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 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2012
Commission File Number: 001-33616
E-HOUSE (CHINA) HOLDINGS LIMITED
17/F, East Tower
No. 333 North Chengdu Road
Shanghai 200041
Peoples Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x |
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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
SIGNATURE
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.
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E-House (China) Holdings Limited | |
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By: |
/s/ Bin Laurence |
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Name: |
Bin Laurence |
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Title: |
Chief Financial Officer |
Date: May 25, 2012
Exhibit 99.1
E-House Reports First Quarter 2012 Results
SHANGHAI, China, May 24, 2012 E-House (China) Holdings Limited (E-House or the Company) (NYSE: EJ), a leading real estate services company in China, today announced its unaudited financial results for the fiscal quarter ended March 31, 2012.
First Quarter 2012 Financial and Operating Highlights
· Total gross floor area (GFA) of new properties sold was 1.9 million square meters. Total value of new properties sold was RMB14.6 billion ($2.3 billion)(1).
· Total revenues decreased 29% year-on-year to $59.1 million.
· Non-GAAP(2) loss from operations was $39.8 million.
· Non-GAAP net loss attributable to E-House shareholders was $16.8 million, or $0.21 loss per diluted American depositary share (ADS).
Although the overall sentiment of Chinas real estate market remains subdued, reflected by low transaction volume in the first quarter, recent market transaction data has been slightly better than our expectation at the beginning of the year. While we do not expect the government to change its restrictive real estate policies in the near future, there are reasons to believe that the real estate market has passed the low point for the year. Moreover, we expect developers will continue to be willing to cut prices in exchange for transaction volumes, commented Xin Zhou, E-Houses co-chairman and CEO.
To better meet the demand of our clients in this challenging real estate environment, we integrated our online advertising, online e-commerce transactions and offline on-site sales support services, and successfully tested our performance-based e-commerce revenue model in the first quarter, continued Mr. Zhou. We believe results-oriented advertising, channel-focused marketing and online-to-offline integrated services are the future of Chinas real estate service industry. Now that we have completed our merger with CRIC, our new corporate and operational structure will help us take full advantage of those trends.
Bin Laurence, E-Houses CFO, added, With the completion of our merger with CRIC and the infrastructure of our platforms mostly in place, we are now focusing more on internal cost control. First quarter selling, general and administrative expenses showed a substantial sequential decline compared with the fourth quarter of last year, partly due to reduced merger-related professional expenses and specific marketing expenses, as well as a result of internal cost control. We will continue our cost control efforts in the next few quarters.
Financial Results for the First Quarter of 2012
Revenues
First quarter total revenues were $59.1 million, a decrease of 29% from $83.3 million for the same quarter of 2011.
(1) This press release contains translations of certain RMB amounts into U.S. dollar amounts solely for the convenience of the reader. The RMB amounts were translated into U.S. dollar amounts at a rate of RMB6.2997 to US$1.00, which is the average central parity rate announced by the Peoples Bank of China for the first quarter of 2012.
(2) E-House uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to E-House shareholders, (4) net income (loss) per basic ADS and (5) net income (loss) per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. See About Non-GAAP Financial Measures and Reconciliation of GAAP and Non-GAAP Results below for more information about the non-GAAP financial measures included in this press release.
Real Estate Brokerage Services
Real estate brokerage services include primary real estate agency services and secondary real estate brokerage services. First quarter revenues from real estate brokerage services were $23.6 million, a decrease of 47% from $44.5 million for the same quarter of 2011.
First quarter revenues from primary real estate agency services were $20.8 million, a decrease of 47% from $39.3 million for the same quarter of 2011. The decrease was mainly due to restrictive government measures aimed at Chinas real estate industry, the effect of which started to become more pronounced around the second quarter of 2011. This resulted in a 37% decrease in total GFA of new properties sold and a 47% decrease in total transaction value of new properties sold during the first quarter of 2012 as compared to the same quarter of 2011. (See Selected Operating Data below for more details on total GFA and transaction value of new properties sold.)
First quarter revenues from secondary real estate brokerage services were $2.8 million, a decrease of 46% from $5.2 million for the same quarter of 2011. This decrease was consistent with the decline in primary real estate agency services resulting from the industry-wide slowdown, as well as the Companys closing of a number of stores since the second half of 2011 in order to reduce cost and optimize the Companys store network. As of March 31, 2012, E-House had a total of 68 secondary real estate brokerage stores in China, compared to 106 stores as of March 31, 2011 and 92 stores as of December 31, 2011.
Real Estate Online Services
First quarter revenues from real estate online services were $21.1 million, an increase of 3% from $20.4 million for the same quarter of 2011. The governments restrictive real estate policies had a greater impact in the first quarter of 2012 than in the first quarter of 2011 as market participants continued to assess the effects since new policies were introduced in early 2011.
Real Estate Information and Consulting Services
First quarter revenues from real estate information and consulting services were $9.9 million, a decrease of 32% compared to $14.6 million for the same quarter of 2011. The year-on-year decrease was primarily due to a reduction in land transaction-related consulting fees, as well as a reduction in other consulting revenues from property developments due to the weak real estate market.
Other Services
Other services include offline real estate advertising services, promotional events services and real estate fund management services. First quarter revenues from other services were $4.5 million, an increase of 17% from $3.8 million for the same quarter of 2011, mainly due to the expansion of real estate promotional event services in the first quarter of 2012.
Cost of Revenues
First quarter cost of revenues was $37.7 million, an increase of 37% from $27.5 million for the same quarter of 2011, primarily due to higher salary expenses for additional sales and editorial staff, additional expenses associated with amortization of capitalized fees paid for Baidu, Inc.s (Baidu) Brand Link product, which the Company started to offer in August 2011, and increased costs associated with increased revenues in promotional event services.
Selling, General and Administrative (SG&A) Expenses
First quarter SG&A expenses were $77.5 million, an increase of 34% from $58.1 million for the same quarter of 2011, primarily due to increases in salary expenses for the Companys primary real estate agency service segment, additional sales and administrative staff for the Companys online and real estate information and consulting businesses, higher marketing expenses for the Companys online business, increased bad debt provision compared with the first quarter of 2011 and share-based compensation expenses as a result of stock options granted in 2011.
Income (Loss) from Operations
First quarter loss from operations was $54.6 million, compared to loss from operations of $1.0 million for the same quarter of 2011. First quarter non-GAAP loss from operations was $39.8 million, compared to non-GAAP income from operations of $11.6 million for the same quarter of 2011.
Net Income (Loss)
First quarter net loss was $34.0 million, compared to net loss of $1.5 million for the same quarter of 2011. First quarter non-GAAP net loss was $20.0 million, compared to non-GAAP net income of $10.5 million for the same quarter of 2011.
Net Income (Loss) Attributable to E-House Shareholders
First quarter net loss attributable to E-House shareholders was $25.9 million, or $0.33 loss per diluted ADS, compared to net loss attributable to E-House shareholders of $0.5 million, or $0.01 loss per diluted ADS, for the same quarter of 2011. First quarter non-GAAP net loss attributable to E-House shareholders was $16.8 million, or $0.21 loss per diluted ADS, compared to non-GAAP net income attributable to E-House shareholders of $7.5 million, or $0.09 per diluted ADS, for the same quarter of 2011.
Cash Flow
As of March 31, 2012, the Company had a cash balance of $331.9 million. First quarter net cash used in operating activities was $56.0 million. This amount was mainly attributable to an increase in customer deposits of $28.5 million, a decrease in income tax payable of $23.9 million, a decrease in payroll payable of $12.2 million and a $20.0 million non-GAAP net loss, partially offset by a decrease in accounts receivables of $18.2 million and a non-cash bad debt provision of $8.2 million. First quarter net cash used in investing activities was $4.5 million, mainly attributable to the payment of $3.2 million to Baidu for the exclusive right to sell its Brand Link product and operate the Baidu real estate channels, as well as regular capital expenditures of $1.7 million.
Business Outlook
The Company maintains its previous revenue estimate range of $490 million to $510 million for the fiscal year ending December 31, 2012, which represents an increase of 22% to 27% from $401.6 million in 2011. This forecast reflects the Companys current and preliminary view, which is subject to change.
Merger with China Real Estate Information Corporation (CRIC)
E-House completed its merger with CRIC, previously listed on the NASDAQ Global Select Market under the ticker symbol CRIC, on April 20, 2012 (the Merger). As a result of the Merger, CRIC has become a wholly-owned subsidiary of E-House and CRICs ADSs ceased trading. As the Company retains the controlling financial interest in CRIC after the Merger, this transaction will be accounted for as an equity transaction. For more information on the accounting treatment of the Merger, please see Unaudited Pro Forma Condensed Consolidated Financial InformationNotes to the Unaudited Pro Forma Condensed Consolidated Financial Information.
Conference Call Information
E-Houses management will host an earnings conference call on May 24, 2012 at 7:30 a.m. U.S. Eastern Time (7:30 p.m. Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as follows:
U.S./International: |
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+1-718-354-1231 |
Hong Kong: |
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+852-2475-0994 |
Mainland China: |
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+86-10-800-819-0121 |
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is E-House earnings call.
A replay of the conference call may be accessed by phone at the following number until May 31, 2012:
International: |
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+1-718-354-1232 |
Passcode: |
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79853054 |
Additionally, a live and archived webcast will be available at http://ir.ehousechina.com.
About E-House
E-House (China) Holdings Limited (E-House) (NYSE: EJ) is Chinas leading real estate services company with a nationwide network covering more than 230 cities. E-House offers a wide range of services to the real estate industry, including online advertising, primary sales agency, secondary brokerage, information and consulting, offline advertising and promotion and real estate investment management services. E-House has received numerous awards for its innovative and high-quality services, including Chinas Best Company from the National Association of Real Estate Brokerage and Appraisal Companies and China Enterprises with the Best Potential from Forbes. For more information about E-House, please visit http://www.ehousechina.com.
Safe Harbor: Forward-Looking Statements
This announcement contains forward-looking statements. These statements are made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as will, expects, anticipates, future, intends, plans, believes, estimates, may, intend, confident, is currently reviewing, it is possible, subject to and similar statements. Among other things, the Business Outlook section and quotations from management in this press release, as well as E-Houses strategic and operational plans, contain forward-looking statements. E-House may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, including on Forms 20-F and 6-K, 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 E-Houses beliefs and expectations, are forward-looking statements and are subject to change. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this press release. Potential risks and uncertainties include, but are not limited to, a severe or prolonged downturn in the global economy, E-Houses susceptibility to fluctuations in the real estate market of China, government measures aimed at Chinas real estate industry, failure of the real estate services industry in China to develop or mature as quickly as expected, diminution of the value of E-Houses brand or image, E-Houses inability to successfully execute its strategy of expanding into new geographical markets in China, E-Houses failure to manage its growth effectively and efficiently, E-Houses failure to successfully execute the business plans for its strategic alliances and other new business initiatives, E-Houses loss of its competitive advantage if it fails to maintain and improve its proprietary CRIC system or to prevent disruptions or failure in the systems performance, E-Houses failure to compete successfully, fluctuations in E-Houses results of operations and cash flows, E-Houses reliance on a concentrated number of real estate developers, natural
disasters or outbreaks of health epidemics and other risks outlined in E-Houses filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of this press release, and E-House does not undertake any obligation to update any such information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement E-Houses consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (GAAP), E-House uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to E-House shareholders, (4) net income (loss) per basic ADS, and (5) net income (loss) per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. The Company also includes in this press release additional non-GAAP financial measures: (1) pro forma results which give effect to the Merger as if the Merger occurred on March 31, 2012 for the balance sheet items, and as if occurred on January 1, 2012 for the statement of operations and statement of comprehensive income items for the three months ended March 31, 2012, and (2) adjusted pro forma results which exclude share-based compensation expense and amortization of intangible assets in relation to business acquisitions from pro forma results. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned Unaudited Reconciliation of GAAP and Non-GAAP Results, and Unaudited Pro Forma Condensed Consolidated Financial Information set forth at the end of this press release.
E-House believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense and amortization of intangible assets resulting from business acquisitions, which may not be indicative of E-Houses operating performance. These non-GAAP financial measures also facilitate managements internal comparisons to E-Houses historical performance and assist its financial and operational decision making. A limitation of using these non-GAAP financial measures is that share-based compensation expense and amortization of intangible assets resulting from business acquisitions are recurring expenses that will continue to exist in E-Houses business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliation between non-GAAP financial measures and their most comparable GAAP financial measures.
For investor and media inquiries please contact:
In China
Michelle Yuan
Director, Investor Relations
E-House (China) Holdings Limited
Phone: +86 (21) 6133-0754
E-mail: michelleyuan@ehousechina.com
Derek Mitchell
Ogilvy Financial, Beijing
Phone: +86 (10) 8520-6284
E-mail: ej@ogilvy.com
In the U.S.
Jessica Barist Cohen
Ogilvy Financial, New York
Phone: +1 (646) 460-9989
E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEET
(In thousands of U.S. dollars)
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December 31, |
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March 31, |
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2011 |
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2012 |
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ASSETS |
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|
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Current assets |
|
|
|
|
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Cash and cash equivalents |
|
392,005 |
|
331,946 |
|
Restricted cash |
|
2,582 |
|
2,937 |
|
Marketable securities |
|
7,982 |
|
8,103 |
|
Customer deposits |
|
56,168 |
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83,762 |
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Accounts receivable, net |
|
244,081 |
|
217,804 |
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Properties held for sale |
|
1,287 |
|
1,289 |
|
Deferred tax assets |
|
22,078 |
|
22,087 |
|
Prepaid expenses and other current assets |
|
21,818 |
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19,907 |
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Amounts due from related parties |
|
1,501 |
|
1,572 |
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Total current assets |
|
749,502 |
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689,407 |
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Property and equipment, net |
|
27,976 |
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37,186 |
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Intangible assets, net |
|
213,263 |
|
203,730 |
|
Investment in affiliates |
|
32,484 |
|
32,368 |
|
Goodwill |
|
49,328 |
|
49,378 |
|
Customer deposits, non-current |
|
26,586 |
|
27,601 |
|
Other non-current assets |
|
44,559 |
|
35,748 |
|
Total assets |
|
1,143,698 |
|
1,075,418 |
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LIABILITIES AND EQUITY |
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|
|
|
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Current liabilities |
|
|
|
|
|
Accounts payable |
|
5,686 |
|
5,136 |
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Accrued payroll and welfare expenses |
|
50,581 |
|
38,315 |
|
Income tax payable |
|
45,762 |
|
21,837 |
|
Other tax payable |
|
19,252 |
|
16,005 |
|
Amounts due to related parties |
|
1,775 |
|
1,621 |
|
Advance from property buyers |
|
2,194 |
|
2,167 |
|
Deferred revenue |
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11,499 |
|
14,299 |
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Liability for exclusive rights, current |
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13,831 |
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15,370 |
|
Other current liabilities |
|
25,517 |
|
21,081 |
|
Total current liabilities |
|
176,097 |
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135,831 |
|
Deferred tax liabilities |
|
40,109 |
|
40,110 |
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Liability for exclusive rights, non-current |
|
21,408 |
|
17,274 |
|
Other non-current liabilities |
|
1,716 |
|
1,582 |
|
Total liabilities |
|
239,330 |
|
194,797 |
|
Equity |
|
|
|
|
|
Ordinary shares ($0.001 par value): 1,000,000,000 and 1,000,000,000 shares authorized, 79,065,624 and 79,111,133 shares issued and outstanding, as of December 31, 2011 and March 31 2012, respectively |
|
79 |
|
79 |
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Additional paid-in capital |
|
688,094 |
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694,519 |
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Accumulated deficit |
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(101,064 |
) |
(126,787 |
) |
Accumulated other comprehensive income |
|
46,253 |
|
46,641 |
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Total E-House equity |
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633,362 |
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614,452 |
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Non-controlling interests |
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271,006 |
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266,169 |
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Total equity |
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904,368 |
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880,621 |
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TOTAL LIABILITIES AND EQUITY |
|
1,143,698 |
|
1,075,418 |
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E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data and per share data)
|
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Three months ended |
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March 31, |
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2011 |
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2012 |
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|
|
|
|
|
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Revenues |
|
83,280 |
|
59,137 |
|
Cost of revenues |
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(27,498 |
) |
(37,675 |
) |
Selling, general and administrative expenses |
|
(58,085 |
) |
(77,547 |
) |
Other operation income, net |
|
1,325 |
|
1,502 |
|
Loss from operations |
|
(978 |
) |
(54,583 |
) |
|
|
|
|
|
|
Interest income |
|
650 |
|
741 |
|
Other loss, net |
|
(1,297 |
) |
(221 |
) |
Loss before taxes and equity in affiliates |
|
(1,625 |
) |
(54,063 |
) |
Income tax benefit |
|
393 |
|
20,240 |
|
Loss before equity in affiliates |
|
(1,232 |
) |
(33,823 |
) |
Loss from equity in affiliates |
|
(254 |
) |
(150 |
) |
Net loss |
|
(1,486 |
) |
(33,973 |
) |
|
|
|
|
|
|
Less: net loss attributable to non-controlling interests |
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(974 |
) |
(8,049 |
) |
|
|
|
|
|
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Net loss attributable to E-House shareholders |
|
(512 |
) |
(25,924 |
) |
|
|
|
|
|
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Loss per share: |
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|
|
|
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Basic |
|
(0.01 |
) |
(0.33 |
) |
Diluted |
|
(0.01 |
) |
(0.33 |
) |
Shares used in computation: |
|
|
|
|
|
Basic |
|
80,758,317 |
|
79,074,043 |
|
Diluted |
|
80,758,317 |
|
79,074,043 |
|
Note
The conversion of Renminbi (RMB) amounts into USD amounts is based on the rate of USD1 = RMB6.2943 on March 31, 2012 and USD1 = RMB6.2997 for the three months ended March 31, 2012.
E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
|
|
Three months ended |
| ||
|
|
March 31, |
| ||
|
|
2011 |
|
2012 |
|
|
|
|
|
|
|
Net loss |
|
(1,486 |
) |
(33,973 |
) |
|
|
|
|
|
|
Other comprehensive income, net of tax Foreign currency translation adjustment |
|
4,750 |
|
523 |
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
3,264 |
|
(33,450 |
) |
|
|
|
|
|
|
Less: Comprehensive income attributable to non-controlling interest |
|
(24 |
) |
(7,915 |
) |
Comprehensive income (loss) attributable to E-House shareholders |
|
3,288 |
|
(25,535 |
) |
E-HOUSE (CHINA) HOLDINGS LIMITED
Unaudited Reconciliation of GAAP and Non-GAAP Results
(In thousands of U.S. dollars, except share data and per ADS data)
|
|
Three months ended |
| ||
|
|
March 31, |
| ||
|
|
2011 |
|
2012 |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
GAAP loss from operations |
|
(978 |
) |
(54,583 |
) |
Share-based compensation expense |
|
7,375 |
|
9,085 |
|
Amortization of intangible assets resulting from business acquisitions |
|
5,251 |
|
5,738 |
|
Non-GAAP income (loss) from operations |
|
11,648 |
|
(39,760 |
) |
|
|
|
|
|
|
GAAP net loss |
|
(1,486 |
) |
(33,973 |
) |
Share-based compensation expense (net of tax) |
|
7,375 |
|
9,085 |
|
Amortization of intangible assets resulting from business acquisitions (net of tax) |
|
4,577 |
|
4,935 |
|
Non-GAAP net income (loss) |
|
10,466 |
|
(19,953 |
) |
|
|
|
|
|
|
GAAP net loss attributable to E-House shareholders |
|
(512 |
) |
(25,924 |
) |
Share-based compensation expense (net of tax and non-controlling interests) |
|
5,542 |
|
6,514 |
|
Amortization of intangible assets resulting from business acquisitions (net of tax and non-controlling interests) |
|
2,429 |
|
2,613 |
|
Non-GAAP net income (loss) attributable to E-House shareholders |
|
7,459 |
|
(16,797 |
) |
|
|
|
|
|
|
GAAP net loss per ADS basic |
|
(0.01 |
) |
(0.33 |
) |
|
|
|
|
|
|
GAAP net loss per ADS diluted |
|
(0.01 |
) |
(0.33 |
) |
|
|
|
|
|
|
Non-GAAP net income (loss) per ADS basic |
|
0.09 |
|
(0.21 |
) |
|
|
|
|
|
|
Non-GAAP net income (loss) per ADS diluted |
|
0.09 |
|
(0.21 |
) |
|
|
|
|
|
|
Shares used in calculating basic GAAP / non-GAAP net income (loss) attributable to shareholders per ADS |
|
80,758,317 |
|
79,074,043 |
|
|
|
|
|
|
|
Shares used in calculating diluted GAAP net loss attributable to shareholders per ADS |
|
80,758,317 |
|
79,074,043 |
|
|
|
|
|
|
|
Shares used in calculating diluted non-GAAP net income (loss) attributable to shareholders per ADS |
|
81,589,335 |
|
79,074,043 |
|
E-HOUSE (CHINA) HOLDINGS LIMITED
SELECTED OPERATING DATA
|
|
Three months ended |
| ||
|
|
March 31, |
| ||
|
|
2011 |
|
2012 |
|
Primary real estate agency service |
|
|
|
|
|
Total Gross Floor Area (GFA) of new properties sold (thousands of square meters) |
|
2,935 |
|
1,863 |
|
Total value of new properties sold (millions of RMB) |
|
27,543 |
|
14,621 |
|
Total value of new properties sold (millions of $) |
|
4,182 |
|
2,321 |
|
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Overview
The following selected unaudited pro forma condensed consolidated financial information has been derived by the application of pro forma adjustments to E-Houses unaudited condensed consolidated financial information for the three months period ended March 31, 2012. The accompanying unaudited pro forma condensed consolidated balance sheet gives effect to the Merger as if it had occurred on March 31, 2012. The accompanying unaudited pro forma condensed consolidated statement of operations and comprehensive income present E-Houses results of operations for the three months ended March 31, 2012, as if the Merger had occurred on January 1, 2012. The unaudited pro forma condensed consolidated financial information is based on, and should be read in conjunction with, the financial information included in this press release. The pro forma adjustments are preliminary and based on E-House managements estimates.
The unaudited pro forma condensed consolidated balance sheet and statement of operations and statement of comprehensive income should not be construed as being representation of the financial position or future operating results of E-House. In addition to the matters noted above, the unaudited pro forma condensed consolidated balance sheet and statement of operations and statement of comprehensive income do not reflect the effect of anticipated synergies and efficiencies associated with the Merger.
The unaudited pro forma condensed consolidated statements of operations include the transaction costs related to the Merger.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2012
(In thousands of U.S. dollars)
|
|
E-House |
|
Pro Forma |
|
Notes |
|
Pro Forma |
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
331,946 |
|
(113,125 |
) |
[A] |
|
218,821 |
|
Restricted cash |
|
2,937 |
|
|
|
|
|
2,937 |
|
Marketable securities |
|
8,103 |
|
|
|
|
|
8,103 |
|
Customer deposits |
|
83,762 |
|
|
|
|
|
83,762 |
|
Accounts receivable |
|
217,804 |
|
|
|
|
|
217,804 |
|
Properties held for sale |
|
1,289 |
|
|
|
|
|
1,289 |
|
Deferred tax assets |
|
22,087 |
|
|
|
|
|
22,087 |
|
Prepaid expenses and other current assets |
|
19,907 |
|
|
|
|
|
19,907 |
|
Amounts due from related parties |
|
1,572 |
|
|
|
|
|
1,572 |
|
Total current assets |
|
689,407 |
|
|
|
|
|
576,282 |
|
Property and equipment, net |
|
37,186 |
|
|
|
|
|
37,186 |
|
Intangible assets, net |
|
203,730 |
|
|
|
|
|
203,730 |
|
Investment in affiliates |
|
32,368 |
|
|
|
|
|
32,368 |
|
Goodwill |
|
49,378 |
|
|
|
|
|
49,378 |
|
Customer deposits, non-current |
|
27,601 |
|
|
|
|
|
27,601 |
|
Other non-current assets |
|
35,748 |
|
|
|
|
|
35,748 |
|
TOTAL ASSETS |
|
1,075,418 |
|
|
|
|
|
962,293 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
5,136 |
|
|
|
|
|
5,136 |
|
Accrued payroll and welfare expenses |
|
38,315 |
|
|
|
|
|
38,315 |
|
Income tax payable |
|
21,837 |
|
|
|
|
|
21,837 |
|
Other tax payable |
|
16,005 |
|
|
|
|
|
16,005 |
|
Amounts due to related parties |
|
1,621 |
|
|
|
|
|
1,621 |
|
Advance from property buyers |
|
2,167 |
|
|
|
|
|
2,167 |
|
Deferred revenue |
|
14,299 |
|
|
|
|
|
14,299 |
|
Liability for exclusive rights, current |
|
15,370 |
|
|
|
|
|
15,370 |
|
Other current liabilities |
|
21,081 |
|
|
|
|
|
21,081 |
|
Total current liabilities |
|
135,831 |
|
|
|
|
|
135,831 |
|
Deferred tax liabilities |
|
40,110 |
|
|
|
|
|
40,110 |
|
Liability for exclusive rights, non-current |
|
17,274 |
|
|
|
|
|
17,274 |
|
Other non-current liabilities |
|
1,582 |
|
|
|
|
|
1,582 |
|
Total liabilities |
|
194,797 |
|
|
|
|
|
194,797 |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
79 |
|
39 |
|
[A] |
|
118 |
|
Additional paid-in capital |
|
694,519 |
|
138,261 |
|
[A] |
|
832,780 |
|
Accumulated deficit |
|
(126,787 |
) |
|
|
|
|
(126,787 |
) |
Accumulated other comprehensive income |
|
46,641 |
|
7,165 |
|
[A] |
|
53,806 |
|
Total E-House equity |
|
614,452 |
|
|
|
|
|
759,917 |
|
Non-controlling interest |
|
266,169 |
|
(258,590 |
) |
[A] |
|
7,579 |
|
Total equity |
|
880,621 |
|
|
|
|
|
767,496 |
|
TOTAL LIABILITIES AND EQUITY |
|
1,075,418 |
|
|
|
|
|
962,293 |
|
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For The Three Months Ended March 31, 2012
(In thousands of U.S. dollars, except share data and per ADS data)
|
|
E-House |
|
Pro forma |
|
Notes |
|
Pro forma |
|
Share-based |
|
Amortization |
|
Adjusted pro |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Revenues |
|
59,137 |
|
|
|
|
|
59,137 |
|
|
|
|
|
59,137 |
| |||
Cost of revenues |
|
(37,675 |
) |
|
|
|
|
(37,675 |
) |
|
|
2,861 |
|
(34,814 |
) | |||
General and administrative expenses |
|
(77,547 |
) |
(78 |
) |
[B] |
|
(77,625 |
) |
9,163 |
|
2,877 |
|
(65,585 |
) | |||
Other operation income, net |
|
1,502 |
|
|
|
|
|
1,502 |
|
|
|
|
|
1,502 |
| |||
Loss from operations |
|
(54,583 |
) |
|
|
|
|
(54,661 |
) |
|
|
|
|
(39,760 |
) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Interest income |
|
741 |
|
|
|
|
|
741 |
|
|
|
|
|
741 |
| |||
Other loss, net |
|
(221 |
) |
|
|
|
|
(221 |
) |
|
|
|
|
(221 |
) | |||
Loss before taxes and equity in affiliates |
|
(54,063 |
) |
|
|
|
|
(54,141 |
) |
|
|
|
|
(39,240 |
) | |||
Income tax benefit |
|
20,240 |
|
|
|
|
|
20,240 |
|
|
|
(803 |
) |
19,437 |
| |||
Loss before equity in affiliates |
|
(33,823 |
) |
|
|
|
|
(33,901 |
) |
|
|
|
|
(19,803 |
) | |||
Loss from equity in affiliates |
|
(150 |
) |
|
|
|
|
(150 |
) |
|
|
|
|
(150 |
) | |||
Net loss |
|
(33,973 |
) |
|
|
|
|
(34,051 |
) |
|
|
|
|
(19,953 |
) | |||
Less: net loss attributable to non-controlling interest |
|
(8,049 |
) |
7,397 |
|
[C] |
|
(652 |
) |
|
|
136 |
|
(516 |
) | |||
Net loss attributable to E-House shareholders |
|
(25,924 |
) |
|
|
|
|
(33,399 |
) |
|
|
|
|
(19,437 |
) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic |
|
$ |
(0.33 |
) |
|
|
|
|
$ |
(0.28 |
) |
|
|
|
|
$ |
(0.16 |
) |
Diluted |
|
$ |
(0.33 |
) |
|
|
|
|
$ |
(0.28 |
) |
|
|
|
|
$ |
(0.16 |
) |
Shares used in computation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic |
|
79,074,043 |
|
38,785,588 |
|
[D] |
|
117,859,631 |
|
|
|
|
|
117,859,631 |
| |||
Diluted |
|
79,074,043 |
|
38,785,588 |
|
[D] |
|
117,859,631 |
|
|
|
|
|
117,859,631 |
|
Unaudited Pro Forma Condensed Consolidated Statement of Comprehensive Income
As of March 31, 2012
(In thousands of U.S. dollars)
|
|
E-House |
|
Pro Forma |
|
Notes |
|
Pro Forma |
|
Net loss |
|
(33,973 |
) |
(78 |
) |
[B] |
|
(34,051 |
) |
Other comprehensive income, net of tax foreign currency translation adjustment |
|
523 |
|
|
|
|
|
523 |
|
Comprehensive loss |
|
(33,450 |
) |
|
|
|
|
(33,528 |
) |
Less: Comprehensive loss attributable to non-controlling interest |
|
(7,915 |
) |
7,278 |
|
[C] |
|
(637 |
) |
Comprehensive loss attributable to E-House shareholders |
|
(25,535 |
) |
|
|
|
|
(32,891 |
) |
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information
1. Basis of Pro Forma Presentation
As E-House retains the controlling financial interest in CRIC after the Merger on April 20, 2012, the Merger will be accounted for as an equity transaction. Therefore, no gain or loss will be recognized in consolidated net income or comprehensive income. The carrying amount of the non-controlling interest in CRIC will be adjusted to reflect the change in E-Houses ownership interest in CRIC. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest is adjusted will be recognized in equity.
The total consideration consists of the following:
|
|
|
|
Amount |
|
|
|
|
|
$ |
|
Cash |
|
|
|
113,124,632 |
|
Fair value of E-House shares issued* |
|
|
|
252,106,323 |
|
Replacement of CRIC share options (additional paid-in capital) |
|
Note [E] |
|
31,002,902 |
|
|
|
|
|
|
|
Total consideration |
|
|
|
396,233,857 |
|
* The fair value of E-House shares is based on the closing price of E-Houses shares as of April 20, 2012.
The consideration has been allocated as follows:
|
|
Amount |
|
|
|
$ |
|
Non-controlling interest |
|
258,590,440 |
|
Accumulated other comprehensive income |
|
(7,164,889 |
) |
Additional paid-in capital |
|
144,808,306 |
|
Total consideration |
|
396,233,857 |
|
2. Pro Forma Adjustments
E-Houses unaudited pro forma condensed consolidated financial information gives effect to the following pro forma adjustments:
Note [A]: To record (1) the removal of E-Houses non-controlling interest of $258,590,440 as of March 31, 2012 associated with CRIC, (2) the removal of accumulated other comprehensive income of $7,164,889 associated with the CRIC non-controlling interest, (3) a decrease in cash and cash equivalents to reflect cash consideration of $113,124,632, (4) the issuance of 38,785,588 E-House shares based on E-Houses closing share price of $6.50 as of April 20, 2012, and (5) an increase in additional paid-in capital of $138,262,133, which is the net amount of the aforementioned items (1) through (4).
Note [B]: To record additional share-based compensation expense for the three months ended March 31, 2012 of $78,316, due to the incremental increase in fair value associated with the issuance of the new E-House share options which replaced CRIC share options.
Note [C]: To record the removal of the net loss attributable to the CRIC non-controlling interest of $7,397,103 and other comprehensive income attributable to the CRIC non-controlling interest of $118,942 for the three months ended March 31, 2012.
Note [D]: To reflect the issuance of 38,785,588 E-House shares upon closing of the transaction.
Note [E]: E-House issued E-House replacement share options to replace CRIC share options. The replacement options had a total fair value of $54,787,620, $31,002,902 of which is attributable to pre-combination services and included as a component of the consideration transferred in the Merger. The increase in additional paid-in capital was immediately offset by a decrease in additional paid-in capital given the equity, as opposed to business combination, nature of the Merger.
3. Pro Forma Shares
The pro forma basic loss per share is based on the weighted average number of E-House shares outstanding for the three months ended March 31, 2012 plus the E-House shares issued for the Merger as shown in note [D] above.
For the three months ended March 31, 2012, the computation of diluted loss per share did not include the potential E-House shares arising from the issuance of the E-House replacement share options, as to do so would result in a decrease in loss per share.