Focus Media Reports Third Quarter 2009 Results

Focus Media Reports Third Quarter 2009 Results

SHANGHAI, Dec. 7 /PRNewswire-Asia/ -- Focus Media Holding Limited (NASDAQ:FMCN) , China's largest digital media group, today announced its unaudited financial results for the third quarter ended September 30, 2009.

Basis of Presentation

On December 22, 2008, the Company announced that it entered into a definitive agreement with SINA Corporation ("SINA") to sell substantially all of the assets of Focus Media's digital out-of-home advertising networks, including the LCD display network, poster frame network and certain in-store network. The assets to be sold to SINA were recorded as an asset group held-for-sale in accordance with US GAAP, and were not depreciated or amortized nor were they subject to the same impairment analysis as assets held and used in continuing operations. Therefore, the GAAP and Non-GAAP financial measures related to the asset group to be sold to SINA for the quarters ended on March 31, 2009 and June 30, 2009 did not include any amortization or depreciation expenses related to the intangible and fixed assets or impairment of fixed assets. On September 28, 2009, the Company and SINA jointly reached a decision not to extend the deadline of the agreement announced on December 22, 2008. As such, the assets proposed to be sold to SINA, were reclassified for financial reporting purpose, as assets to be held and used. In accordance with US GAAP, the Company recorded depreciation expense of $17.0 million on September 28, which represented the cumulative catch-up of depreciation expenses the Company would have recorded during the period from December 22, 2008 to June 30, 2009. During the first quarter of 2009, the Company also announced that it would cease expansion of its digital poster frame networks and, in response to a regulation promulgated by Shanghai Municipality Government in early 2009, the operation of its boat-based advertising platform on the Huangpu River. In accordance with US GAAP, the digital poster frame and the boat-based advertising platform, as part of the asset group to be sold to SINA, were not subject to the same impairment analysis as assets held and used in continuing operations. With the termination of the agreement with SINA in the third quarter of 2009, the assets were reevaluated for impairment, resulting in the Company impairing these assets and recording an impairment charge of $36.0 million in cost of sales for the third quarter of 2009.

The effect of the cumulative catch-up depreciation expenses amounted to $17.0 million, without considering tax effect, and was recorded as cost of sales in both our GAAP and Non-GAAP measures.

In August 2009, the Company started to negotiate with the ex-shareholders of various subsidiaries within the Internet division to sell back part of the equity interests held by the Company in those entities in exchange for the reduction of future earn-out payments. Some of these partial equity disposal transactions were closed towards the end of August. As a result, some of these entities no longer met the criteria for consolidation and were therefore deconsolidated and accounted for as cost or equity method investments from September 2009 onwards. The Company consolidated, in the third quarter of 2009, the results of operations from these entities up to the date of the partial equity disposal transactions. The total net revenues and gross profit for these entities included in the Company's consolidated statement of income for the third quarter of 2009 was $28.6million and $5.1 million, respectively, without considering tax effect. The net revenues and gross profit from these entities will no longer be consolidated by the Company after the dates of the partial equity disposal transactions.

   Highlights for Third Quarter 2009:   -- Total net revenue for third quarter 2009 was $166.6 million, declining      3% from $171.3 million for the second quarter of 2009 and declining 26%      from $224.8 million for the third quarter of 2008.  The aggregate net      revenue for the LCD display network, in-store network and poster frame      network (previous classified within discontinued operations) was $85.8      million, surpassing the high end of Company's previous guidance of      $81.5 million; The aggregate net revenue for the movie theatre and      outdoor traditional billboard network and Internet advertising services      (previously classified within continuing operations) was $80.8 million.      The Internet advertising services division had aggregate net revenue of      $68.3 million, of which $28.6 million was attributable to subsidiaries      that were deconsolidated by the Company in September 2009 and which      will be accounted for as cost or equity method investments in future      periods.  The high end of the Company's previous guidance for the      continuing operations was $47 million for the third quarter of 2009.   -- Net loss attributable to shareholders was $127.6 million or a loss of      $0.99 per fully diluted ADS, compared to net loss attributable to      shareholders of $23 million for the second quarter of 2009, or a loss      of $0.18 per fully diluted ADS and net income attributable to      shareholders of $51.4 million for the third quarter of 2008 or an      income of $0.38 per fully diluted ADS.   -- Non-GAAP net income for the third quarter of 2009 was $7.9 million,      compared to non-GAAP net income of $28.2 million for the second quarter      of 2009 and non-GAAP net income of $71.4 million for the third quarter      of 2008.  The catch-up of depreciation expenses from LCD display      network, poster frame network and in-store network reflected in the      results of operation for the third quarter of 2009 was $16.9 million or      $13.6 million, net of tax; Non-GAAP net income attributable to      deconsolidated subsidiaries from Internet advertising services division      was $0.9 million, net of tax and minority interests.   -- Cash and cash equivalents was $383.1 million as of September 30, 2009,      an increase of 4% from $367.9 million as of June 30, 2009.   -- Gross accounts receivable for the LCD display network, in-store network      and poster frame network (previous classified as discontinued      operations) was $141.5 million as of September 30, 2009, a decline of      6.2% from $150.9 million as of June 30, 2009.  Gross accounts      receivable for the movie theatre and outdoor traditional billboard      network and Internet advertising services (previously classified within      continuing operations), was $113.2 million as of September 30, 2009, a      decline of 11% from $127.0 million as of June 30, 2009.   -- Capital expenditures were $0.9 million for the third quarter of 2009.   -- Contingent earn-out payments related to historical acquisitions paid in      the third quarter of 2009 were $5.3 million, mostly attributable to      poster frame network.    

Jason Jiang, chairman and CEO of Focus Media said, "During this quarter, we have been doing restructurings on multiple business divisions, which lined up as follows: Firstly, we partially disposed of our equity ownership in some acquired subsidiaries in the Internet advertising service division and outdoor traditional billboard division. As a result, we expect to significantly reduce the potential earn-out payments in these two business divisions in the future. Secondly, we terminated the acquisition contracts or renegotiated the earn-out payments with a few under-performing subsidiaries in our poster frame division and meanwhile, expedited the integration of those subsidiaries acquired in previous years. In this way, we enhanced the control over these subsidiaries and, on the other hand, significantly reduced the contingent earn-out payments as well. Though during the past few quarters our poster frame business has performed less satisfactorily due to multiple reasons, such as changes in senior management, the ongoing renegotiation over earn-out payments, fierce competition and over-investment in fixed assets in previous years, we believe that this business division will be back on track with the progress of our integration processes and we expect to see improvement for the fourth quarter and the following quarters. Thirdly, the termination of the agreement with SINA in this quarter enabled us to reevaluate some non-performing assets on our balance sheet, such as the idle digital frames due to ceasing expansion of our digital frame network and the boat-based advertising platform in response to certain new regulations. As a result of these reevaluations, we made impairment charges of $38.8 million on those assets. Through the above mentioned measures, we believe that the assets impairment and disposal losses, which have been negatively affecting our company since the last quarter of 2008 will come to the end by early 2010."

Jason continued, "Going forward, we will focus on our core business and primarily seek organic growth. At the same time, financial discipline will be rigorously followed in our decision-making processes."

Third Quarter 2009 financial results

Advertising net revenue from the LCD display network was $56.0 million for the third quarter of 2009, a slight increase of 4% from $54.3 million for the second quarter of 2009 but a 32% decline from $73.7 million for the third quarter of 2008.

Advertising net revenue from the poster frame network was $22.1 million for the third quarter of 2009, declining from $26.5 million for the second quarter of 2009 and from $44.0 million for the third quarter of 2008 by 17% and 50%, respectively.

Advertising net revenue from the in-store network was $7.6 million for the third quarter of 2009, a 16% decline from $9.0 million for the second quarter of 2009 and a slight increase of 7% from $7.1 million for the third quarter of 2008.

As of September 30, 2009, the total installed base of LCD displays in our commercial location network was 130,890 nationwide, including 125,467 displays through our directly owned networks, and 5,423 displays through our regional distributors, as compared to 133,514 as of June 30, 2009. The total number of non-digital frames available for sale in our poster frame network was 225,762 as of September 30, 2009, as compared to 246,095 as of June 30, 2009. In addition, as of September 30, 2009, we had 36,539 digital frames installed in our poster frame network, as compared to 38,893 as of June 30, 2009. The decline in the number of displays and frames was primarily attributable to continuing optimization of our network. The total number of displays installed in our in-store network was 45,195 as of September 30, 2009, as compared to 44,783 as of June 30, 2009.

Advertising net revenue from the movie theater and outdoor traditional billboard network was $12.5 million in the third quarter of 2009, representing a decrease of 15.4% from $14.8 million for the second quarter of 2009 and a 36.3% decrease from $19.6 million for the third quarter of 2008.

Internet advertising service net revenue was $68.3 million in the third quarter of 2009, compared to $66.7 million for the second quarter of 2009 and $70.8 million for the third quarter of 2008. The revenues from fully and partially disposed subsidiaries contributed $28.6 million and $30.9 million to the Internet advertising service revenue for the third quarter and the second quarter of 2009, respectively.

Non-GAAP gross profit for the LCD display network for the third quarter of 2009 was $33.7 million, compared to $44.3 million for the second quarter of 2009 and $58.0 million for the third quarter of 2008. The catch-up of depreciation expenses reflected in the results of operations from the LCD display network was $7.6 million for the third quarter of 2009.

Non-GAAP gross profit for the poster frame network for the third quarter of 2009 was $1.7 million, compared to $13.6 million for the second quarter of 2009 and $29.8 million for the third quarter of 2008. The catch-up of depreciation expenses reflected in the results of operations from the poster frame network was $5.2 million for the third quarter of 2009.

Non-GAAP gross loss for the in-store network for the third quarter of 2009 was $3.3 million, compared to Non-GAAP gross profit of $2.9 million for the second quarter of 2009 and Non-GAAP gross profit of $4.6 million for the third quarter of 2008. The catch-up of depreciation expenses reflected in the results of operations from the in-store network was $3.3 million for the third quarter of 2009.

Non-GAAP gross profit for the movie theater and outdoor billboard networks for the third quarter of 2009 was $3.7 million, representing a 21.2% decline from $4.7 million for the second quarter of 2009 and a 48% decline from $7.1 million for the third quarter of 2008.

Non-GAAP gross profit from our Internet advertising services for the third quarter of 2009 was $13.2 million, increasing by 23% from $10.7 million for the second quarter of 2009 but declining by 21% from $16.8 million for the third quarter of 2008. The gross profit from fully and partially disposed subsidiaries were $5.0 million and $5.0 million for the third quarter and the second quarter of 2009, respectively.

Non-GAAP operating expense for the third quarter of 2009 was $34.6 million, compared to $43.2 million for the second quarter of 2009 and $37.2 million for the third quarter of 2008. The catch-up of depreciation expenses contributed $0.9 million to the operating expense for the third quarter of 2009.

Business Outlook for Fourth Quarter 2009

The Company provides the following guidance with respect to the fourth quarter ending December 31, 2009:

Net revenues for LCD display networks, In-store networks and Poster frame networks are expected to be no less than $92.0 million. Net revenues for Movie theatre and traditional outdoor billboard and internet advertising services are expected to be no less than $39 million.

Announced termination of merger

On September 28, 2009, the Company and SINA jointly reached a decision not to extend the deadline of the agreement announced on December 22, 2008 to sell substantially all of the assets of Focus Media's digital out-of-home advertising networks, including the LCD display network, poster frame network and certain in-store network.

Continue disposal of equity ownerships in some subsidiaries of our internet advertising business

We plan to continue dispose the equity ownerships in some subsidiaries in our Internet division in the fourth quarter of 2009.

Announced subscription for ordinary shares by Executive Chairman

On September 23, 2009, the Company announced that the Executive Chairman and CEO, Jason Jiang, and the Company entered into a definitive agreement pursuant to which the Company issued and sold to Mr. Jiang, and Mr. Jiang will subscribe for and purchase, 75,000,000 ordinary shares of the Company at a subscription price of US$1.899 per share (equivalent to US$9.495 per ADR), representing the average closing sale price of the Company's shares (adjusted for the share-to-ADS ratio) during the twenty consecutive trading day period immediately preceding September 23, 2009. The aggregate subscription price was $142,425,000. On November 20, 2009, the Company announced the completion of this subscription.

USE OF NON-GAAP FINANCIAL MEASURES

In addition to Focus Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating profit (loss) and non-GAAP net income, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from disposal of previously acquired subsidiaries, impairment charges of certain assets, including acquired intangible assets, goodwill, impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform, write-off of receivables from ex-shareholders of disposed business and one-off charges from expensing IPO expenditures as a result of termination of IPO process of Allyes. The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus Media's operating results in a manner that is focused on the performance of its ongoing operations. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results in the attached financial information. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting future periods. The Company computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.

                           Focus Media Holding Ltd.                     Reconciliation of GAAP to non-GAAP    (U.S. Dollar in thousands, except percentages, share and per-share data)                                (Unaudited)                            Three months ended September 30, 2009                  GAAP       (1)     (2)       (3)     (4)     (5)  Non-GAAP   Gross Profit   LCD display    network       17,177     306   3,607        --    3,169   9,462  33,721   Poster Frame    network      (30,420)     --   5,131        --       --  26,983   1,695   In-store    network       (3,844)     --      --        --       --     516  (3,329)   Internet    advertising    4,051      --     962        --    8,185      --  13,198   Movie   Theater &    Outdoor   Billboard    network        3,001      --     663        --       --      --   3,663   Total Gross    Profit       (10,036)    306  10,363        --   11,354  36,961  48,949    Operating    Expense      120,320  (8,467) (3,501)  (25,944) (45,946) (1,872) 34,589    Operating   profit    (loss)      (130,355)  8,773  13,865    25,944   57,300  38,834  14,360    Net income    (loss)      (127,598)  8,773  13,865    25,944   57,300  29,593   7,877     (1). Share-based compensation.   (2). Amortization of acquired intangible assets.   (3). Loss from disposal of previously acquired subsidiaries, of which loss        from disposal of subsidiaries was $3.7 million, loss from partial        disposal of equity interests in subsidiaries was $14.9 million and        loss from impairment of certain other assets was $7.3 million.   (4). Impairment charges of certain assets, including acquired intangible        assets, goodwill.   (5).Impairment and termination charges related to ceasing expansion of        digital poster frame networks and boat-based advertising platform.                               Three months ended June 30, 2009                 GAAP         (1)     (2)      (3)      (4)      (5) Non-GAAP    Gross Profit   LCD display    network      43,668       667      --       --       --       --   44,335   Poster Frame    network      13,641        --      --       --       --       --   13,641   In-store    network       2,942        --       6       --       --       --    2,948   Internet    advertising   5,748        --   1,565       --    3,395       --   10,708   Movie   Theater &    Outdoor   Billboard    network       3,877        --     868       --       --       --    4,745   Total Gross    Profit       69,876       667   2,439       --    3,395       --   76,378    Operating    Expense      87,863   (10,030) (1,841)  (1,212) (29,053)  (2,528)  43,200    Operating   profit    (loss)      (17,986)   10,697   4,280    1,212   32,447    2,528   33,178    Net income    (loss)      (22,971)   10,697   4,280    1,212   32,447    2,528   28,193     (1). Share-based compensation.   (2). Amortization of acquired intangible assets.   (3). Loss from disposal of previously acquired subsidiaries.   (4). Impairment charges of acquired intangible assets and goodwill.   (5). Impairment charges of fixed assets.                                     Three months ended September 30, 2008                               GAAP          (1)          (2)      Non-GAAP   Gross Profit   LCD display network        56,698          438          878       58,014   Poster Frame network       27,195                     2,618       29,813   In-store network            3,667                       897        4,564   Internet advertising       16,061                       690       16,751   Movie Theater &    Outdoor   Billboard network           6,078                       976        7,054   Total Gross Profit        109,699          438        6,060      116,197    Operating Expense          50,789      (10,372)      (3,202)      37,214    Operating profit           58,910       10,810        9,262       78,982    Net income                 51,350       10,810        9,262       71,422     (1). Share-based compensation.   (2). Amortization of acquired intangible assets.                                        Nine months ended September 30, 2009                                    GAAP      (1)     (2)      (3)      (4)   Gross Profit   LCD display network             83,543    1,219   3,607      --     3,168   Poster Frame network            (5,587)      --   5,131      --        --   In-store network                 1,175       --      15      --        --   Internet advertising            18,779       --   4,097      --    11,580   Movie Theater & Outdoor    Billboard network              11,926       --   2,503      --        --   Total Gross Profit             109,836    1,219  15,353      --    14,748    Operating Expense              262,479  (26,373) (7,254) (27,156) (84,270)    Operating profit (loss)       (152,643)  27,593  22,607   27,156   99,018    Net income (loss)             (156,264)  27,593  22,607   27,156   99,018                                            (5)       (6)     (7)    Non-GAAP   Gross Profit   LCD display network                   9,462       --      --     101,001   Poster Frame network                 26,983       --      --      26,528   In-store network                        516       --      --       1,706   Internet advertising                     --       --      --      34,456   Movie Theater & Outdoor    Billboard network                       --       --      --      14,429    Total Gross Profit                   36,961       --      --     178,118    Operating Expense                    (1,872)  (2,528) (2,466)    110,560    Operating profit (loss)              38,834    2,528   2,466      67,558    Net income (loss)                    29,593    2,528   2,466      54,697     (1). Share-based compensation.   (2). Amortization of acquired intangible assets.   (3). Loss from disposal of previously acquired subsidiaries, of which loss        from disposal of subsidiaries was $4.9 million, loss from partial        disposal of equity interests in subsidiaries was $14.9 million and        loss from impairment of certain other assets was $7.3 million.   (4). Impairment charges of certain assets, including acquired intangible        assets, goodwill.   (5). Impairment and termination charges related to ceasing expansion of        digital poster frame networks and boat-based advertising platform.   (6). Write-off of receivables from ex-shareholders of disposed business.   (7). One-off charges from expensing IPO expenditures as a result of        termination of IPO process of Allyes.                                    Nine months ended September 30, 2008                               GAAP          (1)          (2)      Non-GAAP   Gross Profit   LCD display network       136,597        1,162        2,846      140,605   Poster Frame network       66,375           --        7,314       73,689   In-store network            2,287           --        2,636        4,923   Internet advertising       45,399           --        4,898       50,297   Movie Theater &    Outdoor Billboard    network                   13,873           --        2,869       16,742   Total Gross Profit        264,531        1,162       20,563      286,256    Operating Expense         133,806      (28,693)      (9,806)      95,307    Operating profit          130,725       29,855       30,369      190,949    Net income from    continuing    operations               111,690       29,855       30,369      171,914     (1). Share-based compensation.   (2). Amortization of acquired intangible assets.     CONFERENCE CALL  

The Company will host a conference call to discuss the third quarter 2009 results at 8:00 p.m. U.S. Eastern Time on December 7, 2009 (5:00 p.m. U.S. Pacific Time on December 7, 2009 and 9:00 a.m. Beijing/Hong Kong Time on December 8, 2009). The dial-in details for the live conference call are set forth below: U.S. Toll Free Number +1.800.299.0148, Hong Kong dial-in number +852.3002.1672, International dial-in number +1.617.801.9711; Pass code: 18781737.

A replay of the call will be available from December 7, 2009 11:00 pm until December 14, 2009 (US Eastern Time). The dial-in details for the replay are set forth below: U.S. Toll Free Number +1-888-286-8010, International dial-in number +1-617-801-6888; Pass code 43877318. Additionally, a live and archived web cast of this call will be available on the Focus Media web site at http://ir.focusmedia.cn/ .

SAFE HARBOR: FORWARD-LOOKING STATEMENTS

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the 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. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission 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 Focus Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. 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, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

ABOUT FOCUS MEDIA HOLDING LIMITED

Focus Media Holding Limited (NASDAQ:FMCN) is China's leading multi- platform digital media company, operating the largest out-of-home advertising network in China using audiovisual digital displays, based on the number of locations and number of flat-panel television displays in our network. Through Focus Media's multi-platform digital advertising network, the company reaches urban consumers at strategic locations and point-of-interests over a number of media formats, including audiovisual television displays in buildings and stores, advertising poster frames and other new and innovative media, such as outdoor light-emitting diode or LED digital billboard and Internet advertising platforms. As of September 30, 2009, Focus Media's digital out-of-home advertising network had approximately 125,000 LCD display in its LCD display network and approximately 262,000 advertising in-elevator poster and digital frames, installed in over 90 cities throughout China, and approximately 130 outdoor LED billboard displays in Shanghai and Beijing. For more information about Focus Media, please visit our website athttp://ir.focusmedia.cn.

                          Focus Media Holding Limited                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                           (U.S. Dollars in Thousands)                                                   2009-9-30       2009-6-30   ASSETS   Current assets     Cash and cash equivalents                      383,107          96,186     Hold-to-maturity investment                     29,287              --     Accounts receivable, net                       222,070         121,544     Prepaid expenses and other current assets       19,800          13,537     Deposit paid for acquisition of      subsidiaries                                    5,914          21,859     Amount due from related parties                  8,717           7,638     Rental deposits                                 32,433           9,115     Other current assets                             7,234          21,894     Available-for-sale assets, current                  --         475,531   Total current assets                             702,648         745,445     Rental deposits                                  5,657             114     Equipment, net                                  84,916           5,438     Acquired intangible assets, net                 71,234          63,631     Goodwill                                       422,329          35,507     Other long term assets                          14,468           7,080     Available-for-sale assets, non-current              --         615,751   Total assets                                   1,301,252       1,472,966    LIABILITIES AND SHAREHOLDERS' EQUITY   Current liabilities     Accounts payable                                85,477          68,676     Accrued expenses and other current      liabilities                                   102,305          71,242     Income taxes payable                            24,703          12,939     Amount due to related parties                   10,585          14,491     Available-for-sale liabilities, current             --         108,086     Deferred tax liabilities                           447              --   Total current liabilities                        223,517         275,434     Available-for-sale liabilities, non-current         --           1,853     Deferred tax liabilities                         9,635          10,146   Total liabilities                                233,152         287,433    Shareholders' equity     Ordinary shares                                     32              32     Additional paid in capital                   1,689,630       1,678,667     Accumulated deficit                           (690,232)       (562,632)     Accumulated other comprehensive income          65,434          67,751   Total shareholders' equity                     1,064,864       1,183,818     Noncontrolling interests                         3,236           1,715     Total equity                                 1,068,100       1,185,533   Total liabilities and shareholders' equity     1,301,252       1,472,966                             Focus Media Holding Limited                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS         (U.S. Dollar in thousands, except Earning per ADS and ADS data)                           Three months ended            Nine months ended                   2009-9-30   2009-6-30   2008-9-30   2009-9-30   2008-9-30   Revenues   LCD display    network           60,509      59,943      81,501     158,764     202,566   In-store    network            8,450       9,900      18,513      25,365      56,387   Poster Frame    network           24,155      29,254      48,187      79,216     120,791   Movie Theater &    Outdoor   Billboard    network           12,802      15,030      20,289      47,678      57,726   Internet    advertising       69,755      68,956      73,253     187,650     203,561   Total gross    revenues         175,671     183,083     241,743     498,673     641,031   Less: Sales    taxes              9,114      11,785      16,930      30,274      42,912   Net revenue       166,557     171,298     224,813     468,399     598,119    Cost of    revenues   LCD display    network           38,830      10,678      17,014      61,135      47,939   In-store    network           11,490       6,025      13,098      21,782      48,769   Poster Frame    network           52,550      12,858      16,766      77,752      44,078   Movie Theater &    Outdoor   Billboard    network            9,486      10,885      13,531      34,534      41,742   Internet    advertising       64,237      60,976      54,705     163,360     151,060   Total cost of    revenues         176,593     101,422     115,114     358,563     333,588   Gross profit    (loss)           (10,036)     69,876     109,699     109,836     264,531    Operating    expenses   General and    administrative    22,257      29,249      26,436      77,898      65,706   Selling and    marketing         36,209      31,340      28,353      89,571      78,157   Impairment loss    37,232      27,078                  73,581   Other operating    expenses    (income), net     24,621         195      (4,000)     21,429     (10,057)   Total operating    expenses         120,319      87,862      50,789     262,479     133,806    Operating    income (loss)   (130,355)    (17,986)     58,910    (152,643)    130,725   Interest income     1,049       1,342       1,747       3,980       5,267   Income (loss)    from    continuing    operations    before income    taxes           (129,307)    (16,644)     60,654    (148,663)    135,992   Provision for    income taxes      (4,667)      6,104       8,404       4,400      22,205   Net income    (loss)          (124,639)    (22,748)     52,250    (153,063)    113,787    Less: Net    income(loss)    attributable to    noncontrolling    interests          2,958         223         900       3,201       2,097   Net Income    (loss) from    continuing    operations      (127,598)    (22,971)     51,350    (156,264)    111,690    Net Income from    discontinued    operations,    net of tax                                                       (78,017)    Net Income    (loss)    attributable to    shareholders    (127,598)    (22,971)     51,350    (156,264)     33,673    Income (loss)    per ADS from    continuing    operations   -basic              (0.99)      (0.18)       0.39       (1.21)       0.86   -diluted            (0.99)      (0.18)       0.38       (1.21)       0.84    Income (loss)    per ADS from   discontinuing    operations   -basic                                                              (0.60)   -diluted                                                            (0.59)    Income (loss)    per ADS   -basic              (0.99)      (0.18)       0.39       (1.21)       0.26   -diluted            (0.99)      (0.18)       0.38       (1.21)       0.25    Shares used in    calculating    basic    income/    (loss)    per ADS      129,308,337 129,223,942 131,541,174 129,232,838 130,363,120   Shares used in    calculating    diluted    income/(loss)    per ADS      129,308,337 129,223,942 133,729,070 129,232,838 133,048,334                             FOCUS MEDIA HOLDING LIMITED           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS                          (U.S. Dollar in thousands)                                                 Three months ended                                        2009-9-30    2009-6-30    2008-9-30    Operating activities:   Net loss                              (124,639)     (22,748)      52,250   Adjustments to reconcile net    income/(loss) to net cash    provided by operating activities:   Bad debt provision                       7,602       11,240        5,923   Share-based compensation                 8,773       10,586       10,810   Depreciation and amortization           26,353          671        8,150   Amortization of acquired intangible    assets                                 13,864        4,280        9,262   Loss and impairment on disposal of    equity interest of subsidiaries    and certain other assets               25,944          115           --   Loss from impairment of certain    other assets                            7,285           --           --   Gain on earn out payment    renegotiation                              --        1,052           --   Impairment charges for goodwill,    acquired intangible    assets and fixed assets                96,134       33,938           --   Loss on disposal of fixed assets           955          113          405   Changes in assets and liabilities,    net of effects of acquisitions        (18,199)     (11,433)     (51,381)   Net cash provided by operating    activities                             36,786       27,814       35,418    Investing activities:   Purchase of equipment and other    long term assets                         (854)      (2,787)     (17,028)   Purchase of subsidiaries, net of    cash acquired                          (5,311)     (61,446)     (14,429)   Investment in a joint venture               --           --       (2,970)   Deposits paid to acquire    subsidiaries                               --           --         (901)   Disposal of subsidiaries               (17,403)          --           --   Sales /(purchase) of equity    securities and bank notes                 324         (146)      39,025   Proceeds received from disposal of    fixed assets                               --          195           --   Net cash provided /(used) in    investing activities                  (23,244)     (64,184)       3,697    Financing activities:   Proceeds from issuance of ordinary    shares, net of issuance costs           1,919           --        1,822   Repurchase of ordinary shares               --           --      (29,998)   Net cash provided by/(used in)    financing activities                    1,919           --      (28,176)   Effect of exchange rate changes           (238)         672          717    Net increase (decrease) in cash and    cash equivalents                       15,223      (35,698)      11,656   Cash and cash equivalents,    beginning of period                   367,884      403,582      361,516    Cash and cash equivalents, end of    period                                383,107      367,884      373,172    Supplemental disclosure of cash    flow information:     Income taxes paid                      1,597        3,728        6,037    Supplemental disclosure of non-cash    investing activity:   Acquisition of subsidiaries:     Accounts payable                      16,967        1,842       14,777  

Source: Focus Media Holding Limited

CONTACT: Investor and Media contact - Jing Lu, +86-21-2216-4155, or
ir@focusmedia.cn

Web site: http://ir.focusmedia.cn/

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Profile: International Entertainment