Note: Effective January 1, 2002, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). Under SFAS 142,
goodwill is no longer amortized, beginning January 1, 2002. If the non-amortization provision of
SFAS 142 had been effective in 2001, net loss and basic and diluted net loss per share for the three
months ended June 30, 2001, would have been $(24,843), $(0.18) and $(0.18), respectively, and for
the six months ended June 30, 2001 would have been $(147,974), $(1.09) and $(1.09), respectively.
CNET NETWORKS, INC. Consolidated Balance Sheets Unaudited (000s except per share data)
CNET NETWORKS, Inc. Consolidated Statements of Cash Flows Unaudited (000s)
Six Months Ended
June 30,
--------------------------
2002 2001
------------ ------------
Cash flows from operating activities:
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . $ (56.868) $ (534,698)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization. . . . . . . . . . . . 37,256 425,343
Noncash interest. . . . . . . . . . . . . . . . . . . 548 3,078
Deferred taxes. . . . . . . . . . . . . . . . . . . . 9,557 (39,774)
Allowance for doubtful accounts. . . . . . . . . . . 4,899 8,274
Services exchanged for cost method investments. . . . - (4,697)
(Gain) loss on sale and impairment of marketable
securities and privately held investments . . . . . 6,056 115,140
(Gain) loss on sale and impairment of marketable
debt securities . . . . . . . . . . . . . . . . . . (119) -
Foreign currency translation gain (loss). . . . . . . (2,618) 920
Loss on disposal of fixed assets. . . . . . . . . . . 128 -
Changes in operating assets and liabilities,
net of acquisitions:
Accounts receivable . . . . . . . . . . . . . . . 4,988 32,720
Other assets. . . . . . . . . . . . . . . . . . . 1,495 (14,077)
Accounts payable. . . . . . . . . . . . . . . . . 159 (9,830)
Accrued liabilities . . . . . . . . . . . . . . . (8,720) (28,830)
Other long term liabilities . . . . . . . . . . . (1,068) (2,050)
Benefit from exercise of stock options . . . . . . - 3,602
------------ ------------
Net cash used in operating activities . . . . . . (4,307) (44,879)
------------ ------------
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . (10,572) (19,895)
Purchase of marketable equity securities. . . . . . . . - (40,988)
Purchase of marketable debt securities. . . . . . . . . (94,295) -
Proceeds from sale of marketable debt securities. . . . 106,835 96,890
Proceeds from sale of marketable equity securities. . . 144 23,941
Proceeds from sales of (investments in) - -
privately held companies . . . . . . . . . . . . . . . 3,000 (8,002)
Net cash acquired (paid for) acquisitions . . . . . . . (4,022) -
Other . . . . . . . . . . . . . . . . . . . . . . . . . - -
------------ ------------
Net cash provided by (used in) - -
investing activities. . . . . . . . . . . . . . 1,090 51,946
------------ ------------
Cash flows from financing activities:
Purchase of treasury stock. . . . . . . . . . . . . . . (2) -
Payments received on stockholders' notes. . . . . . . . 149 -
Net proceeds from issuance of common stock. . . . . . . - -
Proceeds from debt. . . . . . . . . . . . . . . . . . . - -
Net proceeds from employee stock purchase plan. . . . . 478 1,405
Net proceeds from exercise of options and warrants. . . 3,136 10,001
Principal payments on capital leases. . . . . . . . . . (207) -
Principal payments on borrowings. . . . . . . . . . . . (42) (862)
------------ ------------
Net cash provided by financing activities. . . . 3,512 10,544
------------ ------------
Net increase in cash and cash equivalents. . . . . . . . . 295 17,611
Effect of exchange rate changes on cash and - -
cash equivalents . . . . . . . . . . . . . . . . . . . . 386 (327)
Cash and cash equivalents at beginning of period . . . . 93,439 167,301
------------ ------------
Cash and cash equivalents at end of period . . . . . . . $ 94,120 $ 184,585
============ ============
CNET NETWORKS, Inc. Segments Unaudited (000s)
CNET's reporting structure changed significantly over the period
since the acquisition of the ZDNet business. After review of the internal
financial reporting structure once that business was fully integrated, it was
determined that CNET's primary areas of measurement and decision-making include
three principal business segments - U.S. Media, International Media and Channel
Services. U.S. Media consists of an online network including sites providing
sources of technology information, as well as shopping services, a technology
print publication, and a radio broadcast providing technology news and
information. International Media includes the delivery of online technology
information and several technology print publications. Channel Services
includes a licensed product database and an online technology marketplace for
resellers, distributors and manufacturers. Management believes that segment
operating income (loss) before depreciation and amortization is an appropriate
measure of evaluating the operating performance of the company's segments.
However, segment operating income (loss) before depreciation and amortization
should not be considered a substitute for operating income, cash flows or other
measures of financial performance prepared in accordance with generally accepted
accounting principles.
Three months ended June 30, 2002
-----------------------------------------------------------
International Channel
U.S. Media Media Services Other(1) Total
---------- ------------ ---------- ---------- ----------
Revenues. . . . . . . . . $ 46,730 $ 6,747 $ 3,761 $ - $ 57,238
Operating expenses . . . . 51,879 8,681 5,094 26,695 92,349
---------- ------------ ---------- ---------- ----------
Operating loss . . . . . $ (5,149)$ (1,934)$ (1,333)$ (26,695) $ (35,111)
========== ============ ========== ========== ==========
Three months ended June 30, 2001
-----------------------------------------------------------
International Channel
U.S. Media Media Services Other(1) Total
---------- ------------ ---------- ---------- ----------
Revenues. . . . . . . . . $ 59,050 $ 8,388 $ 3,651 $ - $ 71,089
Operating expenses . . . . 68,596 12,009 6,284 216,007 302,896
---------- ------------ ---------- ---------- ----------
Operating loss . . . . . $ (9,546)$ (3,621)$ (2,633)$ (216,007) $ (231,807)
========== ============ ========== ========== ==========
Six months ended June 30, 2002
-----------------------------------------------------------
International Channel
U.S. Media Media Services Other(2) Total
---------- ------------ ---------- ---------- ----------
Revenues. . . . . . . . . $ 93,833 $ 11,827 $ 7,230 $ - $ 112,890
Operating expenses . . . . 106,043 16,888 10,443 47,923 181,297
---------- ------------ ---------- ---------- ----------
Operating loss . . . . . $ (12,210)$ (5,061)$ (3,213)$ (47,923) $ (68,407)
========== ============ ========== ========== ==========
Six months ended June 30, 2001
-----------------------------------------------------------
International Channel
U.S. Media Media Services Other(2) Total
---------- ------------ ---------- ---------- ----------
Revenues. . . . . . . . . $ 124,561 $ 14,387 $ 7,293 $ - $ 146,241
Operating expenses . . . . 140,392 22,296 11,044 431,782 605,514
---------- ------------ ---------- ---------- ----------
Operating loss . . . . . $ (15,831)$ (7,909)$ (3,751)$ (431,782) $ (459,273)
========== ============ ========== ========== ==========
(1) For the three months ended June 30, 2002, other represents operating
expenses related to realignment of $7,743, depreciation of $6,766 and
amortization of $12,186. For the three months ended June 30, 2001, other
represents operating expenses related to integration of $3,256, depreciation of
$5,957 and amortization of $206,794.
(2) For the six months ended June 30, 2002, other represents operating
expenses related to realignment and integration of $10,671, depreciation of
$13,007 and amortization of $24,245. For the six months ended June 30, 2001,
other represents operating expenses related to integration of $7,975,
depreciation of $11,553 and amortization of $412,254.
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