ORGANIZATION

9 Months Ended

Sep. 30, 2011

ORGANIZATION

ORGANIZATION

1.     ORGANIZATION

        The accompanying consolidated financial statements include the accounts of CTC Media, Inc. and all consolidated subsidiaries (the "Company"). CTC Media, Inc., a Delaware corporation, has operated the CTC, Domashny and DTV television networks in Russia, since 1996, 2005 and 2008, respectively. The Company transmits its signals by satellite to its owned-and-operated affiliate stations and repeater transmitters and to independent affiliate stations. The Company's network operations, including its relationships with its independent affiliates, are managed by its network subsidiaries: CTC, Domashny and DTV television networks (the "Networks"). During the nine months ended September 30, 2010 and 2011, CTC, Domashny and DTV Networks were operating CTC, Domashny (or "Home") and DTV channels, respectively. Effective October 2011, as a result of the Company's strategic review of the positioning of the DTV channel, DTV Network operates under a new brand—"Peretz" (hereinafter referred to as "DTV" or "DTV Network"). CTC, Domashny and DTV Television Station Groups (the "Television Station Groups") manage the owned-and-operated affiliate stations and repeater transmitters for each respective network. In addition, since 2008, the Company operates the Channel 31 network, a Kazakh television broadcaster, and a broadcaster in Moldova. These two broadcasters comprise an additional business segment—the Commonwealth of Independent States Group (the "CIS Group"). Moreover, since 2008, the Company has another business segment, Production Group, comprising the Company's in-house production operations, specializing in producing sitcoms, series, sketchcoms and entertainment TV shows for the Networks.

        The Company generates substantially all of its revenues from the sale of television advertising on both a national and regional basis. At the national level and for substantially all of the stations in the Television Station Groups, this advertising is currently placed through the Company's own advertising sales house, which serves as the exclusive advertising sales agent for all of the Company's Russian networks and Television Station Groups in respect of Moscow-based clients from January 1, 2011 (Notes 2 and 11). The Company also generates revenues from the sublicensing of programming rights and licensing of internally-produced programming to third parties.