2016 Q3 Earnings call presentation - s2.q4cdn.com€¦ · Q3 2016 EARNINGS CALL PRESENTATION. Cautionary Language 2 This presentation contains forward-looking statements, including

Q3 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 impact of global economicconditions on our markets; the extent to which our liquidity constraints and debt service obligations restrict our business; our success in continuing our initiatives to diversify and enhanceour revenue streams; our ability to make cost-effective investments in our television businesses, including investments in programming; our ability to develop and acquire necessaryprogramming and attract audiences; our ability to refinance our existing indebtedness; changes in the political and regulatory environments where we operate and in the application ofrelevant laws and regulations; our exposure 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 nine months ended September 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 reconciliations 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

Consolidated Results

Operating Income

30

15

0Q3 2015 FX Q3 2015@2016 rates Q3 2016

28.9

(0.5)

28.4

8.4

OIBDA

30

15

0Q3 2015 FX Q3 2015@2016 rates Q3 2016

8.4

(0.2)

8.2

18.0

Net Revenues

150

100

50

0Q3 2015 FX Q3 2015@2016 rates Q3 2016

117.3

(0.2)

117.1126.7

US$ m

US$ m

4

8%

121%

(71)%

OIBDA Margin 7% 7% 14%

For a reconciliation of OIBDA to Operating Income, see Non-GAAP Financial Measures beginning on slide 25.

US$ m

(1) Excluding the reversal of charges in 2015 related to tax audits in Romania,third quarter 2015 results were an operating loss of US$ 1.3 million.

(1)

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

Q3 2016

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%

+9%+5%

+3%+9%

142

158170

175

102111

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

Q3 2016

Q4 2013

Q4 2014

Q4 2015

US$ m

124

141

126

167

193

167

123131

Q1 Q2 Q3

117

Q4

219 216196

129

175

127127

+8%

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%

14%


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 Q3 2016

(31)

3

39

95

110116

122 123129

135145

7

Last Twelve Months (LTM) OIBDA Trend by Quarter

$m @ actual rates


55

50

45

40

35

30

25

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

41 42 43 43 42

3639 39 39 39

Bulgaria60

50

40

30

20

10

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

33 36 34 34 34

26 29 27 27 27

Croatia

60

50

40

30

20

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

38 39 37 38 36

34 35 34 3532

Czech Republic50

40

30

20

10

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

28 29 28 29 30

23 24 23 25 26

Romania

45

40

35

30

25

20

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

3234 33 32 32

3032 31 30 31

Slovakia55

45

35

25

15

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

42 39 4249 52

35 32 32

41 42

Slovenia

All Day Audience Share Prime Time Audience Share 8

Audience Performance Overview

Q3 Revenues by Segment

US$ m

Net Revenues

Q3 2015 Q3 2016

Variance

Actual % Lfl %1

Bulgaria 14.7 13.8 (6.0)% (6.0)%

Croatia 9.9 9.8 (1.2)% (2.2)%

Czech Republic 35.6 39.0 9.7 % 9.7 %

Romania 32.0 37.0 15.5 % 16.6%

Slovak Republic 17.2 17.9 3.7 % 3.9 %

Slovenia 8.6 9.6 11.0 % 11.2 %

Intersegment revenues (0.7) (0.3) NM 2 NM 2

Total net revenues 117.3 126.7 8.0 % 8.2 %

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 September 30, 2016.

9

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 September 30, 2016.See also Non-GAAP Financial Measures beginning on slide 25.

Q3 OIBDA by Segment

US$ mOIBDA

Q3 2015 Q3 2016Variance

Actual% Lfl%¹Bulgaria 2.2 1.9 (12.6)% (12.4)%

Croatia (0.9) (0.5) 43.2 % 43.9 %

Czech Republic 9.5 13.2 39.0 % 39.2 %

Romania 7.0 12.6 81.3 % 83.3 %

Slovak Republic 0.4 (0.4) NM2 NM2

Slovenia (1.6) (0.7) 52.1 % 52.2 %

Eliminations (0.2) 0.0 NM2 NM2

Operations sub-total 16.3 26.1 59.8 % 61.7 %

Central costs (8.0) (8.1) (1.3)% (1.4)%

Total 8.4 18.0 115.7 % 120.7 %

10

Prime Time Audience Share

All Day Audience Share

60

50

40

30

20

10

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

38 39 37 38 36

34 35 34 3532

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: Q3 2016 performance

Q3 2016 Financials

US$ m Q32015

Q32016 % Act % Lfl¹

TV advertising revenues 32.0 34.5 7.7 % 7.7 %

Carriage fee &subscription revenues 1.4 2.6 87.4 % 87.4 %

Other revenues 2.1 1.9 (11.3)% (11.4)%

Net revenues 35.6 39.0 9.7 % 9.7 %

Costs charged inarriving at OIBDA 26.1 25.8 (0.9)% (1.0)%

OIBDA 9.5 13.2 39.0 % 39.2 %

OIBDA Margin 26.7% 33.8% 7.1p.p. 7.2p.p.

Prima Group: 26%

CME Group: 60%

CT Group: 5%

Others: 9%

Market Share TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share

Market Share


Total TV Ad Market

Year-on-Year Change, %

8

6

4

2

0

YTD 2015 YTD 2016

7%

3%

70

65

60

55Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

60%

63%

60%

58%

61%



50

40

30

20

10

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

28 29 28 29 30

23 24 23 25 26


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 Q32015

Q32016 % Act % Lfl¹



Other revenues 0.9 1.1 27.5 % 28.7 %

Net revenues 32.0 37.0 15.5 % 16.6%


OIBDA 7.0 12.6 81.3 % 83.3 %

OIBDA Margin 21.7% 34.1% 12.4 p.p. 12.4 p.p.

12

Romania: Q3 2016 performance

Intact Group: 24%

CME Group: 60%

Prima Group : 2%Others: 6%

TV Ad Market Share (CME Group) YTD 2016 TV Ad Market Share Market Share

Kanal D: 8%

12

10

8

6

4

2

0

YTD 2015 YTD 2016

9%10%

Total TV Ad Market


65

60

55

50Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

57%58%

60% 60% 60%

Audience Performance OverviewQ3 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.2 Number is not meaningful.

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: Q3 2016 performance

US$ m Q32015

Q32016 % Act % Lfl¹



Other revenues 0.9 0.7 (25.0)% (24.9)%

Net revenues 17.2 17.9 3.7 % 3.9 %

Costs charged inarriving at OIBDA 16.8 18.3 8.2 % 8.3 %

OIBDA 0.4 (0.4) NM2 NM2

OIBDA Margin 2.1% (2.1)% NM2 NM2

RTVS: 3%

CME Group: 62%

JOJ Group: 33%


Other: 2%

25

20

15

10

5

0

YTD 2015 YTD 2016

17%

13%

Total TV Ad Market


75

70

65

60

55Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

61%

62%

64%

59%

64%




45

40

35

30

25

20

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

3234 33 32 32

3032 31 30 31

Q3 2016 Financials


Sources: Audience share, GARB (all audience share and leadership data is for the 18-49target group). TV ad market share represents CME’s internal estimates at constant currencyexchange rates.

CME Group: 56%

Bulgaria: Q3 2016 performance

US$ m Q32015

Q32016 % Act % Lfl¹

TV advertising revenues 9.3 8.2 (12.0)% (11.9)%


Other revenues 0.9 0.8 (17.9)% (17.7)%

Net revenues 14.7 13.8 (6.0)% (6.0)%


OIBDA 2.2 1.9 (12.6)% (12.4)%

OIBDA Margin 15.2% 14.1% (1.1) p.p. (1.0) p.p.

Others: 4%

BNT Group: 4%

MTG Group: 36%


14

Total TV Ad Market


65

60

55

50Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

57%

60%

55%

57%

55%




55

50

45

40

35

30

25

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

41 42 43 43 42

3639 39 39 39

YTD 2015 YTD 2016

(2)%

(3)%

Q3 2016 Financials

1

(1)

(3)

(5)


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: Q3 2016 performance

US$ m Q32015

Q32016 % Act % Lfl¹

TV advertising revenues 8.4 8.3 (1.7)% (2.8)%


Other revenues 1.0 0.9 (5.0)% (6.1)%

Net revenues 9.9 9.8 (1.2)% (2.2)%


OIBDA (0.9) (0.5) 43.2 % 43.9 %

OIBDA Margin (9.1)% (5.2)% 3.9 p.p. 3.9 p.p.

HTV Group: 8%

CME Group: 54%

RTL Group: 38%


Total TV Ad Market


2

1

0

YTD 2015 YTD 2016

1% 1%

58

53

48Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

58%

56% 55%

52%

56%




60

50

40

30

20

10

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

3336 34 34 34

2629 27 27 27


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: Q3 2016 performance

US$ m Q32015

Q32016 % Act % Lfl¹

TV advertising revenues 7.0 7.7 11.2% 11.3%

Carriage fee &subscription revenues 1.0 1.2 13.6% 13.6%

Other revenues 0.6 0.7 5.1% 5.3%

Net revenues 8.6 9.6 11.0% 11.2%

Costs charged inarriving at OIBDA 10.2 10.3 1.4% 1.4%

OIBDA (1.6) (0.7) 52.1% 52.2%

OIBDA Margin (18.1)% (7.8)% 10.3 p.p. 10.4 p.p.

CME Group: 74%


Pink SI: 1%

State TV Group: 13%

Planet TV Group: 8%

Other: 4%

8

6

4

2

0

YTD 2015 YTD 2016

4%

6%

Total TV Ad Market


85

80

75

70

65

60Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

70%

80%

73%

78%

70%




55

45

35

25

15

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

4239

42

4952

3532 32

41 42

1 Translated at FX rates as at September 30, 2016.

Debt Maturity Profile and Free Cash Flow

17

Components of free cash flow (US$ m)

Nine months ended September 30, Variance2015 2016OIBDA 67 89 22Change in working capital 50 36 (14)Interest, taxes, and other (23) (67) (44)Net investment in programming (15) (15) 0Cashflow from operations 79 43 (36)Capex (26) (20) 6Free cash flow 53 23 (30)Cash paid for interest (including mandatory cash-pay guarantee fees) 11 41 30Cash paid for guarantee fees previously paid in kind — 28 28Unlevered free cash flow 64 91 27

Maturity Profile as at September 30, 2016(US$ m)1

1,000

800

600

400

200

02016 2017 2018 2019 2020 2021

280

523

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 September 30, 2016.

263

Business Outlook

Based on our view today, for 2016 we expect:

• OIBDA growth of 18% - 20% at constant exchange rates.

• Unlevered free cash flow of $90 - $95 million at actual rates.

Summary of cash payments for interest and guarantee fees:

18

US$ m 2015 actual 2016 estimate

Unlevered free cash flow $74 90 - 95

Cash paid for interest in 2015 (19)

Accrued interest paid at refinancing transaction in April (28)

Cash paid for guarantee fees previously paid in kind (28)

Obligatory cash interest and related guarantee fees in 2016 (27)

Targeted additional guarantee fees to be paid in cash (10)

Free cash flow $55 (3) - 2

$

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.

$

• Guarantee fees due in the fourth quarter of 2016 expected to be paid in kind amount toapproximately $22 million.

• Minimum cash paid for interest and related guarantee fees in 2017 will be approximately $37 million.

Appendix

EARNINGS CALL

19

YTD Revenues by Segment

US$ m

Net Revenues

Nine months ended September 30, Variance

2015 2016 Actual % Lfl %1

Bulgaria 50.9 50.1 (1.5)% (1.4)%

Croatia 38.2 38.0 (0.4)% (1.8)%

Czech Republic 122.7 128.6 4.8 % 3.4 %

Romania 109.6 118.3 7.9 % 9.1%

Slovak Republic 55.0 59.5 8.1 % 8.2 %

Slovenia 35.1 37.3 6.2 % 6.2 %

Intersegment revenues (1.2) (0.8) NM2 NM2

Total net revenues 410.3 430.9 5.0 % 4.8 %

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 September 30, 2016.

20

YTD OIBDA by Segment

US$ mOIBDA

Nine months ended September 30, Variance2015 2016 Actual% Lfl%¹

Bulgaria 8.5 9.0 5.9 % 5.6 %

Croatia 5.9 5.4 (9.1)% (12.4)%

Czech Republic 43.8 46.4 5.8 % 3.6 %

Romania 25.7 45.0 75.0 % 75.1 %

Slovak Republic 3.8 5.2 34.6 % 27.0 %

Slovenia (0.2) 0.2 NM2 NM2

Eliminations (0.3) (0.1) NM2 NM2

Operations sub-total 87.3 111.0 27.2 % 25.3 %

Central costs (20.7) (22.3) (7.7)% (7.5)%

Total 66.6 88.8 33.2 % 30.7 %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 September 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

September 30,Nine months ended

September 30,2015 2016 2015 2016

Net revenues 117.3 126.7 410.3 430.9Content costs 59.0 64.5 203.7 213.7Other operating costs 17.2 17.0 51.6 51.4Depreciation and amortization 9.7 9.6 30.5 28.7Selling, general and administrative costs 2.4 27.2 75.0 77.0Restructuring costs 0.2 — 1.3 —Operating income 28.9 8.4 48.1 60.0Interest expense (44.0) (27.6) (125.9) (106.3)Loss on extinguishment of debt — — — (150.2)Non-operating (expense) / income, net (6.5) 0.4 (22.1) 1.6Credit / (Provision) for income taxes 0.1 (1.0) (3.5) (6.9)Loss from continuing operations (21.5) (19.8) (103.4) (201.8)Loss from discontinued operations, net of tax (0.3) — (0.9) —Net loss (21.8) (19.8) (104.3) (201.8)Net loss attributable to noncontrolling interests 0.3 0.2 0.8 0.4Net loss attributable to CME Ltd. (21.5) (19.6) (103.5) (201.4)

Net loss attributable to CME Ltd. per share (0.18) (0.14) (0.79) (1.42)Please refer to our Form 10-Q for the period ended September 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 September 30, 2016

Current assets 358.3 332.7Non-current assets 1,082.1 1,111.5

Total assets 1,440.4 1,444.2Current liabilities 146.3 196.6Non-current liabilities 974.3 1,111.5

Total liabilities 1,120.6 1,308.1Series B Convertible Redeemable Preferred Stock 241.2 252.5CME Ltd. shareholders' equity / (deficit) 77.3 (117.2)Noncontrolling interests 1.4 0.8Total liabilities and equity 1,440.4 1,444.2

Cash & cash equivalents 61.7 64.2Gross debt 1 (1,107.2) (1,091.2)

Net debt (1,045.5) (1,027.0)

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 September 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 September 30, 2016 for the full financial statements and related notes and disclosures.

US$ mNine months ended September 30,

2015 2016

Net cash generated from continuing operating activities 79.1 42.6

Net cash used in continuing investing activities (26.2) (19.7)

Net cash used in continuing financing activities (27.7) (23.4)

Net cash generated from discontinued operations 4.0 0.7

Impact of exchange rate fluctuations (1.7) 2.4

Net increase in cash and cash equivalents 27.5 2.6

Supplemental disclosure of cash flow information:

Cash paid for interest (includes mandatory cash-pay guarantee fees) 10.7 40.9

Cash paid for guarantee fees previously paid in kind — 27.5

Interest and related guarantee fees paid in kind 43.7 22.3

Accretion on Series B Convertible Redeemable Preferred Stock 12.8 11.3

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 is 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. We believe OIBDA isuseful to investors because it provides a meaningful representation of our performance, as it excludes certain items that do not impacteither our cash flows or the operating results of our operations. OIBDA and unlevered free cash flow are also used as components indetermining management bonuses.

OIBDA includes amortization and impairment of program rights and is calculated 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 2016,the amount of interest and related guarantee fees on our outstanding indebtedness that is paid in cash has increased. Since we expectto use cash generated by the business to pay more interest and related guarantee fees in cash, and these cash payments are reflectedin free cash flow, we think unlevered free cash flow, defined as free cash flow before cash payments for interest and guarantee fees,better illustrates the cash generated by our operations when comparing periods.

For additional information regarding our business segments, see Part 1, Item 1, Note 18, "Segment Data" in our Form 10-Q.

25

26

1 Other items for the three and nine months ended September 30, 2016 reflects the reversal of charges related to tax audits in Romania. Since the charges recorded in the fourth quarter of2014 and the first quarter of 2015 were not included in OIBDA, our subsequent reversal of these charges in the third quarter of 2015 were similarly excluded from OIBDA.

Non-GAAP Financial Measures - Reconciliations

US$ m Three months endedSeptember 30,

Nine months endedSeptember 30,

2015 2016 2015 2016Operating income 28.9 8.4 48.1 60.0

Depreciation of property, plant and equipment 7.0 7.6 20.9 22.5

Amortization of intangible assets 2.7 2.1 9.6 6.2

Other items 1 (30.2) — (12.0) —

OIBDA 8.4 18.0 66.6 88.8

Please refer to our Form 10-Q for the year ended September 30, 2016 for the full financial statements and related notes and disclosures.

US$ m Nine months ended September 30,2015 2016

Net cash generated from continuing operating activities 79.1 42.6Capex additions, net of disposals (26.2) (19.7)Free cash flow 52.9 22.8Cash paid for interest (includes mandatory cash-pay guarantee fees) 10.7 40.9Cash paid for guarantee fees previously paid in kind — 27.5Unlevered free cash flow 63.6 91.2

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 Q3 2016

LTM operating (loss) / income (160.9) (133.5) (97.0) 38.3 35.7 49.5 86.4 94.6 119.6 127.0 106.6

Depreciation of property, plantand equipment

36.0 36.0 36.1 32.8 31.8 30.7 29.7 27.9 28.2 28.9 29.5

Amortization of intangibleassets

14.1 13.7 13.1 12.3 12.6 12.9 12.5 12.3 10.8 9.5 8.9

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 95.4 110.3 116.3 121.7 122.8 128.5 135.3 144.9

Please refer to our Form 10-Q for the period ended September 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 were similarly excluded from OIBDA.

Documents

2016 Q3 Earnings call presentation - s2.q4cdn.com€¦ · Q3 2016 EARNINGS CALL PRESENTATION. Cautionary Language 2 This presentation contains forward-looking statements, including