OREANDA-NEWS. On February 28, 2008 CTC Media, Inc. (NASDAQ: CTCM), a leading television broadcaster in Russia, reported financial results for the full year and three month period ended December 31, 2007, reported the press-centre of CTC Media.

- FOURTH QUARTER –
- Consolidated Revenue Increases 37% to $162 Million-
- OIBDA* Increases 46% to $93 Million-
-Net Income of $60 Million, $0,38 Earnings Per Share-

- FULL YEAR –
- Consolidated Revenue Increases 27% to $472 Million-
- OIBDA* Increases 27% to $220 Million-
-Net Income of $136 Million, $0,86 Earnings Per Share-
*OIBDA is defined as operating income before depreciation and amortization (exclusive of amortization of programming rights and sublicensing rights). OIBDA is a non-GAAP financial measure. Please refer to    Attachment A for a reconciliation of OIBDA to net income.

Financial Highlights
Consolidated revenue increased 27% to $472 million
OIBDA increased 27% to $220 million
OIBDA margin of 46,7%
Net income increased 28% to $136 million
$0,86 fully diluted earnings per share, an increase of 25%

Full-Year Operational Highlights
Combined audience share for the CTC and Domashny networks of 11,0%

CTC Media’s advertising market share exceeded its audience share, reflecting the Company’s success in delivering premium demographics

In 2007, CTC Media executed on key strategic objectives:
- Vertically integrated into production capabilities by acquiring two Russian production companies– COSTAFILM and SOHO MEDIA

- Expanded into the CIS markets by entering into a definitive agreement to acquire a majority economic interest in Channel 31 Group in Kazakhstan, and setting up a TV company in Uzbekistan

- Strengthened presence in regional markets by acquiring two stations for CTC and five stations for Domashny in a number of larger Russian cities

- Grew technical penetration of the CTC Network and Domashny Network to 87,4% and 64,8%, respectively
 
Alexander Rodnyansky, Chief Executive Officer, commented, “In 2007 we delivered on our financial guidance and made significant progress in the execution of our strategic plan. Our results were driven by the robust growth of the Russian television advertising market and the strong position of our CTC and Domashny brands, which continue to deliver the premium younger audiences preferred by advertisers. We also expanded our strategic footprint by entering two new CIS markets, added content rights management and production capabilities, and increased the reach of our existing networks.”
 
“CTC and Domashny are both off to a solid start in the new year, and, as always, we look forward to the launch of our spring programming schedule in March. Our schedule includes hits like the new season of Daddy’s Girls, as well as a significant number of series and show premieres. We expect to benefit from an increasing amount of content from our newly acquired production companies, which already produce some of our most popular series. Channel 31 in Kazakhstan and our newly established station in Uzbekistan are expected to start broadcasting in CTC format at the end of the first quarter of 2008 and beginning of the second quarter of 2008, respectively, and will provide us with a valuable presence in these developing markets. With our disciplined operating focus and strategic progress, we are well positioned to capitalize on the continued expansion of the Russian market and the CIS region in the years ahead.”

Results for the Three Months Ended December 31, 2007
Overall results reflect the continued growth in revenues of CTC Media’s two channels CTC and Domashny, and management’s cost-conscious approach to programming.

CTC Network’s fourth quarter 2007 audience share was 8,9% as compared with 9,0% in fourth quarter 2006. Domashny’s audience share demonstrated healthy growth from 1,5% in the fourth quarter of 2006 to 2,0% in the fourth quarter of 2007.

CTC Media’s total operating revenue for the three months ended December 31, 2007 increased 37% to $161,7 million from $117,9 million for the three months ended December 31, 2006. The revenue growth primarily reflects the continued growth of the Russian television advertising market. Given that our advertising revenues are recorded net of commissions, our fourth quarter revenues were also favorably impacted by the lower commission rate paid by our owned-and-operated stations to Video International in connection with the variable commission rate negotiated through 2007.

Consolidated total operating expenses in the fourth quarter of 2007 amounted to $76,9 million compared to $59,6 million in the fourth quarter of 2006. Total operating expenses decreased as a percentage of revenue by 3% period-on-period. In absolute terms, total operating expenses increased as higher programming costs drove increased programming amortization expense. Fourth quarter costs included $3.6 million in stock-based compensation compared to $3,0 million in the fourth quarter of 2006.

OIBDA increased 45,5% to $92,8 million for the fourth quarter of 2007 compared to $63,7 million in the fourth quarter of 2006. The OIBDA margin for the quarter was 57,4%, compared to 54,1% for the corresponding quarter of 2006, reflecting sound cost management.

Net income for the quarter was $59,7 million compared to $41,1 million for the three months ended December 31, 2006. Fully diluted income per share was $0,38 for the three months ended December 31, 2007, compared to $0,26 for the three months ended December 31, 2006.

Results for the Year Ended December 31, 2007
2007 was another strong year for CTC Media. The Company has demonstrated its ability to sustain high profit margins in an increasingly competitive media environment. This was particularly challenging when compared to 2006 which benefited from CTC’s all-time hit Born Not Pretty.

In 2007, CTC Network maintained its position as the fourth-most watched broadcaster in Russia with average audience share of 9,0%, down from 10,4% in 2006. CTC Network’s average audience share in its target demographic (everyone aged 6-54) was 11,3%, compared to 12,9% in 2006. Domashny’s average audience share for 2007 was 2,0%, compared to 1,4% in 2006, and its average audience share in its target demographic (women aged 25-60) was 2,4%, compared to 1,7% in 2006.

CTC Media’s total operating revenue for the year ended December 31, 2007 increased by 27,3% to $472,1 million from $370,8 million for the year ended December 31, 2006. The revenue growth primarily reflects the continued growth of the Russian television advertising market partially offset by a decline in CTC Network’s audience share. Because we record our advertising revenues net of commissions, revenues were also favorably impacted by the lower commission rate paid by our owned-and-operated stations to Video International in connection with the variable commission rate negotiated through 2007.

Consolidated total operating expenses for 2007 increased by 28,8% to $279,0 million compared to $216,5 million for 2006.

Total operating expenses as a percentage of revenues increased from 58,4% in 2006 to 59,1% in 2007 mainly due to a slight increase, as a percentage of operating revenues, in amortization of programming and sublicensing rights, and depreciation and amortization expense. In 2007, total operating expenses included $13,7 million of stock-based compensation expense compared to $7,2 million in 2006.

OIBDA increased 26,7% to $220,4 million for 2007 compared to $174,0 million for 2006. In 2007, OIBDA margin of 46,7% was in-line with the provided guidance and the prior year’s OIBDA margin of 46,9%. The performance of the Domashny Network and owned-and-operated stations contributed to the overall increase in consolidated 2007 OIBDA. 2007 was the first full year when Domashny Network was OIBDA positive since its launch in 2005.

Net income for the year ended December 31, 2007 was $135,9 million compared to $106,3 million for 2006, an increase of 27,8%. Fully diluted income per share was $0,86 for 2007 compared to $0,69 for 2006.

Guidance
For the full year ending December 31, 2008, the Company currently expects to generate consolidated total operating revenue in the range of $600 to $650 million, with a consolidated OIBDA margin in the range of 45-48%. This guidance range does not include expected revenues from its CIS operations in Kazakhstan and Uzbekistan.