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EXHIBIT 99.3
UNAUDITED PRO FORMA
CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial statements
including the notes thereto, give effect to the February 29, 2000 acquisition of
mySimon, Inc. ("mySimon") by CNET Networks, Inc. ("CNET") in a transaction
accounted for as a purchase. In connection with the acquisition, CNET issued
10,725,927 shares of its common stock and 364,730 options, having a combined
total value of approximately $678.2 million, to the shareholders of mySimon. The
condensed financial statements are based on and are qualified in their entirety
by reference to, and should be read in conjunction with, the consolidated
financial statements of CNET Networks, Inc, as previously filed, and mySimon,
included herein.
The unaudited pro forma condensed statements of operations for the year ended
December 31, 1999 give effect to the acquisition of mySimon as if it had
occurred on January 1, 1999. The unaudited pro forma condensed statements of
operations for the three months ended March 31, 2000 give effect to the
acquisition of mySimon as if it had occurred on January 1, 2000. The unaudited
pro forma condensed balance sheet as of December 31, 1999 gives effect to the
acquisition of mySimon as if the acquisition had occurred on that date.
The pro forma information is presented for illustrative purposes only
and is not necessarily indicative of the operating results or financial position
that would have occurred had the acquisition been consummated as of the
beginning of the periods presented, nor is it necessarily indicative of future
operating results or financial position.
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CNET AND MYSIMON
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
DECEMBER 31, 1999
(OOO's)
PROFORMA PROFORMA
CNET MYSIMON ADJUSTMENTS COMBINED
ASSETS
Current assets:
Cash and cash equivalents ...................... $ 53,063 $ 16,956 $ 70,019
Investments in marketable debt securities ...... 65,985 -- 65,985
Investments in marketable equity securities .... 785,909 -- 785,909
Accounts receivable, net ....................... 24,628 1,073 25,701
Other current assets ........................... 18,743 75 18,818
Restricted cash ................................ 740 -- 740
----------- ----------- ----------- -----------
Total current assets ...................... 949,068 18,104 -- 967,172
Investments in marketable debt securities ........... 109,802 -- 109,802
Investments in marketable equity securities ......... -- -- --
Property and equipment, net ......................... 30,044 2,159 32,203
Other assets ........................................ 50,609 122 50,731
Goodwill ............................................ 90,788 -- 665,292 (a) 765,080
----------- ----------- ----------- -----------
$ 1,230,311 $ 20,385 $ 665,292 $ 1,915,988
=========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................... $ 11,461 $ 821 $ 12,282
Accrued liabilities ............................ 16,398 5,670 22,068
Current portion of long-term debt .............. 5,750 1,000 6,750
Income taxes payable ........................... 5,398 -- 5,398
Deferred tax liability ......................... 306,352 -- 306,352
----------- ----------- ----------- -----------
Total current liabilities ................. 345,359 7,491 -- 352,850
Long-term debt ...................................... 179,114 -- 179,114
----------- ----------- ----------- -----------
Total liabilities ......................... 524,473 7,491 -- 531,964
Stockholders' equity:
Preferred stock ................................ -- 28,022 (28,022)(b) --
Common stock ................................... 7 1,237 (1,237)(b) 7
Additional paid in capital ..................... 218,670 10,911 667,275 (c) 896,856
Other comprehensive income and stock based
compensation .................................. 121,409 (7,874) 7,874 (d) 121,409
Retained earnings (deficit) .................... 365,752 (19,402) 19,402 (b) 365,752
----------- ----------- ----------- -----------
Total stockholders' equity ................ 705,838 12,894 665,292 1,384,024
----------- ----------- ----------- -----------
$ 1,230,311 $ 20,385 $ 665,292 $ 1,915,988
=========== =========== =========== ===========
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CNET AND MYSIMON
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
DECEMBER 31, 1999
(OOO's)
PROFORMA PROFORMA
CNET MYSIMON ADJUSTMENTS COMBINED
Revenues:
Internet ................................. $ 104,887 $ 1,683 106,570
Broadcast ................................ 7,458 -- 7,458
--------- --------- ----------
Total revenues ........................ 112,345 1,683 114,028
Cost of revenues:
Internet ................................. 35,619 475 36,094
Broadcast ................................ 8,341 -- 8,341
--------- --------- ----------
Total cost of revenues ................ 43,960 475 44,435
--------- --------- ----------
Gross profit ................................ 68,385 1,208 69,593
Operating expenses:
Sales and marketing ...................... 91,660 11,630 103,290
Development .............................. 7,561 2,894 10,455
General and administrative ............... 15,266 5,320 (3,258)(d) 17,328
Amortization of goodwill ................. 15,036 -- 221,764 (e) 236,800
--------- --------- --------- ----------
Total operating expenses .............. 129,523 19,844 218,506 367,873
--------- --------- --------- ----------
Operating income(loss) ...................... (61,138) (18,636) (218,506) (298,280)
Other income (expense):
Gain (loss) on investments ............... 734,138 -- 734,138
Interest income (expense), net ........... 1,223 519 1,742
--------- --------- ----------
Total other income (expense) ............ 735,361 519 735,880
--------- --------- ----------
Net income (loss) before income taxes .... $ 674,223 $ (18,117) 437,600
Income taxes ............................ 257,315 -- (91,027)(g) 166,288
--------- --------- ----------
Net income (loss) after income taxes ..... $ 416,908 $ (18,117) 271,312
========= ========= ==========
Basic net income (loss) per share ........... $ 5.80 $ 3.29
Diluted net income (loss) per share ......... $ 5.05 $ 2.88
Shares used in calculating
basic per share data ...................... 71,820 10,725 82,545
Shares used in calculating
diluted per share data .................... 83,373 10,959 94,332
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CNET AND MYSIMON
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
MARCH 31, 2000
(OOO's)
PROFORMA PROFORMA
CNET MYSIMON ADJUSTMENTS COMBINED
Revenues:
Internet ................................. $ 42,043 $ 1,060 43,103
Broadcast ................................ 2,323 -- 2,323
-------- -------- --------
Total revenues ........................ 44,366 1,060 45,426
Cost of revenues:
Internet ................................. 14,072 122 14,194
Broadcast ................................ 2,722 -- 2,722
-------- -------- --------
Total cost of revenues ................ 16,794 122 16,916
-------- -------- --------
Gross profit ................................ 27,572 938 28,510
Operating expenses:
Sales and marketing ...................... 14,728 3,672 18,400
Development .............................. 2,447 652 3,099
General and administrative ............... 5,994 6,041 (4,985)(d) 7,050
Amortization of goodwill ................. 28,114 -- 55,701 (f) 83,815
-------- -------- ----------- --------
Total operating expenses .............. 51,283 10,345 50,716 112,364
-------- -------- ----------- --------
Operating income(loss) ...................... (23,711) (9,427) ( 50,716) (83,854)
Other income (expense):
Gain (loss) on investments ............... (3,966) -- (3,966)
Interest income (expense), net ........... (13) 86 73
-------- -------- --------
Total other income (expense) ............ (3,979) 86 (3,893)
-------- -------- --------
Net income (loss) before income taxes .... $(27,690) $ (9,341) (87,747)
Income taxes ............................ -- -- --
-------- -------- --------
Net income (loss) after income taxes ..... $(27,690) $ (9,341) (87,747)
======== ======== ========
Basic net income (loss) per share ........... $ (0.36) $ (1.00)
Diluted net income (loss) per share ......... $ (0.36) $ (1.00)
Shares used in calculating
basic per share data ...................... 77,422 10,726 88,148
Shares used in calculating
diluted per share data .................... 77,422 10,726 88,148
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NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
(1) Basis of Presentation
The unaudited pro forma condensed statement of operations for the year
ended December 31, 1999 gives effect to the acquisition of mySimon as if it had
occurred on January 1, 1999. The unaudited pro forma condensed statement of
operations for the three months ended March 31, 2000 gives effect to the
acquisition of mySimon as if it had occurred on January 1, 2000. The unaudited
pro forma condensed balance sheet as of December 31, 1999 gives effect to the
acquisition of mySimon as if it had occurred on that date. The condensed
financial statements, including the notes thereto, should be read in conjunction
with the consolidated financial statements of CNET, as previously filed on Form
10K and 10-Q, and mySimon, included herein.
(2) Pro Forma Adjustments
(a) Reflects the purchase price that is allocated to goodwill (which will
be amortized over 3 years) after adjusting for one full year of
amortization.
The purchase price was allocated based on the estimated fair value of the
acquired assets and liabilities. The preliminary allocation is as follows
(in thousands):
Purchase Price $ 678,186
Assets Acquired
Cash 16,956
Accounts receivable, net 1,073
Property, plant, and equipment, net 2,159
Other assets 197
Liabilities Assumed (7,491)
-------
Net Assets Acquired 12,894 12,894
------- ---------
Goodwill $ 665,292
(b) Reflects the elimination of mySimon preferred and common stock,
mySimon accumulated deficit, and reflects one year of goodwill
amortization.
(c) Reflects the 10,725,927 shares of CNET's common stock and 364,730
options issued for the acquisition of mySimon.
(d) Reflects the elimination of stock based compensation.
(e) Reflects one-year amortization of goodwill.
(f) Reflects three months amortization of goodwill.
(g) Reflects the adjustment for tax expense.
(3) Pro Forma Income/(Loss) Per Share
The pro forma basic and diluted net income/(loss) per share calculation
assumes that the 10,725,927 shares of CNET's common stock and 364,730 options
issued in the acquisition were outstanding for the entire year in 1999. For the
three months ended March 31, 2000, the options are not included because their
effect is anti-dilutive.