Form 6-K SINA CORP For: Nov 30

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2016

 

Commission File Number: 001-37361

 

 

SINA Corporation

(Registrant’s Name)

 

 

37F, Jin Mao Tower

88 Century Boulevard, Pudong

Shanghai 200121, China

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F x      Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

Table of Contents

 

TABLE OF CONTENTS

 

Signatures

 

Press Release regarding Results of Operations and Financial Condition for the Third Quarter Ended September 30, 2016, issued by SINA Corporation on November 21, 2016

 

2

Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

	SINA CORPORATION
Date: November 23, 2016	By:	/s/ Bonnie Yi Zhang
		Bonnie Yi Zhang
		Chief Financial Officer

 

3

Exhibit 99.1

 

SINA Reports Third Quarter 2016 Financial Results

 

SHANGHAI, China—November 21, 2016—SINA Corporation (the “Company” or “SINA”) (NASDAQ: SINA), a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the third quarter ended September 30, 2016.

 

Third Quarter 2016 Highlights

 

·          Net revenues increased 21% year over year to $274.9 million. Non-GAAP net revenues increased 22% year over year to $272.3 million.

·          Advertising revenues grew 21% year over year to $233.6 million.

·          Income from operations increased 147% year over year to $36.3 million. Operating margin was 13%, up from 6% for the same period last year. Non-GAAP income from operations increased 99% year over year to $56.5 million. Non-GAAP operating margin was 21%, up from 13% for the same period last year.

·          Net income attributable to SINA was $146.5 million, or $1.90 diluted net income per share. Non-GAAP net income attributable to SINA was $43.7 million, or $0.56 diluted net income per share.

·          Weibo’s monthly active users (“MAUs”) in September 2016 grew 34% year over year to 297 million, 89% of which were mobile users. Average daily active users (“DAUs”) in September 2016 grew 32% year over year to 132 million.

 

“We are delighted to have another solid quarter.” said Charles Chao, Chairman and CEO of SINA. “SINA portal has further implemented its mobile strategy, with significant growth of mobile traffic from SINA News Application. Mobile monetization for portal has further enhanced, with 50% of the portal advertising revenues coming from mobile devices.” Mr. Chao added.

 

“With strong growth in user base, revenues and profitability, Weibo has demonstrated its platform value with the network effect of the content ecosystem and strong monetization capability.” said Mr. Chao. “We take great pride that Weibo is returning to the center stage of Chinese Internet market.”

 

 

Third Quarter 2016 Financial Results

 

For the third quarter of 2016, SINA reported net revenues of $274.9 million, compared to $226.3 million for the same period last year. Non-GAAP net revenues for the third quarter of 2016 totaled $272.3 million, compared to $223.7 million for the same period last year.

 

Online advertising revenues for the third quarter of 2016 were $233.6 million, compared to $193.5 million for the same period last year. The year-over-year growth in online advertising revenues resulted from an increase of $47.8 million in Weibo advertising and marketing revenues, partially offset by a decline of $7.7 million in portal advertising revenues.

 

Non-advertising revenues for the third quarter of 2016 were $41.2 million, compared to $32.8 million for the same period last year. The year-over-year growth in non-advertising revenues was mainly resulted from an increase of $7.1 million in portal non-advertising revenues. Non-GAAP non-advertising revenues for the third quarter of 2016 were $38.6 million, compared to $30.2 million for the same period last year.

 

Gross margin for the third quarter of 2016 was 67%, compared to 63% for the same period last year. Advertising gross margin for the third quarter of 2016 was 70%, compared to 64% for the same period last year. The increasing advertising revenue proportion contributed by small and medium enterprises customers in both portal and Weibo business is the key driver that resulted in a higher gross margin for our advertising business. Non-advertising gross margin for the third quarter of 2016 was 54%, compared to 60% for the same period last year. The decrease in non-advertising gross margin was primarily due to increasing proportion of portal non-advertising revenues, which contributed lower gross margin.

 

Operating expenses for the third quarter of 2016 totaled $148.2 million, compared to $128.6 million for the same period last year. Non-GAAP operating expenses for the third quarter of 2016 totaled $127.9 million, compared to $113.9 million for the same period last year. The year-over-year growth of non-GAAP operating expenses was mainly resulted from an increase of sales and marketing expenditure for portal and Weibo.

 

Income from operations for the third quarter of 2016 was $36.3 million, compared to $14.7 million for the same period last year. Operating margin was 13%, up from 6% for the same period last year. Non-GAAP income from operations for the third quarter of 2016 was $56.5 million, compared to $28.4 million for the same period last year. Non-GAAP operating margin was 21%, up from 13% for the same period last year.

 

Non-operating income for the third quarter of 2016 was $143.1 million, compared to a non-operating income of $4.9 million for the same period last year. Non-operating income for the third quarter of 2016 mainly included: (i) a $133.5 million net gain on sale of and impairment on investments, which is excluded under non-GAAP measure; and (ii) a $5.5 million earnings pick-up from equity-method investments, which are accounted for under the equity-method and reported one quarter in arrears, mainly resulted from earnings pick-up from the Company’s investment in E-House.

 

Net income attributable to SINA for the third quarter of 2016 was $146.5 million, compared to $9.8 million for the same period last year. Diluted net income per share attributable to SINA for the third quarter of 2016 was $1.90, compared to $0.16 for the same period last year. Non-GAAP net income attributable to SINA for the third quarter of 2016 was $43.7 million, compared to $24.4 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the third quarter of 2016 was $0.56, compared to $0.39 for the same period last year.

 

 

As of September 30, 2016, SINA’s cash, cash equivalents and short-term investments totaled $2.2 billion, at similar level compared with the balance as of December 31, 2015. For the third quarter of 2016, net cash provided by operating activities was $256.1 million, capital expenditures totaled $2.3 million, and depreciation and amortization expenses amounted to $7.3 million.

 

Other Developments

 

Completion of E-House Merger

 

As previously announced on June 19, 2015, SINA joined a consortium along with Mr. Xin Zhou, co-chairman of the board of directors and chief executive officer of E-House (China) Holdings Limited (“E-House”), a leading real estate services company in China, and Mr. Neil Nanpeng Shen, a board member of E-House, to acquire all the outstanding ordinary shares of E-House not already owned by SINA, Mr. Xin Zhou, Mr. Neil Nanpeng Shen or their respective affiliates. Pursuant to a definitive agreement and plan of merger (the “Merger Agreement”) with E-House Holdings Ltd. (“Parent”), on August 12, 2016 (the “Closing Date”), E-House completed its merger and became a wholly-owned subsidiary of Parent.  Sina contributed approximately $140.0 million to subscribe newly issued shares of Parent. Immediately following the Closing Date, the Company held 43% of total outstanding shares of Parent and continued to apply equity-method to account for the investment in Parent.

 

On the Closing Date, SINA, Parent and certain other shareholders of Parent entered into a shareholders agreement, pursuant to which (a) Parent undertakes, among other things, that it shall not, directly or indirectly, dispose any ordinary shares of Leju Holdings Limited (“Leju”), an NYSE-listed company, owned by E-House without the prior written approval of each of Mr. Xin Zhou and SINA; and (b) during the 18-month period following the Closing Date, Parent has an option to repurchase all the equity interest held by SINA in Parent for a consideration consisting of (i) 30% of the total outstanding ordinary shares of Leju at the time of the repurchase, and (ii) certain cash payment. The option was recognized as a liability on the basis of its fair value, and its subsequent changes in fair value was reflected in the fair value change in option liability.

 

In-Kind Distribution

 

On August 31, 2016, the Company announced its planned distribution of shares of Weibo to SINA shareholders as of the record date of September 12, 2016 on a pro rata basis, or one Weibo Share for each ten outstanding SINA ordinary shares. As of the distribution date of October 14, 2016, the Company has distributed 7,088,116 Class A ordinary shares of Weibo, based on 70,881,168 ordinary shares of SINA outstanding as of the record date. Following the distribution of the Weibo Shares, SINA’s equity stake in Weibo decreased from approximately 53.5% (or approximately 78% by voting power) to approximately 50.2% (or approximately 75% by voting power), which resulted in an increase in the percentage of the non-controlling interests related to Weibo.

 

 

Annual General Meeting

 

On November 4, 2016, the Company held its annual general meeting of shareholders, where the shareholders re-elected Mr. Ter Fung Tsao as director of SINA. The shareholders also approved and ratified the appointment of PricewaterhouseCoopers Zhong Tian LLP as the Company’s independent auditors for the fiscal year ending December 31, 2016.

 

Non-GAAP Measures

 

This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP advertising and non-advertising gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) attributable to SINA and non-GAAP diluted net income (loss) per share attributable to SINA. These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company’s financial performance prepared in accordance with U.S. GAAP. The Company’s non-GAAP financial measures may be defined differently than similar terms used by other companies. Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures.

 

The Company’s non-GAAP financial measures exclude recognition of deferred revenues in relation to the equity investment in E-House, stock-based compensation, amortization of intangible assets, adjustment for non-GAAP to GAAP reconciling items on the share of equity method investments, gain/loss on sale of investment/business, deemed disposal and impairment on investment, impairment on goodwill, change in fair value in option liability, amortization of convertible debt issuance cost, income tax effects of above non-GAAP to GAAP reconciling items and adjustments for non-GAAP to GAAP reconciling items for the income (loss) attributable to non-controlling interests. The Company’s management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company’s ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company’s current financial results with the Company’s past financial results in a consistent manner, and (ii) in understanding and evaluating the Company’s current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company’s core operating results and business outlook.

 

Use of non-GAAP financial measures has limitations. The Company’s non-GAAP financial measures do not include all income and expense items that affect the Company’s operations.  They may not be comparable to non-GAAP financial measures used by other companies.

 

 

Management compensates for these limitations by also considering the Company’s financial results prepared in accordance with U.S. GAAP. Reconciliations of the Company’s non-GAAP measures to the nearest comparable GAAP measures are set forth in the section below titled “Unaudited Reconciliation of Non-GAAP to GAAP Results.”

 

Conference Call

 

SINA will host a conference call from 9:10 p.m. — 9:50 p.m. Eastern Time on November 21, 2016 (or 10:10 a.m. — 10:50 a.m. Beijing Time on November 22, 2016) to present an overview of the Company’s financial performance and business operations. A live webcast of the call will be available through the Company’s corporate website at http://corp.sina.com.cn. The conference call can be accessed as follows:

 

US:	+1 845 675 0438
Hong Kong:	+852 3018 6776
China:	400 120 0654
International:	+65 6713 5440
Passcode for all regions:	15998968

 

A replay of the conference call will be available through morning Eastern Time November 29, 2016. The dial-in number is +61 2 9003 4211. The passcode for the replay is 15998968.

 

About SINA

 

We are a leading online media company serving China and the global Chinese communities. Our digital media network of SINA.com (portal), SINA.cn (mobile portal), SINA Mobile Apps and Weibo.com (social media) enables Internet users to access professional media and user generated content in multi-media formats from personal computers and mobile devices and share their interests with friends and acquaintances.

 

SINA.com offers distinct and targeted professional content on each of its region-specific websites and a full range of complementary offerings. SINA.cn and SINA Mobile Apps provide news information, professional and entertainment content from SINA.com customized for mobile users in WAP (mobile browser) and mobile application format. Weibo is a leading social media platform for people to create, distribute and discover Chinese-language content. Based on an open platform architecture, Weibo allows users to create and post feeds and attach multi-media content, as well as access a wide range of organically and third-party developed applications, such as online games.

 

Through these properties and other product lines, we offer an array of online media and social media services to our users to create a rich canvas for businesses and advertisers to effectively connect and engage with their targeted audiences.

 

 

Safe Harbor Statement

 

This press release contains forward-looking statements that relate to, among other things, SINA’s expected financial performance and SINA’s strategic and operational plans (as described, without limitation, in quotations from management in this press release). SINA may also make forward-looking statements in the Company’s periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “confidence,” “estimates” and similar statements. SINA assumes no obligation to update the forward-looking statements in this press release and elsewhere. Forward-looking statements involve inherent risks and uncertainties. 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 failure to meet internal or external expectations of future performance given the rapidly evolving markets; condition of the global financial and credit market; the uncertain regulatory landscape in China; fluctuations in the Company’s quarterly operating results; the Company’s reliance on online advertising sales and value-added services for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products, including portal, Weibo and MVAS products; failure to enter and develop the small and medium enterprise market by the Company or through cooperation with other parties, such as Alibaba; failure to successfully integrate acquired businesses; risks associated with the Company’s investments, including equity pick-up and impairment; and failure to compete successfully against new entrants and established industry competitors. Further information regarding these and other risks is included in SINA’s annual report on Form 20-F for the year ended December 31, 2015 and other filings with the Securities and Exchange Commission.

 

Contact:

Investor Relations

SINA Corporation

Phone: +86 10 5898 3336

Email: [email protected]

 

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. Dollars in thousands, except per share data)

 

		Three months ended									Nine months ended
		September 30,						June 30,			September 30,
		2016			2015			2016			2016			2015
Net revenues:
Advertising		$	233,633		$	193,459		$	205,031		$	601,631		$	520,070
Non-advertising		41,242			32,835			38,931			115,881			104,409
		274,875			226,294			243,962			717,512			624,479
Cost of revenues *:
Advertising		71,194			69,741			73,083			212,466			202,668
Non-advertising		19,133			13,276			15,834			47,672			43,658
		90,327			83,017			88,917			260,138			246,326
Gross profit		184,548			143,277			155,045			457,374			378,153
Operating expenses:
Sales and marketing *		64,176			53,342			56,895			172,773			167,577
Product development *		55,674			54,417			53,522			161,690			157,818
General and administrative *		28,366			20,830			23,808			74,308			70,123
		148,216			128,589			134,225			408,771			395,518
Income (Loss) from operations		36,332			14,688			20,820			48,603			(17,365		)
Non-operating income:
Earning (Loss) from equity method investments, net		5,534			93			(6,190		)	(11,220		)	1,016
Gain on sale of investments/business and impairment on investments, net		133,505			(1,066		)	34,925			196,657			16,881
Fair value change in option liability		(2,653		)	—			—			(2,653		)	—
Interest and other income, net		6,703			5,892			6,308			19,619			18,130
		143,089			4,919			35,043			202,403			36,027
Income before income taxes		179,421			19,607			55,863			251,006			18,662
Income tax expenses		(19,050		)	(4,756		)	(2,747		)	(21,781		)	(4,793		)
Net income		160,371			14,851			53,116			229,225			13,869
Less: Net income attributable to non-controlling interests		13,853			5,085			9,789			24,060			2,744
Net income attributable to SINA		$	146,518		$	9,766		$	43,327		$	205,165		$	11,125
Basic net income per share attributable to SINA		$	2.08		$	0.17		$	0.62		$	2.93		$	0.19
Diluted net income per share attributable to SINA **		$	1.90		$	0.16		$	0.59		$	2.74		$	0.18
Shares used in computing basic net income per share attributable to SINA		70,420			58,512			70,047			70,108			58,559
Shares used in computing diluted net income per share attributable to SINA		78,303			58,799			77,202			77,486			58,854

 

* Stock-based compensation in each category:
Cost of revenues - advertising		$	2,380		$	1,569		$	1,775		$	5,721		$	4,131
Sales and marketing		4,791			3,121			3,303			10,937			8,337
Product development		7,261			4,264			3,592			15,775			10,863
General and administrative		7,853			6,437			7,165			21,929			19,960

 

**                  Net income attributable to SINA is adjusted for diluted shares issued by our subsidiary and equity method investments.

 

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

 

		September 30,			December 31,
		2016			2015
Assets
Current assets:
Cash and cash equivalents		$	1,158,970		$	763,439
Short-term investments		1,050,206			1,446,414
Restricted cash		304,375			140,652
Accounts receivable, net		221,132			228,732
Prepaid expenses and other current assets *		288,088			135,416
Subtotal		3,022,771			2,714,653
Property and equipment, net		248,657			47,495
Goodwill and intangible assets, net		57,616			61,954
Long-term investments		1,324,017			1,212,640
Other assets		192,175			320,205
Total assets		$	4,845,236		$	4,356,947
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable **		$	117,467		$	81,351
Amount due to customers		304,375			140,652
Accrued liabilities **		310,449			265,490
Short-term loan		82,081			—
Convertible debt *		799,301			795,108
Deferred revenues		96,862			79,528
Income taxes payable		30,086			16,426
Option liability		2,653			—
Subtotal		1,743,274			1,378,555
Long-term deferred revenues		67,892			76,003
Other long-term liabilities		25,050			25,721
Total liabilities		1,836,216			1,480,279
Shareholders’ equity
SINA shareholders’ equity		2,624,124			2,565,272
Non-controlling interests		384,896			311,396
Total shareholders’ equity		3,009,020			2,876,668
Total liabilities and shareholders’ equity		$	4,845,236		$	4,356,947

 

* Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of debt in the balance sheet as a direct deduction from the related debt rather than assets. Accordingly, the Company retrospectively reclassified $4.9 million of issuance cost of debt from prepaid expenses and other current assets into convertible debt as of December 31, 2015.

 

** Commencing on January 1, 2016, in order to enhance comparability with industry peers, payables that have been invoiced or formally agreed with the suppliers were recorded in accounts payable. To conform to current period presentations, the relevant amounts in prior periods have been reclassified from accrued liabilities accordingly. Such reclassification amounted to $77.8 million as of  December 31, 2015.

 

 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)

 

		Three months ended									Nine months ended
		September 30,						June 30,			September 30,
		2016			2015			2016			2016			2015
Net revenues
Portal:
Portal Advertising		$	79,855		$	87,598		$	78,694		$	222,270		$	247,182
Other		21,058			13,962			19,219			55,941			48,431
Subtotal		100,913			101,560			97,913			278,211			295,613
Weibo:
Advertising and marketing		156,693			105,861			127,173			383,112			272,888
Weibo VAS		20,184			18,873			19,712			59,940			55,978
Subtotal		176,877			124,734			146,885			443,052			328,866
Elimination		(2,915		)	—			(836		)	(3,751		)	—
		$	274,875		$	226,294		$	243,962		$	717,512		$	624,479
Cost of revenues
Portal:
Portal Advertising		$	32,540		$	37,240		$	36,804		$	104,881		$	117,261
Other		13,458			8,536			11,502			33,691			29,210
Subtotal		45,998			45,776			48,306			138,572			146,471
Weibo		44,494			37,241			40,657			121,777			99,855
Elimination		(165		)	—			(46		)	(211		)	—
		$	90,327		$	83,017		$	88,917		$	260,138		$	246,326
Gross margin
Portal		54		%	55		%	51		%	50		%	50		%
Weibo		75		%	70		%	72		%	73		%	70		%
		67		%	63		%	64		%	64		%	61		%

 

 

 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(U.S. Dollars in thousands, except per share data)

 

		Three months ended
		September 30, 2016									September 30, 2015									June 30, 2016
								Non-GAAP									Non-GAAP									Non-GAAP
		Actual			Adjustments			Results			Actual			Adjustments			Results			Actual			Adjustments			Results
Advertising revenues		$	233,633					$	233,633		$	193,459					$	193,459		$	205,031					$	205,031
Non-advertising revenues		41,242			(2,609		)(a)	38,633			32,835			(2,609		)(a)	30,226			38,931			(2,609		)(a)	36,322
Net revenues		$	274,875		$	(2,609	)	$	272,266		$	226,294		$	(2,609	)	$	223,685		$	243,962		$	(2,609	)	$	241,353
					(2,609		)(a)							(2,609		)(a)							(2,609		)(a)
					2,380		(b)							1,569		(b)							1,775		(b)
Gross profit		$	184,548		$	(229	)	$	184,319		$	143,277		$	(1,040	)	$	142,237		$	155,045		$	(834	)	$	154,211
					(19,905		)(b)							(13,822		)(b)							(14,060		)(b)
					(457		)(c)							(883		)(c)							(461		)(c)
Operating expenses		$	148,216		$	(20,362	)	$	127,854		$	128,589		$	(14,705	)	$	113,884		$	134,225		$	(14,521	)	$	119,704
					(2,609		)(a)							(2,609		)(a)							(2,609		)(a)
					22,285		(b)							15,391		(b)							15,835		(b)
					457		(c)							883		(c)							461		(c)
Income from operations		$	36,332		$	20,133		$	56,465		$	14,688		$	13,665		$	28,353		$	20,820		$	13,687		$	34,507
					(2,609		)(a)
					22,285		(b)							(2,609		)(a)							(2,609		)(a)
					457		(c)							15,391		(b)							15,835		(b)
					2,032		(d)							883		(c)							461		(c)
					(133,505		)(e)							2,882		(d)							2,427		(d)
					2,653		(f)							1,066		(e)							(34,925		)(e)
					(10,650		)(g)							(3,850		)(g)							(5,646		)(g)
					1,398		(h)							1,094		(h)							1,085		(h)
					15,133		(i)							(206		)(i)							(102		)(i)
Net income attributable to SINA		$	146,518		$	(102,806	)	$	43,712		$	9,766		$	14,651		$	24,417		$	43,327		$	(23,474	)	$	19,853
Diluted net income per share attributable to SINA *		$	1.90					$	0.56		$	0.16					$	0.39		$	0.59					$	0.27
Shares used in computing diluted net income per share attributable to SINA		78,303			—			78,303			58,799			6,467		(j)	65,266			77,202			—			77,202
Gross margin - advertising		70		%	1		%	71		%	64		%	1		%	65		%	64		%	1		%	65		%
Gross margin - non-advertising		54		%	-4		%	50		%	60		%	-4		%	56		%	59		%	-3		%	56		%

 

 

		Nine months ended
		September 30, 2016									September 30, 2015
								Non-GAAP									Non-GAAP
		Actual			Adjustments			Results			Actual			Adjustments			Results
Advertising revenues		$	601,631					$	601,631		$	520,070					$	520,070
Non-advertising revenues		115,881			(7,827		)(a)	108,054			104,409			(7,827		)(a)	96,582
Net revenues		$	717,512		$	(7,827	)	$	709,685		$	624,479		$	(7,827	)	$	616,652
					(7,827		)(a)							(7,827		)(a)
					5,721		(b)							4,131		(b)
Gross profit		$	457,374		$	(2,106	)	$	455,268		$	378,153		$	(3,696	)	$	374,457
					(48,641		)(b)							(39,160		)(b)
					(1,475		)(c)							(2,691		)(c)
Operating expenses		$	408,771		$	(50,116	)	$	358,655		$	395,518		$	(41,851	)	$	353,667
					(7,827		)(a)							(7,827		)(a)
					54,362		(b)							43,291		(b)
					1,475		(c)							2,691		(c)
Income (Loss) from operations		$	48,603		$	48,010		$	96,613		$	(17,365	)	$	38,155		$	20,790
					(7,827		)(a)
					54,362		(b)							(7,827		)(a)
					1,475		(c)							43,291		(b)
					3,978		(d)							2,691		(c)
					(196,657		)(e)							6,051		(d)
					2,653		(f)							(16,881		)(e)
					(20,815		)(g)							(9,730		)(g)
					3,567		(h)							3,304		(h)
					14,908		(i)							(623		)(i)
Net income attributable to SINA		$	205,165		$	(144,356	)	$	60,809		$	11,125		$	20,276		$	31,401
Diluted net income per share attributable to SINA *		$	2.74					$	0.82		$	0.18					$	0.50
Shares used in computing diluted net income per share attributable to SINA		77,486			—			77,486			58,854			—			58,854
Gross margin - advertising		65		%	1		%	66		%	61		%	1		%	62		%
Gross margin - non-advertising		59		%	-3		%	56		%	58		%	-3		%	55		%

 

(a)	To adjust the recognition of deferred revenue related to the license agreements granted to E-House.
(b)	To adjust stock-based compensation.
(c)	To adjust amortization of intangible assets.
(d)	To adjust the Non-GAAP to GAAP reconciling items on the share of equity method investments, net of share of amortization of intangibles not on their books.
(e)	To adjust (gain) loss on sale of investments/business, (gain) loss on deemed disposal and impairment on investments, net.
(f)	To adjust the change in fair value of option liability.
(g)	To adjust Non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests.
(h)	To adjust the amortization of convertible debt issuance cost.
(i)	To adjust the provision for income tax related to item (c) and (e). Other non-GAAP to GAAP reconciling items have no income tax effect.**
(j)	To adjust the number of shares for dilution resulted from convertible debt and unvested equity granted.
*	Net income (loss) attributable to SINA is adjusted for diluted shares issued by our subsidiary and equity method investments.
**	Most of the reconciliation items were recorded in entities in tax free jurisdictions hence no income tax implications. For impairment on investments, full valuation allowances were made due to as the Company does not expect they can be realized in the foreseeable future.