View
1
Download
0
Category
Preview:
Citation preview
Q2 2016EARNINGS CALL PRESENTATION
Cautionary Language
2
This presentation contains forward-looking statements, including those relating to our capital needs, business strategy, expectations and intentions. Statements that use the terms“believe”, “anticipate”, “trend”, “expect”, “plan”, “estimate”, “forecast”, “intend” and similar expressions of a future or forward-looking nature identify forward-looking statements forpurposes of the U.S. federal securities laws or otherwise. For these statements and all other forward-looking statements, we claim the protection of the safe harbor for forward-lookingstatements contained in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of whichmight not even be anticipated. Forward-looking statements reflect our current views with respect to future events and because our business is subject to such risks and uncertainties,actual results, our strategic plan, our financial position, results of operations and cash flows could differ materially from those described in or contemplated by the forward-lookingstatements contained in this presentation.
Important factors that contribute to such risks include, but are not limited to, those factors set forth under "Risk Factors” in our most recent Quarterly Report on Form 10-Q as well asthe following: levels of television advertising spending and the rate of development of the advertising markets in the countries in which we operate; the effect of global economicuncertainty, including the United Kingdom's exit from the European Union and Eurozone instability in our markets and the extent, timing and duration of any recovery; the extent towhich our liquidity constraints and debt service obligations restrict our business; our success in continuing our initiatives to diversify and enhance our revenue streams; our ability tomake cost-effective investments in our television businesses, including investments in programming; our ability to develop and acquire necessary programming and attract audiences;our ability to refinance our existing indebtedness; changes in the political and regulatory environments where we operate and in the application of relevant laws and regulations; ourexposure to additional tax liabilities; and the timely renewal of broadcasting licenses and our ability to obtain additional frequencies and licenses.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in our filings. Fora more detailed description of these uncertainties and other features, please see the “Risk Factors” section in our most recent Quarterly Report on Form 10-Q filed with the U.S. Securitiesand Exchange Commission. Forward-looking statements speak only as of the date on when they were made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Non-GAAP Financial MeasuresWhile CME reports its results in accordance with generally accepted accounting principles in the United States (“GAAP”), this presentation also refers to several non-GAAP financialmeasures, including OIBDA, OIBDA margin, free cash flow and unlevered free cash flow. These non-GAAP financial measures are used in managing the business, and as suchmanagement believes they may provide meaningful information to investors about underlying trends in our business. This presentation also contains references to like-for-like, orconstant currency, percentage movements (“% Lfl”). These reflect the impact of applying the current period average exchange rates to prior period revenues and costs. Given thesignificant movement of the currencies of our markets against the U.S. dollar, we believe that it is useful to provide percentage movements based on like-for-like as well as actual (“%Act”) percentage movements, which includes the effect of foreign exchange. Unless otherwise stated, all percentage increases or decreases in the following presentation refer to year-on-year percentage changes between the three and six months ended June 30, 2016 and 2015.
Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, CME’s reported results prepared in accordance with GAAP. Please see the attachedappendix for a description of non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures.
Management Attending the Call
Michael Del Nin – Co-Chief Executive Officer
Christoph Mainusch – Co-Chief Executive Officer
David Sturgeon – Chief Financial Officer
Daniel Penn – General Counsel
Mark Kobal – Head of Investor Relations
3
OIBDA
75
60
45
30
15
0Q2 2015 FX Q2 2015@2016 rates Q2 2016
46.8 1.1 47.953.6
Operating Income
75
60
45
30
15
0Q2 2015 FX Q2 2015@2016 rates Q2 2016
36.4 0.8 37.243.9
Net Revenues
250
200
150
100
50
0Q2 2015 FX Q2 2015@2016 rates Q2 2016
166.8 3.7 170.5 175.2
Consolidated Results
US$ m
US$ m
4
3%
12% 18%
OIBDA Margin 28% 28% 31%
For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 25.
US$ m
200
150
100
50
0 Q1 2013
Q1 2014
Q1 2015
Q1 2016
Q2 2013
Q2 2014
Q2 2015
Q2 2016
Q3 2013
Q3 2014
Q3 2015
Q4 2013
Q4 2014
Q4 2015
5
Net Revenues Trend by Quarter
Actual Exchange RatesConstant Exchange Rates1
¹ Reflects the impact of applying the most recent quarterly period average exchange rates to the prior period revenues.
Q1 Q2 Q3 Q4
102114
124129
+12%+9%
+4%
+11%+8%
+3%
+10%+5%
+3%+9%
142
158
170 175
102112 117
174
190 196
US$ m
200
150
100
50
0 Q1 2013
Q1 2014
Q1 2015
Q1 2016
Q2 2013
Q2 2014
Q2 2015
Q2 2016
Q3 2013
Q3 2014
Q3 2015
Q4 2013
Q4 2014
Q4 2015
US$ m
124
141
126
167
193
167
123131
Q1 Q2 Q3
117
Q4
219 216196
129
175
6
OIBDA Margin Trend by Quarter
FY
(8)%
14%
20%
2013 2014 2015 2016
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%Q1 Q2 Q3 Q4
(17)%
4%
(27)%
(1)%
(2)%
21%
2%
25%
9%
28%
7%
29%
13%
31%
For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 25.
130
80
30
-20
-70
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
(31)
3
39
95
110116
122 123129
135
7
Last Twelve Months (LTM) OIBDA Trend by Quarter
$m @ actual rates
For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 25.
55
50
45
40
35
30
25
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
4541 42 43 43
4036
39 39 39
Bulgaria60
50
40
30
20
10
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
36 33 36 34 34
28 26 29 27 27
Croatia
60
50
40
30
20
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
4138 39 37 38
3734 35 34 35
Czech Republic50
40
30
20
10
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
3328 29 28 29
2623 24 23 25
Romania
45
40
35
30
25
20
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
32 3234 33 32
30 3032 31 30
Slovakia55
45
35
25
15
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
44 42 39 4249
36 35 32 32
41
Slovenia
All Day Audience Share Prime Time Audience Share 8
Audience Performance Overview
Q2 Revenues by Segment
US$ m
Net Revenues
Q2 2015 Q2 2016
Variance
Actual % Lfl %1
Bulgaria 19.4 20.5 5.3 % 3.4 %
Croatia 16.2 16.6 2.0 % (1.6)%
Czech Republic 52.1 50.9 (2.3)% (5.4)%
Romania 44.0 48.9 11.1 % 10.4%
Slovak Republic 20.2 22.5 11.4 % 9.2 %
Slovenia 15.1 16.1 7.0 % 4.9 %
Intersegment revenues (0.3) (0.3) NM 2 NM 2
Total net revenues 166.8 175.2 5.0 % 2.8 %
¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues.² Number is not meaningful.
The percentage growth figures have been derived from data included in our Form 10-Q for the period ended June 30, 2016.
9
Q2 OIBDA by Segment
US$ mOIBDA
Q2 2015 Q2 2016Variance
Actual% Lfl%¹Bulgaria 4.0 6.0 47.2 % 44.8 %
Croatia 5.0 4.5 (9.5)% (12.7)%
Czech Republic 24.2 23.1 (4.7)% (7.7)%
Romania 15.4 23.0 48.9 % 48.2 %
Slovak Republic 3.6 3.2 (12.9)% (15.1)%
Slovenia 1.0 1.6 68.6 % 66.4 %
Eliminations 0.0 (0.1) Nm2 Nm2
Operations sub-total 53.3 61.2 14.9 % 12.4 %
Central costs (6.5) (7.6) (17.6)% (15.2)%
Total 46.8 53.6 14.6 % 12.1 %¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs.² Number is not meaningful.
The percentage growth figures have been derived from data included in our Form 10-Q for the period ended June 30, 2016.See also Non-GAAP Financial Measures beginning on slide 25.
10
Prime Time Audience Share
All Day Audience Share
60
50
40
30
20
10
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
4138 39 37 38
3734 35 34 35
¹ Like for-Like currency variance reflects the impact of applying the current period averageexchange rates to the prior period revenues and costs.
Sources: Audience share, ATO - Nielsen Admosphere; Mediaresearch (all audience share datais for the 15-54 target group). TV ad market and TV ad market share represents CME’s internalestimates at constant currency exchange rates. 11
Czech Republic: Q2 2016 performance
Q2 2016 Financials
US$ m Q22015
Q22016 % Act % Lfl¹
TV advertising revenues 48.1 46.7 (3.0)% (6.1)%
Carriage fee &subscription revenues 2.0 2.6 29.9 % 25.7 %
Other revenues 2.0 1.6 (19.1)% (21.4)%
Net revenues 52.1 50.9 (2.3)% (5.4)%
Costs charged inarriving at OIBDA 27.9 27.8 (0.3)% (3.5)%
OIBDA 24.2 23.1 (4.7)% (7.7)%
OIBDA Margin 46.5% 45.4% (1.1) p.p. (1.1) p.p.
Prima Group: 27%
CME Group: 59%
CT Group: 5%
Others: 9%
Market Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share
Market Share
Audience Performance Overview
Total TV Ad Market
Year-on-Year Change, %
10
8
6
4
2
0
YTD 2015 YTD 2016
7%
2%
70
65
60
55Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
60% 60%
63%
60%
58%
Prime Time Audience Share
All Day Audience Share
50
40
30
20
10
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
3328 29 28 29
2623 24 23 25
¹ Like for-Like currency variance reflects the impact of applying the current period averageexchange rates to the prior period revenues and costs.
Sources: Audience share, Kantar Media (all audience share and leadership data is for the18-49 Urban target group). TV ad market share represents CME’s internal estimates atconstant currency exchange rates.
US$ m Q22015
Q22016 % Act % Lfl¹
TV advertising revenues 32.9 37.8 14.8 % 14.1 %
Carriage fee &subscription revenues 10.0 10.2 1.7 % 1.2 %
Other revenues 1.1 1.0 (14.3)% (14.9)%
Net revenues 44.0 48.9 11.1 % 10.4%
Costs charged inarriving at OIBDA 28.6 25.9 (9.3)% (9.9)%
OIBDA 15.4 23.0 48.9 % 48.2 %
OIBDA Margin 35.0% 46.9% 11.9 p.p. 11.9 p.p.
12
Romania: Q2 2016 performance
Intact Group: 23%
CME Group: 60%
Prima Group : 2%Others: 6%
TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share Market Share
Kanal D: 9%
20
15
10
5
0
YTD 2015 YTD 2016
12%
7%
Total TV Ad Market
Year-on-Year Change, %
65
60
55
50Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
59%
57%58%
60% 60%
Audience Performance OverviewQ2 2016 Financials
¹ Like for-Like currency variance reflects the impact of applying the current period averageexchange rates to the prior period revenues and costs.
Sources: Audience share, PMT / TNS SK (all audience share and leadership data is forthe 12-54 target group). TV ad market share represents CME’s internal estimates atconstant currency exchange rates. 13
Slovak Republic: Q2 2016 performance
US$ m Q22015
Q22016 % Act % Lfl¹
TV advertising revenues 18.8 21.2 13.1 % 10.8 %
Carriage fee &subscription revenues 0.4 0.6 55.3 % 52.3 %
Other revenues 1.1 0.7 (32.1)% (33.5)%
Net revenues 20.2 22.5 11.4 % 9.2 %
Costs charged inarriving at OIBDA 16.6 19.3 16.7 % 14.5 %
OIBDA 3.6 3.2 (12.9)% (15.1)%
OIBDA Margin 17.9% 14.0% (3.9) p.p. (4.0) p.p.
RTVS: 4%
CME Group: 61%
JOJ Group: 33%
TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share Market Share
Other: 2%
25
20
15
10
5
0
YTD 2015 YTD 2016
12%
20%
Total TV Ad Market
Year-on-Year Change, %
75
70
65
60
55Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
64%
61%
62%
64%
59%
Audience Performance Overview
Prime Time Audience Share
All Day Audience Share
45
40
35
30
25
20
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
32 3234 33 32
30 3032 31 30
Q2 2016 Financials
¹ Like for-Like currency variance reflects the impact of applying the current period averageexchange rates to the prior period revenues and costs.
Sources: Audience share, GARB (all audience share and leadership data is for the 18-49 targetgroup). TV ad market share represents CME’s internal estimates at constant currency exchangerates.
CME Group: 56%
Bulgaria: Q2 2016 performance
US$ m Q22015
Q22016 % Act % Lfl¹
TV advertising revenues 13.9 14.7 5.9 % 3.9 %
Carriage fee &subscription revenues 4.5 4.6 3.8 % 1.9 %
Other revenues 1.1 1.1 4.5 % 2.5 %
Net revenues 19.4 20.5 5.3 % 3.4 %
Costs charged inarriving at OIBDA 15.4 14.5 (5.7)% (7.5)%
OIBDA 4.0 6.0 47.2 % 44.8 %
OIBDA Margin 20.8% 29.1% 8.3 p.p. 8.3 p.p.
Others: 5%
BNT Group: 3%
MTG Group: 36%
TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share Market Share
14
Total TV Ad Market
Year-on-Year Change, %
65
60
55
50Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
58%
57%
60%
55%
57%
Audience Performance Overview
Prime Time Audience Share
All Day Audience Share
55
50
45
40
35
30
25
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
45
41 42 43 43
40
3639 39 39
2
1
0
-1
-2
YTD 2015 YTD 2016
(1)% (1)%
Q2 2016 Financials
Prime Time Audience Share
All Day Audience Share
60
50
40
30
20
10
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
3633
36 34 34
28 2629 27 27
¹ Like for-Like currency variance reflects the impact of applying the current period averageexchange rates to the prior period revenues and costs.
Sources: Audience share, AGB Nielsen Media Research (all audience share and leadershipdata is for the 18-54 target group). TV ad market share represents CME’s internal estimatesat constant currency exchange rates.
15
Croatia: Q2 2016 performance
US$ m Q22015
Q22016 % Act % Lfl¹
TV advertising revenues 14.7 14.7 (0.1)% (3.6)%
Carriage fee &subscription revenues 0.6 0.6 15.0 % 11.3 %
Other revenues 1.0 1.2 25.5 % 21.4 %
Net revenues 16.2 16.6 2.0 % (1.6)%
Costs charged inarriving at OIBDA 11.2 12.1 7.0 % 3.2 %
OIBDA 5.0 4.5 (9.5)% (12.7)%
OIBDA Margin 30.6% 27.2% (3.4) p.p. (3.4) p.p.
HTV Group: 9%
CME Group: 53%
RTL Group: 38%
TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share Market Share
Total TV Ad Market
Year-on-Year Change, %
2
1
0
YTD 2015 YTD 2016
1% 1%
65
60
55
50Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
55%
58%
56% 55%
52%
Audience Performance OverviewQ2 2016 Financials
Prime Time Audience Share
All Day Audience Share
55
45
35
25
15
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
44 4239
42
49
36 3532 32
41
¹ Like for-Like currency variance reflects the impact of applying the current period averageexchange rates to the prior period revenues and costs.
Sources: Audience share, AGB Nielsen Media Research (all audience share and leadershipdata is for 18-54 target group. TV ad market share represents CME’s internal estimates atconstant currency exchange rates.
16
Slovenia: Q2 2016 performance
US$ m Q22015
Q22016 % Act % Lfl¹
TV advertising revenues 13.2 13.9 5.6% 3.6%
Carriage fee &subscription revenues 1.0 1.2 20.6% 18.3%
Other revenues 0.9 1.0 11.6% 9.6%
Net revenues 15.1 16.1 7.0% 4.9%
Costs charged inarriving at OIBDA 14.1 14.5 2.8% 0.7%
OIBDA 1.0 1.6 68.6% 66.4%
OIBDA Margin 6.4% 10.1% 3.7 p.p. 3.7 p.p.
CME Group: 76%
TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share Market Share
Pink SI: 1%
State TV Group: 13%
Planet TV Group: 8%
Other: 2%
6
5
4
3
2
1
0
YTD 2015 YTD 2016
3%
4%
Total TV Ad Market
Year-on-Year Change, %
85
80
75
70
65
60Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
78%
70%
80%
73%
78%
Audience Performance OverviewQ2 2016 Financials
1 Translated at FX rates as at June 30, 2016.
Debt Maturity Profile and Free Cash Flow
17
Components of free cash flow (US$ m)
Six months ended June 30, Variance2015 2016OIBDA 58 71 13Change in working capital 7 6 (1)Interest, taxes, and other (19) (56) (37)Net investment in programming (5) (4) 1Cashflow from operations 42 18 (24)Capex (14) (11) 3Free cash flow 27 6 (21)Cash paid for interest 9 36 27Cash paid for accrued guarantee fees — 20 20Unlevered free cash flow 36 62 26
Maturity Profile as at June 30, 2016(US$ m)1
1,000
800
600
400
200
02016 2017 2018 2019 2020 2021
278
521
2018 Euro Term Loan 2019 Euro Term Loan 2021 Euro Term Loan
See Non-GAAP Financial Measures beginning on slide 25.Amounts in table derived from data included in our Form 10-Q for the period ended June 30, 2016.
261
Business Outlook
Based on our view today, for 2016 we expect:
• OIBDA growth of low to high teens at constant exchange rates
• Unlevered free cash flow of $85 - $95 million at actual ratesSummary of cash payments for interest and guarantee fees:
18
US$ m 2015 actual 2016 estimate
Unlevered free cash flow $74 85-95
Cash paid for interest in 2015 (19)
Accrued interest paid at refinancing transaction in April (28)
Cash paid for accrued guarantee fees (previously paid in kind) (20)
Obligatory cash interest and guarantee fees in 2016 (27)
Targeted additional guarantee fees to be paid in cash (10)-(20)
Free cash flow $55 $0
$
The outlook above does not include the impact of any unanticipated legal proceedings or other actions that may occur from time-to-time due to
management decisions and changing business circumstances.
Appendix
EARNINGS CALL
19
YTD Revenues by Segment
US$ m
Net Revenues
Six months ended June 30, Variance
2015 2016 Actual % Lfl %1
Bulgaria 36.2 36.3 0.3 % 0.4 %
Croatia 28.2 28.2 (0.1)% (1.6)%
Czech Republic 87.1 89.5 2.8 % 0.9 %
Romania 77.6 81.3 4.8 % 6.0%
Slovak Republic 37.8 41.6 10.1 % 10.2 %
Slovenia 26.5 27.8 4.6 % 4.5 %
Intersegment revenues (0.4) (0.5) NM2 NM2
Total net revenues 293.0 304.2 3.8 % 3.4 %
¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues.² Number is not meaningful.
The percentage growth figures have been derived from data included in our Form 10-Q for the period ended June 30, 2016.
20
YTD OIBDA by Segment
US$ mOIBDA
Six months ended June 30, Variance2015 2016 Actual% Lfl%¹
Bulgaria 6.2 7.0 12.5 % 12.0 %
Croatia 6.8 5.9 (13.6)% (16.5)%
Czech Republic 34.3 33.2 (3.4)% (6.0)%
Romania 18.8 32.4 72.7 % 72.1 %
Slovak Republic 3.5 5.6 59.4 % 48.8 %
Slovenia 1.3 0.9 (30.8)% (32.7)%
Eliminations (0.0) (0.1) NM2 NM2
Operations sub-total 71.0 84.9 19.7 % 17.1 %
Central costs (12.7) (14.2) (11.7)% (11.3)%
Total 58.3 70.7 21.4 % 18.4 %¹ Like-for-Like currency variance reflects the impact of applying the current period average exchange rates to the prior period revenues and costs.² Number is not meaningful.
The percentage growth figures have been derived from data included in our Form 10-Q for the period ended June 30, 2016.See also Non-GAAP Financial Measures beginning on slide 25.
21
Summary Consolidated Statements of Operations
22
US$ m (except per share data)Three months ended
June 30,Six months ended
June 30,2015 2016 2015 2016
Net revenues 166.8 175.2 293.0 304.2Content costs 73.4 77.3 144.7 149.3Other operating costs 17.4 17.9 34.5 34.4Depreciation and amortization 10.4 9.7 20.9 19.1Selling, general and administrative costs 28.7 26.4 72.6 49.8Restructuring costs 0.5 — 1.1 —Operating income 36.4 43.9 19.2 51.7Interest expense (41.7) (29.5) (81.9) (78.7)Loss on extinguishment of debt — (150.2) — (150.2)Non-operating (expense) / income, net (2.9) (0.2) (15.6) 1.2Provision for income taxes (3.5) (5.3) (3.6) (6.0)Loss from continuing operations (11.7) (141.2) (81.9) (181.9)Income / (Loss) from discontinued operations, net of tax 2.7 — (0.6) —Net loss (9.0) (141.2) (82.5) (181.9)Net loss attributable to noncontrolling interests 0.3 (0.1) 0.6 0.2Net loss attributable to CME Ltd. (8.7) (141.3) (82.0) (181.8)
Net loss attributable to CME Ltd. per share (0.09) (0.98) (0.62) (1.29)Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures.
Summary Consolidated Balance Sheet
23
US$ m As at December 31, 2015 As at June 30, 2016
Current assets 358.3 333.4Non-current assets 1,082.1 1,088.6
Total assets 1,440.4 1,422.0Current liabilities 146.3 163.2Non-current liabilities 974.3 1,110.3
Total liabilities 1,120.6 1,273.5Series B Convertible Redeemable Preferred Stock 241.2 250.1CME Ltd. shareholders' equity / (deficit) 77.3 (102.7)Noncontrolling interests 1.4 1.0Total liabilities and equity 1,440.4 1,422.0
Cash & cash equivalents 61.7 46.4Gross debt 1 (1,107.2) (1,092.9)
Net debt (1,045.5) (1,046.5)
¹ Gross debt is the full face value of all outstanding debt and related payables.Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures.
Summary Cash Flow
24
Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures.
US$ mSix months ended June 30,
2015 2016
Net cash generated from continuing operating activities 41.5 17.5
Net cash used in continuing investing activities (14.4) (11.3)
Net cash used in continuing financing activities (27.4) (24.0)
Net cash generated from discontinued operations 5.3 0.7
Impact of exchange rate fluctuations (1.3) 1.7
Net increase / (decrease) in cash and cash equivalents 3.7 (15.2)
Supplemental disclosure of cash flow information:
Cash paid for interest 9.3 35.7
Cash paid for guarantee fees — 20.0
Interest paid in kind 43.7 22.3
Accretion on Series B Convertible Redeemable Preferred Stock 8.4 9.0
Non-GAAP Financial Measures
In this presentation we refer to several non-GAAP financial measures, including OIBDA, OIBDA margin, free cash flow and unleveredfree cash flow. We believe that each of these metrics are useful to investors for the reasons outlined below. Non-GAAP financial measuresmay not be comparable to similar measures reported by other companies. Non-GAAP financial measures should be evaluated inconjunction with, and are not a substitute for, US GAAP financial measures.
We evaluate our consolidated results and the performance of our segments based on net revenues and OIBDA (as defined below). Webelieve OIBDA is useful to investors because it provides a meaningful representation of our performance, as it excludes certain itemsthat do not impact either our cash flows or the operating results of our operations. OIBDA and unlevered free cash flow (as definedbelow) are also used as a component in determining management bonuses.
OIBDA includes amortization and impairment of program rights and is determined as operating income / loss before depreciation,amortization of intangible assets and impairments of assets and certain unusual or infrequent items that are not considered by our co-CEOs when evaluating our performance. Stock-based compensation and certain other items are not allocated to our segments forpurposes of evaluating their performance and therefore are not included in their respective OIBDA. Our key performance measure ofthe efficiency of our consolidated operations and our segments is OIBDA margin. We define OIBDA margin as the ratio of OIBDA to netrevenues. Intersegment revenues and profits have been eliminated on consolidation.
We have previously used free cash flow as a measure of the ability of our operations to generate cash. We define free cash flow as cashflows from continuing operating activities less purchases of property, plant and equipment, net of disposals of property, plant and equipmentand excluding the cash impact of certain unusual or infrequent items that are not included in costs charged in arriving at OIBDA becausethey are not considered by our co-CEOs when evaluating performance. Following the refinancing transaction completed in April, theamount of interest and related guarantee fees on our outstanding indebtedness that is paid in cash has increased. Since we expect touse cash generated by the business to pay more interest and related guarantee fees in cash, and these cash payments are reflected infree cash flow, we think unlevered free cash flow, defined as free cash flow before cash payments for interest and guarantee fees, betterillustrates the cash generated by our operations when comparing periods.
For additional information regarding our business segments, see Item 1, Note 18, "Segment Data" in our Form 10-Q.
25
26
1Other items for the six months ended June, 2015 reflects accruals that were subsequently reversed related to tax audits then underway in Romania. Since the charges recorded were notincluded in OIBDA, our subsequent reversal of these charges during 2015 were similarly excluded from OIBDA.
Non-GAAP Financial Measures - Reconciliations
US$ m Three months endedJune 30,
Six months endedJune 30,
2015 2016 2015 2016Operating income 36.4 43.9 19.2 51.7
Depreciation of property, plant and equipment 6.9 7.6 13.9 14.9
Amortization of intangible assets 3.4 2.1 6.9 4.2
Other items 1 — — 18.2 —
OIBDA 46.8 53.6 58.3 70.7
Please refer to our Form 10-Q for the year ended June 30, 2016 for the full financial statements and related notes and disclosures.
US$ m Six months ended June 30,2015 2016
Net cash generated from continuing operating activities 41.5 17.5Capex additions, net of disposals (14.4) (11.3)Free cash flow 27.1 6.3Cash paid for interest 9.3 35.7Cash paid for guarantee fees — 20.0Unlevered free cash flow 36.4 62.0
Non-GAAP Financial Measures - Reconciliations
27
Last Twelve Months (LTM)
US$ m Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
LTM operating (loss) / income (160.9) (133.5) (97.0) 38.3 35.7 49.5 86.4 94.6 119.6 127.0
Depreciation of property, plant andequipment
36.0 36.0 36.1 32.8 31.8 30.7 29.7 27.9 28.2 28.9
Amortization of intangible assets 14.1 13.7 13.1 12.3 12.6 12.9 12.5 12.3 10.8 9.5
Other items1 — 6.9 6.9 12.0 30.2 23.3 (6.9) (12.0) (30.2) (30.2)
Impairment charge 79.7 79.7 79.7 — — — — — — —
LTM OIBDA (31.1) 2.8 38.8 95.4 110.3 116.3 121.7 122.8 128.5 135.3
Please refer to our Form 10-Q for the period ended June 30, 2016 for the full financial statements and related notes and disclosures.
1Other items reflects accruals that were subsequently reversed related to tax audits in Romania, and a fine that was later overturned in Slovenia. Since the charges recorded were not included in OIBDA, oursubsequent reversal of these charges during 2015 were similarly excluded from OIBDA.
Recommended