Central European Media Enterprises Reports Strong Full-Year Revenues and EBITDA

Central European Media Enterprises Reports Strong Full-Year Revenues and EBITDA

- Net Revenues of $1,019.9 million -

- Segment EBITDA of $345.7 million -

- Non-cash impairment charges relating to Bulgaria and Ukraine -

HAMILTON, Bermuda, Feb. 25 /PRNewswire-FirstCall/ -- Central European Media Enterprises Ltd. ("CME" or the "Company") (Nasdaq/Prague Stock Exchange - CETV) today announced financial results for the fourth quarter and full-year ended December 31, 2008.

Net revenues for the year ended December 31, 2008 increased 22% to $1,019.9 million, compared to the year ended December 31, 2007. Operating income decreased $338.3 million to a loss of $(127.8) million as a result of an impairment charge of $336.8 million relating to the Company's Ukraine and Bulgarian operations. Net income from continuing operations decreased $344.8 million to a loss of $(251.8) million, and fully diluted earnings per share in respect of continuing operations decreased $8.18 to a loss of $(5.95). Segment EBITDA(1) for the year ended December 31, 2008 increased 7% to $345.7 million, compared to the year ended December 31, 2007.

Net revenues for the fourth quarter of 2008 decreased 3% to $291.5 million, compared to the fourth quarter of 2007. Operating income for the quarter decreased $378.4 million to a loss of $(279.2) million as a result of the impairment charge. Net income from continuing operations decreased $394.6 million to a loss of $(322.0) million, and fully diluted earnings per share in respect of continuing operations decreased by $9.35 to a loss of $(7.61). Segment EBITDA for the quarter declined 28% to $93.6 million, compared to the fourth quarter of 2007.

Adrian Sarbu, President and Chief Operating Officer of CME, commented: "2008 was an outstanding year for our core stations despite a difficult fourth quarter. I am particularly pleased with the performance of our Czech and Romanian operations which both delivered their best ever results. In Croatia we enjoyed our highest growth yet in audience share and revenues. In an environment where companies all over the world are struggling, we remain leaders in our markets. 2009 will be challenging as we face adverse macroeconomic conditions and reduced visibility across our markets. We have taken aggressive measures to reduce our operating costs and capex and will take steps necessary to maximize our revenues and liquidity. We expect to emerge from the current economic crisis with our leadership positions intact and to return to our path of growth."

(1) Total Segment Data, Segment Net Revenues and Segment EBITDA as used in this press release are all non-US GAAP measures. For further details, including a reconciliation to the most directly comparable US GAAP financial measures, see 'Reconciliation Between Consolidated Statements of Operations and Segment Data (non-US GAAP)' below. We define Segment EBITDA margin as Segment EBITDA expressed as a percentage of Segment Net Revenue.

Consolidated Results for the Three Months Ended December 31, 2008

Consolidated net revenues for the three months ended December 31, 2008 decreased by 3% to $291.5 million from $300.6 million for the three months ended December 31, 2007. Operating income for the quarter was a loss of $(279.2) million compared to income of $99.2 million for the three months ended December 31, 2007. Net income for the quarter was a loss of $(323.3) million compared to income of $73.0 million for the three months ended December 31, 2007. Fully diluted earnings per share for the three months ended December 31, 2008 decreased $9.35 to a loss of $(7.64).

Headline Consolidated Results for the three months ended December 31, 2008 and 2007 were:

                                    CONSOLIDATED RESULTS (Unaudited)                                 For the Three Months Ended December 31,                                                 (US $000's)                                       2008      2007   $ change  % change   Net revenues                    $291,500  $300,552    $(9,052)    (3)%   Operating (loss) / income     $(279,170)   $99,195  $(378,365)     Nm   Net (loss) / income from    continuing operations        $(322,039)   $74,418  $(396,457)     Nm   Net (loss) / income           $(323,289)   $72,991  $(396,280)     Nm   Fully diluted (loss) /    earnings per share from    continuing operations           $(7.61)     $1.74     $(9.35)     Nm   Fully diluted (loss) / earnings    per share                       $(7.64)     $1.71     $(9.35)     Nm      Consolidated Results for the Year Ended December 31, 2008   

Consolidated net revenues for the year ended December 31, 2008 increased by 22% to $1,019.9 million from $838.9 million for the year ended December 31, 2007. Operating income for the year was a loss of $(127.8) million compared to income of $210.5 million for the year ended December 31, 2007. Net income for the year was a loss of $(255.5) million compared to income of $88.6 million for the year ended December 31, 2007. Fully diluted earnings per share decreased from $2.12 to a loss of $(6.04) for the year ended December 31, 2008.

Headline Consolidated Results for the years ended December 31, 2008 and 2007 were:

                                           CONSOLIDATED RESULTS                                       For the Year Ended December 31,                                                 (US $000's)                                       2008      2007   $ change  % change   Net revenues                  $1,019,934  $838,856   $181,078     22%   Operating (loss) / income      $(127,797) $210,456  $(338,253)     Nm   Net (loss) / income from    continuing operations         $(251,759)  $93,048  $(344,807)     Nm   Net (loss) / income            $(255,544)  $88,568  $(344,112)     Nm   Fully diluted (loss) /    earnings per share from    continuing operations            $(5.95)    $2.23     $(8.18)     Nm   Fully diluted (loss) / earnings    per share                        $(6.04)    $2.12     $(8.16)     Nm      Segment Results   

We evaluate the performance of our television operations based on Segment Net Revenues and EBITDA (earnings before interest, taxes, depreciation and amortization).

Segment Results for the Three Months Ended December 31, 2008

For the three months ended December 31, 2008, Total Segment Net Revenues declined 3% to $291.5 million from $300.6 million for the three months ended December 31, 2007. Total Segment EBITDA for the three months ended December 31, 2008 declined 28% to $93.6 million from $129.8 million in the three months ended December 31, 2007. Segment EBITDA margin for the three months ended December 31, 2008 was 32% compared to 43% for the three months ended December 31, 2007.

Our Total Segment Net Revenues, Total Segment EBITDA and Segment EBITDA margin for the three months ended December 31, 2008 and 2007 were:

                                         SEGMENT RESULTS (Unaudited)                                  For the Three Months Ended December 31,                                                 (US $000's)                                       2008      2007   $ change  % change   Segment Net Revenues -    Broadcast Operations           $288,899  $298,996  $(10,097)      (3%)   Segment Net Revenues -    Non-Broadcast Operations         $2,601    $1,556    $1,045       67%   Total Segment Net Revenues      $291,500  $300,552   $(9,052)      (3%)   Segment EBITDA - Broadcast    Operations                      $96,137  $131,248  $(35,111)     (27%)   Segment EBITDA - Non-Broadcast    Operations                      $(2,548)  $(1,481)   $1,067       72%   Total Segment EBITDA             $93,589  $129,767  $(36,178)     (28%)   Segment EBITDA margin                 32%       43%      Segment Results for the Year Ended December 31, 2008   

For the year ended December 31, 2008, Total Segment Net Revenues increased 22% to $1,019.9 million from $838.9 million for the year ended December 31, 2007. Total Segment EBITDA for the year ended December 31, 2008 increased 7% to $345.7 million from $323.5 million in the year ended December 31, 2007. Segment EBITDA margin for the year ended December 31, 2008 was 34% compared to 39% for the year ended December 31, 2007.

Our Total Segment Net Revenues, Total Segment EBITDA and Segment EBITDA margin for the year ended December 31, 2008 and 2007 were:

                                     SEGMENT RESULTS (Unaudited)                                        For the Year Ended December 31,                                                 (US $000's)                                       2008      2007   $ change  % change   Segment Net Revenues -    Broadcast Operations         $1,010,404  $835,232   $175,172      21%   Segment Net Revenues -    Non-Broadcast Operations         $9,530    $3,624     $5,906     163%   Total Segment Net Revenues    $1,019,934  $838,856   $181,078      22%   Segment EBITDA - Broadcast    Operations                     $354,387  $327,330    $27,057       8%   Segment EBITDA - Non-Broadcast    Operations                      $(8,707)  $(3,878)    $4,829     125%   Total Segment EBITDA            $345,680  $323,452    $22,228       7%   Segment EBITDA margin                 34%       39%     

CME will host a teleconference to discuss its fourth quarter and 2008 year-end results on Wednesday, February 25, 2009 at 10:00 a.m. EST (3:00 p.m. GMT and 4:00 p.m. CET). The teleconference will refer to presentation slides, which will be available on CME's website at www.cetv-net.com prior to the call.

To access the teleconference, U.S. and international callers may dial +1 412-317-9250 ten minutes prior to the start time and reference passcode: 9381217. The conference call will be broadcast live via www.cetv-net.com.

A replay of the teleconference will be available for one week following the call and can be accessed by dialing +1 412-317-0088 for U.S. and international callers, passcode: 9381217. A digital audio replay in mp3 format will also be archived on the Company's web site for two weeks following the call.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements, including those relating to our capital needs, business strategy, expectations and intentions. For these statements and all other forward-looking statements, we claim the protection of the safe harbor for forward-looking statements 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 which might not even be anticipated. Future events and actual results, affecting our strategic plan as well as our financial position, results of operations and cash flows, could differ materially from those described in or contemplated by the forward-looking statements. Important factors that contribute to such risks include, but are not limited to: the effect of the credit crisis and economic downturn in our markets as well as in the United States and Western Europe; decreases in television advertising spending and the rate of development of the advertising markets in the countries in which we operate; the impact of any additional investments we make in our Bulgaria, Croatia and Ukraine operations; our effectiveness in implementing our strategic plan for the Studio 1+1 group in Ukraine; our ability to make future investments in television broadcast operations; our ability to develop and implement strategies regarding sales and multi-channel distribution; changes in the political and regulatory environments where we operate and application of relevant laws and regulations; the timely renewals of broadcasting licenses and our ability to obtain additional frequencies and licenses; and our ability to acquire necessary programming and attract audiences. For a more detailed description of these uncertainties and other factors, please see the "Risk Factors" section in CME's Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 25, 2009.

This press release should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2008, which was filed with the Securities and Exchange Commission on February 25, 2009.

We make available, free of charge, on our website at www.cetv-net.com our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

CME is a broadcasting company operating leading networks in seven Central and Eastern European countries with an aggregate population of approximately 97 million people. The company's television stations are located in Bulgaria (TV2 and Ring TV), Croatia (Nova TV), Czech Republic (TV Nova, Nova Cinema and Nova Sport), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro and MTV Romania), Slovakia (TV Markiza and Nova Sport), Slovenia (POP TV and Kanal A) and Ukraine (Studio 1+1, Studio 1+1 International and Kino). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV".

   For additional information, please visit www.cetv-net.com.                           CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.                        CONSOLIDATED STATEMENTS OF OPERATIONS                     (US$ 000's, except share and per share data)                                     (Unaudited)                                           For the Years Ended December 31,                                             2008       2007       2006    Net revenues                        $1,019,934   $838,856   $602,646   Operating costs                        145,210    116,859     89,486   Cost of programming                    438,203    327,230    226,133   Station selling, general and    administrative expenses                90,841     71,315     64,975   Depreciation of station property,    plant & equipment                      51,668     32,653     25,430   Amortization of broadcast    licenses and other intangibles         35,381     24,970     18,799   Corporate operating costs (including    the cost of settling our Croatia    litigation of $12.5 million in 2007    and non-cash stock-based compensation    of $6.1 million, $5.7 million and $3.6    million in 2008, 2007 and 2006,    respectively)                          49,676     55,373     34,104   Impairment charge                      336,752          -        748   Operating (loss) / income             (127,797)   210,456    142,971   Interest expense, net                  (58,469)   (49,208)   (37,853)   Foreign currency exchange loss, net    (37,877)   (34,409)   (44,892)   Change in fair value of derivatives      6,360     (3,703)   (12,539)   Other income                             2,620      7,891      3,059   (Loss) / income before provision    for income taxes, minority    interest, equity in income of    unconsolidated affiliates and    discontinued operations              (215,163)   131,027     50,746   Provision for income taxes             (34,525)   (20,822)   (14,952)   (Loss) / income before minority    interest, equity in income of    unconsolidated affiliates and    discontinued operations              (249,688)   110,205     35,794   Minority interest in income of    consolidated subsidiaries              (2,071)   (17,157)   (13,602)   Equity in loss of unconsolidated    affiliates                                  -          -       (730)   Gain on sale of unconsolidated    affiliate                                   -          -      6,179   Net (loss) / income from continuing    operations                           (251,759)    93,048     27,641   Net loss from discontinued    operations                             (3,785)    (4,480)    (7,217)   Net (loss) / income                  $(255,544)   $88,568    $20,424    PER SHARE DATA:   Net (loss) / income per share   Continuing operations - Basic           $(5.95)     $2.25      $0.69   Continuing operations - Diluted          (5.95)      2.23       0.68   Discontinued operations - Basic          (0.09)     (0.11)     (0.18)   Discontinued operations - Diluted        (0.09)     (0.11)     (0.18)   Net (loss) / income - Basic              (6.04)      2.14       0.51   Net (loss) / income - Diluted           $(6.04)     $2.12      $0.50    Weighted average common shares used    in computing per share amounts (000s):   Basic                                   42,328     41,384     40,027   Diluted                                 42,328     41,833     40,600                         CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.                       CONSOLIDATED STATEMENTS OF OPERATIONS                    (US$ 000's, except share and per share data)                                      (Unaudited)                                                   For the Three Months Ended                                                          December 31,                                                      2008           2007    Net revenues                                   $291,500       $300,552   Operating costs                                  36,975         33,873   Cost of programming                             130,978        114,196   Station selling, general and administrative    expenses                                        29,958         22,716   Depreciation of station property, plant &    equipment                                       12,631          9,755   Amortization of broadcast licenses and    other intangibles                                9,319          8,057   Corporate operating costs (including non-cash    stock-based compensation of $0.6 million,    $1.6 million and $1.2 million in 2008, 2007    and 2006, respectively)                         14,057         12,760   Impairment charge                               336,752              -   Operating (loss) / income                      (279,170)        99,195   Interest expense, net                           (16,263)       (10,866)   Foreign currency exchange (loss), net           (32,291)        (5,884)   Change in fair value of derivatives              20,031         (7,200)   Other income                                      1,012          8,638   (Loss) / income before provision for income    taxes, minority interest, equity in income    of unconsolidated affiliates and    discontinued operations                       (306,681)        83,883   Provision for income taxes                      (15,048)        (2,189)   (Loss) / income before minority interest,    equity in income of unconsolidated    affiliates and discontinued operations        (321,729)        81,694   Minority interest in income of consolidated    subsidiaries                                      (310)        (7,276)   Net (loss) / income from continuing    operations                                    (322,039)        74,418   Net loss from discontinued operations            (1,250)        (1,427)   Net (loss) / income                           $(323,289)       $72,991    PER SHARE DATA:   Net (loss) / income per share   Continuing operations - Basic                    $(7.61)         $1.76   Continuing operations - Diluted                   (7.61)          1.74   Discontinued operations - Basic                   (0.03)         (0.03)   Discontinued operations - Diluted                 (0.03)         (0.03)   Net (loss) / income - Basic                       (7.64)          1.73   Net (loss) / income - Diluted                    $(7.64)         $1.71    Weighted average common shares used in    computing per share amounts (000s):   Basic                                            42,337         42,297   Diluted                                          42,337         42,654      Segment Data   

We manage our business on a geographic basis, and review the performance of each business segment using data that reflects 100% of operating and license company results. Our segments are comprised of Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic, Slovenia and our two businesses in Ukraine.

We evaluate the performance of our segments based on Segment EBITDA. Segment Net Revenues and Segment EBITDA include the results of certain entities (primarily our operations in the Slovak Republic) that were not consolidated until January 23, 2006.

Segment EBITDA is determined as segment net income/(loss), which includes costs for program rights amortization costs, before interest, taxes, depreciation and amortization of intangible assets. Items that are not allocated to our business segments for purposes of evaluating their performance, and therefore are not included in Segment EBITDA, include:

   --  expenses presented as corporate operating costs in our consolidated       statements of operations;    --  stock-based compensation charges;    --  foreign currency exchange gains and losses;    --  changes in fair value of derivatives; and    --  certain unusual or infrequent items (e.g., extraordinary gains and       losses, impairments of assets or investments).    We use Segment EBITDA as a component in determining management bonuses.   

Below is a table showing our Segment EBITDA by operation and a reconciliation of these figures to our consolidated results for the years ended December 31, 2008, 2007 and 2006, and for the three months ended December 31, 2008 and 2007:

            Reconciliation between Consolidated Statements of Operations                      and Total Segment Data (non-US GAAP)                                     SEGMENT FINANCIAL INFORMATION                                    For the Years Ended December 31,                                              (US $000's)                       Segment Net Revenues (1)           Segment EBITDA                      2008      2007      2006      2008       2007      2006    Country   Bulgaria (TV2,    RING TV)(2)    $1,263        $-        $-  $(10,185)        $-        $-   Croatia    (NOVA TV)      54,651    37,193    22,310    (5,415)   (13,882)  (14,413)   Czech    Republic(3)   376,546   279,237   208,387   208,655    156,496   100,488   Romania (4)    274,627   215,402   148,616   111,783     93,075    65,860   Slovak Republic    (TV MARKIZA)  132,693   110,539    73,420    50,228     41,532    20,805   Slovenia (POP    TV and    KANAL A)       80,696    69,647    54,534    25,413     22,767    19,842   Ukraine    (STUDIO 1+1)   96,738   125,323    96,413   (32,944)    27,000    29,973   Ukraine (KINO,    CITI)(5)        2,720     1,515       726    (1,855)    (3,536)   (1,795)   Total Segment    Data       $1,019,934  $838,856  $604,406  $345,680   $323,452  $220,760    Reconciliation to Consolidated    Statement of Operations:   Consolidated Net    Revenues / (Loss) /    income before    provision for    income taxes,    minority interest,    equity in income of    unconsolidated    affiliates and    discontinued    operations $1,019,934  $838,856  $602,646 $(215,163)  $131,027   $50,746   Corporate operating    costs (including    the cost of    settling Croatian    litigation of    $12.5 million in    2007 and non-cash    stock-based    compensation of    $6.1 million, $5.7    million and $3.6    million in 2008,    2007 and 2006,    respectively)       -         -         -    49,676     55,373    34,104   Impairment charge    -         -         -   336,752          -       748   Unconsolidated    Equity    Affiliates(6)       -         -     1,760         -          -    (1,292)   Depreciation of    station assets      -         -         -    51,668     32,653    25,430   Amortization of    broadcast licenses    and other    intangibles         -         -         -    35,381     24,970    18,799   Interest expense,    net                 -         -         -    58,469     49,208    37,853   Foreign currency    exchange loss,    net                 -         -         -    37,877     34,409    44,892   Change in fair    value of    derivatives         -         -         -    (6,360)     3,703    12,539   Other income         -         -         -    (2,620)    (7,891)   (3,059)   Total Segment    Data       $1,019,934  $838,856  $604,406  $345,680   $323,452  $220,760    (1) All net revenues are derived from external customers.  There are no   inter-segmental revenues.   (2) We acquired our Bulgaria operations on August 1, 2008.   (3) Czech Republic networks are TV NOVA, NOVA SPORT and NOVA CINEMA,   which was launched in December 2007.   (4) Romanian networks are PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL,   SPORT.RO and MTV.   (5) We acquired our Ukraine (KINO, CITI) operations in January 2006 and   ceased operating the CITI channel in January 2009.   (6) Our Slovak Republic operations were accounted for as an equity   affiliate until January 23, 2006.                                         SEGMENT FINANCIAL INFORMATION                                  For the Three Months Ended December 31,                                                  (US $000's)                                 Segment Net Revenues(1)   Segment EBITDA                                     2008       2007       2008       2007    Country   Bulgaria (TV2, RING TV)          $800         $-    $(7,084)        $-   Croatia (NOVA TV)             $16,500    $12,492      1,034     (4,082)   Czech Republic(2)             105,816     96,034     62,200     57,245   Romania(3)                     77,508     79,424     29,999     35,922   Slovak Republic (TV MARKIZA)   44,565     41,924     21,268     18,521   Slovenia (POP TV and KANAL A)  22,305     25,338      8,057     10,523   Ukraine (STUDIO 1+1)           23,212     44,965    (21,628)    12,207   Ukraine (KINO, CITI)(4)           794        375       (257)      (569)   Total Segment Data           $291,500   $300,552    $93,589   $129,767    Reconciliation to Consolidated    Statement of Operations:   Consolidated Net Revenues /    (Loss) / income before    provision for income taxes,    minority interest, equity in    income of unconsolidated    affiliates and discontinued    operations                  $291,500   $300,552  $(306,681)   $83,883   Corporate operating costs    (including non-cash    stock-based compensation of    $0.6 million and $1.6    million in 2008 and 2007,    respectively)                     -           -     14,057     12,760   Impairment charge                  -           -    336,752          -   Depreciation of station assets     -           -     12,631      9,755   Amortization of broadcast    licenses and other intangibles    -           -      9,319      8,057   Interest expense, net              -           -     16,263     10,866   Foreign currency exchange    loss, net                         -           -     32,291      5,884   Change in fair value of    derivatives                       -           -    (20,031)     7,200   Other income                       -           -     (1,012)    (8,638)   Total Segment Data          $291,500    $300,552    $93,589   $129,767    (1) All net revenues are derived from external customers.  There are no   inter-segmental revenues.   (2) Czech Republic networks are TV NOVA, NOVA SPORT and NOVA CINEMA,   which was launched in December 2007.   (3) Romanian networks are PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL,   SPORT.RO and MTV.   (4) We acquired our Ukraine (KINO, CITI) operations in January 2006 and   ceased operating the CITI channel in January 2009.  

First Call Analyst:
FCMN Contact:

Source: Central European Media Enterprises Ltd.

CONTACT: Romana Tomasova, Vice President - Corporate Communications,
Central European Media Enterprises, +44 20 7430 5357,
romana.tomasova@cme-net.com

Web Site: http://www.cetv-net.com/

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Profile: International Entertainment