----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

|   | **x**      | **QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934**  |   |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |       |                                                                                                                                            |   |
|   |       | **For                  the quarterly period ended June 30, 2005**                                                                               |   |
|   |       |                                                                                                                                            |   |
|   | ** ̈** | **TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934** |   |

**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

| **BERMUDA**                                                                    | **98-0438382**                                   |
|--------------------------------------------------------------------------------|--------------------------------------------------|
| (State                or other jurisdiction of incorporation and organization) | (IRS                Employer Identification No.) |
| **Clarendon                House, Church Street, Hamilton**                    | **HM                CX Bermuda**                 |
| (Address                of principal executive offices)                        | (Zip                Code)                        |

**(441)-296-1431**

|   | Class                                                |   | Outstanding                as of August 1, 2005 |   |
|--------|------------------------------------------------------|--------|-------------------------------------------------|--------|
|   | Class                A Common Stock, par value $0.08 |   | 30,516,734                                      |   |
|   | Class                B Common Stock, par value $0.08 |   | 7,334,768                                       |   |

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Table            of Contents

**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**FORM      10-Q**

**For      the quarterly period ended June 30, 2005**

**INDEX**

|                                             |                                                                                                                            |                                                                                                                                    | Page |
|--------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|------|
| **Part                I. Financial information** |                                                                                                                            |
|                                             | **Item                1. Financial Statements**                                                                                 |                                                                                                                                    |
|                                             |                                                                                                                            | Consolidated                Balance Sheets as at June 30, 2005 and December                31, 2004                                     | 3    |
|                                             |                                                                                                                            | Consolidated                Statements of Operations for the Three Months                and Six Months Ended June 30, 2005 and 2004    | 5    |
|                                             |                                                                                                                            | Consolidated                Statement of Shareholders' Equity for the Six                Months from December 31, 2004 to June 30, 2005 | 7    |
|                                             |                                                                                                                            | Consolidated                Statements of Cash Flows for the Six Months                Ended June 30, 2005 and 2004                     | 8    |
|                                             |                                                                                                                            | Notes                to the Consolidated Financial                Statements                                                            | 9    |
|                                             | **Item                2. Management's Discussion and Analysis of Financial                Condition and Results of Operations** | 36                                                                                                                                      |
|                                             | **Item                3. Quantitative and Qualitative Disclosures About                Market Risk**                            | 62                                                                                                                                      |
|                                             | **Item                4. Controls and                Procedures**                                                               | 63                                                                                                                                      |
| **Part                II. Other Information**    |                                                                                                                            |
|                                             | **Item                1. Legal Proceedings**                                                                                    | 64                                                                                                                                      |
|                                             | **Item                4. Submission of Matters to a Vote of Security                Holders**                                   | 67                                                                                                                                      |
|                                             | **Item              5. Other Information**                                                                                      | 68                                                                                                                                      |
|                                             | **Item                6. Exhibits**                                                                                             | 68                                                                                                                                      |
| **Signatures**                                   | 68                                                                                                                              |
| **Exhibit                Index**                 | 69                                                                                                                              |

*Page            2*

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Table            of Contents

**Part      I. Financial Information**

**Item      1. Financial Statements**

**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**CONSOLIDATED      BALANCE SHEETS**

**(US$000s,      except share and per share data)**

**(Unaudited)**

|                                                                                                                 |   | **June                30, 2005** |          | **December                31, 2004** |   |
|----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------------|--------------------------------------|--------|
| **ASSETS**                                                                                                           |   |                             |          |                                 |   |
|                                                                                                                 |   |                             |          |                                 |   |
| **Current                Assets**                                                                                    |   |                             |          |                                 |   |
|                                                                                                                 |   |                             |          |                                 |   |
| Cash                and cash equivalents                                                                             |   | $                                | 113,797       |                                 | $      | 152,568 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Restricted                cash (Note 4)                                                                              |   |                             | 33,177        |                                 |   | 15,574 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Accounts                receivable (net of allowances of $8,426, $6,140,                respectively)                |   |                             | 104,073       |                                 |   | 45,170 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Other                receivable (Note 5)                                                                             |   |                             | -             |                                 |   | 18,368 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Program                rights                                                                                        |   |                             | 34,713        |                                 |   | 22,055 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Loans                to related parties                                                                              |   |                             | 300           |                                 |   | 300 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Other                short-term assets (Note 8)                                                                      |   |                             | 38,972        |                                 |   | 11,014 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| **Total                Current Assets**                                                                              |   |                             | **325,032**   |                                 |   | **265,049** |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| **Non-Current                Assets**                                                                                |   |                             |          |                                 |   |   |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Loans                to related parties                                                                              |   |                             | 2,795         |                                 |   | 2,525 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Investments                in associated companies                                                                   |   |                             | 29,304        |                                 |   | 28,558 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Acquisition                costs (Note 18)                                                                           |   |                             | -             |                                 |   | 10,770 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Property,                plant and equipment (net of depreciation of $104,494, $63,882,                respectively) |   |                             | 47,684        |                                 |   | 31,548 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Program                rights                                                                                        |   |                             | 31,115        |                                 |   | 18,299 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Goodwill                (Note 7)                                                                                     |   |                             | 774,504       |                                 |   | 59,092 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Other                intangibles (Note 7)                                                                            |   |                             | 162,838       |                                 |   | 27,331 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| Other                assets (Note 8)                                                                                 |   |                             | 16,417        |                                 |   | 1,467 |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| **Total                Non-Current Assets**                                                                          |   |                             | **1,064,657** |                                 |   | **179,590** |   |
|                                                                                                                 |   |                             |          |                                 |   |   |   |
| **Total                Assets**                                                                                      |   | **$**                            | **1,389,689** |                                 | **$**  | **444,639** |   |

*The      accompanying notes are an integral part of these consolidated financial      statements.*

*Page            3*

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Table            of Contents

**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**CONSOLIDATED      BALANCE SHEETS (continued)**

**(US$000s,      except share and per share data)**

**(Unaudited)**

|                                                                                                                                                                                                                                      |   | **June                30, 2005** |          | **December                31, 2004** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------------|--------------------------------------|--------|
| **LIABILITIES                AND SHAREHOLDERS’ EQUITY**                                                                                                                                                                             |   |                             |               |                                 |   |  |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| **Current                Liabilities:**                                                                                                                                                                                                   |   |                             |          |                                 |   |   |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Accounts                payable and accrued liabilities (Note 9)                                                                                                                                                                          |   | $                                | 107,171       |                                 | $      | 67,042 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Duties                and other taxes payable                                                                                                                                                                                             |   |                             | 26,267        |                                 |   | 20,243 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Income                taxes payable                                                                                                                                                                                                       |   |                             | 9,144         |                                 |   | 4,658 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Credit                facilities and obligations under capital leases                                                                                                                                                                     |   |                             | 24,880        |                                 |   | 10,472 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Settlement                liability (Note 10)                                                                                                                                                                                             |   |                             | 1,047         |                                 |   | - |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Deferred                consideration - Croatia (Note 5)                                                                                                                                                                                  |   |                             | 3,686         |                                 |   | 6,384 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Deferred                consideration - Czech Republic (Note 5)                                                                                                                                                                           |   |                             | 24,159        |                                 |   | - |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Deferred                tax                                                                                                                                                                                                               |   |                             | 1,346         |                                 |   | 946 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| **Total                Current Liabilities**                                                                                                                                                                                              |   |                             | **197,700**   |                                 |   | **109,745** |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| **Non-Current                Liabilities**                                                                                                                                                                                                |   |                             |          |                                 |   |   |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Accounts                payable and accrued liabilities                                                                                                                                                                                   |   |                             | 520           |                                 |   | 734 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Credit                facilities and obligations under capital leases                                                                                                                                                                     |   |                             | 5,049         |                                 |   | 8,898 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Settlement                liability (Note 10)                                                                                                                                                                                             |   |                             | 48,971        |                                 |   | - |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Euro                245.0 million 8.25% Senior Notes due 2012 (Note 11)                                                                                                                                                                   |   |                             | 296,596       |                                 |   | - |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Euro                125.0 million floating rate Senior Notes due 2012 (Note                11)                                                                                                                                            |   |                             | 151,324       |                                 |   | - |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Income                taxes payable                                                                                                                                                                                                       |   |                             | 3,251         |                                 |   | 3,120 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Provision                for losses in investments in associated companies                                                                                                                                                                |   |                             | 26            |                                 |   | - |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Deferred                tax                                                                                                                                                                                                               |   |                             | 36,670        |                                 |   | 6,213 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| **Total                Non-Current Liabilities**                                                                                                                                                                                          |   |                             | **542,407**   |                                 |   | **18,965** |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Minority                interests in consolidated subsidiaries                                                                                                                                                                            |   |                             | 9,902         |                                 |   | 4,861 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| **SHAREHOLDERS'                EQUITY:**                                                                                                                                                                                                  |   |                             |          |                                 |   |   |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Class                A Common Stock, $0.08 par value:                                                                                                                                                                                     |   |                             |          |                                 |   |   |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Authorized:                100,000,000 shares at June 30, 2005 and December 31, 2004; issued                and                outstanding: 30,506,734 at June 30, 2005 and 21,049,400 at December                31,                2004 |   |                             | 2,441         |                                 |   | 1,684 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Class                B Common Stock, $0.08 par value:                                                                                                                                                                                     |   |                             |          |                                 |   |   |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Authorized:                15,000,000 shares at June 30, 2005 and December 31, 2004; issued                and                outstanding: 7,334,768 at June 30, 2005 and December 31,                2004                                |   |                             | 587           |                                 |   | 587 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Preferred                Stock, $0.08 par value:                                                                                                                                                                                          |   |                             |          |                                 |   |   |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Authorized                5,000,000 shares at June 30, 2005 and December 31, 2004; issued and                outstanding: none at June 30, 2005 and December 31, 2004                                                                     |   |                             |          |                                 |   |   |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Additional                paid-in capital                                                                                                                                                                                                 |   |                             | 742,668       |                                 |   | 387,305 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Retained                earnings/(accumulated deficit)                                                                                                                                                                                    |   |                             | (69,958       | )                                    |   | (87,468 | ) |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| Accumulated                other comprehensive (loss)/income                                                                                                                                                                              |   |                             | (36,058       | )                                    |   | 8,960 |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| **Total                shareholders' equity**                                                                                                                                                                                             |   |                             | **639,680**   |                                 |   | **311,068** |   |
|                                                                                                                                                                                                                                      |   |                             |          |                                 |   |   |   |
| **Total                liabilities and shareholders' equity**                                                                                                                                                                             |   | **$**                            | **1,389,689** |                                 | **$**  | **444,639** |   |

*The      accompanying notes are an integral part of these consolidated financial      statements.*

*Page            4*

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Table            of Contents

**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**(US$000s,      except share and per share data)**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                                                                                  |   | **For                the Three Months****Ended                June 30,** |        | **For                the Six Months****Ended                June 30,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|-------------|------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                  |   | **2005**                                                                 |        | **2004**                                                               |   | **2005** |   | **2004** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |
| **Net                revenues**                                                                                                                                                                                                                                                                                                                                                                       |   | **$**                                                                    | **113,109** |                                                                   | **$**  | **44,886** |   | **$** | **161,413** |   | **$** | **80,734** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Operating                costs                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                     | 18,117      |                                                                   |   | 7,338 |   |   | 29,402 |   |   | 13,409 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Cost                of programming                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                     | 32,081      |                                                                   |   | 15,950 |   |   | 54,403 |   |   | 29,563 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Depreciation                of station fixed assets and other intangibles                                                                                                                                                                                                                                                                                                                             |   |                                                                     | 4,623       |                                                                   |   | 1,336 |   |   | 6,836 |   |   | 2,798 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| **Total                station operating costs and expenses**                                                                                                                                                                                                                                                                                                                                         |   |                                                                     | **54,821**  |                                                                   |   | **24,624** |   |   | **90,641** |   |   | **45,770** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Station                selling, general and administrative expenses                                                                                                                                                                                                                                                                                                                                   |   |                                                                     | 12,562      |                                                                   |   | 4,322 |   |   | 19,490 |   |   | 7,884 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Corporate                operating costs (including non-cash stock based compensation (see                Note 15)                of $ (1.4) million and $ 2.4 million for the three months ended June                30,                2005 and 2004, respectively and $ 1.7 million and $ 4.3 million for                the                six months ended June 30, 2005 and 2004, respectively) |   |                                                                     | 3,451       |                                                                   |   | 7,107 |   |   | 11,182 |   |   | 12,225 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Amortization                of intangibles                                                                                                                                                                                                                                                                                                                                                            |   |                                                                     | 82          |                                                                   |   | 62 |   |   | 159 |   |   | 62 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Impairment                charge (Note 6)                                                                                                                                                                                                                                                                                                                                                             |   |                                                                     | 35,331      |                                                                   |   | - |   |   | 35,331 |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| **Operating                income**                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                     | **6,862**   |                                                                   |   | **8,771** |   |   | **4,610** |   |   | **14,793** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Interest                income                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                     | 559         |                                                                   |   | 786 |   |   | 1,638 |   |   | 2,240 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                     | (6,424      | )                                                                      |   | (667 | ) |   | (6,731 | ) |   | (885 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Foreign                currency exchange gain/(loss), net                                                                                                                                                                                                                                                                                                                                             |   |                                                                     | 30,159      |                                                                   |   | (1,289 | ) |   | 29,430 |   |   | (1,922 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Other                income/(expense)                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                     | 312         |                                                                   |   | (10 | ) |   | (3,689 | ) |   | (781 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| **Income                before provision for income taxes, minority interest, equity in income                of                unconsolidated affiliates and discontinued                operations**                                                                                                                                                                                                |   |                                                                     | **31,468**  |                                                                   |   | **7,591** |   |   | **25,258** |   |   | **13,445** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Provision                for income taxes                                                                                                                                                                                                                                                                                                                                                             |   |                                                                     | (3,565      | )                                                                      |   | (5,769 | ) |   | (5,906 | ) |   | (6,939 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| **Income                before minority interest, equity in income of unconsolidated affiliates                and discontinued operations**                                                                                                                                                                                                                                                          |   |                                                                     | **27,903**  |                                                                   |   | **1,822** |   |   | **19,352** |   |   | **6,506** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Minority                interest in income of consolidated subsidiaries                                                                                                                                                                                                                                                                                                                               |   |                                                                     | (4,104      | )                                                                      |   | (379 | ) |   | (4,681 | ) |   | (457 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Equity                in income of unconsolidated affiliates                                                                                                                                                                                                                                                                                                                                          |   |                                                                     | 4,049       |                                                                   |   | 4,304 |   |   | 4,883 |   |   | 5,199 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| **Net                income from continuing operations**                                                                                                                                                                                                                                                                                                                                              |   |                                                                     | **27,848**  |                                                                   |   | **5,747** |   |   | **19,554** |   |   | **11,248** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - Czech Republic:                                                                                                                                                                                                                                                                                                                                              |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Pre-tax                income from discontinued operations                                                                                                                                                                                                                                                                                                                                            |   |                                                                     | 46          |                                                                   |   | 285 |   |   | 164 |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| Tax                on disposal of discontinued operations                                                                                                                                                                                                                                                                                                                                             |   |                                                                     | (2,435      | )                                                                      |   | - |   |   | (2,208 | ) |   | (45 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| **Net                income/(loss) from discontinued operations**                                                                                                                                                                                                                                                                                                                                     |   |                                                                     | **(2,389**  | **)**                                                                  |   | **285** |   |   | **(2,044** | **)** |   | **(45** | **)** |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                     |        |                                                                   |   |   |   |   |   |   |   |   |   |
| **Net                income**                                                                                                                                                                                                                                                                                                                                                                         |   | **$**                                                                    | **25,459**  |                                                                   | **$**  | **6,032** |   | **$** | **17,510** |   | **$** | **11,203** |   |

** **
*The      accompanying notes are an integral part of these consolidated financial      statements.*

*Page            5*

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**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS (continued)**

**(US$      000's, except share and per share data) **

**(Unaudited)**

|                                                                                                     |   | **For                the Three Months Ended June 30,** |   | **For                the Six Months Ended June 30,** |   |
|----------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                     |   | **2005**                                               |   | **2004**                                             |   | **2005** |   | **2004** |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |
| PER                SHARE DATA:                                                                           |   |                                                   |   |                                                 |   |   |   |   |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |
| Net                income per share (Note 14)                                                            |   |                                                   |   |                                                 |   |   |   |   |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |
| Continuing                operations - Basic (1)                                                         |   | $                                                      | 0.81   |                                                 | $      | 0.21 |   | $ | 0.62 |   | $ | 0.41 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Continuing                operations - Diluted (1)                                                       |   | $                                                      | 0.79   |                                                 | $      | 0.20 |   | $ | 0.61 |   | $ | 0.39 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - Basic                                                           |   | $                                                      | (0.07  | )                                                    | $      | 0.01 |   | $ | (0.06 | ) | $ | - |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - Diluted                                                         |   | $                                                      | (0.07  | )                                                    | $      | 0.01 |   | $ | (0.07 | ) | $ | - |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Net                income - Basic (1)                                                                    |   | $                                                      | 0.74   |                                                 | $      | 0.22 |   | $ | 0.56 |   | $ | 0.41 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Net                income - Diluted (1)                                                                  |   | $                                                      | 0.72   |                                                 | $      | 0.21 |   | $ | 0.54 |   | $ | 0.39 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares used in computing per share amounts                (000s): |   |                                                   |        |                                                 |   |  |   |   |  |   |   |  |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Continuing                operations - Basic (as restated) (1)                                           |   |                                                   | 34,274 |                                                 |   | 27,854 |   |   | 31,345 |   |   | 27,471 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Continuing                operations - Diluted (as restated) (1)                                         |   |                                                   | 35,145 |                                                 |   | 29,033 |   |   | 32,288 |   |   | 28,956 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - Basic (as restated) (1)                                         |   |                                                   | 34,274 |                                                 |   | 27,854 |   |   | 31,345 |   |   | 27,471 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - Diluted (as restated) (1)                                       |   |                                                   | 35,145 |                                                 |   | 29,033 |   |   | 32,288 |   |   | 28,956 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Net                income - Basic (as restated) (1)                                                      |   |                                                   | 34,274 |                                                 |   | 27,854 |   |   | 31,345 |   |   | 27,471 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| Net                income - Diluted (as restated) (1)                                                    |   |                                                   | 35,145 |                                                 |   | 29,033 |   |   | 32,288 |   |   | 28,956 |   |
|                                                                                                     |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |
| (1)                See Note 14, “Earnings Per Share”.                                        |   |                                                   |   |                                                 |   |   |   |   |   |   |   |   |   |

** **
*The      accompanying notes are an integral part of these consolidated financial      statements.*

*Page            6*

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**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**CONSOLIDATED      STATEMENT OF SHAREHOLDERS' EQUITY**

**(US$      000’s)**

**(Unaudited)**

|                                              |   | **Comprehensive****Income/(loss)** |    | **Class                A****Common****Stock** |   | **Class                B****Common****Stock** |   | **Additional****Paid-In****Capital** |    | **Accumulated****Deficit** |   | **Accumulated****Other****Comprehensive****Income/(Loss)** |   | **Total****Shareholders'****Equity** |        |
|---------------------------------------------------|--------|------------------------------------|---------|-----------------------------------------------|--------|-----------------------------------------------|--------|--------------------------------------|---------|----------------------------|--------|------------------------------------------------------------|--------|--------------------------------------|-------------|
| **BALANCE,                December 31, 2004**     |   |                               |    |                                          | **$**  | **1,684**                                     |   | **$**                                | **587** |                       | **$**  | **387,305**                                                |   | **$**                                | **(87,468** | **)** | **$** | **8,960** |   | **$** | **311,068** |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Stock-based                compensation           |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   | 1,682                                                      |   |                                 |        |   |   |   |   |   | 1,682 |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| New                stock issued                   |   |                               |    |                                          |   | 713                                           |   |                                 |    |                       |   | 351,334                                                    |   |                                 |        |   |   |   |   |   | 352,047 |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Stock                options exercised            |   |                               |    |                                          |   | 44                                            |   |                                 |    |                       |   | 2,347                                                      |   |                                 |        |   |   |   |   |   | 2,391 |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Comprehensive                income/(loss):       |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Net                income                         |   | $                                  | 17,510  |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 | 17,510      |   |   |   |   |   | 17,510 |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Other                comprehensive income/(loss): |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Cumulative                translation adjustments |   |                               | (45,018 | )                                             |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   | (45,018 | ) |   | (45,018 | ) |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| Comprehensive                loss                 |   | $                                  | (27,508 | )                                             |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
|                                              |   |                               |    |                                          |   |                                          |   |                                 |    |                       |   |                                                       |   |                                 |        |   |   |   |   |   |   |   |
| **BALANCE,                June 30, 2005**         |   |                               |    |                                          | **$**  | **2,441**                                     |   | **$**                                | **587** |                       | **$**  | **742,668**                                                |   | **$**                                | **(69,958** | **)** | **$** | **(36,058** | **)** | **$** | **639,680** |   |

** **
*The      accompanying notes are an integral part of these consolidated financial      statements.*

*Page            7*

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**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS **

**(US$      000’s) - (Unaudited)**

|                                                                                                               |   | **For                the Six Months****Ended                June 30,** |         |
|--------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------------|
|                                                                                                               |   | **2005**                                                               |         | **2004** |   |
| **CASH                FLOWS FROM OPERATING ACTIVITIES:**                                                           |   |                                                                   |         |   |   |
| **Net                income**                                                                                      |   | **$**                                                                  | **17,510**   |   | **$** | **11,203** |   |
| Adjustments                to reconcile net income/(loss) to net cash used in operating                activities: |   |                                                                   |         |   |   |   |   |
| (Income)/loss                from discontinued operations                                                          |   |                                                                   | 2,044        |   |   | 45 |   |
| Equity                in income, net of dividends received                                                         |   |                                                                   | (720         | ) |   | (5,199 | ) |
| Depreciation                and amortization                                                                       |   |                                                                   | 38,363       |   |   | 20,431 |   |
| Impairment                charge                                                                                   |   |                                                                   | 35,331       |   |   | - |   |
| Interest                accrued on loans                                                                           |   |                                                                   | (84          | ) |   | (828 | ) |
| Loss                on disposal of fixed assets                                                                    |   |                                                                   | 389          |   |   |   |   |
| Stock                based compensation                                                                            |   |                                                                   | 1,682        |   |   | 4,254 |   |
| Minority                interest in income of consolidated subsidiaries                                            |   |                                                                   | 4,681        |   |   | 457 |   |
| Foreign                currency exchange (gain)/loss, net                                                          |   |                                                                   | (29,430      | ) |   | 1,922 |   |
| Net                change in (net of effects of acquisitions and disposals of                businesses):          |   |                                                                   |         |   |   |   |   |
| Accounts                receivable                                                                                 |   |                                                                   | (6,424       | ) |   | (2,744 | ) |
| Program                rights costs                                                                                |   |                                                                   | (37,056      | ) |   | (21,009 | ) |
| Other                assets                                                                                        |   |                                                                   | (4,082       | ) |   | (3,256 | ) |
| Accounts                payable and accrued liabilities                                                            |   |                                                                   | (2,679       | ) |   | (5,633 | ) |
| Change                in fair value of derivatives                                                                 |   |                                                                   | (643         | ) |   | - |   |
| Short                term payables to bank                                                                         |   |                                                                   | -            |   |   | 1,016 |   |
| Income                and other taxes payable                                                                      |   |                                                                   | 4,521        |   |   | - |   |
| **Net                cash generated from continuing operating                activities**                          |   |                                                                   | **23,403**   |   |   | **659** |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES:**                                                           |   |                                                                   |         |   |   |   |   |
| Restricted                cash                                                                                     |   |                                                                   | (18,677      | ) |   | (24 | ) |
| Acquisition                of fixed assets                                                                         |   |                                                                   | (8,539       | ) |   | (3,438 | ) |
| Proceeds                from disposal of fixed assets                                                              |   |                                                                   | 124          |   |   | - |   |
| Investments                in subsidiaries and affiliates (1)                                                      |   |                                                                   | (12,884      | ) |   | (17,084 | ) |
| Acquisition                of TV Nova (Czech Republic) Group                                                       |   |                                                                   | (218,381     | ) |   | - |   |
| Loans                and advances to related parties                                                               |   |                                                                   | -            |   |   | 400 |   |
| License                costs, other assets and intangibles                                                         |   |                                                                   | -            |   |   | 904 |   |
| **Net                cash used in investing activities**                                                           |   |                                                                   | **(258,357** | **)** |   | **(19,242** | **)** |
| **CASH                FLOWS FROM FINANCING ACTIVITIES:**                                                           |   |                                                                   |         |   |   |   |   |
| Cash                facilities and payments under capital leases                                                   |   |                                                                   | (9,942       | ) |   | (622 | ) |
| Net                proceeds from issuance of Senior Notes                                                          |   |                                                                   | 476,188      |   |   | - |   |
| Repayment                  of notes for acquisition of TV Nova (Czech Republic)                  Group             |   |                                                                   | (491,703     | )  |   | - |   |
| Issuance                of stock                                                                                   |   |                                                                   | 233,547      |   |   | 3,583 |   |
| Dividends                paid to minority shareholders                                                             |   |                                                                   | (77          | ) |   | - |   |
| **Net                cash received from/(used in) financing activities**                                           |   |                                                                   | **208,013**  |   |   | **2,961** |   |
| **NET                CASH USED IN DISCONTINUED OPERATIONS (OPERATING)**                                            |   |                                                                   | **(2,000**   | **)** |   | **(9,274** | **)** |
| **IMPACT                OF EXCHANGE RATE FLUCTUATIONS ON CASH**                                                    |   |                                                                   | **(9,830**   | **)** |   | **(2,043** | **)** |
| Net                decrease in cash and cash equivalents                                                           |   |                                                                   | (38,771      | ) |   | (26,939 | ) |
| **CASH                AND CASH EQUIVALENTS, beginning of period**                                                  |   |                                                                   | **152,568**  |   |   | **192,246** |   |
| **CASH                AND CASH EQUIVALENTS, end of period**                                                        |   | **$**                                                                  | **113,797**  |   | **$** | **165,307** |   |
| SUPPLEMENTAL                CASH FLOW INFORMATION:                                                                 |   |                                                                   |         |   |   |   |   |
| Cash                paid for interest                                                                              |   | $                                                                      | 278          |   | $ | 144 |   |
| Cash                paid for income taxes (net of refunds)                                                         |   | $                                                                      | 11,965       |   | $ | 14,089 |   |
| Exchange                of 3.5 million Class A Common Stock (Note 5)                                               |   | $                                                                      | 120,883      |   | $ | - |   |
| Notes                taken out for acquisition of TV Nova (Czech Republic) Group (Note                5)           |   | $                                                                      | 491,703      |   | $ | - |   |
| Exchange                of Other Receivable (Note 5)                                                               |   | $                                                                      | 18,541       |   | $ | - |   |
| Purchase                of Krsak interest financed with payable                                                    |   | $                                                                      | 24,683       |   | $ | - |   |

*The      accompanying notes are an integral part of these consolidated financial      statements.*

*Page            8*

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Table            of Contents

**CENTRAL      EUROPEAN MEDIA ENTERPRISES LTD.**

**Notes      to the Consolidated Financial Statements**

**June      30, 2005**

| **1.** | **Basis                of Presentation** |
|--------|------------------------------------------|

*Page            9*

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***Stock-based      Compensation***

***Pro      Forma Disclosures***

|                                                                                                                                                                                  |   |   |                            | **For                the Three****Months                Ended****June                30,** |   | **For                the Six****Months                Ended****June                30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------|--------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                  |   |   |                            | **(US$                000’s, except per share data)**                                |   |
|                                                                                                                                                                                  |   |   |                            | **2005**                                                                                   |   | **2004**                                                                                 |   | **2005** |   | **2004** |   |
|                                                                                                                                                                                  |   |   |                            |                                                                                       |   |                                                                                     |   |   |   |   |   |
| Net                Income                                                                                                                                                             |   |   | As                Reported      |                                                                                       | $      | 25,459                                                                                   |   | $ | 6,032 |   | $ | 17,510 |   | $ | 11,203 |   |
| Add/(deduct):                Stock-based compensation expense/(income) included in reported net                income,                net of related tax effects                      |   |   | As                Reported      |                                                                                       |   | (1,419                                                                                   | )      |   | 2,369 |   |   | 1,682 |   |   | 4,254 |   |
| Add/(deduct):                Total stock-based compensation expense determined under fair value                based                method for all awards, net of related tax effects |   |   | Pro                FormaExpense |                                                                                       |   | 1,384                                                                                    |   |   | (2,422 | ) |   | (1,727 | ) |   | (4,361 | ) |
| Net                Income                                                                                                                                                             |   |   | Pro                Forma        |                                                                                       | **$**  | **25,424**                                                                               |   | **$** | **5,979** |   | **$** | **17,465** |   | **$** | **11,096** |   |
|                                                                                                                                                                                  |   |   |                            |                                                                                       |   |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| Net                Income Per Common Share - Basic:                                                                                                                                   |   |   | As                Reported      |                                                                                       | $      | 0.74                                                                                     |   | $ | 0.22 |   | $ | 0.56 |   | $ | 0.41                (1 | ) |
|                                                                                                                                                                                  |   |   | Pro                Forma   |                                                                                       | $      | 0.74                                                                                     |   | $ | 0.21 |   | $ | 0.56 |   | $ | 0.40 |   |
|                                                                                                                                                                                  |   |   |                            |                                                                                       |   |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| Net                Income Per Common Share -Diluted:                                                                                                                                  |   |   | As                Reported      |                                                                                       | $      | 0.72                                                                                     |   | $ | 0.21                (1 | ) | $ | 0.54 |   | $ | 0.39                (1 | ) |
|                                                                                                                                                                                  |   |   | Pro                Forma   |                                                                                       | $      | 0.72                                                                                     |   | $ | 0.21                (1 | ) | $ | 0.54 |   | $ | 0.38                (1 | ) |

| **2.** | **Group                Operations** |
|--------|-------------------------------------|

*Page            10*

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| **Key                  Subsidiaries and Affiliates as at June 30,                  2005** |   | **Voting****Interest** |   | **Share                  of****Profits** |   | **Accounting****Treatment** |   | **TV                  Channels** |                              |
|-------------------------------------------------------------------------------------------|--------|------------------------|--------|------------------------------------------|--------|-----------------------------|--------|----------------------------------|-----------------------------------|
| **Continuing                  Operations**                                                |   |                   |   |                                     |   |                        |   |                             |                              |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |
| ***Croatia***                                                                             |   |                   |   |                                     |   |                        |   |                             |                              |
| Operating                  Company:                                                       |   |                   |   |                                     |   |                        |   |                             |                              |
| Operativna                  Kompanija d.o.o. (OK)                                         |   |                   | 100    | %                                        |   | 100                         | %      |                             | Consolidated                      |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                        |   |   |   |   |
| License                  Company:                                                         |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Nova                  TV d.d. (Nova TV Croatia)                                           |   |                   | 100    | %                                        |   | 100                         | %      |                             | Consolidated                      |   |   | NOVA                  TV (Croatia) |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| ***Czech                  Republic***                                                     |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Operating                  Companies:                                                     |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Ceska                  Produkcni 2000 a.s. (CP 2000)                                      |   |                   | 100    | %                                        |   | 100                         | %      |                             | Consolidated                      |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   |   |   |
| MAG                  MEDIA 99 a.s. (Mag Media)                                            |   |                   | 100    | %                                        |   | 100                         | %      |                             | Consolidated                      |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   |   |   |
| License                  Company:                                                         |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| CET                  21 s.r.o. (CET 21)                                                   |   |                   | 96.5   | %                                        |   | 96.5                        | %      |                             | Consolidated                      |   |   | TV                  NOVA |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   | (Czech                  Republic) |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| ***Romania***                                                                             |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Operating                  Companies:                                                     |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Media                  Pro International                                                  |   |                   | 82     | %                                        |   | 82                          | %      |                             | Consolidated                      |   |   |   |   |
| S.A.                  (MPI)                                                               |   |                   |   |                                     |   |                        |   |                             | Subsidiary                        |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Media                  Vision S.R.L. (Media Vision)                                       |   |                   | 70     | %                                        |   | 70                          | %      |                             | Consolidated                      |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   |   |   |
| License                  Companies:                                                       |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Pro                  TV S.A. - formerly Pro TV S.R.L. (Pro TV)                            |   |                   | 82     | %                                        |   | 82                          | %      |                             | Consolidated                      |   |   | PRO                  TV, ACASA, |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   | PRO                  CINEMA and |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   | PRO                  TV   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   | INTERNATIONAL  |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Radio                  Pro S.R.L. - Formerly Media Pro S.R.L                              |   |                   | 20     | %                                        |   | 20                          | %      |                             | Equity                  Accounted |   |   | PRO                  FM (radio), |   |
| (Radio                  Pro)                                                              |   |                   |   |                                     |   |                        |   |                             | Affiliate                         |   |   | INFOPRO |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| ***Slovenia***                                                                            |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Operating                  Company:                                                       |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Produkcija                  Plus d.o.o. (Pro Plus)                                        |   |                   | 100    | %                                        |   | 100                         | %      |                             | Consolidated                      |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   |   |   |
| License                  Companies:                                                       |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Pop                  TV d.o.o. (Pop TV)                                                   |   |                   | 100    | %                                        |   | 100                         | %      |                             | Consolidated                      |   |   | POP                  TV |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   |   |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             |                              |   |   |   |   |
| Kanal                  A d.o.o. (Kanal A)                                                 |   |                   | 100    | %                                        |   | 100                         | %      |                             | Consolidated                      |   |   | KANAL                  A |   |
|                                                                                      |   |                   |   |                                     |   |                        |   |                             | Subsidiary                   |   |   |   |   |

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| **Key                Subsidiaries and Affiliates as at June 30,                2005** |   | **Voting****Interest** |   | **Share                of****Profits** |   | **Accounting****Treatment** |   | **TV                Channels** |                                         |
|---------------------------------------------------------------------------------------|--------|------------------------|--------|----------------------------------------|--------|-----------------------------|--------|--------------------------------|----------------------------------------------|
| **Continuing                Operations**                                              |   |                   |   |                                   |   |                        |   |                           |                                         |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           |                                         |
| ***Slovak                Republic***                                                  |   |                   |   |                                   |   |                        |   |                           |                                         |
| Operating                Company:                                                     |   |                   |   |                                   |   |                        |   |                           |                                         |
| Slovenska                Televizna Spolocnost s.r.o. (STS)                            |   |                   | 49     | %                                      |   | 70                          | %      |                           | Equity                Accounted              |   |   |   |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           | Affiliate                               |   |   |   |   |
| License                Company:                                                       |   |                   |   |                                   |   |                        |   |                           |                                         |   |   |   |   |
| Markiza-Slovakia                s.r.o. (Markiza)                                      |   |                   | 34     | %                                      |   | 0.1                         | %      |                           | Equity                Accounted              |   |   | MARKIZA                TV |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           | Affiliate                               |   |   |   |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           |                                         |   |   |   |   |
| ***Ukraine***                                                                         |   |                   |   |                                   |   |                        |   |                           |                                         |   |   |   |   |
| Operating                Companies:                                                   |   |                   |   |                                   |   |                        |   |                           |                                         |   |   |   |   |
| Innova                Film GmbH (Innova)                                              |   |                   | 60     | %                                      |   | 60                          | %      |                           | Consolidated                                 |   |   |   |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           | Subsidiary                              |   |   |   |   |
| International                Media Services Ltd. (IMS)                                |   |                   | 60     | %                                      |   | 60                          | %      |                           | Consolidated                                 |   |   |   |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           | Subsidiary                              |   |   |   |   |
| Enterprise                "Inter-Media" (Inter-Media)                                 |   |                   | 60     | %                                      |   | 60                          | %      |                           | Consolidated                                 |   |   |   |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           | Subsidiary                              |   |   |   |   |
| License                Company:                                                       |   |                   |   |                                   |   |                        |   |                           |                                         |   |   |   |   |
| Broadcasting                Company "Studio 1+1" (Studio 1+1)                         |   |                   | 18     | %                                      |   | 60                          | %      |                           | Consolidated                                 |   |   | STUDIO                1+1 |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           | Variable                Interest   |   |   |   |   |
|                                                                                  |   |                   |   |                                   |   |                        |   |                           | Entity                                  |   |   |   |   |

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*Page            13*

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*Croatia*

*Czech      Republic*

*Romania*

*Slovenia*

*Slovak      Republic*

*Ukraine*

*Page            14*

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| **3.** | **Recent                Accounting Pronouncements** |
|--------|-----------------------------------------------------|

*Stock      Based Compensation*

| **4.** | **Restricted                Cash** |
|--------|------------------------------------|

| **5.** | **Acquisitions                and Disposals** |
|--------|-----------------------------------------------|

*Czech      Republic*

*Acquisition      - TV Nova*

*Page            15*

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|                                                         |   | **US$                000’s** |        |
|--------------------------------------------------------------|--------|------------------------------------|-------------|
|                                                         |   |                               |        |
| Cash                                                         |   | $                                  | 35,592      |   |
|                                                         |   |                               |        |   |
| Receivables                                                  |   |                               | 56,832      |   |
|                                                         |   |                               |        |   |
| Property,                plant and equipment                 |   |                               | 12,977      |   |
|                                                         |   |                               |        |   |
| Program                library                               |   |                               | 23,141      |   |
|                                                         |   |                               |        |   |
| Intangible                assets subject to amortization     |   |                               | 120,604     |   |
|                                                         |   |                               |        |   |
| Intangible                assets not subject to amortization |   |                               | 17,701      |   |
|                                                         |   |                               |        |   |
| Goodwill                                                     |   |                               | 771,815     |   |
|                                                         |   |                               |        |   |
| Other                assets                                  |   |                               | 25,933      |   |
|                                                         |   |                               |        |   |
| Liabilities                                                  |   |                               | (120,817    | ) |
|                                                         |   |                               |        |   |
| Deferred                tax liability                        |   |                               | (31,795     | ) |
|                                                         |   |                               |        |   |
| Minority                interest                             |   |                               | (2,200      | ) |
|                                                         |   |                               |        |   |
| **Total                purchase price**                      |   | **$**                              | **909,783** |   |

*Page            16*

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|                                                            |   | **For                the Three Months****Ended                June 30,** |    | **For                the Six Months****Ended                June 30,** |   |
|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------|---------|------------------------------------------------------------------------|--------|
|                                                            |   | **2005**                                                                 |    | **2004**                                                               |   | **2005** |   | **2004** |   |
|                                                            |   |                                                                     |    |                                                                   |   |   |   |   |   |
| Pro-forma                                                       |   | **(US$                000's, except per share data)**                    |    |
|                                                            |   |                                                                     |    |
| Net                revenues                                     |   | $                                                                        | 139,552 |                                                                   | $      | 103,582 |   | $ | 243,537 |   | $ | 184,971 |   |
|                                                            |   |                                                                     |    |                                                                   |   |   |   |   |   |   |   |   |   |
| Net                income from continuing operations            |   | $                                                                        | 35,238  |                                                                   | $      | 22,635 |   | $ | 38,118 |   | $ | 35,557 |   |
|                                                            |   |                                                                     |    |                                                                   |   |   |   |   |   |   |   |   |   |
| Net                income                                       |   | $                                                                        | 32,849  |                                                                   | $      | 22,920 |   | $ | 36,074 |   | $ | 35,512 |   |
|                                                            |   |                                                                     |    |                                                                   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                                                                     |    |                                                                   |   |   |   |   |   |   |   |   |   |
| Per                Share Data:                                  |   |                                                                     |    |                                                                   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                                                                     |    |                                                                   |   |   |   |   |   |   |   |   |   |
| Net                income                -                Basic |   | $                                                                        | 0.88    |                                                                   | $      | 0.62 |   | $ | 0.96 |   | $ | 0.97 |   |
|                                                            |   |                                                                     |    |                                                                   |   |   |   |   |   |   |   |   |   |
| Net                income - Diluted                             |   | $                                                                        | 0.86    |                                                                   | $      | 0.60 |   | $ | 0.94 |   | $ | 0.94 |   |

*Romania*

*Acquisition      - MPI and Pro TV*

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*Croatia*

*Acquisition      - Nova TV*

*Slovenia*

*Acquisition      - Pro Plus*

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| **6.** | **Croatian                Impairment** |
|--------|----------------------------------------|

| **7.** | **Goodwill                and Intangible Assets** |
|--------|---------------------------------------------------|

*Goodwill:*

|                                       |   | Carrying                           |       | Additions                  in |   | Allocation  |   | Impairment |        | Foreign   |   | Carrying                       |   |
|--------------------------------------------|--------|------------------------------------|------------|-------------------------------|--------|-------------|--------|------------|-------------|-----------|--------|--------------------------------|--------|
|                                       |   | amount                  as at      |       | the                  period   |   |        |   |       |        | Exchange  |   | amount                  as at  |   |
|                                       |   | December                  31,      |       |                          |   |        |   |       |        | movements |   | June                  30, 2005 |   |
|                                       |   | 2004                               |       |                          |   |        |   |       |        |      |   |                           |   |
|                                       |   | (US$                  000’s) |       |
| Slovenian                  operations      |   | $                                  | 14,724     |                          |   | 2,300       |   |       | -           |      |   | -                              |   |   | (1,626 | ) | $ | 15,398 |   |
|                                       |   |                               |       |                          |   |        |   |       |        |      |   |                           |   |   |   |   |   |   |   |
| Ukrainian                  operations      |   | $                                  | 4,096      |                          |   | -           |   |       | -           |      |   | -                              |   |   | - |   | $ | 4,096 |   |
|                                       |   |                               |       |                          |   |        |   |       |        |      |   |                           |   |   |   |   |   |   |   |
| Romanian                  operations       |   | $                                  | 8,826      |                          |   | 2,919       |   |       | -           |      |   | -                              |   |   | - |   | $ | 11,745 |   |
|                                       |   |                               |       |                          |   |        |   |       |        |      |   |                           |   |   |   |   |   |   |   |
| Croatian                  operations       |   | $                                  | 31,446     |                          |   | -           |   |       | (18,817     | )         |   | (9,706                         | )      |   | (2,193 | ) | $ | 730 |   |
|                                       |   |                               |       |                          |   |        |   |       |        |      |   |                           |   |   |   |   |   |   |   |
| Czech                  Republic operations |   | $                                  | -          |                          |   | 771,815     |   |       | -           |      |   | -                              |   |   | (29,280 | ) | $ | 742,535 |   |
|                                       |   |                               |       |                          |   |        |   |       |        |      |   |                           |   |   |   |   |   |   |   |
| **Total**                                  |   | **$**                              | **59,092** |                          | **$**  | **777,034** |   |       | **(18,817** | **)**     |   | **(9,706**                     | **)**  |   | **(33,099** | **)** | **$** | **774,504** |   |

*Page            19*

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*Other      intangibles:*

|                                      |   | Carrying                           |       | Additions                  /    |   | Impairment  |   | Amortization                  in |        | Foreign   |   | Carrying                       |   |
|-------------------------------------------|--------|------------------------------------|------------|---------------------------------|--------|-------------|--------|----------------------------------|-------------|-----------|--------|--------------------------------|--------|
|                                      |   | amount                  as at      |       | Allocations                  in |   |        |   | the                  period      |        | exchange  |   | amount                  as at  |   |
|                                      |   | December                  31,      |       | the                  period     |   |        |   |                             |        | movements |   | June                  30, 2005 |   |
|                                      |   | 2004                               |       |                            |   |        |   |                             |        |      |   |                           |   |
|                                      |   |                               |       |                            |   |        |   |                             |        |      |   |                           |   |
|                                      |   | (US$                  000’s) |       |
| License                  acquisition cost |   | $                                  | 1,506      |                            |   | -           |   |                             | -           |      |   | -                              |   |   | - |   | $ | 1,506 |   |
|                                      |   |                               |       |                            |   |        |   |                             |        |      |   |                           |   |   |   |   |   |   |   |
| Broadcast                  license        |   | $                                  | 13,069     |                            |   | 137,853     |   |                             | (18,604     | )         |   | (1,492                         | )      |   | (5,508 | ) | $ | 125,318 |   |
|                                      |   |                               |       |                            |   |        |   |                             |        |      |   |                           |   |   |   |   |   |   |   |
| Trademarks                                |   | $                                  | 10,519     |                            |   | 26,545      |   |                             | (7,021      | )         |   | -                              |   |   | (1,029 | ) | $ | 29,014 |   |
|                                      |   |                               |       |                            |   |        |   |                             |        |      |   |                           |   |   |   |   |   |   |   |
| Customer                  relationships   |   | $                                  | 2,237      |                            |   | 5,232       |   |                             | -           |      |   | (256                           | )      |   | (213 | ) | $ | 7,000 |   |
|                                      |   |                               |       |                            |   |        |   |                             |        |      |   |                           |   |   |   |   |   |   |   |
| **Total**                                 |   | **$**                              | **27,331** |                            | **$**  | **169,630** |   | **$**                            | **(25,625** | **)**     | **$**  | **(1,748**                     | **)**  | **$** | **(6,750** | **)** | **$** | **162,838** |   |

| **8.** | **Other                Assets** |
|--------|---------------------------------|

|                                        |   | **As                at June 30, 2005** |       | **December                31, 2004** |   |
|---------------------------------------------|--------|----------------------------------------|------------|--------------------------------------|--------|
|                                        |   | **US$                000’s**     |       | **US$                000’s**   |   |
| Current:                                    |   |                                   |       |                                 |   |
|                                        |   |                                   |       |                                 |   |
| Prepaid                expenses        |   | $                                      | 16,637     |                                 | $      | 9,026 |   |
|                                        |   |                                   |       |                                 |   |   |   |
| VAT                recoverable              |   |                                   | 2,210      |                                 |   | 664 |   |
|                                        |   |                                   |       |                                 |   |   |   |
| Income                taxes receivable      |   |                                   | 12,326     |                                 |   | - |   |
|                                        |   |                                   |       |                                 |   |   |   |
| Capitalized                debt costs       |   |                                   | 1,906      |                                 |   | - |   |
|                                        |   |                                   |       |                                 |   |   |   |
| Other                                       |   |                                   | 5,893      |                                 |   | 1,324 |   |
|                                        |   | **$**                                  | **38,972** |                                 | **$**  | **11,014** |   |
|                                        |   |                                   |       |                                 |   |   |   |
| Long                term:                   |   |                                   |       |                                 |   |   |   |
|                                        |   |                                   |       |                                 |   |   |   |
| Capitalized                debt costs  |   | $                                      | 11,166     |                                 | $      | - |   |
|                                        |   |                                   |       |                                 |   |   |   |
| Other                                       |   |                                   | 5,251      |                                 |   | 1,467 |   |
|                                        |   | **$**                                  | **16,417** |                                 | **$**  | **1,467** |   |

*Page            20*

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| **9.** | **Accounts                Payable and Accrued                Liabilities** |
|--------|----------------------------------------------------------------------------|

|                                     |   | **As                at June 30, 2005** |        | **As                at December 31, 2004** |   |
|------------------------------------------|--------|----------------------------------------|-------------|--------------------------------------------|--------|
|                                     |   | **US$                000’s**     |        | **US$                000’s**         |   |
| Accounts                payable          |   | $                                      | 18,985      |                                       | $      | 16,642 |   |
|                                     |   |                                   |        |                                       |   |   |   |
| Programming                liabilities   |   |                                   | 44,024      |                                       |   | 22,156 |   |
|                                     |   |                                   |        |                                       |   |   |   |
| Other                accrued liabilities |   |                                   | 44,162      |                                       |   | 28,244 |   |
|                                     |   | **$**                                  | **107,171** |                                       | **$**  | **67,042** |   |

| **10.** | **Settlement                Liability** |
|---------|-----------------------------------------|

|                                     |   | **As                at June 30, 2005** |   | **December                31, 2004** |   |
|------------------------------------------|--------|----------------------------------------|--------|--------------------------------------|--------|
|                                     |   | **US$                000’s**     |   | **US$                000’s**   |   |
| Current:                                 |   |                                   |   |                                 |   |
| Mediation                liability       |   | $                                      | 1,047  |                                 | $      | - |   |
|                                     |   |                                   |   |                                 |   |   |   |
| Long                term:                |   |                                   |   |                                 |   |   |   |
| Mediation                liability  |   | $                                      | 48,971 |                                 | $      | - |   |

*Page            21*

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| **11.** | **Senior                Notes** |
|---------|---------------------------------|

|                                       | **Euro                245 million 8.25%****Senior                Notes** |                                       | **Euro                125 million floating****rate                Senior Notes** |
|--------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------|----------------------------------------------------------------------------------|
|                                       |                                                                     |                                       |                                                                             |
|                                       | **Redemption                Price**                                      |                                       | **Redemption                Price**                                              |
|                                       |                                                                     |                                       |                                                                             |
| May                15, 2009                | 104.125%                                                                 | May                15, 2007                | 102.000%                                                                         |
|                                       |                                                                     |                                       |                                                                             |
| May                15, 2010                | 102.063%                                                                 | May                15, 2008                | 101.000%                                                                         |
|                                       |                                                                     |                                       |                                                                             |
| May                15, 2011 and thereafter | 100.00%                                                                  | May                15, 2009 and thereafter | 100.000%                                                                         |

| **12.** | **Segment                Data** |
|---------|---------------------------------|

| · | expenses                presented as corporate expenses in our consolidated statements of                operations (i.e., corporate operating costs, stock-based compensation                and                amortization of intangibles); |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            22*

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| · | changes                in the fair value of derivatives; |
|--------|----------------------------------------------------------|

| · | foreign                currency exchange gains and losses; |
|--------|------------------------------------------------------------|

| · | certain                unusual or infrequent items (e.g., extraordinary gains and losses,                impairments on assets or                investments). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                   |   | **SEGMENT                FINANCIAL INFORMATION**       |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|-------------|
|                                                                                                                                                                                                                                                                   |   | **For                the Three Months Ended June 30,** |        |
|                                                                                                                                                                                                                                                                   |   | **(US                $000's)**                         |        |
|                                                                                                                                                                                                                                                                   |   | **Segment                Net Revenues (1)**            |        | **Segment                EBITDA** |   |
|                                                                                                                                                                                                                                                                   |   | **2005**                                               |        | **2004** |   | **2005** |   | **2004** |   |
| **Country**                                                                                                                                                                                                                                                            |   |                                                   |        |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |
| Croatia                (NOVA TV)                                                                                                                                                                                                                                       |   | $                                                      | 7,652       |   | $ | - |   | $ | (1,337 | ) | $ | - |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Czech                Republic (TV NOVA)                                                                                                                                                                                                                                |   |                                                   | 47,767      |   |   | - |   |   | 28,287 |   |   | - |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Romania                (2)                                                                                                                                                                                                                                             |   |                                                   | 26,592      |   |   | 18,702 |   |   | 11,974 |   |   | 5,920 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Slovak                Republic (MARKIZA TV)                                                                                                                                                                                                                            |   |                                                   | 19,627      |   |   | 17,448 |   |   | 7,956 |   |   | 8,393 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Slovenia                (POP TV and KANAL A)                                                                                                                                                                                                                           |   |                                                   | 13,920      |   |   | 13,751 |   |   | 6,490 |   |   | 6,860 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Ukraine                (STUDIO 1+1)                                                                                                                                                                                                                                    |   |                                                   | 17,178      |   |   | 13,248 |   |   | 4,935 |   |   | 4,895 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| **Total                Segment Data**                                                                                                                                                                                                                                  |   | **$**                                                  | **132,736** |   | **$** | **63,149** |   | **$** | **58,305** |   | **$** | **26,068** |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| **Reconciliation                to Consolidated Statement of Operations:**                                                                                                                                                                                             |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| **Consolidated                Net Revenues / Income before provision for income taxes, minority                interest, equity in income of unconsolidated affiliates and discontinued                operations**                                                    |   | **$**                                                  | **113,109** |   | **$** | **44,886** |   | **$** | **31,468** |   | **$** | **7,591** |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Corporate                operating costs (including non-cash stock based compensation (see                Note 15)                of $ (1.9) million and $ 2.4 million for the three months ended June                30,                2005 and 2004, respectively)) |   |                                                   | -           |   |   | - |   |   | 3,451 |   |   | 7,107 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Amortization                of intangibles                                                                                                                                                                                                                             |   |                                                   | -           |   |   | - |   |   | 82 |   |   | 62 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Impairment                charge                                                                                                                                                                                                                                       |   |                                                   | -           |   |   | - |   |   | 35,331 |   |   | - |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Unconsolidated                equity affiliates (3)                                                                                                                                                                                                                    |   |                                                   | 19,627      |   |   | 18,263 |   |   | 7,956 |   |   | 8,792 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Station                depreciation                                                                                                                                                                                                                                    |   |                                                   | -           |   |   | - |   |   | 4,623 |   |   | 1,336 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Interest                income                                                                                                                                                                                                                                         |   |                                                   | -           |   |   | - |   |   | (559 | ) |   | (786 | ) |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                                                                                                                                                                                                        |   |                                                   | -           |   |   | - |   |   | 6,424 |   |   | 667 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Foreign                currency exchange (gain)/loss, net                                                                                                                                                                                                              |   |                                                   | -           |   |   | - |   |   | (30,159 | ) |   | 1,289 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| Other                (income)/expense                                                                                                                                                                                                                                  |   |                                                   | -           |   |   | - |   |   | (312 | ) |   | 10 |   |
|                                                                                                                                                                                                                                                                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |
| **Total                Segment Data**                                                                                                                                                                                                                                  |   | **$**                                                  | **132,736** |   | **$** | **63,149** |   | **$** | **58,305** |   | **$** | **26,068** |   |

*Page            23*

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|                                                                                                                                                                                                                                                               |   | **SEGMENT                FINANCIAL INFORMATION**     |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|-------------|
|                                                                                                                                                                                                                                                               |   | **For                the Six Months Ended June 30,** |        |
|                                                                                                                                                                                                                                                               |   | **(US                $000's)**                       |        |
|                                                                                                                                                                                                                                                               |   | **Segment                Net Revenues (1)**          |        | **Segment                EBITDA** |   |
|                                                                                                                                                                                                                                                               |   | **2005**                                             |        | **2004** |   | **2005** |   | **2004** |   |
| **Country**                                                                                                                                                                                                                                                        |   |                                                 |        |   |   |   |   |   |   |
| Croatia                (NOVA TV)                                                                                                                                                                                                                                   |   | $                                                    | 12,607      |   | $ | - |   | $ | (4,759 | ) | $ | - |   |
| Czech                Republic (TV NOVA)                                                                                                                                                                                                                            |   |                                                 | 47,767      |   |   | - |   |   | 28,287 |   |   | - |   |
| Romania                (2)                                                                                                                                                                                                                                         |   |                                                 | 45,648      |   |   | 32,787 |   |   | 18,136 |   |   | 10,238 |   |
| Slovak                Republic (MARKIZA TV)                                                                                                                                                                                                                        |   |                                                 | 32,270      |   |   | 29,343 |   |   | 10,126 |   |   | 9,724 |   |
| Slovenia                (POP TV and KANAL A)                                                                                                                                                                                                                       |   |                                                 | 23,853      |   |   | 23,408 |   |   | 9,170 |   |   | 10,787 |   |
| Ukraine                (STUDIO 1+1)                                                                                                                                                                                                                                |   |                                                 | 31,538      |   |   | 25,354 |   |   | 7,284 |   |   | 9,252 |   |
| **Total                Segment Data**                                                                                                                                                                                                                              |   | **$**                                                | **193,683** |   | **$** | **110,892** |   | **$** | **68,244** |   | **$** | **40,001** |   |
|                                                                                                                                                                                                                                                               |   |                                                 |        |   |   |   |   |   |   |   |   |   |   |
| **Reconciliation                to Consolidated Statement of Operations:**                                                                                                                                                                                         |   |                                                 |        |   |   |   |   |   |   |   |   |   |   |
| **Consolidated                Net Revenues / Income before provision for income taxes, minority                interest, equity in income of unconsolidated affiliates and discontinued                operations**                                                |   | **$**                                                | **161,413** |   | **$** | **80,734** |   | **$** | **25,258** |   | **$** | **13,445** |   |
| Corporate                operating costs (including non-cash stock based compensation (see                Note 15)                of $ 1.7 million and $ 4.3 million for the six months ended June                30, 2005                and 2004, respectively)) |   |                                                 | -           |   |   | - |   |   | 11,182 |   |   | 12,225 |   |
| Amortization                of intangibles                                                                                                                                                                                                                         |   |                                                 | -           |   |   | - |   |   | 159 |   |   | 62 |   |
| Impairment                charge                                                                                                                                                                                                                                   |   |                                                 | -           |   |   | - |   |   | 35,331 |   |   | - |   |
| Unconsolidated                equity affiliates (3)                                                                                                                                                                                                                |   |                                                 | 32,270      |   |   | 30,158 |   |   | 10,126 |   |   | 10,123 |   |
| Station                depreciation                                                                                                                                                                                                                                |   |                                                 | -           |   |   | - |   |   | 6,836 |   |   | 2,798 |   |
| Interest                income                                                                                                                                                                                                                                     |   |                                                 | -           |   |   | - |   |   | (1,638 | ) |   | (2,240 | ) |
| Interest                expense                                                                                                                                                                                                                                    |   |                                                 | -           |   |   | - |   |   | 6,731 |   |   | 885 |   |
| Foreign                currency exchange (gain)/loss, net                                                                                                                                                                                                          |   |                                                 | -           |   |   | - |   |   | (29,430 | ) |   | 1,922 |   |
| Other                expense                                                                                                                                                                                                                                       |   |                                                 | -           |   |   | - |   |   | 3,689 |   |   | 781 |   |
| **Total                Segment Data**                                                                                                                                                                                                                              |   | **$**                                                | **193,683** |   | **$** | **110,892** |   | **$** | **68,244** |   | **$** | **40,001** |   |

*Page            24*

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| **13.** | **Summary                Financial Information for Significant Unconsolidated                Affiliates** |
|---------|-----------------------------------------------------------------------------------------------------------|

|                                   |   | **STS                (MARKIZA TV)**    |       |
|----------------------------------------|--------|----------------------------------------|------------|
|                                   |   | **As                at June 30, 2005** |       | **As                at December 31, 2004** |   |
|                                   |   | **(US$                000's)**         |       | **(US$                000's)** |   |
| Current                assets          |   | $                                      | 24,795     |   | $ | 25,548 |   |
|                                   |   |                                   |       |   |   |   |   |
| Non-current                assets      |   |                                   | 18,008     |   |   | 16,919 |   |
|                                   |   |                                   |       |   |   |   |   |
| Current                liabilities     |   |                                   | (25,557    | ) |   | (15,445 | ) |
|                                   |   |                                   |       |   |   |   |   |
| Non-current                liabilities |   |                                   | (131       | ) |   | (149 | ) |
|                                   |   |                                   |       |   |   |   |   |
| Net                Assets              |   | **$**                                  | **17,115** |   | **$** | **26,873** |   |

|                                                                     |   | **STS                (MARKIZA TV)**                                      |    |
|--------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|---------|
|                                                                     |   | **For                the Three Months Ended****June                30,** |    | **For                the Six Months Ended****June                30,** |   |
|                                                                     |   | **2005**                                                                 |    | **2004** |   | **2005** |   | **2004** |   |
|                                                                     |   | **(US$                000's)**                                           |    |
| Net                revenues                                              |   | $                                                                        | 19,627  |   | $ | 17,448 |   | $ | 32,270 |   | $ | 29,343 |   |
|                                                                     |   |                                                                     |    |   |   |   |   |   |   |   |   |   |   |
| Operating                costs                                           |   |                                                                     | (12,213 | ) |   | (9,551 | ) |   | (23,253 | ) |   | (20,736 | ) |
|                                                                     |   |                                                                     |    |   |   |   |   |   |   |   |   |   |   |
| Operating                income                                          |   |                                                                     | 7,414   |   |   | 7,897 |   |   | 9,017 |   |   | 8,607 |   |
|                                                                     |   |                                                                     |    |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                |   |                                                                     | 5,787   |   |   | 6,691 |   |   | 7,084 |   |   | 7,494 |   |
|                                                                     |   |                                                                     |    |   |   |   |   |   |   |   |   |   |   |
| Movement                in accumulated other comprehensive income/(loss) |   |                                                                     | (467    | ) |   | (230 | ) |   | 1,381 |   |   | (169 | ) |

| **14.** | **Earnings                Per Share** |
|---------|---------------------------------------|

|                                                         |   | **For                the Three Months Ended June 30,**             |       |
|--------------------------------------------------------------|--------|--------------------------------------------------------------------|------------|
|                                                         |   | **Net                Income/(Loss)****(US$                000's)** |       | **Common                Shares (000's)** |   | **Net                Income/(Loss) per****Common                Share** |   |
|                                                         |   | **2005**                                                           |       | **2004** |   | **2005** |   | **2004                (as****restated)** |   | **2005** |   | **2004                (as****restated)** |   |
| Basic                EPS                                     |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income attributable to common stock       |   | $                                                                  | 25,459     |   | $ | 6,032 |   |   | 34,274 |   |   | 27,854 |   | $ | 0.74 |   | $ | 0.22 |   |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of dilutive securities : stock options |   |                                                               | -          |   |   | - |   |   | 871 |   |   | 1,179 |   |   | (0.02 | ) |   | (0.01 | ) |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                EPS                                   |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income attributable to common stock       |   | **$**                                                              | **25,459** |   | **$** | **6,032** |   |   | **35,145** |   |   | **29,033** |   | **$** | **0.72** |   | **$** | **0.21** |   |

*Page            25*

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|                                                         |   | **For                the Six Months Ended June 30,**               |       |
|--------------------------------------------------------------|--------|--------------------------------------------------------------------|------------|
|                                                         |   | **Net                Income/(Loss)****(US$                000's)** |       | **Common                Shares (000's)** |   | **Net                Income/(Loss) per****Common                Share** |   |
|                                                         |   | **2005**                                                           |       | **2004** |   | **2005** |   | **2004                (as****restated)** |   | **2005** |   | **2004                (as****restated)** |   |
| Basic                EPS                                     |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |
| Net                income attributable to common stock       |   | $                                                                  | 17,510     |   | $ | 11,203 |   |   | 31,345 |   |   | 27,471 |   | $ | 0.56 |   | $ | 0.41 |   |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of dilutive securities : stock options |   |                                                               | -          |   |   | - |   |   | 943 |   |   | 1,485 |   |   | (0.02 | ) |   | (0.02 | ) |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                EPS                                   |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income attributable to common stock       |   | **$**                                                              | **17,510** |   | **$** | **11,203** |   |   | **32,288** |   |   | **28,956** |   | **$** | **0.54** |   | **$** | **0.39** |   |

*Restatement      of 2004 Earnings Per Share*

*Page            26*

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|                                                                                                    |   | **For                the three months****ended                June 30, 2004** |   | **For                the six months ended****June                30, 2004** |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|
|                                                                                                    |   | **As****previously****reported**                                              |   |  **As                restated**                                        |   | **As****previously****reported** |   |  **As                restated** |   |
| Continuing                operations - Basic                                                            |   |                                                                          |   |                                                                        |   |   |   |   |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |
| Income                from continuing operations per share                                              |   |                                                                          | -      |                                                                        |   | - |   | $ | 0.40 |   | $ | 0.41 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares used in computing per share amounts                (000s) |   |                                                                          | 28,034 |                                                                        |   | 27,854 |   |   | 28,034 |   |   | 27,471 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Continuing                operations - Diluted                                                          |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations per share                                              |   | $                                                                             | 0.19   |                                                                        | $      | 0.20 |   | $ | 0.38 |   | $ | 0.39 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares used in computing per share amounts                (000s) |   |                                                                          | 29,977 |                                                                        |   | 29,033 |   |   | 29,977 |   |   | 28,956 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - Basic                                                          |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares used in computing per share amounts                (000s) |   |                                                                          | 28,034 |                                                                        |   | 27,854 |   |   | 28,034 |   |   | 27,471 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - Diluted                                                        |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares used in computing per share amounts                (000s) |   |                                                                          | 29,977 |                                                                        |   | 29,033 |   |   | 29,977 |   |   | 28,956 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Net                Income -Basic                                                                        |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Net                Income per share                                                                     |   |                                                                          | -      |                                                                        |   | - |   | $ | 0.40 |   | $ | 0.41 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares used in computing per share amounts                (000s) |   |                                                                          | 28,034 |                                                                        |   | 27,854 |   |   | 28,034 |   |   | 27,471 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Net                Income - Diluted                                                                     |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Net                Income per share                                                                     |   | $                                                                             | 0.20   |                                                                        | $      | 0.21 |   | $ | 0.37 |   | $ | 0.39 |   |
|                                                                                                    |   |                                                                          |   |                                                                        |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares used in computing per share amounts                (000s) |   |                                                                          | 29,977 |                                                                        |   | 29,033 |   |   | 29,977 |   |   | 28,956 |   |

| **15.** | **Stock-based                Compensation** |
|---------|---------------------------------------------|

**2005      Option Grants**

| **Date                  of Option Grant** | **Options****granted** | **Risk                  Free****Interest                  Rate** | **Expected                  life** | **Expected****volatility** |
|-------------------------------------------|------------------------|------------------------------------------------------------------|------------------------------------|----------------------------|
|                                      |                   |                                                             |                               |                       |
| June                  2, 2005             | 122,000                | 3.74%                                                            | 6.25                  years        | 53.24%                     |

*Page            27*

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**2004      Option Grants**

| **Date                  of Option Grant** | **Options****granted** | **Risk                  Free****Interest                  Rate** | **Expected                  life** | **Expected****volatility** |
|-------------------------------------------|------------------------|------------------------------------------------------------------|------------------------------------|----------------------------|
|                                      |                   |                                                             |                               |                       |
| February                  2, 2004         | 160,000                | 3.18%                                                            | 6                  years           | 51.5%                      |
|                                      |                   |                                                             |                               |                       |
| May                  3, 2004              | 10,000                 | 3.63%                                                            | 6                  years           | 51.5%                      |
|                                      |                   |                                                             |                               |                       |
| May                  5, 2004              | 20,000                 | 3.71%                                                            | 6                  years           | 51.5%                      |
|                                      |                   |                                                             |                               |                       |
| June                  2, 2004             | 112,000                | 3.91%                                                            | 6                  years           | 51.5%                      |

*Page            28*

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|                                                                                                   |   | **For                the Three****Months                Ended****June                30,** |   | **For                the Six****Months                Ended****June                30,** |   |
|--------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|
|                                                                                                   |   | **(US$                000’s)**                                                       |   |
|                                                                                                   |   | **2005**                                                                                   |   | **2004**                                                                                 |   | **2005** |   | **2004** |   |
| Stock-based                compensation charged under FIN 44 (Variable Plan                Accounting) |   | $                                                                                          | (1,910 | )                                                                                        | $      | 2,147 |   | $ | 746 |   | $ | 3,873 |   |
|                                                                                                   |   |                                                                                       |   |                                                                                     |   |   |   |   |   |   |   |   |   |
| Stock-based                compensation charged under SFAS 123                                         |   |                                                                                       | 491    |                                                                                     |   | 222 |   |   | 936 |   |   | 381 |   |
|                                                                                                   |   |                                                                                       |   |                                                                                     |   |   |   |   |   |   |   |   |   |
| Total                stock-based compensation                                                          |   | $                                                                                          | (1,419 | )                                                                                        | $      | 2,369 |   | $ | 1,682 |   | $ | 4,254 |   |

| **16.** | **Warrants** |
|---------|--------------|

| **17.** | **Commitments                and Contingencies** |
|---------|--------------------------------------------------|

*Litigation*

*General*

*Croatia*

*Page            29*

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*Romania*

*Slovenia*

*Slovak      Republic*

*Ukraine*

*Czech      Republic*

*Claims      Relating to the Vilja Shareholding in CET 21*

*Page            30*

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*Disposition      of the CET 21 Interest Held by CET 21*

*Claims      brought by Alan, Huncik, Venclik and Gal*

*Page            31*

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*Claims      Relating to the Interests of CS and CEDC in CET 21*

*Other      Claims*

*Financial      Commitments — Existing Entities*

*Licenses*

*Page            32*

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*Station      Programming Rights Agreements*

*Operating      Lease Commitments *

|                               |   | **As                at June 30, 2005****(US$                000’s)** |       |
|------------------------------------|--------|----------------------------------------------------------------------------|------------|
| 2005                               |   | $                                                                          | 6,663      |   |
|                               |   |                                                                       |       |   |
| 2006                               |   |                                                                       | 5,407      |   |
|                               |   |                                                                       |       |   |
| 2007                               |   |                                                                       | 1,616      |   |
|                               |   |                                                                       |       |   |
| 2008                               |   |                                                                       | 1,185      |   |
|                               |   |                                                                       |       |   |
| 2009                               |   |                                                                       | 729        |   |
|                               |   |                                                                       |       |   |
| 2010                and thereafter |   |                                                                       | 516        |   |
|                               |   |                                                                       |       |   |
| **Total**                          |   | **$**                                                                      | **16,116** |   |

*Dutch      Tax*

*Page            33*

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*Romania      - Put Options*

*Czech      Republic - Guarantee and Factoring of Trade Receivables*

*‘Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities’*

| **18.** | **Acquisition                Costs** |
|---------|--------------------------------------|

|                             |   | **As                at June 30, 2005** |   | **As                at December 31, 2004** |   |
|----------------------------------|--------|----------------------------------------|--------|--------------------------------------------|--------|
|                             |   | **(US$                000's)**         |   | **(US$                000's)**             |   |
|                             |   |                                   |   |                                       |   |
| Acquisition                costs |   | **$**                                  | **-**  |                                       | **$**  | **10,770** |   |

*Page            34*

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| **19.** | **Subsequent                Events** |
|---------|--------------------------------------|

*Page            35*

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| **Item                2.** | **Management's                Discussion and Analysis of Financial Condition                and Results of Operations** |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------|

***Contents***

| ***I.***   | ***Forward-looking                Statements***                                |
|------------|--------------------------------------------------------------------------------|
|       |                                                                           |
| ***II.***  | ***Executive                Summary***                                         |
|       |                                                                           |
| ***III.*** | ***Analysis                of Segment Results***                               |
|       |                                                                           |
| ***IV.***  | ***Analysis                of the Results of Consolidated Operations***        |
|       |                                                                           |
| ***V.***   | ***Liquidity                and Capital Resources***                           |
|       |                                                                           |
| ***VI.***  | ***Critical                Accounting Policies and                Estimates*** |

| ***I.*** | ***Forward-looking                Statements*** |
|----------|-------------------------------------------------|

*This      report contains forward-looking statements, including statements regarding      the      effect of additional investment in Croatia, the growth of television advertising      in our markets, the future economic conditions in our markets, future      investments in television broadcast operations and the financing thereof, the      growth potential of advertising spending in our markets, and business strategies      and commitments. For these statements and all other forward-looking statements,      we claim the protection of the safe harbor for forward-looking statements      contained in the Private Securities Litigation Reform Act of 1995.      Forward-looking statements are inherently subject to risks and uncertainties,      many of which cannot be predicted with accuracy or are otherwise beyond our      control and some of which might not even be anticipated. Future events and      actual results, affecting our strategic plan as well as our financial position,      results of operations and cash flows, could differ materially from those      described in or contemplated by the forward-looking statements. Important      factors that contribute to such risks include, but are not limited      to*
***,***
*      the      rate of development of advertising markets in countries where we operate,      general market and economic conditions in these countries as well as in the      United States and Western Europe, the renewals of broadcasting licenses, our      ability to acquire programming and the ability to attract audiences, the general      regulatory environments where we operate and application of relevant laws and      regulations.*

| ***II.*** | ***Executive                Summary*** |
|-----------|----------------------------------------|

*Acquisition      of TV NOVA in the Czech Republic*

| · | On                May                5, 2005, we raised almost US$ 700 million in debt and equity financing                through the issuance of Euro 370 million (approximately US$ 480 million                at                the time of issuance) Senior Notes, consisting of Euro 245 million                (approximately US$ 318 million) 8.25% Senior Notes and Euro 125 million                (approximately US$ 162 million) floating rate Senior Notes, which                bear                interest at six-month EURIBOR plus 5.5% as well as 5.4 million shares                of                our Class A Common Stock in a publicly registered offering. A portion                of                the proceeds from these offerings were used to complete the acquisition                of                a controlling interest in the TV Nova (Czech Republic) Group PPF                at the                beginning of May. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | On                May 27, 2005, we completed the acquisition of the minority interest                in CET                21 held by Peter Krsak and on May 31, 2005, we acquired the remaining                15%                interest in the TV Nova (Czech Republic) Group from PPF following                the                exercise of our call option. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | As                a result of these transactions,                we own 68.745% of CET 21, which holds the national terrestrial broadcast                license for TV NOVA in the Czech Republic. Our voting and economic                interest in CET 21 is 96.50% because CET 21 itself holds an undistributed                28.755% interest that is not entitled to voting rights or dividends.                We                also own 100% of Ceska Produkcni 2000 a.s. (“CP 2000”). CP                2000 provides programming, production and advertising related services                to                CET 21 directly, through its wholly owned subsidiary Mag Media and                through                certain other wholly-owned subsidiaries. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            36*

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| · | Our                    shares began trading on the Prague Stock Exchange on June 27,                    2005. |
|--------|---------------------------------------------------------------------------------------------------------------|

| · | Year                on year revenue and operating income growth is attributable to the                acquisition of a television station in the Czech Republic as well                as                strong television advertising market growth in the Ukrainian and                Romanian                markets. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Continuing      Operations*

|                                                 |   | **For                the Three Months Ended June 30,****(US$                000's)** |       |
|------------------------------------------------------|--------|--------------------------------------------------------------------------------------|------------|
|                                                 |   | **2005**                                                                             |       | **2004** |   | ***Movement*** |   |
| Net                Revenues                          |   |                                                                                 | 113,109    |   |   | 44,886 |   |   | *68,223* |   |
| Operating                income                      |   |                                                                                 | 6,862      |   |   | 8,771 |   |   | *(1,909)* |   |
| Net                income from continuing operations |   |                                                                                 | 27,848     |   |   | 5,747 |   |   | *22,101* |   |
| **Net                income**                        |   |                                                                                 | **25,459** |   |   | **6,032** |   |   | ***19,427*** |   |

|                                                                                           |   | **For                the Six Months Ended June 30,****(US$                000's)** |       |
|------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|------------|
|                                                                                           |   | **2005**                                                                           |       | **2004** |   | ***Movement*** |   |
| Net                Revenues                                                                    |   |                                                                               | 161,413    |   |   | 80,734 |   |   | *80,679* |   |
| Operating                income                                                                |   |                                                                               | 4,610      |   |   | 14,793 |   |   | *(10,183)* |   |
| Net                income from continuing operations                                           |   |                                                                               | 19,554     |   |   | 11,248 |   |   | *8,306* |   |
| **Net                income**                                                                  |   |                                                                               | **17,510** |   |   | **11,203** |   |   | ***6,307*** |   |
| **Net                cash generated from continuing operating                activities** |   |                                                                               | **23,403** |   |   | **659** |   |   | ***22,744*** |   |

| · | In                the three months ended June 30, 2005 our total operating Segments                achieved                a Segment EBITDA margin of 44% compared to 41% for the three months                ended                June 30, 2004 (Segment EBITDA is defined and reconciled to                our consolidated US GAAP results in Part I, Note 12, "Segment                Data"). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We                increased our economic and voting interest in our Slovenian operations                to                100%. |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

| · | As                part of our second quarter close process we                performed an analysis of                our Croatian intangible assets and goodwill to determine if they                were                impaired                in                light of our modified strategy. As a result of this analysis we determined                that our Croatian investment was impaired by US$ 35.3 million (for                further                information see Part I, Note 6, “Croatian                Impairment”). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            37*

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*Future      Developments*

| · | For                the remainder of 2005, we will continue to be focused on the integration                of the TV Nova (Czech Republic) Group into our operations and intend                to                undertake a restructuring to simplify the operating structure of                our Czech                operations. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Following                  the successful implementation of the agreement with Mr. Krsak,                  we are in                  the process of terminating litigation surrounding the TV Nova (Czech                  Republic) Group that was initiated by him. This will facilitate                  a planned                  rationalization of the operating structure of the TV Nova (Czech                  Republic)                  Group in order to consolidate broadcasting operations into the                  license                  holding company. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | In                connection with our on-going review of our Croatian operations and                following a strategic assessment of the performance of Nova TV (Croatia)                undertaken during the quarter, we modified our strategy for Croatia                in                late June 2005. This new strategy requires higher current expenditures                than had been planned prior to the strategic assessment in order                to secure                our audience and market share targets. In order to achieve these                targets,                we have increased our budget for the acquisition of higher quality                foreign                and domestic programming for 2005 and 2006, for marketing and promotion                (including improvements to the on-air look of Nova TV (Croatia),                and                accelerated investment for the extension of our technical reach.                We expect                total investment to be in excess of US$ 27 million during 2005. We                expect                that our Croatian operations will approach EBITDA break-even in                2007. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ***III.*** | ***Analysis                of Segment Results*** |
|------------|--------------------------------------------------|

**OVERVIEW**

*Page            38*

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| **SEGMENT                FINANCIAL INFORMATION****For                the Three Months Ended June 30, (US $000's)** |   |
|--------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                               |   | 2005 |   | (1) |   | 2004 |   | (1) |   |
| **Segment                Net Revenue**                                                                             |   |   |   |   |   |   |   |   |   |
| Croatia                (NOVA TV)                                                                                   |   | $ | 7,652 |   |   | 6 | % | $ | - |   |   | - | % |
| Czech                Republic (TV NOVA)                                                                            |   |   | 47,767 |   |   | 36 | % |   | - |   |   | - | % |
| Romania                (2)                                                                                         |   |   | 26,592 |   |   | 20 | % |   | 18,702 |   |   | 30 | % |
| Slovak                Republic (MARKIZA TV)                                                                        |   |   | 19,627 |   |   | 15 | % |   | 17,448 |   |   | 27 | % |
| Slovenia                (POP TV and KANAL A)                                                                       |   |   | 13,920 |   |   | 10 | % |   | 13,751 |   |   | 22 | % |
| Ukraine                (STUDIO 1+1)                                                                                |   |   | 17,178 |   |   | 13 | % |   | 13,248 |   |   | 21 | % |
| **Total                Segment Net Revenue**                                                                       |   | **$** | **132,736** |   |   | **100** | **%** | **$** | **63,149** |   |   | **100** | **%** |
|                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Segment                EBITDA**                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Croatia                (NOVA TV)                                                                                   |   | $ | (1,337 | ) |   | (2 | )% | $ | - |   |   | - | % |
| Czech                Republic (TV NOVA)                                                                            |   |   | 28,287 |   |   | 49 | % |   | - |   |   | - | % |
| Romania                (2)                                                                                         |   |   | 11,974 |   |   | 20 | % |   | 5,920 |   |   | 23 | % |
| Slovak                Republic (MARKIZA TV)                                                                        |   |   | 7,956 |   |   | 14 | % |   | 8,393 |   |   | 32 | % |
| Slovenia                (POP TV and KANAL A)                                                                       |   |   | 6,490 |   |   | 11 | % |   | 6,860 |   |   | 26 | % |
| Ukraine                (STUDIO 1+1)                                                                                |   |   | 4,935 |   |   | 8 | % |   | 4,895 |   |   | 19 | % |
| **Total                Segment EBITDA**                                                                            |   | **$** | **58,305** |   |   | **100** | **%** | **$** | **26,068** |   |   | **100** | **%** |
|                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Segment                EBITDA Margin (3)**                                                                       |   |   | **44** | **%** |   |   |   |   | **41** | **%** |   |   |   |

*Page            39*

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| **SEGMENT                FINANCIAL INFORMATION****For                the Six Months Ended June 30, (US $000's)** |   |
|------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                             |   | 2005 |   | (1) |   | 2004 |   | (1) |   |
| **Segment                Net Revenue**                                                                           |   |   |   |   |   |   |   |   |   |
| Croatia                (NOVA TV)                                                                                 |   | $ | 12,607 |   |   | 6 | % | $ | - |   |   | - | % |
| Czech                Republic (TV NOVA)                                                                          |   |   | 47,767 |   |   | 25 | % |   | - |   |   | - | % |
| Romania                (2)                                                                                       |   |   | 45,648 |   |   | 24 | % |   | 32,787 |   |   | 30 | % |
| Slovak                Republic (MARKIZA TV)                                                                      |   |   | 32,270 |   |   | 17 | % |   | 29,343 |   |   | 26 | % |
| Slovenia                (POP TV and KANAL A)                                                                     |   |   | 23,853 |   |   | 12 | % |   | 23,408 |   |   | 21 | % |
| Ukraine                (STUDIO 1+1)                                                                              |   |   | 31,538 |   |   | 16 | % |   | 25,354 |   |   | 23 | % |
| **Total                Segment Net Revenue**                                                                     |   | **$** | **193,683** |   |   | **100** | **%** | **$** | **110,892** |   |   | **100** | **%** |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Segment                EBITDA**                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Croatia                (NOVA TV)                                                                                 |   | $ | (4,759 | ) |   | (7 | )% | $ | - |   |   | - | % |
| Czech                Republic (TV NOVA)                                                                          |   |   | 28,287 |   |   | 41 | % |   | - |   |   | - | % |
| Romania                (2)                                                                                       |   |   | 18,136 |   |   | 27 | % |   | 10,238 |   |   | 26 | % |
| Slovak                Republic (MARKIZA TV)                                                                      |   |   | 10,126 |   |   | 15 | % |   | 9,724 |   |   | 24 | % |
| Slovenia                (POP TV and KANAL A)                                                                     |   |   | 9,170 |   |   | 13 | % |   | 10,787 |   |   | 27 | % |
| Ukraine                (STUDIO 1+1)                                                                              |   |   | 7,284 |   |   | 11 | % |   | 9,252 |   |   | 23 | % |
| **Total                Segment EBITDA**                                                                          |   | **$** | **68,244** |   |   | **100** | **%** | **$** | **40,001** |   |   | **100** | **%** |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Segment                EBITDA Margin (3)**                                                                     |   |   | **35** | **%** |   |   |   |   | **36** | **%** |   |   |   |

*Page            40*

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**ANALYSIS      BY GEOGRAPHIC SEGMENT**

| **(A)** | **CROATIA** |
|---------|-------------|

**Market      Background: **

**Three      months ended June 30, 2005**

|                                          |   | **SEGMENT                FINANCIAL INFORMATION**                   |   |
|-----------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                          |   | **For                the Three Months Ended June 30, (US $000's)** |   |
|                                          |   |                                                               |   | **2005** |   |
| Croatian                Net Revenues          |   |                                                               |   |   |   | 7,652 |   |
| Croatian                Segment EBITDA        |   |                                                               |   |   |   | (1,337 | ) |
| Croatian                Segment EBITDA Margin |   |                                                               |   |   |   | (17 | )% |

| · | **Net                Revenues**                for the three months ended June 30, 2005 were US$ 7.7 million as                a result                of significant full year contracts having been secured with                domestic and international advertisers. No comparative data is available                as we acquired Nova TV (Croatia) in July of last                year. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Croatian                Segment EBITDA**for                the three months ended June 30, 2005 was a loss of US$ 1.3 million                due to                investment in higher quality programming required to generate greater                audience share and increase Nova TV's (Croatia) advertising market                share. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Six      months ended June 30, 2005**

|                                          |   | **SEGMENT                FINANCIAL INFORMATION**                 |   |
|-----------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                          |   | **For                the Six Months Ended June 30, (US$ 000's)** |   |
|                                          |   |                                                             |   | **2005** |   |
| Croatian                Net Revenues          |   |                                                             |   |   |   | 12,607 |   |
| Croatian                Segment EBITDA        |   |                                                             |   |   |   | (4,759 | ) |
| Croatian                Segment EBITDA Margin |   |                                                             |   |   |   | (38 | )% |

| · | **Net                Revenues**for                the six months ended June 30, 2005** **were                US$ 12.6 million as a result of significant full year contracts                having been secured with domestic and international advertisers. No                comparative data is available as we acquired Nova TV (Croatia) in                July of                last year. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Croatian                Segment EBITDA**for                the six months ended June 30, 2005** **was                a loss of US$ 4.8 million due to investment in higher quality programming                required to generate greater audience share and increase Nova TV's                (Croatia) advertising market share. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            41*

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| **(B)** | **CZECH                REPUBLIC** |
|---------|-----------------------------------|

**Market      Background: **

**Three      months ended June 30, 2005**

|                                                |   | **SEGMENT                FINANCIAL INFORMATION**                   |   |
|-----------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                                |   | **For                the Three Months Ended June 30, (US $000's)** |   |
|                                                |   |                                                               |   | **2005** |   |
| Czech                Republic Net Revenues          |   |                                                               |   |   |   | 47,767 |   |
| Czech                Republic Segment EBITDA        |   |                                                               |   |   |   | 28,287 |   |
| Czech                Republic Segment EBITDA Margin |   |                                                               |   |   |   | 59 | % |

| · | **Net                Revenues**                for the period from the acquisition date of May 2, 2005 to June 30,                2005                were US$ 47.8 million. Based on un-audited and non-US GAAP net revenue                information from management accounts prepared for the months of May                and                June 2004, this represents approximately 5% revenue growth on a local                currency basis. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Czech                Republic Segment EBITDA**for                the period from May 2, 2005 to June 30, 2005 was US$ 28.3 million                delivering an EBITDA margin of 59%. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **(C)** | **ROMANIA** |
|---------|-------------|

**Market      Background: **

*Page            42*

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**Three      months ended June 30, 2005 compared to three months ended June 30,      2004**

|                                          |   | **SEGMENT                FINANCIAL INFORMATION**                   |   |
|-----------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                          |   | **For                the Three Months Ended June 30, (US$ 000's)** |   |
|                                          |   | **2005**                                                           |   | **2004** |   | ***Movement*** |   |
| Romanian                Net Revenues          |   |                                                               | 26,592 |   |   | 18,702 |   |   | *7,890* |   |
| Romanian                Segment EBITDA        |   |                                                               | 11,974 |   |   | 5,920 |   |   | *6,054* |   |
| Romanian                Segment EBITDA Margin |   |                                                               | 45     | % |   | 32 | % |   | *13* | *%* |

| · | **Net                Revenues**for                the three months ended June 30, 2005** **increased                by 42% compared to the three months ended June 30, 2004. This was                due to                market growth, an increase in advertising prices on PRO TV and an                increase                in advertising market share. The increased advertising market share                was                due to higher ratings, additional inventory becoming available following                the launch of Pro Cinema in April 2004 and increased sell out rates                on Pro                Cinema and ACASA TV as advertisers were migrated from Pro                TV. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Romanian                Segment EBITDA**for                the three months ended June 30, 2005** **increased                by 102% compared to the three months ended June 30, 2004 to deliver                an                EBITDA margin of 45%. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **

**Six      months ended June 30, 2005 compared to six months ended June 30,      2004**

|                                          |   | **SEGMENT                FINANCIAL INFORMATION**                 |   |
|-----------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                          |   | **For                the Six Months Ended June 30, (US$ 000's)** |   |
|                                          |   | **2005**                                                         |   | **2004** |   | ***Movement*** |   |
| Romanian                Net Revenues          |   |                                                             | 45,648 |   |   | 32,787 |   |   | *12,861* |   |
| Romanian                Segment EBITDA        |   |                                                             | 18,136 |   |   | 10,238 |   |   | *7,898* |   |
| Romanian                Segment EBITDA Margin |   |                                                             | 40     | % |   | 31 | % |   | 9 | % |

| · | **Net                Revenues**for                the six months ended June 30, 2005** **increased                by 39% compared to the six months ended June 30, 2004. This was due                to                market growth, an increase in advertising prices on PRO TV and an                increase                in advertising market share. The increased advertising market share                was                due to higher ratings, additional inventory becoming available following                the launch of Pro Cinema in April 2004 and increased sell out rates                on Pro                Cinema and ACASA TV as advertisers were migrated from Pro TV. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Romanian                Segment EBITDA**for                the six months ended June 30, 2005** **increased                by 77% compared to the six months ended June 30, 2004 to deliver                an EBITDA                margin of 40%. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            43*

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| **(D)** | **SLOVAK                REPUBLIC** |
|---------|------------------------------------|

**Market      Background:**

**Three      months ended June 30, 2005 compared to three months ended June 30,      2004**

|                                                 |   | **SEGMENT                FINANCIAL INFORMATION**                   |   |
|------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                                 |   | **For                the Three Months Ended June 30, (US$ 000's)** |   |
|                                                 |   | **2005**                                                           |   | **2004** |   | ***Movement*** |   |
| Slovak                Republic Net Revenues          |   |                                                               | 19,627 |   |   | 17,448 |   |   | *2,179* |   |
| Slovak                Republic Segment EBITDA        |   |                                                               | 7,956  |   |   | 8,393 |   |   | *(437* | *)* |
| Slovak                Republic Segment EBITDA Margin |   |                                                               | 41     | % |   | 48 | % |   | *(7* | *)%* |

| · | **Net                Revenues**for                the three months ended June 30, 2005** **increased                by 12% compared to the three months                ended June 30, 2004. This is due in large part to the weakening of                the US                dollar compared to the Slovak koruna. In local currency, net revenues                were                5% greater than in the three months ended June 30, 2004 due to advertisers                spending more of their annual budget in the second quarter of                2005.** ** |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Slova****k                Republic Segment EBITDA**for                the three months ended June 30, 2005 decreased by 5% compared to                the three                months ended June 30, 2004 to deliver a Segment EBITDA margin of                41%. In                local currency Segment EBITDA decreased by 12%. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Six      months ended June 30, 2005 compared to six months ended June 30,      2004**

|                                                 |   | **SEGMENT                FINANCIAL INFORMATION**                 |   |
|------------------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                                 |   | **For                the Six Months Ended June 30, (US$ 000's)** |   |
|                                                 |   | **2005**                                                         |   | **2004** |   | ***Movement*** |   |
| Slovak                Republic Net Revenues          |   |                                                             | 32,270 |   |   | 29,343 |   |   | *2,927* |   |
| Slovak                Republic Segment EBITDA        |   |                                                             | 10,126 |   |   | 9,724 |   |   | *402* |   |
| Slovak                Republic Segment EBITDA Margin |   |                                                             | 31     | % |   | 33 | % |   | *(2* | *)%* |

*Page            44*

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| · | **Net                Revenues**for                the six months ended June 30, 2005 increased by 10% compared to the                six                months ended June 30, 2004. This is primarily due to the weakening                of the                US dollar compared to the Slovak koruna. In local currency, revenues                were                1% greater than the six months ended June 30, 2004**.** |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Slovak                Republic Segment EBITDA**for                the six months ended June 30, 2005 increased by 4% compared to the                six                months ended June 30, 2004, to deliver a Segment EBITDA margin of                31%. In                local currency, Segment EBITDA decreased by 5%. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **(E)** | **SLOVENIA** |
|---------|--------------|

**Market      Background**

**Three      months ended June 30, 2005 compared to three months ended June 30,      2004**

|                                           |   | **SEGMENT                FINANCIAL INFORMATION**                   |   |
|------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                           |   | **For                the Three Months Ended June 30, (US$ 000's)** |   |
|                                           |   | **2005**                                                           |   | **2004** |   | ***Movement*** |   |
| Slovenian                Net Revenues          |   |                                                               | 13,920 |   |   | 13,751 |   |   | *169* |   |
| Slovenian                Segment EBITDA        |   |                                                               | 6,490  |   |   | 6,860 |   |   | *(370* | *)* |
| Slovenian                Segment EBITDA Margin |   |                                                               | 47     | % |   | 50 | % |   | *(3* | *)%* |

| · | **Net                Revenues**for                the three months ended June 30, 2005** **increased                by 1% compared to the three months ended June 30, 2004. This is due                to the                weakening of the US dollar compared to the Slovenian tolar. In local                currency, net revenue decreased by 3% due to reduced advertising                expenditure by mobile telephone operators and increased price competition                from state television. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Slovenian                Segment EBITDA**for                the three months ended June 30, 2005** **decreased                by 5% compared to the three months ended June 30, 2004 to deliver                a                Segment EBITDA margin of 47%. In local currency, Segment EBITDA decreased                by 10%. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            45*

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**Six      months ended June 30, 2005 compared to six months ended June 30,      2004**

|                                           |   | **SEGMENT                FINANCIAL INFORMATION**                 |   |
|------------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                           |   | **For                the Six Months Ended June 30, (US$ 000's)** |   |
|                                           |   | **2005**                                                         |   | **2004** |   | ***Movement*** |   |
| Slovenian                Net Revenues          |   |                                                             | 23,853 |   |   | 23,408 |   |   | *445* |   |
| Slovenian                Segment EBITDA        |   |                                                             | 9,170  |   |   | 10,787 |   |   | *(1,617* | *)* |
| Slovenian                Segment EBITDA Margin |   |                                                             | 38     | % |   | 46 | % |   | *(8* | *)%* |

| · | **Net                Revenues**for                the six months ended June 30, 2005** **increased                by 2% compared to the six months ended June 30, 2004. This is due                to the                weakening of the US dollar compared to the Slovenian tolar. In local                currency, net revenue decreased by 3% due to reduced advertising                expenditure by mobile telephone operators and increased price competition                from state television. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Slovenian                Segment EBITDA**for                the six months ended June 30, 2005** **decreased                by 15% compared to the six months ended June 30, 2004 to deliver                a Segment                EBITDA margin of 38%. In local currency, Segment EBITDA decreased                by                19%. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **(F)** | **UKRAINE** |
|---------|-------------|

**Market      Background: **

**Three      months ended June 30, 2005 compared to three months ended June 30,      2004**

|                                           |   | **SEGMENT                FINANCIAL INFORMATION**                   |   |
|------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                           |   | **For                the Three Months Ended June 30, (US$ 000's)** |   |
|                                           |   | **2005**                                                           |   | **2004** |   | ***Movement*** |   |
| Ukrainian                Net Revenues          |   |                                                               | 17,178 |   |   | 13,248 |   |   | *3,930* |   |
| Ukrainian                Segment EBITDA        |   |                                                               | 4,935  |   |   | 4,895 |   |   | *40* |   |
| Ukrainian                Segment EBITDA Margin |   |                                                               | 29     | % |   | 37 | % |   | *(8* | *)%* |

| · | **Net                Revenues**for                the three months ended June 30, 2005** **increased                by 30% compared to the three months ended June 30, 2004. This is                due to                growth in the advertising market and increased advertising sales                resulting                from broadcasting a 24-hour schedule following the award of a nine-hour                license in July 2004 as well as increased management focus on obtaining                sponsorship revenue. Market growth and revenue generated from a full                24-hour schedule has offset a decrease in prime-time ratings for                Studio                1+1 during the period. Most of the prime-time ratings loss has been                to our                main competitor Inter, who has been successful with locally produced                prime-time series. This is a reversal of ratings trends in the first                six                months of 2004 where Studio 1+1 was particularly successful with                the                introduction of prime-time Russian produced series to the                market. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            46*

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| · | **Ukrainian                Segment EBITDA**for                the three months ended June 30, 2005** **increased                by 1% compared to the three months ended June 30, 2004, to deliver                a                Segment EBITDA margin of 29%. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Six      months ended June 30, 2005 compared to six months ended June 30,      2004**

|                                           |   | **SEGMENT                FINANCIAL INFORMATION**                 |   |
|------------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                           |   | **For                the Six Months Ended June 30, (US$ 000's)** |   |
|                                           |   | **2005**                                                         |   | **2004** |   | ***Movement*** |   |
| Ukrainian                Net Revenues          |   |                                                             | 31,538 |   |   | 25,354 |   |   | *6,184* |   |
| Ukrainian                Segment EBITDA        |   |                                                             | 7,284  |   |   | 9,252 |   |   | *(1,968* | *)* |
| Ukrainian                Segment EBITDA Margin |   |                                                             | 23     | % |   | 36 | % |   | *(13* | *)%* |

| · | **Net                Revenues**for                the six months ended June 30, 2005** **increased                by 24% compared to the six months ended June 30, 2004. This is due                to                growth in the advertising market and increased advertising sales                resulting                from broadcasting a 24-hour schedule following the award of a nine-hour                license in July 2004 as well as increased management focus on obtaining                sponsorship revenue. Market growth and revenue generated from a full                24-hour schedule has offset a decrease in prime-time ratings for                Studio                1+1 during the period. Most of the prime-time ratings loss has been                to our                main competitor Inter, who has been successful with locally produced                prime-time series. This is a reversal of ratings trends in the first                six                months of 2004 where Studio 1+1 was particularly successful with                the                introduction of prime-time Russian produced series to the                market. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | **Ukrainian                Segment EBITDA**for                the six months ended June 30, 2005** **decreased                by 21% compared to the six months ended June 30, 2004 resulting in                a                Segment EBITDA margin of 23%. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            47*

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**PROGRAMMING      PAYMENTS AND PROGRAM AMORTIZATION**

|                                   |   | **For                the Three Months****Ended                June 30,** |       | **For                the Six Months****Ended                June 30,** |   |
|----------------------------------------|--------|--------------------------------------------------------------------------|------------|------------------------------------------------------------------------|--------|
|                                   |   | **(US$                000's)**                                           |       |
|                                   |   | **2005**                                                                 |       | **2004**                                                               |   | **2005** |   | **2004** |   |
| Production                expenses     |   | $                                                                        | 14,644     |                                                                   | $      | 6,269 |   | $ | 23,467 |   | $ | 12,047 |   |
| Program                amortization    |   |                                                                     | 17,437     |                                                                   |   | 9,681 |   |   | 30,936 |   |   | 17,516 |   |
| **Cost                of programming** |   | **$**                                                                    | **32,081** |                                                                   | **$**  | **15,950** |   | **$** | **54,403** |   | **$** | **29,563** |   |

|                                                            |   | **For                the Three Months****Ended                June 30,** |       | **For                the Six Months****Ended                June 30,** |   |
|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------|------------|------------------------------------------------------------------------|--------|
|                                                            |   | **(US$                000's)**                                           |       |
|                                                            |   | **2005**                                                                 |       | **2004**                                                               |   | **2005** |   | **2004** |   |
| Program                amortization:                            |   |                                                                     |       |                                                                   |   |   |   |   |   |
| Croatia                (NOVA TV)                                |   | $                                                                        | 3,849      |                                                                   | $      | - |   | $ | 7,700 |   | $ | - |   |
| Czech                Republic (TV NOVA)                         |   |                                                                     | 2,949      |                                                                   |   | - |   |   | 2,949 |   |   | - |   |
| Romania                (PRO TV, ACASA and PRO TV INTERNATIONAL) |   |                                                                     | 5,273      |                                                                   |   | 5,239 |   |   | 9,145 |   |   | 8,395 |   |
| Slovenia                (POP TV and KANAL A)                    |   |                                                                     | 1,059      |                                                                   |   | 1,197 |   |   | 2,227 |   |   | 2,655 |   |
| Ukraine                (STUDIO 1+1)                             |   |                                                                     | 4,307      |                                                                   |   | 3,245 |   |   | 8,915 |   |   | 6,466 |   |
|                                                            |   |                                                                     | **17,437** |                                                                   |   | **9,681** |   |   | **30,936** |   |   | **17,516** |   |
| Slovak                Republic (MARKIZA TV)                     |   |                                                                     | 1,851      |                                                                   |   | 2,117 |   |   | 3,232 |   |   | 4,511 |   |
|                                                            |   | **$**                                                                    | **19,288** |                                                                   | **$**  | **11,798** |   | **$** | **34,168** |   | **$** | **22,027** |   |
|                                                            |   |                                                                     |       |                                                                   |   |   |   |   |   |   |   |   |   |
| Cash                paid for programming:                       |   |                                                                     |            |                                                                   |   |   |   |   |  |   |   |  |   |
| Croatia                (NOVA TV)                                |   | $                                                                        | 2,522      |                                                                   | $      | - |   | $ | 5,479 |   | $ | - |   |
| Czech                Republic (TV NOVA)                         |   |                                                                     | 6,808      |                                                                   |   | - |   |   | 6,808 |   |   | - |   |
| Romania                (PRO TV, ACASA and PRO TV INTERNATIONAL) |   |                                                                     | 11,041     |                                                                   |   | 7,179 |   |   | 19,610 |   |   | 13,375 |   |
| Slovenia                (POP TV and KANAL A)                    |   |                                                                     | 1,609      |                                                                   |   | 1,382 |   |   | 2,880 |   |   | 2,607 |   |
| Ukraine                (STUDIO 1+1)                             |   |                                                                     | 7,550      |                                                                   |   | 3,605 |   |   | 10,776 |   |   | 8,426 |   |
|                                                            |   |                                                                     | **29,530** |                                                                   |   | **12,166** |   |   | **45,553** |   |   | **24,408** |   |
| Slovak                Republic (MARKIZA TV)                     |   |                                                                     | 2,247      |                                                                   |   | 1,631 |   |   | 5,249 |   |   | 3,699 |   |
|                                                            |   | **$**                                                                    | **31,777** |                                                                   | **$**  | **13,797** |   | **$** | **50,802** |   | **$** | **28,107** |   |

*Page            48*

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| ***IV.*** | ***Analysis                of the Results of Consolidated                Operations*** |
|-----------|----------------------------------------------------------------------------------------|

| **IV** | **(a)                Net Revenues for the three months ended June 30, 2005 compared to                three                months ended June 30, 2004** |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   | **Consolidated                Net Revenues**                       |        |
|----------------------------------------------------|--------|--------------------------------------------------------------------|-------------|
|                                               |   | **For                the Three Months Ended June 30, (US $000's)** |        |
|                                               |   | **2005**                                                           |        | **2004** |   | ***Movement*** |   |
| Croatia                                            |   | $                                                                  | 7,652       |   | $ | - |   | *$* | *7,652* |   |
| Czech                Republic                      |   |                                                               | 47,767      |   |   | - |   |   | *47,767* |   |
| Romania                                            |   |                                                               | 26,592      |   |   | 17,887 |   |   | *8,705* |   |
| Slovenia                                           |   |                                                               | 13,920      |   |   | 13,751 |   |   | *169* |   |
| Ukraine                                            |   |                                                               | 17,178      |   |   | 13,248 |   |   | *3,930* |   |
| **Total                Consolidated Net Revenues** |   | **$**                                                              | **113,109** |   | **$** | **44,886** |   | ***$*** | ***68,223*** |   |

| · | US$                7.7 million of net revenues from our Croatian operations following                the                acquisition in July 2004 as described in "III. Analysis of Segment                Results"; and |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | US$                47.8 million of net revenues from our Czech Republic operations following                the acquisition in May 2005 as described in "III. Analysis of Segment                Results". |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                49% increase in the net revenues of our Romanian operations as described                in "III. Analysis of Segment                Results"; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                1% increase in the net revenues of our Slovenian operations as described                in “III. Analysis of Segment Results";                and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                30% increase in the net revenues of our Ukrainian operations as described                in "III. Analysis of Segment                Results". |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **IV** | **(b)                Net Revenues for the six months ended June 30, 2005 compared to six                months                ended June 30, 2004** |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   | **Consolidated                Net Revenues**                     |        |
|----------------------------------------------------|--------|------------------------------------------------------------------|-------------|
|                                               |   | **For                the Six Months Ended June 30, (US$ 000's)** |        |
|                                               |   | **2005**                                                         |        | **2004** |   | ***Movement*** |   |
| Croatia                                            |   | $                                                                | 12,607      |   | $ | - |   | *$* | *12,607* |   |
| Czech                Republic                      |   |                                                             | 47,767      |   |   | - |   |   | *47,767* |   |
| Romania                                            |   |                                                             | 45,648      |   |   | 31,972 |   |   | *13,676* |   |
| Slovenia                                           |   |                                                             | 23,853      |   |   | 23,408 |   |   | *445* |   |
| Ukraine                                            |   |                                                             | 31,538      |   |   | 25,354 |   |   | *6,184* |   |
| **Total                Consolidated Net Revenues** |   | **$**                                                            | **161,413** |   | **$** | **80,734** |   | ***$*** | ***80,679*** |   |

*Page            49*

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| · | US$                12.6 million of net revenues from our Croatian operations following                the                acquisition in July 2004 as described in "III. Analysis of Segment                Results"; and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | US$                47.8 million of net revenues from our Czech Republic operations following                the acquisition in May 2005 as described in "III. Analysis of Segment                Results". |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                43% increase in the net revenues of our Romanian operations as described                in "III. Analysis of Segment                Results"; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                2% increase in the net revenues of our Slovenian operations as described                in “III. Analysis of Segment Results";                and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                24% increase in the net revenues of our Ukrainian operations as described                in "III. Analysis of Segment                Results". |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **IV** | **(c)                Station Operating Costs and Expenses for the three months ended June                30,                2005 compared to three months ended June 30,                2004** |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                       |   | **Consolidated                Station Operating Costs and Expenses** |       |
|----------------------------------------------------------------------------|--------|----------------------------------------------------------------------|------------|
|                                                                       |   | **For                the Three Months Ended June 30, (US$ 000's)**   |       |
|                                                                       |   | **2005**                                                             |       | **2004** |   | ***Movement*** |   |
| Croatia                                                                    |   | $                                                                    | 7,330      |   | $ | - |   | *$* | *7,330* |   |
| Czech                Republic                                              |   |                                                                 | 16,556     |   |   | - |   |   | *16,556* |   |
| Romania                                                                    |   |                                                                 | 13,808     |   |   | 11,440 |   |   | *2,368* |   |
| Slovenia                                                                   |   |                                                                 | 6,978      |   |   | 6,323 |   |   | *655* |   |
| Ukraine                                                                    |   |                                                                 | 10,149     |   |   | 6,861 |   |   | *3,288* |   |
| **Total                Consolidated Station Operating Costs and Expenses** |   | **$**                                                                | **54,821** |   | **$** | **24,624** |   | ***$*** | ***30,197*** |   |

| · | US$                7.3 million of station operating costs from our Croatian operations,                which                were acquired in July 2004; and |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | US$                16.6 million of station operating costs from our Czech Republic                operations, which were acquired in May                2005. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                21% increase in the station operating costs and expenses of our Romanian                operations due to the increased cost of acquired programming as well                as                the extra programming and other costs of broadcasting Pro Cinema.                Salary                costs also increased by 39% due to the appreciation of local currency                against the US dollar; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                10% increase in operating costs and expenses in our Slovenian operation                primarily due to the introduction of new employment law that has                resulted                in significantly higher social insurance costs for employers. Salary                costs                are therefore 26% higher for the three months ended June 30, 2005;                and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                48% increase in the station operating costs and expenses of our Ukrainian                operations. This is primarily due to increased programming acquisition                and                broadcasting costs associated with broadcasting a 24-hour schedule                following the award of a nine-hour license in July 2004. Staff costs                also                increased by 92% primarily due to increased employee-related taxation                costs from restructuring independent contractor                arrangements. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            50*

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**IV      (d) Station Operating Costs and Expenses for the six months ended June 30,      2005      compared to six months ended June 30, 2004**

|                                                                       |   | **Consolidated                Station Operating Costs and Expenses** |       |
|----------------------------------------------------------------------------|--------|----------------------------------------------------------------------|------------|
|                                                                       |   | **For                the Six Months Ended June 30, (US$ 000's)**     |       |
|                                                                       |   | **2005**                                                             |       | **2004** |   | ***Movement*** |   |
| Croatia                                                                    |   | $                                                                    | 14,805     |   | $ | - |   | *$* | *14,805* |   |
| Czech                Republic                                              |   |                                                                 | 16,556     |   |   | - |   |   | *16,556* |   |
| Romania                                                                    |   |                                                                 | 25,157     |   |   | 20,540 |   |   | *4,617* |   |
| Slovenia                                                                   |   |                                                                 | 13,487     |   |   | 11,593 |   |   | *1,894* |   |
| Ukraine                                                                    |   |                                                                 | 20,636     |   |   | 13,637 |   |   | *6,999* |   |
| **Total                Consolidated Station Operating Costs and Expenses** |   | **$**                                                                | **90,641** |   | **$** | **45,770** |   | ***$*** | ***44,871*** |   |

| · | US$                14.8 million of station operating costs from our Croatian operations,                which were acquired in July 2004;                and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | US$                16.6 million of station operating costs from our Czech Republic                operations, which were acquired in May                2005. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                22% increase in the station operating costs and expenses of our Romanian                operations due to the increased cost of acquired programming as well                as                the extra programming and other costs of broadcasting Pro Cinema.                Staff                costs also increased by 30% due to the appreciation of local currency                against the US dollar; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                16% increase in the station operating costs and expenses of our Slovenian                operations due to the introduction of a new employment law that has                resulted in significantly higher social insurance costs for employers.                Salary costs are therefore 27% higher for the six months ended June                30,                2005; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                51% increase in the station operating costs and expenses of our Ukrainian                operations. This is primarily due to increased programming acquisition                and                broadcasting costs associated with broadcasting a 24-hour schedule                following the award of a nine-hour license in July 2004. Staff costs                also                increased by 82% primarily due to increased employee-related taxation                costs from restructuring independent contractor                arrangements. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            51*

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**IV      (e) Station Selling, General and Administrative Expenses for the three months      ended June 30, 2005 compared to three months ended June 30,      2004**

|                                                                                                      |   | **Consolidated                Station Selling, General and Administrative                Expenses** |       |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|------------|
|                                                                                                      |   | **For                the Three Months Ended June 30, (US$ 000's)**                                  |       |
|                                                                                                      |   | **2005**                                                                                            |       | **2004** |   | ***Movement*** |   |
| Croatia                                                                                                   |   | $                                                                                                   | 2,257      |   | $ | - |   | *$* | *2,257* |   |
| Czech                Republic                                                                             |   |                                                                                                | 5,306      |   |   | - |   |   | *5,306* |   |
| Romania                                                                                                   |   |                                                                                                | 1,502      |   |   | 1,583 |   |   | *(81* | *)* |
| Slovenia                                                                                                  |   |                                                                                                | 975        |   |   | 963 |   |   | *12* |   |
| Ukraine                                                                                                   |   |                                                                                                | 2,522      |   |   | 1,776 |   |   | *746* |   |
| **Total                Consolidated Station Selling, General and Administrative                Expenses** |   | **$**                                                                                               | **12,562** |   | **$** | **4,322** |   | ***$*** | ***8,240*** |   |

| · | US$                2.3 million of station selling, general and administrative expenses                from                our Croatian operations, which were acquired in July 2004;                and |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | US$                5.3 million of station selling, general and administrative expenses                from                our Czech Republic operations, which were acquired in May                2005. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                5% decrease in the station selling, general and administrative expenses                of                our Romanian operations primarily as a result of a US$ 0.3 million                bad                debt provision write back in the three months ended June 30,                2005; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                1% increase in the station selling, general and administrative expenses                of                our Slovenian operations; and |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                42% increase in the station selling, general and administrative expenses                of our Ukrainian operations primarily due to an increase in rent                costs of                US$ 0.2 million and a provision of US$ 0.4 million for local sales                tax                payable on offshore payments which are no longer deductible following                a                change in the taxation law. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**IV      (f) Station Selling, General and Administrative Expenses for the six months      ended June 30, 2005 compared to six months ended June 30,      2004**

|                                                                                                      |   | **Consolidated                Station Selling, General and Administrative                Expenses** |       |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|------------|
|                                                                                                      |   | **For                the Six Months Ended June 30, (US$ 000's)**                                    |       |
|                                                                                                      |   | **2005**                                                                                            |       | **2004** |   | ***Movement*** |   |
| Croatia                                                                                                   |   | $                                                                                                   | 3,778      |   | $ | - |   | *$* | *3,778* |   |
| Czech                Republic                                                                             |   |                                                                                                | 5,306      |   |   | - |   |   | *5,306* |   |
| Romania                                                                                                   |   |                                                                                                | 3,809      |   |   | 3,003 |   |   | *806* |   |
| Slovenia                                                                                                  |   |                                                                                                | 2,179      |   |   | 1,848 |   |   | *331* |   |
| Ukraine                                                                                                   |   |                                                                                                | 4,418      |   |   | 3,033 |   |   | *1,385* |   |
| **Total                Consolidated Station Selling, General and Administrative                Expenses** |   | **$**                                                                                               | **19,490** |   | **$** | **7,884** |   | ***$*** | ***11,606*** |   |

*Page            52*

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| · | US$                3.8 million of station selling, general and administrative expenses                from                our Croatian operations, which were acquired in July 2004;                and |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | US$                5.3 million of station selling, general and administrative expenses                from                our Czech Republic operations, which were acquired in May                2005. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                27% increase in the station selling, general and administrative expenses                of our Romanian operations primarily due to increased rent and office                costs of US$ 0.4 million and bad                debt provisions increasing by US$ 0.2 million. The increase in bad                debt                provisions is partially due to a reversal of bad debt provisions                in the                first six months of 2004 which resulted in a credit for that                period; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | An                18% increase in the station selling, general and administrative expenses                of our Slovenian operations mainly due to increases in marketing                costs;                and |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                46% increase in the station selling, general and administrative expenses                of our Ukrainian operations due to an increase in rent costs of US$                0.4                million and a provision of US$ 0.5 million for local sales tax payable                on                offshore payments which are no longer deductible following a change                in the                taxation law. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**IV      (g) Consolidated results excluding net revenues, station operating costs and      expenses and station selling, general and administrative expenses for the three      months ended June 30, 2005 compared to the three months ended June 30,      2004**

|                                                                                                  |   | **For                the Three Months Ended June 30, (US$ 000's)** |   |
|-------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                                                                                  |   | **2005**                                                           |   | **2004** |   | ***Movement*** |   |
| Corporate                operating costs (including non-cash stock based                compensation) |   |                                                               | 3,451  |   |   | 7,107 |   |   | *(3,656* | *)* |
| Amortization                of intangibles                                                            |   |                                                               | 82     |   |   | 62 |   |   | *20* |   |
| Impairment                charge                                                                      |   |                                                               | 35,331 |   |   | - |   |   | *35,331* |   |
| Interest                income                                                                        |   |                                                               | 559    |   |   | 786 |   |   | *(227* | *)* |
| Interest                expense                                                                       |   |                                                               | (6,424 | ) |   | (667 | ) |   | *(5,757* | *)* |
| Foreign                currency exchange gain/(loss), net                                             |   |                                                               | 30,159 |   |   | (1,289 | ) |   | *31,448* |   |
| Other                income/(expense)                                                                 |   |                                                               | 312    |   |   | (10 | ) |   | *322* |   |
| Provision                for income taxes                                                             |   |                                                               | (3,565 | ) |   | (5,769 | ) |   | *2,204* |   |
| Minority                interest in income of consolidated subsidiaries                               |   |                                                               | (4,104 | ) |   | (379 | ) |   | *(3,725* | *)* |
| Equity                in income of unconsolidated affiliates                                          |   |                                                               | 4,049  |   |   | 4,304 |   |   | *(255* | *)* |
| Post-tax                income/(loss) from discontinued operations                                    |   |                                                               | (2,389 | ) |   | 285 |   |   | *(2,674* | *)* |

**Corporate      operating costs**

|                                                                                                      |   | **For                the Three Months Ended June 30, (US $000's)** |      |
|-----------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|-----------|
|                                                                                                      |   | **2005**                                                           |      | **2004** |   | ***Movement*** |   |
| Corporate                operating costs                                                                  |   | $                                                                  | 4,870     |   | $ | 4,738 |   | *$* | *132* |   |
| Non-cash                stock based compensation                                                          |   |                                                               | (1,419    | ) |   | 2,369 |   |   | *(3,788* | *)* |
| **Corporate                operating costs (including non-cash stock based                compensation)** |   | **$**                                                              | **3,451** |   | **$** | **7,107** |   | ***$*** | ***(3,656*** | ***)*** |

*Page            53*

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** **

**Amortization        of intangibles**

**Impairment        charge:**

**Interest        income**

**Interest        expense**

**Foreign        currency exchange: **

**Other        income**

**Provision        for income taxes: **

**Minority        interest in income of consolidated subsidiaries: **

**Equity          in income of unconsolidated affiliates: **

*Page            54*

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|                                                             |   | **For                the Three Months Ended June 30, (US $000's)** |      |
|------------------------------------------------------------------|--------|--------------------------------------------------------------------|-----------|
|                                                             |   | **2005**                                                           |      | **2004** |   | ***Movement*** |   |
| Slovak                Republic operations                        |   | $                                                                  | 4,050     |   | $ | 4,082 |   | *$* | *(32* | *)* |
| Romanian                operations                               |   |                                                               | (1        | ) |   | 222 |   |   | *(223* | *)* |
| **Equity                in income of unconsolidated affiliates** |   | **$**                                                              | **4,049** |   | **$** | **4,304** |   | ***$*** | ***(255*** | ***)*** |

**Discontinued      operations: **

**IV      (h) Consolidated results excluding net revenues, station operating costs and      expenses and station selling, general and administrative expenses for the six      months ended June 30, 2005 compared to the six months ended June 30,      2004**

|                                                                                                  |   | **For                the Six Months Ended June 30, (US$ 000's)** |   |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                                                                                  |   | **2005**                                                         |   | **2004** |   | ***Movement*** |   |
| Corporate                operating costs (including non-cash stock based                compensation) |   |                                                             | 11,182 |   |   | 12,225 |   |   | *(1,043* | *)* |
| Amortization                of intangibles                                                            |   |                                                             | 159    |   |   | 62 |   |   | *97* |   |
| Impairment                charge                                                                      |   |                                                             | 35,331 |   |   | - |   |   | *35,331* |   |
| Interest                income                                                                        |   |                                                             | 1,638  |   |   | 2,240 |   |   | *(602* | *)* |
| Interest                expense                                                                       |   |                                                             | (6,731 | ) |   | (885 | ) |   | *(5,846* | *)* |
| Foreign                currency exchange gain/(loss), net                                             |   |                                                             | 29,430 |   |   | (1,922 | ) |   | *31,352* |   |
| Other                expense                                                                          |   |                                                             | (3,689 | ) |   | (781 | ) |   | *(2,908* | *)* |
| Provision                for income taxes                                                             |   |                                                             | (5,906 | ) |   | (6,939 | ) |   | *1,033* |   |
| Minority                interest in income of consolidated subsidiaries                               |   |                                                             | (4,681 | ) |   | (457 | ) |   | *(4,224* | *)* |
| Equity                in income of unconsolidated affiliates                                          |   |                                                             | 4,883  |   |   | 5,199 |   |   | *(316* | *)* |
| Post-tax                loss from discontinued operations                                             |   |                                                             | (2,044 | ) |   | (45 | ) |   | *(1,999* | *)* |

**Corporate      operating costs**

|                                                                                                      |   | **For                the Six Months Ended June 30, (US $000's)** |       |
|-----------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|------------|
|                                                                                                      |   | **2005**                                                         |       | **2004** |   | ***Movement*** |   |
| Corporate                operating costs                                                                  |   | $                                                                | 9,500      |   | $ | 7,971 |   | *$* | *1,529* |   |
| Non-cash                stock based compensation                                                          |   |                                                             | 1,682      |   |   | 4,254 |   |   | *(2,572* | *)* |
| **Corporate                operating costs (including non-cash stock based                compensation)** |   | **$**                                                            | **11,182** |   | **$** | **12,225** |   | ***$*** | ***(1,043*** | ***)*** |

** **

*Page            55*

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**Amortization      of intangibles**

**Impairment      charge:**

**Interest      income**

**Interest      expense**

**Foreign      currency exchange: **

**Other      expense**

**Provision      for income taxes: **

**Minority      interest in income of consolidated subsidiaries:**

**Equity      in income of unconsolidated affiliates: **

|                                                             |   | **For                the Six Months Ended June 30, (US $000's)** |      |
|------------------------------------------------------------------|--------|------------------------------------------------------------------|-----------|
|                                                             |   | **2005**                                                         |      | **2004** |   | ***Movement*** |   |
| Slovak                Republic operations                        |   | $                                                                | 4,958     |   | $ | 4,813 |   | *$* | *145* |   |
| Romanian                operations                               |   |                                                             | (75       | ) |   | 386 |   |   | *(461* | *)* |
| **Equity                in income of unconsolidated affiliates** |   | **$**                                                            | **4,883** |   | **$** | **5,199** |   | ***$*** | ***(316*** | ***)*** |

**Discontinued      operations: **

*Page            56*

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| **IV                (i)** | **Consolidated                balance sheet as at June 30, 2005 compared to December 31,                2004** |
|---------------------------|----------------------------------------------------------------------------------------------------------------|

| ***V.*** | ***Liquidity                and Capital Resources*** |
|----------|------------------------------------------------------|

*Summary*

| · | Receipt                of approximately US$ 682 million (net of fees) from the issuance                of Senior                Notes and a public offering of 5.4 million shares of our Class A                Common                Stock; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Approximately                US$ 733 million, including $ 492 million repayment of notes to PPF on                May 5, 2005, was applied toward the purchase of the interests in TV                Nova (Czech Republic) held by PPF and Mr. Krsak (for further information,                see Item 1, Note 5, "Acquisitions and Disposals"); |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The                reclassification of US$ 24 million to restricted cash, representing                money                held in escrow as the second and final payment to Mr. Krsak (for                further                information, see Item 1, Note 5, "Acquisitions and                Disposals"); |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The                addition of US$ 51 million held in our Czech Republic operations                which                were consolidated for the first time as at June 30,                2005; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                payment of US$ 5 million payment in connection with the 2% increase                in our                holding of our Romanian operations (for further information, see                Item 1,                Note 5, "Acquisitions and Disposals");                and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                further payment of Euro 4.7 million (approximately US$ 6 million)                to                acquire the remaining 3.15% interest in Pro Plus (for further information,                see Item 1, Note 5, " Acquisitions and                Disposals”). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Contractual      Cash Obligations*

| Contractual                Obligations            |   | Payments                due by period (US$ 000’s) |        |
|---------------------------------------------------|--------|---------------------------------------------------------|-------------|
|                                              |   | Total                                                   |        | Less                than 1year |   | 1-3                years |   | 3-5                years |   | More                than 5 years |   |
| Long-Term                Debt (1)                 |   | $                                                       | 728,320     |   | $ | 49,483 |   | $ | 72,636 |   | $ | 72,465 |   | $ | 533,736 |   |
| Capital                Lease Obligations          |   |                                                    | 7,211       |   |   | 1,588 |   |   | 979 |   |   | 938 |   |   | 3,706 |   |
| Operating                Leases                   |   |                                                    | 16,116      |   |   | 6,663 |   |   | 7,023 |   |   | 1,914 |   |   | 516 |   |
| Unconditional                Purchase Obligations |   |                                                    | 21,895      |   |   | 21,475 |   |   | 316 |   |   | 104 |   |   | - |   |
| Other                Long-Term Obligations (2)    |   |                                                    | 62,776      |   |   | 3,127 |   |   | 58,642 |   |   | 1,007 |   |   | - |   |
| Total                Contractual Obligations      |   | **$**                                                   | **836,318** |   | **$** | **82,336** |   | **$** | **139,596** |   | **$** | **76,428** |   | **$** | **537,958** |   |

*Page            57*

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| (1) | Senior                notes in the aggregate principal amount of Euro 370 million (approximately                US$ 447.9 million), consisting of Euro 245 million (approximately                US$                296.6 million) 8.25% Senior Notes due 2012 and Euro 125 million                (approximately US$ 151.3 million) floating rate Senior Notes due                2012,                which have been issued at a rate equal to six-month Euro Inter-Bank                Offered Rate (“EURIBOR”) plus 5.5% (EURIBOR - 6 month as at June 30, 2005                was 2.1%) (for further information                see                Note 11, “Senior Notes”). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mag                Media, CP 2000 and CET 21 have two credit facilities of up to an                aggregate                of CZK 1,100 million (approximately US$ 44.3 million) with Ceska                Sporitelna, a.s. (“CS”) and Factoring Ceska Sporitelna, a.s., a subsidiary                of CS. One facility is a CZK 850 million (approximately US$ 34.2                million)                facility for factoring trade receivables of Mag Media (US$ nil drawn                as at                June 30, 2005) and the second is a working capital facility of up                to CZK                700 million (approximately US$ 28.2 million); provided that the aggregate                borrowing under both facilities does not exceed CZK 1,100 million                (approximately US$ 44.3 million). As at June 30, 2005, no trade                receivables were sold by Mag Media and CZK 250 million (approximately                US$                10.1 million) has been drawn under the working capital facility and                bears                a variable interest rate of the three-month Prague Inter-Bank Offered                Rate                (“PRIBOR”) rate plus 1.8% (PRIBOR - 3 month rate as at June 30, 2005 was                1.74%). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | A                facility of up to Euro 8.0 million (approximately US$ 9.7 million)                pursuant to a loan agreement among Pro Plus, Bank Austria Creditanstalt                d.d. (“BACA”) and Nova Ljubljanska banka d.d. which matures in February                2009. As at June 30, 2005 Euro 5.8 million (approximately US$ 7.0                million)                (December 31, 2004: Euro 6.5 million, approximately US$ 7.9 million)                was                drawn by our Slovenian operating company under these agreements.                This loan                bears a variable interest rate of the EURIBOR 6 month rate plus 3.0%                (EURIBOR - 6 month as at June 30, 2005 was 1.9%). As at June 30,                2005 a                rate of 4.9% applied to this loan. This loan facility is secured                by the                real property, fixed assets and receivables of Pro Plus, which as                at June                30, 2005 have a carrying amount of approximately US$ 26.4 million.                Principal                payments of Euro 0.7 million (approximately US$ 0.8 million)                were made on these loans in 2005. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | A                loan of Sk187 million (approximately US$ 5.9 million) (December                31, 2004: Sk187 million, approximately US$ 6.6 million) from                our non-consolidated affiliate, STS. This                loan bears a variable interest rate of the Bratislava Inter-Bank                Offered                Rate (“BRIBOR”) 3 month rate plus 2.2% (BRIBOR - 3 month as at June 30,                2005 was 2.6%). We expect this loan to be repaid in during the third                quarter of 2005. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | A                total of Euro 0.9 million (approximately                US$ 1.1 million) was drawn down on three loan agreements our Croatian                operations have with Hypo Alpe-Adria-Bank d.d. These                loans bear a variable interest rate of the EURIBOR 3 month rate plus                2.5%.                As at June 30, 2005 a rate of 4.65% applied to these loans.                These loan facilities are secured by the real property and fixed                assets of                OK, which as at June 30, 2005 have a carrying amount of approximately                US$                1.4 million. Principal payments of Euro 0.1 million (approximately                US$ 0.1                million)                were made on these loans in 2005. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | An                amount of Euro 0.01 million (approximately US$ 0.02 million) was                drawn                down on a fourth loan agreement our Croatian operations have with                Hypo                Alpe-Adria-Bank d.d. This                loan bears a fixed interest rate of                7.25%. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Euro                0.2 million (approximately US$ 0.2 million) was drawn down by our                Croatian                operations under a loan agreement with BKS Bank fur Karnten and Steiermark                AG.                This loan bears a variable interest rate of the EURIBOR 3 month rate                plus                3.0%. As at June 30, 2005 a rate of 5.15% applied to this                loan.                Principal payments of Euro 0.1                million (approximately US$ 0.1 million)                were made on these loans in 2005. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1) | On                July 24, 2002 STS, a 49% owned affiliate, obtained from Vseobecna                uverova                banka, a.s. ("VUB") a mid-term facility of SKK 100 million (approximately                US$ 3.1 million). This facility matures in December 2005, and bears                a                variable interest rate of the BRIBOR 3 month rate plus 1.7% (BRIBOR                - 3                month as at June 30, 2005 was 2.6%) and is secured by a pledge of                certain                fixed and current assets. The nominal value of receivables under                pledge                according to the contract is US$ 3.2 million. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            58*

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*Sources      and Uses of Ca*
*sh*

|                           |   | **As                at June 30, 2005** |    | **As                at December 31, 2004** |   |
|--------------------------------|--------|----------------------------------------|---------|--------------------------------------------|--------|
| **Country**                    |   | **(US                $ 000’s)**  |    |
| Croatia                        |   | $                                      | 23,659  |                                       | $      | 11,087 |   |
| Czech                Republic  |   |                                   | 466,689 |                                       |   | - |   |
| Romania                        |   |                                   | 34,539  |                                       |   | 37,109 |   |
| Slovak                Republic |   |                                   | 88      |                                       |   | - |   |
| Slovenia                       |   |                                   | 41      |                                       |   | 1,590 |   |
| Ukraine                        |   |                                   | 8,866   |                                       |   | 13,459 |   |
| Total                          |   | $                                      | 533,882 |                                       | $      | 63,245 |   |

*Cash      Outlook*

*Page            59*

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*Tax      Inspections*

*Off-Balance      Sheet Arrangements*

*Page            60*

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| ***VI.*** | ***Critical                Accounting Policies and                Estimates*** |
|-----------|--------------------------------------------------------------------------------|

*Page            61*

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| **Item                3.** | **Quantitative                and Qualitative Disclosures About Market                Risk** |
|----------------------------|----------------------------------------------------------------------------------------------|

**Foreign      Currency Exchange Risk Management**

**Interest      Rate Risk Management**

*Interest      Rate Table as at June 30, 2005 *

| **Expected                Maturity Dates** |   | **2005** |    | **2006** |   | **2007** |   | **2008** |   | **Thereafter** |   |
|--------------------------------------------|--------|----------|---------|----------|--------|----------|--------|----------|--------|----------------|--------|
|                                       |   |     |    |     |   |     |   |     |   |           |   |
| *Total                Debt in Euros 000's* |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Fixed                Rate                  |   |     | -       |     |   | -        |   |     | 13     |           |   | - |   |   | 245,000 |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Average                Interest Rate       |   |     | -       |     |   | -        |   |     | 7.25   | %              |   | - |   |   | 8.25 | % |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Variable                Rate               |   |     | 5,818   |     |   | 235      |   |     | -      |           |   | - |   |   | 125,824 |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Average                Interest Rate       |   |     | 4.91    | %        |   | 5.01     | %      |     | -      |           |   | - |   |   | 7.63 | % |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| *Total                Debt in Sk 000's*    |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Fixed                Rate                  |   |     | -       |     |   | -        |   |     | -      |           |   | - |   |   | - |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Average                Interest Rate       |   |     | -       |     |   | -        |   |     | -      |           |   | - |   |   | - |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Variable                Rate               |   |     | 187,000 |     |   | -        |   |     | -      |           |   | - |   |   | - |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Average                Interest Rate       |   |     | 4.78    | %        |   | -        |   |     | -      |           |   | - |   |   | - |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| *Total                Debt in Czk 000's*   |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Fixed                Rate                  |   |     | -       |     |   | -        |   |     | -      |           |   | - |   |   | - |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Average                Interest Rate       |   |     | -       |     |   | -        |   |     | -      |           |   | - |   |   | - |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Variable                Rate               |   |     | 250,000 |     |   | -        |   |     | -      |           |   | - |   |   | - |   |
|                                       |   |     |    |     |   |     |   |     |   |           |   |   |   |   |   |   |
| Average                Interest Rate       |   |     | 3.54    | %        |   | -        |   |     | -      |           |   | - |   |   | - |   |

*Page            62*

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*Variable      Interest Rate Sensitivity as at June 30, 2004*

|                                                                                      |   |                                                                          |   |                                                                                 |   | **Yearly                  interest charge if interest rates increase by****(US$000s):** |
|-------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|
| **Value                  of Debt as at****June                  30, 2005 (US$****000's)** |   | **Interest                  Rate****as                  at June 30,****2005** |   | **Yearly                  Interest****Charge****(US$                  000’s)** |   |  **1%**                                                                            |   |  **2%** |   |  **3%** |   |  **4%** |   |  **5%** |
| 159,625(Euro                  131.9 million)                                              |   | 4.65%-7.65%                                                                   |   | $                  11,977                                                            |   | $                  13,573                                                               |   | $                  15,170 |   | $                  16,766 |   | $                  18,362 |   | $                  19,958 |
| 5,876(Sk                  187 million)                                                    |   | 4.78%                                                                         |   | 281                                                                                  |   | 340                                                                                     |   | 398 |   | 457 |   | 516 |   | 575 |
| 10,066(Czk                  250 million)                                                  |   | 3.54%                                                                         |   | 356                                                                                  |   | 457                                                                                     |   | 558 |   | 658 |   | 759 |   | 860 |
| **Total**                                                                                 |   |                                                                          |   | **$****12,614**                                                                      |   | **$                  14,370**                                                           |   | **$                  16,126** |   | **$                  17,881** |   | **$                  19,637** |   | **$                  21,393** |

| **Item                4.** | **Controls                and Procedures** |
|----------------------------|--------------------------------------------|

*Page            63*

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**PARTII**

**OTHER      INFORMATION**

| **Item                1.** | **Legal                Proceedings** |
|----------------------------|--------------------------------------|

*General*

*Croatia*

*Romania*

*Slovenia*

*Slovak      Republic*

*Page            64*

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*Ukraine*

*Czech      Republic*

*Claims      Relating to the Vilja Shareholding in CET 21*

*Page            65*

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*Disposition      of the CET 21 Interest Held by CET 21*

*Claims      brought by Alan, Huncik, Venclik and Gal*

*Claims      Relating to the Interests of CS and CEDC in CET 21*

*Page            66*

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*Other      Claims*

**Item      4.**
**      Submission of Matters to a Vote of Security Holders **

|                                | **For**    | **Withheld** |
|-------------------------------------|------------|--------------|
| Ronald                S. Lauder     | 24,432,820 | 36,828       |
|                                |       |         |
| Michael                Garin        | 24,432,780 | 36,868       |
|                                |       |         |
| Charles                R. Frank, Jr | 24,434,120 | 35,528       |
|                                |       |         |
| Herbert                A. Granath   | 24,434,780 | 34,868       |
|                                |       |         |
| Alfred                W. Langer     | 24,434,820 | 34,828       |
|                                |       |         |
| Bruce                Maggin         | 24,434,120 | 35,528       |
|                                |       |         |
| Ann                Mather           | 24,434,820 | 34,828       |
|                                |       |         |
| Eric                Zinterhofer     | 24,432,120 | 37,528       |

*Page            67*

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| **Item                  5.** | **Other                  Information** |
|------------------------------|----------------------------------------|

| **Item                6.** | **Exhibits** |
|----------------------------|--------------|

|   | 10.46  | Agreement                  on Transfer of Ownership Interest, dated May 31, 2005, between                  PPF                  (Cyprus) Limited and Central European Media Enterprises                  Ltd.                                                         |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                  |
|   | 10.47  | Agreement                  on Transfer of Ownership Interest, dated May 31, 2005, between                  PPF                  (Cyprus) Limited and CME Media Enterprises B.V.                                                                                       |
|   |   |                                                                                                                                                                                                                                                                  |
|   | 10.48  | Euro                  37.5 million facility agreement, dated July 29, 2005, between Produkcija                  Plus Storitveno Podjetje d.o.o. and ING Bank N.V., Nova Ljubljanska                  banka                  d.d., and Bank Austria Creditanstalt d.d. |
|   |   |                                                                                                                                                                                                                                                                  |
|   | 31.01  | Sarbanes-Oxley                  Certification s.302 CEO, dated August 4, 2005                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                  |
|   | 31.02  | Sarbanes-Oxley                  Certification s.302 CFO, dated August 4, 2005                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                  |
|   | 32.01  | Sarbanes-Oxley                  Certification - CEO and CFO, dated August 4, 2005 (furnished                  only)                                                                                                                                                   |

**SIGNATURES**

| Date:                August 4, 2005 | /s/                Michael Garin                                                   |
|-------------------------------------|------------------------------------------------------------------------------------|
|                                | Michael                Garin                                                       |
|                                | Chief                Executive Officer                                             |
|                                | (Duly                Authorized Officer)                                           |
|                                |                                                                               |
|                                |                                                                               |
| Date:                August 4, 2005 | /s/                Wallace Macmillan                                               |
|                                | Wallace                Macmillan                                                   |
|                                | Vice                President - Finance                                            |
|                                | (Principal                Financial Officer and Accounting                Officer) |

*Page            68*

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**EXHIBIT      INDEX **

| 10.46 | Agreement                  on Transfer of Ownership Interest, dated May                  31, 2005, between PPF (Cyprus) Limited and Central European Media                  Enterprises Ltd. |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 10.47 | Agreement                  on Transfer of Ownership Interest, dated May                  31, 2005, between PPF (Cyprus) Limited and CME Media Enterprises                  B.V. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 10.48 | Euro                      37.5 million facility agreement, dated July 29,                      2005, between Produkcija Plus Storitveno Podjetje d.o.o. and                      ING Bank                      N.V., Nova Ljubljanska banka d.d., and Bank Austria Creditanstalt                      d.d. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 31.01 | s.302                    Sarbanes-Oxley Certification - CEO, dated August                    4, 2005 |
|-------|------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 31.02 | s.302                  Sarbanes-Oxley Certification - CFO, dated August                  4, 2005 |
|-------|--------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 32.01 | s.906                Sarbanes-Oxley Certification - CEO and CFO, dated                August 4, 2005 (furnished only) |
|-------|-----------------------------------------------------------------------------------------------------------------------|

----