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 March 2019

 

Commission File Number: 001-37361

 


 

Sina Corporation

(Registrant’s Name)

 


 

SINA Plaza, No. 8 Courtyard 10

the West Xibeiwang E. Road

Haidian District, Beijing 100193

People’s Republic of 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

3

 

99.1 - Press Release regarding Financial Results for the Fourth Quarter and Fiscal Year Ended December 31, 2018 issued by Sina Corporation on March 5, 2019

 

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: March 6, 2019

By:

/s/ Bonnie Yi Zhang

 

 

Bonnie Yi Zhang

 

 

Chief Financial Officer

 

3


Exhibit 99.1

 

SINA Reports Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

 

BEIJING, China—March 5, 2019—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 fourth quarter and the fiscal year ended December 31, 2018.

 

Fourth Quarter 2018 Highlights

 

·          Both net revenues and non-GAAP net revenues increased 14% year-over-year to $573.0 million and $570.4 million, respectively.

·          Advertising revenues increased 14% year-over-year to $484.3 million.

·          Non-advertising revenues increased 12% year-over-year to $88.7 million. Non-GAAP non-advertising revenues increased 13% year-over-year to $86.1 million.

·          Net income attributable to SINA was $16.4 million, or $0.22 for diluted net income per share attributable to SINA’s ordinary shareholders. Non-GAAP net income attributable to SINA was $57.7 million, or $0.80 for non-GAAP diluted net income per share attributable to SINA’s ordinary shareholders.

·          Weibo’s monthly active users (“MAUs”) were 462 million in December 2018, a net addition of approximately 70 million users on a year-over-year basis. Weibo’s mobile MAUs represented 93% of Weibo’s MAUs.

·          Weibo’s average daily active users (“DAUs”) were 200 million in December 2018, a net addition of approximately 28 million users on a year-over-year basis.

 

Fiscal Year 2018 Highlights

 

·          Both net revenues and non-GAAP net revenues increased 33% year-over-year to $2.11 billion and $2.10 billion, respectively.

·          Advertising revenues increased 36% year-over-year to $1.79 billion.

·          Non-advertising revenues increased 17% year-over-year to $319.0 million. Non-GAAP non-advertising revenues increased 18% year-over-year to $308.6 million.

·          Net income attributable to SINA was $125.6 million, or $1.70 for diluted net income per share attributable to SINA’s ordinary shareholders. Non-GAAP net income attributable to SINA was $227.1 million, or $3.07 for non-GAAP diluted net income per share attributable to SINA’s ordinary shareholders.

 

Fourth Quarter 2018 Financial Results

 

For the fourth quarter of 2018, SINA reported net revenues of $573.0 million, an increase of 14% compared to $503.7 million for the same period last year. Non-GAAP net revenues for the fourth quarter of 2018 were $570.4 million, an increase of 14% compared to $501.1 million for the same period last year.

 


 

Advertising revenues for the fourth quarter of 2018 were $484.3 million, an increase of 14% compared to $424.8 million for the same period last year, primarily driven by an increase of $84.7 million, or 25% growth in Weibo advertising and marketing revenues.

 

Non-advertising revenues for the fourth quarter of 2018 were $88.7 million, an increase of 12% compared to $79.0 million for the same period last year. Non-GAAP non-advertising revenues for the fourth quarter of 2018 were $86.1 million, an increase of 13% compared to $76.4 million for the same period last year. The year-over-year growth in non-advertising revenues was mainly attributable to the newly acquired live broadcasting business by Weibo in the fourth quarter of 2018.

 

Gross margin for the fourth quarter of 2018 was 79%, compared to 75% for the same period last year. Advertising gross margin for the fourth quarter of 2018 was 82%, compared to 76% for the same period last year. The increase in advertising gross margin was due to our revenue reporting changed from gross basis to net basis under the new revenue guidance adopted. Non-advertising gross margin for the fourth quarter of 2018 was 57%, down from 66% for the same period last year, mainly resulted from the relatively lower margin of the acquired live broadcasting business of Weibo.

 

Operating expenses for the fourth quarter of 2018 totaled $319.9 million, compared to $248.4 million for the same period last year. The increase primarily resulted from the inclusion of marketing expense related to barter transactions recorded under the new revenue guidance as illustrated below as well as goodwill and acquired intangibles impairment charge for non-core business line. Non-GAAP operating expenses for the fourth quarter of 2018 totaled $288.6 million, compared to $226.8 million for the same period last year.

 

Income from operations for the fourth quarter of 2018 was $130.1 million, compared to $128.7 million for the same period last year. Operating margin was 23%, down from 26% for the same period last year. Non-GAAP income from operations for the fourth quarter of 2018 was $159.6 million, compared to $149.8 million for the same period last year. Non-GAAP operating margin was 28%, slightly down from 30% for the same period last year.

 

Non-operating loss for the fourth quarter of 2018 was $12.6 million, compared to a non-operating income of $7.7 million for the same period last year. Non-operating loss for the fourth quarter of 2018 included (i) a $23.0 million net loss on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; (ii) a $15.1 million net interest and other income; and (iii) a $4.7 million net loss from equity-method investments, which is reported one quarter in arrears. Non-operating income for the fourth quarter of 2017 composed of an $11.2 million net interest and other income and a $2.8 million loss pick-up from equity-method investments, which is reported one quarter in arrears.

 

Income tax expenses for the fourth quarter of 2018 were $14.3 million, compared to $17.2 million for the same period last year.

 


 

Net income attributable to SINA’s ordinary shareholders for the fourth quarter of 2018 was $16.4 million, compared to $45.4 million for the same period last year. Diluted net income per share attributable to SINA’s ordinary shareholders for the fourth quarter of 2018 was $0.22, compared to $0.60 for the same period last year. Non-GAAP net income attributable to SINA’s ordinary shareholders for the fourth quarter of 2018 was $57.7 million, compared to $60.0 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA’s ordinary shareholders for the fourth quarter of 2018 was $0.80, compared to $0.79 for the same period last year.

 

As of December 31, 2018, SINA’s cash, cash equivalents and short-term investments totaled $2.3 billion, compared to $3.4 billion as of December 31, 2017. The decrease of SINA’s cash, cash equivalents and short-term investments mainly resulted from continued investment activities, the execution of the Company’s share repurchase program and repayment of SINA’s convertible senior notes. For the fourth quarter of 2018, net cash provided by operating activities was $138.9 million, capital expenditures totaled $17.1 million, and depreciation and amortization expenses amounted to $11.9 million.

 

Fiscal Year 2018 Financial Results

 

For fiscal year 2018, SINA reported net revenues of $2.11 billion, an increase of 33% compared to $1.58 billion in 2017. Non-GAAP net revenues for 2018 were $2.10 billion, an increase of 33% compared to $1.57 billion in 2017.

 

Advertising revenues in 2018 were $1.79 billion, an increase of 36% compared to $1.31 billion in 2017, primarily driven by an increase of $502.4 million, or 50% growth in Weibo advertising and marketing revenues.

 

Non-advertising revenues in 2018 were $319.0 million, an increase of 17% compared to $272.0 million in 2017. Non-GAAP non-advertising revenues in 2018 were $308.6 million, an increase of 18% compared to $261.6 million in 2017, benefiting from increased Weibo membership fees and incremental revenue contributed from the live broadcasting business of Weibo.

 

Gross margin in 2018 was 79%, compared to 74% in 2017. Advertising gross margin in 2018 was 81%, compared to 75% in 2017. The increase in advertising gross margin mainly resulted from our revenue reporting changed from gross basis to net basis under the new accounting standard adopted. Non-advertising gross margin in 2018 was 65%, slightly down from 67% in 2017.

 

Operating expenses in 2018 totaled $1.19 billion, compared to $781.2 million in 2017. Apart from the inclusion of marketing expense related to barter transactions recorded under the new revenue guidance as illustrated below, the increase in operating expenses was also attributable to the increase in sales and marketing expenses for Weibo’s user acquisition and the increase in personnel related expenses. Non-GAAP operating expenses in 2018 totaled $1.07 billion, compared to $694.6 million in 2017.

 


 

Income from operations in 2018 was $467.0 million, compared to $388.6 million in 2017. Operating margin was 22%, down from 25% in 2017. Non-GAAP income from operations in 2018 was $581.5 million, compared to $474.0 million in 2017. Non-GAAP operating margin was 28%, slightly down from 30% in 2017.

 

Non-operating income in 2018 was $88.5 million, compared to $35.7 million in 2017. Non-operating income in 2018 included (i) a $69.4 million net interest and other income; (ii) an $18.0 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; and (iii) a $1.1 million net income from equity-method investments, which is reported one quarter in arrears. Non-operating income in 2017 mainly included (i) a $42.7 million net interest and other income; (ii) a $16.1 million net loss from equity-method investments, which is reported one quarter in arrears; and (iii) a $9.0 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure.

 

Income tax expenses in 2018 were $129.1 million, compared to $74.7 million in 2017. The increase was primarily due to higher profits generated in 2018 and the deferred tax provision recognized in respect of the fair value changes of investments. Non-GAAP income tax expenses in 2018 were $91.0 million, compared to $73.9 million in 2017.

 

Net income attributable to SINA’s ordinary shareholders in 2018 was $125.6 million, compared to $156.6 million in 2017. Diluted net income per share attributable to SINA’s ordinary shareholders in 2018 was $1.70, compared to $2.09 in 2017. Non-GAAP net income attributable to SINA’s ordinary shareholders in 2018 was $227.1 million, compared to $207.9 million in 2017. Non-GAAP diluted net income per share attributable to SINA’s ordinary shareholders in 2018 was $3.07, compared to $2.77 in 2017.

 

For the fiscal year of 2018, net cash provided by operating activities was $311.0 million, capital expenditures totaled $262.2 million, and depreciation and amortization expenses amounted to $41.2 million.

 

Financial Impact from New Revenue Guidance

 

As the Company adopted new revenue guidance ASC Topic 606 on January 1, 2018, results for reporting periods beginning after January 1, 2018 are presented under Topic 606 (‘New Basis’), while prior period amounts are not adjusted and continue to be reported under Topic 605 (‘Old Basis’) , which is the Company’s historic accounting method.

 

The Company’s current period reported results which reflected the impact from the adoption of the new revenue guidance are as follows:

 


 

 

 

Three months ended December 31, 2018

 

 

 

Adjustments

 

 

 

Old Basis
ASC 605 

 

VAT

 

Barter
Transaction

 

New Basis
ASC 606 

 

 

 

($ In thousands, except for percentage)

 

Net revenues

 

556,519

 

(31,196

)

47,691

 

573,014

 

- Portal

 

99,497

 

(5,463

)

643

 

94,677

 

- Weibo

 

460,772

 

(25,945

)

47,048

 

481,875

 

Cost of revenues

 

154,241

 

(31,196

)

 

123,045

 

Operating expenses

 

276,081

 

 

43,834

 

319,915

 

- Sales and marketing

 

147,374

 

 

43,834

 

191,208

 

Income from operations

 

126,197

 

 

3,857

 

130,054

 

Gross margin

 

72.3

%

 

 

 

 

78.5

%

Operating margin

 

22.7

%

 

 

 

 

22.7

%

 

 

 

Year ended December 31, 2018

 

 

 

Adjustments

 

 

 

Old Basis
ASC 605 

 

VAT

 

Barter
Transaction

 

New Basis
ASC 606 

 

 

 

($ In thousands, except for percentage)

 

Net revenues

 

2,113,954

 

(118,006

)

112,379

 

2,108,327

 

- Portal

 

422,835

 

(23,243

)

2,035

 

401,627

 

- Weibo

 

1,703,644

 

(95,470

)

110,344

 

1,718,518

 

Cost of revenues

 

570,046

 

(118,006

)

 

452,040

 

Operating expenses

 

1,076,520

 

 

112,813

 

1,189,333

 

- Sales and marketing

 

587,149

 

 

112,813

 

699,962

 

Income from operations

 

467,388

 

 

(434

)

466,954

 

Gross margin

 

73.0

%

 

 

 

 

78.6

%

Operating margin

 

22.1

%

 

 

 

 

22.1

%

 

Business Outlook

 

For the fiscal year 2019, SINA estimates that its net revenues are between RMB16.5 billion and RMB17.5 billion, or US$2.44 billion and US$2.59 billion, assuming US dollar and RMB exchange rate of 6.75. It represents an annual growth rate of 18% to 25% on a constant currency basis. Such revenue forecast includes the recognition of $10.4 million in deferred license revenues related to the license granted to Leju. This forecast reflects SINA’s current and preliminary view, which is subject to change.

 


 

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 from operations, non-GAAP operating margin, non-GAAP net income attributable to SINA’s ordinary shareholders and non-GAAP diluted net income per share attributable to SINA’s ordinary shareholders. 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 related to the license granted to Leju, stock-based compensation, amortization of intangible assets, goodwill and acquired intangibles impairment, adjustment for non-GAAP to GAAP reconciling items on the share of equity method investments, gain (loss) on sale of investment, deemed disposal, fair value changes and impairment on investment, and income tax effects of above non-GAAP to GAAP reconciling items and adjustment for non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests and amortization of convertible debt issuance cost. 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 7:10 a.m. — 7:40 a.m. Eastern Time on March 5, 2019 (or 8:10 p.m. — 8:40 p.m. Beijing Time on March 5, 2019) 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://ir.sina.com. 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:

 

4677406

 

A replay of the conference call will be available through morning Eastern Time March 13, 2019. The dial-in number is +61 2 9003 4211. The passcode for the replay is 4677406.

 

About SINA

 

SINA is a leading online media company serving China and the global Chinese communities. Its digital media network of SINA.com (portal), SINA mobile (mobile portal and mobile apps) and Weibo (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 mobile provides news information, professional and entertainment content customized for mobile users through mobile applications and mobile portal site SINA.cn.

 

Weibo is a leading social media platform for people to create, distribute and discover content. Based on an open platform architecture, Weibo provides unprecedented and simple way for people and organizations to publicly express themselves in real time, interact with others on a massive global platform and stay connected with the world.

 

Through these properties and other product lines, SINA offer an array of online media and social media services to its 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 fin-tech 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 2017 annual reports on Form 20-F and other filings with the Securities and Exchange Commission.

 

Contact:

Investor Relations

SINA Corporation

Phone: +86 10 5898 3336

Email: ir@staff.sina.com.cn

 


 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

 

Three months ended

 

Year ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

 

2018

 

2017

 

2018

 

2018

 

2017

 

Net revenues (1):

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

$

 484,307

 

$

 424,756

 

$

 483,806

 

$

 1,789,285

 

$

 1,311,866

 

Non-advertising

 

88,707

 

78,982

 

73,395

 

319,042

 

272,018

 

 

 

573,014

 

503,738

 

557,201

 

2,108,327

 

1,583,884

 

Cost of revenues (1)(2):

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

85,048

 

99,858

 

92,407

 

341,153

 

325,494

 

Non-advertising

 

37,997

 

26,812

 

21,408

 

110,887

 

88,643

 

 

 

123,045

 

126,670

 

113,815

 

452,040

 

414,137

 

Gross profit

 

449,969

 

377,068

 

443,386

 

1,656,287

 

1,169,747

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing (1)(2)

 

191,208

 

143,020

 

185,478

 

699,962

 

408,856

 

Product development (2)

 

85,383

 

78,977

 

91,545

 

345,942

 

267,392

 

General and administrative (2)

 

30,633

 

26,421

 

28,377

 

120,184

 

104,923

 

Goodwill and acquired intangibles impairment

 

12,691

 

 

10,554

 

23,245

 

 

 

 

319,915

 

248,418

 

315,954

 

1,189,333

 

781,171

 

Income from operations

 

130,054

 

128,650

 

127,432

 

466,954

 

388,576

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

Earning (Loss) from equity method investments, net

 

(4,731

)

(2,843

)

10,150

 

1,120

 

(16,070

)

Gain (Loss) on sale of investments, fair value changes and impairment on investments, net (3)

 

(22,960

)

(740

)

50,111

 

17,981

 

9,037

 

Interest and other income, net

 

15,090

 

11,244

 

17,051

 

69,355

 

42,696

 

 

 

(12,601

)

7,661

 

77,312

 

88,456

 

35,663

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

117,453

 

136,311

 

204,744

 

555,410

 

424,239

 

Income tax expense

 

(14,347

)

(17,160

)

(68,129

)

(129,084

)

(74,676

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

103,106

 

119,151

 

136,615

 

426,326

 

349,563

 

Less: Net income attributable to non-controlling interests

 

86,729

 

73,787

 

91,176

 

300,764

 

192,994

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to SINA’s ordinary shareholders

 

$

 16,377

 

$

 45,364

 

$

 45,439

 

$

 125,562

 

$

 156,569

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

$

 0.24

 

$

 0.63

 

$

 0.66

 

$

 1.79

 

$

 2.20

 

Diluted net income per share (4)

 

$

 0.22

 

$

 0.60

 

$

 0.62

 

$

 1.70

 

$

 2.09

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing basic net income per share

 

69,235

 

71,516

 

69,332

 

70,296

 

71,284

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing diluted net income per share

 

69,666

 

74,213

 

71,322

 

72,375

 

73,931

 

 


(1)  On January 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers using the modified retrospective method,which means that prior periods amount will be reported on a historical basis and amounts for 2018 are reported on the new basis. Under the new accounting standard, the main impact to the Company is that it now reports revenue net of value added tax and recognizes revenues and expenses at fair value for advertising barter transactions.

 

(2)  Stock-based compensation in each category:

Cost of revenues

 

$

922

 

$

2,145

 

$

3,775

 

$

10,128

 

$

9,257

 

Sales and marketing

 

3,174

 

5,370

 

7,414

 

21,942

 

20,790

 

Product development

 

4,403

 

6,432

 

11,205

 

30,830

 

29,163

 

General and administrative

 

8,834

 

8,237

 

9,012

 

32,169

 

32,177

 

 

(3)  The Company adopted ASU 2016-1, Classification and Measurement of Financial Instruments beginning the first quarter of fiscal year 2018. After the adoption of this new accounting update, the Company measures long-term investments other than those accounted for under the equity method, at fair value through earnings. For those investments without readily determinable fair values, the Company elected to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Changes in the basis of these investments are reported in current earnings. The Company recognized net loss of $20.3 million and net gain of $96.5 million from fair value changes in the investments for the three months and the year ended December 31, 2018, respectively.

 

(4)  Net income attributable to SINA’s ordinary shareholders 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)

 

 

 

December 31,

 

December 31,

 

 

 

2018

 

2017

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,545,800

 

$

1,990,552

 

Short-term investments

 

799,534

 

1,381,991

 

Restricted cash

 

97,032

 

216,151

 

Accounts receivable, net

 

527,897

 

285,681

 

Prepaid expenses and other current assets

 

362,435

 

228,238

 

Subtotal

 

3,332,698

 

4,102,613

 

 

 

 

 

 

 

Property and equipment, net

 

262,846

 

262,676

 

Goodwill and intangible assets, net

 

319,575

 

104,207

 

Long-term investments (1)

 

1,889,843

 

1,288,816

 

Other assets

 

81,127

 

57,082

 

Total assets

 

$

5,886,089

 

$

5,815,394

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

172,562

 

$

130,431

 

Amount due to customers

 

97,032

 

216,151

 

Accrued expenses and other current liabilities

 

540,807

 

446,779

 

Short-term bank loan

 

78,229

 

89,309

 

Convertible debt (2)

 

 

153,092

 

Deferred revenues

 

139,306

 

134,580

 

Income taxes payable

 

115,725

 

102,458

 

Subtotal

 

1,143,661

 

1,272,800

 

 

 

 

 

 

 

Convertible debt

 

884,123

 

879,983

 

Long-term deferred revenues

 

43,652

 

54,372

 

Other long-term liabilities

 

51,781

 

8,510

 

Total liabilities

 

2,123,217

 

2,215,665

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

SINA shareholders’ equity (1)

 

2,717,791

 

2,846,842

 

Non-controlling interests

 

1,045,081

 

752,887

 

Total shareholders’ equity

 

3,762,872

 

3,599,729

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

5,886,089

 

$

5,815,394

 

 


(1) The Company adopted ASU 2016-1, Classification and Measurement of Financial Instruments beginning the first quarter of fiscal year 2018. After the adoption of this new accounting update, the Company measures long-term investments other than those investments accounted for under the equity method, at fair value through earnings.  For those investments without readily determinable fair values, the Company elected to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Changes in the basis of these investments are reported in current earnings. The cumulative impact arising from the adoption was a credit to retained earnings as of January 1, 2018 of $49.0 million.

 

(2) In December 2018, the Company repaid $153.1 million in aggregate principal amount of 1.00% coupon interest convertible senior notes on its maturity date.

 


 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)

 

 

 

Three months ended

 

Year ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

 

2018

 

2017

 

2018

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

 

 

 

 

 

 

 

 

 

Portal:

 

 

 

 

 

 

 

 

 

 

 

Portal Advertising

 

$

67,377

 

$

95,319

 

$

74,533

 

$

290,215

 

$

320,473

 

Other

 

27,300

 

33,842

 

26,707

 

111,412

 

122,535

 

Subtotal

 

94,677

 

129,161

 

101,240

 

401,627

 

443,008

 

 

 

 

 

 

 

 

 

 

 

 

 

Weibo:

 

 

 

 

 

 

 

 

 

 

 

Advertising and marketing

 

417,016

 

332,305

 

409,273

 

1,499,180

 

996,745

 

Weibo VAS

 

64,859

 

45,140

 

50,898

 

219,338

 

153,309

 

Subtotal

 

481,875

 

377,445

 

460,171

 

1,718,518

 

1,150,054

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination

 

(3,538

)

(2,868

)

(4,210

)

(11,818

)

(9,178

)

 

 

$

573,014

 

$

503,738

 

$

557,201

 

$

2,108,327

 

$

1,583,884

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Portal:

 

 

 

 

 

 

 

 

 

 

 

Portal Advertising

 

$

29,180

 

$

35,647

 

$

30,501

 

$

117,600

 

$

121,278

 

Other

 

14,377

 

19,180

 

17,508

 

68,500

 

65,733

 

Subtotal

 

43,557

 

54,827

 

48,009

 

186,100

 

187,011

 

 

 

 

 

 

 

 

 

 

 

 

 

Weibo

 

82,940

 

72,005

 

70,016

 

277,648

 

231,255

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination

 

(3,452

)

(162

)

(4,210

)

(11,708

)

(4,129

)

 

 

$

123,045

 

$

126,670

 

$

113,815

 

$

452,040

 

$

414,137

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

Portal

 

54

%

58

%

53

%

54

%

58

%

Weibo

 

83

%

81

%

85

%

84

%

80

%

 

 

79

%

75

%

80

%

79

%

74

%

 


SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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

 

 

 

Three months ended

 

 

 

December 31, 2018

 

December 31, 2017

 

September 30, 2018

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

Advertising revenues

 

$

484,307

 

 

 

$

484,307

 

$

424,756

 

 

 

$

424,756

 

$

483,806

 

 

 

$

483,806

 

Non-advertising revenues

 

88,707

 

(2,609

)(a)

86,098

 

78,982

 

(2,609

)(a)

76,373

 

73,395

 

(2,609

)(a)

70,786

 

Net revenues

 

$

573,014

 

$

(2,609

)

$

570,405

 

$

503,738

 

$

(2,609

)

$

501,129

 

$

557,201

 

$

(2,609

)

$

554,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

(2,609

)(a)

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

922

(b)

 

 

 

 

2,145

(b)

 

 

 

 

3,775

(b)

 

 

Gross profit

 

$

449,969

 

$

(1,687

)

$

448,282

 

$

377,068

 

$

(464

)

$

376,604

 

$

443,386

 

$

1,166

 

$

444,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,411

)(b)

 

 

 

 

 

 

 

 

 

 

(27,631

)(b)

 

 

 

 

 

 

(2,177

)(c)

 

 

 

 

(20,039

)(b)

 

 

 

 

(1,354

)(c)

 

 

 

 

 

 

(12,691

)(d)

 

 

 

 

(1,535

)(c)

 

 

 

 

(10,554

)(d)

 

 

Operating expenses

 

$

319,915

 

$

(31,279

)

$

288,636

 

$

248,418

 

$

(21,574

)

$

226,844

 

$

315,954

 

$

(39,539

)

$

276,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

17,333

(b)

 

 

 

 

(2,609

)(a)

 

 

 

 

31,406

(b)

 

 

 

 

 

 

2,177

(c)

 

 

 

 

22,184

(b)

 

 

 

 

1,354

(c)

 

 

 

 

 

 

12,691

(d)

 

 

 

 

1,535

(c)

 

 

 

 

10,554

(d)

 

 

Income from operations

 

$

130,054

 

$

29,592

 

$

159,646

 

$

128,650

 

$

21,110

 

$

149,760

 

$

127,432

 

$

40,705

 

$

168,137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

17,333

(b)

 

 

 

 

(2,609

)(a)

 

 

 

 

31,406

(b)

 

 

 

 

 

 

2,177

(c)

 

 

 

 

22,184

(b)

 

 

 

 

1,354

(c)

 

 

 

 

 

 

12,691

(d)

 

 

 

 

1,535

(c)

 

 

 

 

10,554

(d)

 

 

 

 

 

 

4,797

(e)

 

 

 

 

1,503

(e)

 

 

 

 

(6,879

)(e)

 

 

 

 

 

 

22,960

(f)

 

 

 

 

740

(f)

 

 

 

 

(50,111

)(f)

 

 

 

 

 

 

(14,929

)(g)

 

 

 

 

(9,197

)(g)

 

 

 

 

(2,845

)(g)

 

 

 

 

 

 

1,035

(h)

 

 

 

 

690

(h)

 

 

 

 

1,035

(h)

 

 

 

 

 

 

(2,138

)(i)

 

 

 

 

(253

)(i)

 

 

 

 

40,311

(i)

 

 

Net income attributable to SINA’s ordinary shareholders

 

$

16,377

 

$

41,317

 

$

57,694

 

$

45,364

 

$

14,593

 

$

59,957

 

$

45,439

 

$

22,216

 

$

67,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share *

 

$

0.22

 

 

 

$

0.80

 

$

0.60

 

 

 

$

0.79

 

$

0.62

 

 

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing diluted net income per share

 

69,666

 

960

(j)

70,626

 

74,213

 

 

74,213

 

71,322

 

 

71,322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin - advertising

 

82

%

1

%

83

%

76

%

1

%

77

%

81

%

1

%

82

%

Gross margin - non-advertising

 

57

%

-1

%

56

%

66

%

-1

%

65

%

71

%

-1

%

70

%

Operating margin

 

23

%

5

%

28

%

26

%

4

%

30

%

23

%

7

%

30

%

 


 

 

 

Year ended

 

 

 

December 31, 2018

 

December 31, 2017

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

Advertising revenues

 

$

1,789,285

 

 

 

$

1,789,285

 

$

1,311,866

 

 

 

$

1,311,866

 

Non-advertising revenues

 

319,042

 

(10,436

)(a)

308,606

 

272,018

 

(10,436

)(a)

261,582

 

Net revenues

 

$

2,108,327

 

$

(10,436

)

$

2,097,891

 

$

1,583,884

 

$

(10,436

)

$

1,573,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,436

)(a)

 

 

 

 

(10,436

)(a)

 

 

 

 

 

 

10,128

(b)

 

 

 

 

9,257

(b)

 

 

Gross profit

 

$

1,656,287

 

$

(308

)

$

1,655,979

 

$

1,169,747

 

$

(1,179

)

$

1,168,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(84,941

)(b)

 

 

 

 

 

 

 

 

 

 

 

 

(6,689

)(c)

 

 

 

 

(82,130

)(b)

 

 

 

 

 

 

(23,245

)(d)

 

 

 

 

(4,455

)(c)

 

 

Operating expenses

 

$

1,189,333

 

$

(114,875

)

$

1,074,458

 

$

781,171

 

$

(86,585

)

$

694,586

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,436

)(a)

 

 

 

 

 

 

 

 

 

 

 

 

95,069

(b)

 

 

 

 

(10,436

)(a)

 

 

 

 

 

 

6,689

(c)

 

 

 

 

91,387

(b)

 

 

 

 

 

 

23,245

(d)

 

 

 

 

4,455

(c)

 

 

Income from operations

 

$

466,954

 

$

114,567

 

$

581,521

 

$

388,576

 

$

85,406

 

$

473,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,436

)(a)

 

 

 

 

 

 

 

 

 

 

 

 

95,069

(b)

 

 

 

 

(10,436

)(a)

 

 

 

 

 

 

6,689

(c)

 

 

 

 

91,387

(b)

 

 

 

 

 

 

23,245

(d)

 

 

 

 

4,455

(c)

 

 

 

 

 

 

(2,493

)(e)

 

 

 

 

3,276

(e)

 

 

 

 

 

 

(17,981

)(f)

 

 

 

 

(9,037

)(f)

 

 

 

 

 

 

(34,806

)(g)

 

 

 

 

(29,827

)(g)

 

 

 

 

 

 

4,140

(h)

 

 

 

 

690

(h)

 

 

 

 

 

 

38,109

(i)

 

 

 

 

785

(i)

 

 

Net income attributable to SINA’s ordinary shareholders

 

$

125,562

 

$

101,536

 

$

227,098

 

$

156,569

 

$

51,293

 

$

207,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share *

 

$

1.70

 

 

 

$

3.07

 

$

2.09

 

 

 

$

2.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing diluted net income per share

 

72,375

 

 

72,375

 

73,931

 

 

73,931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin - advertising

 

81

%

 

81

%

75

%

1

%

76

%

Gross margin - non-advertising

 

65

%

-1

%

64

%

67

%

-1

%

66

%

Operating margin

 

22

%

6

%

28

%

25

%

5

%

30

%

 


(a)

To exclude the recognition of deferred revenue related to the license granted to Leju.

(b)

To exclude stock-based compensation.

(c)

To adjust amortization of intangible assets.

(d)

To exclude goodwill and acquired intangibles impairment

(e)

To exclude 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.

(f)

To exclude (gain) loss on sale of investments, (gain) loss on deemed disposal, fair value changes and impairment on investments, net.

(g)

To exclude Non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests.

(h)

To exclude the amortization of convertible debt issuance cost.

(i)

To exclude the provision (benefit) for income tax related to item (c), (d) and (f). 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 attributable to SINA’s ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments.

**

The Company considered the tax implication arising from the reconciliation items, and those items recorded in entities in tax free jurisdictions were without relevant tax implications. For impairment on investments, valuation allowances were made for those differences the Company does not expect they can be realized in the foreseeable future.

 


UNAUDITED RECONCILIATION OF SINA’S SHARE OF EQUITY INVESTMENTS’ NON-GAAP TO GAAP RESULTS*

 

 

 

Three months ended

 

 

 

December 31, 2018

 

December 31, 2017

 

September 30, 2018

 

 

 

Actual

 

Adjustments

 

Non-GAAP
Results

 

Actual

 

Adjustments

 

Non-GAAP
Results

 

Actual

 

Adjustments

 

Non-GAAP
Results

 

To exclude stock-based compensation

 

 

 

$

350

 

 

 

 

 

$

881

 

 

 

 

 

$

674

 

 

 

To exclude amortization of intangible assets resulting from business acquisitions

 

 

 

1,062

 

 

 

 

 

1,177

 

 

 

 

 

1,079

 

 

 

To exclude loss on disposal and impairment on investments, net

 

 

 

 

 

 

 

 

848

 

 

 

 

 

1,245

 

 

 

To exclude (gain) loss resulting from the fair value changes in investments, net

 

 

 

4,062

 

 

 

 

 

(1,426

)

 

 

 

 

(9,187

)

 

 

To exclude tax impacts related to amortization of intangible assets

 

 

 

(248

)

 

 

 

 

(178

)

 

 

 

 

(263

)

 

 

Earning (Loss) from equity method investments, net

 

$

(5,160

)

$

5,226

 

$

66

 

$

(2,642

)

$

1,302

 

$

(1,340

)

$

9,723

 

$

(6,452

)

$

3,271

 

Share of amortization of equity investments’ intangibles not on their books

 

367

 

(367

)

 

(253

)

253

 

 

364

 

(364

)

 

Share of tax impacts related to amortization of equity investments’ intangibles not on their books

 

62

 

(62

)

 

52

 

(52

)

 

63

 

(63

)

 

 

 

$

(4,731

)

$

4,797

 

$

66

 

$

(2,843

)

$

1,503

 

$

(1,340

)

$

10,150

 

$

(6,879

)

$

3,271

 

 

 

 

 

 

 

 

 

Year ended

 

 

 

 

 

December 31, 2018

 

December 31, 2017

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

 

 

 

 

 

 

To exclude stock-based compensation

 

 

 

$

2,441

 

 

 

 

 

$

3,759

 

 

 

 

 

 

 

 

 

 

To exclude amortization of intangible assets resulting from business acquisitions

 

 

 

4,379

 

 

 

 

 

3,441

 

 

 

 

 

 

 

 

 

To exclude (gain) loss on disposal and impairment on investments, net

 

 

 

2,989

 

 

 

 

 

(465

)

 

 

 

 

 

 

 

 

To exclude gain resulting from the fair value changes in investments, net

 

 

 

(9,777

)

 

 

 

 

(3,769

)

 

 

 

 

 

 

 

 

To exclude tax impacts related to amortization of intangible assets

 

 

 

(942

)

 

 

 

 

(508

)

 

 

 

 

 

 

 

 

Loss from equity method investments, net

 

$

(463

)

$

(910

)

$

(1,373

)

$

(15,252

)

$

2,458

 

$

(12,794

)

 

 

 

 

 

 

 

 

 

Share of amortization of equity investments’ intangibles not on their books

 

1,306

 

(1,306

)

 

(1,031

)

1,031

 

 

 

 

 

 

 

 

Share of tax impacts related to amortization of equity investments’ intangibles not on their books

 

277

 

(277

)

 

213

 

(213

)

 

 

 

 

 

 

 

 

 

$

1,120

 

$

(2,493

)

$

(1,373

)

$

(16,070

)

$

3,276

 

$

(12,794

)

 

 

 

 

 

 

 

 

 

 


* Earning (Loss) from equity method investments is recorded one quarter in arrears.