Perfect World Announces Third Quarter 2012 Unaudited Financial Results

    Perfect World Announces Third Quarter 2012 Unaudited Financial Results

PR Newswire

BEIJING, Nov. 19, 2012

BEIJING, Nov. 19, 2012 /PRNewswire/ -- Perfect World Co., Ltd. (NASDAQ: PWRD)
("Perfect World" or the "Company"), a leading online game developer and
operator based in China, today announced its unaudited financial results for
the third quarter ended September 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20090416/CNTH023LOGO )

Third Quarter 2012 Highlights[1]

  o Total revenues were RMB695.8 million (USD110.7 million), as compared to
    RMB676.4 million in 2Q12 and RMB708.9 million in 3Q11.
  o Gross profit was RMB566.9 million (USD90.2 million), as compared to
    RMB549.8 million in 2Q12 and RMB587.7 million in 3Q11.
  o Operating profit was RMB109.4 million (USD17.4 million), as compared to
    RMB155.2 million in 2Q12 and RMB193.9 million in 3Q11.  Non-GAAP operating
    profit[2] was RMB127.5 million (USD20.3 million), as compared to RMB172.5
    million in 2Q12 and RMB221.3 million in 3Q11.
  o Net income attributable to the Company's shareholders was RMB86.2 million
    (USD13.7 million), as compared to RMB158.2 million in 2Q12 and RMB143.6
    million in 3Q11.  Non-GAAP net income attributable to the Company's
    shareholders[2] was RMB104.3 million (USD16.6 million), as compared to
    RMB175.5 million in 2Q12 and RMB171.1 million in 3Q11.
  o Basic and diluted earnings per American Depositary Share ("ADS") [3] were
    RMB1.78 (USD0.28) and RMB1.77 (USD0.28), respectively, as compared to
    RMB3.28 and RMB3.25, respectively, in 2Q12, and RMB2.96 and RMB2.83,
    respectively, in 3Q11.  Non-GAAP basic and diluted earnings per ADS[2]
    were RMB2.16 (USD0.34) and RMB2.14 (USD0.34), respectively, as compared to
    RMB3.64 and RMB3.60, respectively, in 2Q12, and RMB3.53 and RMB3.37,
    respectively, in 3Q11.
  o Launched open beta testing for "Return of the Condor Heroes" in September
    2012 in China.
  o Released English version of "Torchlight 2" in September 2012.

[1] The U.S. dollar (USD) amounts disclosed in this press release, except for
those transaction amounts that were actually settled in U.S. dollars, are
presented solely for the convenience of the reader.  The conversion of
Renminbi (RMB) into USD in this release is based on the noon buying rate in
The City of New York for cable transfers in RMB per USD as certified for
customs purposes by the Federal Reserve Bank of New York as of September 28,
2012, which was RMB6.2848 to USD1.00.  The percentages stated in this press
release are calculated based on the RMB amounts.
[2] As used in this press release, non-GAAP operating profit, non-GAAP net
income attributable to the Company's shareholders and non-GAAP earnings per
ADS are defined to exclude share-based compensation charge from operating
profit, net income attributable to the Company's shareholders and earnings per
ADS, respectively.  See "Non-GAAP Financial Measures" and "Reconciliation of
GAAP and Non-GAAP Results" at the end of this press release.
[3] Each ADS represents five ordinary shares.

Mr. Michael Chi, Chairman and Co-Chief Executive Officer of Perfect World
commented, "We are pleased to announce our third quarter results.  During the
third quarter, we primarily focused on content development of our portfolio
and decelerated in-game promotional activities.  As such, the overall
performance of our existing games came in slightly softer than the previous
quarter as we expected.  However, our total revenues were 2.9% higher on a
sequential basis, which was ahead of the high end of our expectations and
primarily a result of solid revenue contribution from our new game.  During
the third quarter, we released the English version of 'Torchlight 2,' a
pay-per-install game.  This game was developed by our majority-owned
subsidiary, Runic Games, Inc. ("Runic Games"), a top-tier game development
studio based in the U.S.  Toward the end of the third quarter, we also
launched an exciting turn-based martial arts MMORPG, 'Return of the Condor
Heroes' in China.  This new title adapted from Louis Cha's literary classic of
the same name is expected to gradually ramp up revenue contribution for us
during the fourth quarter."

"In addition to bringing new games to our players, we also remain dedicated to
maintaining a healthy life cycle for our existing games.  We continued to
provide exciting new game content to players of our existing games through
regular releases of expansion packs and content updates.  For example, we
released expansion packs for our flagship titles, 'Zhu Xian' and 'Perfect
World II,' toward the end of the third quarter."

"As we continue to enhance content for our existing games, we are also further
expanding on our deep and diverse pipeline, which has always been one of our
key competitive advantages.  A number of attractive titles across a variety of
genres are now in development.  Among them are our highly-anticipated MMORPGs,
'Swordsman Online,' 'Saint Seiya Online' and 'Legend of the Condor Heroes,' as
well as a number of web games.  We look forward to introducing these titles to
game players in the coming year and beyond and believe that they will become
new growth drivers for our business."

Mr. Robert Hong Xiao, Co-CEO of Perfect World continued, "In addition to the
great titles our Chinese studios are developing, we also have a number of
global titles in our pipeline.  Our Cryptic Studios in the U.S. is working on
'Neverwinter,' another highly-anticipated MMORPG that we plan to initially
launch in North America.  Cryptic Studios, as well as our other specialized
R&D studios across the world, not only bring more world-class entertainment to
our pipeline, but also play an important role in our globalization strategy in
terms of further strengthening our well-established R&D capabilities
worldwide."

"Another world-class title that we are very excited about is 'Dota 2,' a
world-famous title with a unique mix of action, RTS and RPG gameplay.  We
recently obtained exclusive rights to operate this game in mainland China.  We
look forward to leveraging our vast operational experience in China to bring
more world-class entertainment to our players."

"Our strong operational capabilities are an important component of our
globalization strategy.  In addition to China, we also have an extensive
operational network overseas and we continued to make progress in our overseas
operations and licensing activities.  Recently, we successfully launched
licensed games, 'Dark Blood' and 'RaiderZ,' through our overseas subsidiaries
in Japan and the U.S., respectively.  During the quarter, we also signed
several new agreements to license more of our games to overseas operators."

"As we look forward, we will continue to capitalize on our diverse portfolio
and pipeline, strong global R&D capabilities, and extensive global operating
network to deliver more exciting and innovative titles to gamers all over the
world."

Third Quarter 2012 Financial Results

Total Revenues

Total revenues were RMB695.8 million (USD110.7 million) in 3Q12, as compared
to RMB676.4 million in 2Q12 and RMB708.9 million in 3Q11. 

Online game operation revenues, which include both domestic and overseas
online game operations, were RMB608.2 million (USD96.8 million) in 3Q12, as
compared to RMB626.4 million in 2Q12 and RMB643.2 million in 3Q11.  In the
third quarter, the Company decelerated in-game promotional activities and
continued to focus on content enhancements in order to maintain a healthy life
cycle for its existing games.  

The aggregate average concurrent users (ACU) for games under operation in
mainland China was approximately 601,000 in 3Q12, as compared to 739,000 in
2Q12 and 828,000 in 3Q11.  During late second quarter and throughout the third
quarter, the Company stepped up its anti-cheating efforts for certain games in
order to maintain a healthy and fun gaming environment for players.  The
decrease from 2Q12 was mainly due to such stringent anti-cheating efforts, as
well as adverse seasonality factors affecting user traffic during the third
quarter.  In addition, expansion packs for certain games were released near or
after the end of the third quarter.  As such, user traffic remained at a lower
level prior to releases of the new content.

Licensing revenues were RMB39.0 million (USD6.2 million) in 3Q12, as compared
to RMB46.9 million in 2Q12 and RMB55.8 million in 3Q11.  The decrease from
2Q12 was mainly due to lower initial license fees as the Company did not
launch any new games through its partners in overseas markets in 3Q12.

Other revenues were RMB48.6 million (USD7.7 million) in 3Q12, as compared to
RMB3.0 million in 2Q12 and RMB9.9 million in 3Q11.  The increase from 2Q12 was
primarily due to the contribution from English version of "Torchlight 2"
released in 3Q12.  "Torchlight 2" is a popular pay-per-install game developed
by Runic Games, the Company's majority-owned subsidiary based in the U.S.

Cost of Revenues

The cost of revenues was RMB128.9 million (USD20.5 million) in 3Q12, as
compared to RMB126.6 million in 2Q12 and RMB121.2 million in 3Q11.  

Gross Profit and Gross Margin

Gross profit was RMB566.9 million (USD90.2 million) in 3Q12, as compared to
RMB549.8 million in 2Q12 and RMB587.7 million in 3Q11.  Gross margin was 81.5%
in 3Q12, as compared to 81.3% in 2Q12 and 82.9% in 3Q11.  

Operating Expenses

Operating expenses were RMB457.5 million (USD72.8 million) in 3Q12, as
compared to RMB394.6 million in 2Q12 and RMB393.9 million in 3Q11.  The
increase in operating expenses from 2Q12 was mainly due to increases in sales
and marketing expenses, and R&D expenses in 3Q12.

R&D expenses were RMB197.1 million (USD31.4 million) in 3Q12, as compared to
RMB189.7 million in 2Q12 and RMB170.6 million in 3Q11.  The increase from 2Q12
was primarily due to an increase in staff cost.

Sales and marketing expenses were RMB177.1 million (USD28.2 million) in 3Q12,
as compared to RMB121.8 million in 2Q12 and RMB146.7 million in 3Q11.  The
increase from 2Q12 was largely due to an increase in advertising and
promotional expenses associated with the launch of the Company's new game,
"Return of the Condor Heroes," and releases of several expansion packs for its
existing games, including the flagship titles "Zhu Xian" and "Perfect World
II."  

General and administrative ("G&A") expenses were RMB83.3 million (USD13.2
million) in 3Q12, as compared to RMB83.1 million in 2Q12 and RMB76.5 million
in 3Q11. 

Operating Profit

Operating profit was RMB109.4 million (USD17.4 million) in 3Q12, as compared
to RMB155.2 million in 2Q12 and RMB193.9 million in 3Q11.  Non-GAAP operating
profit was RMB127.5 million (USD20.3 million) in 3Q12, as compared to RMB172.5
million in 2Q12 and RMB221.3 million in 3Q11.

Total Other Income

Total other income was RMB16.1 million (USD2.6 million) in 3Q12, as compared
to RMB38.9 million in 2Q12 and RMB28.5 million in 3Q11.  Due to the
fluctuation of the euro against the U.S. dollar, a foreign exchange loss was
realized in 3Q12 while a foreign exchange gain was realized in 2Q12. 

Income Tax Expense

Income tax expense was RMB29.1 million (USD4.6 million) in 3Q12, as compared
to RMB38.1 million in 2Q12 and RMB78.8 million in 3Q11.  The decrease from
2Q12 was primarily a result of the change in the operating profit in 3Q12. 

Net Income Attributable to the Company's Shareholders

Net income attributable to the Company's shareholders was RMB86.2 million
(USD13.7 million) in 3Q12, as compared to RMB158.2 million in 2Q12 and
RMB143.6 million in 3Q11.  Non-GAAP net income attributable to the Company's
shareholders was RMB104.3 million (USD16.6 million) in 3Q12, as compared to
RMB175.5 million in 2Q12 and RMB171.1 million in 3Q11.

Basic and diluted earnings per ADS were RMB1.78 (USD0.28) and RMB1.77
(USD0.28), respectively, in 3Q12, as compared to RMB3.28 and RMB3.25,
respectively, in 2Q12, and RMB2.96 and RMB2.83, respectively, in 3Q11. 
Non-GAAP basic and diluted earnings per ADS were RMB2.16 (USD0.34) and RMB2.14
(USD0.34), respectively, in 3Q12, as compared to RMB3.64 and RMB3.60,
respectively, in 2Q12, and RMB3.53 and RMB3.37, respectively, in 3Q11.

Cash and Cash Equivalents

As of September 30, 2012, the Company had RMB745.8 million (USD118.7 million)
of cash and cash equivalents, as compared to RMB964.1 million as of June 30,
2012.  The decrease was mainly due to the Company's short-term investments in
certain structured deposits, and was partially offset by the net cash inflow
generated from the Company's online game operations.

Recent Developments

Obtained Exclusive Rights to Operate "Dota 2" in Mainland China

In October 2012, the Company obtained exclusive rights to operate "Dota 2," a
popular online game with the unique mix of action, RTS and RPG gameplay, in
mainland China.

Promoted Mr. Alex Yiran Xu to Senior Vice President

In November 2012, the Company promoted Mr. Alex Yiran Xu, the Company's Vice
President of Strategy, to the Company's Senior Vice President of Business
Development. 

Business Outlook

Based on the Company's current operations, total revenues for the fourth
quarter of 2012 are expected to be between RMB661 million and RMB696 million,
representing a flat to slight decline from the third quarter of 2012.  The
Company successfully released English version of "Torchlight 2," a popular
pay-per-install game, which contributed to revenues in the third quarter.  The
Company does not expect the revenue contribution from this game to be as
significant in the fourth quarter.  On the other hand, the Company's new game,
"Return of the Condor Heroes," is expected to contribute additional revenues
for the fourth quarter, but it will take time to ramp up gradually.

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally
accepted accounting principals in the United States, or GAAP, this press
release presents non-GAAP operating profit, non-GAAP net income attributable
to the Company's shareholders and non-GAAP earnings per ADS by excluding
share-based compensation charge from operating profit, net income attributable
to the Company's shareholders and earnings per ADS, respectively.  The Company
believes these non-GAAP financial measures are important to help investors
understand the Company's operating and financial performance, compare business
trends among different reporting periods on a consistent basis and assess the
Company's core operating results, as they exclude certain expenses that are
not expected to result in cash payments.  The use of the above non-GAAP
financial measures has certain limitations.  Share-based compensation charge
has been and will continue to be incurred and is not reflected in the
presentation of the non-GAAP financial measures.  It should be considered in
the overall evaluation of our results.  None of the non-GAAP measures is a
measure of net income attributable to the Company's shareholders, operating
profit, operating performance or liquidity presented in accordance with GAAP.
 We compensate for these limitations by providing the relevant disclosure of
our share-based compensation charge in our reconciliations to the most
directly comparable GAAP financial measures, which should be considered when
evaluating our performance.  These non-GAAP financial measures should be
considered in addition to financial measures prepared in accordance with GAAP,
but should not be considered a substitute for, or superior to, financial
measures prepared in accordance with GAAP.  Reconciliation of each of these
non-GAAP financial measures to the most directly comparable GAAP financial
measure are set forth at the end of this release.

Conference Call

Perfect World will host a conference call and live webcast at 8:00pm Eastern
Standard Time on Monday, November 19, 2012 (9:00am Beijing time on Tuesday,
November 20, 2012).

Dial-in numbers for the live conference call are as follows:

- U.S. Toll Free Number           1-866-519-4004
- International Dial-in Number    +65-6723-9381
- Mainland China Toll Free Number 800-819-0121
- Hong Kong Toll Free Number      80-093-0346
- U.K. Toll Free Number           080-8234-6646
  Conference ID:                  PWRD

A live and archived webcast of the conference call will be available on the
Investor Relations section of Perfect World's website at http://www.pwrd.com.

A telephone replay of the call will be available beginning two hours after the
conclusion of the conference call through 11:59pm Eastern Time, November 27,
2012.

Dial-in numbers for the replay are as follows:

- U.S. Toll Free Number        1-855-452-5696
- International Dial-in Number +61-2-8199-0299
  Conference ID:               65232118

About Perfect World Co., Ltd. (http://www.pwrd.com)

Perfect World Co., Ltd. (NASDAQ: PWRD) is a leading online game developer and
operator based in China.  Perfect World primarily develops online games based
on proprietary game engines and game development platforms.  Perfect World's
strong technology and creative game design capabilities, combined with
extensive knowledge and experiences in the online game market, enable it to
frequently and promptly introduce popular games designed to cater changing
customer preferences and market trends.  Perfect World's current portfolio of
self-developed online games includes massively multiplayer online role playing
games ("MMORPGs"): "Perfect World," "Legend of Martial Arts," "Perfect World
II," "Zhu Xian," "Chi Bi," "Pocketpet Journey West," "Battle of the
Immortals," "Fantasy Zhu Xian," "Forsaken World," "Dragon Excalibur," "Empire
of the Immortals" and "Return of the Condor Heroes;" an online casual game:
"Hot Dance Party;" and a number of web games and social networking games. 
While a substantial portion of the revenues are generated in China, Perfect
World operates its games in North America, Europe and Japan through its own
subsidiaries.  Perfect World's games have also been licensed to leading game
operators in a number of countries and regions in Asia, Latin America,
Australia, New Zealand, and the Russian Federation and other Russian speaking
territories.  Perfect World intends to continue to explore new and innovative
business models and is committed to maximizing shareholder value over time.

SafeHarborStatements

This press release contains forward-looking statements.  These statements
constitute forward-looking statements under the U.S. Private Securities
Litigation Reform Act of 1995.  These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements.  Among
other things, the management's quotations and "Business Outlook" contain
forward-looking statements.  Such statements involve certain risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements.  Potential risks and uncertainties include,
but are not limited to, Perfect World's limited operating history, its ability
to develop and operate new games that are commercially successful, the growth
of the online game market and the continuing market acceptance of its games
and in-game items in China and elsewhere, its ability to protect intellectual
property rights, its ability to respond to competitive pressure, its ability
to maintain an effective system of internal control over financial reporting,
changes of the regulatory environment in China, and economic slowdown in China
and/or elsewhere.  Further information regarding these and other risks is
included in Perfect World's filings with the U.S. Securities and Exchange
Commission, including its annual report on Form 20-F.  All information
provided in this press release and in the attachments is as of November 19,
2012, and Perfect World does not undertake any obligation to update any
forward-looking statement as a result of new information, future events or
otherwise, except as required under applicable law.

For further information, please contact

Perfect World Co., Ltd.
Vivien Wang - Vice President, Investor Relations & Corporate Communications
Joanne Deng - Investor Relations Manager 
Tel: +86-10-5780-5700 
Fax: +86-10-5780-5713
Email: ir@pwrd.com
http://www.pwrd.com

Christensen Investor Relations
Patty Bruner
Tel: +1-480-614-3036
Fax: +1-480-614-3033
Email: pbruner@christensenir.com

Victor Kuo
Tel: +86-10-5826-4939
Fax: +86-10-5826-4838
Email: vkuo@christensenir.com

Perfect World Co., Ltd.
Unaudited Consolidated Balance Sheets
                                   December 31,   September 30,  September 30,
                                   2011           2012           2012
                                   RMB            RMB            USD
Assets
  Current assets
    Cash and cash equivalents      2,150,213,495  745,781,152    118,664,262
    Restricted cash                535,500,431    836,404,466    133,083,704
    Short-term investments         139,517,875    1,425,249,386  226,777,206
    Accounts receivable, net       142,543,972    144,704,183    23,024,469
    Due from related parties       40,000         -              -
    Prepayment and other assets    94,628,466     146,152,866    23,254,975
    Deferred tax assets            27,130,068     28,384,360     4,516,351
  Total current assets             3,089,574,307  3,326,676,413  529,320,967
  Non current assets
    Equity investments             33,384,729     221,887,923    35,305,487
    Time deposits                  293,892,575    50,840,345     8,089,413
    Restricted time deposits       125,717,425    7,875,551      1,253,111
    Property, equipment, and       1,259,850,498  1,223,150,089  194,620,368
software, net
    Construction in progress       4,793,214      11,820,316     1,880,778
    Intangible assets, net         273,193,489    244,126,194    38,843,908
    Goodwill                       466,328,513    462,973,188    73,665,540
    Due from related parties       7,561,080      7,609,200      1,210,731
    Prepayments and other assets   62,457,484     55,744,033     8,869,659
    Deferred tax assets            35,235,313     37,331,298     5,939,934
Total assets                       5,651,988,627  5,650,034,550  898,999,896
Liabilities and Shareholders'
Equity
  Current liabilities
    Accounts payable               89,123,596     107,742,439    17,143,336
    Short-term bank loans          560,780,100    754,579,000    120,064,123
    Advances from customers        95,921,079     96,487,174     15,352,465
    Salary and welfare payable     204,976,567    159,630,280    25,399,421
    Taxes payable                  43,236,335     33,705,412     5,363,005
    Accrued expenses and other     68,663,124     61,482,708     9,782,763
liabilities
    Due to related parties         155,000        365,000        58,077
    Deferred revenues              461,921,174    415,823,362    66,163,340
    Deferred tax liabilities       106,933,061    64,347,489     10,238,590
    Deferred government grants     579,526        530,448        84,402
  Total current liabilities        1,632,289,562  1,694,693,312  269,649,522
  Deferred revenues                17,481,338     10,301,260     1,639,075
  Deferred tax liabilities         8,005,954      7,524,786      1,197,299
  Other long-term liabilities      8,803,103      -              -
Total liabilities                  1,666,579,957  1,712,519,358  272,485,896
Shareholders' Equity
  Ordinary shares (US$0.0001 par
value, 10,000,000,000 shares
     authorized, 29,671,195 Class
A ordinary shares issued and
     outstanding, 201,238,020
Class B ordinary shares issued
     and outstanding as of
December 31, 2011; 10,000,000,000
     shares authorized, 29,671,195
Class A ordinary shares issued
     and outstanding, 212,028,805
Class B ordinary shares issued
     and outstanding as of         186,948        193,741        30,827
September 30, 2012)
  Additional paid-in capital       212,421,037    313,123,262    49,822,311
  Statutory reserves               268,014,793    270,581,391    43,053,302
  Accumulated other comprehensive  (60,430,695)   (56,713,482)   (9,023,912)
loss
  Retained earnings                3,538,087,071  3,382,100,087  538,139,652
Total Perfect World Shareholders'  3,958,279,154  3,909,284,999  622,022,180
Equity
Non-controlling interests          27,129,516     28,230,193     4,491,820
Total Shareholders' Equity         3,985,408,670  3,937,515,192  626,514,000
Total Liabilities and              5,651,988,627  5,650,034,550  898,999,896
Shareholders' Equity

 

 

Perfect World Co., Ltd.
Unaudited Consolidated Statements of Operations
                    Three months ended
                    September 30,  June 30,       September 30,  September 30,
                    2011           2012           2012           2012
                    RMB            RMB            RMB            USD
Revenues
    Online game     643,240,306    626,444,057    608,210,956    96,774,910
operation revenues
    Licensing       55,801,551     46,923,638     38,967,837     6,200,330
revenues
    Other revenues  9,901,854      3,042,555      48,630,435     7,737,786
Total Revenues      708,943,711    676,410,250    695,809,228    110,713,026
Cost of revenues    (121,227,110)  (126,649,248)  (128,875,426)  (20,505,891)
Gross profit        587,716,601    549,761,002    566,933,802    90,207,135
Operating expenses
    Research and
development         (170,640,162)  (189,673,612)  (197,110,698)  (31,363,082)
expenses
    Sales and       (146,746,286)  (121,773,658)  (177,135,483)  (28,184,745)
marketing expenses
    General and
administrative      (76,475,913)   (83,138,145)   (83,270,255)   (13,249,468)
expenses
Total operating     (393,862,361)  (394,585,415)  (457,516,436)  (72,797,295)
expenses
Operating profit    193,854,240    155,175,587    109,417,366    17,409,840
Other income /
(expenses)
    Share of loss
from equity         (485,958)      (2,425,763)    (4,430,549)    (704,963)
investments
    Interest income 21,618,355     27,861,314     19,169,167     3,050,084
    Interest        (2,277,145)    (7,847,932)    (5,345,876)    (850,604)
expense
    Others, net     9,624,146      21,309,632     6,695,488      1,065,346
Total other income  28,479,398     38,897,251     16,088,230     2,559,863
Profit before tax   222,333,638    194,072,838    125,505,596    19,969,703
    Income tax      (78,769,353)   (38,113,968)   (29,077,514)   (4,626,641)
expense
Income from
continuing          143,564,285    155,958,870    96,428,082     15,343,062
operations, net of
tax
Loss from
discontinued        (1,400,275)    -              -              -
operations, net of
tax
Net Income          142,164,010    155,958,870    96,428,082     15,343,062
Net loss / (income)
attributable to the 1,453,584      2,248,890      (10,269,331)   (1,633,995)
non-controlling
interests
Net income
attributable to the 143,617,594    158,207,760    86,158,751     13,709,067
Company's
shareholders
Net earnings per
share, basic
    Continuing      0.60           0.66           0.36           0.06
operations
    Discontinued    (0.01)         0.00           0.00           0.00
operations
Total earnings per  0.59           0.66           0.36           0.06
share, basic
Net earnings per
share, diluted
    Continuing      0.58           0.65           0.35           0.06
operations
    Discontinued    (0.01)         0.00           0.00           0.00
operations
Total earnings per  0.57           0.65           0.35           0.06
share, diluted
Net earnings per
ADS, basic
    Continuing      2.99           3.28           1.78           0.28
operations
    Discontinued    (0.03)         0.00           0.00           0.00
operations
Total earnings per  2.96           3.28           1.78           0.28
ADS, basic
Net earnings per
ADS, diluted
    Continuing      2.86           3.25           1.77           0.28
operations
    Discontinued    (0.03)         0.00           0.00           0.00
operations
Total earnings per  2.83           3.25           1.77           0.28
ADS, diluted
Shares used in
calculating basic   242,659,663    241,209,046    241,622,487    241,622,487
net earnings per
share
Shares used in
calculating diluted 253,972,573    243,529,117    243,269,476    243,269,476
net earnings per
share
Amount attributable
to the Company's
shareholders:
Income from
continuing          144,967,632    158,207,760    86,158,751     13,709,067
operations, net of
tax
Loss from
discontinued        (1,350,038)    -              -              -
operations, net of
tax
Net income          143,617,594    158,207,760    86,158,751     13,709,067
Total share-based
compensation cost
included in:
    Cost of         (1,646,149)    (1,089,992)    (1,130,569)    (179,889)
revenues
    Research and
development         (12,576,220)   (8,345,586)    (8,598,468)    (1,368,137)
expenses
    Sales and       (3,935,862)    (2,654,574)    (2,730,279)    (434,426)
marketing expenses
    General and
administrative      (9,306,125)    (5,216,569)    (5,652,702)    (899,424)
expenses

 

 

 

Perfect World Co., Ltd.
Reconciliation of GAAP and Non-GAAP Results
                      Three months ended
                      September 30,  June 30,     September 30,  September 30,
                      2011           2012         2012           2012
                      RMB            RMB          RMB            USD
GAAP operating profit 193,854,240    155,175,587  109,417,366    17,409,840
Share based           27,464,356     17,306,721   18,112,018     2,881,876
compensation charge
Non-GAAP operating    221,318,596    172,482,308  127,529,384    20,291,716
profit
GAAP net income
attributable to the   143,617,594    158,207,760  86,158,751     13,709,067
Company's
shareholders
Share based           27,464,356     17,306,721   18,112,018     2,881,876
compensation charge
Non-GAAP net income
attributable to the   171,081,950    175,514,481  104,270,769    16,590,943
Company's
    shareholders
GAAP net earnings per
ADS
    - Basic           2.96           3.28         1.78           0.28
    - Diluted         2.83           3.25         1.77           0.28
Non-GAAP net earnings
per ADS
    - Basic           3.53           3.64         2.16           0.34
    - Diluted         3.37           3.60         2.14           0.34
ADSs used in
calculating net
earnings per ADS
    - Basic           48,531,933     48,241,809   48,324,497     48,324,497
    - Diluted         50,794,515     48,705,823   48,653,895     48,653,895

 

 

SOURCE Perfect World Co., Ltd.

Website: http://www.pwrd.com