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Focus Media Reports Fourth Quarter and Full Year 2012 Results

March 25, 2013

SHANGHAI, March 25, 2013 /PRNewswire/ — Focus Media Holding Limited (Nasdaq: FMCN) today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2012.

Highlights for Fourth Quarter 2012:

  • Total net revenue for the fourth quarter of 2012 was $250.2 million, of which
    • aggregate net revenue from the LCD display network, in-store network, poster frame network and movie theater network was $244.1 million, within the Company’s guidance of between $237.0 million and $246.0 million. This represented a slight decrease of 1% from $247.7 million for the third quarter of 2012 and an increase of 2% from $238.8 million for the fourth quarter of 2011; and
    • net revenue from the traditional outdoor billboard network for the fourth quarter of 2012 was $6.1 million, within the Company’s guidance of between $6.0 million and $7.0 million.
  • GAAP net income attributable to Focus Media for the fourth quarter of 2012 was $76.7 million, representing an increase of 19% from $64.6 million for the third quarter of 2012 and an increase of 107% from $37.1 million for the fourth quarter of 2011, and was adversely affected by the loss from equity method investee, VisionChina, of $38.9 million.
  • Non-GAAP net income attributable to Focus Media for the fourth quarter of 2012 was $95.1 million, within the Company’s guidance of between $93 million and $98 million, slightly increasing from $94.6 million for the third quarter of 2012 and a slight decline of 1% from $96.0 million for the fourth quarter of 2011. Please see the below sections on “Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP to non-GAAP” for more information about the non-GAAP measures referred to within this announcement.
  • GAAP net income attributable to Focus Media per fully diluted ADS was $0.57, representing an increase of 19% from $0.48 per fully diluted ADS for the third quarter of 2012 and an increase of 111% from $0.27 per fully diluted ADS in the fourth quarter of 2011.
  • Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.71, substantially unchanged from $0.71 per fully diluted ADS for the third quarter of 2012 and an increase of 1% from $0.70 per fully diluted ADS for the fourth quarter of 2011.

Highlights for Full Year 2012:

  • Total net revenue for full year 2012 was $927.5 million, an increase of 18% from $786.5 million for full year 2011, of which
    • aggregate net revenue from the LCD display network, in-store network, poster frame network and movie theater network was $895.5 million, representing an increase of 22% from $737.0 million for full year 2011 ; and
    • net revenue from the traditional outdoor billboard network was $32.0 million, representing a decrease of 35% from $49.5 million for full year 2011.
  • GAAP net income attributable to Focus Media for full year 2012 was $238.1 million, representing an increase of 46% from $162.7 million for full year 2011.
  • Non-GAAP net income attributable to Focus Media for full year 2012 was $333.1 million, representing an increase of 17% from $284.1 million for full year 2011. Please see the below sections on “Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP to non-GAAP” for more information about the non-GAAP measures referred to within this announcement.
  • GAAP net income attributable to Focus Media per fully diluted ADS for full year 2012 was $1.79, representing an increase of 52% from $1.18 per fully diluted ADS for full year 2011.
  • Non-GAAP net income attributable to Focus Media per fully diluted ADS for full year 2012 was $2.50, a 22% increase from $2.05 per fully diluted ADS for full year 2011.

Highlights for Balance Sheet and Cash Flow Results of Fourth Quarter and Full Year 2012:

  • Cash, cash equivalents, short-term investments and restricted cash were $1,029.8 million as of December 31, 2012, increasing by 14% from $901.1 million as of September 30, 2012. Our short-term investments consist of longer term dated cash deposits that earn a higher interest rate as compared to cash and cash equivalents.
  • Bank loans were $200.0 million which were all long-term bank loans as of December 31, 2012 secured by onshore renminbi cash deposits, as compared to bank loans of $200.0 million inclusive of short-term bank loans of $100.0 million as of September 31, 2012, which was renewed and converted into long-term bank loans in the fourth quarter of 2012. Long-term bank loans of $100.0 million outstanding as of September 30, 2012, were also extended to 2018 in the fourth quarter of 2012. The bank loan as of December 31, 2012 consisted of a $200.0 million term loan facility agreement entered into on November 21, 2012 with DBS Bank Ltd., Hong Kong Branch (“DBS”) and was used to repay all of the Company’s outstanding indebtedness under its previous credit facilities with DBS.
  • Net accounts receivable for the LCD display network, in-store network, poster frame network and movie theater network was $275.6 million as of December 31, 2012, a decrease of 3% from $284.1 million as of September 30, 2012. Days sales outstanding was 100 days in the fourth quarter of 2012 versus 92 days for the third quarter of 2012. Days sales outstanding was 97 days for full year 2012 versus 85 days for full year 2011. As a supplementary cash collection metric, the actual cash collection from accounts receivables and prepayments from the advertisers was $281.7 million in the fourth quarter of 2012, as compared to $239.8 million in the fourth quarter of 2011.
  • Net cash inflow from operating activities in the fourth quarter of 2012 and full year of 2012 were $142.4 million and $358.3 million, respectively, representing an 11% increase from $128.8 million for the fourth quarter of 2011 and a 28% increase from $280.2 million for full year 2011, respectively.
  • Net cash inflow from operating activities for the fourth quarter of 2012, after deducting the purchase of equipment and subsidiaries was $137.6 million, an increase of 22% from $112.7 million for the fourth quarter of 2011. Net cash inflow from operating activities for full year 2012, after deducting the purchase of equipment and subsidiaries was $335.7 million, representing an increase of 47% from $228.0 million for full year 2011.
  • Capital expenditures were $4.8 million and $19.6 million respectively for the fourth quarter and full year of 2012, mostly attributable to upgrading our LCD screens into interactive screens and network expansion in and into lower tier cities in China.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, “In the fourth quarter of 2012, our operation’s performance was in-line with our previous expectations as we continue to be affected by a slower overall advertising spending in China.”

Kit Low, the Company’s Chief Financial Officer added, “In the fourth quarter of 2012, the Company’s aggregate net revenue year-on-year growth in our LCD display, poster frame business, in-store and movie theater network was 2%. GAAP net income attributable to Focus Media and Non-GAAP net income attributable to Focus Media for the fourth quarter of 2012 was $76.7 million and $95.1 million, respectively. In the fourth quarter of 2012, the Company generated a net cash inflow from operating activities after deducting the purchases of equipment and subsidiaries of $137.6 million.”

Fourth Quarter 2012 financial results

Advertising net revenue from the LCD display network was $127.5 million for the fourth quarter of 2012, representing a slight decrease of 1% from $128.4 million for the third quarter of 2012 and a decrease of 7% from $137.4 million for the fourth quarter of 2011. The decrease in net revenue was due to a weaker brand advertising environment.

Advertising net revenue from the poster frame network was $85.7 million for the fourth quarter of 2012, representing an increase of 5% from $81.6 million for the third quarter of 2012 and an increase of 33% from $64.5 million for the fourth quarter of 2011, which was driven by the strength of promotional budget spending in the market.

Advertising net revenue from the in-store network was $11.1 million for the fourth quarter of 2012, representing a decrease of 23% from $14.5 million for the third quarter of 2012 and a decrease of 31% from $16.1 million for the fourth quarter of 2011. The decrease was mostly attributable to less advertising spending from domestic dairy producers.

Advertising net revenue from the movie theater network was $19.8 million for the fourth quarter of 2012, representing a decrease of 15% from $23.2 million for the third quarter of 2012 due to seasonal factors and a decrease of 5% from $20.8 million for the fourth quarter of 2011. The decrease in net revenue was mainly due to a weaker brand advertising environment.

Advertising net revenue from the traditional outdoor billboard network was $6.1 million for the fourth quarter of 2012, representing a decrease of 21% from $7.7 million for the third quarter of 2012 and a decrease of 56% from $13.9 million for the fourth quarter of 2011 due to combination of downsizing of the division and a weaker advertising environment. Due to medium term advertising spending uncertainties and the continued view of the Company that the traditional outdoor billboard network is not a core business segment, the Company has decided to downsize this business segment by divesting four entities within the segment. Two of which have been divested prior to end of the third quarter of 2012 and the other two were divested in the fourth quarter of 2012. Consequently, $1.2 million of revenues of two divested entities for the fourth quarter of 2012, $4.8 million of revenues of four divested entities for the third quarter of 2012 and $3.8 million of revenues of four divested entities for the fourth quarter of 2011 have been reclassified into “Net loss from discontinued operations” in the consolidated statements of operations. Other relevant items in the consolidated statements of operations were also reclassified accordingly to reflect the reclassification arising from the discontinued operations of the 4 entities.

Non-GAAP gross profit from the LCD display network for the fourth quarter of 2012 was $98.3 million, representing a decrease of 2% from $99.8 million for the third quarter of 2012 and a decrease of 13% from $113.6 million for the fourth quarter of 2011. The decrease in non-GAAP gross profit was a result of quarter-on-quarter and year-on-year revenue declines while the cost of sales remained largely unchanged in the LCD display network

Non-GAAP gross profit from the poster frame network for the fourth quarter of 2012 was $56.9 million, representing an increase of 8% from $52.5 million for the third quarter of 2012, and an increase of 58% from $35.9 million for the fourth quarter of 2011.

Non-GAAP gross profit from the in-store network for the fourth quarter of 2012 was $5.8 million, representing a decrease of 36% from $9.1 million for the third quarter of 2012 and a decrease of 55% from $12.8 million in the fourth quarter of 2011 mainly due to the combination of a lower revenue and relatively unchanged cost of sales.

Non-GAAP gross profit from the movie theater network for the fourth quarter of 2012 was $10.9 million, representing a decrease of 25% from $14.5 million for the third quarter of 2012 and a decrease of 21% from $13.8 million for the fourth quarter of 2011 due to a lower revenue and a larger cost of sales as a result of network expansion.

Non-GAAP gross profit from the traditional outdoor billboard network for the fourth quarter of 2012 was $0.8 million, compared to $1.2 million loss for the third quarter of 2012 and a decrease of 62% from $2.1 million for the fourth quarter of 2011.

Non-GAAP operating expense for the fourth quarter of 2012 was $57.9 million, substantially unchanged from $57.5 million for the third quarter of 2012. It also represented a decrease of 7% from $62.2 million for the fourth quarter of 2011.

Net cash inflow from operating activities in the fourth quarter of 2012 and full year of 2012 were $142.4 million and $358.3 million, respectively, representing an 11% increase from $128.8 million for the fourth quarter of 2011 and a 28% increase from $280.2 million for full year 2011, respectively.

Net cash inflow from investing activities for the fourth quarter of 2012 was $53.3 million. In the fourth quarter of 2012, the Company incurred capital expenditures of $4.8 million. Meanwhile, the Company received net cash inflows from disposal of short-term investments after deducting the placement of restricted cash totaling $57.3 million during the quarter. Short-term investments are longer term dated cash deposits normally with maturities of between three and twelve months that earn higher interest rate as compared to cash and cash equivalents. Restricted cash is deposited in bank accounts as security for bank borrowings.

Net cash used for financing activities for the fourth quarter of 2012 was $17.8 million, which consisted of a dividend paid by the Company declared in the third quarter of 2012.

Operating Data Summary

The Company is providing a breakdown of operating data as follows:

1) The approximate number of displays in the LCD display network was as follows:

                                    As of December 31, 2012    As of September 30, 2012

    LCD screens (note)                                 136,711                     136,870

    LCD 2.0 digital picture screens                     35,615                      35,535

    Total for LCD display network                      172,326                     172,405

Note: The decrease in the total number of LCD screens as of December 31, 2012 as compared to that as of September 30, 2012 was due to network optimization. Of the total LCD screens of 136,711 as of December 31, 2012, 10,534 screens were operated through our regional distributors as compared to 9,589 screens as of September 30, 2012.

2) The approximate number of devices in the poster frame network was as follows:

                                      As of December 31, 2012    As of September 30, 2012

    Frame 1.0 picture frames (note)                      505,571                     497,269

    Frame 2.0 digital picture screens                     36,341                      35,892

    Total                                                541,912                     533,161

Note: The increase in the total number of Frame 1.0 picture frames as of December 31, 2012 as compared to that as of September 30, 2012 was due to organic network expansion.

3) The total number of displays installed in our in-store network was approximately 52,267 as of December 31, 2012, slightly decreasing from 53,239 as of September 30, 2012 due to network optimization.

4) The number of movie screens on which the Company had the right to lease advertising time as of December 31, 2012 was approximately 2,730, as compared to 2,470 as of September 30, 2012. The increase was due to organic network expansion

Arrangements Regarding Announced Recurring Shareholder Payments

On January 10, 2012, the Company announced a policy starting from 2012 to issue a recurring dividend with payments expected to equal approximately 25% of the Company’s annual non-GAAP net income of the preceding fiscal year and to reserve up to an additional 30% of the Company’s annual non-GAAP net income of the preceding fiscal year (starting from 2012 earnings) that can be used, at the discretion of the board of directors, to increase the dividend payment or the size of our share purchase program in effect at that time (the “dividend policy”).

The Company announced on November 27, 2012 that its board of directors had resolved to postpone approval of future cash dividends through December 31, 2012 due to ongoing considerations relating to the going private proposal.

Due to the signing on December 19, 2012 of the going private merger agreement, which prohibits the Company from paying any dividends or repurchasing any of its ordinary shares or ADS pending consummation of the merger, the Company’s board of directors has resolved to terminate the dividend policy effective December 31, 2012.

Announcement of the Extraordinary General Meeting of Shareholders to Vote on the Going Private Transaction

The Company announced today that it has called an extraordinary general meeting of the shareholders to be held on April 29, 2013 to consider and vote on, among other things, the proposal to authorize and approve the previously announced agreement and plan of merger, dated December 19, 2012, among Giovanna Parent Limited, Giovanna Acquisition Limited and the Company, the plan of merger and the transactions contemplated thereby (including the merger).

Foreign Currency Translation

Assets and liabilities are translated at the exchange rate as of December 31, 2012, which was $1 to RMB 6.2855. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the fourth quarter of 2012, which was $1 to RMB 6.2926. Translation adjustments are reported as a component of comprehensive income.

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 (cumulatively and by segment), non-GAAP operating expenses, non-GAAP operating profit (loss), non-GAAP net income and non-GAAP fully-diluted earnings per ADR, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity investment and goodwill impairment. Management uses these non-GAAP financial measures to better assess operating performance of the Company. 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 for future periods. The Company computes its non-GAAP financial measures using a consistent method from quarter to quarter, mostly excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity investment and goodwill impairment. 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. Dollars in thousands, except percentages, share and per-share data)

                                                                             (Unaudited)

                                                                                                      Three months ended December 31, 2012
                                                                                                      ------------------------------------

                                                                                                        GAAP                       (1)      (2)    (3)   (4) Non-GAAP
                                                                                                        ----                      ---      ---    ---   ---  --------

    Gross Profit (loss)

    LCD display network                                                                                             97,431        354      478            -       98,263

    Poster frame network                                                                                            56,776          -       74            -       56,850

    In-store network                                                                                                 5,841          -                     -        5,841

    Movie theater network                                                                                           10,925          -                     -       10,925

    Traditional outdoor billboard network                                                                              333          -      418            -          751
                                                                                                                       ---        ---      ---          ---          ---

    Total Gross Profit                                                                                             171,306        354      970            -      172,630
                                                                                                                   -------        ---      ---          ---      -------

    General and administrative                                                                                      32,968    (11,638)                            21,330

    Selling and marketing                                                                                           51,973       (998)    (521)                   50,454

    Other operating  income, net                                                                                   (13,897)                                      (13,897)
                                                                                                                   -------                                       -------

    Total operating expense                                                                                         71,044    (12,636)    (521)                   57,887
                                                                                                                    ------    -------     ----                    ------

    Operating profit from continuing                                                                               100,262     12,990    1,491                   114,743
       operations

    Profit from continuing operations                                                                              103,506     12,990    1,491  1,526            119,513
       before income taxes and loss
       from equity method investee

    Net profit from continuing                                                                                      76,296     12,990    1,491  4,126             94,903
       operations

    Net loss from discontinued                                                                                        (232)                174         (375)        (433)
       operations

    Net income attributable to Focus                                                                                76,672     12,990    1,665  4,126  (375)      95,078
       Media

    Basic net income from continuing                                                                                  0.59                                          0.73
       operations attributable to Focus
       Media per ADS

    Diluted net income from continuing                                                                                0.57                                          0.71
       operations attributable to Focus
       Media per ADS

    Basic net income from discontinued                                                                                0.00                                          0.00
       operations attributable to Focus
       Media per ADS

    Diluted net income from discontinued                                                                              0.00                                          0.00
       operations attributable to Focus
       Media per ADS

    Basic net income attributable to Focus                                                                            0.59                                          0.73
        Media per ADS

    Diluted net income attributable to Focus                                                                          0.57                                          0.71
       Media per ADS

    ADS used in calculating basic income                                                                       130,265,271                                   130,265,271
       per ADS

    ADS used in calculating diluted income                                                                     134,529,688                                   134,529,688
       per ADS

    (1). Share-based compensation.
    (2). Amortization of acquired intangible assets.
    (3). loss from equity investment, including equity method investee (VisionChina) and cost method investment
    (4). Gain from disposal of previously acquired subsidiaries

                                                        Three months ended September 30, 2012

                                                             GAAP                       (1)      (2)    (3)  (4) Non-GAAP
                                                             ----                      ---      ---    ---  ---  --------

    Gross Profit (loss)

    LCD display network                                                  98,443        495      813      -    -                99,751

    Poster frame network                                                 52,341          -      129      -    -                52,470

    In-store network                                                      9,082          -        -      -    -                 9,082

    Movie theater network                                                14,471          -        -      -    -                14,471

    Traditional outdoor billboard network                                (1,708)         -      462      -    -                (1,246)
                                                                         ------        ---      ---    ---  ---                ------

    Total Gross Profit                                                  172,629        495    1,404      -    -               174,528
                                                                        -------        ---    -----    ---  ---               -------

    General and administrative                                           36,132    (14,884)       -      -    -                21,248

    Selling and marketing                                                53,123     (1,438)    (552)     -    -                51,133

    Other operating  income, net                                        (14,890)         -        -      -    -               (14,890)
                                                                        -------        ---      ---    ---  ---               -------

    Total operating expense                                              74,365    (16,322)    (552)     -    -                57,491
                                                                         ------    -------     ----    ---  ---                ------

    Operating profit from continuing                                     98,264     16,817    1,956      -    -               117,037
       operations

    Profit from continuing operations                                   102,346     16,817    1,956      -    -               121,119
       before income taxes and loss
       from equity method investee

    Net profit from continuing                                           65,334     16,817    1,956  9,499    -                93,606
       operations

    Net profit/ (loss) from discontinued                                 (1,008)         -      806      -  908                   706
       operations

    Net income attributable to Focus                                     64,590     16,817    2,762  9,499  908                94,576
       Media

    Basic net income from continuing                                       0.52                                                  0.74
       operations attributable to Focus
       Media per ADS

    Diluted net income from continuing                                     0.49                                                  0.71
       operations attributable to Focus
       Media per ADS

    Basic net income from discontinued                                    (0.01)                                                 0.00
       operations attributable to Focus
       Media per ADS

    Diluted net income from discontinued                                  (0.01)                                                 0.00
       operations attributable to Focus
       Media per ADS

    Basic net income attributable to Focus                                 0.51                                                  0.74
       Media per ADS

    Diluted net income attributable to Focus                               0.48                                                  0.71
       Media per ADS

    ADS used in calculating basic income                            127,777,021                                           127,777,021
       per ADS

    ADS used in calculating diluted income                          133,518,344                                           133,518,344
       per ADS

    (1). Share-based compensation.

    (2). Amortization of acquired intangible assets.

    (3). Loss from equity method investee (VisionChina)

    (4). Goodwill impairment
                                                        Three months ended December 31, 2011

                                                            GAAP                       (1)       (2)     (3) Non-GAAP
                                                            ----                      ---       ---     ---  --------

    Gross Profit

    LCD display network                                                112,179        286     1,100       -               113,565

    Poster frame network                                                35,036          -       890       -                35,926

    In-store network                                                    12,797          -         -       -                12,797

    Movie theater network                                               13,803          -         -       -                13,803

    Traditional outdoor billboard network                                1,591          -       459       -                 2,050
                                                                         -----        ---       ---     ---                 -----

    Total Gross Profit                                                 175,406        286     2,449       -               178,141
                                                                       -------        ---     -----     ---               -------

    General and administrative                                          37,092    (14,267)        -       -                22,825

    Selling and marketing                                               49,606     (1,029)   (1,055)      -                47,522

    Other operating  income, net                                        (8,181)         -         -       -                (8,181)
                                                                        ------        ---       ---     ---                ------

    Total operating expense                                             78,517    (15,296)   (1,055)      -                62,166
                                                                        ------    -------    ------     ---                ------

    Operating profit from continuing                                    96,889     15,582     3,504       -               115,975
       operations

    Profit before tax from continuing                                  100,941     15,582     3,504       -               120,027
       operations

    Net profit from continuing                                          37,037     15,582     3,504  38,882                95,005
       operations

    Net loss from discontinued                                          (1,538)                 980                          (558)
       operations

    Net income attributable to Focus                                    37,093     15,582     4,484  38,882                96,041
       Media

    Basic net income from continuing                                      0.29                                               0.73
       operations attributable to Focus
       Media per ADS

    Diluted net income from continuing                                    0.28                                               0.70
       operations attributable to Focus
       Media per ADS

    Basic net income from discontinued                                   (0.01)                                              0.00
       operations attributable to Focus
       Media per ADS

    Diluted net income from discontinued                                 (0.01)                                              0.00
       operations attributable to Focus
       Media per ADS

    Basic net income attributable to Focus                                0.28                                               0.73
       Media per ADS

    Diluted net income attributable to Focus                              0.27                                               0.70
       Media per ADS
                                                                                                                              ===

    ADS used in calculating basic income                           132,073,143                                        132,073,143
       per ADS
                                                                                                                              ---

    ADS used in calculating diluted                                136,912,952                                        136,912,952
       income per ADS
                                                                                                                              ---

    (1). Share-based compensation.

    (2). Amortization of acquired intangible assets.

    (3). Loss from equity method investee (VisionChina)

                                                                                        Focus Media Holding Ltd.

                                                                                   Reconciliation of GAAP to non-GAAP

                                                                       (U.S. Dollar in thousands, except share and per-share data)

                                                                                               (Unaudited)

                                                                                                                                  Twelve months ended December 31, 2012

                                                                                                                                         GAAP                       (1)       (2)       (3)  (4) Non-GAAP
                                                                                                                                         ----                      ---       ---       ---  ---  --------

    Gross Profit (loss)

    LCD display network                                                                                                                             352,346      1,821     3,136                              357,303

    Poster frame network                                                                                                                            183,873                  596                              184,469

    In-store network                                                                                                                                 30,284                                                    30,284

    Movie theater network                                                                                                                            43,994                                                    43,994

    Traditional outdoor billboard network                                                                                                            (2,592)               1,805                                 (787)
                                                                                                                                                     ------                -----                                 ----

    Total Gross Profit                                                                                                                              607,905      1,821     5,537                              615,263
                                                                                                                                                    -------      -----     -----                              -------

    General and administrative                                                                                                                      136,704    (56,561)                                        80,143

    Selling and marketing                                                                                                                           194,095     (5,255)   (2,260)                             186,580

    Other operating  income, net                                                                                                                    (38,588)                                                  (38,588)
                                                                                                                                                    -------                                                   -------

    Total operating expense                                                                                                                         292,211    (61,816)   (2,260)                             228,135
                                                                                                                                                    -------    -------    ------                              -------

    Operating profit from continuing                                                                                                                315,694     63,637     7,797                              387,128
       operations

    Profit before tax from continuing                                                                                                               331,459     63,637     7,797     1,526                    404,419
       operations

    Net profit from continuing                                                                                                                      237,001     63,637     7,797    20,087                    328,522
       operations

    Net profit/ (loss) from                                                                                                                          (1,065)               3,005            533                2, 473
       discontinued operations

    Net income attributable to Focus                                                                                                                238,078     63,637    10,802    20,087  533               333,137
       Media

    Basic net income from continuing                                                                                                                   1.86                                                      2.57
       operations attributable to Focus
       Media per ADS

    Diluted net income from continuing                                                                                                                 1.80                                                      2.48
       operations attributable to Focus
       Media per ADS

    Basic net income from discontinued                                                                                                                (0.01)                                                     0.02
       operations attributable to Focus
       Media per ADS

    Diluted net income from discontinued                                                                                                              (0.01)                                                     0.02
       operations attributable to Focus
       Media per ADS

    Basic net income attributable to                                                                                                                   1.85                                                      2.59
       Focus Media per ADS

    Diluted net income attributable to                                                                                                                 1.79                                                      2.50
       Focus Media per ADS

    ADS used in calculating basic                                                                                                               128,809,554                                               128,809,554
       income per ADS

    ADS used in calculating diluted                                                                                                             133,250,339                                               133,250,339
       income per ADS

    (1). Share-based compensation.

    (2). Amortization of acquired intangible assets.

    (3). loss from equity investment, including equity method investee (VisionChina) and cost method investment

    (4). Loss from disposal of previously acquired subsidiaries, of which gain from disposal of subsidiaries was $0.4 million and loss from impairment of goodwill was $0.9 million.

                                                                    Focus Media Holding Ltd.

                                                               Reconciliation of GAAP to non-GAAP

                                            (U.S. Dollar in thousands, except percentages, share and per-share data)

                                                                          (Unaudited)

                                                                                                 Twelve months ended December 31, 2011

                                                                                                        GAAP                       (1)     (2)     (3) Non- GAAP
                                                                                                        ----                      ---     ---     ---  ---------

    Gross Profit

    LCD display network                                                                                            358,518        880   4,409       -               363,807

    Poster frame network                                                                                            75,079          -   4,175       -                79,254

    In-store network                                                                                                35,792          -       -       -                35,792

    Movie theater network                                                                                           25,082          -      43       -                25,125

    Traditional outdoor billboard network                                                                            7,610          -   1,808       -                 9,418
                                                                                                                     -----        ---   -----     ---                 -----

    Total Gross Profit                                                                                             502,081        880  10,435       -               513,396
                                                                                                                   -------        ---  ------     ---               -------

    General and administrative                                                                                     126,518    (57,119)      -       -                69,399

    Selling and marketing                                                                                          146,392     (3,803) (4,220)      -               138,369

    Other operating (income), net                                                                                  (16,147)         -       -       -               (16,147)
                                                                                                                   -------        ---     ---     ---               -------

    Total operating expense                                                                                        256,763    (60,922) (4,220)      -               191,621
                                                                                                                   -------    -------  ------     ---               -------

    Operating profit from continuing                                                                               245,318     61,802  14,655       -               321,775
       operations

    Profit before tax from continuing                                                                              260,139     61,802  14,655       -               336,596
       operations

    Net profit from continuing                                                                                     161,790     61,802  14,655  43,633               281,880
       operations

    Net profit from discontinued operations                                                                           (978)         -   1,343       -                   365

    Net income attributable to Focus                                                                               162,677     61,802  15,998  43,633               284,110
       Media

    Basic net income from continuing                                                                                  1.21                                             2.11
       operations per ADS

    Diluted net income from continuing                                                                                1.18                                             2.04
       operations per ADS

    Basic net income from discontinued                                                                                0.00                                             0.01
       operations per ADS

    Diluted net income from discontinued                                                                              0.00                                             0.01
       operations per ADS

    Basic net income attributable to Focus                                                                            1.21                                             2.12
       Media per ADS

    Diluted net income attributable to                                                                                1.18                                             2.05
       Focus Media per ADS
                                                                                                                                                                        ===

    ADS used in calculating basic income                                                                       134,241,550                                      134,241,550
       per ADS
                                                                                                                                                                        ---

    ADS used in calculating diluted income                                                                     138,320,991                                      138,320,991
       per ADS
                                                                                                                                                                        ---

    (1). Share-based compensation.

    (2). Amortization of acquired intangible assets.

    (3). Loss from equity method investee (VisionChina)

CONFERENCE CALL

1) The Company will host a conference call to discuss the fourth quarter and full year 2012 results at 9:00 p.m. U.S. Eastern Time on March 25, 2013 (6:00 p.m. U.S. Pacific Time on March 25, 2013 and 9:00 a.m. Beijing/Hong Kong Time on March 26, 2013). The dial-in details for the live conference call are set forth below:

International Toll Dial-In Number: + 65.6723.9381

Local Dial-In Number(s):
China, Domestic Mobile: 400.620.8038
China, Domestic: 800.819.0121
Hong Kong: +852.2475.0994
United States: +1.718.354.1231

International Toll Free Dial-in Number(s):
Hong Kong: +852.800.930.346
United States: +1.866.519.4004

Conference ID # 23817537

2) A replay of the call will be available from 0:00 a.m. March 26 – 8:59 a.m. April 2, 2013 (US Eastern Time). The dial-in details for the replay are set forth below:

International Toll Dial-In Number: +61.2.8199.0299

Local Dial-In Number(s):
Hong Kong: +852.3051.2780
United States: +1.646.254.3697

International Toll Free Dial-in Number(s):
China 400: 400.120.0932
China 800: 800.870.0205
Hong Kong: +852.800.963.117
United States: +1.855.452.5696

Conference ID # 23817537

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) operates China’s largest lifestyle targeted interactive digital media network. The Company offers one of the most comprehensive targeted interactive digital media platforms aimed at Chinese consumers at various urban locations. The increasingly fragmented and mobile lifestyle of Chinese urban consumers has created the need for more efficient media means to capture consumer attention. Focus Media’s mission is to build an increasingly comprehensive and measurable interactive urban media network that reaches consumers at various out-of-home locations.


                                       Focus Media Holding Limited

                             UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                                       (U.S Dollars in Thousands)

                             2012-12-31                   2012-09-30                   2011-12-31

    ASSETS

    Current assets

    Cash and cash
     equivalents                                 674,133                      491,729               331,218

    Restricted cash                                    -                       99,043                99,673

    Short-term investments                       115,125                      211,238               226,047

    Accounts receivable, net                     282,977                      294,102               249,206

    Prepaid expenses and
     other current assets                         83,048                       71,616                62,604

    Rental deposits                               57,152                       60,739                60,913

    Held-for-sale assets-
     current                                           -                        4,660                     -

    Other current assets                           2,418                        2,262                 3,222
                                                   -----                        -----                 -----

    Total current assets                       1,214,853                    1,235,389             1,032,883

    Restricted cash                              240,554                       99,043                99,673

    Rental deposits, non-
     current                                       3,447                        3,252                 4,047

    Equipment, net                                66,073                       66,044                79,042

    Acquired intangible
     assets, net                                   3,326                        4,776                35,025

    Goodwill                                     439,384                      439,201               459,113

    Equity method investment                       1,001                        5,040

    Held-for-sale assets-
     non-current                                       -                       21,008                20,534

    Other long term assets                         7,248                       14,642                11,120

    Total assets                               1,975,886                    1,888,395             1,741,437
                                               =========                    =========             =========

    LIABILITIES AND EQUITY

    Current liabilities

    Short-term bank loan                               -                      100,000               100,000

     Accounts payable                             14,810                       16,828                19,448

     Accrued expenses and
      other current
      liabilities                                179,441                      188,569               173,754

     Income taxes payable                         69,437                       43,745                35,463

    Amount due to related
     parties                                         577                        1,554                 2,196

    Held-for-sale
     liabilities-current                               -                        9,468                     -

    Deferred tax liabilities                      31,464                       29,339                33,550
                                                  ------                       ------                ------

    Total current
     liabilities                                 295,729                      389,503               364,411

    Long-term loan                               200,000                      100,000                71,000

    Acquisition purchase
     price payable                                     -                            -                13,106

    Held-for-sale
     liabilities-non-
     current                                           -                        6,159                     -

    Deferred tax
     liabilities, non-
     current                                      12,201                       13,190                20,099
                                                  ------                       ------                ------

    Total liabilities                            507,930                      508,852               468,616
                                                 -------                      -------               -------

    Equity

    Ordinary shares                                   33                           32                    32

    Additional paid in
     capital                                   1,561,435                    1,548,446             1,533,617

    Subscription receivable                            -                            -                     -

    Accumulated deficit                         (214,554)                    (291,226)             (400,276)

    Accumulated other
     comprehensive income                        123,015                      113,318               119,796
                                                 -------                      -------               -------

    Total Focus Media equity                   1,469,929                    1,370,570             1,253,169

    Noncontrolling interests                      (1,973)                       8,973                19,652
                                                  ------                        -----                ------

     Total equity                              1,467,956                    1,379,543             1,272,821
                                               ---------                    ---------             ---------

    Total liabilities and
     equity                                    1,975,886                    1,888,395             1,741,437
                                               =========                    =========             =========

                                                                Focus Media Holding Limited

                                                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                              (U.S Dollars in thousands, except earnings per ADS and ADS data)

                                 Three months ended                Twelve Months ended
                                 ------------------                -------------------

                                     2012-12-31                         2012-9-30                        2011-12-31             2012-12-31             2011-12-31

    Revenues

    LCD display network                            134,372                           135,777                           150,452                491,290                486,550

    In-store network                                11,311                            14,879                            17,559                 53,149                 61,669

    Poster frame network                            89,679                            86,056                            70,595                319,522                202,548

    Movie theater network                           20,358                            23,753                            21,658                 78,591                 53,330

    Traditional outdoor                              6,141                             7,751                            14,242                 32,490                 50,358
       billboard network

    Total gross revenues                           261,861                           268,216                           274,506                975,042                854,455

    Less: Sales taxes                               11,672                            12,740                            21,807                 47,541                 67,923
                                                    ------                            ------                            ------                 ------                 ------

    Total net revenue (note 1)                     250,189                           255,476                           252,699                927,501                786,532
                                                   -------                           -------                           -------                -------                -------

    Cost of revenues

    LCD display network                             30,025                            29,976                            25,229                113,135                 85,847

    In-store network                                 5,254                             5,384                             3,258                 21,504                 20,582

    Poster frame network                            28,903                            29,268                            29,511                117,685                110,370

    Movie theater network                            8,924                             8,762                             6,980                 32,661                 25,753

    Traditional outdoor                              5,777                             9,457                            12,315                 34,611                 41,899
       billboard network

    Total cost of revenues                          78,883                            82,847                            77,293                319,596                284,451
                                                    ------                            ------                            ------                -------                -------

    Gross profit                                   171,306                           172,629                           175,406                607,905                502,081
                                                   -------                           -------                           -------                -------                -------

    Operating expenses

    General and administrative                      32,968                            36,132                            37,092                136,704                126,518

    Selling and marketing                           51,973                            53,123                            49,606                194,095                146,392

    Other operating (income)                       (13,897)                          (14,890)                           (8,181)               (38,588)               (16,147)
       expenses, net

    Total operating expenses                        71,044                            74,365                            78,517                292,211                256,763
                                                    ------                            ------                            ------                -------                -------

    Operating profit                               100,262                            98,264                            96,889                315,694                245,318

    Interest income                                  6,181                             5,366                             4,636                 22,358                 15,538

    Interest expense                                (1,411)                           (1,284)                             (584)                (5,067)                  (717)

    Loss from cost method                           (1,526)                                -                                 -                 (1,526)                     -
       equity investment

    Income from continuing                         103,506                           102,346                           100,941                331,459                260,139
       operations before
       income taxes

    Provision for income taxes                      24,610                            27,513                            25,022                 75,897                 54,716

    Loss from equity method                          2,600                             9,499                            38,882                 18,561                 43,633
       investee

    Net income from                                 76,296                            65,334                            37,037                237,001                161,790
       continuing operations

    Net loss from discontinued                        (232)                           (1,008)                           (1,538)                (1,065)                  (978)
       operations, net of tax

    Net income                                      76,064                            64,326                            35,499                235,936                160,812

    Less: Net loss attributable                       (608)                             (264)                           (1,594)                (2,142)                (1,865)
       to noncontrolling
       interests

    Net income attributable                         76,672                            64,590                            37,093                238,078                162,677
       to Focus Media

    Net income from continuing
    operations per ADS

    - basic                                           0.59                              0.52                              0.29                   1.86                   1.21

    - diluted                                         0.57                              0.49                              0.28                   1.80                   1.18

    Net income from discontinued
    operations per ADS

    - basic                                           0.00                             (0.01)                            (0.01)                 (0.01)                  0.00

    - diluted                                         0.00                             (0.01)                            (0.01)                 (0.01)                  0.00

    Net income attributable to
    Focus Media per ADS

    - basic                                           0.59                              0.51                              0.28                   1.85                   1.21
                                                      ====                              ====                              ====                   ====                   ====

    - diluted                                         0.57                              0.48                              0.27                   1.79                   1.18
                                                      ====                              ====                              ====                   ====                   ====

    ADS used in calculating                    130,265,271                       127,777,021                       132,073,143            128,809,554            134,241,550
       basic income per ADS

    ADS used in calculating                    134,529,688                       133,518,344                       136,912,952            133,250,339            138,320,991
       diluted income per ADS

                                                     Focus Media Holding Limited

                                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                  (U.S Dollars in thousands, except earnings per ADS and ADS data)

                                 Three months ended        Twelve months ended
                                 ------------------        -------------------

                                     2012-12-31                 2012-09-30                 2011-12-31         2012-12-31          2011-12-31

    Net income                                  76,064                     64,326                     35,499             235,936             160,812

    Other comprehensive
       income, net of tax

    Foreign currency                             9,687                     (2,964)                     8,256               2,638              40,190
       translation adjustments

    Share of post-acquisition                       76                        (43)                       256                 552               1,639
       movements in equity
       investee's other
       comprehensive income

    Comprehensive income                        85,827                     61,319                     44,011             239,126             202,641

    Comprehensive loss                            (542)                      (286)                    (1,429)             (2,171)             (1,491)
       attributable to
       non-controlling interests

    Comprehensive income                        86,369                     61,605                     45,440             241,297             204,132
       attributable to Focus
       Media

Note 1: Details of net revenues by segment are as follows (U.S. Dollars in thousands):

                          Three months ended      Twelve months ended
                          ------------------      -------------------

                              2012-12-31               2012-9-30       2011-12-31       2012-12-31         2011-12-31

    Gross revenues

    LCD display network                   134,372              135,777          150,452            491,290            486,550

    In-store network                       11,311               14,879           17,559             53,149             61,669

    Poster frame network                   89,679               86,056           70,595            319,522            202,548

    Movie theater network                  20,358               23,753           21,658             78,591             53,330

    Traditional outdoor                     6,141                7,751           14,242             32,490             50,358
       billboard network

    Total gross revenues                  261,861              268,216          274,506            975,042            854,455
                                          -------              -------          -------            -------            -------

    Less: Sales taxes

    LCD display network                     6,916                7,358           13,044             25,809             42,185

    In-store network                          216                  413            1,504              1,361              5,295

    Poster frame network                    4,000                4,447            6,048             17,964             17,099

    Movie theater network                     509                  520              875              1,936              2,495

    Traditional outdoor                        31                    2              336                471                849
       billboard network

    Total sales tax                        11,672               12,740           21,807             47,541             67,923
                                           ------               ------           ------             ------             ------

    Net revenues

    LCD display network                   127,456              128,419          137,408            465,481            444,365

    In-store network                       11,095               14,466           16,055             51,788             56,374

    Poster frame network                   85,679               81,609           64,547            301,558            185,449

    Movie theater network                  19,849               23,233           20,783             76,655             50,835

    Traditional outdoor                     6,110                7,749           13,906             32,019             49,509
       billboard network

    Total net revenues                    250,189              255,476          252,699            927,501            786,532
                                          =======              =======          =======            =======            =======


                                                                         Focus Media Holding Limited

                                                           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS

                                                                         (U.S. Dollars in thousands)

                                                                                                  Three months ended        Twelve months ended
                                                                                                ------------------         -------------------

                                                                                                    2012-12-31                 2011-12-31             2012-12-31           2011-12-31

    Operating activities:

    Net income                                                                                                     76,064                     35,499              235,936                160,812

    Adjustments to reconcile net income to net cash
       provided by operating activities:

    Bad debt expenses                                                                                               4,182                      5,755               13,341                 16,013

    Share-based compensation                                                                                       12,990                     15,582               63,637                 61,802

    Depreciation                                                                                                    7,820                      7,601               30,741                 28,787

    Amortization of acquired intangible assets                                                                      1,665                      4,484               10,802                 15,998

    Loss from cost method investee                                                                                  1,526                          -                1,526                      -

    Loss from equity method investee                                                                                2,600                     38,882               18,561                 43,632

    Change in fair value of contingent consideration                                                                    -                          -                1,179                      -
       liabilities for acquisition of subsidiaries

    Others                                                                                                         (1,523)                      (199)                 621                  1,910

    Net changes in current assets and current liabilities,                                                         37,121                     21,189              (18,094)               (48,796)
       net of effects of acquisitions

    Net cash provided by operating activities                                                                     142,445                    128,793              358,250                280,158
                                                                                                                  -------                    -------              -------                -------

    Investing activities:

    Purchase of equipment and other long term assets                                                               (4,807)                   (15,494)             (19,645)               (38,918)

    Payment paid to acquire subsidiaries, net of cash                                                                   -                       (606)              (2,929)               (13,228)
       acquired

    Investment in equity method investee                                                                                -                          -                    -                (61,003)

    Cash deposited as restricted cash                                                                             (40,719)                  (199,346)             (67,232)              (199,346)

    Cash received from the release of restricted cash                                                                                                              26,366

    Proceeds received from the sale of short-term                                                                 114,916                    166,643              470,977              1,044,680
       investments

    Proceeds used in investment in short-term                                                                     (16,937)                  (186,371)            (359,595)            (1,124,034)
       investments

    Proceeds received from disposal of fixed assets                                                                    69                        100                  409                    672

    Proceeds from disposal of subsidiaries                                                                          1,392                          -                2,519                  7,296

    Cash of disposed entities                                                                                        (596)                         -               (2,378)                     -

    Net cash provided by/(used in) investing                                                                       53,318                   (235,074)              48,492               (383,881)
       activities

    Financing activities:

    Proceeds from short-term loan                                                                                       -                    145,000               34,794                175,000

    Repayment of short-term loan                                                                                 (100,000)                   (75,000)            (134,017)               (75,000)

    Proceeds from long-term loan                                                                                  200,000                     71,000              229,000                 71,000

    Repayment from long-term loan                                                                                (100,000)                         -             (100,000)                     -

    Cash used for share repurchase                                                                                      -                   (144,269)             (41,445)              (213,375)

    Dividend payout                                                                                               (17,846)                         -              (53,148)                     -

    (Repayment to) capital injection  from noncontrolling                                                               -                       (321)                   -                   (397)
       interests

    Proceeds from issuance of ordinary shares, net of                                                                   -                      1,236                   34                  3,063
       issuance costs

    Net cash provided by/(used in) financing activities                                                           (17,846)                    (2,354)             (64,782)               (39,709)
                                                                                                                  -------                     ------              -------                -------

    Effect of exchange rate changes                                                                                 3,504                      4,531                  955                 20,174
                                                                                                                    -----                      -----                  ---                 ------

    Net increase in cash and cash equivalents                                                                     181,421                   (104,104)             342,915               (123,258)

    Cash and cash equivalents, beginning of period                                                                491,729                    435,322              331,218                454,476
                                                                                                                  -------                    -------              -------                -------

    Add: Cash and cash equivalents in held-for-sale                                                                   983                          -                    -                      -
       assets, beginning of period

    Cash and cash equivalents, end of period                                                                      674,133                    331,218              674,133                331,218
                                                                                                                  =======                    =======              =======                =======

    Supplemental disclosure of cash flow information:

    Income taxes paid                                                                                               2,684                      2,970               39,791                 27,582

    Interest paid                                                                                                   1,487                        560                4,885                    665
                                                                                                                    =====                        ===                =====                    ===

    Supplemental disclosure of non-cash investing
    activity:

      Accrual for acquisition of subsidiaries                                                                         671                     19,584                  671                 19,584
                                                                                                                      ===                     ======                  ===                 ======

SOURCE Focus Media Holding Limited


Source: PR Newswire