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CTC Media Financial Results for the Third Quarter Ended September 30, 2012



CTC Media Financial Results for the Third Quarter Ended September 30, 2012

MOSCOW, Nov. 7, 2012 (GLOBE NEWSWIRE) -- 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 third quarter
ended September 30, 2012.

                      Three Months                  Nine Months          
                      Ended September 30,           Ended September 30,
(US$ 000's except per 2011       2012       Change  2011      2012      Change
share data)
                                                                         
Total operating       $159,578   $162,009   2%      $529,602  $540,713  2%
revenues
Total operating       (133,060)  (206,057)  55%     (405,411) (485,668) 20%
expenses
Total operating
expenses before       (116,217)  (123,554)  6%      (388,568) (403,165) 4%
non-recurring items^1
OIBDA^2               31,298     (39,137)   -225%   137,116   70,096    -49%
OIBDA margin^2        19.6%      -24.2%     -223%   25.9%     13.0%     -50%
Adjusted OIBDA^3      48,141     43,366     -10%    153,959   152,599   -1%
Adjusted OIBDA        30.2%      26.8%      -11%    29.1%     28.2%     -3%
margin^2
Net income
(loss) attributable   16,393     (38,480)   -335%   77,653    28,188    -64%
to CTC Media, Inc.
stockholders
Fully diluted         $0.10      ($0.24)    -340%   $0.49     $0.18     -63%
earnings per share
Adjusted net income
attributable to CTC   29,867     27,522     -8%     91,127    94,190    3%
Media, Inc.
stockholders^3
Adjusted diluted      $0.19      $0.17      -11%    $0.58     $0.60     3%
earnings per share^3
                                                                         
 
^1 Total operating expenses (before non-recurring items) is a non-GAAP
financial measure that excludes a $16.8 million non-recurring charge arising
primarily from the impairment of the PERETZ trade name in the third quarter of
2011 and a $82.5 million non-recurring charge arising from the impairment of
analog broadcasting licenses in the third quarter of 2012. Please see the
accompanying financial tables at the end of this release for a reconciliation
of total operating expenses (before non-recurring items) to GAAP total
operating expenses.
^2 OIBDA is defined as operating income before depreciation and amortization
(excluding 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 income margin.
^3 All adjusted numbers are non-GAAP financial measures reported before the
non-recurring items described above. Please see the accompanying financial
tables at the end of this release for a reconciliation of adjusted OIBDA to
OIBDA, adjusted net income to GAAP reported net income and adjusted diluted
earnings per share to GAAP reported earnings per share.

 THIRD QUARTER FINANCIAL HIGHLIGHTS

  * Total revenues of $162.0 million – up 12% year-on-year in ruble terms
  * Russian advertising revenues up 11% year-on-year in ruble terms
  * Adjusted OIBDA of $43.4 million with an adjusted OIBDA margin of 26.8%
  * Adjusted fully diluted earnings per share of $0.17 (Q3 2011: $0.19)
  * Net cash position^1  of $96.4 million at the end of the period
  * The Board of Directors has declared a cash dividend of $0.13 per share to
    be paid on or about December 28, 2012 to shareholders of record as of
    December 1, 2012.

OPERATING HIGHLIGHTS

  * Nikolay Surikov appointed as CFO in October
  * Natalia Bilan appointed as Head of Story First Production, Natalia
    Korotkova appointed as Head of Domashny Channel and Konstantin Khachaturov
    appointed as Chief Business Support Officer in October
  * Combined Russian national inventory fully sold-out for Q3 and
    approximately 95% sold-out for the full year
  * New logo and on-air identity of CTC Channel launched in September
  * CTC Media content made available on Sony Entertainment Network in
    September
  * Multi-year programming deal signed between Channel 31 in Kazakhstan and
    Warner Bros. in August

Boris Podolsky, Chief Executive Officer of CTC Media, commented: "Our total
operating revenues were up 12% in ruble terms in the third quarter of 2012,
while our Russian advertising sales grew by 11% and in line with the growth in
Russian TV advertising spending. While the market growth was higher in the
third quarter than in the first half of the year, for the full year we
continue to expect up to 10% growth in the TV advertising spending in ruble
terms.

"Our third quarter results were impacted by non-cash impairment charges
related to our analog broadcasting licenses, which were triggered by recent
official announcements of the terms of a tender for a second digital multiplex
and the planned schedule for the switch-off of the analog broadcasting system,
but our underlying profitability remains strong. We delivered a solid adjusted
OIBDA margin of 26.8% in the third quarter and we continue to expect OIBDA
margin at or around 30% for the full year, when adjusted for non-recurring
asset impairment charges recognized in the quarter.

"With successful launches of our Fall schedule premieres, which included
follow-up seasons of our hit "Daddy's Daughters" sitcom and "Boarding School"
series, CTC Network demonstrated strong ratings in weekday prime time in
September. Together with the overall rise in television viewership in Russia,
this enabled us to maintain stable year-on-year inventory in the third
quarter, despite a year-on-year decline in the CTC Network's target audience
share. Our Domashny and Peretz Channels continued to generate higher ratings
year-on-year in Q3, and Peretz's year-on-year advertising sales increase was
almost five times greater than the Russian TV advertising market growth in the
quarter.

"We continue to roll out our CTC Fall schedule and have more first-run shows
in the pipeline to be launched by the end of the year. Our most recently
premiered series, "Kitchen", has already become a major success and was the
most-watched show on Russian television in the 9pm weekday slot among 6-54 and
10-45 year old viewers in the past 2 weeks. In addition to new shows, this
Fall season on the CTC Channel also boasts a revamped logo and on-air
identity.

"Revenues from our CIS operations were up 28% year-on-year in US dollar terms
in the third quarter of 2012, primarily reflecting higher sellout ratios for
Channel 31 in Kazakhstan. CTC-International again almost tripled its sales in
US dollar terms in the third quarter of 2012, as the channel further expanded
its broadcast footprint.

"In line with our long-term strategy, we have continued to invest in our
in-house content production and broader programming acquisitions, as well as
in the build-out of our footprint and online presence. We also distributed
$61.7 million in the first nine months of the year in cash dividends and still
ended the period with net cash of $96.4 million. We also declared a further
dividend of $0.13 per share to be paid in the fourth quarter.

"Looking ahead, our Russian channels are now approximately 95% sold out for
2012 at higher average prices than last year, and negotiations with the
advertisers for 2013 are now in full swing. We have also made the important
strategic decision that all three of our Russian channels – CTC, Domashny and
Peretz – participate in the recently announced tender for slots in the second
multiplex. We believe that presence in the digital TV spectrum will be value
accretive for all three channels in the longer run and will enable us to grow
our market shares, free cash flows and shareholder returns. We also believe
that we have a strong alternative transmission option if one or more of our
channels is not successfully allocated a slot in the second multiplex."

_________________________

^1  Net cash position is defined as cash, cash equivalents and short-term
investments less interest bearing liabilities.

Operating Review

Switch to New Target Audiences from 2013

The Company will switch to the following target audiences for CTC and Peretz
Networks starting from January 1, 2013:  

                                        
                       2012            2013
                       Target Audience Target Audience
                                        
CTC Network            All 6-54        All 10-45
                                        
Peretz Network         All 25-59       All 25-49

Domashny Network's target demographic, "women 25-59", will remain unchanged.

The switch to the new target audiences for CTC and Peretz is a part of the
Company's overall positioning strategy for these channels, reflecting
advertiser demand. The decision to narrow the target audiences primarily
reflects the Company's expectation that it will continue to deliver higher
audience shares and more advertising inventory in the new demographics. 

Share of Viewing

                                       Average Audience Shares (%)
                                       Q3 2011 9M 2011 Q2 2012 Q3 2012 9M 2012
                                                                        
CTC Network (all 6-54)                  9.9     10.8    8.9     8.7     9.6
CTC Network (all 10-45)                 11.0    12.1    10.2    10.1    11.1
Domashny Network (females 25-59)        3.3     3.1     3.8     3.6     3.7
Peretz Network (all 25-59)              1.9     2.0     2.6     2.6     2.6
Peretz Network(all 25-49)               2.0     2.1     2.9     2.9     2.9
Channel 31 (all 6-54)                   17.7    16.0    15.6    15.3    15.1

During the third quarter, the CTC Network maintained its place as the fourth
most-watched broadcaster in Russia in its new target demographic of everyone
between 10 and 45 years old. At the same time, its average audience shares
(both in the current and new target age groups) were down year-on-year,
primarily reflecting a decreased amount of first-run content on air compared
to the third quarter of 2011 as well as increased competition and audience
fragmentation.

While the CTC Network posted a significant year-on-year decline in its average
target audience shares in Q3, the prime time audience shares (both in the
current and new target age groups) remained almost stable year-on-year in the
full quarter, and were up year-on-year in September after the new Fall
schedule was launched.

The Domashny Network's target audience share was up year-on-year in the third
quarter to 3.6% from 3.3%. This year-on-year increase in Domashny's target
audience share was primarily due to the continued strong performance of
programming, including foreign and locally-produced series, such as the
Turkish historical drama "Magnificent Century" and the Russian comedy series
"Masha in Law" (Masha v Zakone).

The Peretz Network's target audience share was up year-on-year in the third
quarter to 2.6% from 1.9%. The year-on-year growth was primarily driven by the
success of the programming schedule introduced following the channel's
repositioning in late 2011, which primarily included locally produced
entertainment shows. The new sketch comedy show "Jokes" (Anekdoty), which
premiered in August 2012, was among the prime-time ratings drivers in the
third quarter.

Channel 31's average target audience share was down year-on-year in the third
quarter to 15.3% from 17.7%, primarily reflecting increased competition from
the state-owned channels which aired the 2012 Summer Olympics.

Revenues

(US$ 000's)              Three Months               Nine Months          
                         Ended September 30,        Ended September 30,
Operating revenues:      2011      2012      Change 2011      2012      Change
                                                                         
Advertising revenue      $154,432  $157,480  2%     $517,482  $521,542  1%
Sublicensing and own     4,068     3,348     -18%   9,527     15,638    64%
production revenue
Other revenue            1,078     1,181     10%    2,593     3,533     36%
Total operating revenues $159,578  $162,009  2%     $529,602  $540,713  2%

Total operating revenues were up 2% year-on-year in the third quarter in US
dollar terms and up 12% in ruble terms. This primarily reflected the growth of
the Russian television advertising market, growth in the target audience
shares for Domashny and Peretz Networks, year-on-year increase in inventory
levels across Russian TV channels, as well as higher sellout for Channel 31 in
Kazakhstan. This was partially offset by lower year-on-year target audience
shares for the CTC Network.

The Company's sublicensing and own-production revenue was down 18%
year-on-year in the third quarter in US dollar terms, primarily as a result of
the timing of sales to broadcasters in Ukraine.

Other revenue was up 10% year-on-year in the third quarter in US dollar terms,
which primarily reflects growth in revenues from CTC-International.

                     Three Months                  Nine Months           
                     Ended September 30,           Ended September 30,
(US$ 000's)          2011       2012       Change  2011       2012      Change
                                                                         
Operating revenues                                                       
by segment^^1:
CTC Network          $94,945    $93,265    -2%     $331,066   $329,495   --
Domashny Network     20,870     20,584     -1%     64,938     64,449    -1%
Peretz Network       13,034     18,249     40%     41,610     51,749    24%
CTC Television       21,234     17,943     -15%    64,453     58,965    -9%
Station Group
Domashny Television  3,435      3,796      11%     10,127     11,731    16%
Station Group
Peretz Television    1,499      1,741      16%     4,380      5,546     27%
Station Group
CIS Group            4,086      5,219      28%     11,978     15,533    30%
Production Group     109        204        87%     175        398       127%
CTC-International    366        1,008      175%    875        2,847     225%
Total operating      $159,578   $162,009   2%      $529,602   $540,713  2%
revenues
                                                                         
^1  Segment revenues are shown from external customers only, net of
intercompany revenues of $8.4 million in the third quarter of 2011, $9.6
million in the third quarter of 2012, $24.5 million in the first nine months
of 2011 and $21.1 million in the first nine months of 2012 that primarily
related to revenues from the Production Group that have been eliminated in the
consolidation of the Company's revenues.

Combined revenues for the CTC, Domashny and Peretz Networks were up 13%
year-on-year in the third quarter in ruble terms, while combined revenues for
the CTC, Domashny and Peretz television station groups were stable
year-on-year in the third quarter. The more positive year-on-year dynamics for
the Company's networks compared with the television station groups primarily
reflect a higher rate of growth in the Russian national TV advertising market
than in the regional TV advertising market. In US dollar terms, the revenue
dynamics were negatively impacted by the depreciation of the Russian ruble
against the US dollar. Russian advertising sales accounted for approximately
94% of third quarter total operating revenues and were up 11% year-on-year in
ruble terms.

The CIS Group, which accounted for 3.2% of revenues in the third quarter of
2012 (Q3 2011: 2.6%), reported a 28% year-on-year increase in sales in US
dollar terms. This primarily reflected the higher sellout for Channel 31 in
Kazakhstan.

Digital Broadcasting Tender

On October 16, 2012, the Russian Federal Service for Supervision in the Sphere
of Telecommunications, Information Technologies and Mass Communications
(Roskomnadzor) announced the terms of a tender for a second digital multiplex.
The results of the tender are to be announced on December 14, 2012.
Governmental authorities have also announced that the existing analog
broadcasting system will be switched off at the end of the rollout period, and
indicated regional deadlines ranging from 2014 to 2017. In light of these
events, the Company has determined that the lives of its analog broadcasting
licenses are no longer indefinite. Accordingly, the Company tested its
broadcasting licenses for impairment as of September 30, 2012, and commenced
amortization from October 1, 2012. As of September 30, 2012, the decrease in
cash flow projections expected from analog broadcasting licenses, due to the
revision of the useful lives of these licenses from indefinite to expected
terms ranging from 2014 to 2017, resulted in impairment losses of $82.5
million.

Expenses

Total operating expenses were up 55% year-on-year in the third quarter in US
dollar terms and up 71% in ruble terms, and were impacted by non-cash
impairment charges totaling $82.5 million related to analog broadcasting
licenses, reflecting the reassessment of their useful lives from indefinite to
finite as result of the planned transition to digital broadcasting (discussed
in more detail above).

Total operating expenses before non-recurring items were up 6% year-on-year in
the third quarter in US dollar terms and up 17% in ruble terms. This primarily
reflected the year-on-year increase in programming amortization costs and
selling, general and administrative expenses. 

                         Three Months               Nine Months          
                         Ended September 30,        Ended September 30,
(US$ 000's)              2011      2012      Change 2011      2012      Change
                                                                         
Operating expenses:                                                      
Direct operating         $11,066   $10,220   -8%    $32,533   $33,411   3%
expenses
Selling, general &       35,808    40,589    13%    116,675   124,860   7%
administrative expenses
Stock-based compensation 756       1,731     129%   15,592    5,352     -66%
expenses
Amortization of          62,836    65,037    4%     209,047   220,187   5%
programming rights
Amortization of
sublicensing rights and  971       1,066     10%    1,796     4,304     140%
own production cost
Depreciation &           4,780     4,911     3%     12,925    15,051    16%
amortization
Total operating expenses
before non-recurring     $116,217  $123,554  6%     $388,568  $403,165  4%
items
Impairment loss          16,843    82,503    390%   16,843    82,503    390%
Total operating expenses $133,060  $206,057  55%    $405,411  $485,668  20%

Direct operating expenses decreased by 8% year-on-year in US dollar terms and
increased by 2% in ruble terms in the third quarter, largely as a result of
increased transmission fees and broadcasting expenses relating to regional
stations acquired after the third quarter of 2011, partially offset by
decreases in salaries and benefits.

Selling, general and administrative expenses were up 13% year-on-year in US
dollar terms and up 25% year-on-year in ruble terms in the third quarter. The
increase was primarily due to an increase in compensation payable to Video
International, increases in advertising and promotion expenses, and higher
payroll costs. Compensation payable to Video International, which is included
in selling, general and administrative expenses, amounted to $17.3 million in
the third quarter of 2012 (Q3 2011: $16.4 million).

Stock-based compensation expenses totaled $1.7 million in the third quarter
(Q3 2011: $0.8 million). The increase in stock-based compensation expense was
principally due to reversals of certain expenses related to performance-based
options and stock appreciation rights that were not expected to vest during
the three months ended September 30, 2011.

Programming expenses were up 4% year-on-year in US dollar terms and up 14% in
ruble terms in the third quarter, which primarily reflected a more expensive
content mix for the CTC and Domashny channels and, to a lesser extent, for
Peretz. Amortization of programming rights at the CTC Channel was up 14%
year-on-year in the third quarter in ruble terms mainly due to increases in
both the volume and cost of foreign content aired during the quarter resulting
from the expiration of certain licenses. Amortization of programming rights at
the Domashny Channel was up 21% year-on-year in the third quarter in ruble
terms, primarily due to more expensive foreign and Russian series and due to
increased volume of Russian series aired during the quarter. Programming costs
at the Peretz Channel were up 15% year-on-year in the third quarter in ruble
terms primarily due to airing more expensive locally produced entertainment
shows and programs during the quarter.

Sublicensing and own production costs were up 10% year-on-year in US dollar
terms and up 21% year-on-year in ruble terms in the third quarter, which was
mainly due to the year-on-year changes in the mix of content sold to
broadcasters in Ukraine, partially offset by the decreased volume of content
sold.

Depreciation and amortization expenses were up 3% year-on-year in US dollar
terms and up 13% year-on-year in ruble terms in the third quarter. The
increase primarily related to the Company's new broadcasting facility in
Moscow.

CTC Media therefore reported consolidated adjusted OIBDA, excluding the
abovementioned impairment losses, of $43.4 million in the third quarter (Q3
2011: $48.1 million). The adjusted OIBDA margin was 26.8% for the quarter (Q3
2011: 30.2%).

Net interest income was $1.6 million in the third quarter of 2012 (Q3 2011:
$1.1 million). The Company reported a foreign currency gain of $1.1 million in
the third quarter of 2012 (Q3 2011 foreign currency loss: $2.1 million),
primarily representing the impact of ruble appreciation on the Company's
dollar-denominated liabilities, partially offset by the impact of ruble
appreciation on the Company's dollar-denominated assets, and losses from its
forward contracts.

Adjusted pre-tax income therefore decreased by 11% year-on-year in US dollar
terms to $41.7 million in the third quarter (Q3 2011: $47.0 million).

CTC Media's adjusted effective tax rate was stable year-on-year at 35% in the
third quarter. Adjusted net income attributable to CTC Media, Inc.
stockholders therefore decreased by 8% year-on-year in US dollar terms to
$27.5 million in the third quarter (Q3 2011: $29.9 million), and adjusted
fully diluted earnings per share decreased to $0.17 (Q3 2011: $0.19).

Cash Flows and Financial Position

The Company's net cash flow from operating activities was stable year-on-year
at $57.0 million for the first nine months of 2012 compared to the same period
of 2011 and reflected the net effect of the decrease in taxed paid and higher
cash expenditure, including acquisition of programming and sublicensing
rights.

Net cash provided by investing activities totaled $26.9 million for the first
nine months of 2012 (net cash used in investing activities for the first nine
months of 2011: $1.9 million). This primarily represented cash received from
deposits in the amount of $39.0 million, partially offset by $9.4 million of
capital expenditures, which mainly related to purchases of cable connections
and leasehold improvements for new office facilities, and $2.7 million paid in
relation to acquisitions of new regional broadcasting stations in Russia.

Cash used in financing activities amounted to $72.0 million for the first nine
months of 2012 (first nine months of 2011: $59.2 million) and included the
payment of $61.7 million in cash dividends to the Company's stockholders, $4.2
million in dividends to minority shareholders of CTC Media's
owned-and-operated stations and net settlement of a $10.8 million bank
overdraft, partially offset by proceeds of $4.6 million received from the
exercise of stock options by a former CEO.

The Company's net cash position (cash and cash equivalents and short-term
investments less interest-bearing liabilities) amounted to $96.4 million at
September 30, 2012, compared to $132.2 million at the end of the third quarter
of 2011 and $124.2 million at the end of the second quarter of 2012.

Dividends

The CTC Media Board of Directors has declared a dividend of $0.13 per share
payable in the fourth quarter, or approximately $20.6 million in total, which
will be paid on or about December 28, 2012 to shareholders of record as at
December 1, 2012. Thus, the total dividend payments in 2012 will be
approximately $80 million, as previously anticipated.

Full Year 2012 Outlook

Approximately 95% of CTC Media's forecast full-year 2012 Russian national
inventory is currently committed, at average prices that are higher than in
2011. The Company expects up to 10% growth in TV advertising spending in
Russia in ruble terms for the full-year 2012.

The Company expects an OIBDA margin for the full year 2012 at or around 30%
(adjusted for non-recurring non-cash asset impairment charges recognized in Q3
2012).

Conference Call

The Company will host a conference call to discuss its 2012 third quarter
financial results today, Wednesday, November 7^th, 2012, at 8:00 a.m. ET (5:00
p.m. Moscow time, 1:00 p.m. London time). To access the conference call,
please dial:

  +1 631 510 7498 (US/International) 
  +44 (0) 1452 555 566 (UK/International) 
  Pass code: 54578772

A live webcast of the conference call will also be available via the investor
relations section of the Company's corporate web site -
www.ctcmedia.ru/investors. The webcast will also be archived on the Company's
web site for two weeks.

About CTC Media, Inc.

CTC Media is a leading independent media company in Russia, with operations
throughout Russia and in a number of other CIS markets. It operates three
free-to-air television networks in Russia – CTC, Domashny and Peretz – as well
as Channel 31 in Kazakhstan and a TV company in Moldova, with a combined
potential audience of over 150 million people. The international pay-TV
version of the CTC channel is available in North America, Europe, North
Africa, the Middle East, Central and South East Asia. CTC Media also has its
own TV content production capabilities through its Story First Production
subsidiary. The Company's common stock is traded on the NASDAQ Global Select
Market under the symbol "CTCM". For more information about CTC Media, please
visit www.ctcmedia.ru.

The CTC Media, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=9587

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, as well as certain adjusted figures described below. 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. 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 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 the Company's intangible assets were acquired in
business acquisitions. The amortization of intangible assets is therefore also
excluded from OIBDA.

Adjusted financial measures. As described above, in the third quarter of 2011,
CTC Media recognized $16.8 million in intangible asset impairment charges
arising primarily from the impairment of the DTV trade name following the
rebranding of that channel to Peretz. In addition, in the third quarter of
2012, CTC Media recognized $82.5 million in impairment charges related to
analog broadcasting licenses reflecting the reassessment of their useful lives
from indefinite to finite as result of the planned transition to digital
broadcasting. CTC Media uses adjusted OIBDA (on a consolidated and segment
basis), adjusted total operating expenses (before non-recurring items),
adjusted operating income, adjusted net income before tax and noncontrolling
interest, adjusted income tax expense, adjusted effective tax rate, adjusted
net income and adjusted diluted earnings per share, each of which has been
adjusted to exclude the non-recurring charges described above, so as to permit
management to assess and compare the operational performance of the business
for the third quarters of 2011 and 2012, and the first nine months of 2011 and
2012, and to facilitate comparisons for future reporting periods.

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
include, among others, statements regarding the introduction of digital
broadcasting in our markets and the results of planned tenders for digital
frequencies, developments in the volume and pricing of television advertising
in the Company's target markets; the Company's anticipated advertising sellout
in 2012; the further development of the Peretz and Domashny channels; the
Company's expected rate of its full year 2012 OIBDA margin; and the Company's
expected increase of its total operating revenues in ruble terms in 2012.
These statements 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, the success of the Company's participation in the tender for the
second digital multiplex, the impact of the introduction of digital
broadcasting on the Company's business models and plans, changes in the size
of the Russian television advertising market; the continued successful
operation of the Company's own internal sales house structure; depreciation of
the value of the Russian ruble compared to the US dollar; 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; 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 annual report on Form 10-K filed with the SEC on February 28, 2012
and its quarterly report on Form 10-Q filed with the SEC on or about the date
hereof.

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 (LOSS)
(in thousands of US dollars, except share and per share data)
 
                               Three months ended      Nine months ended
                               September 30,           September 30,
                               2011        2012        2011        2012
REVENUES:                                                           
Advertising                    $154,432    $157,480    $517,482    $521,542
Sublicensing and own           4,068       3,348       9,527       15,638
production revenue
Other revenue                  1,078       1,181       2,593       3,533
Total operating revenues       159,578     162,009     529,602     540,713
EXPENSES:                                                           
Direct operating expenses
(exclusive of amortization of
programming rights,
sublicensing rights and own
production cost, shown below;
exclusive of depreciation and
amortization of $3,876 and
$4,215 for the three months
and $10,355 and $12,424 for     (11,066)    (10,220)    (32,533)    (33,411)
the nine months ended
September 30, 2011 and 2012,
respectively; and exclusive of
stock-based compensation
of $806 and $458 for the three
months and $5,242 and $1,270
for the nine months ended
September 30, 2011 and 2012,
respectively)
Selling, general and
administrative (exclusive of
depreciation and amortization
of $904 and $696 for the three
months and $2,570 and $2,627
for the nine months ended
September 30, 2011 and 2012,    (35,808)    (40,589)    (116,675)   (124,860)
respectively; and exclusive of
stock- based compensation of
$(50) and $1,273 for the three
months and $10,350 and $4,082
for the nine months ended
September 30, 2011 and 2012,
respectively)
Stock‑based compensation        (756)       (1,731)     (15,592)    (5,352)
expense
Amortization of programming     (62,836)    (65,037)    (209,047)   (220,187)
rights
Amortization of sublicensing    (971)       (1,066)     (1,796)     (4,304)
rights and own production cost
Depreciation and amortization
(exclusive of amortization of
programming rights,             (4,780)     (4,911)     (12,925)    (15,051)
sublicensing rights and own
production cost)
Impairment loss                 (16,843)    (82,503)    (16,843)    (82,503)
Total operating expenses        (133,060)   (206,057)   (405,411)   (485,668)
OPERATING INCOME/(LOSS)         26,518      (44,048)    124,191     55,045
FOREIGN CURRENCY GAINS          (2,054)     1,115       (307)       1,666
(LOSSES)
INTEREST INCOME                 1,207       1,790       3,946       5,778
INTEREST EXPENSE                (98)        (231)       (361)       (596)
OTHER NON-OPERATING INCOME,     4,425       370         4,645       1,216
net
EQUITY IN INCOME OF INVESTEE    147         223         514         657
COMPANIES
Income (loss) before income     30,145      (40,781)    132,628     63,766
tax
INCOME TAX (EXPENSE)/ BENEFIT   (12,868)    2,000       (51,369)    (33,496)
CONSOLIDATED NET INCOME (LOSS)  $ 17,277    $ (38,781)  $ 81,259    $ 30,270
LESS: (INCOME) LOSS
ATTRIBUTABLE TO NONCONTROLLING  $ (884)     $ 301       $ (3,606)   $ (2,082)
INTEREST
NET INCOME (LOSS) ATTRIBUTABLE
TO CTC MEDIA, INC.              $ 16,393    $ (38,480)  $ 77,653    $ 28,188
STOCKHOLDERS
Net income (loss) per share
attributable to CTC Media,      $ 0.10      $ (0.24)    $ 0.49      $ 0.18
Inc. stockholders—basic
Net income (loss) per share
attributable to CTC Media,      $ 0.10      $ (0.24)    $ 0.49      $ 0.18
Inc. stockholders—diluted
Weighted average common shares 157,306,064 158,160,719 157,192,671 157,939,820
outstanding—basic
Weighted average common shares 157,937,940 158,160,719 158,028,622 158,295,732
outstanding—diluted
Dividends declared per share   $0.22       $0.13       $0.60       $0.39

 
 
CTC MEDIA, INC, AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands of US dollars, except share and per share data)
                                                                  
                                                    December 31, September 30,
                                                    2011         2012
ASSETS                                                            
CURRENT ASSETS:                                                   
Cash and cash equivalents                           $12,331      $24,001
Short-term investments                              117,233      80,148
Trade accounts receivable, net of allowance for
doubtful accounts (December 31, 2011—$977;          21,831       33,017
September 30, 2012—$1,494) 
Taxes reclaimable                                   20,311       31,442
Prepayments                                         57,091       81,887
Programming rights, net                             106,947      132,494
Deferred tax assets                                 20,086       20,609
Other current assets                                1,351        3,691
TOTAL CURRENT ASSETS                                357,181      407,289
PROPERTY AND EQUIPMENT, net                         46,299       45,947
INTANGIBLE ASSETS, net:                                           
Broadcasting licenses                               158,178      84,566
Cable network connections                           28,148       25,907
Trade names                                         5,213        5,493
Network affiliation agreements                      2,120        525
Other intangible assets                             3,197        2,912
Net intangible assets                               196,856      119,403
GOODWILL                                            165,566      173,836
PROGRAMMING RIGHTS, net                             92,134       107,245
INVESTMENTS IN AND ADVANCES TO INVESTEES            5,041        5,151
PREPAYMENTS                                         3,012        2,254
DEFERRED TAX ASSETS                                 26,015       26,044
OTHER NON-CURRENT ASSETS                            997          132
TOTAL ASSETS                                        $893,101     $887,301
LIABILITIES AND STOCKHOLDERS' EQUITY                              
CURRENT LIABILITIES:                                              
Bank overdraft                                       16,941       7,756
Accounts payable                                     69,891       73,746
Accrued liabilities                                  21,393       31,720
Taxes payable                                        31,905       26,210
Deferred revenue                                     7,367        13,857
Deferred tax liabilities                             12,613       12,067
TOTAL CURRENT LIABILITIES                            160,110      165,356
DEFERRED TAX LIABILITIES                             35,783       24,626
COMMITMENTS AND CONTINGENCIES                        —            — 
STOCKHOLDERS' EQUITY:                                             
Common stock ($0.01 par value; shares authorized
175,772,173; shares issued and outstanding           1,573        1,582
December 31, 2011—157,320,070; September 30,
2012—158,160,719) 
Additional paid-in capital                           481,969      490,819
Retained earnings                                    322,184      288,689
Accumulated other comprehensive loss                 (111,754)    (85,015)
Non-controlling interest                             3,236        1,244
TOTAL STOCKHOLDERS' EQUITY                           697,208      697,319
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $893,101     $887,301

 
 
CTC MEDIA, INC, AND SUBSIDIARIES 
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of US dollars)
                                                                     
                                                         Nine months 
                                                         ended September 30,
                                                         2011       2012
CASH FLOWS FROM OPERATING ACTIVITIES:                                
Consolidated net income                                  $81,259    $30,270
Adjustments to reconcile net income to net cash provided             
by operating activities:
Deferred tax benefit                                      (4,938)    (11,354)
Depreciation and amortization                             12,925     15,051
Amortization of programming rights                        209,047    220,187
Amortization of sublicensing rights and own production    1,796      4,304
cost 
Stock based compensation expense                          15,592     5,352
Equity in income of unconsolidated investees              (514)      (657)
Foreign currency losses/(gains)                           307        (1,666)
Impairment loss                                           16,843     82,503
Changes in operating assets and liabilities:                         
Trade accounts receivable                                 10,242     (13,024)
Prepayments                                               (8,727)    (3,594)
Other assets                                              (4,338)    (11,270)
Accounts payable and accrued liabilities                  (5,188)    14,150
Deferred revenue                                          (1,026)    5,994
Other liabilities                                         (12,860)   (7,600)
Dividends received from equity investees                  533        485
Acquisition of programming and sublicensing rights        (253,960)  (272,158)
Net cash provided by operating activities                56,993     56,973
CASH FLOWS FROM INVESTING ACTIVITIES:                                
Acquisitions of property and equipment and intangible     (16,037)   (9,437)
assets 
Acquisitions of businesses, net of cash acquired          (24,476)   (2,683)
Receipts from deposits                                    38,646     39,014
Net cash provided by (used in) investing activities       (1,867)    26,894
CASH FLOWS FROM FINANCING ACTIVITIES:                                
Proceeds from exercise of stock options                   5,352      4,615
Settlement of overdraft                                   —          (10,756)
Dividends paid to stockholders                            (59,714)   (61,683)
Dividends paid to noncontrolling interest                 (4,813)    (4,195)
Net cash used in financing activities                     (59,175)   (72,019)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH          1,332      (178)
EQUIVALENTS 
Net increase/(decrease) in cash and cash equivalents      (2,717)    11,670
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD          59,565     12,331
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $56,848    $24,001

 
 
CTC MEDIA, INC. AND SUBSIDIARIES 
UNAUDITED SEGMENT FINANCIAL INFORMATION 
 (in thousands of US dollars)
                                                                                                                 
             Three months ended September 30, 2011
                                                                           Amortization
             Operating                                        Amortization of                                   OIBDA
             revenue    Intersegment Operating   Depreciation of           sublicensing Impairment              adjusted
             from       revenue      income/     and          programming  rights and   loss        OIBDA       for
             external                (loss)      amortization rights       own                                  impairment
             customers                                                     production                           loss
                                                                           cost
CTC Network   $ 94,945   $ 134        $ 29,139    $ (1,045)    $ (43,338)   $ (919)      --          $ 30,184    $ 30,184
Domashny      20,870     2            3,012       (477)        (11,214)     --           --          3,489       3,489
Network
Peretz        13,034     --           (9,065)     (722)        (5,618)      --           (11,136)    (8,343)     2,793
Network
CTC
Television    21,234     579          10,396      (536)        --           --           (3,533)     10,932      14,465
Station
Group
Domashny
Television    3,435      967          1,053       (506)        --           --           (413)       1,559       1,972
Station
Group
Peretz
Television    1,499      422          (3,181)     (1,233)      --           --           (1,761)     (1,948)     (187)
Station
Group
CIS Group     4,086      --           (671)       (169)        (3,047)      --           --          (502)       (502)
Production    109        6,097        (543)       (12)         --           (6,020)      --          (531)       (531)
Group
Corporate     --         230          (3,693)     (76)         --           --           --          (3,617)     (3,617)
Office
Business
segment       $ 159,212  $ 8,431      $ 26,447    $ (4,776)    $ (63,217)   $ (6,939)    $ (16,843)  $ 31,223    $ 48,066
results
Eliminations  366        (8,431)      71          (4)          381          5,968        --          75          75
and other
Consolidated  $ 159,578  --           $ 26,518    $ (4,780)    $ (62,836)   $ (971)      $ (16,843)  $ 31,298    $ 48,141
results
                                                                                                                 
             Three months ended September 30, 2012
                                                                           Amortization
             Operating                                        Amortization of                                   OIBDA
             revenue    Intersegment Operating   Depreciation of           sublicensing Impairment              adjusted
             from       revenue      income/     and          programming  rights and   loss        OIBDA       for
             external                (loss)      amortization rights       own                                  impairment
             customers                                                     production                           loss
                                                                           cost
CTC Network   $ 93,265   $ 105        $ 24,808    $ (1,246)    $ (44,740)   $ (886)      $ --        $ 26,054    $ 26,054
Domashny      20,584     1            1,879       (331)        (12,285)     (1)          --          2,210       2,210
Network
Peretz        18,249     --           4,744       (723)        (5,853)      --           --          5,467       2,793
Network
CTC
Television    17,943     723          (8,009)     (557)        (91)         --           (19,523)    (7,452)     12,071
Station
Group
Domashny
Television    3,796      982          (15,043)    (730)        (1)          --           (16,224)    (14,313)    1,911
Station
Group
Peretz
Television    1,741      432          (44,681)    (1,151)      --           --           (43,795)    (43,530)    265
Station
Group
CIS Group     5,219      --           (1,850)     (108)        (2,392)      --           (2,961)     (1,742)     1,219
Production    204        7,355        (15)        (3)          (184)        (6,827)      --          (12)        (12)
Group
Corporate     --         --           (5,888)     (48)         --           --           --          (5,640)     (5,640)
Office
Business
segment       $ 161,001  $ 9,598      $ (38,167)  $ (4,849)    $ (65,546)   $ (7,714)    $ (82,503)  $ (38,958)  $ 40,871
results
Eliminations  1,008      (9,598)      (5,881)     (62)         509          6,648        --          (179)       (179)
and other
Consolidated  $ 162,009  $--          $ (44,048)  $ (4,911)    $ (65,037)   $ (1,066)    $ (82,503)  $ (39,137)  $ 43,366
results
                                                                                                                 
                                                                                                                 
             Nine months ended September 30, 2011
                                                                           Amortization
             Operating                                        Amortization of                                   OIBDA
             revenue    Intersegment Operating   Depreciation of           sublicensing Impairment              adjusted
             from       revenue      income/     and          programming  rights and   loss        OIBDA       for
             external                (loss)      amortization rights       own                                  impairment
             customers                                                     production                           loss
                                                                           cost
CTC Network   $ 331,066  $ 390        $ 110,255   $ (2,310)    $ (149,250)  $ (1,851)    --          $ 112,565   $ 112,565
Domashny      64,938     7            10,316      (952)        (33,503)     --           --          11,268      11,268
Network
Peretz        41,610     --           (8,720)     (2,239)      (23,292)     --           (11,136)    (6,481)     4,655
Network
CTC
Television    64,453     1,518        39,082      (1,625)      --           --           (3,533)     40,707      44,240
Station
Group
Domashny
Television    10,127     2,618        3,172       (1,387)      --           --           (413)       4,559       4,972
Station
Group 
Peretz
Television    4,380      1,054        (6,255)     (3,665)      --           --           (1,761)     (2,590)     (829)
Station
Group
CIS Group     11,978     --           310         (441)        (6,752)      --           --          751         751
Production    175        18,904       (849)       (47)         --           (17,484)     --          (802)       (802)
Group
Corporate     --         976          (25,643)    (243)        --           --           --          (25,400)    (25,400)
Office
Business
segment       $ 528,727  $ 25,467     $ 121,668   $ (12,909)   $ (212,797)  $ (19,335)   $ (16,843)  $ 134,577   $ 151,420
results
Eliminations  875        (25,467)     2,523       (16)         3,750        17,539       --          2,539       2,539
and other
Consolidated  $ 529,602  --           $ 124,191   $ (12,925)   $ (209,047)  $ (1,796)    $ (16,843)  $ 137,116   $ 153,959
results
                                                                                                                 
             Nine months ended September 30, 2012
                                                                           Amortization
             Operating                                        Amortization of                                   OIBDA
             revenue    Intersegment Operating   Depreciation of           sublicensing Impairment              adjusted
             from       revenue      income/     and          programming  rights and   loss        OIBDA       for
             external                (loss)      amortization rights       own                                  impairment
             customers                                                     production                           loss
                                                                           cost
CTC Network   $ 329,495  $ 297        $ 93,304    $ (4,000)    $ (156,162)  $ (3,956)    $--         $ 97,304    $ 97,304
Domashny      64,449     13           5,539       (1,026)      (37,346)     (33)         --          6,565       6,565
Network
Peretz        51,749     --           11,801      (2,244)      (19,750)     --           --          14,045      14,045
Network
CTC
Television    58,965     1,738        18,447      (1,571)      (263)        --           (19,523)    20,018      39,541
Station
Group
Domashny
Television    11,731     3,026        (12,002)    (2,154)      (3)          --           (16,224)    (9,848)     6,376
Station
Group 
Peretz
Television    5,546      1,605        (46,250)    (3,542)      (1)          --           (43,795)    (42,708)    1,087
Station
Group
CIS Group     15,533     --           (539)       (331)        (7,988)      --           (2,961)     (208)       2,753
Production    398        14,371       (1,644)     (19)         (207)        (13,521)     --          (1,625)     (1,625)
Group
Corporate     --         --           (9,158)     (94)         --           --           --          (14,704)    (14,704)
Office
Business
segment       $ 537,866  $ 21,050     $ 68,656    $ (14,887)   $ (221,720)  $ (17,510)   $ (82,503)  $ 68,839    $ 151,342
results
Eliminations  2,847      (21,050)     (13,611)    (164)        1,533        13,206       --          1,257       1,257
and other
Consolidated  $ 540,713  $--          $ 55,045    $ (15,051)   $ (220,187)  $ (4,304)    $ (82,503)  $ 70,096    $ 152,599
results

 
 
CTC MEDIA, INC. AND SUBSIDIARIES 
RECONCILIATION OF CONSOLIDATED OIBDA TO 
CONSOLIDATED OPERATING INCOME (LOSS)
                                                                      
                                                                      
                                      Three months ended   Nine months ended 
                                      September 30,        September 30,
(US$ 000's)                           2011     2012        2011      2012
                                                                      
OIBDA                                 $31,298   $ (39,137) $137,116  $70,096
Depreciation and amortization
(exclusive of amortization of          (4,780)  (4,911)     (12,925)  (15,051)
programming rights and sublicensing
rights)
Operating income (loss)               $26,518   $ (44,048) $124,191  $55,045
                                                                      
                                                                      
                                                                      
CTC MEDIA, INC. AND SUBSIDIARIES 
RECONCILIATION OF CONSOLIDATED OIBDA MARGIN TO 
CONSOLIDATED OPERATING INCOME (LOSS) MARGIN
                                                                      
                                      Three months ended   Nine months ended 
                                      September 30,        September 30,
                                      2011     2012        2011      2012
                                                                      
OIBDA margin                          19.6%    -24.2%      25.9%     13.0%
Depreciation and amortization
(exclusive of amortization of
programming rights and sublicensing   -3.0%    -3.0%       -2.5%     -2.8%
rights) as a % of total operating
revenues
Operating income (loss) margin        16.6%    -27.2%      23.4%     10.2%

 
 
CTC MEDIA, INC. AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED ADJUSTED OIBDA AND OTHER ADJUSTED FINANCIAL MEASURES TO 
CONSOLIDATED OIBDA AND OTHER CORRESPONDING CONSOLIDATED GAAP FINANCIAL MEASURES, RESPECTIVELY 
                                                                                      
                                                                        Net income
(US$ 000's                                   Income before              (loss)       Fully
except per             Total     Operating   income tax and Income tax  attributable diluted
share      OIBDA       operating income/     noncontrolling expense     to           earnings
data)                  expenses  (loss)      interest                   CTC Media,   per share
                                                                        Inc.
                                                                        stockholders
                                                                                      
Three
Months
Ended                                                                                 
September
30, 2011
Adjusted
non-US      $ 48,141    $         $ 43,361    $ 46,988       $ (16,237)  $ 29,867     $ 0.19
GAAP                   (116,217)
results
Impact of
impairment  (16,843)    (16,843)  (16,843)    (16,843)       3,369       (13,474)     (0.09)
loss
Results as
reported
(under US
GAAP,
except for  $ 31,298    $         $ 26,518    $ 30,145       $ (12,868)  $ 16,393     $ 0.10
OIBDA                  (133,060)
which is a
non-GAAP
financial
measure)
                                                                                      
Nine
Months
Ended                                                                                 
September
30, 2011
Adjusted
non-US      $ 153,959   $         $ 141,034   $ 149,471      $ (54,738)  $ 91,127     $ 0.58
GAAP                   (388,568)
results
Impact of
impairment  (16,843)    (16,843)  (16,843)    (16,843)       3,369       (13,474)     (0.09)
loss
Results as
reported
(under US
GAAP,
except for              $
OIBDA       $ 137,116  (405,411)  $ 124,191   $ 132,628      $ (51,369)  $ 77,653     $ 0.49
which is a
non-US
GAAP
financial
measure)
                                                                                      
                                                                                      
CTC MEDIA, INC. AND SUBSIDIARIES
RECONCILIATION OF CONSOLIDATED ADJUSTED OIBDA AND OTHER ADJUSTED FINANCIAL MEASURES TO
CONSOLIDATED OIBDA AND OTHER CORRESPONDING CONSOLIDATED GAAP FINANCIAL MEASURES, RESPECTIVELY
 
                                                                        Net income
(US$ 000's                                   Income before              (loss)       Fully
except per             Total     Operating   income tax and Income tax  attributable diluted
share      OIBDA       operating income/     noncontrolling expense     to           earnings
data)                  expenses  (loss)      interest                   CTC Media,   per
                                                                        Inc.         share
                                                                        stockholders
                                                                                      
Three
Months
Ended                                                                                 
September
30, 2012
Adjusted
non-US      $ 43,366    $         $ 38,455    $ 41,722       $ (14,501)  $ 27,522     $ 0.17
GAAP                   (123,554)
results
Impact of
impairment  (82,503)    (82,503)  (82,503)    (82,503)       16,501      (66,002)     (0.41)
loss
Results as
reported
(under US
GAAP,
except for  $ (39,137)  $         $ (44,048)  $ (40,781)     $ 2,000     $ (38,480)   $ (0.24)
OIBDA                  (206,057)
which is a
non-GAAP
financial
measure)
                                                                                      
Nine
Months
Ended                                                                                 
September
30, 2012
Adjusted
non-US      $ 152,599   $         $ 137,548   $ 146,269      $ (49,997)  $ 94,190     $ 0.60
GAAP                   (403,165)
results
Impact of
impairment  (82,503)    (82,503)  (82,503)    (82,503)       16,501      (66,002)     (0.42)
loss
Results as
reported
(under US
GAAP,
except for              $
OIBDA       $ 70,096   (485,668)  $ 55,045    $ 63,766       $ (33,496)  $ 28,188     $ 0.18
which is a
non-US
GAAP
financial
measure)

 
 
CTC MEDIA, INC. AND SUBSIDIARIES
RECONCILIATION OF SEGMENT OIBDA TO SEGMENT OPERATING INCOME (LOSS)
                                                               
Three months ended September 30,                               
2011
                                                               
                                 Depreciation and
                                 amortization (exclusive of   Operating income
(US$ 000's)          OIBDA       amortization of programming  (loss)
                                 rights and
                                 sublicensing rights)
                                                               
CTC Network           $ 30,184    $ (1,045)                    $ 29,139
Domashny Network      3,489       (477)                        3,012
Peretz Network        (8,343)     (722)                        (9,065)
CTC Television        10,932      (536)                        10,396
Station Group
Domashny Television   1,559       (506)                        1,053
Station Group
Peretz Television     (1,948)     (1,233)                      (3,181)
Station Group
CIS Group             (502)       (169)                        (671)
Production Group      (531)       (12)                         (543)
Corporate Office      (3,617)     (76)                         (3,693)
Business Segment      $ 31,223    $ (4,776)                    $ 26,447
Results
Eliminations and      75          (4)                          71
Other
Consolidated Results  $ 31,298    $ (4,780)                    $ 26,518
                                                               
Three months ended September 30,                               
2012
                                 Depreciation and
                                 amortization (exclusive of   Operating income
(US$ 000's)          OIBDA       amortization of programming  (loss)
                                 rights and
                                 sublicensing rights)
                                                               
CTC Network           $ 26,054    $ (1,246)                    $ 24,808
Domashny Network      2,210       (331)                        1,879
Peretz Network        5,467       (723)                        4,744
CTC Television        (7,452)     (557)                        (8,009)
Station Group
Domashny Television   (14,313)    (730)                        (15,043)
Station Group
Peretz Television     (43,530)    (1,151)                      (44,681)
Station Group
CIS Group             (1,742)     (108)                        (1,850)
Production Group      (12)        (3)                          (15)
Corporate Office      (5,640)     (48)                         (5,688)
Business segment      $ (38,958)  $ (4,897)                    $ (43,855)
results
Eliminations and      (179)       (14)                         (193)
other
Consolidated results  $ (39,137)  $ (4,911)                    $ (44,048)
                                                               
 
Nine months ended September 30,                                
2011
                                                               
                                 Depreciation and
                                 amortization (exclusive of   Operating income
(US$ 000's)          OIBDA       amortization of programming  (loss)
                                 rights and
                                 sublicensing rights)
                                                               
CTC Network           $ 112,565   $ (2,310)                    $ 110,255
Domashny Network      11,268      (952)                        10,316
Peretz Network        (6,481)     (2,239)                      (8,720)
CTC Television        40,707      (1,625)                      39,082
Station Group
Domashny Television   4,559       (1,387)                      3,172
Station Group
Peretz Television     (2,590)     (3,665)                      (6,255)
Station Group
CIS Group             751         (441)                        310
Production Group      (802)       (47)                         (849)
Corporate Office      (25,400)    (243)                        (25,643)
Business Segment      $ 134,577   $ (12,909)                   $ 121,668
Results
Eliminations and      2,539       (16)                         2,523
Other
Consolidated Results  $ 137,116   $ (12,925)                   $ 124,191
                                                               
                                                               
Nine months ended September 30,                                
2012
                                 Depreciation and
                                 amortization (exclusive of   Operating income
(US$ 000's)          OIBDA       amortization of              (loss)
                                 programming rights and
                                 sublicensing rights)
                                                               
CTC Network           $ 97,304    $ (4,000)                    $ 93,304
Domashny Network      6,565       (1,026)                      5,539
Peretz Network        14,045      (2,244)                      11,801
CTC Television        20,018      (1,571)                      18,447
Station Group
Domashny Television   (9,848)     (2,154)                      (12,002)
Station Group
Peretz Television     (42,708)    (3,542)                      (46,250)
Station Group
CIS Group             (208)       (331)                        (539)
Production Group      (1,625)     (19)                         (1,644)
Corporate Office      (14,704)    (142)                        (14,846)
Business segment      $ 68,839    $ (15,029)                   $ 53,810
results
Eliminations and      1,257       (22)                         1,235
other
Consolidated results  $ 70,096    $ (15,051)                   $ 55,045

CONTACT: For further information, please
         visit www.ctcmedia.ru or contact:

         Ekaterina Ostrova
         Director, Corporate Communications and Investor Relations
         + 7 495 783 3650
         ir@ctcmedia.ru
        
         Irina Klimova
         Senior Manager, Investor Relations
         +7 495 981 0740
         ir@ctcmedia.ru
        
         Viktoriya Bakaeva
         Head of Media Relations, Press Secretary
         +7 495 785 6347, ext. 1210
         pr@ctcmedia.ru

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