Central European Media Enterprises Ltd., a Bermuda company limited by shares, is a media and entertainment company operating in Central and Eastern Europe. Our assets are held through a series of Dutch and Curaçao holding companies. We manage our business on a geographical basis, with four operating segments; Bulgaria, the Czech Republic, Romania and the Slovak Republic, which are also our reportable segments and our main operating countries. See Note 19, "Segment Data" for financial information by segment. On July 9, 2017, we entered into a framework agreement with Slovenia Broadband S.à r.l., a wholly owned subsidiary of United Group B.V., relating to the sale of our Croatia and Slovenia operations. See Note 3, "Discontinued Operations and Assets Held for Sale" for further information.

We are the market-leading broadcasters in each of our four operating countries with a combined portfolio of 2726 television channels. Each ~~of our broadcast operations~~country also develops and produces content for their television channels. We generate advertising revenues in our country operations primarily through entering into agreements with advertisers, advertising agencies and sponsors to place advertising on the television channels that we operate. We generate additional revenues by collecting fees from cable, and direct-to-home (“DTH”) and internet protocol television ("IPTV") operators for carriage of our channels. ~~With the exception of our Bulgarian operations,~~Unless otherwise indicated, we own 100% of our broadcast operating and license companies in each country.

We operate one general entertainment channel, BTV, and five other channels, BTV CINEMA, BTV COMEDY, ~~RING,~~ BTV ACTION, BTV LADY and ~~BTV LADY.~~RING. We own 94.0% of CME Bulgaria B.V. ("CME Bulgaria"), the subsidiary that owns our Bulgaria operations.

We operate one general entertainment channel, TV NOVA, ~~(Czech Republic),~~ and seven other channels, NOVA 2, NOVA CINEMA, NOVA SPORT 1, NOVA SPORT 2, NOVA ACTION, ~~NOVA 2,~~ NOVA GOLD and NOVA INTERNATIONAL, a general entertainment channel broadcasting in the Slovak Republic.

We operate one general entertainment channel, PRO TV, and ~~eight~~seven other channels, PRO 2, ~~(formerly ACASA),~~PRO X, PRO GOLD, ~~(formerly ACASA GOLD),~~ PRO CINEMA, PRO ~~X (formerly SPORT.RO),~~TV INTERNATIONAL, MTV ROMANIA, ~~PRO TV INTERNATIONAL,~~as well as PRO TV CHISINAU, a general entertainment channel broadcasting in ~~Moldova, and ACASA IN MOLDOVA.~~Moldova.

We operate one general entertainment channel, TV MARKIZA, and three other channels, DOMA, ~~(Slovak Republic),~~ DAJTO, and MARKIZA INTERNATIONAL, a general entertainment channel broadcasting in the Czech Republic.

The terms the “Company”, “we”, “us”, and “our” are used in this Form 10-Q to refer collectively to the parent company, Central European Media Enterprises Ltd. (“CME Ltd.”), and the subsidiaries through which ~~we operate.~~our various businesses are conducted. Unless otherwise noted, all statistical and financial information presented in this report has been converted into U.S. dollars using period-end exchange rates. All references to “US$”, “USD” or “dollars” are to U.S. ~~dollars;~~dollars, all references to “BGN” are to the Bulgarian ~~leva;~~leva, all references to “CZK” are to the Czech ~~koruna;~~koruna, all references to “RON” are to the New Romanian ~~lei;~~lei, and all references to “Euro” or “EUR” are to the European Union Euro. Certain amounts may not recalculate due to the use of rounded numbers.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Quarterly Report on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States of America (“US GAAP”). Amounts as of December 31, ~~2016~~2017 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 filed with the Securities and Exchange Commission on February ~~9, 2017.~~8, 2018. Our significant accounting policies have not changed since December 31, ~~2016,~~2017, except as noted below.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring items and changes in US GAAP, necessary for their fair presentation in conformity with US GAAP for complete financial statements. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services, net of taxes assessed by a government authority that are both imposed on and concurrent with the specific revenue-producing transaction and collected from the customer. Timing of revenue recognition may differ from the timing of invoicing to customers. We defer the recognition of revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. We record a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Invoicing typically occurs on a monthly basis and customers are obliged to pay within 30 to 60 days of issuance. For certain services and customer types, we require payment before the services are provided.

In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing.

Our principal revenue streams and their respective accounting treatments are discussed below:

Television advertising revenues primarily result from the sale of advertising time. Television advertising revenues are earned as the commercials are aired. In many countries, we commit to provide advertisers with certain rating levels in connection with their advertising. Revenue is recorded based on a charge per Gross Rating Point ("GRP") ordered during the month net of estimated shortfalls. Discounts and agency commissions on television advertising revenue are recognized at the point when the advertising is broadcast and are reflected as a reduction to gross revenue. These amounts are known in advance or can be reasonably estimated based on historical practice.

Carriage fees and subscription revenues includes revenues from cable operators and direct-to-home broadcasters and fees from subscriptions to our streaming services. Revenues from cable operators and direct-to-home broadcasters are recognized as revenue over the period for which the channels are provided and to which the fees relate. A portion of this fee revenue is based on the number of subscribers to our channels and recognized during the period, based upon the number of subscribers. The impacts of future changes in subscriber levels are recognized when they occur as estimates of future subscribers are constrained. Revenues from subscriptions to our streaming services are recognized over the period of the subscription.

Other revenues primarily includes revenues from our internet display advertising, as well as revenues from the licensing of our content. Internet display advertising revenues are recognized on a cost-per-impression basis based on the number of times a customer's advertisement is displayed on our websites. Revenues from the licensing of our content are recognized over the license period beginning from delivery or reasonable access to the content.

Our revenue streams involve significant judgment with respect to the discounts and agency commissions we provide to certain customers based on the amount of advertising purchased. Such discounts are based on estimates of the total amount expected to be earned and reduce revenue based on a systematic and rational allocation of the cost of honoring the discounts earned and claimed to each of the underlying revenue transactions that result in progress by the customer towards earning the discount. Due to timing of the information provided by the rating agencies, significant judgment may be necessary to estimate the total volume of GRPs delivered within the contract period.

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions.

We present our results of operations, financial position and cash flows of operations that have either been sold or that meet the criteria for "held-for-sale accounting" as discontinued operations if the disposal represents a strategic shift that will have a major effect on our operations and financial results. At the time an operation qualifies for held-for-sale accounting, the operation is evaluated to determine whether or not the carrying amount exceeds its fair value less cost to sell. Any loss as a result of carrying amounts in excess of fair value less cost to sell is recorded in the period the operation qualifies for held-for-sale accounting. Management judgment is required to (1) assess the criteria required to qualify for held-for-sale accounting, and (2) estimate fair value. Our Croatia and Slovenia operations are classified as discontinued operations and assets held for sale for all periods presented. See Note 3, "Discontinued Operations and Assets Held for Sale".

The unaudited condensed consolidated financial statements include the accounts of CME Ltd. and our subsidiaries, after the elimination of intercompany accounts and transactions. Entities in which we hold less than a majority voting interest but over which we have the ability to exercise significant influence are accounted for using the equity method. Other investments are accounted for using the cost method.

We experience seasonality, with advertising sales tending to be lowest during the third quarter of each calendar year due to the summer holiday period (typically July and August), and highest during the fourth quarter of each calendar year due to the holiday season.

On January 1, ~~2017~~2018, we adopted ~~guidance issued by the~~ Financial Accounting Standards Board ~~(the “FASB”~~("FASB") which is intended to improve the accounting for the income tax consequences of intercompany transfers of assets other than inventory. The guidance requires an entity to recognize the income tax consequences of such transfers in the period in which the transfer occurs, rather than defer recognition of current and deferred income taxes for the transfer until the asset is sold to a third party. The early adoption of this guidance did not have a material impact on our condensed consolidated financial statements.

In August 2016, the FASB issued guidance which is intended to reduce the existing diversity in practice related to specific cash flow issues. As applicable to us, the guidance requires that cash flows at the settlement of zero-coupon debt instruments or debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing be bifurcated between cash outflows for operating activities for the portion attributable to accrued interest, and cash outflows for financing activities for the portion attributable to the principal. ~~The guidance requires a retrospective transition method and is effective for our fiscal year beginning January 1, 2018, with early adoption permitted.~~ We ~~expect to adopt~~adopted this guidance as of January 1, ~~2018. Upon adoption,~~2018 which did not impact our net cash flows generated from ~~/ used in~~ continuing operating activities ~~for the year ended December 31, 2016 will decrease by US$ 110.7 million with a corresponding increase~~ in ~~net cash used in / provided by continuing financing activities.~~

In February 2016, the FASB issued guidance to increase transparency and comparability among organizations by recognizing leasing assets and liabilities on the balance sheet and requiring additional disclosures about an entity's leasing arrangements. The guidance requires that a lessee recognize a liability to make lease payments and a right-of-use asset, with an available exception for leases shorter than twelve months. The guidance is effective for our fiscal year beginning January 1, 2019. We have completed the initial stages of our assessment of the broad implications of the guidance on our operating segments, controls and related IT systems and continue to analyze contractual data to quantify the potential impact.

In June 2016, the FASB issued new guidance to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments replace the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for our fiscal year beginning January 1, 2020 with early adoption permitted for our fiscal year beginning January 1, 2019. We are in the process of assessing the potential impacts of this guidance.

On July 9, 2017, we entered into a framework agreement with Slovenia Broadband S.à r.l. (the "Purchaser"), a wholly owned subsidiary of United Group B.V., relating to the sale of our Croatia and Slovenia operations for cash consideration of EUR 230.0 million (approximately US$ ~~271.5 million)~~268.1 million at June 30, 2018 rates) (the "Divestment Transaction"), subject to customary working capital adjustments. On March 26, 2018, the Croatian Agency for Electronic Media confirmed the transaction is permissible under Croatian media legislation and on May 7, 2018, the Purchaser received the approval of the Croatian Competition Agency for the Divestment Transaction.

On July 5, 2018 we signed an amended and restated framework agreement (the “Restated Framework Agreement”), which bifurcates the Divestment Transaction into individual transactions for our Croatia operations (the "Croatian Transaction") and our Slovenia operations (the "Slovenian Transaction") and allocates the total cash consideration of EUR 230.0 million (approximately US$ 268.1 million) into (i) cash consideration for closing of the Croatian Transaction of EUR 85.0 million (approximately US$ 99.1 million) and (ii) cash consideration for closing of the Slovenian Transaction of EUR 145.0 million (approximately US$ 169.0 million), each on a cash-free and debt-free basis and each subject to customary working capital adjustments (see Note 22, "Subsequent Events").

The carrying amounts of the major classes of assets and liabilities of our discontinued operations that are classified as held for sale in the condensed consolidated balance sheets at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 were:

Goodwill by reporting unit as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 was as follows:

Changes in the net book value of our other intangible assets as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 are summarized as follows:

Broadcast licenses consist of our TV NOVA license in the Czech Republic, which is amortized on a straight-line basis through the expiration date of the license in 2025. Our customer relationships are deemed to have an economic useful life of, and are amortized on a straight-line basis over, five years to fifteen ~~years~~.years.

~~Pursuant to~~On February 5, 2018, we entered into an amendment ~~in March 2017~~ to extend the ~~Reimbursement Agreement (as defined below) with Time Warner Inc. ("Time Warner"), as guarantor~~maturity date of ~~our obligations under~~ the 2019 Euro ~~Term Loans (as defined below), the grid pricing structure on the all-in rate that applied only to the 2021 Euro Term~~ Loan ~~(as defined below) was extended to~~(formerly the 2018 Euro Term ~~Loan (as defined below) and the 2019 Euro Term Loan (as defined below), with a reduction in the pricing under the grid for each of the Euro Term Loans resulting in an all-in rate ranging~~Loan) from ~~8.5% (if our net leverage is greater than or equal~~November 1, 2018 to ~~seven times) to 5.0% (if our net leverage is less than five times). As at September 30, 2017,~~May 1, 2019. On February 6, 2018, we reduced our net leverage ratio to below six times and anticipate a reduction of our all-in rate to 6.0% from the end of October 2017. In addition, we can achieve a further 50 basis point reduction in the all-in rate if we reduce our long-term debt to less than EUR 815.0 million, subject to certain adjustments in respect of specified debt repayments, on or prior to September 30, 2018. We are required to pay the first 5.0% of the all-in rate (including the base rate and the rate paid pursuant to customary hedging arrangements) on the Euro Term Loans in cash and the remainder may be paid in cash or in kind, at our option. For details, see the table below under the heading "Reimbursement Agreement and Guarantee Fees".

On April 25, 2018, we entered into a series of amendments (effective on April 26, 2018) which modify certain terms of our 2021 Euro Loan (formerly the 2019 Euro Term Loan), the 2023 Euro Loan ~~on which~~(formerly the 2021 Euro Term Loan), the 2023 Revolving Credit Facility (formerly the 2021 Revolving Credit Facility) (each as defined below) and the Reimbursement Agreement (as defined below) (collectively, the "Financing Transactions"). The Financing Transactions reduce the rates payable under the pricing grid under the Reimbursement Agreement and the 2023 Revolving Credit Facility as well as extend the maturity dates of the 2021 Euro Loan, the 2023 Euro Loan and the 2023 Revolving Credit Facility. The amount available to us under the 2023 Revolving Credit Facility increased to US$ 75.0 million from April 26, 2018.

On May 3, 2018, we ~~recognized a loss on extinguishment~~paid EUR 110.0 million (approximately US$ 132.0 million at May 3, 2018 rates) of ~~US$ 0.1 million.~~the outstanding principal balance of the 2019 Euro Loan.

We are required to apply the proceeds from the ~~sale of our Croatia~~Croatian Transaction and ~~Slovenia operations~~Slovenian Transaction (see Note 3, "Discontinued Operations and Assets Held for Sale") to the repayment of the remaining principal ~~amounts owing in respect~~amount of the ~~2018~~2019 Euro ~~Term~~ Loan. Any excess amounts will then be applied to pay fees related to the ~~2019~~2021 Euro ~~Term~~ Loan, including Guarantee Fees and the Commitment Fee which we have previously paid in ~~kind pursuant~~kind. To the extent excess funds are available thereafter, the remaining proceeds are required to be applied to the ~~Reimbursement Agreement (see Note 3, "Discontinued Operations and Assets Held for Sale").~~principal amounts owing in respect of the 2021 Euro Loan.

Total long-term debt and credit facilities comprised the following at ~~September~~June 30, ~~2017:~~2018:

Our long-term debt comprised the following at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016:~~2017:

The fair values of the ~~2018~~ Euro ~~Term Loan~~Loans (as defined below) as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 were determined based on comparable instruments that trade in active ~~markets, plus an applicable spread.~~markets. This measurement of estimated fair value uses Level 2 inputs as described in Note 12, "Financial Instruments and Fair Value Measurements". Certain derivative instruments, including contingent event of default and change of control put options, have been identified as being embedded in each of the ~~2018~~ Euro ~~Term Loan.~~Loans. The embedded derivatives are considered clearly and closely related to ~~the 2018~~their respective Euro ~~Term~~ Loan, and as such are not required to be accounted for separately.

As at ~~September~~June 30, ~~2017,~~2018, the principal amount of our floating rate senior unsecured term credit facility (the "2019 Euro ~~Term~~ Loan") outstanding was EUR ~~235.3~~40.8 million (approximately US$ ~~277.8~~47.6 million). The 2019 Euro ~~Term~~ Loan bears interest at three-month EURIBOR (fixed pursuant to customary hedging arrangements (see Note 12, "Financial Instruments and Fair Value Measurements")) plus a margin of between 1.1% and 1.9% depending on the credit rating of Warner Media, LLC ("Warner Media", formerly Time Warner. The all-in borrowing rate including the Guarantee Fee ranges from 8.5% to 5.0% per annum based on our net leverage (see the table below under the heading "Reimbursement Agreement and Guarantee Fees"Warner, Inc.)., a wholly owned subsidiary of AT&T, Inc. ("AT&T") as of June 14, 2018. As at ~~September~~June 30, ~~2017,~~2018, the all-in borrowing rate on amounts outstanding under the 2019 Euro ~~Term~~ Loan was ~~7.25%~~3.75%, the components of which are shown in the table below under the heading "Interest Rate Summary".

Interest on the 2019 Euro ~~Term~~ Loan is payable quarterly in arrears on each ~~February 13, May 13, August 13~~March 12, June 12, September 12 and ~~November 13.~~December 12. The 2019 Euro ~~Term~~ Loan ~~matures~~will mature on ~~November~~May 1, 2019 and may ~~currently~~ be prepaid at our option, in whole or in part, without premium or penalty. The 2019 Euro ~~Term~~ Loan is a senior unsecured obligation of CME Ltd., and is unconditionally guaranteed by our 100% owned subsidiary CME BVMedia Enterprises B.V. ("CME BV") and by ~~Time~~ Warner Media and certain of its subsidiaries.

As at ~~September~~June 30, ~~2017,~~2018, the principal amount of our floating rate senior unsecured term credit facility (the "2021 Euro ~~Term~~ Loan") outstanding was EUR ~~468.8~~235.3 million (approximately US$ ~~553.5~~274.4 million). The 2021 Euro ~~Term~~ Loan bears interest at three-month EURIBOR (fixed pursuant to customary hedging arrangements (see Note 12, "Financial Instruments and Fair Value Measurements")) plus a margin of between 1.1% and 1.9% depending on the credit rating of Time Warner. The all-in borrowing rate including the Guarantee Fee ranges from 8.5% to 5.0% per annum based on our net leverage (see the table below under the heading "Reimbursement Agreement and Guarantee Fees").Warner Media. As at ~~September~~June 30, ~~2017,~~2018, the all-in borrowing rate on amounts outstanding under the 2021 Euro ~~Term~~ Loan was ~~7.25%~~3.75%, the components of which are shown in the table below under the heading "Interest Rate Summary".

Interest on the 2021 Euro Loan is payable quarterly in arrears on each February 13, May 13, August 13 and November 13. The 2021 Euro Loan matures on November 1, 2021 and may currently be prepaid at our option, in whole or in part, without premium or penalty from cash generated from our operations. From April 26, 2020, the 2021 Euro Loan may be refinanced at our option. The 2021 Euro Loan is a senior unsecured obligation of CME Ltd. and is unconditionally guaranteed by CME BV and by Warner Media and certain of its subsidiaries.

As at June 30, 2018, the principal amount of our floating rate senior unsecured term credit facility (the "2023 Euro Loan") outstanding was EUR 468.8 million (approximately US$ 546.5 million). The 2023 Euro Loan bears interest at three-month EURIBOR (fixed pursuant to customary hedging arrangements (see Note 12, "Financial Instruments and Fair Value Measurements")) plus a margin of between 1.1% and 1.9% depending on the credit rating of Warner Media. As at June 30, 2018, the all-in borrowing rate on amounts outstanding under the 2023 Euro Loan was 4.25%, the components of which are shown in the table below under the heading "Interest Rate Summary".

Interest on the 2023 Euro Loan is payable quarterly in arrears on each January 7, April 7, July 7 and October 7. The ~~2021~~2023 Euro ~~Term~~ Loan matures on ~~February 19, 2021~~April 26, 2023 and may be prepaid at our option, in whole or in part, without premium or penalty ~~upon~~from cash generated from our operations. From April 26, 2020, the ~~earlier of the occurrence of certain events, including if~~2023 Euro Loan may be refinanced at our ~~net leverage (as defined in the Reimbursement Agreement) decreases to below five times for two consecutive quarters, or at any time from February 19, 2020.~~option. The ~~2021~~2023 Euro ~~Term~~ Loan is a senior unsecured obligation of CME BV and is unconditionally guaranteed by CME Ltd. and by ~~Time~~ Warner Media and certain of its subsidiaries.

In connection with ~~Time Warner’s~~Warner Media’s guarantees of the 2019 Euro ~~Term Loans,~~Loan, the 2021 Euro Loan and 2023 Euro Loan (collectively, the "Euro Loans"), we entered into a reimbursement agreement (as amended, the “Reimbursement Agreement") with ~~Time Warner.~~Warner Media. The Reimbursement Agreement provides for the payment of guarantee fees (collectively, the "Guarantee Fees") to ~~Time~~ Warner Media as consideration for those guarantees, and the reimbursement to ~~Time~~ Warner Media of any amounts paid by them under any guarantee or through any loan purchase right exercised by it. The loan purchase right allows ~~Time~~ Warner Media to purchase any amount outstanding under the Euro ~~Term~~ Loans from the lenders following an event of default under the Euro ~~Term~~ Loans or the Reimbursement Agreement. The Reimbursement Agreement is jointly and severally guaranteed by both our 100% owned subsidiary Central European Media Enterprises N.V. ("CME NV") and CME BV and is secured by a pledge over 100% of the outstanding shares of each of CME NV and CME BV. The covenants and events of default under the Reimbursement Agreement are substantially the same as under the ~~2021~~2023 Revolving Credit Facility (described below).

We pay Guarantee Fees to Warner Media based on the amounts outstanding on the Euro Loans calculated on a per annum basis and on our consolidated net leverage (as defined in the Reimbursement Agreement) as shown in the tables below:

The all-in rate remains subject to a further reduction of up to 50 basis points if CME’s total debt is reduced below EUR 815.0 million on or prior to September 30, 2018, subject to certain adjustments in respect of specified debt repayments, such that the all-in rate cannot be less than 3.0%. Pursuant to the Financing Transactions, the Guarantee Fees must be paid in cash.

Our consolidated net leverage as at June 30, 2018 and December 31, 2017 was 4.4x and 5.4x, respectively. For the three and six months ended June 30, 2018 and 2017, we recognized US$ 5.3 million and US$ 14.0 million; and US$ 11.5 million and US$ 24.5 million, respectively, of Guarantee Fees as interest expense in our condensed consolidated statements of operations and comprehensive income / loss.

We pay Guarantee Fees to Time Warner based on the amounts outstanding on the Euro Term Loans calculated on a per annum basis and on our consolidated net leverage (as defined in the Reimbursement Agreement) as shown in the table below:

The Guarantee Fees previously paid in kind are presented as a component of other non-current liabilities (see Note 11, "Other Liabilities") and bear interest per annum at their respective Guarantee Fee rate (as set forth in the table below). Guarantee Fees ~~paid in cash~~ are included in cash flows from operating activities in our condensed consolidated statements of cash flows.

~~As at September 30, 2017, we~~We had no balance outstanding under the US$ ~~115.0~~75.0 million revolving credit facility (the ~~“2021~~"2023 Revolving Credit ~~Facility”~~Facility"), all of which was available to be drawn. The aggregate principal amount available decreases to US$ 50.0 million with effect from January 1, 2018 or, if earlier, upon the repayment of amounts owing in respect of the 2018 Euro Term Loan with the expected proceeds from the sale of our Croatia and Slovenia operations (see Note 3, "Discontinued Operations and Assets Held for Sale"). as at June 30, 2018.

The ~~2021~~2023 Revolving Credit Facility bears interest at a rate per annum based on, at our option, an ~~alternative~~alternate base rate ("ABR Loans" as defined in the 2023 Revolving Credit Facility Agreement) plus ~~7.0%~~the spread applicable to ABR Loans based on our consolidated net leverage or an amount equal to the greater of (i) an adjusted ~~LIBOR~~LIBO rate and (ii) 1.0%, plus ~~in each case, 8.0%, with~~ the ~~first 5.0% payable in cash and the remainder payable at our election in cash or in kind by adding such accrued interest~~spread applicable to the ~~applicable principal amount outstanding under~~Eurodollar Loans (as defined in the ~~2021 Revolving Credit Facility. The interest rate on the 2021~~2023 Revolving Credit Facility ~~is determined~~Agreement) based on ~~the basis of~~ our consolidated net leverage ratio (as defined in the Reimbursement Agreement) ~~and ranges from LIBOR (subject to a floor of 1.0%) plus 9.0% (if our net leverage is greater than or equal to seven times) to 7.0% per annum (if our net leverage ratio is less than five times).~~, with all amounts payable in cash. The maturity date of the ~~2021~~2023 Revolving Credit Facility is ~~February 19, 2021.~~April 26, 2023. When drawn, the ~~2021~~2023 Revolving Credit Facility permits prepayment at our option in whole or in part without penalty.

Pursuant to the Financing Transactions, the following spreads are applicable:

The ~~2021~~2023 Revolving Credit Facility is jointly and severally guaranteed by CME NV and CME BV and is secured by a pledge over 100% of the outstanding shares of each of CME NV and CME BV. The ~~2021~~2023 Revolving Credit Facility agreement contains limitations on ~~our~~CME’s ability to incur indebtedness, incur guarantees, grant liens, pay dividends or make other distributions, enter into certain affiliate transactions, consolidate, merge or effect a corporate reconstruction, make certain investments acquisitions and loans, and conduct certain asset sales. The agreement also contains maintenance covenants in respect of interest ~~cover, cash flow~~ cover and total leverage ratios, and has covenants in respect of incurring indebtedness, the provision of guarantees, making investments and disposals, granting security and certain events of defaults.

At ~~September~~June 30, ~~2017,~~2018, the maturity of our long-term debt and credit facilities ~~excluding any future elections to pay interest in kind,~~ was as follows:

We lease certain of our office and broadcast facilities as well as machinery and equipment under various leasing arrangements. The future minimum lease payments, by year and in the aggregate, under capital leases with initial or remaining non-cancellable lease terms in excess of one year, consisted of the following at ~~September~~June 30, ~~2017~~2018:

Program rights comprised the following at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017:

Accounts receivable comprised the following at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017:

Other current and non-current assets comprised the following at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017:

Capitalized debt costs are being amortized over the term of the ~~2021~~2023 Revolving Credit Facility using the straight-line method, which approximates the effective interest method.

Property, plant and equipment comprised the following at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017:

The movement in the net book value of property, plant and equipment during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 was comprised of:

Accounts payable and accrued liabilities comprised the following at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017:

Other current and non-current liabilities comprised the following at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017:

During the three and six months ended June 30, 2018 and 2017, we recognized revenue of US$ 1.6 million and US$ 4.1 million; and US$ 1.2 million; and US$ 3.7 million related to our deferred revenue existing at December 31, 2017 and 2016, respectively. The increase in our deferred revenues for the six months ended June 30, 2018 is primarily the result of cash payments received from customers in advance of satisfying our performance obligations.

ASC 820, “Fair Value Measurements and Disclosure”, establishes a hierarchy that prioritizes the inputs to those valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are:

Basis of Fair Value Measurement

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

We evaluate the position of each financial instrument measured at fair value in the hierarchy individually based on the valuation methodology we apply. The carrying amount of financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities, approximate their fair value due to the short-term nature of these items. The fair value of our long-term debt is included in Note 5, "Long-term Debt and Other Financing Arrangements".

We value the interest rate swap agreements using a valuation model which calculates the fair value on the basis of the net present value of the estimated future cash flows. The most significant input used in the valuation model is the expected EURIBOR-based yield curve. These instruments were allocated to Level 2 of the fair value hierarchy because the critical inputs to this model, including current interest rates, relevant yield curves and the known contractual terms of the instruments, were readily observable.

As a part of the Financing Transactions (see Note 5, "Long-term Debt and Other Financing Arrangements") we entered into forward starting interest rate swap agreements to mitigate our exposure to interest rate fluctuations on the outstanding principal amount of the 2021 Euro Loan and 2023 Euro Loan for the period from maturity of the current instruments until the prolonged maturity date of the related Euro Loan.

In ~~August~~May 2018, we settled in part the interest rate swaps underlying the ~~2018~~2019 Euro ~~Term~~ Loan to align with the EUR ~~50.0~~110.0 million reduction of the principal balance of that loan following the repayment on ~~August 1, 2017~~May 3, 2018 (see Note 5, "Long-term Debt and Other Financing Arrangements"). Changes in the fair value ~~for~~of the settled portion of ~~these~~this interest rate ~~swaps is~~swap are recognized within other non-operating income, net in our condensed consolidated statements of operations and comprehensive income / loss.

The expected proceeds from the ~~sale of the Croatia and Slovenia segments~~Divestment Transaction will be used to satisfy amounts owing in respect of the ~~2018~~2019 Euro ~~Term~~Loan and a portion of the 2021 Euro Loan (see Note 5, "Long-term Debt and Other Financing Arrangements"). ~~It is probable~~The anticipated reduction of principal amounts owing in respect of the ~~sale~~2021 Euro Loan will ~~complete prior to the initial~~reduce future interest ~~payment on~~payments that the interest rate swap maturing on November 1, ~~2018 which precludes recognition~~2019 is designed to hedge. To maintain the effectiveness of the ~~effective~~interest rate swap, we have de-designated a portion to align the notional amount of the ~~changes in fair value within accumulated other comprehensive income / loss. All~~instrument with the 2021 Euro Loan principal that will remain after the application of Divestment Transaction proceeds. For the portion de-designated, all related fair value adjustments, ~~and~~including those previously recognized in accumulated other comprehensive income / loss, are recognized in other non-operating income, net in our condensed consolidated statements of operations and comprehensive income / loss (see Note 14, "Equity").

WeFrom time to time, we have entered into ~~the below~~ forward foreign exchange contracts to reduce our exposure to movements in foreign exchange rates related to contractual payments under certain dollar-denominated agreements. ~~Information relating to financial instruments as~~As at ~~September~~June 30, ~~2017 is as follows:~~

200,000 shares of our Series B Convertible Redeemable Preferred Stock, par value US$ 0.08 per share (the “Series B Preferred Shares”), were issued and outstanding as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016.~~2017. As at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the ~~carrying~~accreted value of the Series B Preferred Shares was US$ ~~262.1~~269.4 million and US$ ~~254.9~~264.6 million, respectively. The Series B Preferred Shares are held by Time Warner Media Holdings B.V. ("TW Investor")., a wholly owned subsidiary of AT&T. As of ~~September~~June 30, ~~2017,~~2018, the 200,000 shares of Series B ~~Preferred Shares~~preferred stock were convertible into approximately ~~108.1~~111.1 million shares of Class A common stock.

The ~~initial~~ stated value of the Series B Preferred Shares of US$ 1,000 per share ~~accretes~~accreted at an annual rate of 3.75%, compounded quarterly, from June 25, 2016 tountil June 24, 2018. ~~We have the right to pay cash to the holder in lieu of any further accretion.~~The Series B Preferred Shares will not accrete further. Each Series B Preferred Share may, at the holder's option, be converted into the number of shares of our Class A common stock determined by dividing (i) the accreted stated value plus accrued but unpaid dividends, if any, in each case as of the conversion date, by (ii) the conversion price, which was approximately US$ 2.42 at ~~September~~June 30, ~~2017,~~2018, but is subject to adjustment from time to time pursuant to customary weighted-average anti-dilution provisions with respect to our issuances of equity or equity-linked securities at a price below the then-applicable conversion price (excluding any securities issued under our benefit plans at or above fair market value). We have the right to redeem the Series B Preferred Shares in whole or in part upon 30 days' written notice. The redemption price of each outstanding Series B Preferred Share is equal to its accreted stated value plus accrued but unpaid dividends, if any, in each case as of the redemption date specified in the redemption notice. After receipt of a redemption notice, each holder of Series B Preferred Shares will have the right to convert, prior to the date of redemption, all or part of such Series B Preferred Shares to be redeemed by us into shares of our Class A common stock in accordance with the terms of conversion described above.

Holders of the Series B Preferred Shares have no voting rights on any matter presented to holders of any class of our capital stock, with the exception that they may vote with holders of shares of our Class A common stock (i) with respect to a change of control event or (ii) as provided by our Bye-laws or applicable Bermuda law. Holders of Series B Preferred Shares will participate in any dividends declared or paid on our Class A common stock on an as-converted basis. The Series B Preferred Shares will rank pari passu with our Series A Convertible Preferred Stock and senior to all other equity securities of the Company in respect of payment of dividends and distribution of assets upon liquidation. The Series B Preferred Shares have such other rights, powers and preferences as are set forth in the Certificate of Designation for the Series B Preferred Shares.

We concluded that the Series B Preferred Shares were not considered a liability and that the embedded conversion feature in the Series B Preferred Shares was clearly and closely related to the host contract and therefore did not need to be bifurcated. The Series B Preferred Shares are ~~required to be classified outside of permanent equity because such shares can be redeemed for cash in certain circumstances.~~not considered a liability and the embedded conversion feature does not require bifurcation. The Series B Preferred Shares are ~~carried on the balance sheet~~classified outside of permanent equity at redemption ~~value. As the Series B Preferred Shares are redeemable, we have~~value which includes accreted changes in the redemption value since issuance. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, we recognized accretion on the Series B Preferred Shares of US$ ~~2.5~~2.3 million and US$ ~~7.2~~4.8 million; and US$ 2.4 million and US$ ~~11.3~~4.8 million, respectively, with corresponding decreases in additional paid-in capital.

5,000,000 shares of Preferred Stock were authorized as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017.

One share of Series A Convertible Preferred Stock (the "Series A Preferred Share") was issued and outstanding as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017. The Series A Preferred Share is convertible into 11,211,449 shares of Class A common stock on the date that is 61 days after the date on which the ownership of our outstanding shares of Class A common stock by a group that includes TW Investor and its affiliates would not be greater than 49.9%. The Series A Preferred Share is entitled to one vote per each share of Class A common stock into which it is convertible and has such other rights, powers and preferences, including potential adjustments to the number of shares of Class A common stock to be issued upon conversion, as are set forth in the Certificate of Designation for the Series A Preferred Share.

200,000 shares of Series B Preferred Shares were issued and outstanding as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 (see Note 13, "Convertible Redeemable Preferred Shares"). As of ~~September~~June 30, ~~2017,~~2018, the 200,000 Series B Preferred Shares were convertible into approximately ~~108.1~~111.1 million shares of Class A common stock.

440,000,000 shares of Class A common stock and 15,000,000 shares of Class B common stock were authorized as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017. The rights of the holders of Class A common stock and Class B common stock are identical except for voting rights. The shares of Class A common stock are entitled to one vote per share and the shares of Class B common stock are entitled to ten votes per share. Shares of Class B common stock are convertible into shares of Class A common stock on a one-for-one basis for no additional ~~consideration.~~consideration and automatically convert into shares of Class A common stock on a one-for-one basis when the number of shares of Class B common stock is less than 10% of the total number of shares of common stock outstanding. Holders of each class of shares are entitled to receive dividends and upon liquidation or dissolution are entitled to receive all assets available for distribution to holders of our common stock. Under our ~~Bye-laws,~~bye-laws, the holders of each class have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares.

There were ~~144.9~~252.1 million and ~~143.4~~145.5 million shares of Class A common stock outstanding at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017, respectively, and no shares of Class B common stock outstanding at ~~September~~June 30, ~~2017~~2018 or December 31, ~~2016~~2017.

As at ~~September~~June 30, ~~2017~~2018, TW Investor owns ~~42.4%~~64.4% of the outstanding shares of Class A common ~~stock~~stock. In connection with the exercise of warrants by Warner Media and ~~has a~~ ~~46.5%~~ ~~voting interest in~~TW Investor (described below), each of them issued standing proxies to the independent directors of the Company, ~~due~~pursuant to which it granted the right to vote the shares received on the exercise of those warrants (the “Warrant Shares”) on all matters other than a change in control. In accordance with these proxies, the Warrant Shares will be voted in proportion to votes cast at a general meeting of the Company, excluding such Warrant Shares. As a result of the standing proxies, after giving effect to its ownership of the Series A Preferred ~~Share.~~Share, TW Investor has a 44.7% voting interest in the Company.

On May 2, 2014, we issued 114,000,000 warrants in connection with a rights offering. Each warrant ~~may be exercised~~was exercisable until May 2, 2018 and ~~entitles~~entitled the holder thereof to receive one share of our Class A common stock at an exercise price of US$ 1.00 per share in cash. During the ~~nine~~six months ended ~~September~~June 30, ~~2017, 563,325~~2018, 105,652,401 warrants were exercised, including 100,926,996 by Warner Media (formerly Time Warner, Inc. at date of exercise) and TW Investor, resulting in net proceeds to us of approximately US$ ~~0.6~~105.7 million. ~~As at September 30, 2017, 106,439,720~~Of the 114,000,000 issued warrants, remained outstanding. Time Warner and TW Investor collectively hold 100,926,996 of these warrants. The warrants are classified in additional paid-in capital, a component of equity, and are not subject to subsequent revaluation.202,175 expired unexercised on May 2, 2018.

The movement in accumulated other comprehensive loss during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 comprised the following:

Interest expense comprised the following for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:

We paid cash interest (including mandatory cash-pay Guarantee Fees) of US$ ~~22.2~~21.5 million and US$ ~~38.3~~19.6 million during the ~~nine~~six months ended ~~September~~June 30, 2018 and 2017, ~~and 2016,~~ respectively. ~~In addition, we paid US$ 1.4 million and US$ 5.5 million of Guarantee Fees in cash during the nine months ended September 30, 2017 and 2016, respectively, for which we had the option to pay in kind.~~ Interest expense related to the ~~2018~~2019 Euro ~~Term~~Loan and 2021 Euro Loan has been allocated to results from discontinued operations relative to the proportion of those principal balances expected to be repaid from the proceeds of the Divestment Transaction (see Note 3, "Discontinued Operations and Assets Held for Sale").

Other non-operating income / expense, net comprised the following for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:

Under our 2015 Stock Incentive Plan (the "2015 Plan"), 6,000,000 shares of Class A common stock are authorized for grants of stock options, restricted stock units ("RSU"), restricted stock and stock appreciation rights to employees and non-employee directors. In addition, any shares available under our Amended and Restated Stock Incentive Plan (which expired on June 1, 2015), including in respect of any awards that expire, terminate or are forfeited, will be available for awards under the 2015 Plan. Under the 2015 Plan, awards are made to employees and directors at the discretion of the Compensation Committee. Any awards previously issued under the Amended and Restated Stock Incentive Plan will continue to be governed by the terms of that plan.

Grants of options allow the holders to purchase shares of Class A common stock at an exercise price, which is generally the market price prevailing at the date of the grant, with vesting between one and four years after the awards are granted. There was no option activity during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~.2018. The summary of stock options outstanding as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 is presented below:

When options are vested, holders may exercise them at any time up to the maximum contractual life of the instrument which is specified in the option agreement. At June 30, 2018, the maximum life of options that were issued under the 2015 Plan was ten years. Upon providing the appropriate written notification, holders pay the exercise price and receive shares. Shares delivered in respect of stock option exercises are newly issued shares.

The fair value of stock options is estimated on the grant date using the Black-Scholes option-pricing model and recognized ratably over the requisite service period as a component of selling, general and administrative expenses. The aggregate intrinsic value (the difference between the stock price on the last day of trading of the second quarter of June 30, 2018 and the exercise prices multiplied by the number of in-the-money options) represents the total intrinsic value that would have been received by the option holders had they exercised all in-the-money options as at June 30, 2018. This amount changes based on the fair value of our Class A common stock. As at June 30, 2018, there was US$ 0.8 million of unrecognized compensation expense related to stock options which is expected to be recognized over a weighted-average period of 1.2 years.

Each RSU represents a right to receive one share of Class A common stock of the Company for each RSU that vests in accordance with a time-based vesting schedule, generally between one to four years from the date of grant. Upon vesting, shares of Class A common stock are issued from authorized but unissued shares. Holders of RSU awards are not entitled to receive cash dividend equivalents and are not entitled to vote. The grant date fair value of RSUs is calculated as the closing price of our Class A common shares on the date of grant and presented as a component of selling, general and administrative expenses.

The fair value of stock options is estimated on the grant date using the Black-Scholes option-pricing model and recognized ratably over the requisite service period. The aggregate intrinsic value (the difference between the stock price on the last day of trading of the third quarter of September 30, 2017 and the exercise prices multiplied by the number of in-the-money options) represents the value that would have been received by the option holders had they exercised all in-the-money options as at September 30, 2017. This amount changes based on the fair value of our Class A common stock. As at September 30, 2017, there was US$ 1.4 million of unrecognized compensation expense related to stock options which is expected to be recognized over a weighted-average period of 1.9 years.

As at ~~September~~June 30, 2018 and December 31, 2017,, there were 479,406 and 719,109, respectively, of unvested RSUs with performance conditions included in the above. No RSUs with performance conditions were granted or forfeited during the six months ended June 30, 2018. As at June 30, 2018, the intrinsic value of unvested RSUs was US$ ~~11.0 million~~.10.3 million. Total unrecognized compensation cost related to unvested RSUs as at ~~September~~June 30, ~~2017~~2018 was US$ ~~5.1~~6.9 million and is expected to be recognized over a weighted-average period of ~~2.1 years~~.2.6 years.

The following weighted-average, equity awards and convertible shares were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive for the periods presented:

These instruments may become dilutive in the future. As set forth in the Certificate of Designation for the Series B Preferred Shares, the holders of our Series B Preferred Shares are not contractually obligated to share in our losses.

Revenues from contracts with customers comprised the following for the three and six months ended June 30, 2018 and 2017:

Management reviews the performance of our operations based on the above revenue types as well as on a geographic basis as described above. Management does not review other disaggregations of revenues from contracts with customers.

At ~~September~~June 30, ~~2017~~2018, we had total commitments of US$ ~~138.9~~71.3 million (December 31, ~~2016:~~2017: US$ ~~128.2~~99.1 million) in respect of future programming, including contracts signed with license periods starting after the balance sheet date. In addition, we have digital transmission obligations, future minimum operating lease payments for non-cancellable operating leases with remaining terms in excess of one year (net of any sublease income) and other commitments as follows:

We are from time to time party to legal proceedings, arbitrations and regulatory proceedings arising in the normal course of our business operations, including the proceeding described below. We evaluate, on a quarterly basis, developments in such matters and provide accruals for such matters, as appropriate. In making such decisions, we consider the degree of probability of an unfavorable outcome and our ability to make a reasonable estimate of the amount of a loss. An unfavorable outcome in any such proceedings, if material, could have an adverse effect on our business or consolidated financial statements.

In the fourth quarter of 2016, our Slovak subsidiary MARKIZA-SLOVAKIA, spol. s.r.o. (“Markiza”) was notified of claims that were filed in June 2016 in a court of first instance in Bratislava, the Slovak Republic to collect amounts allegedly owing under four promissory ~~notes.~~notes that have a collective face value of approximately EUR 69.0 million. These four promissory notes were purportedly issued in June 2000 by Pavol Rusko in his personal capacity and were purportedly guaranteed by Markiza under the signature of Mr. Rusko, who was an executive director of Markiza at that time as well as one of its shareholders. The notes purport to be issued in favor of Marian Kocner, a controversial Slovak businessman, and to a former associate of Mr. Kocner, and were supposedly assigned several times, ultimately to Sprava a inkaso zmeniek, s.r.o., a company owned by Mr. Kocner that is the plaintiff in these proceedings.

Two of the notes, each of which purportedly has a face value of approximately EUR 8.3 million, allegedly matured in ~~2015~~2015; and the other two, each of which purportedly has a face value of approximately EUR 26.2 million, allegedly matured in 2016. The four notes ~~purport~~accrue interest from their purported maturity dates. Although Mr. Rusko has asserted, both in written responses to beactive claims filed in respect of three of the ~~aggregate amount~~promissory notes as well as in subsequent oral testimony, that he signed the notes in June 2000, we do not believe that the notes were signed in June 2000 or that any of ~~approximately EUR 69.0 million.~~the notes are authentic.

Despite a random case assignment system in the Slovak Republic, claims in respect of three of the notes were initially assigned to the same judge. ~~The judge who~~One of those claims, concerning one of the promissory notes having a face value of approximately EUR 8.3 million (the “First PN Case”), was ~~assigned~~subsequently reassigned. Proceedings on the claim in respect of the fourth promissory note (in the amount of approximately EUR ~~26.0~~26.2 million) were terminated ~~proceedings~~ in January 2017 by the presiding judge because the plaintiff failed to pay court ~~fees. The plaintiff refiled this claim~~fees and were terminated a second time by a different presiding judge in ~~June 2017; the judge who was assigned the refiled claim terminated proceedings in~~ September 2017 after the plaintiff ~~again~~refiled but failed to pay court ~~fees. In responses~~fees a second time.

During the first quarter of 2018, the court of first instance began to ~~the claims~~schedule hearings in respect of the ~~other three~~First PN Case as well as the claims relating to the second promissory note having a face value of approximately EUR 8.3 million (the “Second PN Case”) and one of the promissory notes ~~that were filed~~having a face value of approximately EUR 26.2 million (the “Third PN Case”). On April 26, 2018, the judge in ~~August 2017, Mr. Rusko asserted that he signed~~ the ~~three notes~~First PN Case ruled in ~~June 2000. We do not believe that the notes were signed in June 2000 or that any~~favor of the ~~notes are authentic. We are vigorously defending the claims.~~plaintiff. Markiza has appealed that decision.

On May 14, 2018, Markiza filed a criminal complaint with the Office of the Special Prosecutor Office of the Slovak Republic (the “Special Prosecutor’s Office”) alleging that Mr. Kocner and Mr. Rusko committed the offenses of (1) counterfeiting, falsification, and illegal production of money and securities and (2) obstruction or perversion of justice. The Special Prosecutor’s Office opened criminal proceedings in the matter at that time.

On June 20, 2018, the Special Prosecutor’s Office issued a decision to formally charge Mr. Kocner and Mr. Rusko with counterfeiting, falsification, and illegal production of money and securities and with obstruction or perversion of justice. Subsequently, Mr. Kocner has been taken into pre-trial custody by the Slovak authorities.

Following the initiation of these criminal proceedings, a hearing scheduled in respect of the Third PN Case was canceled and to date no further hearing has been scheduled. No hearings in the Second PN Case have been held.

Markiza is seeking to have the civil proceedings suspended until the conclusion of the criminal proceedings. In the event any of the civil proceedings are not suspended, Markiza will continue to vigorously defend the claims.

Based on the facts and circumstances of these cases, we have not accrued any amounts in respect of these claims.

We consider our related parties to be our officers, directors and shareholders who have direct control and/or influence over the Company as well as other parties that can significantly influence management. On June 14, 2018, AT&T acquired the outstanding shares of Warner Media. We have identified transactions with individuals or entities associated with ~~Time Warner,~~AT&T, which is represented on our Board of Directors and holds a ~~46.5%~~44.7% voting interest in CME Ltd. (see Note 14, "Equity") as at ~~September~~June 30, ~~2017~~2018, as material related party transactions.

On July 5, 2018, we signed an amended and restated framework agreement (the “Restated Framework Agreement”) with Slovenia Broadband S.à r.l. (the “Purchaser”), a wholly owned subsidiary of United Group B.V., amending and restating the framework agreement entered into on July 9, 2017, relating to the sale of our Croatia and Slovenia operations. Under the Restated Framework Agreement, the sale of our Croatia operations (the “Croatian Transaction”) is independent of the sale of our Slovenia operations (the “Slovenian Transaction”). The Restated Framework Agreement allocates the total cash consideration of EUR 230.0 million (approximately US$ 268.1 million) into (i) cash consideration for closing of the Croatian Transaction of EUR 85.0 million (approximately US$ 99.1 million) and (ii) cash consideration for closing of the Slovenian Transaction of EUR 145.0 million (approximately US$ 169.0 million), each on a cash-free and debt-free basis and each subject to customary working capital adjustments.

The Competition Protection Agency in Slovenia has confirmed that the Croatian Transaction does not fall within the scope of its review and the Croatian Transaction is expected to close on or about July 31, 2018, subject to the satisfaction of the remaining customary closing conditions. Closing of the Slovenian Transaction remains subject to receipt by the Purchaser of the approval of the Competition Protection Agency in Slovenia, as well as other customary closing conditions.

The Restated Framework Agreement includes certain mutual termination rights including an extension of the right of either party to terminate the Restated Framework Agreement if the transaction had not closed by September 13, 2018. If the Restated Framework Agreement is terminated by either party because closing has not occurred prior to September 13, 2018, the Purchaser is obliged to pay CME a termination fee of EUR 7.0 million (approximately US$ 8.2 million) if neither transaction has closed by such date, and approximately EUR 4.4 million (approximately US$ 5.1 million) if the Croatian Transaction has closed but the Slovenian Transaction has not closed by such date, subject to certain exceptions, including if any requisite regulatory approval has not been obtained as a result of the Purchaser being required to make a specified material divestiture as a condition to such regulatory approval.

The exchange rates used in this report are as at ~~September~~June 30, ~~2017,~~2018, unless otherwise indicated.

Please note that we may announce information using SEC filings, press releases, public conference calls, webcasts and posts to the "Investors" section of our website, www.cme.net. We intend to continue to use these channels to communicate important information about CME Ltd. and our operations. We encourage investors, the media, our customers and others interested in the Company to review the information we post at www.cme.net.

Central European Media Enterprises Ltd. ("CME Ltd.") is a media and entertainment company operating mainly in four countries in Central and Eastern Europe. We manage our business on a geographical basis, with four operating segments: Bulgaria, the Czech Republic, Romania, and the Slovak Republic, which are also our reportable segments. These operating segments reflect how CME Ltd.’s operating performance is evaluated by our chief operating decision makers, who we have identified as our co-Chief Executive Officers, how our operations are managed by segment managers, and the structure of our internal financial reporting.

On July 9, 2017, we entered into a framework agreement with Slovenia Broadband S.à r.l., a wholly owned subsidiary of United Group B.V., relating to the sale of our Croatia and Slovenia operations. On July 18, 2018, the Competition Protection Agency in Slovenia confirmed the closing of the Croatian Transaction was outside the scope of its review and we expect the Croatian Transaction will be completed on or about July 31, 2018. Accordingly, these operations are classified as held for sale and they are presented as discontinued operations for all periods in this report; and the discussion below relates to our continuing operations in the four remaining operating segments.

In this report we refer to several non-GAAP financial measures, including OIBDA, OIBDA margin, free cash flow and unlevered free cash flow. We believe that each of these metrics is useful to investors for the reasons outlined below. Non-GAAP financial measures may not be comparable to similar measures reported by other companies. Non-GAAP financial measures should be evaluated in conjunction 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 is useful to investors because it provides a meaningful representation of our performance, as it excludes certain items that do not impact either our cash flows or the operating results of our operations. OIBDA and unlevered free cash flow are also used as components in determining 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-Chief Executive Officers when evaluating our performance. ~~Stock-based~~From January 1, 2018, stock-based compensation and certain ~~other items are not~~operating costs incurred on behalf of our segments at the corporate level have been allocated to our segments for purposes of evaluating their ~~performance and therefore are not included in their respective OIBDA.~~performance. Prior period information has been recast to conform to the current period presentation. Our key performance measure of the efficiency of our consolidated operations and our segments is OIBDA margin. We define OIBDA margin as the ratio of OIBDA to net revenues.

Following a repricing of our Guarantee Fees ~~completed~~ in March 2017 and April 2018, the proportion of interest and related Guarantee Fees on our outstanding indebtedness that must be paid in cash has increased. In addition to this obligation to pay more ~~interest and related~~ Guarantee Fees in cash, we expect to use cash generated by the business to pay certain Guarantee Fees that ~~are payable~~were previously paid in kind. These cash payments are all reflected in free cash flow; accordingly, we believe unlevered free cash flow, defined as free cash flow before cash payments for interest and Guarantee Fees, best illustrates the cash generated by our operations when comparing periods. We define free cash flow as net cash generated from continuing operating activities less purchases of property, plant and equipment, net of disposals of property, plant and equipment and excluding the cash impact of certain unusual or infrequent items that are not included in costs charged in arriving at OIBDA because they are not considered by our co-Chief Executive Officers when evaluating performance.

For additional information regarding our business segments, including a reconciliation of OIBDA to US GAAP financial measures, see Item 1, Note 19, "Segment Data". For a reconciliation of free cash flow and unlevered free cash flow to a US GAAP financial ~~measure,~~measures, see "Free Cash Flow and Unlevered Free Cash Flow" below.

While our reporting currency is the dollar, our consolidated revenues and costs are divided across a range of European currencies and CME Ltd.’s functional currency is the Euro. Given the significant movement of the currencies in the markets in which we operate against the dollar, we believe that it is useful to provide percentage movements based on actual percentage movements (“% Act”), which includes the effect of foreign exchange, as well as like-for-like percentage movements (“% Lfl”). The like-for-like percentage movement references reflect the impact of applying the current period average exchange rates to the prior period revenues and costs. Since the difference between like-for-like and actual percentage movements is solely the impact of movements in foreign exchange rates, our discussion in the following analysis is focused on constant currency percentage movements in order to highlight those factors influencing operational performance. The incremental impact of foreign exchange rates is presented in the tables preceding such analysis. Unless otherwise stated, all percentage increases or decreases in the following analysis refer to year-on-year percentage changes between the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016.~~2017.

The following table provides a summary of our consolidated results of our continuing operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:

Our consolidated net revenues ~~increased~~were steady at constant rates in the three ~~and nine~~ months ended ~~September~~June 30, ~~2017~~2018 compared to the corresponding ~~periods~~period in ~~2016 due to growth in both~~2017 as television advertising revenues and carriage fees and subscription ~~revenues.~~revenues were broadly flat. Television advertising revenues grew 16% at actual rates and 3% at constant rates in the first half of 2018 compared to 2017, which drove an increase in net revenues for the first half of 2018. Television advertising spending overall in the markets of the countries in which we operate grew an estimated 6%4% overall at constant rates in the first ~~nine months~~half of ~~2017~~2018 compared to 2016. Our television advertising revenues grew 5% at actual rates and 4% at constant rates during the same period due primarily to significant year-on-year growth in Romania, as well as higher levels of spending in Bulgaria and the Czech Republic. Carriage fees and subscription revenues increased 16% at actual and constant rates in the nine months ended September 30, 2017 compared to the corresponding period in 2016 primarily due to additional carriage fees from contracts with cable, satellite and internet protocol television ("IPTV") operators in the Slovak Republic since January of this year.

Costs charged in arriving at OIBDA ~~increased 7% and 3% at actual rates~~ in the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 increased 9% and 14% at actual rates, respectively, due to a stronger Euro compared to the dollar, but were broadly flat at constant rates compared to the corresponding periods in ~~2016. At constant rates, costs were broadly flat in the third quarter, and increased 2% in the first nine months of 2017 compared to 2016.~~2017. Content costs increased ~~2% and 5%~~3% at constant rates in the ~~third~~second quarter and first ~~nine months~~half of ~~2017, respectively, as we made targeted~~2018, while investments in our programming line-up to monetize additional ratings in Romania when available, to improve our competitive positioning in Bulgaria and the Czech Republic, and to support the change in the way our channels are distributed in the Slovak Republic. Other operating costs decreased in the third quarter and first nine months of 2017 due to savings from transmission costs, whichpopular local content were partially offset ~~higher bad debt charges.~~by other cost savings.

Since the growth in revenue outpaced the increase in costs, our OIBDA margin increased in the ~~three and nine~~six months ended ~~September~~June 30, ~~2017.~~2018. This dynamic also drove an increase in operating income, with a similar improvement in operating margin. We expect revenues to grow at a faster pace than costs in ~~2017~~2018 and for the next few years, leading to continued OIBDA margin expansion year on year, although trends may vary from quarter to quarter.

The ~~improvement in our operations during the twelve month period ended September 30, 2017 reduced our net leverage ratio to 5.8x at the end~~completion of the ~~quarter, which will result in our cost of borrowing decreasing by 125 basis points to 6.0% from the end of October 2017.~~

On February 5, 2018, we entered into an amendment to extend the maturity date of the 2019 Euro Loan from November 1, 2018 to May 1, 2019, and subsequently repaid EUR 50.0 million (approximately US$ 61.6 million at February 6, 2018 rates) of the outstanding principal balance of that loan.

On April 25, 2018, we entered into a series of amendments which modify certain terms of the 2021 Euro Loan, the 2023 Euro Loan, the 2023 Revolving Credit Facility and the Reimbursement Agreement (collectively, the "Financing Transactions"), which were effective on April 26, 2018. The Financing Transactions reduced the rates under the pricing grid in the Reimbursement Agreement used to calculate the Guarantee Fees payable, and extended the maturity dates of each of the 2021 Euro Loan, the 2023 Euro Loan and the 2023 Revolving Credit Facility.

On April 25, 2018, Warner Media exercised 100,926,996 warrants resulting in proceeds of US$ 100.9 million, and an additional 2.4 million warrants were exercised by other shareholders during the second quarter prior to their expiration on May 2, 2018. The total number of warrants exercised between 2016 and 2018 was 113.8 million. On May 3, 2018, we used proceeds from the recent warrant exercises, together with excess cash on hand, to repay EUR 110.0 million (approximately US$ 132.0 million at May 3, 2018 rates) of the outstanding principal balance of the 2019 Euro Loan.

Following this repayment, there is EUR 40.8 million of principal outstanding on our nearest debt maturity, and together with the continued improvement in our operations, our net leverage ratio improved to 4.4x at the end of the second quarter. With the new pricing grids applicable to the Euro Loans, our weighted average cost of borrowing was 4.1% at the end of the second quarter, down from 6.00% at the start of the year.

On July 9, 2017, we agreed to sell our operations in Croatia and Slovenia to Slovenia Broadband S.à r.l. (the "Purchaser"), a subsidiary of United Group B.V. ~~(“United Group”~~(the "United Group"), subject to obtaining regulatory approvals and other customary closing conditions. ~~The transaction~~On March 26, 2018 the Croatian Agency for Electronic Media confirmed the Divestment Transaction is ~~expected to close by~~permissible under Croatian media legislation. On May 7, 2018, the ~~end of 2017 or early 2018.~~

Proceeds from the ~~proceeds~~Croatian Transaction will be used to repay debt and related payables, including the remaining balance of the ~~2018 Euro Term Loan in full, with any excess proceeds applied to repay the Commitment Fee and a portion of the~~ 2019 Euro ~~Term~~ Loan, resulting in our nearest debt maturity being 2021. If the Croatian Transaction had closed on June 30, 2018, this repayment of debt and related ~~Guarantee Fees, which will result in a significant decrease in~~payables would have reduced our ~~indebtedness and in our net leverage ratio. Based on our results for the period ended September 30, 2017, this would reduce CME’s~~ net leverage ratio from ~~5.8x~~4.4x to ~~4.8x.~~

The Slovenian Transaction with a purchase price of EUR 145.0 million (approximately US$ 169.0 million) plus any working capital adjustment, remains subject to ~~decrease from 6.0% to 4.5%. We estimate the annual savings from interest and Guarantee Fees resulting~~certain closing conditions, including regulatory approvals from the ~~transaction will exceed both income~~Competition Protection Agency in Slovenia. We agreed to extend the long-stop date of the Divestment Transaction to September 13, 2018, and ~~cash generated by~~ the ~~combined operations~~parties continue working to satisfy the applicable closing conditions. If the Slovenian Transaction had also closed on June 30, 2018, the incremental repayment of ~~Croatia~~debt and ~~Slovenia in 2016. The~~related payables would have further reduced our net ~~assets~~leverage ratio from 4.1x to 3.6x at the end of ~~these businesses, which are presented as held for sale on~~ the ~~Condensed Consolidated Balance Sheet, were approximately US$ 102.9 million as at September 30, 2017.~~second quarter.

Our unlevered free cash flow increased during the first ~~nine~~six months of ~~2017~~2018 compared to the same period in ~~2016~~2017 reflecting higher collection of cash ~~collections~~ from ~~revenue growth, which~~receivables generated during the significant improvement in fourth quarter performance in 2017 and first quarter in 2018 when compared to the respective periods in the prior years, as well as increased prepayments from customers and lower capital expenditures. This was partially offset by higher cash ~~spending on programming as well as higher cash~~ paid for income ~~taxes and capital expenditures. Free~~taxes.

Although our interest expense decreased significantly during the six months ended June 30, 2018 compared to the prior year period, the proportion of interest expense required to be paid in cash ~~flow increased significantly more than unlevered free cash flow due to a significant decrease in~~increased. Accordingly, higher cash paid for interest and Guarantee Fees ~~because last year we paid accrued interest related to the 2017 PIK Notes and 2017 Term Loan when they were refinanced in April 2016, and we also repaid accrued Guarantee Fees previously paid in kind~~was reflected in the ~~first nine months of 2016.~~

The following table sets out our estimates of the year-on-year changes in real GDP, real private consumption and the television advertising market, net of discounts, in our countries for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018:

After adjusting for inflation, we estimate that during the first ~~nine~~six months of ~~2017,~~2018, GDP grew in each of the countries in which we operate at a rate that exceeded the average growth rate for Western Europe. ~~Romania continued~~Analysts forecast this trend to ~~be one of the fastest growing economies in the European Union, and is forecast to be the leader~~persist for the ~~remainder~~duration of ~~2017. Similar to the last few~~2018, which would make four consecutive years ~~it has been reported~~ that ~~GDP~~ growth in ~~our markets has been less reliant on~~these territories outpaces more developed markets. Higher average wages in Romania continues to support significant growth in ~~exports,~~private consumption, and ~~domestic demand has played a larger role~~unemployment remains at historically low rates in ~~economic expansion. In Romania, increases to the minimum wage have provided support for higher disposable income. Consumer confidence remains strong in~~Bulgaria and the Czech and Slovak Republics, ~~reflecting historically low rates of~~with the Czech Republic seeing the lowest unemployment rate in ~~those countries.~~the European Union. We believe the growth in real private consumption forecast for ~~2017~~2018 will support overall growth in the television advertising markets across the four countries where we continue to operate.

On March 29, 2017, the United Kingdom formally initiated the process to leave the European Union, commonly referred to as “Brexit”, triggering a two-year period to finalize the terms of that separation. While the negotiations over the exact terms of Brexit may negatively impact economic growthTelevision advertising spending in ~~the UK and Europe, the contribution of domestic demand as a component of GDP growth has reduced the sensitivity of~~ our ~~markets to external shocks affecting exports. Additionally, we have not seen an appreciable impact on the behavior of advertisers~~countries decreased overall in ~~the countries in~~April 2018, which we ~~operate since the UK electorate voted in favor of Brexit in June 2016.~~

Our total Net Revenues and OIBDA by segment were as follows:

The television advertising market in Bulgaria increased an estimated 5%9% at constant rates in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to the same period in ~~2016.~~2017.

Our television advertising revenues increased significantly at constant rates in the ~~third~~second quarter and first ~~nine months~~half of ~~2017~~2018 compared to the same periods in ~~2016~~2017 primarily due to higher prices. Higher prices in ~~our sales policy for~~the second quarter were partially offset by selling fewer GRPs, including as a result of the timing of some campaigns, which started earlier this year compared to 2017 and therefore were already reflected in the results of the first three months of 2018. However, we sold more GRPs overall in the first half of the year ~~which were particularly~~due to strong ~~year-on-year in the third quarter.~~demand for advertising on television. Carriage fees and subscription revenues ~~decreased slightly at constant rates during~~increased in the ~~third~~second quarter ~~but increased year to-date~~of 2018 compared to 2017 primarily due to ~~continued efforts to secure new contracts with cable, satellite and IPTV operators with improved pricing.~~price increases.

On a constant currency basis, costs charged in arriving at OIBDA ~~increased~~decreased in the ~~third quarter~~three and ~~first nine~~six months ~~of 2017~~ended June 30, 2018 compared to the same periods ~~of 2016~~in 2017 due ~~primarily~~ to ~~increases in~~lower bad debt charges and professional fees, which was partially offset by higher content costs ~~resulting primarily from higher quality productions in certain time slots compared to the schedule~~as we launched a new telenovela on our main channel in the ~~prior year, as well as higher bad debt charges.~~access-prime time slot.

The television advertising market in the Czech Republic increased an estimated 4%2% at constant rates in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to the same period in ~~2016.~~2017.

Television advertising revenues were broadly flat at constant rates in the second quarter, reflecting a decrease in average prices that was mostly offset by selling more GRPs. The year-on-year increase in GRPs sold was higher during the first quarter of 2018 due to phasing, the Winter Olympics, and the earlier timing of the Easter holiday in 2018, which more than offset lower average prices, so television advertising revenues increased at constant rates in the first ~~nine months~~half of ~~2017 compared to the same period in 2016 due to higher average prices. Third quarter revenues were flat at constant rates, as higher average prices were offset by selling fewer GRPs during the period.~~2018. Carriage fees and subscription revenues increased on a constant currency basis due to an increase in the ~~third quarter and first nine months~~number of ~~2017 due primarily to~~subscribers as well as new contracts ~~for Nova International that became effective late in 2016.~~with higher prices.

Costs charged in arriving at OIBDA increased on a constant currency basis in the ~~third~~second quarter and first ~~nine months~~half of ~~2017~~2018 compared to the same periods in ~~2016~~2017 due to ~~an increase in~~higher content costs, ~~from~~which reflected higher quality local fiction productions this year compared to the schedule in ~~2016, an earlier start to certain key shows, and increased costs for sport rights and news, which~~2017. This was partially offset by ~~lower transmission costs.~~spending less on foreign acquired programming.

The television advertising market in Romania increased an estimated ~~12%~~5% at constant rates in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to the same period in ~~2016.~~2017.

Our television advertising revenues ~~increased~~decreased at constant rates induring the ~~third~~second quarter ~~of 2017 compared to the same period last year~~from selling fewer GRPs due to lower ratings, which was partially offset by higher ~~prices, and the year-to-date period in 2017 also benefited from selling more GRPs.~~prices. The market ~~continues to be~~remains largely sold-out in ~~2017~~Romania and while the economy continues to expand rapidly, we expected the significant level of television advertising market growth seen in the first quarter to moderate during the remainder of 2018. During the first half of 2018 we have ~~increased our all-day audience share compared~~seen some spending shift to ~~2016, and consequently our~~the lower priced competition since they generated more inventory ~~available~~ to sell. In addition, in the second and third quarters of 2016 our main channel aired the European football championship, which significantly increased the volume of inventory available and sold last year. If the benefit of the tournament last year was excluded, we estimate our television advertising revenues increased approximately 16% in the year-to-date period. Carriage fees and subscription revenues ~~grew~~were lower on a constant currency basis during the ~~third~~ quarter ~~and first nine months of 2017~~primarily due to ~~an increase in~~subscriber audits that benefited the ~~number of reported subscribers.~~prior year.

Costs charged in arriving at OIBDA ~~increased~~decreased at constant rates during the second quarter and first ~~nine months~~half of ~~2017~~2018 primarily due to ~~a increase in~~lower content costs, from both savings on production costs for locally produced formats this year when compared to the schedule in 2017, as ~~we invested more in local productions~~well as savings on foreign acquired programming. The second quarter also benefited from lower bad debt charges and the reversal of entertainment formats and aired more popular foreign programming to increase ratings. In the third quarter of 2017, these costs were mostly offset by savings from the European football championship that was broadcast in 2016.a legal accrual.

The television advertising market in the Slovak Republic increased an estimated 3%4% at constant rates in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to the same period in ~~2016.~~2017.

Our television advertising revenues ~~decreased~~increased on a constant currency basis ~~during~~in the ~~third~~second quarter due to higher sponsorship revenues, which were partially offset by selling fewer GRPs related to the timing of Easter this year compared to last year. In addition, there was some impact of phasing on the part of advertisers who spent more in the second quarter of 2017 following our exit from DTT in the beginning of last year. As spending patterns returned to normal in 2018 we estimate this contributed to market contraction in the second quarter of 2018 compared to 2017, while the same period in 2016 from selling fewer GRPs due to lower coverage for our channels, which have been distributed exclusively on cable, satellite and IPTV platforms in the country since January of this year. Demand for GRPs was also lower in the first nine months of 2017 compared to 2016 due to informational and political campaigns that took placemarket maintained growth in the first half of ~~2016. If this spending is excluded,~~2018 and our ~~television advertising~~ revenues increased ~~3% at constant rates~~more significantly than they did in the ~~first nine months of 2017.~~second quarter. The change in the way our channels are distributed also resulted in a significant increase in carriage fees and subscriptions revenue ~~as well as a cost reduction~~in the first half of 2018 from ~~significantly lower transmission costs. During~~higher prices due to certain contracts signed during the ~~remainder~~course of 2017 we anticipate reduced pressure on our ratings as additional households transition to cable, satellite and IPTV platforms and the measurement panel is updated to better reflect how viewers watch television.2017.

On a constant currency basis, costs charged in arriving at OIBDA ~~decreased~~increased during the ~~third~~second quarter ~~primarily~~and first half of 2018 due to ~~lower transmission~~an increase in spending on content, as there were higher costs ~~which were partially offset~~associated with a new series launched this year in the access-prime time slot. We also incurred significant legal and professional fees in the first ~~nine months~~half of ~~2017 by an increase in content costs as we made targeted adjustments in~~ the ~~programming line-up since we changed the way our channels are distributed.~~year (see Item 1, Note 20 Commitments and Contingencies).

Television advertising revenues: We estimate television advertising spending in our markets ~~grew on~~for the three months ended June 30, 2018 were relatively flat as reduced spending in April was offset by increased spending in May and June as compared to the same periods in 2017. Strong market growth in the first quarter of 2018 resulted in estimated average ~~by 6%~~growth of 4% at constant rates in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 as compared to the same period in ~~2016, positively impacting our television advertising revenues.~~2017. See "Overview - Segment Performance" above for additional information on television advertising revenues for each of our operating countries.

Carriage fees and subscriptions: Carriage fees and subscriptions ~~revenue increased~~revenues during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 to 18%~~2018 grew approximately 1% and ~~16% of total net revenues,~~4% at constant rates, respectively, as compared to ~~17% and 15% for~~ the same periods in ~~2016. The increases arose~~2017 primarily ~~in the Slovak Republic where our channels are exclusively available on cable, satellite and IPTV platforms since January 2017 and in Romania~~ due to new contracts, higher subscriber ~~counts.~~counts and increased rates. See "Overview - Segment Performance" above for additional information on carriage fees and subscription revenues for each of our operating countries.

Other revenues: Other revenues include primarily internet advertising revenues and revenues generated through the licensing of our own productions. Other revenues ~~decreased~~increased during the three months ended ~~September~~June 30, ~~2017~~2018 as compared to the same period in ~~2016~~2017 primarily due to ~~lower internet advertising~~higher online revenues in the Czech ~~Republic and fewer special events~~Republic. Other revenues decreased at constant rates during the six months ended June 30, 2018 as compared to the same period in ~~Romania, offset by increases in~~2017 primarily due to a lower volume of production services in the Slovak Republic. ~~Other revenues for the nine months ended September 30, 2017 remained in line with those of the same period in 2016.~~

Content costs: Content costs (including production costs and amortization and impairment of program rights) increased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to the same periods in ~~2016~~2017 primarily due to the inclusion of ~~both higher quality acquired programming and~~ more hours of local productions in our broadcast schedules.

Other operating costs: Other operating costs (excluding content costs, depreciation of property, plant and equipment, amortization of broadcast licenses and other intangibles as well as selling, general and administrative expenses) decreased at constant rates during the three ~~and nine~~ months ended ~~September~~June 30, ~~2017~~2018 compared to the same ~~periods~~period in ~~2016,~~2017 primarily due to payroll and related cost savings in the Slovak Republic. Other operating costs decreased at constant rates during the six months ended June 30, 2018 compared to the same period in 2017 primarily due to reductions in transmission costs in the Slovak Republic as well as payroll and related cost savings in the Slovak Republic ~~following our decision not~~and Bulgaria, which were partially offset by increases to ~~renew our contract~~amounts paid for ~~the terrestrial distribution of our channels there.~~authors' rights in Romania.

Depreciation of property, plant and equipment: Total depreciation of property, plant and equipment increased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to the same periods in ~~2016~~2017 primarily due to depreciation on ~~production~~machinery and ~~technical~~ equipment placed in service ~~as we replaced fully depreciated assets.~~during 2017.

Amortization of broadcast licenses and other intangibles: Total amortization of broadcast licenses and other intangibles decreased at constant rates during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to the same periods in ~~2016~~2017 primarily due to certain intangibles in the Czech Republic and Romania becoming fully amortized ~~partly offset by an increase~~ in ~~amortization of certain of our trademarks in the Czech Republic.~~2017.

Selling, general and administrative expenses: Selling, general and administrative expenses ~~increased for~~decreased at constant rates during the three ~~and nine~~ months ended ~~September~~June 30, ~~2017~~2018 as compared to the same ~~periods~~period in ~~2016~~2017 primarily due to lower bad debt charges in Bulgaria and the revision of a legal provision in Romania due to a change in our estimated exposure, partially offset by increased legal fees in the Slovak Republic. Selling, general and administrative expenses increased slightly at constant rates during the six months ended June 30, 2018 as compared to the same period in 2017 primarily due to increased legal fees in the Slovak Republic, offset by lower bad debt charges in ~~Bulgaria.~~Bulgaria and the revision of a legal provision in Romania due to a change in our estimated exposure.

Selling, general and administrative expenses for three and six months ended June 30, 2018 and 2017 also include charges in respect of non-cash stock-based compensation (see Item 1, Note 17, "Stock-based Compensation"). Non-cash stock-based compensation charges for the three and six months ended June 30, 2018 and 2017 were US$ 1.1 million and US$ 2.2 million; and US$ 0.8 million and US$ 1.6 million, respectively.

Operating income: Operating income during the three ~~and nine~~ months ended ~~September~~June 30, 2018 decreased slightly at constant rates compared to the same period in 2017 primarily due to increases in content costs and depreciation which outpaced decreases in other operating costs and selling, general and administrative expenses. Operating income during the six months ended June 30, 2018 increased compared to the same ~~periods~~period in ~~2016~~2017 primarily due to increases in television advertising and carriage fee revenues, which outpaced the ~~increases~~increase in content ~~costs~~costs; and ~~selling, general and administrative expenses.~~due to reductions in other operating costs. Our operating margin, which is determined as operating income ~~/ loss~~ divided by net revenues, was ~~13%~~28.7% and ~~19%~~22.4% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to ~~11%~~29.4% and ~~17%~~21.7% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017.

Interest expense: Interest expense during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 decreased compared to the ~~three and nine months ended September 30, 2016 primarily~~same periods in 2017 due to lower amortization of debt discount and issuance costs following the extinguishment of the 2017 PIK Notes and 2017 Term Loan in April 2016 and due to a lower effective interest rate on the replacement facility. We also realized interest expense savings as a result of the repricing of our Guarantee Fees in ~~March~~April 2018, principal repayments of ~~2017.~~the 2019 Euro Loan and due to reduced borrowing costs following a reduction in our net leverage ratio as defined within the Reimbursement Agreement. See Item 1, Note 5, "Long-term Debt and Other Financing Arrangements".

Interest income: Interest income primarily reflects earnings on cash balances and was not material.

Foreign currency exchange (loss) / gain, net: We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the local functional currency of the relevant subsidiary. This includes third party receivables and payables, as well as certain of our intercompany loans which are not considered of a long-term investment nature. Our subsidiaries generally receive funding via loans that are denominated in currencies other than the ~~dollar, and~~functional currency of the lender, therefore any change in the relevant exchange rate will require us to recognize a transaction gain or loss on revaluation. Certain of our intercompany loans are classified as long-term in nature, and therefore gains or losses on revaluation are not recorded through the statement of operations and comprehensive income / loss. See the discussion under "Currency translation adjustment, net" below.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018, we recognized a net ~~gain~~loss of US$ ~~14.1~~1.8 million comprised of transaction ~~gains~~losses of US$ ~~7.7~~1.2 million relating to the revaluation of intercompany loans, transaction ~~gains~~losses of approximately US$ ~~2.4~~2.5 million on our long-term debt and other financing arrangements and transaction gains of US$ ~~4.0~~1.9 million relating to the revaluation of monetary assets and liabilities denominated in currencies other than the local functional currency of the relevant subsidiary.

During the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017, we recognized a net gain of US$ ~~13.1~~9.5 million comprised of transaction gains of US$ ~~38.1~~1.9 million relating to the revaluation of intercompany loans, transaction ~~losses~~gains of approximately US$ ~~25.3~~5.3 million on our long-term debt and other financing arrangements and transaction gains of US$ ~~0.3~~2.3 million relating to the revaluation of monetary assets and liabilities denominated in currencies other than the local functional currency of the relevant subsidiary.

Change in fair value of derivatives: During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018, we recognized losses as a result of the change in the fair value of our ~~USD/EUR foreign currency forward contracts entered into on January 31, 2017, May 16, 2017 and July 21, 2017 and the~~ interest rate swaps ~~we use~~that are not designated as hedging ~~instruments for interest payments on the 2018 Euro Term Loan.~~instruments. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we recognized losses as a result of the change in the fair value of ~~certain~~our since settled USD/EUR foreign currency forward ~~contracts which matured in 2016.~~contracts. See Item 1, Note 12, "Financial Instruments and Fair Value Measurements".

Loss on extinguishment of debt: During the three and six months ended June 30, 2018, we recognized losses on extinguishment of debt related to our repayments of EUR 50.0 million (approximately US$ 61.6 million at February 6, 2018 rates) and EUR 110.0 million (approximately US$ 132.0 million at May 3, 2018 rates) of the 2019 Euro Loan.

Other income, ~~/ (expense),~~ net: Our other income / expense, net during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 was not material.

Provision for income taxes: The provision for income taxes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 reflects income tax charges on profits in the Czech Republic and Romania and the impact of losses on which no tax benefit has been received. The provision for income taxes for the ~~same periods in 2016~~three and six months ended June 30, 2017 reflects losses on which no tax benefit has been received and an income tax charge on profits in the Czech Republic, Romania and the Slovak Republic.

Our operating subsidiaries are subject to income taxes at statutory rates ~~ranging from 10.0%~~of 10% in Bulgaria, ~~to 21.0%~~16% in Romania, 19% in the Czech Republic and 21% in the Slovak Republic.

~~Index~~

Net loss attributable to noncontrolling interests: The results attributable to noncontrolling interests for the three and ~~nine~~six months ended ~~September~~June 30, 2018 and 2017 ~~and 2016 relates~~relate to the noncontrolling interest share of our Bulgaria operations.

Currency translation adjustment, net: The underlying equity value of our investments (which are denominated in the functional currency of the relevant entity) are converted into dollars at each balance sheet date, with any change in value of the underlying assets and liabilities being recorded as a currency translation adjustment to the balance sheet rather than net income / ~~loss.~~(loss). Other comprehensive income / (loss) due to currency translation adjustment, net comprised the following for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:

Certain of our intercompany loans are denominated in currencies other than the functional currency of the lender and are considered to be of a long-term investment nature as the repayment of these loans is neither planned nor anticipated for the foreseeable future. The foreign exchange gains ~~/ (losses)~~ on the remeasurement of these intercompany loans to the lender's functional currency are treated in the same manner as currency translation adjustments.

The following charts depict the movement of the dollar versus the functional currencies of our operations, based on monthly closing rates, during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~September~~June 30, ~~2016~~2017.

Percent Change During the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018

Percent Change During the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017

~~(Loss)~~Unrealized (loss) / gain on derivative instruments: The (losses) / gains on derivatives classified as cash flow hedges of the 2021 and 2023 Euro ~~Term~~ Loans, which are recognized in accumulated other comprehensive income / ~~loss,~~(loss), for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 are due to the effective portion of the changes in the fair value of our interest rate ~~swap~~swaps on the ~~2019~~2021 and ~~2021~~2023 Euro ~~Term~~ Loans. See Item 1, Note 12, "Financial Instruments and Fair Value Measurements".

Note: The analysis below is intended to highlight the key factors at constant rates that led to the movements from December 31, ~~2016,~~2017, excluding the impact of foreign currency translation.

Cash and cash equivalents ~~increased~~decreased by US$ ~~26.4~~14.5 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018. The change in cash and cash equivalents for the periods presented below is summarized as follows:

The increase in net cash generated from continuing operations during the ~~nine~~six months ended ~~September~~June 30, 2018 when compared to the same period in 2017 reflects ahigher collection of cash from receivables generated during the significant ~~decrease~~improvement in ~~cash paid for interest~~fourth quarter performance in 2017 and ~~Guarantee Fees. In 2016, we paid accrued interest related~~first quarter in 2018 when compared to the ~~2017 PIK Notes and 2017 Term Loan when they were refinanced in April 2016 and we also repaid US$ 5.5 million of accrued Guarantee Fees~~respective periods in the ~~first half of 2016 which were previously paid in kind. The increase also reflects higher cash collections~~prior years as well as increased prepayments from ~~revenue growth which are partly~~customers, partially offset by higher cash paid for ~~programming and~~income taxes during the six months ended June 30, 2018 compared to the same period in 2017. We paid cash interest (including mandatory cash-pay Guarantee Fees) of US$ ~~22.2~~21.5 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 compared to US$ ~~38.3~~19.6 million during the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017.

Our net cash used in continuing investing activities decreased for the ~~nine~~six months ended ~~September~~June 30, 2018 and 2017 ~~and 2016 relates~~primarily due to the timing of capital expenditures for property, plant and ~~equipment.~~equipment and increases in capital leasing.

~~Cash used in continuing financing activities during the nine months ended September 30, 2017 primarily reflected principal repayments made on our 2018 Euro Term Loan. The~~Net cash used in continuing financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2018 primarily reflects principal repayments made on our 2019 Euro Loan, partially offset by cash received from the exercise of warrants. Cash provided by continuing financing activities during the six months ended June 30, 2017 primarily reflected ~~the refinancing of the 2017 PIK Notes~~proceeds from a sale-leaseback transaction entered into in Romania and ~~the 2017 Term Loan, partly offset by~~ proceeds from the exercise of ~~stock warrants.~~warrants, partly offset by payments made under capital lease agreements.

The increase in net cash ~~used in~~provided by / (used in) discontinued operations during the ~~nine~~six months ended ~~September~~June 30, 2018 reflects the collection of cash from receivables generated during the significant performance improvement in fourth quarter in 2017 ~~primarily reflected capital expenditures~~when compared to 2016 and increased prepayments from customers offset by lower cash paid for ~~property, plant~~interest and ~~equipment. The net~~Guarantee Fees associated with the 2019 Euro Loan and the 2021 Euro Loan, which were allocated to Net cash ~~used in~~provided by / (used in) discontinued operations ~~during the nine months ended September 30, 2016 primarily reflected the payment~~- operating activities in our condensed consolidated statements of ~~Guarantee Fees related to the 2018 Euro Term Loan.~~cash flows. See Item 1, Note 3, "Discontinued Operations and Assets Held for Sale".

Our ongoing source of cash is primarily the receipt of payments from advertisers, advertising agencies and distributors of our television channels. WeIn addition, we expect to receive proceeds from the Divestment Transaction. As at June 30, 2018, we also ~~have~~had available the ~~2021~~aggregate principal amount under the 2023 Revolving Credit Facility of US$ 75.0 million (see Item 1, Note 5, "Long-term Debt and Other Financing Arrangements"). As at September 30, 2017, the aggregate principal amount available under the 2021 Revolving Credit Facility was US$ 115.0 million and was undrawn. The available amount decreases to US$ 50.0 million with effect from January 1, 2018 or, if earlier, upon the repayment of the 2018 Euro Term Loan with the expected proceeds from the Divestment Transaction. Surplus cash, after funding ongoing operations, may be remitted to us, where appropriate, by our subsidiaries in the form of debt interest payments, ~~and capital~~principal repayments, dividends, and other distributions and loans from our subsidiaries.

Corporate law in the Central and Eastern European countries in which we operate stipulates generally that dividends may be declared by the partners or shareholders out of yearly profits subject to the maintenance of registered capital, required reserves (if applicable) and after the recovery of accumulated losses. The reserve requirement restriction generally provides that before dividends may be distributed, a portion of annual net profits (typically at least 5.0%) be allocated to a reserve, which is capped at a proportion of the registered capital of a company (ranging from 5.0% to 20.0%). There are no third-party restrictions that limit our subsidiaries' ability to transfer amounts to us in the form of loans or advances.

Our future contractual obligations as at ~~September~~June 30, ~~2017~~2018 were as follows:

For more information on our long-term debt, see Item 1, Note 5, "Long-term Debt and Other Financing Arrangements". Interest payable on our long-term debt is calculated using ~~exchange~~interest rates and ~~interest~~exchange rates in effect as at ~~September~~June 30, ~~2017~~2018. For the purposes of the above table, it is assumed that the Guarantee Fees eligible to be paid in kind will be paid in kind at each interest payment date through the maturity dates of the respective Euro Term Loan. However, we intend to allocate excess cash towards paying the Guarantee Fees related to the 2018 Euro Term Loan in cash rather than electing to pay any portion in kind.

Unconditional purchase obligations primarily comprise future programming commitments. At ~~September~~June 30, ~~2017,~~2018, we had commitments in respect of future programming of US$ ~~$138.9~~71.3 million. This includes contracts signed with license periods starting after ~~September~~June 30, ~~2017.~~2018.

For more information on our operating lease commitments, see Item 1, Note 20, "Commitments and Contingencies".

Other long-term obligations are primarily comprised of digital transmission ~~commitments.~~commitments and the Commitment Fee payable to Warner Media.

Top Tone Media Holdings Limited has exercised its right to acquire additional equity in CME Bulgaria. However, the closing of this transaction has not yet occurred because ~~the~~ purchaser financing is still pending. If consummated, we would own 90.0% of our Bulgaria broadcast operations. The option strike price is the fair value of the equity in CME Bulgaria, as determined by an independent valuation.

Because cash flows from operating activities were negative from 2012 to 2014, we relied on equity and debt financings to ensure adequate funding for our operations. ~~While~~Since 2015, our cash ~~flows~~flow from operating activities ~~were~~has been positive ~~in 2015~~ and ~~2016,~~ our ~~average~~ cost of borrowing ~~was high~~has consistently decreased. In the first half of 2018, net cash generated from continuing operations and ~~our election~~unlevered free cash flow were US$ 75.6 million and US$ 89.3 million, respectively, compared to US$ 56.6 million and US$ 64.3 million in the first half of 2017 (See Section II, Overview). As at June 30, 2018, we had US$ 40.4 million in cash and cash equivalents.

On April 25, 2018, Warner Media and TW Investor exercised 100,926,996 warrants at US$ 1.00 per share. We applied the US$ 100.9 million proceeds and together with cash from operations to repay EUR 110.0 million (approximately US$ 132.0 million at May 3, 2018 rates) of the outstanding principal of the 2019 Euro Loan, reducing the outstanding amount to EUR 40.8 million (approximately US$ 47.6 million). Following the closing of the Croatian Transaction, which is expected to occur on July 31, 2018, we will use the proceeds of approximately US$ 100.0 million to pay ~~certain interest~~down the remainder of the 2019 Euro Loan and apply the remaining proceeds to repay the accrued Commitment Fee and Guarantee Fees ~~in kind increased our leverage. Our financing transactions in 2016 and 2017 significantly lowered our cost of borrowing.~~

Upon closing of the Slovenian Transaction, we ~~paid accrued interest~~plan to use the proceeds to repay a significant portion of the outstanding principal amount of the 2021 Euro Loan. In the event that neither the Croatian Transaction nor the Slovenian Transaction closes, we expect to be able to repay the current outstanding balance of 2019 Euro Loan from the cash generated from the business prior to its maturity on ~~the 2017 PIK Notes and 2017 Term Loan when they were refinanced.~~May 1, 2019.

As at ~~September~~June 30, ~~2017, we have repaid in cash all previously accrued~~2018, our net leverage improved to 4.4x (compared to 4.8x as at March 31, 2018). The weighted average all-in rate (comprising interest and Guarantee ~~Fees related~~Fees) applicable to the ~~2018~~ Euro ~~Term Loan~~Loans is approximately 4.1%, all of which is payable in cash. We expect the all-in rates to decline further upon additional deleveraging following the closing of the Croatian Transaction and ~~intend to continue to make payments of such Guarantee Fees~~the Slovenian Transaction and improvements in ~~cash when due, rather than electing to pay in kind. However,~~our operating results.

In addition, while we expect ~~improvements in~~our unlevered free cash flow to ~~exceed~~grow due to continuous improvement in our operating results, we anticipate the ~~amount~~amounts of ~~these payments, and therefore expect free~~ cash ~~flow~~paid for income taxes will continue to increase in ~~2017 compared~~2018 and to ~~2016.~~

Our corporate credit is rated B2B1 by Moody's Investors Service with a positive outlook and B+ by Standard & Poor's ~~(currently~~with a positive outlook. Our ratings show each agency's opinion of our financial strength, operating performance and ability to meet our debt obligations as they become due. These ratings take into account the particular emphasis the ratings agencies place on CreditWatch with developing implications due to the announced Divestment Transaction). Ratings agencies have indicated that retention of these ratings is dependent on maintaining an adequate liquidity profile,metrics such as leverage ~~ratios~~ratio and cash flow, ~~profile~~which they use as ~~well as~~measurements of a company's liquidity and financial strength. They also reflect an emphasis by the ratings agencies on the track record of strong financial support from ~~Time Warner. Among other parameters,~~Warner Media. We may be subject to downgrades if our operating performance deteriorates or we fail to ~~meet~~maintain adequate ~~liquidity,~~levels of liquidity. In addition, our ratings may be downgraded if the agencies form a view that material support from Warner Media is not as strong, or the strategic importance of CME to Warner Media is not as significant as it ~~is likely that~~has been in the rating agencies will downgrade us. The availability of additional liquidity is dependent upon our continued operating performance, improved financial performance and credit ratings. We are currently able to raise only a limited amount of additional debt (other than refinancing indebtedness) or under the agreement governing the 2021 Revolving Credit Facility and the Reimbursement Agreement.past.

We have entered into a number of significant contracts with financial counterparties as follows:

We are party to interest rate swap agreements to mitigate our exposure to interest rate fluctuations on our Euro ~~Term~~ Loans. These interest rate swaps, certain of which are designated as cash flow hedges, provide the Company with variable-rate cash receipts in exchange for fixed-rate payments over the lives of the agreements, with no exchange of the underlying notional amount.

We are exposed to movements in the USD to EUR exchange rates related to contractual payments under dollar-denominated agreements. To reduce this exposure, from time to time we enter into pay-Euro receive-dollar forward foreign exchange contracts. AsWe had no such agreements outstanding at ~~September~~June 30, ~~2017, two forward foreign exchange contract with an aggregate notional amount of approximately US$ 26.3 million related to contractual operating payments were outstanding.~~2018.

We may deposit cash in the global money markets with a range of bank counterparties and review the counterparties we choose ~~weekly.~~regularly. The maximum period of deposit is three months but we have more recently held amounts on deposit for shorter periods, ~~from overnight to one month.~~mainly overnight. The credit rating of a bank is a critical factor in determining the size of cash deposits and we will only deposit cash with banks of investment grade rating. In addition, we also closely monitor the credit default swap spreads and other market information for each of the banks with which we consider depositing or have deposited funds.

None.

Our accounting policies that have a material effect on our financial condition and results of operations are more fully described in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 filed with the Securities and Exchange Commission ("SEC") on February ~~9, 2017.~~8, 2018. The preparation of these financial statements requires us to make judgments in selecting appropriate assumptions for calculating financial estimates, which inherently contain some degree of uncertainty. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. Using these estimates, we make judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe our critical accounting policies are as follows: program rights, goodwill and intangible assets, impairment or disposal of long-lived assets, revenue recognition, income taxes, foreign exchange, determination of the fair value of financial instruments, contingencies and discontinued operations. These critical accounting policies affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. See Item 1, Note 2, "Basis of Presentation" for a discussion of accounting standards adopted in the period, and recently issued accounting standards not yet adopted.

We engage in activities that expose us to various market risks, including the effect of changes in foreign currency exchange rates and interest rates. We do not engage in speculative transactions, nor do we hold or issue financial instruments for trading purposes. The table below sets forth our market risk sensitive instruments as at the following dates:

We conduct business in a number of currencies other than our functional currencies. As a result, we are subject to foreign currency exchange rate risk due to the effects that foreign exchange rate movements of these currencies have on our costs and on the cash flows we receive from our subsidiaries. In limited instances ~~including the transactions noted below,~~ we enter into forward foreign exchange contracts to minimize foreign currency exchange rate risk.

We periodically enter into forward foreign exchange contracts to reduce our exposure to movements in the USD to EUR exchange rates related to contractual payments under dollar-denominated agreements. At ~~September~~June 30, ~~2017, two~~2018, no forward foreign exchange contracts ~~with an aggregate notional amount of approximately US$ 26.3 million~~ were outstanding.

The Euro ~~Term~~ Loans each bear interest at a variable rate based on EURIBOR plus an applicable margin. We are party to a number of interest rate swap agreements intended to reduce our exposure to interest rate movements (see Item 1, Note 12, "Financial Instruments and Fair Value Measurements").



BERMUDA		98-0438382
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

O'Hara House, 3 Bermudiana Road, Hamilton, Bermuda		HM 08
(Address of principal executive offices)		(Zip Code)



Large accelerated filer £	Accelerated filer T	Non-accelerated filer £	Smaller reporting company £
			Emerging growth company £



Class	Outstanding as of ~~October 20, 2017~~July 19, 2018
Class A Common Stock, par value $0.08	~~144,963,821~~252,121,007



			Page
Part I Financial Information
	Item 1. Financial Statements		1
		Condensed Consolidated Balance Sheets as at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017	1
		Condensed Consolidated Statements of Operations and Comprehensive Income / Loss for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	2
		Condensed Consolidated Statement of Equity for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018	3
		Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	4
		Notes to the Condensed Consolidated Financial Statements	6
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		2426
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		3739
	Item 4. Controls and Procedures		3839
Part II Other Information
	Item 1. Legal Proceedings		3840
	Item 1A. Risk Factors		3840
	Item 6. Exhibits		4447
Signatures			4548


	September 30, 2017		December 31, 2016		June 30, 2018		December 31, 2017
ASSETS
Current assets
Cash and cash equivalents	$	67,034	$	40,606	$	40,447	$	54,903
Accounts receivable, net (Note 7)	122,406		141,371		146,374		158,903
Program rights, net (Note 6)	70,510		69,662		71,437		69,706
Other current assets (Note 8)	28,197		27,541		35,022		33,106
Current assets held for sale (Note 3)	135,171		61,242
Assets held for sale (Note 3)					142,623		148,156
Total current assets	423,318		340,422		435,903		464,774
Non-current assets
Property, plant and equipment, net (Note 9)	100,308		89,080		96,781		103,648
Program rights, net (Note 6)	188,484		143,428		154,842		182,170
Goodwill (Note 4)	693,142		601,535		682,555		712,359
Other intangible assets, net (Note 4)	147,073		134,705		138,272		148,235
Other non-current assets (Note 8)	20,365		21,273		13,939		16,869
Non-current assets held for sale (Note 3)	—		60,274
Total non-current assets	1,149,372		1,050,295		1,086,389		1,163,281
Total assets	$	1,572,690	$	1,390,717	$	1,522,292	$	1,628,055


LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities (Note 10)	$	157,322		$	134,378		$	114,800		$	143,893
Current portion of long-term debt and other financing arrangements (Note 5)	2,425			1,228			51,015			2,960
Other current liabilities (Note 11)	23,535			8,467			25,853			9,280
Current liabilities held for sale (Note 3)	32,246			27,492
Liabilities held for sale (Note 3)							31,583			32,131
Total current liabilities	215,528			171,565			223,251			188,264
Non-current liabilities
Long-term debt and other financing arrangements (Note 5)	1,067,153			1,001,408			821,657			1,085,714
Other non-current liabilities (Note 11)	87,230			67,963			104,097			95,254
Non-current liabilities held for sale (Note 3)	—			1,414
Total non-current liabilities	1,154,383			1,070,785			925,754			1,180,968
Commitments and contingencies (Note 20)
TEMPORARY EQUITY
200,000 shares of Series B Convertible Redeemable Preferred Stock of $0.08 each (December 31, 2016 - 200,000) (Note 13)	262,115			254,899
200,000 shares of Series B Convertible Redeemable Preferred Stock of $0.08 each (December 31, 2017 - 200,000) (Note 13)							269,370			264,593
EQUITY
CME Ltd. shareholders’ equity (Note 14):
One share of Series A Convertible Preferred Stock of $0.08 each (December 31, 2016 – one)	—			—
144,881,732 shares of Class A Common Stock of $0.08 each (December 31, 2016 – 143,449,913)	11,590			11,476
Nil shares of Class B Common Stock of $0.08 each (December 31, 2016 – nil)	—			—
One share of Series A Convertible Preferred Stock of $0.08 each (December 31, 2017 – one)							—			—
252,121,007 shares of Class A Common Stock of $0.08 each (December 31, 2017 – 145,486,497)							20,170			11,639
Nil shares of Class B Common Stock of $0.08 each (December 31, 2017 – nil)							—			—
Additional paid-in capital	1,905,449			1,910,244			1,999,610			1,905,779
Accumulated deficit	(1,776,411		)	(1,785,536		)	(1,702,477		)	(1,735,768		)
Accumulated other comprehensive loss	(199,906		)	(243,988		)	(213,434		)	(187,438		)
Total CME Ltd. shareholders’ deficit	(59,278		)	(107,804		)
Total CME Ltd. shareholders’ equity / (deficit)							103,869			(5,788		)
Noncontrolling interests	(58		)	1,272			48			18
Total deficit	(59,336		)	(106,532		)
Total equity / (deficit)							103,917			(5,770		)
Total liabilities and equity	$	1,572,690		$	1,390,717		$	1,522,292		$	1,628,055



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Net revenues	$	119,431		$	107,527		$	378,058		$	356,147
Operating expenses:
Content costs	55,871			51,920			174,214			166,938
Other operating costs	12,612			13,482			35,747			40,773
Depreciation of property, plant and equipment	6,936			5,801			19,345			17,134
Amortization of broadcast licenses and other intangibles	2,187			2,073			6,349			6,247
Cost of revenues	77,606			73,276			235,655			231,092
Selling, general and administrative expenses	25,803			22,801			70,204			64,984
Operating income	16,022			11,450			72,199			60,071
Interest expense (Note 15)	(18,352		)	(22,424		)	(54,773		)	(90,640		)
Loss on extinguishment of debt (Note 5)	(101		)	—			(101		)	(150,158		)
Other non-operating income, net (Note 16)	3,643			350			12,783			1,638
Income / (loss) before tax	1,212			(10,624		)	30,108			(179,089		)
Provision for income taxes	(3,157		)	(1,145		)	(12,770		)	(6,706		)
(Loss) / income from continuing operations	(1,945		)	(11,769		)	17,338			(185,795		)
Loss from discontinued operations, net of tax (Note 3)	(5,988		)	(8,054		)	(8,747		)	(15,971		)
Net (loss) / income	(7,933		)	(19,823		)	8,591			(201,766		)
Net loss attributable to noncontrolling interests	188			196			534			387
Net (loss) / income attributable to CME Ltd.	$	(7,745	)	$	(19,627	)	$	9,125		$	(201,379	)

Net (loss) / income	$	(7,933	)	$	(19,823	)	$	8,591		$	(201,766	)
Other comprehensive income
Currency translation adjustment	9,227			7,262			42,203			15,264
(Loss) / gain on derivative instruments (Note 12)	(135		)	(1,360		)	1,083			(5,581		)
Total other comprehensive income	9,092			5,902			43,286			9,683
Comprehensive income / (loss)	1,159			(13,921		)	51,877			(192,083		)
Comprehensive loss attributable to noncontrolling interests	439			232			1,330			568
Comprehensive income / (loss) attributable to CME Ltd.	$	1,598		$	(13,689	)	$	53,207		$	(191,515	)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Net revenues	$	159,555		$	146,895		$	298,737		$	258,627
Operating expenses:
Content costs	66,905			59,698			136,711			118,343
Other operating costs	12,397			11,881			25,084			23,136
Depreciation of property, plant and equipment	7,548			6,450			14,914			12,409
Amortization of broadcast licenses and other intangibles	2,267			2,053			4,623			4,162
Cost of revenues	89,117			80,082			181,332			158,050
Selling, general and administrative expenses	24,596			23,660			50,618			44,400
Operating income	45,842			43,153			66,787			56,177
Interest expense (Note 15)	(10,441		)	(17,428		)	(25,453		)	(36,421		)
Other non-operating (expense) / income, net (Note 16)	(6,936		)	6,908			(2,888		)	9,140
Income before tax	28,465			32,633			38,446			28,896
Provision for income taxes	(7,140		)	(7,368		)	(11,037		)	(9,613		)
Income from continuing operations	21,325			25,265			27,409			19,283
Income / (loss) from discontinued operations, net of tax (Note 3)	4,700			2,533			5,688			(2,759		)
Net income	26,025			27,798			33,097			16,524
Net loss attributable to noncontrolling interests	16			137			194			346
Net income attributable to CME Ltd.	$	26,041		$	27,935		$	33,291		$	16,870

Net income	$	26,025		$	27,798		$	33,097		$	16,524
Other comprehensive (loss) / income
Currency translation adjustment	(34,629		)	30,904			(22,844		)	32,976
Unrealized (loss) / gain on derivative instruments (Note 12)	(3,119		)	(40		)	(2,928		)	1,218
Total other comprehensive (loss) / income	(37,748		)	30,864			(25,772		)	34,194
Comprehensive (loss) / income	(11,723		)	58,662			7,325			50,718
Comprehensive (income) / loss attributable to noncontrolling interests	(416		)	590			(30		)	891
Comprehensive (loss) / income attributable to CME Ltd.	$	(12,139	)	$	59,252		$	7,295		$	51,609


PER SHARE DATA (Note 18):
Net (loss) / income per share:
Net income / (loss) per share:
Continuing operations — basic	$	(0.03	)	$	(0.09	)	$	0.04		$	(1.31	)	$	0.05	$	0.09	$	0.07	$	0.06
Continuing operations — diluted	(0.03		)	(0.09		)	0.03			(1.31		)	0.05		0.07		0.06		0.04
Discontinued operations — basic	(0.04		)	(0.05		)	(0.06		)	(0.11		)	0.02		0.01		0.02		(0.01		)
Discontinued operations — diluted	(0.04		)	(0.05		)	(0.06		)	(0.11		)	0.01		0.00		0.02		0.00
Net loss attributable to CME Ltd. — basic	(0.07		)	(0.14		)	(0.02		)	(1.42		)
Net loss attributable to CME Ltd. — diluted	(0.07		)	(0.14		)	(0.02		)	(1.42		)
Net income attributable to CME Ltd. — basic													0.07		0.10		0.09		0.05
Net income attributable to CME Ltd. — diluted													0.06		0.07		0.08		0.04

Weighted average common shares used in computing per share amounts (000’s):
Basic	156,189			153,494			155,579			149,898			235,148		155,738		196,807		155,269
Diluted	156,189			153,494			233,761			149,898			258,783		235,952		250,515		230,872


	CME Ltd.																								CME Ltd.
	Series A Convertible Preferred Stock			Class A Common Stock			Class B Common Stock																		Series A Convertible Preferred Stock			Class A Common Stock			Class B Common Stock
	Number of shares	Par value		Number of shares	Par value		Number of shares	Par value		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total Deficit			Number of shares	Par value		Number of shares	Par value		Number of shares	Par value		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total (Deficit) / Equity
BALANCE December 31, 2016	1	$	—	143,449,913	$	11,476	—	$	—	$	1,910,244		$	(1,785,536	)	$	(243,988	)	$	1,272		$	(106,532	)
BALANCE December 31, 2017																									1	$	—	145,486,497	$	11,639	—	$	—	$	1,905,779		$	(1,735,768	)	$	(187,438	)	$	18		$	(5,770	)
Stock-based compensation	—	—		—	—		—	—		2,140			—			—			—			2,140			—	—		—	—		—	—		2,240			—			—			—			2,240
Exercise of warrants (Note 14)	—	—		563,325	45		—	—		518			—			—			—			563			—	—		105,652,401	8,452		—	—		97,200			—			—			—			105,652
Share issuance, stock-based compensation	—	—		868,494	69		—	—		(69		)	—			—			—			—			—	—		982,109	79		—	—		(79		)	—			—			—			—
Withholding tax on net share settlement of stock-based compensation	—	—		—	—		—	—		(168		)	—			—			—			(168		)	—	—		—	—		—	—		(753		)	—			—			—			(753		)
Preferred dividend paid in kind	—	—		—	—		—	—		(7,216		)	—			—			—			(7,216		)	—	—		—	—		—	—		(4,777		)	—			—			—			(4,777		)
Net income / (loss)	—	—		—	—		—	—		—			9,125			—			(534		)	8,591			—	—		—	—		—	—		—			33,291			—			(194		)	33,097
Gain on derivative instruments	—	—		—	—		—	—		—			—			1,083			—			1,083
Unrealized loss on derivative instruments																									—	—		—	—		—	—		—			—			(2,928		)	—			(2,928		)
Currency translation adjustment	—	—		—	—		—	—		—			—			42,999			(796		)	42,203			—	—		—	—		—	—		—			—			(23,068		)	224			(22,844		)
BALANCE September 30, 2017	1	$	—	144,881,732	$	11,590	—	$	—	$	1,905,449		$	(1,776,411	)	$	(199,906	)	$	(58	)	$	(59,336	)
BALANCE June 30, 2018																									1	$	—	252,121,007	$	20,170	—	$	—	$	1,999,610		$	(1,702,477	)	$	(213,434	)	$	48		$	103,917


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2017			2016			2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income / (loss)	$	8,591		$	(201,766	)
Adjustments to reconcile net income / (loss) to net cash generated from continuing operating activities:
Loss from discontinued operations, net of tax (Note 3)	8,747			15,971
Net income							$	33,097		$	16,524
Adjustments to reconcile net income to net cash generated from continuing operating activities:
(Income) / loss from discontinued operations, net of tax (Note 3)							(5,688		)	2,759
Amortization of program rights	174,214			166,938			136,711			118,343
Depreciation and other amortization	29,976			43,785			22,161			19,351
Interest and related Guarantee Fees paid in kind	14,733			14,300			2,934			14,733
Loss on extinguishment of debt (Note 5)	101			150,158
Gain on disposal of fixed assets	(68		)	(45		)
Loss on extinguishment of debt (Note 16)							288			—
Loss / (gain) on disposal of fixed assets							8			(28		)
Deferred income taxes	(1,300		)	6,783			(380		)	(1,116		)
Stock-based compensation (Note 17)	2,044			2,364			2,162			1,612
Change in fair value of derivatives	1,204			11,722			1,166			621
Foreign currency exchange gain, net	(12,459		)	(13,683		)
Foreign currency exchange loss / (gain), net							1,091			(9,138		)
Changes in assets and liabilities:
Accounts receivable, net	35,280			19,530			7,534			6,856
Accounts payable and accrued liabilities	(5,435		)	(5,986		)	(3,904		)	(5,906		)
Program rights	(183,625		)	(174,346		)	(129,363		)	(119,595		)
Other assets and liabilities	(1,559		)	(1,470		)	(1,127		)	(1,274		)
Accrued interest	10,668			11,665			(1,673		)	(1,697		)
Income taxes payable	991			(255		)	(6,992		)	2,955
Deferred revenue	11,645			12,576			19,374			14,653
VAT and other taxes payable	(3,110		)	(1,269		)	(1,763		)	(3,100		)
Net cash generated from continuing operating activities	$	90,638		$	56,972		$	75,636		$	56,553

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	$	(16,389	)	$	(14,850	)	$	(7,834	)	$	(11,976	)
Disposal of property, plant and equipment	139			88			15			111
Net cash used in continuing investing activities	$	(16,250	)	$	(14,762	)	$	(7,819	)	$	(11,865	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt	$	—		$	533,963
Repayment of debt	(59,060		)	(540,699		)	$	(193,557	)	$	—
Debt transaction costs	(106		)	(9,541		)	(1,518		)	—
Payment of credit facilities and capital leases	(1,757		)	(755		)	(1,888		)	(1,072		)
Settlement of forward currency swaps	—			(12,106		)
Proceeds from exercise of warrants	563			5,947			105,652			527
Proceeds from sale-leaseback transactions	2,746			—			—			2,746
Payments of withholding tax on net share settlement of share-based compensation	(168		)	—			(537		)	(168		)
Net cash used in continuing financing activities	$	(57,782	)	$	(23,191	)
Net cash (used in) / provided by continuing financing activities							$	(91,848	)	$	2,033

Net cash provided by / (used in) discontinued operations - operating activities	3,273			(17,308		)	12,294			(3,319		)
Net cash used in discontinued operations - investing activities	(3,125		)	(4,789		)	(2,127		)	(1,672		)
Net cash used in discontinued operations - financing activities	(210		)	(181		)	(155		)	(136		)

Impact of exchange rate fluctuations on cash and cash equivalents	9,884			2,005			(437		)	5,787
Net increase / (decrease) in cash and cash equivalents	$	26,428		$	(1,254	)
Net (decrease) / increase in cash and cash equivalents							$	(14,456	)	$	47,381
CASH AND CASH EQUIVALENTS, beginning of period	40,606			59,120			54,903			40,606
CASH AND CASH EQUIVALENTS, end of period	$	67,034		$	57,866		$	40,447		$	87,987


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest (including mandatory cash-pay Guarantee Fees)	$	22,206	$	38,317	$	21,531	$	18,191
Cash paid for Guarantee Fees that may be paid in kind	1,411		5,483		—		1,411
Cash paid for income taxes, net of refunds	12,380		234		18,444		7,034

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Accretion on Series B Convertible Redeemable Preferred Stock	$	7,216	$	11,314	$	4,777	$	4,762



	September 30, 2017		December 31, 2016
Assets held for sale
Current assets held for sale
Cash and cash equivalents	$	7,061	$	2,853
Accounts receivable, net	29,064		36,969
Program rights, net	66,449		16,489
Property, plant and equipment, net	20,909		—
Other current assets	11,688		4,931
Total current assets held for sale	$	135,171	$	61,242
Non-current assets held for sale
Program rights, net	$	—	$	35,927
Property, plant and equipment, net	—		20,008
Other non-current assets	—		4,339
Total non-current assets held for sale	$	—	$	60,274

Liabilities held for sale
Current liabilities held for sale
Accounts payable and accrued liabilities	$	27,922	$	26,603
Other current liabilities	4,324		889
Total current liabilities held for sale	$	32,246	$	27,492
Non-current liabilities held for sale
Other non-current liabilities	$	—	$	1,414
Total non-current liabilities held for sale	$	—	$	1,414



	Bulgaria			Czech Republic			Romania			Slovak Republic		Total
Gross Balance, December 31, 2016	$	171,389		$	744,483		$	82,786		$	46,089	$	1,044,747
Accumulated impairment losses	(144,639		)	(287,545		)	(11,028		)	—		(443,212		)
Balance, December 31, 2016	26,750			456,938			71,758			46,089		601,535
Foreign currency	3,208			75,461			7,386			5,552		91,607
Balance, September 30, 2017	29,958			532,399			79,144			51,641		693,142
Accumulated impairment losses	(144,639		)	(287,545		)	(11,028		)	—		(443,212		)
Gross Balance, September 30, 2017	$	174,597		$	819,944		$	90,172		$	51,641	$	1,136,354



	Principal Amount of Liability Component		Debt Issuance Costs ⁽¹⁾			Net Carrying Amount
2018 Euro Term Loan	$	237,064	$	(351	)	$	236,713
2019 Euro Term Loan	277,837		(411		)	277,426
2021 Euro Term Loan	553,465		(5,804		)	547,661
2021 Revolving Credit Facility	—		—			—
Total long-term debt and credit facilities	$	1,068,366	$	(6,566	)	$	1,061,800


	September 30, 2017							December 31, 2016							June 30, 2018							December 31, 2017
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Indefinite-lived:
Trademarks	$	86,448	$	—		$	86,448	$	76,731	$	—		$	76,731	$	85,066	$	—		$	85,066	$	87,900	$	—		$	87,900
Amortized:
Broadcast licenses	213,532		(155,054		)	58,478		184,195		(128,876		)	55,319		210,563		(158,806		)	51,757		220,194		(161,820		)	58,374
Trademarks	420		(420		)	—		380		(380		)	—		409		(409		)	—		421		(421		)	—
Customer relationships	57,813		(55,863		)	1,950		51,338		(48,997		)	2,341		56,888		(55,595		)	1,293		58,771		(56,996		)	1,775
Other	1,723		(1,526		)	197		1,522		(1,208		)	314		1,698		(1,542		)	156		1,753		(1,567		)	186
Total	$	359,936	$	(212,863	)	$	147,073	$	314,166	$	(179,461	)	$	134,705	$	354,624	$	(216,352	)	$	138,272	$	369,039	$	(220,804	)	$	148,235



Consolidated Net Leverage				2019 Euro Loan		2021 Euro Loan		2023 Euro Loan
≥	7.0x			6.00	%	6.00	%	6.50	%
<	7.0x	-	6.0x	5.00	%	5.00	%	5.50	%
<	6.0x	-	5.0x	4.25	%	4.25	%	4.75	%
<	5.0x	-	4.0x	3.75	%	3.75	%	4.25	%
<	4.0x	-	3.0x	3.25	%	3.25	%	3.75	%
<	3.0x			3.25	%	3.25	%	3.50	%



Consolidated Net Leverage				Cash Rate⁽¹⁾		PIK Fee Rate		Total Rate ⁽²⁾
≥	7.0x			5.00	%	3.50	%	8.50	%
<	7.0x	-	6.0x	5.00	%	2.25	%	7.25	%
<	6.0x	-	5.0x	5.00	%	1.00	%	6.00	%
<	5.0x			5.00	%	—	%	5.00	%



Consolidated Net Leverage				Alternate Base Rate Loans		Eurodollar Loans
≥	7.0x			5.25	%	6.25	%
<	7.0x	-	6.0x	4.25	%	5.25	%
<	6.0x	-	5.0x	3.50	%	4.50	%
<	5.0x	-	4.0x	3.00	%	4.00	%
<	4.0x	-	3.0x	2.50	%	3.50	%
<	3.0x			2.25	%	3.25	%



	Carrying Amount				Fair Value
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
2018 Euro Term Loan	$	236,713	$	263,734	$	225,679	$	233,297
2019 Euro Term Loan	277,426		247,594		251,012		203,314
2021 Euro Term Loan	547,661		487,881		464,212		369,738
	$	1,061,800	$	999,209	$	940,903	$	806,349


⁽¹⁾	~~Includes cash paid for interest for the Euro Term Loans and the related customary hedging arrangements.~~


⁽²⁾	Subject to certain adjustments in respect of specified debt repayments, if we reduce our long-term debt to less than EUR 815.0 million prior to September 30, 2018, a 50 basis point reduction in the all-in rate would be applied.



	Base Rate			Rate Fixed Pursuant to Interest Rate Hedges			Guarantee Fee Rate		All-in Borrowing Rate
2018 Euro Term Loan	1.50	%		0.21	%	⁽¹⁾	5.54	%	7.25	%
2019 Euro Term Loan	1.50	%		0.31	%		5.44	%	7.25	%
2021 Euro Term Loan	1.50	%		0.28	%		5.47	%	7.25	%
2021 Revolving Credit Facility ⁽²⁾	9.33	%	⁽³⁾	—	%		—	%	9.33	%


⁽²⁾	Effective until February 19, 2021. From February 19, 2021 through maturity on April 26, 2023, the rate fixed pursuant to interest rate hedges will increase to 0.97%, with a corresponding decrease in the Guarantee Fee rate, such that the all-in borrowing rate remains 4.25% if our net leverage ratio remains unchanged.


⁽³⁾⁽⁴⁾	Based on the three month LIBOR of ~~1.33%~~2.34% as at ~~September~~June 30, ~~2017.~~2018.


⁽¹⁾	We have a cash pooling arrangement with Bank Mendes Gans (“BMG”), a subsidiary of ING Bank N.V. (“ING”), which enables us to receive credit ~~across~~throughout the group in respect of cash balances ~~deposited~~which our subsidiaries deposit with BMG. Cash deposited by our subsidiaries with BMG is pledged as security against the drawings of other subsidiaries up to the amount deposited.


2017	$	696
2018	2,512			$	1,912
2019	2,153			3,466
2020	1,872			3,152
2021	708			1,969
2022 and thereafter	—
2022				259
2023 and thereafter				—
Total undiscounted payments	7,941			10,758
Less: amount representing interest	(163		)	(373		)
Present value of net minimum lease payments	$	7,778		$	10,385


⁽¹⁾	Includes assets acquired under capital leases of US$ 4.0 million and US$ 4.0 million for the six months ended June 30, 2018 and 2017, respectively.


Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted instruments.


Level 2	Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly.


Level 3	Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.



Trade Date	Number of Contracts	Description	Aggregate Notional Amount		Maturity Date	Objective	Fair Value as at September 30, 2017
April 5, 2016	5	Interest rate swap	EUR	468,800	February 21, 2021	Interest rate hedge underlying 2021 Euro Term Loan	$	(1,798	)
April 5, 2016	4	Interest rate swap	EUR	200,800	November 1, 2018	Interest rate hedge underlying 2018 Euro Term Loan, forward starting on November 1, 2017	$	(338	)
November 10, 2015	3	Interest rate swap	EUR	235,335	November 1, 2019	Interest rate hedge underlying 2019 Euro Term Loan	$	(1,587	)
November 14, 2014	2	Interest rate swap	EUR	200,800	November 1, 2017	Interest rate hedge underlying 2018 Euro Term Loan	$	(52	)


	Currency translation adjustment, net			(Loss) / Gain on derivative instruments designated as hedging instruments			TOTAL Accumulated Other Comprehensive Loss			Currency translation adjustment, net			Unrealized (loss) / gain on derivative instruments designated as hedging instruments			TOTAL Accumulated Other Comprehensive Loss
BALANCE December 31, 2016	$	(239,537	)	$	(4,451	)	$	(243,988	)
Other comprehensive income / (loss) before reclassifications:
Foreign exchange gain on intercompany transactions ⁽¹⁾	7,824			—			7,824
Foreign exchange gain on the Series B Preferred Shares	29,284			—			29,284
BALANCE December 31, 2017										$	(184,256	)	$	(3,182	)	$	(187,438	)
Other comprehensive (loss) / income before reclassifications:
Foreign exchange loss on intercompany loans ⁽¹⁾										(3,524		)	—			(3,524		)
Foreign exchange loss on the Series B Preferred Shares										(7,677		)	—			(7,677		)
Currency translation adjustment	5,891			—			5,891			(11,867		)	—			(11,867		)
Change in the fair value of hedging instruments	—			(1,484		)	(1,484		)	—			(5,595		)	(5,595		)
Amounts reclassified from accumulated other comprehensive loss:
Changes in fair value reclassified to interest expense	—			2,120			2,120			—			1,231			1,231
Changes in fair value reclassified to other non-operating income, net ⁽²⁾	—			447			447			—			1,436			1,436
Net other comprehensive income	42,999			1,083			44,082			(23,068		)	(2,928		)	(25,996		)
BALANCE September 30, 2017	$	(196,538	)	$	(3,368	)	$	(199,906	)
BALANCE June 30, 2018										$	(207,324	)	$	(6,110	)	$	(213,434	)


⁽¹⁾	Represents foreign exchange ~~gains~~losses on intercompany loans that are of a long-term investment nature which are reported in the same manner as translation adjustments.



	Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at December 31, 2016	2,011,392	$	2.32	8.58	$	453
Outstanding at September 30, 2017	2,011,392	2.32		7.83	3,470
Vested and expected to vest	2,011,392	2.32		7.83	3,470
Exercisable at September 30, 2017	902,848	$	2.31	7.76	$	1,572



	Number of Shares / Units		Weighted Average Grant Date Fair Value
Unvested at December 31, 2016	2,542,625		$	2.61
Granted	1,158,887		3.62
Vested	(912,246	)	2.65
Forfeited	(75,582	)	1.53
Unvested at September 30, 2017	2,713,684		$	3.06



	Number of Shares / Units		Weighted Average Grant Date Fair Value
Unvested at December 31, 2017	2,694,063		$	3.07
Granted	962,369		4.28
Vested	(1,162,732	)	3.17
Unvested at June 30, 2018	2,493,700		$	3.49


Net revenues:	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Bulgaria	$	16,039		$	13,789		$	52,118		$	50,103		$	23,427		$	20,774		$	42,860		$	36,079
Czech Republic	42,681			39,031			135,526			128,558			61,028			53,371			112,562			92,845
Romania	40,469			36,970			127,983			118,269			49,594			48,570			95,555			87,514
Slovak Republic	20,384			17,864			63,348			59,466			26,770			24,624			49,723			42,964
Intersegment revenues ⁽¹⁾	(142		)	(127		)	(917		)	(249		)	(1,264		)	(444		)	(1,963		)	(775		)
Total net revenues	$	119,431		$	107,527		$	378,058		$	356,147		$	159,555		$	146,895		$	298,737		$	258,627


⁽¹⁾	Reflects revenues earned from the sale of content to ~~our~~ other ~~segments.~~country segments in CME Ltd. All other revenues are third party revenues.