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CTC Media: Financial Results for the Second Quarter, Ended June 30, 2009
MOSCOW, August 6 /PRNewswire/ -- CTC Media, Inc. ("CTC Media" or "the Company") (NASDAQ: CTCM), Russia's
leading independent media company, today announced its unaudited consolidated
financial results for the second quarter and six months ended June 30, 2009.
Three Months Six Months
Ended June 30, Ended June 30,
(US$ 000's except per 2008 2009 Change 2008 2009 Change
share data)
Total operating
revenues $172,770 $113,894 -34.1% $309,516 $218,672 -29.4%
Total operating
expenses (102,735) (70,065) -31.8% (186,449) (138,260) -25.8%
OIBDA(1) 73,440 46,509 -36.7% 128,676 85,673 -33.4%
OIBDA margin 42.5% 40.8% -1.7% 41.6% 39.2% -2.4%
Net income attributable
to CTC Media, Inc.
stockholders 48,816 30,335 -37.9% 90,529 53,647 -40.7%
Diluted earnings per
share $0.31 $0.19 -38.7% $0.57 $0.34 -40.4%
SECOND QUARTER FINANCIAL HIGHLIGHTS
- Total revenues down 34% year-on-year in US dollar terms (down 10%
year-on-year in ruble terms) to $113.9 million
- Russian advertising revenues down 12% year-on-year in ruble terms
- Total operating expenses down 32% year-on-year in US dollar terms (down
7% year-on-year in ruble terms) to $70.1 million
- OIBDA of $46.5 million with an OIBDA margin of 40.8%
- Net income of $30.3 million, fully diluted earnings per share of $0.19
- Net cash position of $35.0 million
SECOND QUARTER OPERATING HIGHLIGHTS
- Average combined 4+ audience share in Russia up year-on-year to 13.4%
from 12.6%
- Target audience viewing shares up for all three Russian networks on a
sequential and year-on-year basis
- CTC was the most watched channel in Russia in prime time by 25-54 year
olds with kids for the first time
- CTC was the third most watched channel in Russia by 6-54 year olds for
the first time since 2006
Anton Kudryashov, Chief Executive Officer of CTC Media,
commented: "Despite the fact that the ongoing weak economic environment
adversely impacted advertising spending in the second quarter, we have
continued to significantly outperform the market. Our Russian advertising
revenues, which account for over 90% of total revenues, were down 12%
year-on-year in ruble terms in the second quarter, compared to an estimated
21% decline in the overall Russian television advertising market according to
Video International. The year-on-year decline in the consolidated results
again reflected the substantial year-on-year weakening of the ruble and other
operating currencies against the US dollar reporting currency."
"Our outperformance of the market was driven by healthy
sell-out and power ratios, as well as rising target audience viewing shares
for our three complementary Russian networks. At the same time we managed to
substantially reduce our operating costs year-on-year and the measures that
we have taken in 2008 and into 2009 have enabled us to maintain an OIBDA
margin of over 40%. Furthermore, we remain in a net cash financial position."
"Despite the limited levels of forward visibility, we do
expect to continue to outperform the Russian television advertising market in
the second half of 2009. We also continue to expect organic costs to be flat
year-on-year in ruble terms for the full year, despite the fact that we are
now investing in programming for the Fall schedules, in order to build on the
momentum of our growing audience shares and to enhance our competitive
position."
Operating Review
Revenues(2)
Three Months Six Months
Ended June 30, Ended June 30,
(US$ 000's) 2008 2009 Change 2008 2009 Change
Operating revenues:
CTC Network $109,863 $71,655 -34.8% 207,694 142,210 -31.5%
Domashny Network 16,211 10,884 -32.9% 31,678 21,450 -32.3%
DTV Network 12,220 9,183 -24.9% 12,220 17,850 46.1%
CTC Television
Station Group 26,394 15,873 -39.9% 45,993 26,127 -43.2%
Domashny Television
Station Group 4,366 2,217 -49.2% 7,565 3,957 -47.7%
DTV Station
Television Group 1,804 1,015 -43.7% 1,804 1,789 -0.8%
CIS Group 1,722 2,836 64.7% 2,372 4,880 105.7%
Production Group 190 231 21.6% 190 409 115.3%
Total operating
revenues $172,770 $113,894 -34.1% $309,516 $218,672 -29.4%
Total operating revenues for the three months ended June 30, 2009 were
down 34% year-on-year in dollar terms. The second quarter results in both
2008 and 2009 included full quarterly contributions by DTV Group in Russia
and Channel 31 Group in Kazakhstan, which were both acquired in the first
half of 2008.
The reported decline in revenues reflected the underlying weakness in the
advertising markets, as well as the year-on-year depreciation of the
Company's principal operating currency (the ruble) against the Company's
reporting currency (the US dollar). The depreciation had a negative impact of
approximately 27% on the Company's ruble denominated sales. Advertising sales
in Russia, which accounted for 93% of total second quarter revenues in 2009
and 95% in 2008, were down 12% year-on-year in the second quarter in ruble
terms.
The year-on-year development in advertising revenues for the Russian
Television Station Groups reflected the sharper decline in the regional
advertising markets in Russia when compared with the national advertising
market, and was due to the weighting of spending by large advertisers to
national campaigns.
CIS Group revenues were up 65% year-on-year in the second
quarter of 2009 due to increased advertising prices and sell-out rates for
Channel 31 in Kazakhstan, which were offset by the year-on-year depreciation
of the Kazakh tenge against the US dollar. Channel 31 generated over 90% of
CIS Group revenues in the quarter.
Share of Viewing in Target Demographics
Average Audience Shares (%)
Q2 2008 Q1 2009 Q2 2009
CTC Network (all 6-54) 11.6 11.4 12.5
Domashny Network (females 25-60) 2.7 2.6 2.9
DTV Network (all 25-54) 2.3 2.2 2.4
Channel 31 (all 6-54) 13.3 12.7 11.7
Each of the Russian networks delivered higher target audience
viewing shares in the second quarter, both on a sequential and year-on-year
basis.
The flagship CTC channel substantially increased its target
audience share in the second quarter and, for the first time since 2006, was
the third most watched channel by 6 to 54 year olds. CTC was also the most
watched channel in prime time by 25 to 54 year olds with kids, and maintained
its overall position as the fourth most watched free-to-air channel in
Russia. The rising ratings were driven by the continued success of the
'Daddy's Girls' and 'Ranetki' series in prime time and supported by a
well-balanced broader programming schedule.
Domashny's audience share also increased year-on-year and
quarter-on-quarter due to the strong performance of the CTC hit series 'Born
Not Pretty', as well as the late prime time weekday slot featuring foreign
series such as 'Desperate Housewives'.
DTV has been focused since January 2009 on the 25-54 year old
target group. The share of viewing in the revised demographic increased in
the second quarter following the continued success of locally produced
'Marital Fiction', as well as the late prime time slots for Russian and
foreign criminal investigation and action formats such as 'The
Investigators', 'The Trace', and 'Law and Order'.
Expenses
Three Months Six Months
Ended June 30, Ended June 30,
(US$ 000's) 2008 2009 Change 2008 2009 Change
Operating expenses:
Direct operating
expenses $ 10,206 $7,635 -25.2% $16,996 $14,982 -11.8%
Selling, general &
administrative expenses 22,897 16,928 -26.1% 41,971 35,250 -16.0%
Amortization of
programming rights 61,799 41,415 -33.0% 116,222 78,298 -32.6%
Amortization of
sublicensing rights and
own production cost 4,428 1,407 -68.2% 5,651 4,469 -20.9%
Depreciation &
amortization 3,405 2,680 -21.3% 5,609 5,261 -6.2%
Total operating
expenses $102,735 $70,065 -31.8% $186,449 $138,260 -25.8%
Total operating expenses for the three months ended June 30, 2009 were
down 32% year-on-year in dollar terms. The reported decrease in expenses
reflected the year-on-year reduction in programming amortization expenses, as
well as the depreciation of the Company's ruble and other operating
currencies against the US dollar reporting currency. Total operating
expenditure was down 7% year on year in ruble terms in the second quarter and
included full quarterly contributions from DTV Group and Channel 31 Group in
both 2008 and 2009.
Direct operating expenses were down 25% year-on-year in the second
quarter in dollar terms, while selling, general and administrative costs were
down 26%.
Programming expenses decreased by 33% year-on-year and represented 36% of
revenues, which was unchanged from the second quarter of 2008 as a percentage
of revenues. The year-on-year decrease reflected a reduction in programming
impairment charges from $4.0 million to $1.0 million, and a $1.5 million
reduction in amortization charges due to the changes in the Company's
amortization policy for certain types of Russian-produced programming from
the beginning of 2009. When excluding the effect of the amortization policy
changes, programming expenses were down 31% year-on-year in the second
quarter in US dollar terms.
The 68% year-on-year decline in sublicensing and own production costs
primarily reflected the lower cost of in-house produced series and sitcoms
that were sold to third party broadcasters in Ukraine.
Consolidated OIBDA was therefore lower year-on-year at $46.5
million (Q2 2008: $73.4 million) but the OIBDA margin declined by less than
two percentage points to 40.8% (Q2 2008: 42.5%).
Group depreciation and amortization charges decreased by 21%
year-on-year to $2.7 million (Q2 2008: $3.4 million) in the second quarter,
and consolidated operating income totaled $43.8 million (Q2 2008: $70.0
million).
The Company's pre-tax income amounted to $41.8 million (Q2
2008: $70.8 million) in the quarter. The effective tax rate decreased
year-on-year in the second quarter to 26% (Q2 2008: 30%) mainly due to the
decrease in statutory income tax rates in Russia (from 24% to 20%) and
Kazakhstan (from 30% to 20%) from the beginning of 2009.
Consolidated net income attributable to CTC Media, Inc.
stockholders therefore totaled $30.3 million (Q2 2008: $48.8 million) in the
second quarter and fully diluted earnings per share amounted to $0.19 (Q2
2008: $0.31).
Cash Flow
The Company's net cash flow from operations
totaled $50.0 million in the first six months of 2009 (first six months of
2008: $66.9 million) and reflected the net effect of lower advertising sales
and lower expenses in the first half of 2009.
Cash used in investing activities totaled
$18.7 million during the first six months of 2009 (first six months of 2008:
$ 320.3 million) and included $11.0 million in payments related to the
acquisitions of Costafilm and Soho Media, as well as the purchasing of
equipment and software for the Company's new digital platform technology
center in Moscow. The investments in the first half of 2008 included the
acquisition of the DTV Group in Russia, the Channel 31 Group in Kazakhstan,
the Costafilm and Soho Media production companies in Russia, and a number of
local owned-and-operated stations in Russia.
Cash used for financing activities amounted
to $35.7 million in the first half of the year (first six months of 2008:
$1.8 million). This included a $33.8 million part repayment of the syndicated
loan, which the Company drew down in July 2008 to finance the acquisition of
DTV Group.
The Company's cash and cash equivalents
amounted to $91.7 million at June 30, 2009, compared to $98.1 million at the
end of 2008 and $62.5 million at June 30, 2008.
Borrowings
The Company's total borrowings and accrued
interest amounted to $56.7 million (June 30, 2008: $155.5 million) at the end
of the reporting period, compared to $90.6 million at the end of 2008. The
Company therefore had a net cash position, which is defined as cash and cash
equivalents less interest bearing liabilities, of $35.0 million (June 30,
2008: net debt of $93.0 million) at the end of the reporting period, compared
to a net cash position of $7.5 million at the end of 2008.
Conference Call
The Company will host a conference call to discuss its second
quarter financial results today, Thursday, August 6, 2009, at 9:00 a.m. ET
(5:00 p.m. Moscow time, 2:00 p.m. London time). To access the conference
call, please dial +1-718-247-0880 (US/International) or +44-20-7138-0845
(UK/International). The pass code for the call is 4810933. A live webcast of
the conference call will also be available via the investor relations section
of the Company's corporate web site - http://www.ctcmedia.ru/investors. The
webcast will also be archived on the Company's web site for two weeks.
Use of Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are
prepared and presented in accordance with US GAAP, the Company uses the
following non-GAAP financial measures: OIBDA (on a consolidated and segment
basis) and OIBDA margin. The presentation of this financial information is
not intended to be considered in isolation or as a substitute for, or
superior to, financial information prepared and presented in accordance with
GAAP. For more information on these non-GAAP financial measures, please see
the accompanying financial tables included at the end of this release.
The Company uses these non-GAAP financial measures for
financial and operational decision making and as a means to evaluate
period-to-period comparisons. The Company believes that these non-GAAP
financial measures provide meaningful supplemental information regarding its
performance and liquidity by excluding certain expenses that may not be
indicative of its recurring core business operating results, meaning its
operating performance excluding certain non-cash charges. These metrics are
used by management to further its understanding of the Company's operating
performance in the ordinary, ongoing and customary course of operations. The
Company also believes that these metrics provide investors and equity
analysts with a useful basis for analyzing operating performance against
historical data and the results of comparable companies.
OIBDA and OIBDA margin. OIBDA is defined as operating income
before depreciation and amortization (exclusive of amortization of
programming rights and sublicensing rights). OIBDA margin is defined as OIBDA
divided by total operating revenues. The most directly comparable GAAP
measures to the non-GAAP measures of OIBDA and OIBDA margin are operating
income and operating income margin, respectively. Unlike operating income,
OIBDA excludes depreciation and amortization, other than amortization of
programming rights and sublicensing rights. The purchase of programming
rights is the Company's most significant expenditure that enables it to
generate revenues and OIBDA includes the impact of the amortization of these
rights. Expenditures for capital items such as property, plant and equipment
have a materially less significant impact on the Company's ability to
generate revenues. For this reason, the Company excludes the related
depreciation expense for these items from OIBDA. Moreover, a significant
portion of its intangible assets were acquired in business acquisitions. The
amortization of intangible assets is therefore also excluded from OIBDA.
About CTC Media, Inc.
CTC Media is a leading independent media company in Russia. It
owns and operates the CTC television network, with its signal carried by more
than 350 affiliate stations, including 20 owned-and-operated stations; the
Domashny television network, with its signal carried by over 250 affiliate
stations, including 12 owned-and-operated stations; and the DTV television
network, with its signal carried by affiliate stations including five
owned-and-operated stations. CTC Media owns two TV content production
companies, Costafilm and Soho Media, and operates Channel 31 in Kazakhstan
and TV companies in Uzbekistan and Moldova. The company's common stock is
traded on The NASDAQ Global Select Market under the symbol "CTCM". For more
information on CTC Media, please visit http://www.ctcmedia.ru.
Caution Concerning Forward Looking Statements
Certain statements in this press release that are not based on
historical information are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements, which include, among other things, statements regarding the
impact the current unfavorable macroeconomic situation globally and in Russia
may have on the size of the Russian television advertising market in 2009 and
the split of advertising sales between the national and local markets,
reflect the Company's current expectations concerning future results and
events. These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of CTC Media to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. The potential risks and uncertainties that could
cause actual future results to differ from those expressed by forward-looking
statements include, among others, continued depreciation of the value of the
Russian ruble compared to the US dollar, changes in the size of the Russian
television advertising market, particularly in light of the current economic
instability in Russia and globally; the Company's ability to deliver audience
share, particularly in primetime, to its advertisers; free-to-air television
remaining a significant advertising forum in Russia; the Company's reliance
on a single television advertising sales house for substantially all of its
revenues; and restrictions on foreign involvement in the Russian television
business. These and other risks are described in the "Risk Factors" section
of CTC Media's quarterly report on Form 10-Q filed with the SEC on August 6,
2009. Other unknown or unpredictable factors could have material adverse
effects on CTC Media's future results, performance or achievements. In light
of these risks, uncertainties, assumptions and factors, the forward-looking
events discussed herein may not occur. You are cautioned not to place undue
reliance on these forward-looking statements. CTC Media does not undertake
any obligation to publicly update or revise any forward-looking statements
because of new information, future events or otherwise.
CTC MEDIA, INC, AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (LOSS)
(in thousands of US dollars, except share and per share data)
Three months ended June Six months ended June
30, 30,
2008 2009 2008 2009
REVENUES:
Advertising $ 165,720 $ 108,540 $ 300,776 $ 207,761
Sublicensing and own
production revenue 6,374 5,017 7,452 9,892
Other revenue 676 337 1,288 1,019
Total operating
revenues 172,770 113,894 309,516 218,672
EXPENSES:
Direct operating
expenses (exclusive
of amortization of
programming rights
and sublicensing
rights, shown below,
exclusive of
depreciation and
amortization of
$2,615 and $2,020
for the three months
and $4,033 and
$4,071 for the six
months ended June
30, 2008 and 2009
respectively; and
inclusive of
stock-based
compensation of $213
and $89 for the
three months and
$426 and $302 for
the six months ended
June 30, 2008 and
2009, respectively) (10,206) (7,635) (16,996) (14,982)
Selling, general and
administrative
(exclusive of
depreciation and
amortization of $790
and $660 for the
three months and
$1,576 and $1,190
for the six months
ended June 30, 2008
and 2009,
respectively;
inclusive of
stock-based
compensation of
$3,146 and $3,853
for the three months
and $6,292 and
$7,930 for the six
months ended June
30, 2008 and 2009,
respectively) (22,897) (16,928) (41,971) (35,250)
Amortization of
programming rights (61,799) (41,415) (116,222) (78,298)
Amortization of
sublicensing rights
and own production
cost (4,428) (1,407) (5,651) (4,469)
Depreciation and
amortization
(exclusive of
amortization of
programming rights
and sublicensing
rights) (3,405) (2,680) (5,609) (5,261)
Total operating
expenses (102,735) (70,065) (186,449) (138,260)
OPERATING INCOME 70,035 43,829 123,067 80,412
FOREIGN CURRENCY
GAINS (LOSSES) 1,528 (703) 2,206 (4,736)
INTEREST INCOME 1,175 709 4,967 1,769
INTEREST EXPENSE (2,253) (2,260) (2,259) (4,414)
OTHER NON-OPERATING
INCOME (LOSSES), net (184) 92 (99) (128)
EQUITY IN INCOME OF
INVESTEE COMPANIES 452 158 745 235
Income before income
tax 70,753 41,825 128,627 73,138
INCOME TAX EXPENSE (21,140) (10,978) (36,230) (19,477)
CONSOLIDATED NET
INCOME $ 49,613 $ 30,847 $ 92,397 $ 53,661
LESS: INCOME (LOSS)
ATTRIBUTABLE TO
NONCONTROLLING
INTEREST $ (797) $ (512) $ (1,868) $ (14)
NET INCOME
ATTRIBUTABLE TO CTC
MEDIA, Inc. $ 48,816 $ 30,335 $ 90,529 $ 53,647
Net income
attributable to
common stockholders $ 48,816 $ 30,335 $ 90,529 $ 53,647
Net income per share
attributable to CTC
Media, Inc.
stockholders - basic $ 0.32 $ 0.20 $ 0.60 $ 0.35
Net income per share
attributable to CTC
Media, Inc.
stockholders -
diluted $ 0.31 $ 0.19 $ 0.57 $ 0.34
Weighted average
common shares
outstanding
- basic 152,150,644 152,155,213 152,137,810 152,155,213
Weighted average
common shares
outstanding -
diluted 159,111,955 157,577,511 159,168,909 156,942,600
CTC MEDIA, INC, AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of US dollars)
Six months ended June 30,
2008 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income $ 92,397 $ 53,661
Adjustments to reconcile net income
to net cash provided by
operating activities:
Deferred tax benefit (9,224) (3,242)
Depreciation and amortization 5,609 5,261
Amortization of programming rights 116,222 78,298
Amortization of sublicensing rights
and own production cost 5,651 4,469
Stock based compensation expense 6,718 8,231
Equity in income of unconsolidated investees (745) (235)
Foreign currency (gains) losses (2,206) 4,736
Changes in operating assets and liabilities:
Trade accounts receivable (15,933) 1,552
Prepayments 4,328 375
Other assets (5,831) 3,557
Accounts payable and accrued liabilities 1,917 3,155
Deferred revenue (4,936) (8,123)
Other liabilities 10,228 (16,226)
Dividends received from equity investees 985 334
Acquisition of programming and
sublicensing rights (138,311) (85,778)
Net cash provided by operating activities 66,869 50,025
CASH FLOWS FROM INVESTING ACTIVITIES: -
Acquisitions of property and equipment
and intangible assets (6,783) (6,545)
Acquisitions of businesses, net
of cash acquired (313,001) (12,145)
Other (515) -
Net cash used in investing activities (320,299) (18,690)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 1,811 -
Repayments of loans - (33,750)
(Incease) Decrease in restricted cash (10) 111
Dividends paid to noncontrolling interest (3,574) (2,054)
Net cash provided by financing activities (1,773) (35,693)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH (2,034)
EQUIVALENTS 10,602
Net decrease in cash and cash equivalents (244,601) (6,392)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 307,073 98,055
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 62,472 $ 91,663
CTC MEDIA, INC, AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of US dollars, except share and per share data)
December
31, June 30,
2008 2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 98,055 $ 91,663
Trade accounts receivable, net of allowance for
doubtful accounts (December 31, 2008 - $1,355; June
30, 2009 - $1,297) 33,670 29,649
Taxes reclaimable 8,171 8,986
Prepayments 29,005 21,306
Programming rights, net 71,976 66,952
Deferred tax assets 14,166 18,052
Other current assets 7,720 5,799
TOTAL CURRENT ASSETS 262,763 242,407
RESTRICTED CASH 210 99
PROPERTY AND EQUIPMENT, net 22,722 20,195
INTANGIBLE ASSETS, net:
Broadcasting Licenses 166,173 156,128
Cable Network Connection 25,205 26,281
Trade names 17,587 16,426
Network affiliation agreements 9,214 7,634
Other intangible assets 1,244 785
Net intangible assets 219,423 207,254
GOODWILL 223,027 207,906
PROGRAMMING RIGHTS, net 48,031 59,200
SUBLICENSING RIGHTS, net 1,221 383
INVESTMENTS IN AND ADVANCES TO INVESTEES 5,311 4,864
PREPAYMENTS 6,238 3,013
DEFERRED TAX ASSET 15,154 16,604
OTHER NON-CURRENT ASSETS 2,729 5,417
TOTAL ASSETS $ 806,829 $ 767,342
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 41,025 43,490
Accrued liabilities 41,573 29,084
Taxes payable 30,154 12,495
Short-term loans and interest accrued 62,165 56,551
Deferred revenue 14,683 2,992
Deferred tax liability 2,778 2,874
TOTAL CURRENT LIABILITIES 192,378 147,486
LONG-TERM LOANS 28,438 178
DEFERRED TAX LIABILITY 38,943 34,787
COMMITMENTS AND CONTINGENCIES (Note 9) - -
STOCKHOLDERS' EQUITY:
Common stock; $0.01 par value; shares authorized
175,772,173;
shares issued and outstanding December 31, 2008 and
June 30, 2009 - 152,155,213) 1,522 1,522
Additional paid-in capital 365,362 373,594
Retained earnings 232,321 285,968
Accumulated other comprehensive loss (54,615) (76,591)
Non-controlling interest 2,481 398
TOTAL STOCKHOLDERS' EQUITY 547,070 584,891
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 806,829 $ 767,342
CTC MEDIA, INC. AND SUBSIDIARIES
UNAUDITED SEGMENT FINANCIAL INFORMATION
(in thousands of US dollars)
Three months ended June 30, 2008
Operating
revenue
from Operating Depreciation
external Intersegment income/ and
customers revenue (loss) amortization OIBDA
CTC Network $109,863 $3,427 $53,621 $(265) $53,886
Domashny Network 16,211 - 3,200 (173) 3,373
DTV Network 12,220 - 5,626 (275) 5,901
CTC Television 26,394 514 18,894 (529) 19,423
Station Group
Domashny
Television
Station Group 4,366 275 94 (658) 752
DTV Television
Station Group 1,804 53 (631) (713) 82
CIS Group 1,722 - (1,505) (222) (1,283)
Production Group 190 14,640 663 (38) 701
Corporate Office - - (8,533) (530) (8,003)
Business segment
results $172,770 $18,909 $71,429 $(3,403) $74,832
Eliminations and
other - (18,909) (1,394) (2) (1,392)
Consolidated
operating income $172,770 - $70,035 $(3,405) $73,440
Three months ended June 30, 2009
Operating
revenue
from Operating Depreciation
external Intersegment income/ and
customers revenue (loss) amortization OIBDA
CTC Network $71,655 $901 $35,392 $(93) $35,485
Domashny
Network 10,884 7 2,552 (72) 2,624
DTV Network 9,183 - 3,446 (623) 4,069
CTC Television
Station Group 15,873 330 10,353 (453) 10,806
Domashny
Television
Station Group 2,217 316 366 (318) 684
DTV Television
Station Group 1,015 50 (765) (813) 48
CIS Group 2,836 - (354) (209) (145)
Production
Group 231 14,290 1,328 (7) 1,335
Corporate
Office - - (7,221) (92) (7,130)
Business
segment
results $113,894 $15,894 $45,097 $(2,680) $47,776
Eliminations
and other - (15,894) (1,268) - (1,267)
Consolidated
operating
income $113,894 - $43,829 $(2,680) $46,509
CTC MEDIA, INC. AND SUBSIDIARIES
UNAUDITED SEGMENT FINANCIAL INFORMATION (continued)
(in thousands of US dollars)
Six months ended June 30, 2008
Operating
revenue
from Operating Depreciation
external Intersegment income/ and
customers revenue (loss) amortization OIBDA
CTC Network $207,694 $3,625 $99,157 $(509) $99,666
Domashny Network 31,678 - 7,734 (345) 8,079
DTV Network 12,220 - 5,626 (275) 5,901
CTC Television
Station Group 45,993 930 29,527 (1,030) 30,557
Domashny
Television
Station Group 7,565 525 37 (1,283) 1,320
DTV Television
Station Group 1,804 53 (631) (713) 82
CIS Group 2,372 - (1,873) (353) (1,520)
Production Group 190 14,640 663 (38) 701
Corporate Office - - (15,736) (1,062) (14,674)
Business segment
results $309,516 $19,773 $124,504 $(5,608) $130,112
Eliminations and
other - (19,773) (1,437) (2) (1,436)
Consolidated
operating income $309,516 - $123,067 $(5,609) $128,676
Six months ended June 30, 2009
Operating
revenue
from Operating Depreciation
external Intersegment income/ and
customers revenue (loss) amortization OIBDA
CTC Network $142,210 $1,684 $69,693 $(224) $69,917
Domashny Network 21,450 11 5,936 (185) 6,121
DTV Network 17,850 - 7,167 (1,215) 8,382
CTC Television
Station Group 26,127 606 15,622 (868) 16,490
Domashny
Television
Station Group 3,957 610 443 (629) 1,072
DTV Television
Station Group 1,789 77 (1,960) (1,534) (426)
CIS Group 4,880 - (1,716) (431) (1,285)
Production Group 409 20,168 1,591 (19) 1,610
Corporate Office - - (15,077) (156) (14,921)
Business segment
results $218,672 $23,156 $81,699 $(5,261) $86,960
Eliminations and
other - (23,156) (1,287) (0) (1,287)
Consolidated
operating income $218,672 - $80,412 $(5,261) $85,673
CTC MEDIA, INC. AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED OIBDA TO
CONSOLIDATED OPERATING INCOME
(in thousands of US dollars)
Three months ended Six months ended
June 30, June 30,
2008 2009 2008 2009
OIBDA $73,440 $46,509 $128,676 $85,673
Depreciation and amortization
(exclusive of amortization of
programming rights and sublicensing
rights) (3,405) (2,680) (5,609) (5,261)
Operating income $70,035 $43,829 $123,067 $80,412
CTC MEDIA, INC. AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED OIBDA MARGIN TO
CONSOLIDATED OPERATING INCOME MARGIN
Three months ended Six months ended
June 30, June 30,
2008 2009 2008 2009
OIBDA margin 42.5% 40.8% 41.6% 39.2%
Depreciation and amortization
(exclusive of amortization of
programming rights and sublicensing
rights) as a percentage of total
operating revenues (2.0%) (2.4%) (1.8%) (2.4%)
Operating income margin 40.5% 38.4% 39.8% 36.8%
CTC MEDIA, INC. AND SUBSIDIARIES
RECONCILIATION OF SEGMENT OIBDA TO SEGMENT OPERATING INCOME
(in thousands of US dollars)
Three Months Ended June 30, 2008
Depreciation and
amortization
(exclusive of
amortization of
OIBDA programming rights, Operating
sublicensing rights income
and own production
cost)
CTC Network $53,886 $(265) $53,621
Domashny Network 3,373 (173) 3,200
DTV Network 5,901 (275) 5,626
CTC Television Station Group 19,423 (529) 18,894
Domashny Television Station Group 752 (658) 94
DTV Television Station Group 82 (713) (631)
CIS Group (1,283) (222) (1,505)
Production Group 701 (38) 663
Corporate (8,003) (530) (8,533)
Business Segment Results $74,832 $(3,403) $71,429
Eliminations and Other (1,392) (2) (1,394)
Consolidated Results $73,440 $(3,405) $70,035
Three Months Ended June 30, 2009
Depreciation and
amortization
(exclusive of
amortization of
OIBDA programming rights, Operating
sublicensing rights income
and own production
cost)
CTC Network $35,485 $(93) $35,392
Domashny Network 2,624 (72) 2,552
DTV Network 4,069 (623) 3,446
CTC Television Station Group 10,806 (453) 10,353
Domashny Television Station Group 684 (318) 366
DTV Television Station Group 48 (813) (765)
CIS Group (145) (209) (354)
Production Group 1,335 (7) 1,328
Corporate (7,130) (91) (7,221)
Business Segment Results $47,776 $(2,679) $45,097
Eliminations and Other (1,267) (1) (1,268)
Consolidated Results $46,509 $(2,680) $43,829
CTC MEDIA, INC. AND SUBSIDIARIES
RECONCILIATION OF SEGMENT OIBDA TO SEGMENT OPERATING INCOME
(Continued)
(in thousands of US dollars)
Six Months Ended June 30, 2008
Depreciation and
amortization
(exclusive of
amortization of
programming rights
and sublicensing Operating
OIBDA rights) income
CTC Network $99,666 $(509) $99,157
Domashny Network 8,079 (345) 7,734
DTV Network 5,901 (275) 5,626
CTC Television Station Group 30,557 (1,030) 29,527
Domashny Television Station 1,320 (1,283) 37
Group
DTV Television Station Group 82 (713) (631)
CIS Group (1,520) (353) (1,873)
Production Group 701 (38) 663
Corporate (14,674) (1,062) (15,736)
Business Segment Results $130,112 $(5,608) $124,504
Eliminations and Other (1,436) (1) (1,437)
Consolidated Results $128,676 $(5,609) $123,067
Six Months Ended June 30, 2009
Depreciation and
amortization
(exclusive of
amortization of Operating
OIBDA programming rights income
and sublicensing
rights)
CTC Network $69,917 $(224) $69,693
Domashny Network 6,121 (185) 5,936
DTV Network 8,382 (1,215) 7,167
CTC Television Station Group 16,490 (868) 15,622
Domashny Television Station 1,072 (629) 443
Group
DTV Television Station Group (426) (1,534) (1,960)
CIS Group (1,285) (431) (1,716)
Production Group 1,610 (19) 1,591
Corporate (14,921) (156) (15,077)
Business Segment Results $86,960 $(5,261) $81,699
Eliminations and Other (1,287) (0) (1,287)
Consolidated Results $85,673 $(5,261) $80,412
(1) OIBDA is defined as operating income before depreciation
and amortization (excluding the amortization of programming rights and
sublicensing rights). OIBDA margin is defined as OIBDA divided by total
operating revenues. Both OIBDA and OIBDA margin are non-GAAP financial
measures. Please see the accompanying financial tables at the end of this
release for a reconciliation of OIBDA to operating income and OIBDA margin to
operating margin.
(2) Segment revenues are shown from external customers only,
net of intercompany revenues of $18.9 million in the second quarter of 2008,
$15.9 million in the second quarter of 2009, $19.8 million in the first six
months of 2008, and $23.2 million in the first six months of 2009, most of
which related to revenues from the Production Group that have been eliminated
in the consolidation of the Company's revenues.
For further information, please visit http://www.ctcmedia.ru or contact:
CTC Media, Inc.
Investor Relations
Ekaterina Ostrova or
Ekaterina Tsukanova
Tel: +7-495-783-3650
ir@ctcmedia.ru
Media Relations
Ekaterina Osadchaya or
Angelika Larionova
Tel: +7-495-785-6333
pr@ctcmedia.ru
