HONG KONG, Sept. 26, 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 second quarter 2014 ended June 30,
2014.
Non-GAAP Financial Highlights (1)
- Net revenues were RMB964.4
million (US$156.7 million),
down 2.8% QoQ and 11.8% YoY.
- Gross profit was RMB745.8 million
(US$121.2 million), down 4.6% QoQ and
10.0% YoY. Gross margin was 77.3%, compared with 78.8% in Q1 2014
and 75.8% in Q2 2013.
- Operating income was RMB366.0
million (US$59.5 million),
down 9.0% QoQ and 21.5% YoY. Operating margin was 38.0%, compared
with 40.5% in Q1 2014 and 42.6% in Q2 2013.
- Net income attributable to the Company's shareholders was
RMB325.8 million (US$53.0 million), down 2.5% QoQ and 36.4% YoY.
Net margin was 33.8%, compared with 33.7% in Q1 2014 and 46.9% in
Q2 2013.
- Earnings per diluted ADS were RMB1.20 (US$0.20),
compared with RMB1.24 in Q1 2014 and
RMB1.92 in Q2 2013.
GAAP Financial Highlights (1)
- Net revenues were RMB964.4
million (US$156.7 million),
down 2.8% QoQ and 11.8% YoY.
- Massively multi-player online (MMO) game revenues were
RMB868.7 million (US$141.2 million), down 5.2% QoQ and 11.0%
YoY.
- Mobile game revenues were RMB85.8
million (US$13.9 million), up
30.8% QoQ and down 15.7% YoY.
- Other revenues were RMB9.9
million (US$1.6 million), down
5.7% QoQ and 32.7% YoY.
- Gross profit was RMB728.8 million
(US$118.5 million), down 4.7% QoQ and
10.4% YoY. Gross margin was 75.6%, compared with 77.1% in Q1 2014
and 74.4% in Q2 2013.
- Operating income was RMB333.0
million (US$54.1 million),
down 9.1% QoQ and 22.9% YoY. Operating margin was 34.5%, compared
with 36.9% in Q1 2014 and 39.5% in Q2 2013.
- Net income attributable to the Company's shareholders was
RMB300.0 million (US$48.8 million), down 1.9% QoQ and 38.3% YoY.
Net margin was 31.1%, compared with 30.8% in Q1 2014 and 44.5% in
Q2 2013.
- Earnings per diluted ADS were RMB1.10 (US$0.18),
compared with RMB1.12 in Q1 2014 and
RMB1.82 in Q2 2013.
Operating Highlights (1)
- MMO games operated in China
and overseas:
- Average Monthly Active Users (average MAU) decreased 1.0% QoQ
from 17.7 million to 17.5 million.
- Average Monthly Paying Users (average MPU) decreased 1.9% QoQ
from 3.0 million to 3.0 million.
- Monthly Average Revenue per Paying User (ARPU) decreased 3.3%
QoQ from RMB101.0 to RMB97.7.
- Mobile games operated in China
and overseas:
- Average Daily Active Users (average DAU) increased 5.6% QoQ
from 462,700 to 488,600.
- Average Revenue per Daily Active User (ARDAU) increased 22.5%
QoQ from RMB1.6 to RMB1.9.
(1)
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Notes:
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1.
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Acquisition of
Shengzhan and Shengjing.
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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.
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2.
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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.
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3.
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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.
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4.
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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.
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5.
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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.
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6.
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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.
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7.
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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.
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"Revenues from mobile games grew significantly during the second
quarter as we successfully launched 'Chain Chronicle' in
China and South Korea," commented Mr. Xiangdong Zhang, Chief Executive Officer of
Shanda Games. "The strength and
appeal of our exciting pipeline continued to grow following the
launch of 'Final Fantasy XIV' in August and the buzz generated by
'Dungeon Striker' which is expected to be released late this year.
While we remain one of China's
leading online game content providers, we will continue to invest
in our PC and mobile portfolio and pipeline to strengthen our
competitive advantages and to drive long-term sustainable
growth."
Second Quarter 2014 Unaudited Financial Results
(GAAP)
Net Revenues. In the second quarter of
2014, net revenues were RMB964.4
million (US$156.7 million), a
decrease of 2.8% from RMB992.1
million in the first quarter of 2014 and a decrease of 11.8%
from RMB1,093.1 million in the second
quarter of 2013. MMO game revenues, mobile game revenues, and other
revenues accounted for 90.1%, 8.9% and 1.0% of total net revenues,
respectively. China revenues and
overseas revenues accounted for 90.4% and 9.6% of total net
revenues, respectively.
Net revenues generated from MMO games decreased 5.2%
quarter-over-quarter and 11.0% year-over-year to RMB868.7 million (US$141.2
million) in the second quarter of 2014. Despite
quarter-over-quarter revenue increases from several major MMO
games, MMO game revenues declined sequentially during the second
quarter of 2014 as the Company received higher royalty revenues
during the preceding quarter. Average MAU for MMO games decreased
1.0% quarter-over-quarter to 17.5 million, primarily due to the
effects of seasonality with less school holidays in the second
quarter. Average MPU for MMO games decreased 1.9%
quarter-over-quarter to 3.0 million, primarily due to changes made
in "AION's" revenue model which moved it from a time-based model to
a free-to-play and pay-for-items based model during the second
quarter of 2014. As a result, ARPU for MMO games decreased 3.3%
quarter-over-quarter to RMB97.7.
Net revenues generated from mobile games were RMB85.8 million (US$13.9
million) in the second quarter of 2014, an increase of 30.8%
from RMB65.6 million in the first
quarter of 2014 and a decrease of 15.7% from RMB101.8 million in the second quarter of 2013.
The sequential increase was primarily due to the successful launch
of "Chain Chronicle" in China and
South Korea, which was partially
offset by a decline in revenue from several mobile games, including
"Million Arthur," which were entering the mature stages of their
lifecycles. As a result, average DAU for mobile games increased
5.6% quarter-over-quarter to 488,600 and ARDAU for mobile games
increased 22.5% quarter-over-quarter to RMB1.9.
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Q2 2013
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Q3 2013
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Q4 2013
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Q1 2014
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Q2 2014
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MMO Games
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Average MAU (in
millions)
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18.9
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18.4
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17.7
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17.7
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17.5
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Average MPU (in
millions)
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3.2
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2.9
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2.9
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3.0
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3.0
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ARPU (RMB)
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102.0
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108.7
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101.7
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101.0
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97.7
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Mobile
Games
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Average DAU (in
thousands)
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367.2
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574.9
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558.9
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462.7
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488.6
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ARDAU (RMB)
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3.0
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2.9
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2.4
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1.6
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1.9
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Other revenues were RMB9.9 million
(US$1.6 million) in the second
quarter of 2014, compared with RMB10.5
million in the first quarter of 2014 and RMB14.7 million in the second quarter of
2013.
Cost of Revenues. Cost of revenues for the second
quarter of 2014 was RMB235.6 million
(US$38.2 million), an increase of
3.7% from RMB227.3 million in the
first quarter of 2014 and a decrease of 15.8% from RMB279.9 million in the second quarter of 2013.
The sequential increase in the cost of revenues was primarily due
to an increase in royalty fees paid to licensors as a result of an
increase in revenues generated from licensed games during the
second quarter of 2014. Cost of revenues represented 24.4% of net
revenues, compared with 22.9% in the first quarter of 2014 and
25.6% in the second quarter of 2013.
Gross Profit. Gross profit for the second quarter
of 2014 was RMB728.8 million
(US$118.5 million), representing
decreases of 4.7% from RMB764.8
million in the first quarter of 2014 and 10.4% from
RMB813.2 million in the second
quarter of 2013. Gross margin was 75.6% in the second quarter of
2014, compared with 77.1% in the first quarter of 2014 and 74.4% in
the second quarter of 2013.
Operating Expenses. Total operating expenses for
the second quarter of 2014 were RMB395.8
million (US$64.4 million),
representing a decrease of 0.7% from RMB398.6 million in the first quarter of 2014 and
an increase of 3.7% from RMB381.5
million in the second quarter of 2013. Operating expenses
represented 41.0% of net revenues, an increase from 40.2% in the
first quarter of 2014 and 34.9% in the second quarter of 2013.
Product development expenses decreased 1.6% quarter-over-quarter
and 10.8% year-over-year to RMB159.7
million (US$26.0 million) in
the second quarter of 2014. The sequential decrease was primarily
due to a decrease in bonus expense for research and development
employees during the second quarter of 2014. Product development
expenses represented 16.6% of net revenues, compared with 16.4% in
the first quarter of 2014 and 16.4% in the second quarter of
2013.
Sales and marketing expenses decreased 1.8% quarter-over-quarter
and increased 33.2% year-over-year to RMB148.4 million (US$24.1
million) in the second quarter of 2014. The sequential
decrease in sales and marketing expenses was primarily due to a
decrease in promotional expenses during the second quarter of 2014,
partially offset by an increase in commissions paid to third-party
platforms for distributing mobile games in line with the increase
in mobile game revenues. Sales and marketing expenses represented
15.4% of net revenues, compared with 15.2% in the first quarter of
2014 and 10.2% in the second quarter of 2013.
General and administrative expenses increased 2.9%
quarter-over-quarter and decreased 3.6% year-over-year to
RMB87.7 million (US$14.3 million) in the second quarter of 2014.
The sequential increase in general and administrative expenses was
primarily due to an increase in salaries and intra-company sales
tax expenses, which were partially offset by a decrease in
share-based compensation expenses during the second quarter of
2014. General and administrative expenses accounted for 9.1% of net
revenues, compared with 8.6% in the first quarter of 2014 and 8.3%
in the second quarter of 2013.
Share-based compensation expenses were RMB7.2 million (US$1.2
million) in the second quarter of 2014, compared with
RMB10.0 million in the first quarter
of 2014 and RMB7.0 million in the
second quarter of 2013.
Operating Income. Operating income for the second
quarter of 2014 was RMB333.0 million
(US$54.1 million), a decrease of 9.1%
from RMB366.2 million in the first
quarter of 2014 and a decrease of 22.9% from RMB431.7 million in the second quarter of 2013.
Operating margin was 34.5% in the second quarter of 2014, compared
with 36.9% in the first quarter of 2014 and 39.5% in the second
quarter of 2013.
Government Financial Incentives. Government
financial incentives totaled RMB20.4
million (US$3.3 million) in
the second quarter of 2014, compared with RMB23.9 million in the first quarter of 2014 and
RMB43.5 million in the second quarter
of 2013. 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
RMB43.3 million (US$7.0 million), compared with other expense of
RMB4.9 million in the first quarter
of 2014 and other expense of RMB4.0
million in the second quarter of 2013. The
quarter-over-quarter increase in other expense was primarily due to
the increase in foreign exchange losses, which arose from the
currency settlement of new RMB-denominated intra-company loans of
an offshore entity whose functional currency was the U.S. dollar,
at a prescribed foreign exchange rate applied by the settlement
bank, which was higher than the prevailing market rate, in relation
to the Company's need for U.S. dollar capital during the second
quarter of 2014.
Income Tax Expense. Income tax expense for
the second quarter of 2014 was RMB27.6
million (US$4.5 million),
compared with RMB91.5 million in the
first quarter of 2014 and RMB3.6
million in the second quarter of 2013. The sequential
decrease in income tax expense was mainly due to one of the
Company's subsidiaries obtaining approval for preferred tax rates
for the years 2013 and 2014 as a "key national software
enterprise." Since the subsidiary did not receive approval for the
preferred tax status until the second quarter of 2014, the Company
during the second quarter recorded a tax benefit for the excess tax
charges in 2013 and the first quarter of 2014.
Net income attributable to the Company's
shareholders. Net income attributable to the Company's
shareholders for the second quarter of 2014 was RMB300.0 million (US$48.8
million), compared with RMB305.7
million in the first quarter of 2014 and RMB486.1 million in the second quarter of 2013.
Earnings per diluted ADS in the second quarter of 2014 were
RMB1.10 (US$0.18), compared with RMB1.12 in the first quarter of 2014 and
RMB1.82 in the second quarter of
2013.
Net Cash. In the second quarter of 2014,
the Company generated RMB179.2
million (US$29.1 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 dividends
payable, decreased from RMB1,368.7
million as of March 31, 2014
to RMB979.3 million (US$159.2 million) as of June 30, 2014, primarily as a result of the
Company paying cash in the amount of RMB547.5 million (US$89.0
million) as a partial payment for the acquisition of
Shengzhan and Shengjing. Please refer to the "Note to the Financial
Information" below for more details.
First Half 2014 Unaudited Financial Results
Net Revenues. Net revenues for the first half of
2014 totaled RMB1,956.5 million
(US$318.0 million), a decrease of
10.7% from RMB2,190.7 million in the
first half of 2013.
Gross Profit. Gross profit for the first half of
2014 was RMB1,493.6 million
(US$242.8 million), a decrease of
8.6% from RMB1,633.5 million in the
first half of 2013. Gross margin was 76.3%, an increase from 74.6%
in the first half of 2013.
Operating Income. Operating income for the first
half of 2014 was RMB699.2 million
(US$113.6 million), a decrease of
21.0% from RMB884.6 million in the
first half of 2013. Operating margin was 35.7%, a decrease from
40.4% in the first half of 2013.
Non-GAAP Operating Income. Non-GAAP operating
income for the first half of 2014 was RMB768.0 million (US$124.8
million), a decrease of 19.8% from RMB957.8 million in the first half of 2013.
Non-GAAP operating margin was 39.3%, a decrease from 43.7% in the
first half of 2013.
Net Income Attributable to Ordinary Shareholders.
Net income for the first half of 2014 was RMB605.7 million (US$98.4
million), a decrease of 29.1% from RMB853.7 million in the first half of 2013. Net
margin was 31.0%, a decrease from 39.0% in the first half of 2013.
Earnings per diluted ADS were RMB2.24
(US$0.36), compared with RMB3.18 in the first half of 2013.
Non-GAAP Net Income Attributable to Ordinary
Shareholders. Non-GAAP net income for the first half of
2014 was RMB660.1 million
(US$107.3 million), a decrease of
27.5% from RMB910.1 million in the
first half of 2013. Non-GAAP net margin was 33.7%, a decrease from
41.5% in the first half of 2013. Non-GAAP earnings per diluted ADS
were RMB2.44 (US$0.40), compared with RMB3.38 in the first half of 2013.
Net Cash. In the first half of 2014 the Company
generated RMB361.8 million
(US$58.8 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
RMB1,222.8 million as of December 31, 2013 to RMB979.3 million (US$159.2
million) as of June 30,
2014.
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, the controlling shareholder of the Company, and an
affiliate of Primavera Capital Limited ("Primavera" and, together
with Shanda Interactive, 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 share
(each representing two class A ordinary shares) (each an "ADS").
Based on the offer price, the Proposal valued 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 preceding 30 trading days.
On January 29, 2014, the Company
announced that the Board had 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.
On April 21, 2014, Shanda SDG
Investment Limited, a wholly-owned subsidiary of Shanda
Interactive, entered into a share purchase agreement with Perfect
World Co., Ltd. (NASDAQ: PWRD, "Perfect World"), another leading
online game developer and operator in China, for Perfect World to acquire a total of
30,326,005 class A ordinary shares of Shanda Games. Pursuant to the share purchase
agreement, Perfect World was to acquire these shares from Shanda
SDG Investment Limited for a total consideration of US$100 million in cash. In addition, Perfect
World had also entered into an adherence agreement to become a
party to the consortium agreement and participate as a new member
of the Consortium in the proposed "going private" transaction with
respect to Shanda Games.
On April 28, 2014, the Company was
informed by Shanda Interactive that FV Investment Holdings, an
affiliate of FountainVest Partners, entered into an adherence
agreement on April 25, 2014 to become
a party to the consortium agreement and participate as a new member
of the Consortium in the proposed "going private" transaction with
respect to Shanda Games.
On May 19, 2014, the Company was
informed by Shanda Interactive that CAP IV Engagement Limited, an
affiliate of Carlyle Asia Partners IV, L.P., entered into an
adherence agreement on May 19, 2014
to become a party to the consortium agreement and participate as a
new member of the Consortium in the proposed "going private"
transaction with respect to Shanda
Games.
On September 2, 2014, the Company
was informed by Shanda Interactive of the following changes to the
Consortium:
- Orient Finance Holdings (Hong
Kong) Limited, a company limited by shares incorporated and
existing under the laws of Hong
Kong and an affiliate of Orient Securities Company Limited
("Orient Finance"), Shanghai Buyout Fund L.P., a limited
partnership formed under the laws of the
People's Republic of China and an affiliate of Haitong
Securities Co., Ltd. ("Haitong"), and Ningxia Zhongyincashmere
International Group Co., Ltd. ("Ningxia"), a company formed under
the laws of the People's Republic of
China each joined the Consortium as new members through
adherence agreements to become parties to the Consortium
Agreement.
- Orient Finance entered into a share purchase agreement to
purchase 123,552,669 class A ordinary shares of the Company,
representing approximately 23% of the total ordinary shares
(including class A ordinary shares and class B ordinary shares) of
the Company outstanding as of August 31,
2014. Haitong entered into share purchase agreements to
purchase an aggregate of 107,438,129 class A ordinary shares of the
Company, representing approximately 20% of the total ordinary
shares (including class A ordinary shares and class B ordinary
shares) of the Company outstanding as of August 31, 2014. Ningxia entered into a share
purchase agreement to purchase 80,577,828 class A ordinary shares
of the Company, representing approximately 15% of the total
ordinary shares (including class A ordinary shares and class B
ordinary shares) of the Company outstanding as of August 31, 2014. The transactions contemplated by
the various share purchase agreements closed on September 23 and September
24, 2014.
- Primavera, Perfect World, FV Investment Holdings, and CAP IV
Engagement Limited have withdrawn from the Consortium.
On September 4, 2014, the Company
announced that it has reconstituted the Special Committee, as Mr.
Andy Lin is affiliated with one of
the new members of the Consortium, Orient Finance. The Board
reconstituted the Special Committee to consist of two independent
directors, Mr. Chan and Mr. Gui, who are not affiliated with any
member of the Consortium, to consider and evaluate the Proposal.
The Special Committee will continue to be advised by Bank of
America Merrill Lynch as its financial advisor and Sullivan &
Cromwell LLP as its U.S. legal counsel.
The Company cautions its shareholders and others considering
trading its securities that neither the Board nor the Special
Committee has made any decision with respect to the Company's
response to the Proposal. 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.
The Company, in relation to the proposed transaction and
associated need for U.S. dollar capital, entered into a new long
term loan facility in the first quarter of 2014 with several
commercial banks totaling US$117
million (RMB719.8 million) to
replace existing long term loans with Shanghai Commercial &
Savings Bank, Ltd. and the Bank of Taiwan totaling US$55
million (RMB335.3 million),
which were early-repaid in April
2014.
Recent Business Highlights
June 12, 2014 -
Shanda Games began open beta testing
for "Love Live," a 2D mobile card game licensed from the leading
Japanese game developer, KLab Inc., in mainland China.
July 10, 2014 -
Shanda Games began the first round
closed beta testing for "Dungeon Striker," an in-house developed
action-based 3D MMO game, in mainland China.
July 23, 2014 -
Shanda Games began open beta testing
for "Bloodline," an in-house developed 2D mobile card game, in
mainland China.
July 25, 2014 -
Shanda Games began open beta testing
for "Three Kingdoms Puzzle Wars," a 2D mobile game licensed from
the leading Japanese game developer, Cygames Inc., in mainland
China.
August 25, 2014 -
Shanda Games began open beta testing
for "Final Fantasy XIV," a fantasy-themed 3D MMO game licensed from
the leading Japanese game developer, Square Enix, in mainland
China.
September 18, 2014 -
Shanda Games entered into commitment
letters with eight game producers providing for them to receive
retention equity awards, subject to a number of conditions,
including the closing of a "going private" transaction involving
the Company and compliance with applicable laws, rules and
regulations. The equity award will be granted under the terms
of an equity incentive plan to be adopted by the Company's board
after the closing of a "going private" transaction involving the
Company. Each equity award is expected to be no less than
RMB80 million (US$13 million) in value.
Currency Convenience Translation
The United States dollar (US$)
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 RMB6.1528 to US$1.00 as published by the People's Bank of
China on June 30, 2014. 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 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
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 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 and the first half of 2014, the Company paid an
aggregate of US$390.2 million to
Shanda Interactive as further partial acquisition payments, which
were reported as financing cash flows in the statement of cash
flows. The remainder of approximately US$53.3 million is reported in "deferred
acquisition consideration payable to Shanda Interactive" in the
accompanying unaudited condensed consolidated balance sheet. 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 was 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; and the introduction and
potential success of new MMO game and mobile game titles 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 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
|
|
March 31
|
|
June 30
|
|
2013
|
|
2014
|
|
2014
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
877.6
|
|
1,060.4
|
|
654.7
|
|
106.4
|
Restricted
cash
|
4.5
|
|
-
|
|
-
|
|
-
|
Short-term
investments
|
1,525.6
|
|
1,512.3
|
|
804.0
|
|
130.7
|
Accounts receivable,
net of allowance for
doubtful accounts
|
193.3
|
|
229.8
|
|
311.6
|
|
50.6
|
Accounts receivable
due from related parties
|
38.1
|
|
44.2
|
|
9.2
|
|
1.5
|
Deferred licensing
fees and related costs
|
11.1
|
|
8.1
|
|
5.0
|
|
0.8
|
Prepayments and other
current assets
|
237.9
|
|
269.6
|
|
313.9
|
|
51.0
|
Other receivables due
from related parties
|
71.2
|
|
59.9
|
|
50.3
|
|
8.2
|
Deferred tax
assets
|
100.1
|
|
103.6
|
|
81.7
|
|
13.3
|
Total current
assets
|
3,059.4
|
|
3,287.9
|
|
2,230.4
|
|
362.5
|
|
|
|
|
|
|
|
|
Time deposits with
maturity over one year
|
723.0
|
|
723.0
|
|
644.4
|
|
104.7
|
Investments in
affiliated companies
|
201.7
|
|
216.3
|
|
222.6
|
|
36.2
|
Property and
equipment
|
191.0
|
|
171.1
|
|
155.4
|
|
25.3
|
Intangible
assets
|
428.9
|
|
396.0
|
|
415.9
|
|
67.6
|
Goodwill
|
299.7
|
|
299.7
|
|
299.7
|
|
48.7
|
Long-term
deposits
|
31.5
|
|
17.3
|
|
15.6
|
|
2.5
|
Other long term
assets
|
160.8
|
|
185.5
|
|
180.3
|
|
29.3
|
Non-current deferred
tax assets
|
31.4
|
|
28.1
|
|
25.1
|
|
4.1
|
Total
assets
|
5,127.4
|
|
5,324.9
|
|
4,189.4
|
|
680.9
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term
borrowings
|
1,567.9
|
|
1,203.2
|
|
523.8
|
|
85.1
|
Accounts
payable
|
85.2
|
|
93.0
|
|
85.0
|
|
13.8
|
Accounts payable due
to related parties
|
20.7
|
|
22.5
|
|
21.2
|
|
3.4
|
Licensing fees
payable
|
175.1
|
|
164.6
|
|
208.4
|
|
33.9
|
Taxes
payable
|
138.3
|
|
135.4
|
|
94.8
|
|
15.4
|
Deferred
revenue
|
365.4
|
|
258.4
|
|
237.6
|
|
38.6
|
Other payables and
accruals
|
444.1
|
|
439.6
|
|
340.7
|
|
55.5
|
Other payables due to
related parties
|
2.8
|
|
3.0
|
|
5.8
|
|
0.9
|
Deferred acquisition
consideration payable to
Shanda Interactive
|
867.5
|
|
875.3
|
|
327.8
|
|
53.3
|
Dividend
payable
|
4.7
|
|
4.0
|
|
3.2
|
|
0.5
|
Deferred tax
liabilities
|
61.7
|
|
78.0
|
|
100.7
|
|
16.4
|
Total current
liabilities
|
3,733.4
|
|
3,277.0
|
|
1,949.0
|
|
316.8
|
|
|
|
|
|
|
|
|
Long-term
borrowings
|
335.3
|
|
719.8
|
|
596.8
|
|
97.0
|
Long-term
liabilities
|
33.0
|
|
31.5
|
|
34.2
|
|
5.6
|
Non-current deferred
tax liabilities
|
76.9
|
|
71.5
|
|
66.0
|
|
10.6
|
Non-current deferred
revenue
|
29.5
|
|
21.7
|
|
19.4
|
|
3.2
|
Total
liabilities
|
4,208.1
|
|
4,121.5
|
|
2,665.4
|
|
433.2
|
Redeemable
non-controlling interests
|
14.0
|
|
14.0
|
|
14.0
|
|
2.3
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
(US$0.01 par value)
|
39.4
|
|
39.4
|
|
39.5
|
|
6.4
|
Additional paid-in
capital
|
9.5
|
|
18.3
|
|
23.9
|
|
3.9
|
Statutory
reserves
|
168.2
|
|
171.5
|
|
172.9
|
|
28.1
|
Accumulated other
comprehensive loss
|
(24.3)
|
|
(47.8)
|
|
(22.6)
|
|
(3.7)
|
Retained
earnings
|
402.2
|
|
702.7
|
|
1,000.3
|
|
162.6
|
Total Shanda Games
Limited shareholders' equity
|
595.0
|
|
884.1
|
|
1,214.0
|
|
197.3
|
Non-controlling
interests
|
310.3
|
|
305.3
|
|
296.0
|
|
48.1
|
Total shareholders'
equity
|
905.3
|
|
1,189.4
|
|
1,510.0
|
|
245.4
|
Total liabilities and
shareholders' equity
|
5,127.4
|
|
5,324.9
|
|
4,189.4
|
|
680.9
|
|
|
|
|
|
|
|
|
Ordinary shares
outstanding
|
536,608,446
|
|
536,876,392
|
|
537,185,520
|
|
537,185,520
|
ADS equivalents
outstanding
|
268,304,223
|
|
268,438,196
|
|
268,592,760
|
|
268,592,760
|
SHANDA GAMES
LIMITED
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in millions, except
for share and per share data)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
June 30
|
|
March 31
|
|
June 30
|
2013(1)
|
2014
|
2014
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net
revenues:
|
|
|
|
|
|
|
|
MMO game
revenues
|
976.6
|
|
916
|
|
868.7
|
|
141.2
|
Mobile game
revenues
|
101.8
|
|
65.6
|
|
85.8
|
|
13.9
|
Other
revenues
|
14.7
|
|
10.5
|
|
9.9
|
|
1.6
|
Total net
revenues
|
1,093.10
|
|
992.1
|
|
964.4
|
|
156.7
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
-279.9
|
|
-227.3
|
|
-235.6
|
|
-38.2
|
Gross
profit
|
813.2
|
|
764.8
|
|
728.8
|
|
118.5
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Product
development
|
-179.1
|
|
-162.3
|
|
-159.7
|
|
-26
|
Sales and
marketing
|
-111.4
|
|
-151.1
|
|
-148.4
|
|
-24.1
|
General and
administrative
|
-91
|
|
-85.2
|
|
-87.7
|
|
-14.3
|
Total operating
expenses
|
-381.5
|
|
-398.6
|
|
-395.8
|
|
-64.4
|
|
|
|
|
|
|
|
|
Income from
operations
|
431.7
|
|
366.2
|
|
333
|
|
54.1
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
24.1
|
|
-2.1
|
|
3
|
|
0.5
|
Government financial
incentives
|
43.5
|
|
23.9
|
|
20.4
|
|
3.3
|
Other (expense),
net
|
-4
|
|
-4.9
|
|
-43.3
|
|
-7
|
Income before income
tax expense and equity
in profits (losses) of affiliated companies
|
495.3
|
|
383.1
|
|
313.1
|
|
50.9
|
|
|
|
|
|
|
|
|
Income tax
expense
|
-3.6
|
|
-91.5
|
|
-27.6
|
|
-4.5
|
Equity in profits
(losses) of affiliated companies
|
-2.1
|
|
1.6
|
|
-7.2
|
|
-1.2
|
Net income
|
489.6
|
|
293.2
|
|
278.3
|
|
45.2
|
Net (income) / loss
attributable to non-controlling interests
|
-3.5
|
|
12.5
|
|
21.7
|
|
3.6
|
Net income
attributable to the Company's shareholders
|
486.1
|
|
305.7
|
|
300
|
|
48.8
|
|
|
|
|
|
|
|
|
Earnings per ordinary
share
|
|
|
|
|
|
|
|
Basic
|
0.91
|
|
0.57
|
|
0.56
|
|
0.09
|
Diluted
|
0.91
|
|
0.56
|
|
0.55
|
|
0.09
|
|
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
Basic
|
1.82
|
|
1.14
|
|
1.12
|
|
0.18
|
Diluted
|
1.82
|
|
1.12
|
|
1.1
|
|
0.18
|
|
|
|
|
|
|
|
|
Weighted average
ordinary shares outstanding
|
|
|
|
|
|
|
|
Basic
|
535,519,805
|
|
536,678,069
|
|
537,063,311
|
|
537,063,311
|
Diluted
|
535,524,325
|
|
541,917,816
|
|
544,064,521
|
|
544,064,521
|
|
|
|
|
|
|
|
|
Weighted average ADS
outstanding
|
|
|
|
|
|
|
|
Basic
|
267,759,902
|
|
268,339,034
|
|
268,531,656
|
|
268,531,656
|
Diluted
|
267,762,163
|
|
270,958,908
|
|
272,032,260
|
|
272,032,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
non-GAAP measures to GAAP measures
|
|
|
|
|
|
|
|
Non-GAAP gross
profit
|
828.9
|
|
782
|
|
745.8
|
|
121.2
|
Intangible asset
amortization arising from acquisitions
|
-15.8
|
|
-16.8
|
|
-16.8
|
|
-2.7
|
Share-based
compensation cost
|
0.1
|
|
-0.4
|
|
-0.2
|
|
0
|
GAAP gross
profit
|
813.2
|
|
764.8
|
|
728.8
|
|
118.5
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income
|
466.2
|
|
402
|
|
366
|
|
59.5
|
Intangible asset
amortization arising from acquisitions
|
-27.5
|
|
-25.8
|
|
-25.8
|
|
-4.2
|
Share-based
compensation cost
|
-7
|
|
-10
|
|
-7.2
|
|
-1.2
|
GAAP operating
income
|
431.7
|
|
366.2
|
|
333
|
|
54.1
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to the Company's shareholders
|
512.2
|
|
334.3
|
|
325.8
|
|
53
|
Intangible asset
amortization arising from acquisitions
|
-27.5
|
|
-25.8
|
|
-25.8
|
|
-4.2
|
Share-based
compensation cost
|
-7
|
|
-10
|
|
-7.2
|
|
-1.2
|
Income tax
effect
|
5.8
|
|
5.4
|
|
5.4
|
|
0.9
|
Intangible asset
amortization arising from
acquisitions attributable to non-controlling interests
|
2.6
|
|
1.8
|
|
1.8
|
|
0.3
|
GAAP net income
attributable to the Company's shareholders
|
486.1
|
|
305.7
|
|
300
|
|
48.8
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per share
|
0.96
|
|
0.62
|
|
0.6
|
|
0.1
|
Non-GAAP expense per
share
|
-0.05
|
|
-0.06
|
|
-0.05
|
|
-0.01
|
GAAP diluted earnings
per share
|
0.91
|
|
0.56
|
|
0.55
|
|
0.09
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
1.92
|
|
1.24
|
|
1.2
|
|
0.2
|
Non-GAAP expense per
ADS
|
-0.1
|
|
-0.12
|
|
-0.1
|
|
-0.02
|
GAAP diluted earnings
per ADS
|
1.82
|
|
1.12
|
|
1.1
|
|
0.18
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of intangible asset amortization arising from
acquisitions included in:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
-15.8
|
|
-16.8
|
|
-16.8
|
|
-2.7
|
Product
development
|
-7.9
|
|
-6.9
|
|
-6.9
|
|
-1.2
|
Sales and
marketing
|
-1.4
|
|
-1.2
|
|
-1.2
|
|
-0.2
|
General and
administrative
|
-2.4
|
|
-0.9
|
|
-0.9
|
|
-0.1
|
Total
|
-27.5
|
|
-25.8
|
|
-25.8
|
|
-4.2
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of share-based compensation cost included in:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
0.1
|
|
-0.4
|
|
-0.2
|
|
0
|
Product
development
|
-4.2
|
|
-2.6
|
|
-3.1
|
|
-0.5
|
Sales and
marketing
|
0.1
|
|
-0.1
|
|
-
|
|
-
|
General and
administrative
|
-3
|
|
-6.9
|
|
-3.9
|
|
-0.7
|
Total
|
-7
|
|
-10
|
|
-7.2
|
|
-1.2
|
|
Note:
|
|
(1) Amounts presented
revised for all historical periods prior to August 2013 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)
|
|
|
Six months
ended
|
|
June 30
2013
(1)
|
|
June 30
2014
|
|
RMB
|
|
RMB
|
|
US$
|
Net
revenues:
|
|
|
|
|
|
MMO game
revenues
|
1,948.0
|
|
1,784.7
|
|
290.1
|
Mobile game
revenues
|
208.3
|
|
151.4
|
|
24.6
|
Other
revenues
|
34.4
|
|
20.4
|
|
3.3
|
Total net
revenues
|
2,190.7
|
|
1,956.5
|
|
318.0
|
|
|
|
|
|
|
Cost of
revenues
|
(557.2)
|
|
(462.9)
|
|
(75.2)
|
Gross
profit
|
1,633.5
|
|
1,493.6
|
|
242.8
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Product
development
|
(348.9)
|
|
(322.0)
|
|
(52.3)
|
Sales and
marketing
|
(221.4)
|
|
(299.5)
|
|
(48.7)
|
General and
administrative
|
(178.6)
|
|
(172.9)
|
|
(28.2)
|
Total operating
expenses
|
(748.9)
|
|
(794.4)
|
|
(129.2)
|
|
|
|
|
|
|
Income from
operations
|
884.6
|
|
699.2
|
|
113.6
|
|
|
|
|
|
|
Interest income,
net
|
53.5
|
|
0.9
|
|
0.1
|
Government financial
incentives
|
61.6
|
|
44.3
|
|
7.2
|
Other (expense),
net
|
(11.6)
|
|
(48.2)
|
|
(7.7)
|
Income before income
tax expense and equity in loss of
affiliated companies
|
988.1
|
|
696.2
|
|
113.2
|
|
|
|
|
|
|
Income tax
expense
|
(113.2)
|
|
(119.1)
|
|
(19.4)
|
Equity in loss of
affiliated companies
|
(5.4)
|
|
(5.6)
|
|
(0.9)
|
Net income
|
869.5
|
|
571.5
|
|
92.9
|
Net (income) / loss
attributable to non-controlling interests
|
(15.8)
|
|
34.2
|
|
5.5
|
Net income
attributable to the Company's shareholders
|
853.7
|
|
605.7
|
|
98.4
|
|
|
|
|
|
|
Earnings per ordinary
share
|
|
|
|
|
|
Basic
|
1.59
|
|
1.13
|
|
0.18
|
Diluted
|
1.59
|
|
1.12
|
|
0.18
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
Basic
|
3.18
|
|
2.26
|
|
0.36
|
Diluted
|
3.18
|
|
2.24
|
|
0.36
|
|
|
|
|
|
|
Weighted average
ordinary shares outstanding
|
|
|
|
|
|
Basic
|
537,839,924
|
|
536,873,171
|
|
536,873,171
|
Diluted
|
537,846,469
|
|
542,993,650
|
|
542,993,650
|
|
|
|
|
|
|
Weighted average ADS
outstanding
|
|
|
|
|
|
Basic
|
268,919,962
|
|
268,436,585
|
|
268,436,585
|
Diluted
|
268,923,234
|
|
271,496,825
|
|
271,496,825
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
non-GAAP measures to GAAP measures
|
Non-GAAP gross
profit
|
1,665.1
|
|
1,527.8
|
|
248.3
|
Intangible asset
amortization arising from acquisitions
|
(31.6)
|
|
(33.6)
|
|
(5.5)
|
Share-based
compensation cost
|
-
|
|
(0.6)
|
|
(0.1)
|
GAAP gross
profit
|
1,633.5
|
|
1,493.6
|
|
242.7
|
|
|
|
|
|
|
Non-GAAP operating
income
|
957.8
|
|
768.0
|
|
124.8
|
Intangible asset
amortization arising from acquisitions
|
(55.0)
|
|
(51.6)
|
|
(8.4)
|
Share-based
compensation cost
|
(18.2)
|
|
(17.2)
|
|
(2.8)
|
GAAP operating
income
|
884.6
|
|
699.2
|
|
113.6
|
|
|
|
|
|
|
Non-GAAP net income
attributable to the Company's shareholders
|
910.1
|
|
660.1
|
|
107.3
|
Intangible asset
amortization arising from acquisitions
|
(55.0)
|
|
(51.6)
|
|
(8.4)
|
Share-based
compensation cost
|
(18.2)
|
|
(17.2)
|
|
(2.8)
|
Income tax
effect
|
11.6
|
|
10.8
|
|
1.8
|
Intangible asset
amortization arising from acquisitions
attributable to non-controlling interests
|
5.2
|
|
3.6
|
|
0.6
|
GAAP net income
attributable to the Company's shareholders
|
853.7
|
|
605.7
|
|
98.5
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per share
|
1.69
|
|
1.22
|
|
0.20
|
Non-GAAP expense per
share
|
(0.10)
|
|
(0.10)
|
|
(0.02)
|
GAAP diluted earnings
per share
|
1.59
|
|
1.12
|
|
0.18
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
3.38
|
|
2.44
|
|
0.40
|
Non-GAAP expense per
ADS
|
(0.20)
|
|
(0.20)
|
|
(0.04)
|
GAAP diluted earnings
per ADS
|
3.18
|
|
2.24
|
|
0.36
|
|
Supplemental
disclosure of intangible asset amortization arising from
acquisitions included in:
|
|
Cost of
revenues
|
(31.6)
|
|
(33.6)
|
|
(5.5)
|
Product
development
|
(15.8)
|
|
(13.8)
|
|
(2.2)
|
Sales and
marketing
|
(2.8)
|
|
(2.4)
|
|
(0.4)
|
General and
administrative
|
(4.8)
|
|
(1.8)
|
|
(0.3)
|
Total
|
(55.0)
|
|
(51.6)
|
|
(8.4)
|
|
Supplemental
disclosure of share-based compensation cost included in:
|
|
Cost of
revenues
|
-
|
|
(0.6)
|
|
(0.1)
|
Product
development
|
(7.8)
|
|
(5.7)
|
|
(0.9)
|
Sales and
marketing
|
-
|
|
(0.1)
|
|
(0.0)
|
General and
administrative
|
(10.4)
|
|
(10.8)
|
|
(1.8)
|
Total
|
(18.2)
|
|
(17.2)
|
|
(2.8)
|
|
Note:
|
|
(1) Amounts presented
revised for all historical periods prior to August 2013 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 CASH FLOWS
|
(in millions, except
for share and per share data)
|
|
|
Six months
ended
|
|
June 30
2013(1)
|
|
June 30
2014
|
|
RMB
|
|
RMB
|
|
US$
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
869.5
|
|
571.5
|
|
92.9
|
Adjustments
for:
|
|
|
|
|
|
Share-based
compensation expenses
|
18.2
|
|
17.2
|
|
2.8
|
Depreciation and
amortization
|
143.5
|
|
122.9
|
|
20.0
|
Other
|
(17.7)
|
|
88.1
|
|
14.3
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
Prepayments and
licensing fees and royalties
|
(7.0)
|
|
(57.9)
|
|
(9.4)
|
Others
|
(243.8)
|
|
(380.0)
|
|
(61.8)
|
Net cash provided by
operating activities
|
762.7
|
|
361.8
|
|
58.8
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchase of property,
equipment and intangible assets
|
(32.1)
|
|
(23.0)
|
|
(3.7)
|
Acquisitions (net of
cash acquired) and purchase of equity investments
|
(13.0)
|
|
(24.2)
|
|
(3.9)
|
Decrease in
short-term investments
|
302.5
|
|
820.1
|
|
133.3
|
Decrease in loan
receivable and other receivables due from related
parties
|
270.3
|
|
-
|
|
-
|
Others
|
(10.9)
|
|
(5.5)
|
|
(1.0)
|
Net cash provided by
investing activities
|
516.8
|
|
767.4
|
|
124.7
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Payment for seller
financing from Shanda Interactive on Shengzhan and
Shengjing transactions
|
-
|
|
(547.5)
|
|
(89.0)
|
Proceeds from loan
borrowings and other payables due to related parties
|
88.4
|
|
719.8
|
|
117.0
|
Repayment of loan
borrowings and other payables due to related parties
|
(1,482.8)
|
|
(1,534.7)
|
|
(249.4)
|
Dividends
paid
|
(2.1)
|
|
(0.7)
|
|
(0.1)
|
Net distribution to
Shanda Interactive arising from platform service and
prepaid card business
|
(238.5)
|
|
-
|
|
-
|
Others
|
131.9
|
|
1.8
|
|
0.3
|
Net cash used in
financing activities
|
(1,503.1)
|
|
(1,361.3)
|
|
(221.2)
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(4.8)
|
|
9.3
|
|
1.5
|
Net decrease in cash
and cash equivalents
|
(228.4)
|
|
(222.8)
|
|
(36.2)
|
Cash and cash
equivalents, beginning of period
|
2,132.4
|
|
877.5
|
|
142.6
|
Cash and cash
equivalents, end of period
|
1,904.0
|
|
654.7
|
|
106.4
|
|
Note:
|
|
(1) Amounts presented
revised for all historical periods prior to August 2013 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