BEIJING, Feb. 6, 2012 /PRNewswire-Asia/ -- Changyou.com
Limited ("Changyou" or the "Company") (NASDAQ: CYOU), a leading
online game developer and operator in China, today announced its unaudited financial
results for the fourth quarter and fiscal year ended December 31, 2011.
(Logo: http://photos.prnewswire.com/prnh/20090402/CNTH020LOGO
)
Fourth Quarter 2011
Highlights(1)
- Total revenues reached a record US$137.7
million and increased 7% quarter-over-quarter and 39%
year-over-year. Excluding revenues from the recently acquired
game information portal operated through the 17173.com Website (the
"17173 Business"), total revenues increased 5% quarter-over-quarter
and 37% year-over-year to US$125.2
million and exceeded the high end of the Company's guidance
by US$0.2 million.
- Net income attributable to Changyou.com Limited was
US$64.3 million, or US$1.21 per fully diluted ADS(2). Net income
attributable to Changyou.com Limited increased 4%
quarter-over-quarter and 20% year-over-year. Excluding net income
from the 17173 Business, net income attributable to Changyou.com
Limited increased 3% quarter-over-quarter and 14% year-over-year to
US$54.3 million, or US$1.02 per fully diluted ADS.
- Non-GAAP(3) net income attributable to Changyou.com Limited was
US$71.2 million, or US$1.33 per fully diluted ADS. Non-GAAP net
income attributable to Changyou.com Limited increased 13%
quarter-over-quarter and 28% year-over-year. Excluding non-GAAP net
income from the 17173 Business, non-GAAP net income attributable to
Changyou.com Limited increased 13% quarter-over-quarter and 23%
year-over-year to US$61.0 million,
and exceeded the high end of the Company's guidance by US$1.0 million. Excluding non-GAAP net income
from the 17173 Business, non-GAAP fully diluted earnings per ADS
attributable to Changyou.com Limited were US$1.14.
- Aggregate registered accounts for the Company's games(4),
excluding the Web-based game of Shenzhen 7Road Technology Co., Ltd. ("7Road"),
increased 10% quarter-over-quarter and 58% year-over-year to 175.5
million.
- Aggregate peak concurrent users ("PCU") for the Company's
games, excluding 7Road's Web-based game, increased 2%
quarter-over-quarter and 14% year-over-year to 1.17 million.
- Aggregate active paying accounts ("APA") for the Company's
games, excluding 7Road's Web-based game, increased 5%
quarter-over-quarter and 18% year-over-year to 3.17 million.
- Average revenue per active paying account ("ARPU") for the
Company's games, excluding 7Road's Web-based game, increased 2%
quarter-over-quarter and 1% year-over-year to RMB221.
- On December 15, 2011, the Company
completed the acquisition from Sohu of the 17173 Business, which
operates a leading game information portal in China.
(1) On December 15, 2011, Changyou
completed the acquisition from Sohu.com Inc ("Sohu") of the 17173
Business. As Changyou and the 17173 Business were under common
control by Sohu both before and after the closing of the
acquisition, in accordance with ASC 805-50, Changyou's unaudited
consolidated financial information reported in this press release,
unless otherwise stated, has been prepared as if the 17173 Business
had been owned and operated by Changyou throughout the periods
presented. For unaudited financial information before the inclusion
in Changyou's unaudited consolidated financial statements of the
results of operations of the 17173 Business, please refer to the
accompanying "Supplementary Notes - Condensed Consolidated
Statement of Operations" and "Supplementary Notes - Reconciliations
of Non-GAAP Results of Operation Measures to the Nearest Comparable
GAAP Measures."
(2) Each American depositary share ("ADS") represents two Class A
ordinary shares.
(3) Beginning in the fourth quarter of 2011, the Company revised
its non-GAAP reporting methodology to exclude goodwill impairment,
impairment of intangibles via acquisitions of businesses and
related tax impact, non-cash tax benefits from excess tax
deductions related to share-based awards and income from the
reversal of contingent consideration previously recorded for
acquisitions, in addition to its historical practice of excluding
share-based compensation expense from non-GAAP results.
Explanation of the Company's non-GAAP financial measures and
related reconciliations to GAAP financial measures are included in
the accompanying "Non-GAAP Disclosure" and "Reconciliations of
Non-GAAP Results of Operation Measures to the Nearest Comparable
GAAP Measures."
(4) Excludes Web-based games of 7Road and comprises the following
games operated in China:
Tian Long Ba Bu ("TLBB"),
Duke of Mount Deer ("DMD"), Blade
Online, Blade Hero 2, Da Hua Shui Hu, Zhong
Hua Ying Xiong, Immortal Faith, and Legend of Ancient
World.
Fiscal Year 2011 Highlights
- Total revenues reached a record US$484.6
million, an increase of 37% year-over-year. Excluding
revenues from the 17173 Business, total revenues increased 36%
year-over-year to US$446.4
million.
- Net income attributable to Changyou.com Limited was
US$245.5 million, or US$4.61 per fully diluted ADS. Net income
attributable to Changyou.com Limited increased 26% year-over-year.
Excluding net income from the 17173 Business, net income
attributable to Changyou.com Limited increased 22% year-over-year
to US$214.2 million, or US$4.02 per fully diluted ADS.
- Non-GAAP net income attributable to Changyou.com Limited
increased 26% year-over-year to US$256.9
million, or US$4.81 per fully
diluted ADS. Excluding non-GAAP net income of 17173 Business,
non-GAAP net income attributable to Changyou.com Limited increased
23% year-over-year to US$225.0
million, or US$4.21 per fully
diluted ADS.
Mr. Tao Wang, Changyou's chief executive officer, commented,
"Tian Long Ba Bu, or TLBB, continues
to be a winner for us, based on its loyal fan base and our ability
to deliver high-quality innovations that keep the game attractive.
For TLBB, our latest major expansion pack, TLBB3, was a big factor
in our record-breaking results for the fourth quarter and for the
full year. DDTank, the flagship game of our new subsidiary 7Road,
continues to be one of the top-ranked Web-based games on game
portals and social networking sites in China. During the year, we completed a
strategic review and implemented a number of changes reflecting the
diversity of our business going forward, with separate teams and
roadmaps for MMO games, Web-based games, mobile and social games,
user platforms, and the international market. We expect these
expanded strategies to carry us into the next phase as we evolve
reflecting new story lines, new technology and changing user
preferences for online games in China and the world."
Mr. Dewen Chen, president and
chief operating officer, continued, "Late in the year, we
jumpstarted our platform-based strategy with the acquisition of
17173.com, one of China's leading
portals for news and information about online games. We plan to
invest in 17173 to make it even more user friendly by adding
services and access to a variety of games designed for different
platforms and user communities. We regard 17173 as both a brand
builder and a building block to developing our platform business,
offering a one-stop-shop for gamers of all types, which will help
to deepen and expand the Changyou community online."
Mr. Alex Ho, Changyou's chief
financial officer, added, "A strong fourth quarter helped to make
2011 a record-breaking year, in terms of total revenues and full
year non-GAAP net income. We were able to exceed our expectations
for the quarter. We owe this to the continuing strong performance
of our MMORPG business, which we expect will give us the cash flows
and financial leverage to execute our strategic plans. With a rich
cash reserve and a debt-free balance sheet, we are well-positioned
to invest in emerging opportunities in other fast-growing segments
of the industry and to enhance shareholder value over the long
term."
Fourth Quarter 2011 Operational
Results
The Company's operational results for the fourth quarter of
2011, which exclude those of 7Road's Web-based game, were as
follows:
- Aggregate registered accounts for the Company's games increased
10% quarter-over-quarter and 58% year-over-year to 175.5
million.
- Aggregate PCU for the Company's games increased 2%
quarter-over-quarter and 14% year-over-year to 1.17 million.
- Aggregate APA for the Company's games increased 5%
quarter-over-quarter and 18% year-over-year to 3.17 million.
- ARPU for the Company's games increased 2% quarter-over-quarter
and 1% year-over-year to RMB221,
which is consistent with the Company's intention to have ARPU
within a range that keeps the Company's games affordable for the
majority of Chinese game players.
7Road's operational results for the fourth quarter of 2011 were
as follows:
- Active accounts(5) for 7Road's game were 41.9 million, a
decrease of 11% quarter-over-quarter.
- Active charging accounts(6) for 7Road's game were 1.6 million,
and essentially flat quarter-over-quarter.
- Average revenue recognized per active charging accounts(7) for
7Road's game were RMB38, and was flat
quarter-over-quarter.
(5) Active accounts are defined as registered accounts that were
logged in at least once during the period.
(6) Active charging accounts are defined as the number of active
accounts that purchased virtual currency for use in the game during
the period.
(7) Average revenue recognized per active charging accounts is
defined as net revenues recognized by 7Road for the period divided
by the number of active charging accounts for the same period.
Basis of Presentation for Unaudited
Financial Results
On December 15, 2011, Changyou
completed the acquisition from Sohu of the 17173 Business. As
Changyou and the 17173 Business were under common control by Sohu
both before and after the acquisition, in accordance with ASC
805-50, Changyou's unaudited consolidated financial information
reported in this press release, unless otherwise stated, has been
prepared as if the 17173 Business had been owned and operated by
Changyou throughout the periods presented. Tables showing
Changyou's unaudited financial information before the inclusion of
the results of operations of the 17173 Business in Changyou's
unaudited consolidated financial statements are provided for
investors' reference in the accompanying "Supplementary Notes -
Condensed Consolidated Statements of Operations" and "Supplementary
Notes - Reconciliations of Non-GAAP Results of Operation Measures
to the Nearest Comparable GAAP Measures."
To enhance investors' overall understanding of Changyou's
current financial performance and prospects for the future and
consistent with the approach taken by other leading technology
companies, beginning in the fourth quarter of 2011, the Company
revised its non-GAAP reporting methodology to exclude goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact, non-cash tax benefits from
excess tax deductions related to share-based awards and income from
the reversal of contingent consideration previously recorded for
acquisitions, in addition to its historical practice of excluding
share-based compensation expense from non-GAAP results. Like
share-based compensation expense, goodwill impairment, impairment
of intangibles via acquisitions of businesses and the related tax
impact, non-cash tax benefits from excess tax deductions related to
share-based awards and income from the reversal of contingent
consideration previously recorded for acquisitions, cannot be
anticipated by management, and these expenses are not built into
the Company's annual budgets and quarterly forecasts, which
generally will be the basis for information Changyou provides to
analysts and investors as guidance for future operating
performance. In general, the monthly financial results for internal
reporting and any performance measure for commissions and bonuses
are based on non-GAAP financial measures that exclude share-based
compensation expense, goodwill impairment, impairment of
intangibles via acquisitions of businesses and the related tax
impact, non-cash tax benefits from excess tax deductions related to
share-based awards and income from the reversal of contingent
consideration previously recorded for acquisitions.
Fourth Quarter 2011 Unaudited Financial
Results
Revenues
Total revenues for the fourth quarter of 2011 increased 7%
quarter-over-quarter and 39% year-over-year to US$137.7 million. Excluding revenues from the
17173 Business, total revenues increased 5% quarter-over-quarter
and 37% year-over-year to US$125.2
million and exceeded the high end of the Company's guidance
by US$0.2 million.
Online game revenues, which include revenues from Changyou's
game operations and overseas licensing revenues and revenues from
7Road, increased 6% quarter-over-quarter and 34% year-over-year to
US$123.3 million. The increases were
mainly due to the growth and ongoing popularity of TLBB in
China.
Online advertising revenues, which consist of revenues from the
17173 Business, increased 28% quarter-over-quarter and 65%
year-over-year to US$12.4 million.
The increases were mainly due to higher advertising spending by
advertisers to promote the upcoming launch of new games in the
fourth quarter of 2011.
Other revenues, which consist of cinema advertising revenues,
were US$2.0 million, down 38%
quarter-over-quarter. The decrease was mainly due to the Company
streamlining its operations of the cinema advertising business in
the fourth quarter of 2011.
Gross profit
Gross profit and non-GAAP gross profit increased 6%
quarter-over-quarter and 30% year-over-year to US$116.7 million. Both gross margin and non-GAAP
gross margin were 85%, which was the same as for the third quarter
of 2011, compared with 90% in the fourth quarter of 2010.
Gross profit and non-GAAP gross profit of the online games
business increased 6% quarter-over-quarter and 29% year-over-year
to US$106.9 million. Both gross
margin and non-GAAP gross margin of the online games business were
87%, which was the same as for the third quarter of 2011, compared
with 90% in the fourth quarter of 2010. The year-over-year decline
in gross margin and non-GAAP gross margin of the online game
business were mainly due to higher bandwidth costs incurred for new
games and the hiring of game operation staff in the fourth quarter
of 2011.
Gross profit of the online advertising business increased 31%
quarter-over-quarter and 71% year-over-year to US$11.3 million. Non-GAAP gross profit of the
online advertising business increased 31% quarter-over-quarter and
70% year-over-year to US$11.4
million. Gross margin of the online advertising business was
91%, compared with 89% in the third quarter of 2011 and 88% in the
fourth quarter of 2010. Non-GAAP gross margin of the online
advertising business was 92%, compared with 90% in the third
quarter of 2011 and 89% in the fourth quarter of 2010. The
quarter-over-quarter and year-over-year increases in gross margin
and non-GAAP gross margin of the online advertising business were
mainly due to an increase in online advertising revenues in the
fourth quarter of 2011.
Gross loss and non-GAAP gross loss of other business were
US$1.6 million compared with
US$0.2 million in the third quarter
of 2011. The increases in gross loss and non-GAAP gross loss of
other business were mainly due to lower cinema advertising revenues
in the fourth quarter of 2011.
Operating expenses
Total operating expenses increased 15% quarter-over-quarter and
57% year-over-year to US$43.7
million, which included US$5.4
million of goodwill impairment and impairment of intangibles
via acquisitions of businesses. The goodwill impairment and
impairment of intangibles via acquisitions of businesses were
related to the cinema advertising business.
Product development expenses were US$16.0
million, an increase of 27% quarter-over-quarter and 18%
year-over-year. The quarter-over-quarter increase in product
development expenses was mainly due to the hiring of game engineers
and increased expenses related to royalties for licensed games in
the fourth quarter of 2011. The year-over-year increase in product
development expenses was mainly due to the hiring of game engineers
and a full quarter of product development expenses from 7Road,
offset by lower expenses related to royalties for licensed games in
the fourth quarter of 2011.
Sales and marketing expenses were US$12.5
million, a decrease of 29% quarter-over-quarter and an
increase of 35% year-over-year. The quarter-over-quarter decrease
in sales and marketing expenses was largely a result of a reduction
in advertising spending for DMD in the fourth quarter of 2011 after
the game's launch in the third quarter. The year-over-year increase
in sales and marketing expenses was mainly due to an increase in
headcount and higher advertising spending for the promotion of our
games in the fourth quarter of 2011.
General and administrative expenses were US$9.9 million, an increase of 29%
quarter-over-quarter and 95% year-over-year. The
quarter-over-quarter increase in general and administrative
expenses was mainly due to an increase in headcount and an increase
in bad debt expenses related to the cinema advertising business in
the fourth quarter of 2011. The year-over-year increase in general
and administrative expenses was mainly due to an increase in
headcount, a full quarter of general and administrative expenses
from 7Road and an increase in bad debt expenses related to the
cinema advertising business in the fourth quarter of 2011.
Operating profit
Operating profit increased 2% quarter-over-quarter and 18%
year-over-year to US$72.9 million.
Operating margin was 53%, compared with 56% in the third quarter of
2011 and 62% in the fourth quarter of 2010.
Non-GAAP operating profit increased 9% quarter-over-quarter and
25% year-over-year to US$79.8
million. Non-GAAP operating margin was 58%, compared with
57% in the third quarter of 2011 and 64% in the fourth quarter of
2010.
Net income
Net income increased 4% quarter-over-quarter and 22%
year-over-year to US$65.4 million.
Net margin was 48%, compared with 49% in the third quarter of 2011
and 54% in the fourth quarter of 2010.
Non-GAAP net income increased 12% quarter-over-quarter and 30%
year-over-year to US$72.3 million.
Non-GAAP net margin was 52%, compared with 50% in the third quarter
of 2011 and 56% in the fourth quarter of 2010.
Net income attributable to Changyou.com
Limited
Net income attributable to Changyou.com Limited increased 4%
quarter-over-quarter and 20% year-over-year to US$64.3 million. Fully diluted earnings per ADS
attributable to Changyou.com Limited were US$1.21, up from US$1.16 in the third quarter of 2011 and
US$1.00 in the fourth quarter of
2010. Net margin attributable to Changyou.com Limited was 47%,
compared with 48% in the third quarter of 2011 and 54% in the
fourth quarter of 2010.
Excluding net income from the 17173 Business, net income
attributable to Changyou.com Limited increased 3%
quarter-over-quarter and 14% year-over-year to US$54.3 million. Excluding net income from the
17173 Business, fully diluted earnings per ADS attributable to
Changyou.com Limited were US$1.02, up
from US$0.99 in the third quarter of
2011 and US$0.90 in the fourth
quarter of 2010. Excluding net income from the 17173 Business, net
margin attributable to Changyou.com Limited was 43%, compared with
44% in the third quarter of 2011 and 52% in the fourth quarter of
2010.
Non-GAAP net income attributable to Changyou.com Limited
increased 13% quarter-over-quarter and 28% year-over-year to
US$71.2 million. Non-GAAP fully
diluted earnings per ADS attributable to Changyou.com Limited were
US$1.33, up from US$1.18 in the third quarter of 2011 and
US$1.04 in the fourth quarter of
2010. Non-GAAP net margin attributable to Changyou.com Limited was
52%, compared with 49% in the third quarter of 2011 and 56% in the
fourth quarter of 2010.
Excluding non-GAAP net income from the 17173 Business, non-GAAP
net income attributable to Changyou.com Limited increased 13%
quarter-over-quarter and 23% year-over-year to US$61.0 million, and exceeded the high end of the
Company's guidance by US$1.0 million.
Excluding non-GAAP net income from the 17173 Business, non-GAAP
fully diluted earnings per ADS attributable to Changyou.com Limited
were US$1.14, up from US$1.01 in the third quarter of 2011 and
US$0.93 in the fourth quarter of
2010. Excluding non-GAAP net income from the 17173 Business,
non-GAAP net margin attributable to Changyou.com Limited was 49%,
compared with 45% in the third quarter of 2011 and 54% in the
fourth quarter of 2010.
Cash balances
As of December 31, 2011, Changyou
had a net cash balance of US$330.4
million, which decreased from US$458.6 million as of September 30, 2011 as a result of the Company
paying US$146.5 million in the fourth
quarter of 2011 for the acquisition of the 17173 Business and
paying US$62.8 million for the
progress payment of an office building under construction.
Operating cash flow for the fourth quarter of 2011 was a net inflow
of US$76.7 million.
Fiscal Year 2011 Unaudited Financial Results
Revenues
Total revenues in 2011 increased to US$484.6 million, up 37% year-over-year from
2010. Excluding revenues from the 17173 Business, total revenues
increased 36% year-over-year to US$446.4
million.
Online game revenues increased to US$435.5 million, up 33% year-over-year from
2010. The increases were mainly due to the ongoing popularity of
TLBB in China, the consolidation
of revenue from 7Road starting from June 1,
2011 and the launch of the new game DMD in 2011.
Online advertising revenues increased to US$38.2 million, up 42% year-over-year from 2010.
The increases were mainly due to advertisers doing more marketing
and promotions for the launch of a greater number of new games in
2011.
Other revenues were US$10.9
million, and reflect cinema advertising revenues from our
wholly-owned subsidiary, Shanghai Jing Mao Cultural Communications
Ltd. and its affiliate ("Jing Mao"),
which were consolidated into the Company's financial statements
commencing February 1, 2011.
Gross profit
Gross profit increased to US$417.1
million, up 30% from 2010. Non-GAAP gross profit increased
to US$417.3 million, up 30% from
2010. Both gross margin and non-GAAP gross margin were 86%,
compared with 91% in 2010.
Gross profit of the online games business increased to
US$385.7 million, up 30% from 2010.
Non-GAAP gross profit of the online games business increased to
US$385.8 million, up 30% from 2010.
Both gross margin and non-GAAP gross margin of the online games
business were 89%, compared with 91% in 2010. The decline in gross
margin was mainly due to higher bandwidth costs incurred for new
games and the hiring of game operation staff in 2011.
Gross profit of the online advertising business increased to
US$34.3 million, up 44% from 2010.
Non-GAAP gross profit of the online advertising business increased
to US$34.4 million, up 43% from 2010.
Gross margin of the online advertising business was 90%, compared
with 88% in 2010. Non-GAAP gross margin of the online advertising
business was 90%, compared with 89% in 2010. The increase in gross
margin was mainly due to an increase in online advertising revenues
in 2011.
Gross loss and non-GAAP gross loss of other business were
US$2.9 million.
Operating expenses
Total operating expenses were US$137.2
million, up 39% from 2010. Total operating expenses in 2011
included goodwill impairment, impairment of intangibles via
acquisitions of businesses of US$5.4
million for the cinema advertising business.
Product development expenses were US$52.2
million, up 31% from 2010. The increase in product
development expenses was mainly due to the hiring of more game
engineers in 2011 and the consolidation of product development
expenses from 7Road starting from June 1,
2011.
Sales and marketing expenses were US$49.9
million, up 27% from 2010. The increase in sales and
marketing expenses was mainly due to the hiring of more sales and
marketing professionals and higher advertising spending for the
promotion of new games in 2011.
General and administrative expenses were US$29.7 million, up 52% from 2010. The increase
in general and administrative expenses was mainly due to an
increase in headcount in 2011 and the consolidation of general and
administrative expenses from 7Road starting from June 1, 2011.
Operating profit
Operating profit was US$279.8
million, up 26% from 2010. Operating margin was 58%,
compared with 63% in 2010.
Non-GAAP operating profit was US$291.4
million, up 26% from 2010. Non-GAAP operating margin was
60%, compared with 66% in 2010.
Net income
Net income increased to US$248.0
million, up 27% from 2010. Net margin was 51%, compared with
55% in 2010.
Non-GAAP net income increased to US$259.5
million, up 27% from 2010. Net margin was 54%, compared with
58% in 2010.
Net income attributable to
Changyou.com Limited
Net income attributable to Changyou.com Limited was US$245.5 million, up 26% from 2010. Fully diluted
earnings per ADS attributable to Changyou.com Limited were
US$4.61, up from US$3.66 in 2010. Net margin attributable to
Changyou.com Limited was 51%, compared with 55% in 2010.
Excluding net income from the 17173 Business, net income
attributable to Changyou.com Limited increased 22% year-over-year
to US$214.2 million. Excluding net
income from the 17173 Business, fully diluted earnings per ADS
attributable to Changyou.com Limited were US$4.02, up from US$3.29 in 2010. Excluding net income from the
17173 Business, net margin attributable to Changyou.com Limited was
48%, compared with 53% in 2010.
Non-GAAP net income attributable to Changyou.com Limited was
US$256.9 million, up 26% from 2010.
Non-GAAP fully diluted earnings per ADS attributable to
Changyou.com Limited were US$4.81, up
from US$3.82 in 2010. Non-GAAP net
margin attributable to Changyou.com Limited was 53%, compared with
58% in 2010.
Excluding non-GAAP net income from the 17173 Business, non-GAAP
net income attributable to Changyou.com Limited increased 23%
year-over-year to US$225.0 million.
Excluding non-GAAP net income from the 17173 Business, non-GAAP
fully diluted earnings per ADS attributable to Changyou.com Limited
were US$4.21, up from US$3.43 in 2010. Excluding non-GAAP net income
from the 17173 Business, non-GAAP net margin attributable to
Changyou.com Limited was 50%, compared with 56% in 2010.
Other Business Developments in the Fourth Quarter of
2011
Changyou completes
acquisition of
the 17173 Business
On December 15, 2011, Changyou
completed the acquisition from Sohu of the 17173 Business for fixed
cash consideration of US$162.5
million.
Business Outlook
For the first quarter of 2012, Changyou expects:
- Total revenues to be between US$130.0
million and US$134.0 million, including online game revenues
of US$121.0 million to US$124.0
million and online advertising revenues of US$7.0 million to US$8.0 million.
- Non-GAAP net income attributable to Changyou.com Limited to be
between US$58.0 million and US$60.0
million.
- Non-GAAP fully diluted earnings per ADS attributable to
Changyou.com Limited to be between US$1.08
and US$1.12.
- Assuming no new grants of share-based awards, share-based
compensation expense to be between US$1.0
million and US$1.5 million, reducing fully diluted earnings
per ADS attributable to Changyou.com Limited by US$0.02 to US$0.03.
Non-GAAP Disclosure
Beginning in the fourth quarter of 2011, the Company revised its
non-GAAP reporting methodology to exclude goodwill impairment,
impairment of intangibles via acquisitions of businesses and the
related tax impact, non-cash tax benefits from excess tax
deductions related to share-based awards and income from the
reversal of contingent consideration previously recorded for
acquisitions, in addition to its historical practice of excluding
share-based compensation expense from non-GAAP results.
To supplement the unaudited consolidated financial information
prepared in accordance with United States Generally Accepted
Accounting Principles ("GAAP"), Changyou's management uses non-GAAP
measures of gross profit, operating profit, net income attributable
to Changyou.com Limited and diluted net income attributable to
Changyou.com Limited per ADS, which are adjusted from results based
on GAAP to exclude the compensation cost of share-based awards
granted, goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions. These measures should be considered in
addition to results prepared in accordance with GAAP, but should
not be considered a substitute for, or superior to, GAAP
results.
Changyou's management believes that excluding the share-based
compensation expense, goodwill impairment, impairment of
intangibles via acquisitions of businesses and the related tax
impact, non-cash tax benefits from excess tax deductions related to
share-based awards and income from the reversal of contingent
consideration previously recorded for acquisitions from its
non-GAAP financial measures is useful for itself and investors.
Further, the amount of share-based compensation expense, goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact, non-cash tax benefits from
excess tax deductions related to share-based awards and income from
the reversal of contingent consideration previously recorded for
acquisitions cannot be anticipated by management, and these
expenses are not built into the Company's annual budgets and
quarterly forecasts, which generally will be the basis for
information Changyou provides to analysts and investors as guidance
for future operating performance. As share-based compensation
expense, goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions does not involve subsequent cash outflow,
Changyou does not factor this in when evaluating and approving
expenditures or when determining the allocation of its resources to
its business operations. As a result, in general, the monthly
financial results for internal reporting and any performance
measure for commissions and bonuses are based on non-GAAP financial
measures that exclude share-based compensation expense, goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact, non-cash tax benefits from
excess tax deductions related to share-based awards and income from
the reversal of contingent consideration previously recorded for
acquisitions.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Changyou's current financial
performance and prospects for the future. A limitation of using
non-GAAP gross profit, operating profit, net income attributable to
Changyou.com Limited and diluted net income attributable to
Changyou.com Limited per ADS, excluding share-based compensation
expense, goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions, is that the share-based compensation
charge has been and will continue to be a significant recurring
expense in the Company's business for the foreseeable future,
goodwill impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact, non-cash tax benefits from
excess tax deductions related to share-based awards and income from
the reversal of contingent consideration previously recorded for
acquisitions may recur in the future. In order to mitigate these
limitations the Company has provided specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables include details on the reconciliation between
GAAP financial measures that are most directly comparable to the
non-GAAP financial measures the Company has presented.
Notes to Financial Information
Financial information in this press release other than the
information indicated as being non-GAAP is derived from Changyou's
unaudited financial statements prepared in accordance with
GAAP.
Mezzanine Equity consists of non-controlling interests in 7Road
and a put option that gives the non-controlling shareholders the
right to put their shares to Changyou at a pre-determined price if
7Road achieves specified performance milestones before the expiry
of the put option and certain other circumstances occur. The put
option will expire in 2014. Non-controlling interests of 7Road and
the put option are classified as mezzanine equity in Changyou's
consolidated balance sheets, as redemption of the non-controlling
interests is not solely within the control of Changyou.
In accordance with ASC subtopic 480-10, Changyou accretes the
balance of non-controlling interests to its redemption value over
the period from the date of 7Road acquisition to the earliest
exercise date of the put right. Any subsequent changes in the
redemption value are considered to be changes in accounting
estimates and are also recognized over the same period as net
income attributable to mezzanine classified non-controlling
interests.
Safe Harbor Statement
It is currently expected that the Business Outlook will not be
updated until the release of Changyou's next quarterly earnings
announcement; however, Changyou reserves the right to update its
Business Outlook at any time for any reason.
This announcement contains forward-looking statements.
Statements that are not historical facts, including statements
about the Company's beliefs and expectations, are forward-looking
statements. These statements are based on current plans, estimates
and projections, and therefore you should not place undue reliance
on them. Forward-looking statements involve inherent risks and
uncertainties. The Company cautions that a number of important
factors could cause actual results to differ materially from those
contained in any forward-looking statement. Potential risks and
uncertainties include, but are not limited to, the continuing
global financial and credit markets crisis and its potential impact
on the Chinese economy, the uncertain regulatory landscape in
the People's Republic of China,
fluctuations in Changyou's quarterly operating results, Changyou's
historical and possible future losses and limited operating
history, and the Company's reliance on Tian
Long Ba Bu as its major revenue source. Further information
regarding these and other risks is included in Changyou's Annual
Report on Form 20-F filed on February 28,
2011, and other filings with the Securities and Exchange
Commission.
Conference Call Information
Changyou's management team will host an earnings conference call
today at 7 a.m. U.S. Eastern Time,
February 6, 2012 (8 p.m. Beijing/Hong
Kong, February 6, 2012).
The dial-in details for the live conference call are:
|
|
US:
|
+1-866-519-4004
|
|
Hong Kong:
|
+852-2475-0994
|
|
International:
|
+1-718-354-1231
|
|
Passcode:
|
CYOU
|
|
|
|
|
|
Please dial in 10 minutes before the call is scheduled to begin
and provide the passcode to join the call.
A telephone replay of the call will be available after the
conclusion of the conference call at 10:00
a.m. U.S. Eastern Time on February 6
through February 13, 2012. The dial-in details for the
telephone replay are:
|
|
International:
|
+1-718-354-1232
|
|
Passcode:
|
42327837
|
|
|
|
|
|
The live webcast and archive of the conference call will be
available on the Investor Relations section of Changyou's website
at http://www.changyou.com/ir/.
About Changyou
Changyou.com Limited (NASDAQ: CYOU) is a leading developer and
operator of online games in China
with a diverse portfolio of online games that includes Tian Long Ba Bu, one of the most popular
massively multi-player online ("MMO") games in China, and DDTank, one of the top-ranking
Web-based games in China. Changyou
also owns and operates the 17173.com Website, a leading game
information portal in China.
Changyou began operations as a business unit within Sohu.com Inc.
(NASDAQ: SOHU) in 2003, and was carved out as a separate,
stand-alone company in December 2007.
It completed an initial public offering on April 7, 2009. Changyou has an advanced
technology platform that includes advanced 2.5D and 3D graphics
engines, a uniform game development platform, effective
anti-cheating and anti-hacking technologies, proprietary
cross-networking technology and advanced data protection
technology. For more information, please visit
http://www.changyou.com/ir/.
For investor and media inquiries, please contact:
In China:
Ms. Angie Chang
Investors Relations
Changyou.com Limited
Tel: +86 (10) 6861-3688
E-mail: ir@cyou-inc.com
In the United
States:
Mr. Jeff Bloker
Christensen
Tel: +1 (480) 614-3003
E-mail: jbloker@ChristensenIR.com
CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS
AMOUNTS)
|
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
|
Dec.
31, 2011
|
|
Sep.
30, 2011
|
|
Dec.
31, 2010
|
|
Dec.
31, 2011
|
|
Dec.
31, 2010
|
|
|
|
(a)
|
|
Restated
(a)
|
|
Restated
(a)
|
|
(a)
|
|
Restated
(a)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Online game
|
$
|
123,252
|
$
|
115,799
|
$
|
91,736
|
$
|
435,512
|
$
|
327,153
|
|
Online advertising
|
|
12,413
|
|
9,684
|
|
7,538
|
|
38,211
|
|
26,953
|
|
Others
|
|
1,986
|
|
3,214
|
|
-
|
|
10,853
|
|
-
|
|
Total
revenues
|
|
137,651
|
|
128,697
|
|
99,274
|
|
484,576
|
|
354,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Online
game (includes
share-based
compensation
expense of $29,
$21,
$44,
$102
and $194
respectively)
|
|
16,341
|
|
14,578
|
|
8,923
|
|
49,837
|
|
29,852
|
|
Online advertising (includes
share-based
compensation
expense of $31,
$31,
$70,
$128
and $236
respectively)
|
|
1,069
|
|
1,038
|
|
908
|
|
3,892
|
|
3,154
|
|
Others
|
|
3,589
|
|
3,460
|
|
-
|
|
13,783
|
|
-
|
|
Total cost
of revenues
|
|
20,999
|
|
19,076
|
|
9,831
|
|
67,512
|
|
33,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
116,652
|
|
109,621
|
|
89,443
|
|
417,064
|
|
321,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Product
development
(includes share-based
compensation
expense
of $640,
$465,
$969,
$2,399
and $4,465,
respectively)
|
|
15,978
|
|
12,592
|
|
13,574
|
|
52,238
|
|
39,893
|
|
Sales and
marketing
(includes share-based
compensation
expense
of $217,
$236,
$207,
$960
and $569
respectively)
|
|
12,453
|
|
17,655
|
|
9,232
|
|
49,893
|
|
39,211
|
|
General
and
administrative
(includes
share-based
compensation expense
of $546,
$545,
$857,
$2,528
and $4,098
respectively)
|
|
9,852
|
|
7,615
|
|
5,053
|
|
29,684
|
|
19,558
|
|
Goodwill
impairment and
impairment of
acquired
intangibles
via acquisition
of businesses
(b)
|
|
5,420
|
|
-
|
|
-
|
|
5,420
|
|
-
|
|
Total operating
expenses
|
|
43,703
|
|
37,862
|
|
27,859
|
|
137,235
|
|
98,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
72,949
|
|
71,759
|
|
61,584
|
|
279,829
|
|
222,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
4,338
|
|
3,404
|
|
1,232
|
|
11,926
|
|
4,155
|
|
Foreign currency exchange
loss
|
|
(129)
|
|
(160)
|
|
(265)
|
|
(618)
|
|
(527)
|
|
Other income /
(expense)
|
|
248
|
|
1,141
|
|
(962)
|
|
457
|
|
(1,393)
|
|
Income before income tax
expense
|
|
77,406
|
|
76,144
|
|
61,589
|
|
291,594
|
|
224,673
|
|
Income tax expense
|
|
(11,970)
|
|
(13,163)
|
|
(8,148)
|
|
(43,580)
|
|
(29,990)
|
|
Net income
|
|
65,436
|
|
62,981
|
|
53,441
|
|
248,014
|
|
194,683
|
|
Less:
Net income
attributable to
mezzanine classified
non-controlling
interests
|
|
1,105
|
|
1,092
|
|
-
|
|
2,558
|
|
-
|
|
Net income
attributable to Changyou.com
Limited
|
$
|
64,331
|
$
|
61,889
|
$
|
53,441
|
$
|
245,456
|
$
|
194,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS attributable
to Changyou.com Limited
|
$
|
1.23
|
$
|
1.18
|
$
|
1.03
|
$
|
4.68
|
$
|
3.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income per ADS attributable
to Changyou.com Limited
|
|
52,510
|
|
52,506
|
|
52,039
|
|
52,427
|
|
51,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
ADS attributable
to Changyou.com Limited
|
$
|
1.21
|
$
|
1.16
|
$
|
1.00
|
$
|
4.61
|
$
|
3.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,317
|
|
53,331
|
|
53,181
|
|
53,300
|
|
53,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
(a)
|
The above condensed consolidated
statements of operations have been prepared as if the recently
acquired 17173 Business from Sohu had been in existence throughout
the periods presented in accordance with ASC 805-50. Changyou
completed the acquisition from Sohu the 17173 Business on December
15, 2011. For Changyou's condensed consolidated statements of
operations before the consolidation of the financials of the 17173
Business, please refer to the accompanying "Supplementary Notes -
Condensed Consolidated Statements of Operations."
|
|
(b)
|
Goodwill impairment and
impairment of intangibles via acquisitions of businesses of US$5.4
million for the three months ended December 31, 2011 were related
to the cinema advertising business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED,
IN THOUSANDS)
|
|
|
|
As
of Dec.
31, 2011
|
|
As of Dec.
31, 2010
|
|
|
|
(a)
|
|
Restated
(a)
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
330,411
|
$
|
351,027
|
|
Accounts receivable,
net
|
|
11,326
|
|
6,743
|
|
Short-term
investments
|
|
17,560
|
|
-
|
|
Prepaid and other current
assets
|
|
11,610
|
|
7,953
|
|
Due from associated
companies
|
|
-
|
|
4,983
|
|
Due from Sohu
|
|
-
|
|
312
|
|
Total
current assets
|
|
370,907
|
|
371,018
|
|
Non-current
assets:
|
|
|
|
|
|
Fixed assets,
net
|
|
68,394
|
|
54,641
|
|
Goodwill
|
|
134,616
|
|
28,143
|
|
Intangible assets,
net
|
|
48,441
|
|
7,979
|
|
Interests in associated
companies
|
|
350
|
|
3,645
|
|
Deferred tax
assets
|
|
3,605
|
|
2,733
|
|
Other assets,
net
|
|
126,760
|
|
60,214
|
|
Total non-current
assets
|
|
382,166
|
|
157,355
|
|
TOTAL ASSETS
|
$
|
753,073
|
$
|
528,373
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Receipts in advance and
deferred revenue
|
$
|
51,900
|
$
|
36,237
|
|
Accounts payable and
accrued liabilities
|
|
69,438
|
|
43,388
|
|
Tax payables
|
|
13,189
|
|
15,844
|
|
Due to Sohu
|
|
20,969
|
|
5,155
|
|
Total
current liabilities
|
|
155,496
|
|
100,624
|
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term deferred tax
liabilities
|
|
5,146
|
|
243
|
|
Long-term contingent
consideration
|
|
16,704
|
|
-
|
|
Long-term accounts
payable
|
|
3,612
|
|
-
|
|
Total long-term
liabilities
|
|
25,462
|
|
243
|
|
Total liabilities
|
|
180,958
|
|
100,867
|
|
MEZZANINE EQUITY
|
|
|
|
|
|
Total
mezzanine equity
|
|
57,254
|
|
-
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Total
shareholders' equity
|
|
514,861
|
|
427,506
|
|
TOTAL
LIABILITIES, MEZZANINE EQUITY
AND
SHAREHOLDERS' EQUITY
|
$
|
753,073
|
$
|
528,373
|
|
Note:
|
|
|
(a)
|
The above condensed consolidated
balance sheets have been prepared as if the recently acquired 17173
Business from Sohu had been in existence throughout the periods
presented in accordance with ASC 805-50. Changyou completed the
acquisition from Sohu the 17173 Business on December 15,
2011.
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
SUPPLEMENTARY NOTES -
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS
AMOUNTS)
|
|
|
|
Three Months
Ended Dec.
31, 2011
|
|
|
|
Changyou
Standalone
|
|
17173
|
|
Eliminations
and
adjustments
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
$
|
123,252
|
$
|
-
|
$
|
-
|
$
|
123,252
|
|
Online advertising
|
|
-
|
|
13,590
|
|
(1,177)
|
|
12,413
|
|
Others
|
|
1,986
|
|
-
|
|
-
|
|
1,986
|
|
Total
revenues
|
|
125,238
|
|
13,590
|
|
(1,177)
|
|
137,651
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
|
16,341
|
|
-
|
|
-
|
|
16,341
|
|
Online advertising
|
|
-
|
|
1,069
|
|
-
|
|
1,069
|
|
Others
|
|
3,589
|
|
-
|
|
-
|
|
3,589
|
|
Total cost
of revenues
|
|
19,930
|
|
1,069
|
|
-
|
|
20,999
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
105,308
|
|
12,521
|
|
(1,177)
|
|
116,652
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
15,328
|
|
650
|
|
-
|
|
15,978
|
|
Sales and
marketing
|
|
13,424
|
|
206
|
|
(1,177)
|
|
12,453
|
|
General and
administrative
|
|
9,100
|
|
752
|
|
-
|
|
9,852
|
|
Goodwill impairment and
impairment of intangibles via acquisitions of
businesses
|
|
5,420
|
|
-
|
|
-
|
|
5,420
|
|
Total
operating expenses
|
|
43,272
|
|
1,608
|
|
(1,177)
|
|
43,703
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
62,036
|
|
10,913
|
|
-
|
|
72,949
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
4,338
|
|
-
|
|
-
|
|
4,338
|
|
Foreign currency exchange
loss
|
|
(129)
|
|
-
|
|
-
|
|
(129)
|
|
Other income
|
|
247
|
|
1
|
|
-
|
|
248
|
|
Income before income tax
expense
|
|
66,492
|
|
10,914
|
|
-
|
|
77,406
|
|
Income tax expense
|
|
(11,081)
|
|
(889)
|
|
-
|
|
(11,970)
|
|
Net income
|
|
55,411
|
|
10,025
|
|
-
|
|
65,436
|
|
Less:
Net income
attributable to
mezzanine classified
non-controlling
interests
|
|
1,105
|
|
-
|
|
-
|
|
1,105
|
|
Net income
attributable to Changyou.com
Limited
|
$
|
54,306
|
$
|
10,025
|
$
|
-
|
$
|
64,331
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS attributable
to Changyou.com Limited
|
$
|
1.03
|
|
|
|
|
|
1.23
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income per ADS attributable
to Changyou.com Limited
|
|
52,510
|
|
|
|
|
|
52,510
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
ADS attributable
to Changyou.com Limited
|
$
|
1.02
|
|
|
|
|
|
1.21
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,317
|
|
|
|
|
|
53,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
SUPPLEMENTARY NOTES -
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS
AMOUNTS)
|
|
|
|
Three Months
Ended Sep.
30,
2011
|
|
|
|
Changyou
Standalone
|
|
17173
|
|
Eliminations
and
adjustments
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
$
|
115,799
|
$
|
-
|
$
|
-
|
$
|
115,799
|
|
Online advertising
|
|
-
|
|
12,677
|
|
(2,993)
|
|
9,684
|
|
Others
|
|
3,214
|
|
-
|
|
-
|
|
3,214
|
|
Total
revenues
|
|
119,013
|
|
12,677
|
|
(2,993)
|
|
128,697
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
|
14,578
|
|
-
|
|
-
|
|
14,578
|
|
Online advertising
|
|
-
|
|
1,038
|
|
-
|
|
1,038
|
|
Others
|
|
3,460
|
|
-
|
|
-
|
|
3,460
|
|
Total cost
of revenues
|
|
18,038
|
|
1,038
|
|
-
|
|
19,076
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
100,975
|
|
11,639
|
|
(2,993)
|
|
109,621
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
11,987
|
|
605
|
|
-
|
|
12,592
|
|
Sales and
marketing
|
|
20,213
|
|
221
|
|
(2,779)
|
|
17,655
|
|
General and
administrative
|
|
6,893
|
|
722
|
|
-
|
|
7,615
|
|
Total
operating expenses
|
|
39,093
|
|
1,548
|
|
(2,779)
|
|
37,862
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
61,882
|
|
10,091
|
|
(214)
|
|
71,759
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
3,404
|
|
-
|
|
-
|
|
3,404
|
|
Foreign currency exchange
loss
|
|
(160)
|
|
-
|
|
-
|
|
(160)
|
|
Other income
|
|
1,139
|
|
2
|
|
-
|
|
1,141
|
|
Income before income tax
expense
|
|
66,265
|
|
10,093
|
|
(214)
|
|
76,144
|
|
Income tax expense
|
|
(12,360)
|
|
(803)
|
|
-
|
|
(13,163)
|
|
Net income
|
|
53,905
|
|
9,290
|
|
(214)
|
|
62,981
|
|
Less:
Net income
attributable to
mezzanine classified
non-controlling
interests
|
|
1,092
|
|
-
|
|
-
|
|
1,092
|
|
Net income
attributable to Changyou.com
Limited
|
$
|
52,813
|
$
|
9,290
|
$
|
(214)
|
$
|
61,889
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS attributable
to Changyou.com Limited
|
$
|
1.01
|
|
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income per ADS attributable
to Changyou.com Limited
|
|
52,506
|
|
|
|
|
|
52,506
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
ADS attributable
to Changyou.com Limited
|
$
|
0.99
|
|
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,338
|
|
|
|
|
|
53,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
SUPPLEMENTARY NOTES -
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS
AMOUNTS)
|
|
|
|
Three Months
Ended Dec.
31, 2010
|
|
|
|
Changyou
Standalone
|
|
17173
|
|
Eliminations
and
adjustments
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
$
|
91,736
|
$
|
-
|
$
|
-
|
$
|
91,736
|
|
Online advertising
|
|
-
|
|
8,866
|
|
(1,328)
|
|
7,538
|
|
Total
revenues
|
|
91,736
|
|
8,866
|
|
(1,328)
|
|
99,274
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
|
8,923
|
|
-
|
|
-
|
|
8,923
|
|
Online advertising
|
|
-
|
|
908
|
|
-
|
|
908
|
|
Total cost
of revenues
|
|
8,923
|
|
908
|
|
-
|
|
9,831
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
82,813
|
|
7,958
|
|
(1,328)
|
|
89,443
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
13,006
|
|
568
|
|
-
|
|
13,574
|
|
Sales and
marketing
|
|
9,872
|
|
673
|
|
(1,313)
|
|
9,232
|
|
General and
administrative
|
|
4,493
|
|
560
|
|
-
|
|
5,053
|
|
Total
operating expenses
|
|
27,371
|
|
1,801
|
|
(1,313)
|
|
27,859
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
55,442
|
|
6,157
|
|
(15)
|
|
61,584
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
1,232
|
|
-
|
|
-
|
|
1,232
|
|
Foreign currency exchange
loss
|
|
(265)
|
|
-
|
|
-
|
|
(265)
|
|
Other (expense)
/ income
|
|
(963)
|
|
1
|
|
-
|
|
(962)
|
|
Income before income tax
expense
|
|
55,446
|
|
6,158
|
|
(15)
|
|
61,589
|
|
Income tax expense
|
|
(7,631)
|
|
(517)
|
|
-
|
|
(8,148)
|
|
Net income
attributable to Changyou.com
Limited
|
$
|
47,815
|
$
|
5,641
|
$
|
(15)
|
|
53,441
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS attributable
to Changyou.com Limited
|
$
|
0.92
|
|
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income per ADS attributable
to Changyou.com Limited
|
|
52,039
|
|
|
|
|
|
52,039
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
ADS attributable
to Changyou.com Limited
|
$
|
0.90
|
|
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,186
|
|
|
|
|
|
53,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
SUPPLEMENTARY NOTES -
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS
AMOUNTS)
|
|
|
|
Twelve Months
Ended Dec.
31, 2011
|
|
|
|
Changyou
Standalone
|
|
17173
|
|
Eliminations
and
adjustments
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
$
|
435,512
|
$
|
-
|
$
|
-
|
$
|
435,512
|
|
Online advertising
|
|
-
|
|
44,981
|
|
(6,770)
|
|
38,211
|
|
Others
|
|
10,853
|
|
-
|
|
-
|
|
10,853
|
|
Total
revenues
|
|
446,365
|
|
44,981
|
|
(6,770)
|
|
484,576
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
|
49,837
|
|
-
|
|
-
|
|
49,837
|
|
Online advertising
|
|
-
|
|
3,892
|
|
-
|
|
3,892
|
|
Others
|
|
13,783
|
|
-
|
|
-
|
|
13,783
|
|
Total cost
of revenues
|
|
63,620
|
|
3,892
|
|
-
|
|
67,512
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
382,745
|
|
41,089
|
|
(6,770)
|
|
417,064
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
50,059
|
|
2,179
|
|
-
|
|
52,238
|
|
Sales and
marketing
|
|
54,337
|
|
2,204
|
|
(6,648)
|
|
49,893
|
|
General and
administrative
|
|
27,108
|
|
2,576
|
|
-
|
|
29,684
|
|
Goodwill impairment and
impairment
of intangibles
via acquisitions of
businesses
|
|
5,420
|
|
-
|
|
-
|
|
5,420
|
|
Total
operating expenses
|
|
136,924
|
|
6,959
|
|
(6,648)
|
|
137,235
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
245,821
|
|
34,130
|
|
(122)
|
|
279,829
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
11,926
|
|
-
|
|
-
|
|
11,926
|
|
Foreign currency exchange
loss
|
|
(618)
|
|
-
|
|
-
|
|
(618)
|
|
Other income
|
|
455
|
|
2
|
|
-
|
|
457
|
|
Income before income tax
expense
|
|
257,584
|
|
34,132
|
|
(122)
|
|
291,594
|
|
Income tax expense
|
|
(40,848)
|
|
(2,732)
|
|
-
|
|
(43,580)
|
|
Net income
|
|
216,736
|
|
31,400
|
|
(122)
|
|
248,014
|
|
Less:
Net income
attributable to
mezzanine classified
non-controlling
interests
|
|
2,558
|
|
-
|
|
-
|
|
2,558
|
|
Net income
attributable to Changyou.com
Limited
|
$
|
214,178
|
$
|
31,400
|
$
|
(122)
|
$
|
245,456
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS attributable
to Changyou.com Limited
|
$
|
4.09
|
|
|
|
|
$
|
4.68
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income per ADS attributable
to Changyou.com Limited
|
|
52,427
|
|
|
|
|
|
52,427
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
ADS attributable
to Changyou.com Limited
|
$
|
4.02
|
|
|
|
|
$
|
4.61
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,301
|
|
|
|
|
|
53,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
SUPPLEMENTARY NOTES -
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS
AMOUNTS)
|
|
|
|
Twelve Months
Ended Dec.
31, 2010
|
|
|
|
Changyou
Standalone
|
|
17173
|
|
Eliminations
and
adjustments
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
$
|
327,153
|
$
|
-
|
$
|
-
|
$
|
327,153
|
|
Online advertising
|
|
-
|
|
31,552
|
|
(4,599)
|
|
26,953
|
|
Total
revenues
|
|
327,153
|
|
31,552
|
|
(4,599)
|
|
354,106
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Online game
|
|
29,852
|
|
-
|
|
-
|
|
29,852
|
|
Online advertising
|
|
-
|
|
3,154
|
|
-
|
|
3,154
|
|
Total cost
of revenues
|
|
29,852
|
|
3,154
|
|
-
|
|
33,006
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
297,301
|
|
28,398
|
|
(4,599)
|
|
321,100
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
37,918
|
|
1,975
|
|
-
|
|
39,893
|
|
Sales and
marketing
|
|
41,002
|
|
2,793
|
|
(4,584)
|
|
39,211
|
|
General and
administrative
|
|
17,533
|
|
2,025
|
|
-
|
|
19,558
|
|
Total
operating expenses
|
|
96,453
|
|
6,793
|
|
(4,584)
|
|
98,662
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
200,848
|
|
21,605
|
|
(15)
|
|
222,438
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
4,155
|
|
-
|
|
-
|
|
4,155
|
|
Foreign currency exchange
loss
|
|
(527)
|
|
-
|
|
-
|
|
(527)
|
|
Other (expense)
/ income
|
|
(1,394)
|
|
1
|
|
-
|
|
(1,393)
|
|
Income before income tax
expense
|
|
203,082
|
|
21,606
|
|
(15)
|
|
224,673
|
|
Income tax expense
|
|
(28,178)
|
|
(1,812)
|
|
-
|
|
(29,990)
|
|
Net income
attributable to Changyou.com
Limited
|
$
|
174,904
|
$
|
19,794
|
$
|
(15)
|
$
|
194,683
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS attributable
to Changyou.com Limited
|
$
|
3.37
|
|
|
|
|
$
|
3.75
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income per ADS attributable
to Changyou.com Limited
|
|
51,896
|
|
|
|
|
|
51,896
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
ADS attributable
to Changyou.com Limited
|
$
|
3.29
|
|
|
|
|
$
|
3.66
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,121
|
|
|
|
|
|
53,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS OF NON-GAAP
RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
(UNAUDITED,
IN
THOUSANDS, EXCEPT
PER ADS AMOUNTS)
|
|
|
|
Three Months
Ended Dec. 31, 2011
|
|
Three Months
Ended Sep. 30, 2011
|
|
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
|
|
|
Share-based
compensation
expense (a)
|
|
Goodwill
impairment,
impairment
of intangibles
via
acquisitions
of
businesses
and the
related tax
impact
(b)
|
|
|
|
Share-based
compensation
expense (a)
|
|
Goodwill
impairment,
impairment
of
intangibles
via
acquisitions
of
businesses
and the
related tax
impact
(b)
|
|
|
Online game gross
profit
|
$
|
106,911
|
$
|
29
|
$
|
-
|
$
|
106,940
|
$
|
101,221
|
$
|
21
|
$
|
-
|
$
|
101,242
|
|
Online advertising
gross profit
|
|
11,344
|
|
31
|
|
-
|
|
11,375
|
|
8,646
|
|
31
|
|
-
|
|
8,677
|
|
Other gross loss
|
|
(1,603)
|
|
-
|
|
-
|
|
(1,603)
|
|
(246)
|
|
-
|
|
-
|
|
(246)
|
|
Gross profit
|
$
|
116,652
|
$
|
60
|
$
|
-
|
$
|
116,712
|
$
|
109,621
|
$
|
52
|
$
|
-
|
$
|
109,673
|
|
Gross margin
|
|
85%
|
|
|
|
|
|
85%
|
|
85%
|
|
|
|
|
|
85%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
$
|
72,949
|
$
|
1,463
|
$
|
5,420
|
$
|
79,832
|
$
|
71,759
|
$
|
1,298
|
$
|
-
|
$
|
73,057
|
|
Operating margin
|
|
53%
|
|
|
|
|
|
58%
|
|
56%
|
|
|
|
|
|
57%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
65,436
|
$
|
1,463
|
$
|
5,365
|
$
|
72,264
|
$
|
62,981
|
$
|
1,298
|
$
|
-
|
$
|
64,279
|
|
Net income attributable to
Changyou.com Limited
|
$
|
64,331
|
$
|
1,463
|
$
|
5,365
|
$
|
71,159
|
$
|
61,889
|
$
|
1,298
|
$
|
-
|
$
|
63,187
|
|
Net margin
|
|
47%
|
|
|
|
|
|
52%
|
|
48%
|
|
|
|
|
|
49%
|
|
Diluted net income per ADS
attributable to Changyou.com Limited
|
$
|
1.21
|
|
|
|
|
$
|
1.33
|
$
|
1.16
|
|
|
|
|
$
|
1.18
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,317
|
|
|
|
|
|
53,537
|
|
53,331
|
|
|
|
|
|
53,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
(a)
|
To eliminate share-based
compensation expense as measured using the fair value
method.
|
|
(b)
|
Beginning in the fourth
quarter of 2011, the Company revised its non-GAAP reporting
methodology to exclude goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact,
non-cash tax benefits from
excess tax deductions related to share-based awards
and income
from the reversal of
contingent consideration previously recorded for
acquisitions, in addition to its historical practice of excluding
share-based compensation expense from non-GAAP results.
Goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact of US$5.4
million for the three months ended December 31, 2011
were related to
the cinema
advertising business. There were no non-cash tax
benefits from excess tax deductions related to share-based
awards and income
from the reversal of
contingent consideration previously recorded for
acquisitions during the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS OF NON-GAAP
RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
(UNAUDITED,
IN
THOUSANDS, EXCEPT
PER ADS AMOUNTS)
|
|
|
|
Three Months
Ended Dec. 31, 2010
|
|
|
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
|
|
|
|
Share-based
compensation
expense (a)
|
|
Goodwill
impairment,
impairment
of intangibles
via
acquisitions
of
businesses
and the
related tax
impact
(b)
|
|
|
|
Online game gross
profit
|
$
|
82,813
|
$
|
44
|
$
|
-
|
$
|
82,857
|
|
|
Online advertising
gross profit
|
|
6,630
|
|
70
|
|
-
|
|
6,700
|
|
|
Gross profit
|
$
|
89,443
|
$
|
114
|
$
|
-
|
$
|
89,557
|
|
|
Gross margin
|
|
90%
|
|
|
|
|
|
90%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
$
|
61,584
|
$
|
2,147
|
$
|
-
|
$
|
63,731
|
|
|
Operating margin
|
|
62%
|
|
|
|
|
|
64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
53,441
|
$
|
2,147
|
$
|
-
|
$
|
55,588
|
|
|
Net income attributable to
Changyou.com Limited
|
$
|
53,441
|
$
|
2,147
|
$
|
-
|
$
|
55,588
|
|
|
Net margin
|
|
54%
|
|
|
|
|
|
56%
|
|
|
Diluted net income per ADS
attributable to Changyou.com Limited
|
$
|
1.00
|
|
|
|
|
$
|
1.04
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,181
|
|
|
|
|
|
53,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
(a)
|
To eliminate share-based
compensation expense as measured using the fair value
method.
|
|
(b)
|
Beginning in the fourth quarter
of 2011, the Company revised its non-GAAP reporting methodology to
exclude goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions, in addition to its historical practice
of excluding share-based compensation expense from non-GAAP
results. There were no goodwill impairment, impairment of
intangibles via acquisitions of businesses and the related tax
impact, non-cash tax benefits from excess tax deductions related to
share-based awards and income from the reversal of contingent
consideration previously recorded for acquisitions during the
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS OF NON-GAAP
RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
(UNAUDITED,
IN
THOUSANDS, EXCEPT
PER ADS AMOUNTS)
|
|
|
|
Twelve Months Ended
Dec. 31, 2011
|
|
Twelve Months
Ended Dec.
31, 2010
|
|
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
|
|
|
Share-based
compensation
expense (a)
|
|
Goodwill
impairment,
impairment
of intangibles
via
acquisitions
of
businesses
and the
related tax
impact
(b)
|
|
|
|
Share-based
compensation
expense (a)
|
|
Goodwill
impairment,
impairment
of
intangibles
via
acquisitions
of
businesses
and the
related tax
impact (b)
|
|
|
Online game gross
profit
|
$
|
385,675
|
$
|
102
|
$
|
-
|
$
|
385,777
|
$
|
297,301
|
$
|
194
|
$
|
-
|
$
|
297,495
|
|
Online advertising gross
profit
|
|
34,319
|
|
128
|
|
-
|
|
34,447
|
|
23,799
|
|
236
|
|
-
|
|
24,035
|
|
Other gross loss
|
|
(2,930)
|
|
-
|
|
-
|
|
(2,930)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Gross profit
|
$
|
417,064
|
$
|
230
|
$
|
-
|
$
|
417,294
|
$
|
321,100
|
$
|
430
|
$
|
-
|
$
|
321,530
|
|
Gross margin
|
|
86%
|
|
|
|
|
|
86%
|
|
91%
|
|
|
|
|
|
91%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
$
|
279,829
|
$
|
6,117
|
$
|
5,420
|
$
|
291,366
|
$
|
222,438
|
$
|
9,562
|
$
|
-
|
$
|
232,000
|
|
Operating margin
|
|
58%
|
|
|
|
|
|
60%
|
|
63%
|
|
|
|
|
|
66%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
248,014
|
$
|
6,117
|
$
|
5,365
|
$
|
259,496
|
$
|
194,683
|
$
|
9,562
|
$
|
-
|
$
|
204,245
|
|
Net income attributable to
Changyou.com Limited
|
$
|
245,456
|
$
|
6,117
|
$
|
5,365
|
$
|
256,938
|
$
|
194,683
|
$
|
9,562
|
$
|
-
|
$
|
204,245
|
|
Net margin
|
|
51%
|
|
|
|
|
|
53%
|
|
55%
|
|
|
|
|
|
58%
|
|
Diluted net income per ADS
attributable to Changyou.com Limited
|
$
|
4.61
|
|
|
|
|
$
|
4.81
|
$
|
3.66
|
|
|
|
|
$
|
3.82
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,300
|
|
|
|
|
|
53,472
|
|
53,120
|
|
|
|
|
|
53,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
(a)
|
To eliminate share-based
compensation expense as measured using the fair value
method.
|
|
(b)
|
Beginning in the fourth quarter
of 2011, the Company revised its non-GAAP reporting methodology to
exclude goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions, in addition to its historical practice
of excluding share-based compensation expense from non-GAAP
results. Goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact of US$5.4
million for the twelve months ended December 31, 2011 were related
to the cinema advertising business. There were no non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration
previously recorded for
acquisitions during the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU
STANDALONE
SUPPLEMENTARY NOTES
- RECONCILIATIONS
OF NON-GAAP RESULTS OF OPERATION
MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES
(UNAUDITED,
IN
THOUSANDS, EXCEPT
PER ADS AMOUNTS)
|
|
|
|
Three Months
Ended Dec. 31, 2011
|
|
Three Months
Ended Sep. 30, 2011
|
|
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
|
|
|
Share-based
compensation expense (a)
|
|
Goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact (b)
|
|
|
|
Share-based
compensation expense (a)
|
|
Goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact (b)
|
|
|
Net income attributable to
Changyou.com Limited
|
$
|
54,306
|
$
|
1,341
|
$
|
5,365
|
$
|
61,012
|
$
|
52,813
|
$
|
963
|
$
|
-
|
$
|
53,776
|
|
Net margin
|
|
43%
|
|
|
|
|
|
49%
|
|
44%
|
|
|
|
|
|
45%
|
|
Diluted net income per ADS
attributable to Changyou.com Limited
|
$
|
1.02
|
|
|
|
|
$
|
1.14
|
$
|
0.99
|
|
|
|
|
$
|
1.01
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,317
|
|
|
|
|
|
53,537
|
|
53,338
|
|
|
|
|
|
53,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
(a)
|
To eliminate share-based
compensation expense as measured using the fair value
method.
|
|
(b)
|
Beginning in the fourth quarter
of 2011, the Company revised its non-GAAP reporting methodology to
exclude goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions, in addition to its historical practice
of excluding share-based compensation expense from non-GAAP
results. Goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact of US$5.4
million for the three months ended December 31, 2011 were related
to the cinema advertising business. There were no non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions during the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
STANDALONE
SUPPLEMENTARY NOTES
- RECONCILIATIONS OF NON-GAAP
RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
(UNAUDITED,
IN
THOUSANDS, EXCEPT
PER ADS AMOUNTS)
|
|
|
|
Three Months
Ended Dec. 31, 2010
|
|
|
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
|
|
|
|
Share-based
compensation expense (a)
|
|
Goodwill
impairment, impairment of intangibles via acquisitions of
businesses and the related tax impact (b)
|
|
|
|
Net income attributable to
Changyou.com Limited
|
$
|
47,815
|
$
|
1,855
|
$
|
-
|
$
|
49,670
|
|
|
Net margin
|
|
52%
|
|
|
|
|
|
54%
|
|
|
Diluted net income per ADS
attributable to Changyou.com Limited
|
$
|
0.90
|
|
|
|
|
$
|
0.93
|
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,186
|
|
|
|
|
|
53,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
(a)
|
To eliminate share-based
compensation expense as measured using the fair value
method.
|
|
(b)
|
Beginning in the fourth quarter
of 2011, the Company revised its non-GAAP reporting methodology to
exclude goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions, in addition to its historical practice
of excluding share-based compensation expense from non-GAAP
results. There were no goodwill impairment, impairment of
intangibles via acquisitions of businesses and the related tax
impact, non-cash tax benefits from excess tax deductions related to
share-based awards and income from the reversal of contingent
consideration previously recorded for acquisitions during the
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
STANDALONE
SUPPLEMENTARY NOTES
- RECONCILIATIONS OF NON-GAAP
RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
(UNAUDITED,
IN
THOUSANDS, EXCEPT
PER ADS AMOUNTS)
|
|
|
|
Twelve Months Ended
Dec. 31, 2011
|
|
Twelve Months
Ended Dec.
31, 2010
|
|
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
adjustments
|
|
Non-GAAP
|
|
|
|
|
Share-based
compensation
expense (a)
|
|
Goodwill
impairment,
impairment
of intangibles
via
acquisitions
of
businesses
and the
related tax
impact
(b)
|
|
|
|
Share-based
compensation
expense (a)
|
|
Goodwill
impairment,
impairment
of
intangibles
via
acquisitions
of
businesses
and the
related tax
impact (b)
|
|
|
Net income attributable to
Changyou.com Limited
|
$
|
214,178
|
$
|
5,456
|
$
|
5,365
|
$
|
224,999
|
$
|
174,904
|
$
|
8,594
|
$
|
-
|
$
|
183,498
|
|
Net margin
|
|
48%
|
|
|
|
|
|
50%
|
|
53%
|
|
|
|
|
|
56%
|
|
Diluted net income per ADS
attributable to Changyou.com Limited
|
$
|
4.02
|
|
|
|
|
$
|
4.21
|
$
|
3.29
|
|
|
|
|
$
|
3.43
|
|
ADSs used in computing diluted
net income per ADS attributable to Changyou.com Limited
|
|
53,301
|
|
|
|
|
|
53,472
|
|
53,121
|
|
|
|
|
|
53,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
(a)
|
To eliminate share-based
compensation expense as measured using the fair value
method.
|
|
(b)
|
Beginning in the fourth quarter
of 2011, the Company revised its non-GAAP reporting methodology to
exclude goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact, non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions, in addition to its historical practice
of excluding share-based compensation expense from non-GAAP
results. Goodwill impairment, impairment of intangibles via
acquisitions of businesses and the related tax impact of US$5.4
million for the twelve months ended December 31, 2011 were related
to the cinema advertising business. There were no non-cash tax
benefits from excess tax deductions related to share-based awards
and income from the reversal of contingent consideration previously
recorded for acquisitions during the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Changyou.com Limited