HONG KONG, March 21, 2014 /PRNewswire/ -- Shanda Games
Limited ("Shanda Games," or the
"Company") (NASDAQ: GAME), a leading online game developer,
operator and publisher in China,
today announced its unaudited consolidated financial results for
the fourth quarter and full year 2013 ended December 31, 2013.
Fourth Quarter Non-GAAP Financial Highlights (1)
- Net revenues were RMB1,029.3
million (US$168.8 million),
down 8.5% QoQ and 6.0% YoY.
- Gross profit was RMB789.6 million
(US$129.6 million), down 3.5% QoQ and
8.0% YoY. Gross margin was 76.7%, compared with 72.8% in Q3
2013 and 78.4% in Q4 2012.
- Operating income was RMB432.9
million (US$71.1 million),
down 10.4% QoQ and 16.1% YoY. Operating margin was 42.1%,
compared with 43.0% in Q3 2013 and 47.1% in Q4 2012.
- Net income attributable to the Company's shareholders was
RMB361.6 million (US$59.4 million), down 15.7% QoQ and 8.2%
YoY. Net margin was 35.1%, compared with 38.1% in Q3 2013 and
36.0% in Q4 2012.
- Earnings per diluted ADS were RMB1.34 (US$0.22),
compared with RMB1.60 in Q3 2013 and
RMB1.46 in Q4 2012.
Fourth Quarter GAAP Financial Highlights (1)
- Net revenues were RMB1,029.3
million (US$168.8 million),
down 8.5% QoQ and 6.0% YoY.
- Massively multi-player online (MMO) game revenues were
RMB898.5 million (US$147.4 million), down 6.4% QoQ and 14.0%
YoY.
- Mobile game revenues were RMB120.9
million (US$19.8 million),
down 21.0% QoQ and up 1,374.4% from RMB8.2
million a year ago.
- Other revenues were RMB9.9
million (US$1.6 million), down
16.8% QoQ and 76.3% YoY.
- Gross profit was RMB773.4 million
(US$126.9 million), down 3.6% QoQ and
7.7% YoY. Gross margin was 75.1%, compared with 71.3% in Q3
2013 and 76.5% in Q4 2012.
- Operating income was RMB398.6
million (US$65.4 million),
down 10.4% QoQ and 15.6% YoY. Operating margin was 38.7%,
compared with 39.5% in Q3 2013 and 43.1% in Q4 2012.
- Net income attributable to the Company's shareholders was
RMB335.3 million (US$55.0 million), down 15.9% QoQ and 6.2% YoY.
Net margin was 32.6%, compared with 35.5% in Q3 2013 and
32.6% in Q4 2012.
- Earnings per diluted ADS were RMB1.24 (US$0.20),
compared with RMB1.50 in Q3 2013 and
RMB1.32 in Q4 2012.
Fourth Quarter Operating Highlights (1)
- MMO games operated in China
and overseas:
- Average Monthly Active Users (average MAU) decreased 3.8% QoQ
from 18.4 million to 17.7 million, primarily due to the typical
effects of seasonality as the third quarter includes China's school summer holidays and therefore
allows the Company to attract more users than the fourth
quarter.
- Average Monthly Paying Users (average MPU) remained essentially
flat QoQ at 2.9 million.
- Monthly Average Revenue per Paying User (ARPU) decreased 7.1%
QoQ from RMB105.9 to RMB98.4, mainly due to a revenue decline in
several key games as the Company continued decelerating
monetization of these games to ensure a longer lifecycle as well as
the typical effects of seasonality.
- Mobile games operated in China
and overseas:
- Average Daily Active Users (average DAU) decreased 2.8% QoQ
from 574,900 to 558,900, mainly due to a decline in users of
"Million Arthur" in China and
Korea in Q4 2013.
- Average Revenue per Daily Active User (ARDAU) decreased 18.7%
QoQ from RMB2.9 to RMB2.4, primarily as a result of overseas users
spending less on the purchase of in-game items.
Full Year 2013 Non-GAAP Financial Highlights
(1)
- Net revenues decreased 7.9% YoY to RMB4,344.7 million (US$712.6
million).
- Gross profit decreased 10.4% YoY to RMB3,272.8 million
(US$536.7 million). Gross margin was 75.3%, compared with
77.4% in 2012.
- Operating income decreased 18.5% YoY to RMB1,873.8 (US$307.4 million). Operating
margin was 43.1%, compared with 48.8% in 2012.
- Net income attributable to the Company's shareholders decreased
11.0% YoY to RMB1,700.8 million (US$279.0 million). Net
margin was 39.1%, compared with 40.5% in 2012.
- Earnings per diluted ADS were RMB6.32 (US$1.04),
compared with RMB6.88 in 2012.
Full Year 2013 GAAP Financial Highlights
(1)
- Net revenues decreased 7.9% YoY to RMB4,344.7 million (US$712.6
million).
- MMO game revenues decreased 16.6% YoY to RMB3,806.3 million (US$624.3 million).
- Mobile game revenues increased 4,627.5% YoY to RMB482.2 million (US$79.1
million).
- Other revenues decreased 61.8% YoY to RMB56.2 million (US$9.2
million).
- Gross profit decreased 9.9% YoY to RMB3,208.9 million (US$526.3
million). Gross margin was 73.9%, compared with 75.5% in
2012.
- Operating income decreased 18.5% YoY to RMB1,727.9 million
(US$283.4 million). Operating margin was 39.8%, compared with
44.9% in 2012.
- Net income attributable to the Company's shareholders decreased
10.1% YoY to RMB1,587.8 million (US$260.4 million). Net
margin was 36.5%, compared with 37.4% in 2012.
- Earnings per diluted ADS were RMB5.90 (US$0.96),
compared with RMB6.36 in 2012.
(1) Notes:
- Acquisition of Shengzhan and Shengjing.
On August 31, 2013, Shanda Games completed the acquisition of
Shengzhan and Shengjing, two affiliates responsible for the
operating platform and prepaid card distribution businesses,
respectively, from its parent company Shanda Interactive
Entertainment Limited ("Shanda Interactive") (the "Transaction").
As Shanda Games and the acquired affiliates were (and
continue to be) under common control by Shanda Interactive both
before and after the closing of the acquisition, in accordance with
the applicable accounting guidance in the Financial Accounting
Standards Board's Accounting Standards Codification 805-50, the
acquisitions have been accounted for as a reorganization of
entities under common control and Shanda
Games' unaudited consolidated financial information reported
in this press release, unless otherwise stated, has been prepared
as if Shengzhan and Shengjing had been owned and operated by
Shanda Games throughout the periods
presented. For more details regarding the Transaction, please
refer to the "Note to the Financial Information" in this press
release as well as the Company's press release dated July 28, 2013.
- Starting with the first quarter of 2013, the Company adjusted
the presentation of its financial statements in order to provide
investors with a better understanding of the Company's changing
business. Previously, the Company reported online game
revenues derived in China (which
included revenues from both MMO games and mobile games) and other
revenues as its two principal revenue categories. Three
revenue categories are now being reported. These include MMO
game revenues, mobile game revenues, and other revenues. Each
of these three categories includes revenues derived inside and
outside China. Prior period amounts reported under the pre-Q1
2013 classifications have been reclassified to conform to the
current presentation.
- MAU refers to the number of users who play the Company's MMO
games during a calendar month. Average MAU is the average of the
MAU for each calendar month during a given period.
- MPU refers to the number of paying users for the Company's MMO
games during a calendar month. Average MPU is the average of
the MPU for each calendar month during a given period.
- ARPU refers to (i) the total MMO game revenues for a given
period, divided by (ii) the number of months in that period,
further divided by (iii) the average MPU during the
period.
- DAU refers to the number of users who play the Company's mobile
games during a day. Average DAU is the average of the DAU for
each day during a given period.
- ARDAU refers to (i) the total mobile game revenues for a given
period, divided by (ii) the number of days in that period, further
divided by (iii) the average DAU during the period. ARDAU
reflects overall monetization for mobile game users. DAU and
ARDAU are metrics the Company uses most frequently to monitor its
mobile game's performance.
- The calculation of MAU, MPU and DAU for the Company's games in
China and overseas does not
include user data for games that were licensed to third-party game
operators.
"Our mobile game revenues for 2013 grew significantly
year-over-year as we worked to expand our mobile game portfolio
across multiple regions," commented Mr. Xiangdong Zhang, Chief Executive Officer of
Shanda Games. "Recently,
Shanda Games received seven awards
at the China Game Industry Annual Conference, including the Most
Anticipated Mobile Game which I believe demonstrates the buzz our
future pipeline is currently creating and the direction we are
headed in as a company. We continue to expand our mobile game
pipeline in China and overseas as
we look forward to the launch of our two most anticipated MMO's,
'Final Fantasy XIV' and 'Dungeon Striker,' later this year. I
am confident that our strategy has aligned our competitive
advantages and years of experience with the long-term fundamentals
of the online game industry."
Fourth Quarter 2013 Unaudited
Financial Results (GAAP)
Net Revenues. In the fourth quarter
of 2013, net revenues were RMB1,029.3
million (US$168.8 million), a
decrease of 8.5% from RMB1,124.7
million in the third quarter of 2013 and a decrease of 6.0%
from RMB1,095.2 million in the fourth
quarter of 2012. MMO game revenues, mobile game revenues, and
other revenues accounted for 87.3%, 11.7% and 1.0% of total net
revenues, respectively. China revenues and overseas revenues accounted
for 91.8% and 8.2% of total net revenues, respectively.
Net revenues generated from MMO games declined 6.4%
quarter-over-quarter and 14.0% year-over-year to RMB898.5 million (US$147.4
million) in the fourth quarter of 2013. The sequential
decrease was primarily due to a revenue decline in several key
games as the Company continued decelerating monetization of these
games to ensure a longer lifecycle as well as the typical effects
of seasonality as the third quarter included China's summer holidays.
Average MAU for MMO games decreased 3.8% quarter-over-quarter to
17.7 million, mainly due to the typical effects of seasonality as
the third quarter included China's
summer holidays. Average MPU for MMO games remained
essentially flat quarter-over-quarter at 2.9 million. ARPU
decreased 7.1% quarter-over-quarter to RMB98.4, primarily due to the Company's strategy
to decelerate monetization for several key games and a weaker
seasonality in the fourth quarter.
Net revenues generated from mobile games were RMB120.9 million (US$19.8
million) in the fourth quarter of 2013, a decrease of 21.0%
from RMB153.0 million in the third
quarter of 2013 and an increase of more than 13 times from
RMB8.2 million in the fourth quarter
of 2012. The quarter-over-quarter decrease was primarily due
to a decline in revenue contribution from "Million Arthur" in
China and overseas.
Average DAU for mobile games was 558,900 in the fourth quarter
of 2013, representing a 2.8% decrease from 574,900 in the third
quarter of 2013. The quarter-over-quarter decrease in average
DAU was mainly due to a user decline in mobile games in
China and Korea during the fourth
quarter of 2013. ARDAU for mobile games decreased 18.7%
quarter-over-quarter to RMB2.4,
primarily as a result of users spending less on purchasing in-game
items in overseas markets.
|
Q4 2012
|
Q1 2013
|
Q2 2013
|
Q3 2013
|
Q4 2013
|
MMO Games
|
|
|
|
|
|
Average MAU (in
millions)
|
19.1
|
18.6
|
18.9
|
18.4
|
17.7
|
Average MPU (in
millions)
|
3.4
|
3.4
|
3.2
|
2.9
|
2.9
|
ARPU (RMB)
|
98.5
|
93.1
|
97.5
|
105.9
|
98.4
|
Mobile
Games
|
|
|
|
|
|
Average DAU (in
thousands)
|
41.0
|
290.2
|
367.2
|
574.9
|
558.9
|
ARDAU
(RMB)
|
2.2
|
4.1
|
3.0
|
2.9
|
2.4
|
Other revenues were RMB9.9 million
(US$1.6 million) in the fourth
quarter of 2013, compared with RMB11.9
million in the third quarter of 2013 and RMB41.7 million in the fourth quarter of 2012.
Cost of Revenues. Cost of revenues for the
fourth quarter of 2013 was RMB255.9
million (US$41.9 million),
representing decreases of 20.7% from RMB322.6 million in the third quarter of 2013 and
0.6% from RMB257.5 million in the
fourth quarter of 2012. The quarter-over-quarter decrease in
the cost of revenues was primarily because the Company ceased
operating the MMO game "RIFT" in the third quarter of 2013 and
therefore accelerated the amortization of the licensing fee paid
for "RIFT" during the third quarter of 2013. There were no
revenues or associated licensing fee costs from the game in the
fourth quarter of 2013. The Company also saw a decline in
royalty fees paid to third parties in the fourth quarter of 2013 as
a result of decreased revenues from licensed games. Cost of
revenues represented 24.9% of net revenues, compared with 28.7% in
the third quarter of 2013 and 23.5% in the fourth quarter of 2012.
Gross Profit. Gross profit for the
fourth quarter of 2013 was RMB773.4
million (US$126.9 million),
representing decreases of 3.6% from RMB802.1
million in the third quarter of 2013 and 7.7% from
RMB837.7 million in the fourth
quarter of 2012. Gross margin was 75.1% in the fourth quarter
of 2013, compared with 71.3% in the third quarter of 2013 and 76.5%
in the fourth quarter of 2012.
Operating Expenses. Total operating expenses
for the fourth quarter of 2013 were RMB374.8
million (US$61.5 million),
representing an increase of 4.9% from RMB357.4 million in the third quarter of 2013 and
an increase of 2.5% from RMB365.6
million in the fourth quarter of 2012. Operating
expenses represented 36.4 % of net revenues, an increase from 31.8%
in the third quarter of 2013 and 33.4% in the fourth quarter of
2012.
Product development expenses increased 3.9% quarter-over-quarter
and decreased 0.1% year-over-year to RMB186.1 million (US$30.5
million) in the fourth quarter of 2013. The sequential
increase was primarily due to an increase in bonuses given to
research and development employees during the fourth quarter of
2013. Product development expenses represented 18.1% of net
revenues, compared with 15.9% in the third quarter of 2013 and
17.0% in the fourth quarter of 2012.
Sales and marketing expenses increased 16.3%
quarter-over-quarter and 33.4% year-over-year to RMB121.5 million (US$19.9
million) in the fourth quarter of 2013. The
quarter-over-quarter increase in sales and marketing expenses was
primarily due to an increase in promotional expenses for existing
and upcoming games during the fourth quarter of 2013. Sales
and marketing expenses represented 11.8% of net revenues, compared
with 9.3% in the third quarter of 2013 and 8.3% in the fourth
quarter of 2012.
General and administrative expenses decreased 34.6%
quarter-over-quarter and 23.8% year-over-year to RMB67.2 million (US$11.1
million) in the fourth quarter of 2013. The sequential
decrease in general and administrative expenses was primarily due
to a decrease in sales tax related to inter-Company transactions as
a net effect of the receipt of preferred tax status by several
subsidiaries in the fourth quarter of 2013. General and
administrative expenses accounted for 6.5% of net revenues,
compared with 9.1% in the third quarter of 2013 and 8.1% in the
fourth quarter of 2012.
Share-based compensation expenses were RMB8.9 million (US$1.5
million) in the fourth quarter of 2013, compared with
RMB10.9 million in the third quarter
of 2013 and RMB12.2 million in the
fourth quarter of 2012.
Operating Income. Operating income
for the fourth quarter of 2013 was RMB398.6
million (US$65.4 million), a
decrease of 10.4% from RMB444.7
million in the third quarter of 2013 and a decrease of 15.6%
from RMB472.1 million in the fourth
quarter of 2012. Operating margin was 38.7% in the fourth
quarter of 2013, compared with 39.5% in the third quarter of 2013
and 43.1% in the fourth quarter of 2012.
Government Financial Incentives. Government
financial incentives totaled RMB49.1
million (US$8.1 million) in
the fourth quarter of 2013, compared with RMB48.6 million in the third quarter of 2013 and
RMB56.3 million in the fourth quarter
of 2012. The Company's receipt of government financial
incentives is subject to time lags and inconsistent government
administrative practices relating to the timing of payments.
Other Income (Expense), Net. Other expense
was RMB10.8 million (US$1.9 million), compared with other income of
RMB15.2 million in the third quarter
of 2013 and other expense of RMB36.1
million in the fourth quarter of 2012. The
quarter-over-quarter change was mainly due to a gain from the sale
of marketable securities in the third quarter of 2013.
Income Tax Expense. Income tax
expense for the fourth quarter of 2013 was RMB104.5 million (US$17.1
million), compared with RMB104.6
million in the third quarter of 2013 and RMB148.7 million in the fourth quarter of
2012.
Net income attributable to the Company's
shareholders. Net income attributable to the
Company's shareholders for the fourth quarter of 2013 was
RMB335.3 million (US$55.0 million), compared with RMB398.9 million in the third quarter of 2013 and
RMB357.4 million in the fourth
quarter of 2012. Earnings per diluted ADS in the fourth
quarter of 2013 were RMB1.24
(US$0.20), compared with RMB1.50 in the third quarter of 2013 and
RMB1.32 in the fourth quarter of
2012.
Net Cash. In the fourth quarter of
2013, the Company generated RMB431.7
million (US$70.8 million) in
cash flows from operating activities. The Company's cash and
cash equivalents, time deposits with maturity over one year,
short-term investments and restricted cash, net of loans and
dividend payable, decreased from RMB2,617.3
million as of September 30,
2013 to RMB1,222.8 million
(US$200.4 million) as of December 31, 2013, primarily as a result of the
Company paying cash in the amount of US$301.2 million as a partial payment for the
acquisition of Shengzhan and Shengjing. Please refer to the
"Note to the Financial Information" in this press release for more
details.
Full Year 2013 Unaudited Financial Results (GAAP)
Net Revenues. Net revenues for the full year
2013 totaled RMB4,344.7 million
(US$712.6 million), a decrease of
7.9% from RMB4,718.6 million in
2012.
Gross Profit. Gross profit for the full year
2013 was RMB3,208.9 million
(US$526.3 million), a decrease of
9.9% from RMB3,562.8 million in
2012. Gross margin was 73.9%, compared with 75.5% in
2012.
Operating Income. Operating income for the
full year of 2013 was RMB1,727.9
million (US$283.4 million), a
decrease of 18.5% from RMB2,120.0
million in 2012. Operating margin was 39.8%, compared
with 44.9% in 2012.
Net Income Attributable to Ordinary
Shareholders. Net income for the full year 2013 was
RMB1,587.8 million (US$260.4 million), a decrease of 10.1% from
RMB1,765.4 million in 2012. Net
margin was 36.5%, compared with 37.4% in 2012. Earnings per
diluted ADS were RMB5.90 (US$0.96), compared with RMB6.36 in 2012.
Net Cash. For the full year 2013, the
Company generated RMB1,698.6 million
(US$278.6 million) in cash flows from
operating activities. The Company's cash and cash
equivalents, time deposits with maturity over one year, short-term
investments and restricted cash, net of loans and dividend payable,
decreased from RMB3,934.7 million as
of December 31, 2012 to RMB1,222.8 million (US$200.4 million) as of December 31, 2013.
Receipt of Non-Binding Proposal to Acquire the
Company
On January 27, 2014, the Company
announced that its Board of Directors (the "Board") had received a
preliminary non-binding proposal letter dated January 27th, 2014 (the "Proposal") from Shanda
Interactive Entertainment Limited, the controlling shareholder of
the Company, and an affiliate of Primavera Capital Limited
(together, the "Consortium"). According to the Proposal, the
Consortium proposed to acquire the Company in a "going private"
transaction for US$3.45 per class A
or class B ordinary share, or US$6.90
per American depositary shares (each representing two class A
ordinary shares) (each an "ADS"). Based on the offer price,
the Proposal values the Company at approximately US$1.9 billion in fully enlarged equity
value. According to the Proposal, the offer price represents
a premium of 21.3% to the Company's volume-weighted average price
of its ADSs on January 24, 2014 and a
premium of 44.4% to the volume-weighted average price of its ADSs
during the last 30 trading days.
On January 29, 2014, the Company
announced that the Board has formed a special committee of
independent directors who are not affiliated to any member of the
Consortium (the "Special Committee") consisting of Andy Lin, Yong Gui and Heng Wing Chan to
evaluate the Proposal. The Special Committee subsequently
retained Sullivan & Cromwell LLP as its U.S. legal counsel and
Bank of America Merrill Lynch as its financial advisor.
The Special Committee has not set a definitive timetable for the
completion of its evaluation of the proposed transaction or any
other alternative transaction (if any) and does not currently
intend to announce developments unless and until an agreement has
been reached. There can be no assurance that any definitive
offer will be made by the Consortium or any other person, that any
definitive agreement will be executed relating to the proposed
transaction, or that the proposed transaction or any other
transaction will be approved or consummated.
Recent Business Highlights
November 23,
2013 - Mobile game "Million Arthur" was
awarded the 2013 Most Popular Mobile Game in China Award at the Global Mobile Game
Developers Conference.
December 3,
2013 - Shanda
Games entered into an agreement with SEGA Networks for the
operating rights to "Chain Chronicle" in Mainland China,
Taiwan, Hong Kong, Macau and South
Korea.
December 5,
2013 - Shanda
Games launched a 4.5 expansion pack for its 3D fantasy MMO
game "AION." The expansion pack offers players a new "Gundam"
occupation and eight new maps.
December 27, 2013
- Shanda Games received seven
awards at the China Game Industry Annual Conference. The awards
included:
- Shanda Games - China Top Ten Gaming Brand 2013
- Shanda Games - China Top Ten Overseas Market Expansion
Brand 2013
- Mr. Xiangdong Zhang, Chief
Executive Officer - China Top Ten Most Influential Person in
Gaming Industry 2013
- "Final Fantasy XIV" - Top Ten Most Anticipated Client Game
2014
- "World Zero (Mobile Version)" - Top Ten Most Anticipated
Mobile Game 2014
- "World Zero" - Top Ten Most Popular Online Client Game
2013
- "World Zero" - Top Ten Most Popular Domestically Developed
Online Game 2013
January 7,
2014 - SG SEA Sdn Bhd, a subsidiary of
Smile Gate, began commercial operation for "Championship Manager
Online" in Malaysia and
Singapore, a 2D soccer-themed
online game licensed from Shanda
Games.
January 9,
2014 - Shanda
Games began open beta testing for "The Age 3," an in-house
developed martial arts themed 2D MMO game.
February 2,
2014 - Shanda
Games launched "The Big Guy II," a new expansion pack of
"Dragon Nest." The expansion pack offers new classes,
occupations, missions and maps.
February 25,
2014 - Shanda
Games began open beta testing for "Guardian Cross," a 2D
mobile card game licensed from the leading Japanese game developer,
Square Enix.
Currency Convenience Translation
The United States dollar (US$)
amounts disclosed in this press release are presented solely for
the convenience of the reader. The conversion of Renminbi
(RMB) into U.S. dollars is based on RMB6.0969 to US$1.00 as published by the People's Bank of
China on December 31, 2013. The Company makes no
representation that the Renminbi or U.S. dollar amounts referred to
in this release could have been, or could be, converted into U.S.
dollars at such rate or at all. The percentages stated are
calculated based on the RMB amounts.
Note to the Financial Information
The unaudited financial information disclosed above is
preliminary and subject to adjustments. Adjustments to these
preliminary financial statements may be identified when audit work
is performed for the year-end audit, which could result in
significant differences from this preliminary unaudited financial
information.
On August 31, 2013, Shanda Games completed the acquisition of
Shengzhan and Shengjing, two affiliates providing operating
platform and prepaid card distribution services, respectively, from
its parent company Shanda Interactive for an aggregate purchase
price of US$812.7 million (the
"Transaction"). The purchase price was partially settled in
the third quarter of 2013 through (i) a cash payment in the amount
of US$201.6 million (reported as an
investing cash flow in the accompanying unaudited condensed
consolidated statement of cash flows) and (ii) the non-cash
exchange of a receivable due from Shanda Interactive in the amount
of US$167.6 million. In the
fourth quarter of 2013, the Company paid an addition of
US$301.2 million to Shanda
Interactive as a partial acquisition payment. The remainder
of approximately US$142.3 million
(reported in "other payables due to related parties" in the
accompanying unaudited condensed consolidated balance sheet) will
be settled in cash on or before June
30, 2014. For more details regarding the Transaction,
please refer to the Company's press release dated July 28, 2013.
Shanda Games and the acquired
affiliates were, and are, under common control. Accordingly,
the Transaction was accounted for as a reorganization of entities
under common control, with the acquired assets and liabilities
thereof consolidated into Shanda
Games' financial statements at their carrying values (book
values). The excess of the purchase price over the net book
value of the businesses acquired was recorded in the Company's
consolidated balance sheet at the date of the Transaction in a
manner similar to a dividend through a charge to retained earnings,
with the residual amount being recorded to appropriate components
of equity.
Pursuant to applicable U.S. GAAP principles, the Transaction
constituted a "change in reporting entity" for which retrospective
consolidation of the commonly controlled businesses is required for
all historical periods since the inception of common control by
Shanda Interactive. Accordingly, Shanda Games' unaudited consolidated financial
information has been prepared as if the acquired businesses had
been part of Shanda Games for all
periods presented. Given the acquired businesses are part of
Shanda Games' single vertically
integrated business model and will not be evaluated on a separate
basis internally for performance measurement, the Company's online
game business continues to be presented as a single operating
segment.
Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with
United States (U.S.) generally
accepted accounting principles (GAAP), this earnings release
contains non-GAAP financial numbers including non-GAAP gross
profit, non-GAAP operating income, non-GAAP net income attributable
to the Company's shareholders and non-GAAP earnings per share
data.
The non-GAAP financial measures disclosed by the Company exclude
share-based compensation, amortization of acquisition-related
intangible assets, and the related income tax effects. These
non-GAAP measures are not in accordance with, or an alternative
for, measures prepared in accordance with generally accepted
accounting principles and may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures
are not based on any comprehensive set of accounting rules or
principles. Shanda Games believes that non-GAAP measures have
limitations in that they do not reflect all of the amounts
associated with Shanda Games'
results of operations as determined in accordance with GAAP and
that these measures should only be used to evaluate the Company's
results of operations in conjunction with the corresponding GAAP
measures.
Shanda Games believes that the
presentation of non-GAAP financial measures when shown in
conjunction with the corresponding GAAP measures provides useful
information to investors and management regarding financial and
business trends relating to its financial condition and results of
operations. Shanda Games' management also believes that the
non-GAAP financial measures are appropriate for period to period
comparisons in the Company's budget, planning and evaluation
processes. From time to time in the future, there may be
other items that Shanda Games may
exclude in reviewing its financial results.
Safe Harbor Statement
This announcement contains forward-looking statements.
These statements are made under the "safe harbor" provisions
of the U.S. Private Securities Litigation Reform Act of 1995.
Statements in this announcement that are not historical
facts, including but not limited to statements regarding the
long-term growth of the Company; the expansion into mobile games;
the introduction and potential success of new MMO game titles
including but not limited to "Final Fantasy XIV" and "Dungeon
Striker"; and the expansion into global market represent only the
Company's current expectations, assumptions, estimates and
projections and are forward-looking statements. These
forward-looking statements involve various risks and uncertainties.
Important risks and uncertainties that could cause the
Company's actual results to be materially different from
expectations include but are not limited to the risk that the
Company is unable to launch, the games the Company intends to
release; such games and any related expansion packs are not well
received by users; the games fail to meet the expectations of end
users; the games that the Company operates overseas or has licensed
to partners globally are not well received by end users in these
countries; the Company fails to execute its mobile strategy and the
Company fails to deliver long-term growth, as well as the risks set
forth in the Company's filings with the U.S. Securities and
Exchange Commission, including the Company's annual report on Form
20-F. The Company does not undertake any obligation to update
any forward-looking statement, except as required under applicable
law.
About Shanda Games
Shanda Games Limited (NASDAQ: GAME) is a leading online game
developer, operator and publisher in China. Shanda Games offers a diversified game
portfolio, which includes some of the most popular massively
multiplayer online (MMO) games and mobile games in China and in overseas markets, targeting a
large and diverse community of users. Shanda Games manages and operates online games
that are developed in-house, co-developed with world-leading game
developers, acquired through investments or licensed from third
parties. For more information about Shanda Games, please visit
http://www.ShandaGames.com.
Contact
Shanda Games Limited:
Ellen Chiu, Investor Relations
Director
Maggie Zhou, Investor Relations
Associate Director
Phone: +86-21-5050-4740 (Shanghai)
Email: IR@ShandaGames.com
Christensen:
Christian Arnell
Phone: +86-10-5900-1548 (China)
Email: carnell@ChristensenIR.com
Linda Bergkamp
Phone: +1-480-614-3004 (U.S.A.)
Email: lbergkamp@ChristensenIR.com
SHANDA GAMES
LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in millions, except
for share and per share data)
|
|
|
December 31
|
|
September
30
|
|
December
31
|
|
2012
(1)
|
|
2013
|
|
2013
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
2,132.4
|
|
1,726.3
|
|
877.6
|
|
143.9
|
Restricted
cash
|
1.0
|
|
-
|
|
4.5
|
|
0.7
|
Short-term
investments
|
1,663.3
|
|
899.5
|
|
1,525.6
|
|
250.2
|
Marketable
securities
|
7.2
|
|
-
|
|
-
|
|
-
|
Accounts receivable,
net of allowance for
doubtful accounts
|
107.5
|
|
228.9
|
|
193.3
|
|
31.8
|
Accounts receivable
due from related parties
|
89.1
|
|
30.8
|
|
38.1
|
|
6.2
|
Deferred licensing
fees and related costs
|
7.5
|
|
11.2
|
|
11.1
|
|
1.8
|
Prepayments and other
current assets
|
193.2
|
|
177.4
|
|
237.9
|
|
39.0
|
Other receivables due
from related parties
|
2,901.4
|
|
58.3
|
|
71.2
|
|
11.7
|
Deferred tax
assets
|
79.7
|
|
97.8
|
|
100.1
|
|
16.5
|
Total current
assets
|
7,182.3
|
|
3,230.2
|
|
3,059.4
|
|
501.8
|
|
|
|
|
|
|
|
|
Time deposits with
maturity over one year
|
-
|
|
-
|
|
723.0
|
|
118.6
|
Investment in
affiliated companies
|
184.1
|
|
202.5
|
|
201.7
|
|
33.1
|
Property and
equipment
|
262.1
|
|
207.0
|
|
191.0
|
|
31.3
|
Intangible
assets
|
579.8
|
|
481.6
|
|
428.9
|
|
70.3
|
Goodwill
|
329.2
|
|
298.4
|
|
299.7
|
|
49.2
|
Long-term
deposits
|
55.6
|
|
70.6
|
|
31.5
|
|
5.2
|
Other long term
assets
|
202.4
|
|
170.2
|
|
160.8
|
|
26.4
|
Non-current deferred
tax assets
|
21.0
|
|
32.7
|
|
31.4
|
|
5.1
|
Total
assets
|
8,816.5
|
|
4,693.2
|
|
5,127.4
|
|
841.0
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term
borrowings
|
1,668.8
|
|
-
|
|
1,567.9
|
|
257.2
|
Accounts
payable
|
60.1
|
|
80.8
|
|
85.2
|
|
14.0
|
Accounts payable due
to related parties
|
40.1
|
|
18.3
|
|
20.7
|
|
3.5
|
Licensing fees
payable
|
160.6
|
|
179.0
|
|
175.1
|
|
28.7
|
Taxes
payable
|
191.1
|
|
157.8
|
|
138.3
|
|
22.7
|
Deferred
revenue
|
341.8
|
|
322.6
|
|
365.4
|
|
59.9
|
Other payables and
accruals
|
644.5
|
|
449.7
|
|
444.1
|
|
72.8
|
Other payables due to
related parties
|
990.4
|
|
2,730.5
|
|
870.3
|
|
142.7
|
Dividend
payable
|
11.5
|
|
8.5
|
|
4.7
|
|
0.8
|
Deferred tax
liabilities
|
53.6
|
|
45.0
|
|
61.7
|
|
10.0
|
Total current
liabilities
|
4,162.5
|
|
3,992.2
|
|
3,733.4
|
|
612.3
|
|
|
|
|
|
|
|
|
Long-term
borrowings
|
-
|
|
-
|
|
335.3
|
|
55.0
|
Long-term
liabilities
|
26.0
|
|
30.0
|
|
33.0
|
|
5.4
|
Non-current deferred
tax liabilities
|
102.4
|
|
84.5
|
|
76.9
|
|
12.6
|
Non-current deferred
revenue
|
37.8
|
|
34.9
|
|
29.5
|
|
4.9
|
Total
liabilities
|
4,328.7
|
|
4,141.6
|
|
4,208.1
|
|
690.2
|
Redeemable
non-controlling interests
|
14.0
|
|
14.0
|
|
14.0
|
|
2.4
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
outstanding
|
540,947,314
|
|
536,118,676
|
|
536,608,446
|
|
536,608,446
|
ADS equivalent
outstanding
|
270,473,657
|
|
268,059,338
|
|
268,304,223
|
|
268,304,223
|
|
|
|
|
|
|
|
|
Ordinary shares
(US$0.01 par value)
|
39.7
|
|
39.4
|
|
39.4
|
|
6.5
|
Additional paid-in
capital
|
1,651.0
|
|
5.0
|
|
9.5
|
|
1.6
|
Statutory
reserves
|
161.0
|
|
165.7
|
|
168.2
|
|
27.6
|
Accumulated other
comprehensive loss
|
(38.4)
|
|
(50.5)
|
|
(24.3)
|
|
(4.0)
|
Retained
earnings
|
2,607.2
|
|
72.5
|
|
402.2
|
|
65.9
|
Total Shanda Games
Limited shareholders'
equity
|
4,420.5
|
|
232.1
|
|
595.0
|
|
97.6
|
Non-controlling
interests
|
53.3
|
|
305.5
|
|
310.3
|
|
50.8
|
Total shareholder's
equity
|
4,473.8
|
|
537.6
|
|
905.3
|
|
148.4
|
Total liabilities and
shareholders' equity
|
8,816.5
|
|
4,693.2
|
|
5,127.4
|
|
841.0
|
|
Note:
(1) Amounts presented
revised for all historical periods to reflect the acquisition of
certain commonly controlled businesses from the Company's parent as
if the acquisition had happened as of the beginning of the earliest
period presented. Please refer to the "Note to the Financial
Information" section in this press release for further
information.
|
|
SHANDA GAMES
LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in millions, except
for share and per share data)
|
|
|
Three months
ended
|
|
December 31
2012 (1)
|
|
September 30
2013
|
|
December 31
2013
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net
revenues:
|
|
|
|
|
|
|
|
MMO game revenues
(2)
|
1,045.3
|
|
959.8
|
|
898.5
|
|
147.4
|
Mobile game revenues
(2)
|
8.2
|
|
153.0
|
|
120.9
|
|
19.8
|
Other revenues
(2)
|
41.7
|
|
11.9
|
|
9.9
|
|
1.6
|
Total net
revenues
|
1,095.2
|
|
1,124.7
|
|
1,029.3
|
|
168.8
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
(257.5)
|
|
(322.6)
|
|
(255.9)
|
|
(41.9)
|
Gross
profit
|
837.7
|
|
802.1
|
|
773.4
|
|
126.9
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Product
development
|
(186.3)
|
|
(179.2)
|
|
(186.1)
|
|
(30.5)
|
Sales and
marketing
|
(91.1)
|
|
(104.5)
|
|
(121.5)
|
|
(19.9)
|
General and
administrative
|
(88.2)
|
|
(102.8)
|
|
(67.2)
|
|
(11.1)
|
Goodwill
impairment
|
-
|
|
(30.8)
|
|
-
|
|
-
|
Settlement of gain
contingency with former
shareholder
|
-
|
|
59.9
|
|
-
|
|
-
|
Total operating
expenses
|
(365.6)
|
|
(357.4)
|
|
(374.8)
|
|
(61.5)
|
|
|
|
|
|
|
|
|
Income from
operations
|
472.1
|
|
444.7
|
|
398.6
|
|
65.4
|
|
|
|
|
|
|
|
|
Interest income,
net
|
23.3
|
|
20.7
|
|
3.6
|
|
0.6
|
Government financial
incentives
|
56.3
|
|
48.6
|
|
49.1
|
|
8.1
|
Other income
(expense), net
|
(36.1)
|
|
15.2
|
|
(10.8)
|
|
(1.9)
|
Income before income
tax expense and equity
in loss of affiliated
companies
|
515.6
|
|
529.2
|
|
440.5
|
|
72.2
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(148.7)
|
|
(104.6)
|
|
(104.5)
|
|
(17.1)
|
Income from
continuing operations, net of
tax
|
366.9
|
|
424.6
|
|
336.0
|
|
55.1
|
Equity in loss of
affiliated companies
|
(8.0)
|
|
(0.1)
|
|
(2.0)
|
|
(0.3)
|
Net income
|
358.9
|
|
424.5
|
|
334.0
|
|
54.8
|
Net (income) / loss
attributable to
non-controlling interests
|
(1.5)
|
|
(25.6)
|
|
1.3
|
|
0.2
|
Net income
attributable to the Company's
shareholders
|
357.4
|
|
398.9
|
|
335.3
|
|
55.0
|
|
|
|
|
|
|
|
|
Earnings per ordinary
share
|
|
|
|
|
|
|
|
Basic
|
0.66
|
|
0.75
|
|
0.63
|
|
0.10
|
Diluted
|
0.66
|
|
0.75
|
|
0.62
|
|
0.10
|
|
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
Basic
|
1.32
|
|
1.50
|
|
1.26
|
|
0.20
|
Diluted
|
1.32
|
|
1.50
|
|
1.24
|
|
0.20
|
|
|
|
|
|
|
|
|
Weighted average
ordinary shares outstanding
|
|
|
|
|
|
|
|
Basic
|
542,570,995
|
|
535,156,207
|
|
536,355,713
|
|
536,355,713
|
Diluted
|
542,579,324
|
|
536,678,693
|
|
537,240,907
|
|
537,240,907
|
|
|
|
|
|
|
|
|
Weighted average ADS
outstanding
|
|
|
|
|
|
|
|
Basic
|
271,285,498
|
|
267,578,104
|
|
268,177,857
|
|
268,177,857
|
Diluted
|
271,289,662
|
|
268,339,347
|
|
268,620,453
|
|
268,620,453
|
|
|
|
|
|
|
|
|
Reconciliation from
non-GAAP measures to GAAP measures
|
|
Non-GAAP gross
profit
|
858.6
|
|
818.3
|
|
789.6
|
|
129.6
|
Intangible asset
amortization arising from
acquisitions
|
(20.9)
|
|
(15.8)
|
|
(15.8)
|
|
(2.6)
|
Share-based
compensation cost
|
0.0
|
|
(0.4)
|
|
(0.4)
|
|
(0.1)
|
GAAP gross
profit
|
837.7
|
|
802.1
|
|
773.4
|
|
126.9
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income
|
516.0
|
|
483.1
|
|
432.9
|
|
71.1
|
Intangible asset
amortization arising from
acquisitions
|
(31.7)
|
|
(27.5)
|
|
(25.4)
|
|
(4.2)
|
Share-based
compensation cost
|
(12.2)
|
|
(10.9)
|
|
(8.9)
|
|
(1.5)
|
GAAP operating
income
|
472.1
|
|
444.7
|
|
398.6
|
|
65.4
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to the
Company's
shareholders
|
393.8
|
|
429.0
|
|
361.6
|
|
59.4
|
Intangible asset
amortization arising from
acquisitions
|
(31.7)
|
|
(27.5)
|
|
(25.4)
|
|
(4.2)
|
Share-based
compensation cost
|
(12.2)
|
|
(10.9)
|
|
(8.9)
|
|
(1.5)
|
Income tax
effect
|
7.0
|
|
5.7
|
|
5.4
|
|
0.9
|
Intangible asset
amortization arising from
acquisitions attributable to
non-controlling
interests
|
0.5
|
|
2.6
|
|
2.6
|
|
0.4
|
GAAP net income
attributable to the
Company's
shareholders
|
357.4
|
|
398.9
|
|
335.3
|
|
55.0
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per share
|
0.73
|
|
0.80
|
|
0.67
|
|
0.11
|
Non-GAAP expense per
share
|
(0.07)
|
|
(0.05)
|
|
(0.05)
|
|
(0.01)
|
GAAP diluted earnings
per share
|
0.66
|
|
0.75
|
|
0.62
|
|
0.10
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
1.46
|
|
1.60
|
|
1.34
|
|
0.22
|
Non-GAAP expense per
ADS
|
(0.14)
|
|
(0.10)
|
|
(0.10)
|
|
(0.02)
|
GAAP diluted earnings
per ADS
|
1.32
|
|
1.50
|
|
1.24
|
|
0.20
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of intangible asset amortization arising from
acquisitions included in:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
(20.9)
|
|
(15.8)
|
|
(15.8)
|
|
(2.6)
|
Product
development
|
(6.9)
|
|
(7.9)
|
|
(7.9)
|
|
(1.3)
|
Sales and
marketing
|
(1.4)
|
|
(1.4)
|
|
(1.2)
|
|
(0.2)
|
General and
administrative
|
(2.5)
|
|
(2.4)
|
|
(0.5)
|
|
(0.1)
|
Total
|
(31.7)
|
|
(27.5)
|
|
(25.4)
|
|
(4.2)
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of share-based compensation cost included in:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
-
|
|
(0.4)
|
|
(0.4)
|
|
(0.1)
|
Product
development
|
(5.2)
|
|
(1.5)
|
|
(2.9)
|
|
(0.5)
|
Sales and
marketing
|
0.1
|
|
(0.1)
|
|
(0.1)
|
|
-
|
General and
administrative
|
(7.1)
|
|
(8.9)
|
|
(5.5)
|
|
(0.9)
|
Total
|
(12.2)
|
|
(10.9)
|
|
(8.9)
|
|
(1.5)
|
|
|
|
|
|
|
|
|
Notes:
(1) Amounts presented
revised for all historical periods to reflect the acquisition of
certain commonly controlled businesses from the Company's parent as
if the acquisition had happened as of the beginning of the earliest
period presented. Please refer to the "Note to the Financial
Information" section in this press release for further
information.
|
|
(2) Starting with the
first quarter of 2013, the Company adjusted the presentation of its
financial statements in order to provide investors with a better
understanding of the Company's changing business. Previously, the
Company reported online game revenues derived in China (which
included revenues from both MMO games and mobile games) and other
revenues as its two principal revenue categories. Three revenue
categories are now being reported. These include MMO game revenues,
mobile game revenues, and other revenues. Each of these three
categories includes revenues derived inside and outside China.
Prior period amounts reported under the pre-Q1 2013 classifications
have been reclassified to conform to the current
presentation.
|
SHANDA GAMES
LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in millions, except
for share and per share data)
|
|
|
Twelve months
ended
|
|
December
31
2012
(1)
|
|
December
31
2013
|
|
RMB
|
|
RMB
|
|
US$
|
Net
revenues:
|
|
|
|
|
|
MMO game revenues
(2)
|
4,561.4
|
|
3,806.3
|
|
624.3
|
Mobile game revenues
(2)
|
10.2
|
|
482.2
|
|
79.1
|
Other revenues
(2)
|
147.0
|
|
56.2
|
|
9.2
|
Total net
revenues
|
4,718.6
|
|
4,344.7
|
|
712.6
|
|
|
|
|
|
|
Cost of
revenues
|
(1,155.8)
|
|
(1,135.8)
|
|
(186.3)
|
Gross
profit
|
3,562.8
|
|
3,208.9
|
|
526.3
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Product
development
|
(712.3)
|
|
(714.1)
|
|
(117.1)
|
Sales and
marketing
|
(317.6)
|
|
(447.5)
|
|
(73.3)
|
General and
administrative
|
(412.9)
|
|
(348.5)
|
|
(57.2)
|
Goodwill
impairment
|
-
|
|
(30.8)
|
|
(5.1)
|
Settlement of gain
contingency with former
shareholder
|
-
|
|
59.9
|
|
9.8
|
Total operating
expenses
|
(1,442.8)
|
|
(1,481.0)
|
|
(242.9)
|
|
|
|
|
|
|
Income from
operations
|
2,120.0
|
|
1,727.9
|
|
283.4
|
Interest income,
net
|
106.1
|
|
77.7
|
|
12.7
|
Government financial
incentives
|
183.9
|
|
159.4
|
|
26.1
|
Other income
(expense), net
|
(54.9)
|
|
(7.2)
|
|
(1.1)
|
Income before income
tax expense and equity in loss
of affiliated
companies
|
2,355.1
|
|
1,957.8
|
|
321.1
|
|
|
|
|
|
|
Income tax
expense
|
(545.5)
|
|
(322.3)
|
|
(52.9)
|
Income from
continuing operations, net of
tax
|
1,809.6
|
|
1,635.5
|
|
268.2
|
Equity in loss of
affiliated companies
|
(21.0)
|
|
(7.5)
|
|
(1.2)
|
Net income
|
1,788.6
|
|
1,628.0
|
|
267.0
|
Net income
attributable to non-controlling interests
|
(23.2)
|
|
(40.2)
|
|
(6.6)
|
Net income
attributable to the Company's
shareholders
|
1,765.4
|
|
1,587.8
|
|
260.4
|
|
|
|
|
|
|
Earnings per ordinary
share
|
|
|
|
|
|
Basic
|
3.18
|
|
2.96
|
|
0.49
|
Diluted
|
3.18
|
|
2.95
|
|
0.48
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
Basic
|
6.36
|
|
5.92
|
|
0.98
|
Diluted
|
6.36
|
|
5.90
|
|
0.96
|
|
|
|
|
|
|
Weighted average
ordinary shares outstanding
|
|
|
|
|
|
Basic
|
554,813,612
|
|
536,790,221
|
|
536,790,221
|
Diluted
|
554,842,073
|
|
537,395,413
|
|
537,395,413
|
|
|
|
|
|
|
Weighted average ADS
outstanding
|
|
|
|
|
|
Basic
|
277,406,806
|
|
268,395,110
|
|
268,395,110
|
Diluted
|
277,421,037
|
|
268,697,707
|
|
268,697,707
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
non-GAAP measures to GAAP measures
|
Non-GAAP gross
profit
|
3,652.1
|
|
3,272.8
|
|
536.7
|
Intangible asset
amortization arising from acquisitions
|
(89.0)
|
|
(63.1)
|
|
(10.3)
|
Share-based
compensation cost
|
(0.3)
|
|
(0.8)
|
|
(0.1)
|
GAAP gross
profit
|
3,562.8
|
|
3,208.9
|
|
526.3
|
|
|
|
|
|
|
Non-GAAP operating
income
|
2,300.5
|
|
1,873.8
|
|
307.4
|
Intangible asset
amortization arising from acquisitions
|
(138.0)
|
|
(107.9)
|
|
(17.7)
|
Share-based
compensation cost
|
(42.5)
|
|
(38.0)
|
|
(6.3)
|
GAAP operating
income
|
2,120.0
|
|
1,727.9
|
|
283.4
|
|
|
|
|
|
|
Non-GAAP net income
attributable to the Company's
shareholders
|
1,910.0
|
|
1,700.8
|
|
279.0
|
Intangible asset
amortization arising from acquisitions
|
(138.0)
|
|
(107.9)
|
|
(17.7)
|
Share-based
compensation cost
|
(42.5)
|
|
(38.0)
|
|
(6.3)
|
Income tax
effect
|
31.9
|
|
22.7
|
|
3.7
|
Intangible asset
amortization arising from acquisitions
attributable to non-controlling
interests
|
4.0
|
|
10.2
|
|
1.7
|
GAAP net income
attributable to the Company's
shareholders
|
1,765.4
|
|
1,587.8
|
|
260.4
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per share
|
3.44
|
|
3.16
|
|
0.52
|
Non-GAAP expense per
share
|
(0.26)
|
|
(0.21)
|
|
(0.04)
|
GAAP diluted earnings
per share
|
3.18
|
|
2.95
|
|
0.48
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
6.88
|
|
6.32
|
|
1.04
|
Non-GAAP expense per
ADS
|
(0.52)
|
|
(0.42)
|
|
(0.08)
|
GAAP diluted earnings
per ADS
|
6.36
|
|
5.90
|
|
0.96
|
|
|
|
|
|
|
Supplemental
disclosure of intangible asset amortization arising from
acquisitions included in:
|
|
|
|
|
|
|
Cost of
revenues
|
(89.0)
|
|
(63.1)
|
|
(10.3)
|
Product
development
|
(27.5)
|
|
(31.5)
|
|
(5.2)
|
Sales and
marketing
|
(9.4)
|
|
(5.4)
|
|
(0.9)
|
General and
administrative
|
(12.1)
|
|
(7.9)
|
|
(1.3)
|
Total
|
(138.0)
|
|
(107.9)
|
|
(17.7)
|
|
|
|
|
|
|
Supplemental
disclosure of share-based compensation cost included in:
|
|
|
|
|
|
|
Cost of
revenues
|
(0.3)
|
|
(0.8)
|
|
(0.1)
|
Product
development
|
(20.1)
|
|
(12.1)
|
|
(2.0)
|
Sales and
marketing
|
(0.2)
|
|
(0.1)
|
|
-
|
General and
administrative
|
(21.9)
|
|
(25.0)
|
|
(4.2)
|
Total
|
(42.5)
|
|
(38.0)
|
|
(6.3)
|
|
Notes:
(1) Amounts presented
revised for all historical periods to reflect the acquisition of
certain commonly controlled businesses from the Company's parent as
if the acquisition had happened as of the beginning of the earliest
period presented. Please refer to the "Note to the Financial
Information" section in this press release for further
information.
|
(2) Starting with the
first quarter of 2013, the Company adjusted the presentation of its
financial statements in order to provide investors with a better
understanding of the Company's changing business. Previously, the
Company reported online game revenues derived in China (which
included revenues from both MMO games and mobile games) and other
revenues as its two principal revenue categories. Three revenue
categories are now being reported. These include MMO game revenues,
mobile game revenues, and other revenues. Each of these three
categories includes revenues derived inside and outside China.
Prior period amounts reported under the pre-Q1 2013 classifications
have been reclassified to conform to the current
presentation.
|
SHANDA GAMES
LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in millions, except
for share and per share data)
|
|
|
Twelve months
ended
|
|
December
31
2012
(1)
|
|
December
31
2013
|
|
RMB
|
|
RMB
|
|
US$
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
1,788.6
|
|
1,628.0
|
|
267.0
|
Adjustments
for:
|
-
|
|
-
|
|
-
|
Share-based
compensation expenses
|
42.5
|
|
38.0
|
|
6.2
|
Depreciation and
amortization
|
297.7
|
|
317.0
|
|
52.0
|
Other
|
43.5
|
|
1.5
|
|
0.2
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
Prepayments and
licensing fees and royalties
|
13.8
|
|
(10.7)
|
|
(1.8)
|
Others
|
104.6
|
|
(275.2)
|
|
(45.0)
|
Net cash provided by
operating activities
|
2,290.7
|
|
1,698.6
|
|
278.6
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchase of property,
equipment and intangible assets, net
|
(59.3)
|
|
(48.0)
|
|
(7.9)
|
Acquisitions (net of
cash acquired) and purchase of equity investments
|
(50.6)
|
|
(1,319.2)
|
|
(216.4)
|
(Increase) / decrease
in short-term investments
|
591.4
|
|
(585.9)
|
|
(96.1)
|
(Increase) / decrease
in loan receivable and other receivables due from related
parties
|
(1,413.3)
|
|
1,734.8
|
|
284.5
|
Others
|
(11.3)
|
|
13.1
|
|
2.2
|
Net cash (used in)
investing activities
|
(943.1)
|
|
(205.2)
|
|
(33.7)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Payment for seller
financing from Shanda Interactive on Shengzhan and
Shengjing transactions
|
-
|
|
(1,839.5)
|
|
(301.7)
|
Repurchase of common
stock
|
(255.4)
|
|
(64.1)
|
|
(10.5)
|
Proceeds from loan
borrowings and other payables due to related parties
|
3,960.5
|
|
1,991.6
|
|
326.7
|
Repayment of loan
borrowings and other payables due to related parties
|
(2,373.5)
|
|
(2,694.5)
|
|
(441.9)
|
Dividends
paid
|
(1,810.0)
|
|
(6.6)
|
|
(1.1)
|
Net distribution to
Shanda Interactive
|
(619.3)
|
|
(341.4)
|
|
(56.0)
|
Others
|
(19.9)
|
|
199.2
|
|
32.6
|
Net cash (used in)
financing activities
|
(1,117.6)
|
|
(2,755.3)
|
|
(451.9)
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
6.6
|
|
7.1
|
|
1.1
|
Net decrease in cash
and cash equivalents
|
236.6
|
|
(1,254.8)
|
|
(205.9)
|
Cash and cash
equivalents, beginning of period
|
1,895.8
|
|
2,132.4
|
|
349.8
|
Cash and cash
equivalents, end of period
|
2,132.4
|
|
877.6
|
|
143.9
|
|
Note:
(1) Amounts presented
revised for all historical periods to reflect the acquisition of
certain commonly controlled businesses from the Company's parent as
if the acquisition had happened as of the beginning of the earliest
period presented. Please refer to the "Note to the Financial
Information" section in this press release for further
information.
|
SOURCE Shanda Games Limited