COMMITMENTS AND CONTINGENCIES

Commitments

a) Programming Rights Agreements and Other Commitments

At June 30, 2014, we had total commitments of US$ 229.5 million (December 31, 2013: US$ 253.6 million) in respect of future programming, including contracts signed with license periods starting after the balance sheet date. These are presented with future minimum operating lease payments for non-cancellable operating leases with remaining terms in excess of one year (net of amounts to be recharged to third parties) and other commitments as follows:



	Programming purchase obligations		Digital transmission obligations		Operating leases		Capital expenditures
2014	$	45,211	$	14,585	$	2,926	$	3,535
2015	76,610		18,906		3,702		1,057
2016	64,208		12,268		2,438		—
2017	28,171		6,432		1,756		—
2018	12,662		3,920		1,389		—
2019 and thereafter	2,629		1,466		8,730		—
Total	$	229,491	$	57,577	$	20,941	$	4,592

b) Factoring of Trade Receivables

CET 21 has a CZK 910 million (approximately US$ 45.3 million) factoring framework agreement with FCS. Under this facility up to CZK 910 million (approximately US$ 45.3 million) may be factored on a recourse or non-recourse basis. As at June 30, 2014, there were CZK 324.8 million (approximately US$ 16.2 million) (December 31, 2013: CZK 13.1 million, approximately US$ 0.7 million at June 30, 2014 rates), of receivables subject to the factoring framework agreement.

c) Other

Top Tone Holdings has exercised its right to acquire additional equity in CME Bulgaria, however the closing of this transaction has not yet occurred because the purchaser financing is still pending. If consummated, we would own 90.0% of our Bulgaria operations.

Contingencies

a) Litigation

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

Slovenian Competition Proceeding

On April 24, 2013 the Competition Protection Agency of the Republic of Slovenia (“CPA”) adopted a decision finding that our wholly-owned subsidiary Produkcija Plus d.o.o. (“Pro Plus”) has abused a dominant position on the Slovenian television advertising market in breach of applicable competition law, by requiring exclusivity from its advertising customers and by applying loyalty discounts in favor of its customers. Pro Plus filed an appeal with the Slovenian Supreme Court on May 24, 2013. On December 3, 2013, the Slovenian Supreme Court affirmed the decision of the CPA. In May 2014, Pro Plus received notice that the CPA commenced a proceeding regarding the imposition of a fine. On July 21, 2014 the CPA adopted a decision to impose a fine of EUR 5.1 million (approximately US$ 6.9 million). Pro Plus intends to appeal the decision. No fine is payable during the pendency of such an appeal. As at June 30, 2014, we have accrued the full amount of the fine in other current liabilities in our condensed consolidated balance sheet.

b) Restrictions on dividends from Consolidated Subsidiaries and Unconsolidated Affiliates

Corporate law in the Central and Eastern European countries in which we have operations stipulates generally that dividends may be declared by shareholders, out of yearly profits, subject to the maintenance of registered capital and required reserves after the recovery of accumulated losses. The reserve requirement restriction generally provides that before dividends may be distributed, a portion of annual net profits (typically 5.0%) be allocated to a reserve, which reserve is capped at a proportion of the registered capital of a company (ranging from 5.0% to 25.0%). The restricted net assets of our consolidated subsidiaries and equity in earnings of investments accounted for under the equity method together are less than 25.0% of consolidated net assets.