311
|
$
|
3,004
|
$
|
26,502
|
||||||
Shareholders’
loans repaid
|
-
|
|
-
|
|
11,061
|
|
-
|
|
-
|
|
11,061
|
||||||||
Dividend
distribution
|
-
|
-
|
-
|
(17,668
|
)
|
-
|
(17,668
|
)
|
|||||||||||
Net
income
|
-
|
-
|
-
|
11,771
|
-
|
11,771
|
|||||||||||||
Currency
translation adjustment
|
-
|
-
|
-
|
-
|
(3,226
|
)
|
(3,226
|
)
|
|||||||||||
BALANCE,
December 31, 2005
|
$
|
6
|
$
|
24,242
|
$
|
-
|
$
|
4,414
|
$
|
(222
|
)
|
$
|
28,440
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|||||||||
Net
income
|
$
|
11,771
|
$
|
13,868
|
$
|
8,523
|
||||
Adjustments
to reconcile net income to net cash generated from operating
activities:
|
||||||||||
Depreciation
and amortization
|
9,584
|
10,834
|
11,454
|
|||||||
Receivables
write-off and provision for doubtful accounts receivable
|
101
|
77
|
(35
|
)
|
||||||
(Gain)/loss
on disposal of fixed assets
|
(40
|
)
|
(87
|
)
|
2
|
|||||
Deferred
income taxes
|
769
|
336
|
945
|
|||||||
Net
change in:
|
||||||||||
Accounts
receivable
|
6,790
|
(1,080
|
)
|
(1,969
|
)
|
|||||
Other
assets
|
(1,131
|
)
|
(3
|
)
|
198
|
|||||
Program
rights
|
(11,779
|
)
|
(9,129
|
)
|
(10,124
|
)
|
||||
Accounts
payable and accrued liabilities
|
913
|
109
|
(1,773
|
)
|
||||||
Income
and other taxes payable
|
(1,751
|
)
|
(1,744
|
)
|
2,329
|
|||||
Other
current liabilities
|
440
|
(17
|
)
|
277
|
||||||
Net
cash generated from operating activities
|
15,667
|
13,164
|
9,827
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Purchase
of property, plant and equipment
|
(5,283
|
)
|
(2,110
|
)
|
(942
|
)
|
||||
Proceeds
from disposal of property, plant and equipment
|
54
|
257
|
27
|
|||||||
Investments
in subsidiaries and unconsolidated affiliates
|
-
|
-
|
(3
|
)
|
||||||
Purchase
of other assets and intangibles
|
(154
|
)
|
(26
|
)
|
(212
|
)
|
||||
Net
cash used in investing activities
|
(5,383
|
)
|
(1,879
|
)
|
(1,130
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Proceeds
from credit facilities
|
-
|
105
|
-
|
|||||||
Payment
of credit facilities and capital leases
|
(2,565
|
)
|
(600
|
)
|
(973
|
)
|
||||
Repayment
of loans and advances to shareholders
|
10,104
|
-
|
-
|
|||||||
Loans
and advances to shareholders
|
-
|
(596
|
)
|
(2,955
|
)
|
|||||
Dividends
paid
|
(16,647
|
)
|
(10,329
|
)
|
(4,205
|
)
|
||||
Net
cash used in financing activities
|
(9,108
|
)
|
(11,420
|
)
|
(8,133
|
)
|
||||
Impact
of exchange rate fluctuations on cash
|
(524
|
)
|
657
|
628
|
||||||
Net
increase in cash and cash equivalents
|
652
|
522
|
1,192
|
|||||||
CASH
AND CASH EQUIVALENTS, beginning of year
|
4,601
|
4,079
|
2,887
|
|||||||
CASH
AND CASH EQUIVALENTS, end of year
|
$
|
5,253
|
$
|
4,601
|
$
|
4,079
|
||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||
Cash
paid for interest
|
$
|
131
|
$
|
200
|
$
|
212
|
||||
Cash
paid for income taxes (net of refunds)
|
$
|
4,108
|
$
|
6,448
|
$
|
847
|
1.
|
ORGANIZATION
AND BUSINESS
|
·
|
The
broadcasting of programming (both own production and acquired);
and
|
·
|
The
sale of advertising.
|
Company
Name
|
Voting
Interest
|
Jurisdiction
of
Organization
|
Subsidiary
(1)
|
|||
ADAM
a.s.
|
100%
|
Slovakia
|
Subsidiary
|
|||
Gamatex
s.r.o.
|
100%
|
Slovakia
|
Subsidiary
|
|||
Markiza
Slovakia, spol. s.r.o. (“Markiza”)
|
-%
|
Slovakia
|
Consolidated
Variable-Interest Entity (2)
|
(1)
|
All
subsidiaries have been consolidated in our Financial Statements.
|
(2)
|
For
further information, see Note 2, "Summary of Significant Accounting
Policies".
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
Consolidated
Balance Sheet Financial Statement Caption
|
As
at December 31, 2005
|
|||||||||
Balance
prior to
adjustment
|
Impact
of FIN 46
(R)
|
Adjusted
Balance
|
||||||||
(US$
000's)
|
||||||||||
Total
current assets
|
$
|
22,682
|
$
|
579
|
$
|
23,261
|
||||
Total
assets
|
41,291
|
582
|
41,873
|
|||||||
Total
current liabilities
|
12,726
|
(53
|
)
|
12,673
|
||||||
Total
non-current liabilities
|
125
|
-
|
125
|
|||||||
Minority
interest
|
-
|
635
|
635
|
|||||||
Total
shareholders' equity
|
$
|
28,440
|
$
|
-
|
$
|
28,440
|
Consolidated
Statement of Operations Financial Statement
Caption
|
For
the Twelve Months ended December 31, 2005
|
|||||||||
Balance
prior to
adjustment
|
Impact
of FIN 46
(R)
|
Adjusted
Balance
|
||||||||
(US$
000's)
|
||||||||||
Net
revenues
|
$
|
64,266
|
$
|
-
|
$
|
64,266
|
||||
Total
operating expenses
|
49,664
|
(39
|
)
|
49,625
|
||||||
Operating
income
|
14,602
|
39
|
14,641
|
|||||||
Income
before minority interest
|
11,771
|
35
|
11,806
|
|||||||
Net
income
|
$
|
11,771
|
$
|
-
|
$
|
11,771
|
Asset
category
|
Estimated
useful life
|
Land
|
Indefinite
|
Buildings
|
25
years
|
Station
machinery, fixtures and equipment
|
4
-
8 years
|
Other
equipment
|
3
-
8 years
|
Software
licenses
|
3
-
5 years
|
Amortization
%
|
||||||||||
Type
of programming
|
Run
1
|
Run
2
|
Run
3
|
Run
4
|
Run
5
|
|||||
Films
and series, 2 runs
|
65%
|
35%
|
-
|
-
|
-
|
|||||
Concerts,
documentaries, film about film, etc.
|
100%
|
-
|
-
|
-
|
-
|
3.
|
ACCOUNTS
RECEIVABLE:
|
December
31,
2005
|
December
31,
2004
|
||||||
Trading:
|
|||||||
Third-party
customers
|
$
|
10,936
|
$
|
19,497
|
|||
Less:
allowance for bad debts and credit notes
|
(1,540
|
)
|
(1,902
|
)
|
|||
Related
parties
|
56
|
448
|
|||||
Total
|
$
|
9,452
|
$
|
18,043
|
4.
|
OTHER
ASSETS:
|
December
31,
2005
|
December
31,
2004
|
||||||
Current:
|
|||||||
Prepaid
expenses and advances
|
$
|
621
|
$
|
590
|
|||
Income
tax receivable
|
1,084
|
216
|
|||||
VAT
and other taxes receivable
|
854
|
-
|
|||||
Deferred
income taxes
|
267
|
79
|
|||||
Other
receivables
|
221
|
204
|
|||||
Total
|
$
|
3,047
|
$
|
1,089
|
|||
Non-current:
|
|||||||
Deferred
income taxes
|
$
|
161
|
$
|
1,243
|
|||
Total
|
$
|
161
|
$
|
1,243
|
5.
|
PROPERTY,
PLANT AND EQUIPMENT
|
December
31,
2005
|
December
31,
2004
|
||||||
Land
and buildings
|
$
|
11,771
|
$
|
12,910
|
|||
Machinery,
fixtures and equipment
|
19,734
|
17,945
|
|||||
Other
equipment
|
6,963
|
7,186
|
|||||
Software
|
1,431
|
1,435
|
|||||
Construction
in progress
|
111
|
76
|
|||||
Total
cost
|
40,010
|
39,552
|
|||||
Less:
Accumulated depreciation
|
(25,765
|
)
|
(26,734
|
)
|
|||
Total
net book value
|
$
|
14,245
|
$
|
12,818
|
|||
Assets
held under capital lease (included in the above):
|
|||||||
Other
equipment
|
$
|
429
|
$
|
418
|
|||
Total
costs
|
429
|
418
|
|||||
Less:
Accumulated depreciation
|
(154
|
)
|
(114
|
)
|
|||
Net
book value
|
$
|
275
|
$
|
304
|
6.
|
INTANGIBLE
ASSETS
|
December
31,
2005
|
December
31,
2004
|
||||||
Gross
value
|
$
|
577
|
$
|
700
|
|||
Accumulated
amortization
|
(531
|
)
|
(568
|
)
|
|||
Total
net book value
|
$
|
46
|
$
|
132
|
7.
|
ACCOUNTS
PAYABLE AND ACCRUED
LIABILITIES
|
December
31,
2005
|
December
31,
2004
|
||||||
Accounts
payable
|
$
|
3,312
|
$
|
2,650
|
|||
Programming
liabilities
|
3,623
|
3,028
|
|||||
Other
accrued liabilities
|
4,546
|
5,196
|
|||||
$
|
11,481
|
$
|
10,874
|
8.
|
CREDIT
FACILITIES AND OBLIGATIONS UNDER CAPITAL
LEASES
|
December
31,
2005
|
December
31,
2004
|
|||||||||
Long-term
loans
|
(a
|
)
|
$
|
-
|
$
|
2,807
|
||||
Capital
leases
|
196
|
220
|
||||||||
Total
|
196
|
3,027
|
||||||||
Less
current maturities
|
(71
|
)
|
(2,878
|
)
|
||||||
Total
non-current maturities
|
$
|
125
|
$
|
149
|
2006
|
$
|
90
|
||
2007
|
81
|
|||
2008
|
49
|
|||
2009
|
-
|
|||
2010
|
-
|
|||
2011
and thereafter
|
-
|
|||
Total
|
220
|
|||
Less:
amount representing interest
|
(24
|
)
|
||
Present
value of net minimum lease payments
|
$
|
196
|
9.
|
INCOME
TAXES
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Current
income tax expense
|
$
|
2,507
|
$
|
3,175
|
$
|
2,925
|
||||
Deferred
tax provision
|
769
|
336
|
945
|
|||||||
Provision
for income taxes
|
$
|
3,276
|
$
|
3,511
|
$
|
3,870
|
For
the Years Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Income
taxes at statutory rates (2005, 2004: 19.0%; 2003: 25.0%)
|
$
|
2,866
|
$
|
3,295
|
$
|
3,098
|
||||
Effect
of change in tax rate
|
-
|
-
|
531
|
|||||||
Tax
effect of permanent differences
|
410
|
216
|
377
|
|||||||
Change
in valuation allowance
|
-
|
-
|
(136
|
)
|
||||||
Provision
for income taxes
|
$
|
3,276
|
$
|
3,511
|
$
|
3,870
|
December
31,
2005
|
December
31,
2004
|
||||||
Assets:
|
|||||||
Property,
plant and equipment
|
$
|
40
|
$
|
185
|
|||
Programs
rights
|
281
|
996
|
|||||
Accounts
receivable
|
113
|
233
|
|||||
Gross
deferred tax assets
|
434
|
1,414
|
|||||
Valuation
allowance
|
-
|
-
|
|||||
Net
deferred tax assets
|
$
|
434
|
$
|
1,414
|
|||
Liabilities:
|
|||||||
Unrealized
foreign exchange, net
|
(6
|
)
|
(83
|
)
|
|||
Other
|
-
|
(9
|
)
|
||||
Total
deferred tax liabilities
|
$
|
(6
|
)
|
$
|
(92
|
)
|
|
Net
deferred income tax assets
|
$
|
428
|
$
|
1,322
|
10.
|
COMMITMENTS
AND CONTINGENCIES
|
2006
|
$
|
521
|
||
2007
|
335
|
|||
2008
|
-
|
|||
2009
|
-
|
|||
2010
|
-
|
|||
2011
and thereafter
|
-
|
|||
Total
|
$
|
856
|
|
Payments
due by period
|
|||||||||||||||
|
Total
|
Less
than 1 year
|
2
years
|
3
years
|
More
than 3 years
|
|||||||||||
|
||||||||||||||||
Unconditional
purchase obligations
|
$
|
13,170
|
$
|
13,170
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Station
program rights
|
4,629
|
2,267
|
2,362
|
-
|
-
|
|||||||||||
Other
long-term obligations
|
5,446
|
5,446
|
-
|
-
|
-
|
|||||||||||
|
||||||||||||||||
Total
|
$
|
23,245
|
$
|
20,883
|
$
|
2,362
|
$
|
-
|
$
|
-
|
11.
|
RELATED
PARTY TRANSACTIONS
|
12.
|
RESTRICTION
ON DIVIDEND DISTRIBUTION
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE
REGISTRANT
|
Name
of Director
|
Principal
Occupation
|
Age
|
Year
Became
a
Director
|
|||
Ronald
S. Lauder
|
Non-executive
Chairman of the Board
|
62
|
1994
|
|||
Michael
Garin
|
Chief
Executive Officer and Director
|
59
|
2003
|
|||
Charles
R. Frank, Jr.
|
Financial
Advisor
|
68
|
2001
|
|||
Herbert
A. Granath
|
Chairman
Emeritus, ESPN
|
77
|
2002
|
|||
Herbert
Kloiber
|
Chairman,
Tele Muenchen Group
|
58
|
2006
|
|||
Alfred
W. Langer
|
Consultant
|
55
|
2000
|
|||
Bruce
Maggin
|
Principal,
the H.A.M. Media Group, LLC
|
62
|
2002
|
|||
Ann
Mather
|
Former
CFO, Pixar Animation Studios
|
46
|
2004
|
|||
Eric
Zinterhofer
|
Partner,
Apollo Management, L.P.
|
34
|
2004
|
EXECUTIVE
COMPENSATION
|
Long-Term
Compensation
|
|||||||||||||||||||
Awards
|
|||||||||||||||||||
Annual
Compensation
|
Securities
|
||||||||||||||||||
Name
and
Principal
Position
|
Year
|
Salary
$
|
Bonus
$
|
Other
Annual
Compensation
$
|
Underlying
Options/SARs
#
|
All
Other
Compensation
$
|
|||||||||||||
Michael
Garin
|
2005
|
625,000
|
950,000
|
--
|
30,000
|
20,019(8)
|
|
||||||||||||
Chief
Executive Officer (1)
|
2004
|
572,917
|
825,000
|
--
|
160,000
|
17,359(8)
|
|
||||||||||||
2003
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||
|
|||||||||||||||||||
Frederic
T. Klinkhammer
|
2005
|
142,628
|
166,666
|
--
|
--
|
15,222(8)
|
|
||||||||||||
Vice
Chairman (2)
|
2004
|
625,000
|
--
|
--
|
--
|
19,243(8)
|
|
||||||||||||
2003
|
625,000
|
625,000
|
16,515(6)
|
|
40,000
|
1,017,620(9)
|
|
||||||||||||
|
|||||||||||||||||||
Robert
E. Burke
|
2005
|
328,440
|
184,257
|
76,363(7)
|
|
15,000
|
5,913(8)
|
|
|||||||||||
President
and Chief Operating
|
2004
|
326,493
|
425,196
|
76,182(7)
|
|
--
|
8,439(8)
|
|
|||||||||||
Officer
(3)
|
2003
|
293,010
|
271,528
|
68,369(7)
|
|
80,000
|
6,703(8)
|
|
|||||||||||
|
|||||||||||||||||||
|
|||||||||||||||||||
Wallace
Macmillan
|
2005
|
355,596
|
163,482
|
--
|
10,000
|
4,865(8)
|
|
||||||||||||
Chief
Financial Officer and Vice
|
2004
|
326,493
|
195,174
|
--
|
20,000
|
6,884(8)
|
|
||||||||||||
President
- Finance(4)
|
2003
|
220,365
|
--
|
--
|
20,000
|
6,020(8)
|
|
||||||||||||
|
|||||||||||||||||||
Marina
Williams
|
2005
|
364,933
|
167,674
|
--
|
15,000
|
5,602(8)
|
|
||||||||||||
Executive
Vice President (5)
|
2004
|
41,759
|
42,238
|
--
|
20,000
|
222(8)
|
|
||||||||||||
2003
|
--
|
--
|
--
|
--
|
--
|
(1)
|
Became
Chief Executive Officer on February 2,
2004.
|
(2)
|
Retired
on March 22, 2005 in connection with expiration of his employment
agreement after having served as Vice-Chairman since February 2,
2004;
previously Vice Chairman and Chief Executive Officer since March
2003 and
Chief Executive Officer and President since March
1999.
|
(3)
|
Became
President and Chief Operating Officer in March 2003; previously
Vice
President and Chief Operating Officer since July
2001.
|
(4)
|
Became
Chief Financial Officer and Vice President - Finance in March 2003.
|
(5)
|
Became
Executive Vice President on November 22,
2004.
|
(6)
|
Represents
an expatriate premium allowance.
|
(7)
|
Represents
a housing allowance.
|
(8)
|
Represents
life and health insurance benefits paid by the
Company.
|
(9)
|
Long-Term
Compensation included a $1,000,000 Special Long-Term Incentive
Bonus that
was granted to Mr. Klinkhammer pursuant to his employment agreement,
which
provided that if the fair market value of the Company's Class A
Common Stock on December 31, 2003 was greater than $8.125 per share
(the split-adjusted trading price on March 22, 1999) and the
percentage increase in such share price was greater than the
percentage
increase in the NASDAQ composite average during the period from
March 22, 1999 to December 31, 2003, he would be entitled to
such bonus. In addition, he received $17,620 in life and health
insurance
benefits paid by the Company.
|
Individual
Grants
|
|||||||||||||||||||
Number
of
Securities
Underlying
|
Percent
of
Total
Options
Granted
to
Employees
|
Exercise
or
|
Potential
Realizable
Value
at Assumed Annual
Rates
of Stock Price
Appreciation
For
Option Term
|
||||||||||||||||
Options
|
in
Fiscal
|
Base
Price
|
Expiration
|
5%
|
10%
|
||||||||||||||
Name
|
Granted
|
Year
|
($/sh)
(1)
|
Date
(2)
|
($)
|
($)
|
|||||||||||||
Michael
Garin
|
30,000
|
15.42%
|
|
$
|
44.50
|
6/1/15
|
$
|
948,303
|
$
|
2,473,911
|
|||||||||
|
|||||||||||||||||||
Robert
E. Burke
|
15,000
|
7.71%
|
|
$
|
44.50
|
6/1/15
|
$
|
474,152
|
$
|
1,236,955
|
|||||||||
|
|
||||||||||||||||||
Wallace
Macmillan
|
10,000
|
5.14%
|
|
$
|
44.50
|
6/1/15
|
$
|
316,101
|
$
|
824,637
|
(1)
|
The
exercise price is set by the Compensation Committee, but may
be not less
than the fair market value of the Common Stock on the date
of grant of the
option. Options for the Named Executive Officers were granted
on June 2,
2005.
|
(2)
|
All
options granted to the Named Executive Officers will vest in
four equal
installments on each of the first four anniversaries of the
date of
grant.
|
Name
|
Shares
Acquired
On
Exercise
(#)
|
Value
Realized
($)
|
Number
of Securities
Underlying
Unexercised
Options
At
Fiscal Year-end
(#)
Exercisable/Unexercisable
|
Value
of Unexercised
In-the-Money
Options
at
Fiscal
Year-End
($)(1)
Exercisable/Unexercisable
|
||||
Michael
Garin
|
0
|
0
|
40,000/150,000
|
$1,536,400/5,011,200
|
||||
Frederic
T. Klinkhammer
|
486,000
|
$20,530,912
|
800/13,200
|
$38,028/627,462
|
||||
Robert
E. Burke
|
0
|
0
|
173,600/41,400
|
$9,239,376/1,455,927
|
||||
Wallace
Macmillan
|
0
|
0
|
20,000/30,000
|
$894,171/969,929
|
||||
Marina
Williams
|
0
|
0
|
6,600/28,400
|
$165,600/537,340
|
(1)
|
Fair
market value of securities underlying the options at fiscal year
end minus
the exercise price of the options.
|
(2)
|
On
March 3, 2006 Robert E. Burke exercised 25,000 options with an
exercise
price of $2.138 per share, realizing a gain of $1,561,800 based
upon the
market price on that date of $64.61 per
share.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
Beneficial
Ownership of
|
Beneficial
Ownership of
|
Common
Stock
|
||||||||||
Name
of Beneficial Owner
|
Class
A Common
Stock(a)
|
Class
B Common
Stock
|
%
of
Voting
|
%
Owner-
|
||||||||
Number
|
Percent
|
Number
|
Percent
|
Power(b)
|
ship(b)
|
|||||||
Ronald
S. Lauder(1)(8)
|
--
|
--
|
6,031,965(24)
|
85.02%
|
59.13%
|
15.81%
|
||||||
Michael
N. Garin
|
80,000(12)
|
*
|
--
|
--
|
*
|
*
|
||||||
Charles
R. Frank, Jr.
|
--
(13)
|
--
|
--
|
--
|
*
|
*
|
||||||
Herbert
A. Granath
|
20,000(14)
|
--
|
--
|
|||||||||
Frederic
T. Klinkhammer(2)
|
664(15)
|
*
|
--
|
--
|
*
|
*
|
||||||
Herbert
Kloiber(3)
|
--
|
--
|
--
|
--
|
*
|
*
|
||||||
Alfred
W. Langer
|
12,400(16)
|
*
|
--
|
--
|
*
|
*
|
||||||
Bruce
Maggin
|
10,400(17)
|
*
|
--
|
--
|
*
|
*
|
||||||
Ann
Mather
|
4,000
(18)
|
--
|
--
|
--
|
--
|
--
|
||||||
Eric
Zinterhofer
|
4,000(19)
|
--
|
--
|
--
|
--
|
--
|
||||||
Robert
E. Burke
|
148,332(20)
|
*
|
--
|
--
|
*
|
*
|
||||||
Wallace
Macmillan
|
26,664(21)
|
*
|
--
|
--
|
*
|
*
|
||||||
Marina
Williams
|
6,666(22)
|
|||||||||||
All
directors and executive officers as a group (12 persons)
|
313,126(23)
|
*
|
6,031,965(24)
|
85.02%
|
59.26%
|
16.50%
|
||||||
--
|
--
|
|||||||||||
Leonard
A. Lauder(4)(9)
|
--
|
--
|
721,673
|
10.36%
|
7.16%
|
1.90%
|
||||||
Federated
Investors, Inc.(5)(10)
|
3,002,088
|
9.67%
|
--
|
--
|
2.98%
|
7.90%
|
||||||
Eric
Semler(6)(11)
|
2,365,497
|
7.62%
|
--
|
--
|
2.35%
|
6.22%
|
||||||
--
|
--
|
|||||||||||
Testora
Ltd(7)
|
3,500,000
|
11.27%
|
--
|
--
|
3.47%
|
9.20%
|
*
|
Less
than 1.0%
|
(a)
|
Does
not include 6,966,533 shares of Class A Common Stock issuable upon
conversion of shares of Class B Common Stock. Shares of Class B
Common
Stock are convertible at any time into shares of Class A Common
Stock for
no additional consideration on a share-for-share
basis.
|
(b)
|
Represents
the percentage of total voting power and the percentage ownership
of the
Class A Common Stock and the Class B Common Stock currently beneficially
owned by each identified shareholder and all directors and executive
officers as a group. The Class A Common Stock and the Class B Common
Stock
are the only authorized classes of the Company’s capital stock with shares
outstanding.
|
1.
|
The
address of Ronald S. Lauder is Suite 4200, 767 Fifth Avenue,
New York, New
York 10153.
|
2.
|
Mr.
Klinkhammer’s term as Vice Chairman and a member of the Board of Directors
ended on March 22, 2005 upon the expiration of his employment
agreement.
|
3.
|
Herbert
G. Kloiber was appointed to the Board of Directors on February
1, 2006.
|
4.
|
Information
in respect of the beneficial ownership of Leonard A. Lauder (other
than
percentage ownership) is based upon a statement on Schedule 13D
filed by
him. The address of Mr. Leonard Lauder is c/o The Estée Lauder Companies
Inc., 767 Fifth Avenue, New York, New York
10153.
|
5.
|
Information
in respect of the beneficial ownership of Federated Investors,
Inc. (other
than percentage ownership) is based upon a statement on Schedule
13G filed
on February 14, 2005 jointly by Federated Investors, Inc., Voting
Shares
Irrevocable Trust, John F. Donahue, Rhodora J. Donahue and J.
Christopher
Donahue. The address of Federated Investors, Inc., Voting Shares
Irrevocable Trust, John F. Donahue, Rhodora J. Donahue and J.
Christopher
Donahue is Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779.
|
6.
|
Information
in respect of the beneficial ownership of Eric Semler (other than
percentage ownership) is based upon a statement on Schedule 13G/A
filed by
him on January 18, 2006. The address of Mr. Semler is 888 Seventh
Avenue,
Suite 1504, New York, New York
10019.
|
7.
|
Information
in respect of the beneficial ownership of Testora Limited (other
than
percentage ownership) is based upon a statement on Schedule 13G
filed by
it on January 11, 2006 The address of Testora Limited is Grigori
Afxentiou, 8, El.Pa. Livadioti, Flat/Office 401, P.C. 6023, Larnaca,
Cyprus.
|
8.
|
57,799
of the shares of Class B Common Stock listed are owned directly
by Ronald
S. Lauder, 3,385,417 of the shares of Class B Common Stock are
owned by
RSL Investments Corporation, 1,672,500 of the shares of Class B
Common
Stock are owned by RSL Capital LLC and 577,788 of the shares of
Class B
Common Stock are owned by TV Holdings Ltd., all of which are owned
by Mr.
Lauder. 210,461 of the shares of Class B Common Stock are held
by RAJ
Family Partners L.P., which Mr. Lauder may be deemed to beneficially
own.
In addition, Mr. Lauder directly owns currently exercisable options
to
purchase 128,000 shares of Class B Common
Stock.
|
9.
|
285,239
of the shares of Class B Common Stock listed are owned directly
by Leonard
A. Lauder and 436,434 of the shares of Class B Common Stock are
held by
LWG Family Partners L.P., a partnership whose managing partner
is a
corporation which is one-third owned by Mr.
Lauder.
|
10.
|
Federated
Investors, Inc. (“Parent”) is the parent holding company of Federated
Equity Management Company of Pennsylvania and Federated Global
Investment
Management Corp. (the “Investment Advisors”), which act as investment
advisors to registered investment companies and separate accounts
that own
shares of common stock in Central European Media Enterprises, Ltd.
The
Investment Advisors are wholly owned subsidiaries of FII Holdings,
Inc.,
which is a wholly owned subsidiary of Parent. All of the Parent’s
outstanding voting stock is held in the Voting Shares Irrevocable
Trust
for which John F. Donahue, Rhodora J. Donahue and J. Christopher
Donahue
act as trustees. The trustees have collective voting control over
the
Parent and shared voting power over the shares
listed.
|
11.
|
Mr.
Semler has sole power to vote and to dispose of these shares which
consists of (i) 1,459,491 Shares held for the account of TCS Capital
Investments; (ii) 123,405 Shares held for the account of TCS Capital;
(iii) 780,601 Shares held for the account of TCS Capital II; and
(iv)
2,000 Shares held for the account of TCS Select. TCS Capital Management,
LLC, a Delaware limited liability company (“TCS Capital Management”) is
the investment manager of each TCS Capital International, TCS Capital
and
TCS Capital II. Mr. Semler is the investment manager of TCS Capital
Management.
|
12.
|
Consists
of 80,000 shares of Class A Common Stock underlying options which
are
currently exercisable at an exercise price of $19.49 per share
and which
expire on February 1, 2014. Does not include (i) 80,000 shares
of Class A
Common Stock underlying options with an exercise price of $19.49
per share
which are not currently exercisable and will not become exercisable
within
60 days and expire on February 1, 2014, and (ii) 30,000 shares
of Class A
Common Stock underlying options with an exercise price of $44.50
per share
which are not currently exercisable and will not become exercisable
within
60 days and expire on June 1, 2015.
|
13.
|
Does
not include (i) 6,400 shares of Class A Common Stock underlying
options
with an exercise price of $1.958 per share which are not currently
exercisable and will not become exercisable within 60 days and
expire on
May 15, 2012; (ii) 9,600 shares of Class A Common Stock underlying
options
with an exercise price of $10.897 per share which are not currently
exercisable and will not become exercisable within 60 days and
expire on
May 21, 2013; (iii) 12,000 shares of Class A Common Stock underlying
options with an exercise price of $22.11 per share which are not
currently
exercisable and will not become exercisable within 60 days and
expire on
June 1, 2014; and (iv) 6,000 shares of Class A Common Stock underlying
options with an exercise price of $44.50 per share which are not
currently
exercisable and will not become exercisable within 60 days and
expire on
June 1, 2015.
|
14.
|
Consists
of (i) 9,600 shares of Class A Common Stock underlying options
which are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $1.958 per share and which expire on May 15,
2012; and
(ii) 6,400 shares of Class A Common Stock underlying options which
are
currently exercisable, or will become exercisable within 60 days,
at a
price of $10.897 per share and which expire on May 21, 2013; and
(iii)
4,000 shares of Class A Common Stock underlying options which are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $22.11 per share and which expire on June 1,
2014. Does
not include (i) 6,400 shares of Class A Common Stock underlying
options
with an exercise price of $1.958 per share are not currently exercisable
and will not become exercisable within 60 days and expire on May
15, 2012;
(ii) 9,600 shares of Class A Common Stock underlying options with
an
exercise price of $10.897 per share which are not currently exercisable
and will not become exercisable within 60 days and expire on May
21, 2013;
and (iii) 12,000 shares of Class A Common Stock underlying options
with an
exercise price of $22.11 per share which are not currently exercisable
and
will not become exercisable within 60 days and expire on June 1,
2014; and
(iv) 6,000 shares of Class A Common Stock underlying options with
an
exercise price of $44.50 per share which are not currently exercisable
and
will not become exercisable within 60 days and expire on June 1,
2015.
|
15.
|
Consists
of 664 shares of Class A Common Stock underlying options which
are
currently exercisable or will become exercisable within 60 days,
at an
exercise price of $10.365 per share and which expire on May 28,
2013. Does
not include 13,336 shares of Class A Common Stock underlying options
with
an exercise price of $10.365 per share are not currently exercisable
and
will not become exercisable within 60 days and expire on May 28,
2013.
|
16.
|
Consists
of (i) 2,000 shares of Class A Common Stock underlying options
which are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $0.294 per share and which expire on April 18,
2011;
(ii) 3,200 shares of Class A Common Stock underlying options which
are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $1.958 per share and which expire on May 15,
2012; (iii)
3,200 shares of Class A Common Stock underlying options which will
become
exercisable within 60 days, at an exercise price of $10.897 per
share and
which expire on May 21, 2013; and (iv) 4,000 shares of Class A
Common
Stock underlying options which are currently exercisable, or will
become
exercisable within 60 days, at an exercise price of $22.11 per
share and
which expire on June 1, 2014. Does not include (i) 2,000 shares
of Class A
Common Stock underlying options with an exercise price of $0.294
per share
which are not currently exercisable and will not become exercisable
within
60 days and expire on April 18, 2011; (ii) 6,400 shares of Class
A Common
Stock underlying options with an exercise price of $1.958 per share
which
are not currently exercisable and will not become exercisable within
60
days and expire on May 15, 2012; (iii) 9,600 shares of Class A
Common
Stock underlying options with an exercise price of $10.897 per
share which
are not currently exercisable and will not become exercisable within
60
days and expire on May 21, 2013; (iv) 12,000 shares of Class A
Common
Stock underlying options with an exercise price of $22.11 per share
which
are not currently exercisable and will not become exercisable within
60
days, and expire on June 1, 2014; and (v) 6,000 shares of Class
A Common
Stock underlying options with an exercise price of $44.50 per share
which
are not currently exercisable and will not become exercisable within
60
days and expire on June 1, 2015.
|
17.
|
Consists
of (i) 6,400 shares of Class A Common Stock underlying options
which are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $10.897 per share and which expire on May 21,
2013; and
(ii) 4,000 shares of Class A Common Stock underlying options which
are
currently exercisable at, or will become exercisable within 60
days, an
exercise price of $22.11 per share and which expire on June 1,
2014. Does
not include (i) 9,600 shares of Class A Common Stock underlying
options
with an exercise price of $10.897 per share which are not currently
exercisable and will not become exercisable within 60 days and
expire on
May 21, 2013; (ii) 12,000 shares of Class A Common Stock underlying
options with an exercise price of $22.11 per share which are not
currently
exercisable and will not become exercisable within 60 days and
expire on
June 1, 2014; and (iii) 6,000 shares of Class A Common Stock underlying
options with an exercise price of $44.50 which are not currently
exercisable and will not become exercisable within 60 days and
expire on
June 1, 2015.
|
18.
|
Consists
of 4,000 shares of Class A Common Stock underlying options which
are
currently exercisable, or will become exercisable within 60 days,
at a
price of $22.11 per share and which expire on June 1, 2014. Does
not
include (i) 12,000 shares of Class A Common Stock underlying options
with
an exercise price of $22.11 per share which are not currently exercisable
and will not become exercisable within 60 and expire on June 1,
2014; and
(ii) 6,000 shares of Class A Common Stock underlying options with
an
exercise price of $44.50 per share which are not currently exercisable
and
will not become exercisable within 60 days and expire on June 1,
2015.
|
19.
|
Consists
of 4,000 shares of Class A Common Stock underlying options which
are
currently exercisable, or will be exercisable within 60 days, at
a price
of $22.11 per share and which expire on June 1, 2014. Does not
include (i)
12,000 shares of Class A Common Stock underlying options with an
exercise
price of $22.11 per share which are not currently exercisable and
will not
become exercisable within 60 days and expire on June 1, 2014; and
(ii)
6,000 shares of Class A Common Stock underlying options with an
exercise
price of $44.50 per share which are not currently exercisable and
will not
become exercisable within 60 days and expire on June 1,
2015.
|
20.
|
Consists
of (i) 95,000 shares of Class A Common Stock underlying options
which are
currently exercisable at an exercise price of $2.1375 per share
and which
expire on April 1, 2012; and (ii) 53,332 shares of Class A Common
Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $10.365 per
share and
which expire on May 28, 2013. Does not include (i) 26,668 shares
of Class
A Common Stock underlying options with an exercise price of $10.365
per
share which are not currently exercisable and will not become exercisable
within 60 days and expire on May 28, 2013; and (ii) 15,000 shares
of Class
A Common Stock underlying options with an exercise price of $44.50
per
share which are not currently exercisable and will not become exercisable
within 60 days and expire on June 1, 2015.
|
21.
|
Consists
of (i) 13,332 shares of Class A Common Stock underlying options
which are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $10.365 per share and which expire on May 21,
2013; and
(ii) 13,332 shares of Class A Common Stock underlying options which
are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $18.93 per share and which expire on May 4, 2014.
Does
not include (i) 6,668 shares of Class A Common Stock underlying
options
with an exercise price of $10.365 per share which are not currently
exercisable and will not become exercisable within 60 days and
expire on
May 21, 2013; (ii) 6,668 shares of Class A Common Stock underlying
options
with an exercise price of $18.93 per share which are not currently
exercisable and will not become exercisable within 60 days and
expire on
May 4, 2014; and (ii) 10,000 shares of Class A Common Stock underlying
options with an exercise price of $44.50 per share which are not
currently
exercisable and will not become exercisable within 60 days and
which
expire on June 1, 2015.
|
22.
|
Consists
of 6,666 shares of Class A Common Stock underlying options which
are
currently exercisable, or will become exercisable within 60 days,
at an
exercise price of $32.80 per share and which expire on November
21, 2014.
Does not include (i) 13,334 shares of Class A Common Stock underlying
options with an exercise price of $32.80 per share which are not
currently
exercisable and will not become exercisable within 60 days and
expire on
November 21, 2014; and (ii) 15,000 shares of Class A Common Stock
underlying options with an exercise price of $44.50 per share and
which
are not currently execisable and will not become exercisable within
60
days and expire on June 1, 2015.
|
23.
|
Consists
of 313,126 shares of Class A Common Stock underlying options which
are
currently exercisable or will become exercisable within 60 days.
Does not
include 399,074 shares of Class A Common Stock underlying options
which
are not currently exercisable and will not become exercisable within
60
days.
|
24.
|
Includes
(i) 100,000 shares of Class B Common Stock underlying options which
are
currently exercisable at an exercise price of $23.925 per share
and which
expire on August 1, 2007; (ii) 8,000 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at a price of $0.2625 per share and
which
expire on May 18, 2011; (iii) 9,600 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at a price of $2.0558 per share and
which
expire on May 15, 2012; (iv) 6,400 shares of Class B Common Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at a price of $11.44 per share and
which
expire on May 21, 2013; and (v) 4,000 shares of Class B Common
Stock
underlying options which are currently exercisable, or will become
exercisable within 60 days, at an exercise price of $23.22 per
share and
which expire on June 1, 2014. Does not include (i) 2,000 shares
of Class B
Common Stock underlying options with an exercise price of $0.2625
per
share which are not currently exercisable and will not become exercisable
within 60 days and expire on May 18, 2011; (ii) 6,400 shares of
Class B
Common Stock underlying options with an exercise price of $2.0558
per
share which are not currently exercisable and will not become exercisable
within 60 days, and expire on May 15, 2012; and (iii) 9,600 shares
of
Class B Common Stock underlying options with an exercise price
of $11.44
per share which are not currently exercisable and will not become
exercisable within 60 days, and expire on May 21, 2013; (iv) 12,000
shares
of Class B Common Stock underlying options with an exercise price
of
$23.22 per share which are not currently exercisable and will not
become
exercisable within 60 days, and expire on June 1, 2014;and (v)
6,000
shares of Class B Common Stock underlying options with an exercise
price
of $46.725 which are not currently exercisable and will not become
exercisable within 60 days and expire on June 1,
2015.
|
Equity
Compensation Plan Information
|
||||||||||
(a)
|
(b)
|
(c)
|
||||||||
Plan
Category
|
Number
of Securities
to
be issued upon
exercise
of
outstanding
options,
warrants
and rights
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation
plans
(excluding securities
reflected
in column (a))
|
|||||||
Equity
compensation plans approved by security holders
|
1,118,275(1)
|
|
|
$22.23
|
1,392,088(2)
|
|
||||
Equity
compensation plans not approved by security holders
|
0(3)
|
|
--
|
1,000,000
|
||||||
Total
|
1,118,275
|
|
$22.23
|
(1)
|
This
number consists of options outstanding at December 31, 2005 under
the
Company’s 1994 Stock Option Plan and under the Amended and Restated 1995
Stock Incentive Plan.
|
(2)
|
This
number includes the aggregate number of shares of Common Stock
that
remains available for future issuance, at December 31, 2005 under
the
Company’s shareholder approved equity compensation plans, consisting of
1,392,088 shares available under the Amended and Restated 1995
Stock
Incentive Plan. The term of the 1994 Stock Option Plan expired
on July 11,
2004. Any option outstanding under the 1994 Stock Option Plan at
the time
of the termination of the Plan will remain outstanding until such
option
has been exercised or has expired in accordance with its
terms.
|
(3)
|
The
Company’s 1998 Stock Appreciation Rights Plan (the “SAR Plan”) allows the
Company to grant up to 1,000,000 SARs. The SARs are subject to
substantially the same general conditions as apply to options granted
under the Amended and Restated 1995 Stock Incentive Plan. When
SARs are
exercised, the grantee will receive in cash the amount by which
the
Company’s stock price exceeds a base price fixed by the Compensation
Committee at the time of grant. There were no SARs outstanding
at December
31, 2005.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
Exhibit
Number
|
Description
|
||
Consent of Deloitte & Touche LLP | |||
Consent of Deloitte Audit s.r.o. | |||
Sarbanes-Oxley
Certification s.302 CEO, dated March 15, 2006
|
|||
Sarbanes-Oxley
Certification s.302 CFO, dated March 15, 2006
|
|||
Sarbanes-Oxley
Certification - CEO and CFO, dated March 15, 2006 (furnished
only)
|
|
Central
European Media Enterprises Ltd.
|
|
By:
/s/ Wallace Macmillan
|
Wallace
Macmillan
|
|
Vice
President - Finance
|
|
(Principal
Financial Officer and Accounting Officer)
|
|
|
March
15, 2006
|