CTC Media, Inc. Investor Presentation
First Quarter 2013 Results A Leading Independent Broadcaster in Russia From Private TV Network to Public Media Holding
Launch of CTC-international in Germany and the Baltics
Telcrest Investments Limited acquired a 25% stake in СTС Media from Alfa Group
Establishment of Story First CTC Media was content production founded as Story Modern Times Group Initial Public Offering company First Communications became a shareholder on NASDAQ Launch of CTC- of CTC Media international in Launch of Domashniy.ru USA women’s portal
1989 1994 2002 2005 2006 2008 2009 2010 2011 2012
Launch of CTC- international in Launch of CTC Launch of Acquisition of DTV Israel Launch of CTC- Network Domashny Network (rebranded to Peretz international in in 2011) Establishment of Kazakhstan, Kyrgyzstan, CTC Media’s Armenia, Georgia, Acquisition of internal advertising Azerbaijan, Thailand and Channel 31 in sales house uplink to HOT BIRD Kazakhstan and ‘Everest Sales’
launch of CTC Mega CTC and Domashny channel in Moldova Launch of received digital licenses Videomore.ru online content portal 2 We Fully Capture the Value Chain by Being a Vertically Integrated TV Broadcaster
CTC – target audience All 10-45
Domashny – target audience Females 25-59 FREE-TO-AIR ( RUSSIA) Peretz – target audience All 25-49
Kazakhstan Channel 31 FREE-TO-AIR (CIS) Moldova СTС Mega
CONTENT PRODUCTION Free-to-air Story First Production TV ad maket growth1
AD SALES Internal advertising sales house Everest
International version of CTC channel CTC-INTERNATIONAL (PAY-TV)
Various digital projects
DIGITAL MEDIA Online video portal Videomore.ru
Women’s portal Domashniy.ru
3 We Operate in Attractive Markets Russia Kazakhstan Population = 142 million Population = 16.3 million Armenia, Georgia, 2012 TV Ad Market = US$ 4.5 billion* 2012 TV Ad Market = US$ 135.5 million* Azerbaijan Russian-speaking population = 12.3 million Russian-speaking population=10.4 mln Kyrgyzstan Russian-speaking population = 2.5 million Thailand USA Russian-speaking tourists = 1.3 million (2012) Russian-speaking population = 3.5 million Israel Russian-speaking Germany population = 1.5 million Russian-speaking population = 6 million Moldova Since February 2012 Population = 3.6 million CTC-International 2012 TV Ad Market = US$ 16.7 million* is available on the HOT BIRDTM 8 satellite (W/E Europe, North Africa, Middle East and Central Asia Baltic states coverage) Russian-speaking population = 4 million
Sources: Video International, Russian Association of Communications Agencies, ZenithOptimedia, CIA World Factbook, Rosstat, Russkiy Mir Foundation 4 Note: (*) All TV Ad Markets figures are net of VAT We Are the Largest Independent FTA-Broadcaster in Russia with Premium Audiences
Combined audience shares, % (all 10-45 demographic) Maintained 2nd place
23.6
21.7
17.5
15.3
13.1 12.9 12.6 12.1
9.5 8.4
5.7 4.9 4.7 4.1
Q1 2012
Q1 2013
Gazprom-Media СTС Media VGTRK (Rossiya) Channel One National Media Group Prof-Media UTV Russia Holding
Source: TNS Russia 5 Growth Company Operating in a Dynamic Market
6 Digitalization in Russia Is on Its Way
First multiplex Second multiplex Third multiplex
* Terms of tender to be announced in 2013
+ 1public TV channel (to be launched in May 2013) + 1 vacant slot
Available in 7 regions
To be fully rolled-out (98% all-Russia penetration) by 2016
*Expected payment for digital transition in 2013 is 107.8 mln RUB (approximately $3 mln net of VAT) per channel . Fees payable to RTRS for 2014 and beyond will st be calculated on an annual basis according to rates that RTRS will set by October 1 of the prior year and will be impacted by the multiplex infrastructure roll-out. 7 Russian Ad Market Has Significant Potential for Further Development…
Russian TV ad market was #9 in the world Free-to-air TV ad market growth1 and #5 in Europe in 20121…
62.1
298 22.2 257 263
219
15.3 186 bln 12.8 140 129 5.7 117 US $ US 5.2 RUB bln RUB 109 4.7 4.6 4.5 96 95
42
2004 2008 2009 2010 2011 2012 TV Ad Market Total Ad Market …and is expected to become # 5 in the world 1 2 66.3 and #1 in Europe in 2014 Russian TV ad market forecast
22.4
18.2 275 15.2
5.9 5.9 5.3 bln 5.1 190
4.8 bln
US $ US 140 RUB RUB
2012 2015F 2020F
Note: All TV Ad Markets figures are net of VAT 8 Sources: (1) Zenith Optimedia, Company’s estimates (2) Video International …Due to Relatively Low Ad Spend as % of GDP and Underleveraged Consumer
Ad spend as % of GDP¹ Retail and mortgage loans as % of GDP2
1.7 1.6 1.5 1.4
1.2 1.1 1.0 33% 0.9 0.9 1.0 18% 0.9 30% 0.8 0.8 0.7 0.7 0.6 0.6 0.6 0.5 0.5 0.5 0.4 18% 25% 20% 17% 13% 12% 6%
3% 3%
UK
USA
Turkey Russia
Russia
Poland
Austria Poland
Ukraine
Belgium
Bulgaria
Hungary
Slovenia
Germany
Czech RepCzech Kazakhstan
CEE AverageCEE 2008 2012 Retail loans, % of GDP Mortgage loans, % of GDP
Sources: (1) ZenithOptimedia, Company’s estimates (2) Eurostat, National Central Banks, 2012
9 TV Is the Most Attractive Advertising Medium in Russia
FY 2011 cost per thousand in Russia (US$)²
TV is the only medium with truly national reach TV 1.8 Important social and cultural platform More free-to-air networks than in other countries Radio 2.9
High quality free-to-air content offering Internet 4.9
Newspapers 5.4
Magazines 6.0
Ad spend in Russia by media segment1 (%) H1 2011 TV cost per thousand (US$)²
48% 46% 43% Russia 2.1
31% Asia 8.0
Western Europe 9.0 19% 18% 14% 13% Eastern Europe 11.0 6% 4% 1% 0.4% 2% North America 17.0
TV Internet Press Outdoor Radio Other 2004 2012 2020F
Sources: (1) Russian Association of Communication Agencies, Video International (2) Initiative Media 10 Internet Consumption Is Growing…
2012: Russia is #1 in Europe by number of Internet users Increase of time spend online (hours per day)
68.0 67.5 3.1 2.9 2.7 52.7 52.2 2.4 2.3 2.1 36.5 1.7
0.9 0.7 0.5
Russia Germany UK France Turkey China Russia Brazil India USA Japan
Internet users, mln 2009 2015E
2012: Internet Ad market growth in Russia (RUB, bln) 2012: Internet penetration by country
56
84% 83% 78% 42
27 48% 48% 40% 18 15 11 11%
2007 2008 2009 2010 2011 2012 UK Germany US Turkey Russia China India
Sources: ComScore, Boston Consulting Group, Zenith Optimedia, AKAR, Mindshare Interaction, ITU 11 …but Not at the Expense of TV Usage
TV Usage (Minutes per day, All 16+)
249 246 243 243 228 232 226 222
210 169 188 153 TV 142 133 134 170 Radio Internet
Other
58 48 51 47 45 46 44 37 42 13 39 40 Minutesper day 5 5 6 23 2005 2006 2007 2008 2009 2010 2011 2012
Source: TNS Gallup Media, Russia 12 We Continue to Deliver Strong Top and Bottom-line Growth…
280 256 805 247 45% 766 250 730 41% 220 221 680 39% 38% 211 38% 41% 200 37% 574 174 532 35% 32% 32% 32% 150 427
104 273 100 25%
71 26% 26% 27%
181 50 22% 21%
16% 21% 20% 16%
US $ mln $ US US $ mln $ US 0 15% 2004 2005 2006 2007 2008** 2009** 2010 2011** 2012** 2004 2005 2006 2007 2008** 2009** 2010 2011** 2012**
(Comparable-basis) total operating revenues*** OIBDA* OIBDA margin*, % Peers average OIBDA margin****,%
Notes: (*) OIBDA is defined as operating income before depreciation and amortization (exclusive of amortization of programming and sublicensing rights. OIBDA margin is defined as OIBDA divided by total operating revenues. Both OIBDA and OIBDA margin are non-GAAP financial measures (see reconciliations on page 44) (**) 2008 OIBDA and OIBDA margin are adjusted to exclude a $232.7 million charge arising from the impairment of the intangible assets of DTV Group in Russia, Channel 31 in Kazakhstan and a broadcasting group in Moldova; 2009 OIBDA and OIBDA margin are adjusted to exclude an $18.7 million charge arising from the impairment of the broadcasting licenses in Russia and a $28.6 million stock-based compensation expense recognized in conjunction with the previously announced settlement by CTC Media of litigation brought by it against its former CEO; 2011 OIBDA and OIBDA margin are adjusted to exclude a $106.4 million charge arising from the impairment of several regional broadcasting licenses and the Peretz Network goodwill; 2011 OIBDA and OIBDA margin are adjusted to $82.5 million non-recurring charge arising from the impairment of analog broadcasting licenses (see reconciliations on page 42-43) (***) Comparable-basis operating revenues are non-GAAP financial measures provided in order to facilitate period-to-period comparisons of CTC Media’s results following the implementation of the new model of advertising sales starting from 2011 (see reconciliations on page 44) (****) Following companies are included in European peers average OIBDA margin calculations: CME, TVN, S.A. Modern Times Group, Antena3, ITV plc, Metropole Television, Mediaset, ProSiebenSat, Mediaset Espana, TF1 13 …and to Diversify Our Lines of Business
69% 15%
11%
2004 Q1 2013 Sublicensing 2% Channel 31 2% Digital Media 0.5% CTC- International 0.5%
Russian FTA Russian FTA Broadcasting Broadcasting 100% 95%
14 Strategic Focus on Long-Term Growth and Diversification
15
We Have Clear Strategic Priorities
• Build library DISTRIBUTION PLATFORMS: • Enhance existing platforms • Stabilize audience • Develop in-house share production Improve audience • profile
• Invest in ideas
development female portal
• Increase production comedy portal Grow audience volumes • and market shares • Develop distribution
• Create strong brands collaboration (VK, Youtube)
CIS • Be available on all screens Grow audience • and market shares DIVERSIFICATION: CONTENT • iVas on existing platforms
• Games
Up to 20% Expand to markets • • Transmedia branded with Russian- entertainment content
speaking audiences
CONTENT DIGITAL MEDIA DIGITAL
of CTC Media channels’ programming grid
(from ~10% in 2012) BROADCASTING Content is king…. Distribution platform is queen 16 Domashny and Peretz Are Benefiting from Fragmentation of Russian TV Market
Audience shares, all 10-45 demographic Channels’ target demographics, %
3.6 3.2 2.7 2.1 60%
FY 2011 FY 2012 FY 2011 FY 2012
50%
Top 3 state-controlled channels
40%
1st tier channels
30%
2nd tier channels
20% Non-FTA and regional channels
10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1 2013 Notes: top 3 state-controlled channels: Channel One, Rossiya 1, NTV; 1st tier channels: CTC, TNT, Ren-TV; 2nd tier channels: TV-3, Domashny, Peretz, Rossiya K, Channel 5, Rossiya 2, Euronews, Zvezda, MTV, Rossiya 24, Ю, 2x2, TV Center, Disney, RU TV 17
CTC Improves Its Target Audience Profile in Commercially Attractive Demographic
2013 Target audience
18 Sources: TNS Russia CTC Maintained Its Viewership Position in 2013
Kitchen First season (Oct-Mar 2013) 19.1%1,2 Second Season (25.03-10.04.13) 19.7%
Maintained 3rd place 13.4 12.7 12.1 11.0 11.0 11.3 10.2 10.1 The 80’s First season (February 2012) 21.5% Second season (21.01-20.02.13) 17.1%
2010 2011 Q1'12 Q2'12 Q3'12 Q4'12 2012 Q1'13 Traffic Light Fourth season(Apr-Aug 2012) 11.2% #2 #3 #2 #3 #4 #3 #3 #3 Fifth season (04.02-11.04.13) 13.8%
Audience share in all 10-45 demographic, %
Think like a woman! First run (15.04-25.04.13) 14.1%
Note:(1) in CTC target demographic All 10-45 (2) First run (Oct-Nov 2012) 19.1%, Second run (Oct-Nov 2012) 12.2%, Third run (21.01-21.02.13) 15.3%, Fourth run (13.03-21.03.13) 11.9% 19
Domashny Improves Affinity in Its Target Demographic
Sources: TNS Russia 20 Domashny Has Been Growing Audience Share Since Its Launch in 2005
Foreign & Russian series
3.6 3.2 3.2 2.8 2.8 2.4 1.7 1.5
Reality & Lifestyle
2005 2006 2007 2008 2009 2010 2011 2012
3.7 3.8 3.6 3.1 3.0 DocuReality
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13
Audience share in women 25-59 demographic, % Science-fiction documentary
21 Peretz Improves Audience Profile In Commercially Attractive Young Adults Demographics
Sources: TNS Russia 22 Peretz Audience Share up Q-on-Q in Q1 2013
Beyond the Law (Jan-Mar 2013) Average share – 4.2%1
2.7
2.1 2.1 2.0
Hot topic! (March 2013) Average share – 3.2%
2009 2010 2011 2012
2.8 2.9 2.9 2.5 +100500 (Jan-Mar 2013) 2.3 Average share – 3.2%
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Road Wars (Jan-Mar 2013) Audience share in all 25-49 demographic, % Average share – 3.1%
23 Note:(1) in Peretz target demographic All 25-49 Stable Consumer Goods Client Base with Large Multi-National and Local Advertisers
Ad spending on CTC Media’s Russian channels by category
Q1 2012 Q1 2013 * 1 Food and beverages 27% 26% ■ Vast majority of CTC Media’s Russian advertisers are basic 2 Pharmaceuticals and vitamins 15% 20% consumer goods focused 3 Cosmetics and personal care products 16% 19% 4 Other goods 17% 14% ■ CTC Media’s advertisers’ budgets split: 5 Telecoms 6% 5% 6 Detergents 4% 4% . 80% multinationals, 20% local companies 7 Auto 4% 4% 8 Retail 3% 4% ■ 42% of ad revenue** came from top 10 clients in Q1 2013 9 Appliances 3% 3% 10 Finance 2% 1% . 11 Beer 3% 0%
Notes: (*) National advertising sales for CTC, Domashny and Peretz Networks 24 (**) Total Russian National advertising sales for CTC, Domashny and Peretz Channels Developing in Attractive CIS, International and Digital Media Markets
25 Strong Market Positions in the Kazakhstan
Channel 31, Kazakhstan (all 6-54 demographics)* Significant growth in CIS revenue and OIBDA margin
23.6 15.2% 14.7%
17.8 11.6% 11.2% 21.4% 17% 12.6 11.0
14% 20.2%
12% 11%
-20.2% 4.3% US$ mln US$
FY 2009 FY 2010 FY 2011 FY 2012 FY 2009 FY 2010 FY 2011 FY 2012 Target audience share Market share 15.6 % Revenue OIBDA margin 15.3 % Moved from #4 to #3
14.5 %
13.8 % 13.4 %
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 #4 #3 #3 #3 #3 Source: (*) TNS Central Asia 26 Target audience share, All 6-54 demographic Plus We Continue to Expand Internationally…
Increasing CTC Media’s international brand awareness & value through CTC-international Russian-speaking population
December 2009 – Dish USA May 2011 – Time Warner; RMG October 2011 – Cablevision 3.5 mln
Israel June 2011 – Hot; Yes 1.5 mln
Germany March 2011 – Kartina TV IPTV 6 mln
Baltic States October 2011 – Viasat Broadcasting 4 mln
Kazakhstan February 2012 – Digital TV; Icon TV 12.3 mln
Europe February 2012 – uplink service HOT BIRDTM North Africa Middle East Central Asia
Kyrgyzstan April 2012 – Europe-Asia cable and satellite network 2.5 mln
Armenia Georgia May 2012 – Caucasus cable networks 10.4 mln Azerbaijan
Thailand July 2012 – Thai Media Export cable network
Total Russian-speaking population 40.2 mln 27 …and Enter New Platforms to Be Wherever Our Viewers Are
28 First Transmedia Project in Russia Is a Massive Hit for Audience and Advertisers
■ 50 love stories from real people across Russia ■ Sponsored by Liubumyj brand (PepsiCo) ■ Total reach 52.7 mln (30 mln –TV & 22.7mln – digital media) ■ Involved users 4.6 mln ■ Already 2 Festival Awards for best integrated campaign and best online project*
* Advertising Festival “White Square” Strong and Flexible Financial Position
30 Q1 2013 Financial Highlights
Three Months Ended March 31, Change (US$ 000’s except per share data) 2012 2013 in USD in RUB Total operating revenues $191,120 $195,287 2% 4% Total operating expenses (141,149) (153,103) 8% 10% OIBDA 55,128 50,649 -8% -6% OIBDA margin 28.8% 25.9% Net income/(loss) attributable to CTC Media, Inc. stockholders 32,622 28,588 -12% -11%
Diluted earnings per share $0.21 $0.18 -14% Net cash position
31 Q1 2013 Balance Sheet and Cash Flow Highlights
Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights
Three months Three months As of December 31, As of March 31, ended March 31, ended March 31, 2012 2013 2012 2013 (US$ mln) (US$ mln) Cash at beginning of period 12.3 55.2 Cash and cash equivalents 55.2 15.4 Net cash provided by operating activities 8.9 (12.9) Short-term investments 131.4 128.6 including acquisition of progr. and sublic. rights (85.2) (109.0) Total assets 985.6 947.5 Net cash used in investing activities 23.3 (1.4) including goodwill 178.0 173.9 including acquisition of businesses (26.3) (0.3) including broadcasting licenses 82.3 76.1 including CapEx (3.0) (1.1)
including programming rights 255.3 242.4 including receipts from/(investments in) deposits - -
Working capital1 298.3 285.0 Net cash used in financing activities (15.8) (24.9)
Total debt (bank overdraft) 13.2 6.1 Cash at end of period 30.7 15.4 CapEx (3.0) (1.1) Stockholders’ equity 762.9 750.1 CapEx as % of total revenue 1.6% 0.6% 2 Net cash position 173.4 137.9 Free cash flow3 5.8 -14.0
Notes: (1) Working capital = current assets - current liabilities (2) Net cash position = cash and cash equivalents + short-term investments - total debt (3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets 3232 High Levels of Cash Conversion and Return on Capital Employed
% of OIBDA Converted to Operating Cash Flow Return on Capital Employed*
2007-2012 36% average 200 186 186 33% ROCE: 30% 180 29% 158 158 27% 27% 27% 160 133 140 117 116 120 100 84% 80 72% 67% 66% 63% 62% 60 40 47%
20 mln US$ 0 2006 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
Operating Cash Flow % of OIBDA converted
Note: (*) ROCE excludes one-off non-cash asset impairment charges recognized in 2008, 2009 and 2011. 33 To Conclude…
34 Appendix
35 CTC Media Shareholder Structure
CTC Media, Inc.
Number of common shares outstanding 158,160,719 (as of March 31, 2013)
38% 25% 37%
Telcrest Investments Modern Times Group Free float MTG AB Limited
Shareholder of CTC Media Shareholder of CTC Media IPO on NASDAQ in June 2006 since 2002 since 2011
Independent Directors
Lorenzo Grabau Angelo Codignoni Tamjid Basunia Co-Chairman Co-Chairman Director
Irina Gofman Dmitry Lebedev Werner Klatten Board of Directors Director Director Director
Jørgen Madsen Lindemann Timur Weinstein Jean-Pierre Morel Director Director Director 36 Audience Shares In “All 10-45” Most Commercially Attractive Demographic
Audience shares1, %
18.4
15.6 Difference in audience shares among Top-5 channels is narrowing 13.0 Q1 2012 12.6 12.7 12.5 Q1 2013 12.1 11.3 10.6
9.4 9.2 9.1
5.0 5.2 4.3 3.4 3.2 3.0 2.6 2.5 2.7 2.3 2.1 2.0 2.2 1.8 1.7 1.8 1.5 1.5 1.3 1.5 1.2 1.0 1.3 1.4 0.9 0.8 0.7 0.9 0.1 0.1
TNT Channel CTC NTV Rossiya 1 Ren-TV Channel 5 Disney* TV-3 Peretz Domashny Rossiya 2 U** TV Center 2x2 MTV Zvezda Rossiya K Rossiya 24 Euronews Other 2 One
(1) Source: TNS Russia, CTC Media’s Research Department (2) Includes audience shares of regional and non-FTA channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 37 Audience Shares In “All 4+” Demographic
Audience shares1, %
17.0
14.7 14.6 14.7
13.513.5 13.5 13.4
Q1 2012 Q1 2013
7.7 7.8
7.0 6.7
5.6 5.4 5.0 4.6
2.6 2.8 2.7 2.7 2.3 2.3 2.2 2.2 2.3 2.1 2.0 1.7 1.9 1.9 1.7 1.8 0.9 1.0 0.9 0.8 0.8 0.6 0.7 0.8 0.1 0.1 2 Rossiya 1 Channel NTV TNT CTC Channel 5 Ren-Tv TV Center TV-3 Rossiya 2 Domashny Peretz Zvezda Disney* Rossiya K Rossiya 24 U** MTV 2x2 Euronews Other One
(1) Source: TNS Russia, CTC Media’s Research Department (2) Includes audience shares of regional and non-FTA channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 38 Consistent Growth in Technical Penetration
Technical Penetration1, %
94% 95% 95% 91% 87% 88% 89% 85% 84% 82% 80% 76% 71% 73% 68% 65% 61% 54%
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
Note: (1) Technical penetration means the percentage of the population that has the technical ability to receive a particular broadcast signal. Measured annually by TNS Gallup Media in cities with populations of more than 100,00039 39 Advertising Sales Structure since 2011
Advertisers
Advertising Agencies
Internal Sales Houses External Sales Houses
Everest Sales RTR-Media Gazprom-Media / Alkasar Video International
Consultancy services 40 Operating Expenses
as % of total operating as % of total operating expenses revenues
4% Depreciation & amortization 6% 2% 1% 8% 7% 4% 3% Stock-based compensation 1% 30% 27% 2% 6% 6% (165.2) (181.3) 21% Direct operating expenses 22% (78.5) (91.1)
SG&A expenses 56% 59% 47% 41%
Programming expenses
Q1 2012 Q1 2013 Q1 2012 Q1 2013
$141.1 mln $153.1 mln $191.1 mln $195.3 mln
41 FY 2012 Income Statement Highlights
Twelve Months Change Ended December 31, in USD in RUB (US$ 000's except per share data) 2011 2012 Total operating revenues $766,360 $804,946 5% 10% Total operating expenses (before non-recurring items) (537,293) (572,556) 7% 12% Total operating expenses (643,675) (655,059) 2% Adjusted OIBDA 246,716 256,408 4% 8% Adjusted OIBDA margin 32.2% 31.9%
OIBDA 140,334 173,905 24% 37% OIBDA margin 18.3% 21.6%
Adjusted net income attributable to CTC Media, Inc. stockholders 152,561 157,794 3% 9%
Adjusted diluted earnings per share $0.97 $1.00 3% 9% Net income/(loss) attributable to CTC Media, Inc. stockholders 53,118 93,063 75% 85% Diluted earnings per share $0.34 $0.59 74% 84% Net cash position
42 FY 2012 Balance Sheet and Cash Flow Highlights
Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights
As of December 31, As of December 31, Twelve months ended December 31, (US$ mln) 2011 2012
(US$ mln) 2011 2012 Cash and cash equivalents 12.3 55.2 Cash at beginning of period 59.6 12.3 Short-term investments 117.2 131.4 Net cash provided by operating activities 115.8 157.7 Total assets 893.7 985.6 including acquisition of progr. and sublic. rights (358.6) (364.2)
including goodwill 164.4 178.0 Net cash used in investing activities (54.6) (26.5)
including broadcasting licenses 159.4 82.3 including acquisition of businesses (25.0) (4.0)
including CapEx (19.8) (15.6) including programming rights 199.1 255.3 including receipts from/(investments in) deposits (9.8) (6.8) Working capital1 197.1 298.3 Net cash used in financing activities (115.0) (88.9) Total debt (bank overdraft) 16.9 13.2 Cash at end of period 12.3 55.2 Stockholders’ equity 697.2 762.9 CapEx (19.8) (15.6) CapEx as % of total revenue 2.6% 1.9% Net cash position2 112.6 173.4 Free cash flow3 96.0 142.1
Notes: (1) Working capital = current assets - current liabilities (2) Net cash position = cash and cash equivalents + short-term investments - total debt (3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets 4343 Reconciliation of Non-GAAP Measures
Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other corresponding GAAP financial measures
Income (loss) Net income before income (loss) Fully diluted Total operating Operating Income tax OIBDA tax and non- attributable to earnings per expenses income (loss) expense controlling CTC Media, Inc. share (US$ 000’s except per share data) interest stockholders Three months ended September 30, 2012 Adjusted non-US GAAP results $43,366 ($123,554) $38,455 $41,722 ($14,501) $27,522 $0.17 Impact of impairment loss (82,503) (82,503) (82,503) (82,503) 16,501 (66,002) (0.41) Results as reported (under US GAAP, except for OIBDA which is a non-US GAAP financial measure) ($39,137) ($206,057) ($44,048) ($40,781) $2,000 ($38,480) ($0.24) Income (loss) Net income before income (loss) Fully diluted Total operating Operating Income tax OIBDA tax and non- attributable to earnings per expenses income (loss) expense controlling CTC Media, Inc. share (US$ 000’s except per share data) interest stockholders Three months ended September 30, 2011 Adjusted non-US GAAP results $ 48,141 ($116,217) $ 43,361 $ 46,988 ($16,237) $ 29,867 $ 0.19 Impact of impairment loss (16,843) (16,843) (16,843) (16,843) 3,369 (13,474) (0.09) Results as reported (under US GAAP, except for OIBDA which is a non-US GAAP financial measure) $ 31,298 ($133,060) $ 26,518 $ 30,145 ($12,868) $ 16,393 $ 0.10 Income before Fully diluted Total operating Operating income income tax and Income tax (US$ 000’s except per share data) OIBDA Net income (loss) earnings per expenses (loss) noncontrolling expense share interest Twelve Months Ended December 31, 2012 Adjusted non-US GAAP results $256,408 ($572,556) $232,390 $247,192 ($82,645) $157,794 $1.00 Impact of impairment loss (82,503) (82,503) (82,503) (82,503) 17,772 (64,731) (0.41) Results as reported (under US GAAP, except for OIBDA which is a non-US GAAP financial measure) $173,905 ($655,059) $149,887 $164,689 ($64,873) $93,063 44$0.59 44 Reconciliation of Non-GAAP Measures
Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other corresponding GAAP financial measures
Income (loss) Total Operating Fully diluted before income tax Income tax (US$ 000’s except per share data) OIBDA operating income Net income (loss) earnings per and noncontrolling expense expenses (loss) share interest Twelve months ended December 31, 2011 Adjusted non-US GAAP results $246,716 ($537,293) $ 229,067 $ 243,301 ($83,342) $ 152,561 $ 0.97 Impact of impairment loss (106,382) (106,382) (106,382) (106,382) 6,939 (99,443) (0.63) Results as reported (under US GAAP, except for OIBDA which is a non-US GAAP financial measure) $140,334 ($643,675) $ 122,685 $ 136,919 ($76,403) $ 53,118 $ 0.34 Twelve months ended December 31, 2009 Adjusted non-US GAAP results $87,382 ($96,460) $84,047 $87,585 ($20,759) $64,466 $0.41
Impact of non-cash intangible asset impairment charge (18,739) (18,739) (18,739) (18,739) 3,748 (14,991) (0.10) Impact of Stock-based compensation expense related to settlement of litigation against former executive (28,588) (28,588) (28,588) (28,588) - (28,588) (0.18) Results as reported (under US GAAP, except for OIBDA, which is a non-GAAP financial measure) $163,929 ($353,638) $152,475 $148,645 ($45,626) $100,389 $0.64
Twelve months ended December 31, 2008 Adjusted non-US GAAP results $280,241 ($94,636) $92,712 $74,266 ($1,653) $64,635 $1.11
Impact of non-cash impairment of intangible assets of DTV, Kz and Moldova (232,683) (232,683) (232,683) (232,683) 30,331 (153,679) (0.97) Results as reported (under US GAAP, except for OIBDA) $47,558 ($327,319) ($139,971) ($158,417) $28,678 ($89,044) $0.14
45 Reconciliation of Non-GAAP Measures (continued)
Reconciliation of consolidated OIBDA to consolidated operating income
USD mln Q1 2013 Q1 2012 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 Operating income (loss) 42,184 49,971 149,887 122,685 207,118 152,475 34,181 193,061 154,313 90,187 62,559 Add: depreciation and 8,465 5,157 24,018 17,649 13,736 11,454 13,379 27,361 19,651 13,920 7,962 amortization
OIBDA 50,649 55,128 173,905 140,334 220,854 163,929 47,560 220,422 173,964 104,107 70,521
Reconciliation of consolidated OIBDA margin to consolidated operating income margin USD mln Q1 2013 Q1 2012 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 Operating margin 21.6% 26.1% 18.6% 16.0% 34.4% 30.1% 5.3% 40.9% 41.6% 38.0% 40.2% Add: depreciation and amortization as 4.3% 2.7% 3.0% 2.3% 2.3% 2.3% 2.1% 5.8% 5.3% 5.8% 5.1% percentage of revenue OIBDA margin 25.9% 28.8% 21.6% 18.3% 36.7% 32.4% 7.4% 46.7% 46.9% 43.8% 45.3%
Reconciliation of comparable-basis, non-GAAP total operating revenues to total operating revenues USD mln 2004 2005 2006 2007 2008 2009 2010 Comparable-basis total operating 180,639 273,352 427,091 532,143 729,629 574,107 680,418 revenues Agency commission fees payable to Video International in connection with Russian advertising sales (25,072) (35,875) (56,257) (60,087) (89,458) (67,994) (79,133) (excluding commissions for regional advertising sales to local clients) Total operating revenues 155,567 237,477 370,834 472,056 640,171 506,113 601,285
46
Contact Information and Disclaimer
For further information please visit www.ctcmedia.ru or contact:
Ekaterina Ostrova Irina Klimova Director, Corporate Communications and Investor Relations Senior Manager, Investor Relations E-mail: [email protected] Tel: +7 (495) 783 3650 Tel: +7 (495) 981 0740
DISCLAIMER . The information contained in this presentation, including market data that are attributed to specific sources and have not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. . The presentation is not an offer of securities for sale in the United States. Neither the presentation nor any copy of it may be taken or transmitted into or distributed in the United States of America or to any U.S. person within the meaning of Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”). . This presentation is not a public offer or advertisement of securities in the Russian Federation, and is not an offer, or an invitation to make offers, to purchase any securities in the Russian Federation. . Certain statements in this presentation 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, statement regarding Company’s intention to pay dividends in 2013, anticipation of tender for third multiplex to be announced in 2013, statement regarding Russian advertising market growth, roll-out of digital broadcasting in Russia by 2016, launch of public channel in Russia in 2013, advertising expenditures in different segments in Russia, increase of time spent online in Russia. 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, changes in the size of the Russian television advertising market; the roll-out of digital broadcasting in Russia; 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 our recently report on Form 10-Q filed with the SEC on November 7, 2012. 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.
47