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Central European Media Enterprises (NASDAQ:CETV)

Q4 2011 Earnings Call

February 22, 2012 9:00 am ET

Executives

Romana Wyllie - Vice President of Corporate Communications

Adrian Sarbu - Chief Executive Officer, President and Director

David Sach - Chief Financial Officer and Executive Vice President

Anthony Chhoy - Executive Vice President of Strategic Planning and Operations

Daniel Penn - Executive Vice President, Secretary and General Counsel

Analysts

Vivek Khanna - Deutsche Bank AG, Research Division

Ajay Agrawal - Nomura Securities Co. Ltd., Research Division

Daria Fomina - Goldman Sachs Group Inc., Research Division

Andrzej Knigawka - ING Groep N.V., Research Division

Tim Hamby - Janco Partners, Inc., Research Division

Unknown Analyst

Ankur Agarwal

Pavel Ryska - J & T Banka, A.S., Research Division

Operator

Hello. My name is Lindy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Central European Media Enterprises Fourth Quarter and Full Year 2011 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, February 22, 2012.

It is now my pleasure to turn the floor over to Romana Wyllie, Vice President of Corporate Communications. Ms. Wyllie, you may begin your conference.

Romana Wyllie

Thank you, Lindy. Good morning, good afternoon or [Foreign Language] to each of you, and welcome to CME's Fourth Quarter and Full Year 2011 Investor Conference Call. We are broadcasting our earnings call via a video webcast to enable you to see the management team in action. You can join us via the link on our homepage, www.cme.net. There, you can also download the presentation slides, which we will refer to during this call. You can find them on our homepage in the bottom-left corner. The participants of today's call will be CME's President and Chief Executive Officer, Adrian Sarbu.

Adrian Sarbu

Good afternoon, and [Foreign Language].

Romana Wyllie

Chief Financial Officer, David Sach.

David Sach

[Foreign Language]

Romana Wyllie

Anthony Chhoy, Executive Vice President, Strategic Planning and Operations.

Anthony Chhoy

Good afternoon.

Romana Wyllie

And our General Counsel, Daniel Penn.

Daniel Penn

Greetings.

Romana Wyllie

Before I turn to Adrian, let me read the usual Safe Harbor statement. Our presentation today will contain forward-looking statements. Actual results may vary material from those expressed or implied due to various factors. These factors are discussed in detail in our SEC filings, including the Form 10-K filed earlier today and posted on our website. During this call, we will refer to certain financial information that is not in U.S. GAAP. Please see the Appendix to the presentation and Note 18 to our financial statements in our Form 10-K for a reconciliation to U.S. GAAP financial measures.

And now please turn to Page 4 of our presentation, and I will pass you over to Adrian.

Adrian Sarbu

Thank you, Romana, and good morning and good afternoon, everyone. In 2011, we outperformed the markets. Our revenues grew by 17% and OIBDA increased by 56%. Our OIBDA margin improved by 4 percentage points to 19%, and our overall market share grew by 1 percentage point. This happened in a challenging year when our TV ad markets remained stressed. We proved again that we have a strong management team that are building powerful brands.

Please turn to Slide 5. We have a history of outperforming the markets, and 2011 was not an exception. Following the successful implementation of our new business model, One Content, Multiple Distribution, we are expanding from a single revenue source to multiple revenue engines. In 2011, we strengthened our leadership across the market, and even if 2012 may not be an easy year, we are confident that we'll successfully face the challenges ahead of us. We built a culture of outperforming.

David?

David Sach

Thank you, Adrian. Please turn to Slide 6. In aggregate, our markets experienced growth in real GDP of 2% during 2011, with increases in all countries. This growth was largely driven by export demand. Consumer confidence in our markets was impacted by concerns about the European sovereign debt situation. And as a result, real private consumption continued to lay GDP growth for much of the year, but has now turned positive. Despite aggregate television advertising spending fluctuating from down 3% to up 2% on a quarterly basis during 2011, spending ended flat for the full year in line with private consumption.

Moving to Slide 7. Our consolidated net revenues increased by 17% to $865 million for the full year, equivalent to an increase of 10% in constant currencies. All 3 segments contributed to this increase. Costs increased by 5% in constant currency terms, but this included the full year impact that the acquisition of bTV in Bulgaria, the acquisition of Bontonfilm and investments in new channels in Croatia and Slovenia. Excluding the impact of these acquisitions and investments, a total like-for-like cost decreased 1%. Central costs were 6% lower. Consolidated OIBDA increased by 56% to $167 million or 40% in constant currencies, with our OIBDA margin increasing from 15% to 19%.

Due to the impact of the current economic environment, we recorded an impairment charge of $69 million in respect to the Bulgarian broadcast reporting unit and the Media Pro Entertainment production services reporting unit following our annual impairment review.

Adrian will now present the full year highlights for our broadcast division.

Adrian Sarbu

I invite you to turn to Slide 8 of our presentation, highlighting the achievements of the broadcast division. In 2011, we strengthened our overall primetime audience leadership with lower costs. The drivers of this audience increase were Slovakia and Croatia. Our competitive advantage, built over many years, enables us to generate the majority of the advertising inventory in each country, with more than 60% in the Czech Republic, Slovakia, Bulgaria and Slovenia. We also strengthened our overall market share leadership with increases in Slovakia, Bulgaria, Croatia and Slovenia of between 1 and 7 percentage points. Following our expansion to pay windows, we increased subscription revenues in Slovenia, Romania, Bulgaria and Czech Republic.

David?

David Sach

Turning to Slide 9. Our Broadcast segment delivered a 12% increase in net revenues or 5% in constant currencies. Market share gains in Croatia, Slovakia, Slovenia and Bulgaria contributed to broadcast revenue growth. In Czech, our revenues were flat as a result of our decision not to discount, which enabled us to gradually increase CPP levels in the last quarter. We believe higher CPP levels will enable us to benefit us in the long-term as markets recover. In Romania, our revenues were impacted by the lower market.

Broadcast costs increased by 1% on a constant currency basis, primarily due to the acquisition of the bTV group in Bulgaria and new channel launches, such as Doma in Croatia and POP NON STOP in Slovenia. Excluding these investments, like-for-like costs decreased by 3%. As a result, Broadcast OIBDA increased by 28% to $211 million, an increase of 19% in constant currency terms.

Now over to Adrian for a summary of Media Pro Entertainment's full year achievements.

Adrian Sarbu

Let's move to Slide 10, and let me point to a few highlights of this division. Media Pro Entertainment is the content engine of our operation. In 2011, it delivered 2,369 hours of local content to our broadcasters, driving their ratings and third-party revenue growth.

I'm proud to highlight our best performing new fiction productions that we launched in 2011: Home Wars in Bulgaria; Headnuts in Slovenia; Lara's Choice in Croatia; Expozitura in the Czech Republic; Bet with Life in Romania; and reality and entertainment shows like The Voice in Romania, Got Talent in Romania and Slovenia and Let's Dance in Slovenia.

Media Pro Entertainment's products are now distributed in all traditional and digital content windows in our markets and licensed worldwide in more than 70 countries.

David?

David Sach

Let's move to Slide 11. Media Pro Entertainment delivered a revenue increase of 33% or 26% in constant currencies. Full year revenues of $187 million include 6 months of revenue from the acquisition of Bontonfilm on June 30. Helped by the contribution of Bontonfilm, third-party revenues increased by 110% to $75 million and now account for 40% of total Media Pro revenues. Excluding Bontonfilm, third-party revenues increased by 65%.

Costs increased by 21% in constant currency terms as a result of higher third-party activity and the acquisition impact of Bontonfilm. Media Pro Entertainment reported OIBDA of $4 million for the year compared to a loss of $3 million in 2010.

Adrian will now present our New Media accomplishments.

Adrian Sarbu

Thank you, David. Please turn to Slide 12. The most important piece of news about our New Media business is the rollout of subscription video-on-demand services on the Voyo platform in Slovenia, the Czech Republic and Romania at the end of 2011. The growth of Voyo is mostly driven by CME content and our strong marketing voice.

With Voyo, our New Media business expands from advertising to pay and subscription revenues. We are optimistic about this business model and its prospects. In the digital world, where different platforms and devices are becoming more common, we believe that our brands and our compelling content will only appreciate in value.

David?

David Sach

Thank you, Adrian. Please turn to Slide 13. Our New Media segment increased revenues by 41% as a result of an expansion in a number of websites and contribution from Voyo. We achieved these high revenues with lower costs. Costs in constant currency terms fell by 2%. The increase in scale from higher revenues has benefited OIBDA. New Media reported an OIBDA loss of $3 million, representing an improvement of 61% over the prior year. In the fourth quarter, the New Media division was profitable for the first time.

Let's turn to Slide 14. Improving free cash flow was a top priority in 2011 and will remain so in 2012. The improvement in our free cash flow in 2011 reflects our significantly higher OIBDA, improved working capital management and reduced capital expenditures. We expect the phasing of cash flows in 2012 to be different than in 2011. The advanced collections plan that we implemented in the first quarter of 2011, which delivered approximately $47 million of receipts, will not be repeated in the first quarter of 2012. Nonetheless, we are targeting positive free cash flow for the full year.

Please move now to Slide 15. In the first 7 months of the year, when the financial markets were open to us, we significantly reshaped and improved our debt maturity profile. We refinanced $261 million of our 2013 convertible notes, extending these maturities to 2015. We also drew our revolving credit facility and repurchased $50 million of our 2013 convertible notes to improve our maturity profile, and we purchased $24 million of our fixed rate 2016 notes to reduce our cash interest costs. As a result of these actions, our 2013 debt maturities have been significantly reduced.

Turning to Slide 16, we ended the year with $246 million of liquidity, including $186 million of cash. Our net debt was $1.2 billion. The significant improvement in OIBDA or in cash management helped reduce our leverage ratio from 11x in 2010 to 7x this year. Our current liquidity is sufficient to manage our debt maturities over the next 2 years, but our current leverage ratio is still unacceptably high, particularly in the current uncertain macroeconomic environment and changing financial markets. Our key priority for 2012 is further deleveraging. Now that the financial markets are open, we are looking at debt and equity-based options to refinance or repurchase our debt in the near term, in particular, the 2013 convertible notes.

We hope to provide further details before our next earnings call. I now hand you over to Adrian for final comments.

Adrian Sarbu

Let's move to Slide 17 and talk about our 2012 priorities. With our One Content, Multiple Distribution business model, we have set CME on a firm path to growth for many years to come. Our key assets are our people, brands and leadership position in all our markets.

We'll finance, develop and produce more local content for multiple distribution platforms and devices and expand international sales. We are planning to further diversify our revenues by expanding our channel portfolio, focusing on subscription and premium pay TV channels.

In 2012, you will witness the emergence of Voyo as the third growth engine of CME, following our broadcast and content divisions. Eventually, Voyo will become the main distribution platform for CME content.

And now, a remark about the advertising market in 2012. Our outlook on the recovery of the television advertising market remains cautious with variation from country to country in the timing and strength of the recovery. From the perspective of today, 2012 looks challenging, but we built a business model that enables us to outperform and continue to grow.

Thank you. Romana?

Romana Wyllie

Thank you, Adrian. That concludes the formal presentation. We are now going to move to Q&A, so operator, please open the lines for questions.

Question-and-Answer Session

Operator

[Operator Instructions] I now hand you back to Ms. Wyllie.

Romana Wyllie

The first question comes from Vivek Khanna from Deutsche Bank.

Vivek Khanna - Deutsche Bank AG, Research Division

I just had one quick question, if I may. It's really to the Czech markets. Clearly, you are focusing to increase CPP and does not discounting. I'm just trying to get a feel for do you think that the market share loss which you've experienced in that market looking on a primetime basis has sort of ended on or do you see this scope for some further market share loss, clearly, albeit at higher pricing levels? And related to that, I just wanted to get a sense for how much of you think the revenues which were going to the state broadcasters, how much of that do you think you'll be able to capture over the course of the year?

Romana Wyllie

Adrian, do you want to start?

Adrian Sarbu

Yes. Vivek, the story of market share in Czech Republic related to prices, to competition and to other inputs, it's more than one year old. One year ago, we were asked why did we lose market share. I think it's the reality and the examples and the results are quite self-explanatory. We are pushing, after 3 years of crisis, to appreciate our prices, to give our inventory the real vest [ph]. This is a process with ups and downs. In one quarter, you may lose 1 to 3 points of market share. The other quarter, you may get it back. And you look at the 2011, and you see these things happen when the market didn't increase dramatically. So you may expect from quarter to quarter, ups and downs in our market share, but not dramatic. In respect of the money from public television, we have to see in the next months what the clients decided. We are just in the middle of February, and as you know, February and January are low seasons. So we cannot exactly guess how our clients decided to spend their money for 2012, but it's fair to expect that the significant part of the money from -- released from the budgets, which were spent in public television last year, will be directed to CME. We hope in the range of our market share. Anthony, do you want to add something?

Anthony Chhoy

No, just, Vivek, on the limitation of the advertising and teleshopping path TV, I think it's the -- the full year impact we expect is between $25 million to $30 million, of which CME and obviously the other private commercial and broadcasters will share that money.

Romana Wyllie

Next question comes from Ajay Agrawal from Nomura.

Ajay Agrawal - Nomura Securities Co. Ltd., Research Division

Three questions, please. And just to continue on the pricing strategy, could you give us some color on the pricing situation in Romania and Bulgaria in Q4 2011? And how do you see the prices going forward in FY '12 for Romania and Bulgaria? That's the first question. Second is on impairment loss in Bulgaria. Could you give us some detail as in -- I mean, which part of the Bulgarian operation where that's related to? That's the second question. Third one is on the operating cost levels. I think, I mean, the operating cost levels were down this year on a like-for-like basis. Would you be giving some guidance in terms of operating expenses for FY '12?

Romana Wyllie

Okay, so the first question, Anthony, on Romania and Bulgaria?

Anthony Chhoy

Just with the -- Ajay, to understand the first question, you're talking about the prices in Q4 last year with Romania and Bulgaria. I think it's -- our strategy there is to -- I mean, we did start to gradually increase the prices in both markets as well and get some similar to what we have done obviously in the Czech Republic. And Adrian already mentioned before that we believe that high CPP levels reflect the value of our inventory. That's going to benefit us in the long term, yes, especially as the market recovers. That's on the prices. And in terms of Bulgaria in Q4 and get some -- the OIBDA there declined in the fourth quarter. That's due to the one-time benefits in Q4 2010, where we aired a significant amount of 0 cost programming that was derived from the write-down of the former Pro.bg programming assets as part of the bTV acquisition. But on the -- in Bulgaria, we still remain the undisputed term leader in the market. We've got over 50% primetime audience share there. We've also increased the market share by 2 points to 70%, so we're very confident our Bulgarian management team will continue to outperform the markets in that particular -- I think it's -- going forward. And just on the operating costs, Ajay -- I think it's -- one of our key priorities is to maintain our strong audience leadership in the market without increasing our overall costs. We'll still continue to rigorously manage our costs, which we have demonstrated in 2011, and we're going to continue doing that going forward as well.

Romana Wyllie

And then the question about impairment, David?

David Sach

Ajay, it's related to the broadcast operation and specifically, the bTV acquisition. As you know, that's the most recent acquisition and therefore, we had less headroom between our book value and the fair value in that particular operation. So obviously, with these current market conditions, we've taken the more conservative view of the future discounted cash flows and therefore, without that headroom, took the impairment hits in Bulgaria. The other operations, obviously, we've had them for a while. We had significantly more headroom. You can see that analysis in our 10-K in the MD&A section.

Romana Wyllie

Next question comes from Daria Fomina from Goldman Sachs.

Daria Fomina - Goldman Sachs Group Inc., Research Division

A couple of more question are already answered, but one last. You mentioned that you've got various equity options. Is equity raising -- raises something you're really looking at, at this point?

Romana Wyllie

David?

David Sach

Hi, Daria. We're looking at all options, and that's all we're going to say on this subject. We really want to just point out that those 2013 notes, we realized that we need to start addressing them, so just wanted to point out that we're looking at all those options. So just to get you comfortable that we're well aware of the need to start addressing those 2013 notes and how we're going to refinance or repay them.

Romana Wyllie

So next question comes from Andrzej Knigawka from ING.

Andrzej Knigawka - ING Groep N.V., Research Division

I have 2 questions. One on Czech Republic. Obviously, you understand the argument of quarterly numbers being quite volatile, but I think NTG reported 20% growth in sales in the first quarter for their broadcasting operations in Czech Republic Prima. And I see from the presentation that TV Nova or your revenue in Czech korunas in Czech Republic was down 1%. This is quite a disparity. And obviously, fourth quarter is only a quarter, but it's your biggest quarter of the year -- by far the biggest quarter of the year. And my question is, where do you see that market share trend going forward? Do you expect to recap some of the market share in Czech Republic? Are you going to increase your programming expenses? What's the action plan for like first half of the year in your biggest market?

Romana Wyllie

Adrian, will you start?

Adrian Sarbu

Let me repeat the statement which I made a couple of minutes ago, Andrzej. We are looking to maintain an increased market share in every country. But first of all, to achieve to a market share, you have to have a strong audience share. And the environment in which we operate in the last 4 years with significant decreases in spending, we had to look at the costs. So for us, first is to maintain a comfortable audience share which will enable us to promote our operating model in broadcasting; second, to get the right value for our inventory because we generate a very, very valuable inventory, and in the last couple of years, the trend was to discount the value of this inventory, and we announced more than one year ago that our priority is this. Put it in a one single word, pricing. But that doesn't mean we are not focused on maintaining or increasing our market share. So subject toward the evolution of the market in every quarter to the behavior of the clients of the agency -- agencies and of our competitors, we'll try to optimize the results of our company. But at the end of the day, let's not forget that in Czech Republic, we ended the year with 49% OIBDA margin, which is probably the best EBITDA margin in broadcasting in Europe, and this is an increase via 2010. So Anthony will give you more numbers related to fourth quarter performance.

Anthony Chhoy

Yes just -- Andrzej, just to reiterate some of Adrian's points, we still retain a strong front on audience share with over 40%, which we felt that, that was in line with the demand of the markets. And in the fourth quarter, we reduced our local currency costs by 13%. That contributed to an outstanding OIBDA margin of 58% in Q4 this year versus the Q4 2010 or 53%. So we're very satisfied with the performance. I think it's -- in our Czech operation, I think Adrian already touched on the market share situation, which obviously will, I think, look to maintain or increase that. But obviously, to make sure that it reflects the CPP level of our -- develop our inventory.

Andrzej Knigawka - ING Groep N.V., Research Division

Yes, I mean, these are very fair answers. So obviously, your margins in Czech Republic in the fourth quarter was outstanding. I think it was highest quarter. In number, margin's highest from the fourth quarter '08. So nothing wrong where the cost comes from. That's for sure. And just briefly a second question, if I may, on Romania. Because -- I mean, at least for me, there's only upside there in terms of contribution to the group overall EBITDA pie because, like last year, Romania contribution was only -- not significantly smaller than Slovenia, and given the size of the markets and like your position and historical contribution, Romania should have been much, much bigger like normalized market conditions. And -- I mean, we understand there's competition there, probably stronger than any other markets, and there is a good market there. So my question is really what do you think is going to take, I think, in terms of time for Romania to be much, much stronger contributor to EBITDA for the overall group? Is it going to take a year? Is it going to take more than that [indiscernible]? What's your like mid-term view on that market?

Romana Wyllie

Adrian?

Adrian Sarbu

Andrzej, Romania, as all our major operations, carry the -- an operating model and the cost structure in broadcasting linked to foreign programming. There is a little bit of time needed to reset this cost base. And this we performed in an environment when the market in Romania didn't grow last year but went down. So we estimate that in the next 1 to 2 years, Romania will come back to the strong EBITDA, strong bottom line, which it showed in 2007 and 2008. Anthony?

Anthony Chhoy

Yes, just to give you the comparison, Andrzej, it's like when you compare Slovenia and Romania, Slovenia in 2011, the TV ad market grew by 5%. In Romania the TV ad markets went down by 6%. I think it's reflected in the fourth quarter, where we have improved the OIBDA and OIBDA margin of our Romania operations by reducing our record counselling costs there by 7% and even -- I think it's -- even when the market went down by 4%. So we improved that, but as Adrian has highlighted, that will take us 1 or 2 years to unwind those in foreign studio deals, which we had long-term deals, which we signed back in 2008.

Anthony Chhoy

Next question, Tim Hamby from Janco Partners.

Tim Hamby - Janco Partners, Inc., Research Division

First question is on the New Media segment. I wanted to see if we could get a little bit of color around the 20,000 subscription subscriber base you have there. And are these all paying subscribers or are they promotional as well? And then second question is on Media Pro. I wanted to see if we could get fourth quarter third-party revenues and hours license.

Romana Wyllie

Adrian will start with the first question.

Adrian Sarbu

Voyo, Tim, the 20,000 subscribers are paid subscribers. And the average, I think the average is $5 per subscriber. So Anthony, do you want to answer to the next?

Anthony Chhoy

Just in terms of the number of, I think, it's hours that you said that was licensed internationally, it was 856 some hours, and we licensed that to over 70 countries on Media Pro.

Romana Wyllie

Next in the queue is Dennis Akhul [ph] from BH [ph].

Unknown Analyst

I only have one question. It was for Adrian. More broadly speaking, what sort of benefits might there be for the business for CME if it was to enter into some sort of joint venture or arrangement with a company such as ProSieben or another sort of operator? Is there any additional sort of synergies which CME could achieve? Is there any rationale to such fit? How should one think about it?

Romana Wyllie

Adrian?

Adrian Sarbu

The result was rational, but it's not the timing.

Unknown Analyst

When -- how should one think of timing?

Adrian Sarbu

We -- let me explain. I suppose you understand here why I say it's not the timing.

Adrian Sarbu

This company has -- we think that CME has much higher potential than it is showing now, and we understand why. The share price is where it is. And we work every single day to give you reason to invest more in our stock. So please, your own seatwork to answer to this question.

Operator

[Operator Instructions]

Romana Wyllie

So we have Vivek Khanna again.

Vivek Khanna - Deutsche Bank AG, Research Division

No, Romana. All my questions have been answered already.

Romana Wyllie

And next in the queue is Ankur Agarwal from HSBC.

Ankur Agarwal

I got 2 questions. One is on your leverage. Obviously, you made a lot of progress this year. Is there any target level that you have in mind from here onwards? And second, do you anticipate increase in your interest costs going forward as you refinance your 2013 and 2014 notes? These are my 2 questions.

Romana Wyllie

So the first one on leverage, David?

David Sach

Okay. In terms of leverage targets, I've said on previous calls, Ankur, that we're going to get down to 4x net debt to OIBDA. So we will do everything in our power in terms of growing OIBDA or deleveraging in other ways to achieve that target in the next couple of years. And so I didn't quite catch your question on interest costs. I mean, this year, there is a one-off cost of $25 million to $30 million related to the exchanges in getting those 2013 exchange into 2015, so there's a one-off cost there in the interest costs that will go away in terms of what would be the interest costs going forward. It obviously depends on which refinancing or debt repayment options we pursue.

Ankur Agarwal

All right. I mean, these convertible bonds are probably a low-cost debt for you and in case -- well, my question was more in case -- more relevant in case if you refinance fully by more bonds which will probably be at a higher cost, so that's where I was coming from.

David Sach

Yes, sure. The -- yes, as you say, the 2004 notes have the lowest coupon, so there are floating-rate notes with a coupon of roughly 2.5%. So you're right, we're financing those right now. It doesn't make a lot of sense. We'll keep those in place and obviously, refinance them more towards the maturity dates. So right now, we're more focused on the '13s, which obviously come due in roughly a little over a year.

Romana Wyllie

Okay, next in the queue is Pavel Ryska from J & T Bank.

Pavel Ryska - J & T Banka, A.S., Research Division

My question is can you give us maybe more insight on your target to achieve positive free cash flow for this year? Because we've seen in the past few months that you're also targeting positive free cash flow for 2011. Finally, it was slightly minus, so is this target for this year in terms of dozens of millions of dollars, or is it only slightly positive? Just a brief view on it.

Romana Wyllie

David?

David Sach

Okay. Well, let me start off with the '11 free cash flow. I'd like to point out, obviously, an improvement from $96 million to $3 million is -- negative is quite an improvement so -- and quite an accomplishment, so we're happy with the improvement. We were targeting, as you say, breakeven to positive free cash flow in '11 and missed it because receipts were slightly lower than we anticipated. But obviously as we manage our cash, what you saw that all the components of free cash flow were positive in the slide that I put up in terms of OIBDA, working capital and CapEx, and we want to make sure in 2011 that the working capital improvement was sustainable. It wouldn't be reversed in '12. So when we look towards '12, obviously, we'd be looking for further OIBDA improvement. Working capital, we would expect to be sustainable if not a small improvement. CapEx, we would like to keep somewhat similar to 2011, and then we'll see whether we can reduce the investment in programming. And we'll just have to see what happens with that interest cost as we pursue those options to see where we finally end up on our 2012 cash flow. So you're going to have to work through some of those numbers I gave you and come up with your own estimate there, but it does look like it will be positive for us in '12.

Romana Wyllie

There are no more questions in the queue, so let me thank you for joining us today. We hope that you enjoyed our video webcast, and we welcome your feedback and comments. I'd also like to remind you that you can keep up-to-date and follow our progress between earnings calls on our website, www.cme.net. Or as always, I'm available for any additional questions anytime. We look forward to seeing you all shortly. Goodbye.

Operator

Thank you. This does conclude today's Central European Media's Fourth Quarter and Full Year 2011 Earnings Conference Call. Please disconnect your lines at this time, and have a wonderful day.

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