<PAGE>
EXHIBIT 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Combined Financial Statements for
Gemstar-TV Guide International, Inc. (the "Pro Forma Statements") give effect to
the merger using the purchase method of accounting as if the merger had been
completed on June 30, 2000 for balance sheet purposes and on April 1, 1999 for
statement of operations purposes, subject to the assumptions and adjustments
described in the accompanying Notes to Unaudited Pro Forma Condensed Combined
Financial Statements.
The pro forma adjustments contained in the Pro Forma Statements, including the
amounts used in the preliminary purchase price allocation, are based upon the
best information available to management as of the date of this Amended Current
Report on Form 8-K/A, in part utilizing preliminary assessments by independent
valuation consultants. The pro forma adjustments are preliminary and have been
made solely for purposes of developing such Pro Forma Statements. In most cases,
these estimates have relied heavily on assessments by TV Guide's management in
light of TV Guide's business model. The business activities of the combined
company have been and are currently being evaluated in light of existing facts
and circumstances. As a result of that assessment, there is a possibility that
certain of the businesses of TV Guide could be substantially changed. The impact
of such potential changes are not reflected in the Pro Forma Statements. As a
result, the final allocation of the purchase price and the amounts and lives of
the intangible assets, including goodwill, could be different from the amounts
and lives used in the Pro Forma Statements and such differences could be
material to the results of operations of the combined company following the
merger.
For purposes of preparing the Unaudited Pro Forma Condensed Combined Statement
of Operations for the three months ended June 30, 2000, Gemstar's operating
results for its first quarter ended June 30, 2000 have been combined with the
operating results of TV Guide for its second quarter ended June 30, 2000. TV
Guide's year end is December 31. Using TV Guide's operating results for its
first quarter ended March 31, 2000 would not significantly change the Unaudited
Pro Forma Condensed Combined Statement of Operations for the three months ended
June 30, 2000.
The Pro Forma Statements have been derived from the historical consolidated
financial statements of Gemstar and TV Guide and are qualified in their entirety
by reference to, and should be read in conjunction with, such historical
consolidated financial statements and related notes thereto.
The Pro Forma Statements are presented for illustrative purposes only and do
not purport to be indicative of the operating results or financial position that
would have actually occurred if the merger had occurred on the dates indicated,
nor are they necessarily indicative of future operating results or financial
position of the combined company. The Pro Forma Statements do not give effect to
any cost savings or synergies which may result from the integration of the
Gemstar and TV Guide operations.
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GEMSTAR-TV GUIDE INTERNATIONAL, INC.
(FORMERLY GEMSTAR INTERNATIONAL GROUP LIMITED)
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
June 30, 2000
(In millions)
<TABLE>
<CAPTION>
Gemstar TV Guide Pro Forma
Historical Historical Adjustments Pro Forma
------------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash, cash equivalents and
marketable securities $ 295 $ 115 $ (24) (1) $ 305
(81) (2)
Accounts receivable and other
current assets 94 304 -- 398
------ ------ ------ ---------
Total current assets 389 419 (105) 703
Property, plant and equipment, net 5 81 -- 86
Intangible assets, net 21 2,700 7,275 (1) 9,996
Other assets, net 109 100 (8) (1) 198
(3) (3)
------ ------ ------ ---------
$524 $3,300 $7,159 $10,983
====== ====== ====== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable, accrued expenses
and current debt $ 36 $ 159 $ (11) (2) $ 184
Deferred revenue 7 294 -- 301
------ ------ ------ ---------
Total current liabilities 43 453 (11) 485
Deferred income taxes 42 630 939 (1) 1,611
Long-term debt -- 677 (70) (2) 607
Other liabilities 2 60 -- 62
Shareholders' equity:
Capital stock and additional
paid-in capital 348 1,291 6,581 (1) 8,217
(3) (3)
Retained earnings 70 183 (183) (1) 70
Accumulated other comprehensive
income, net of tax 47 6 (6) (1) 47
Unearned compensation -- -- (88) (1) (88)
Treasury stock, at cost (28) -- -- (28)
------ ------ ------ ---------
Net shareholders' equity 437 1,480 6,301 8,218
------ ------ ------ ---------
$524 $3,300 $7,159 $10,983
====== ====== ====== =========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial
Statements.
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GEMSTAR-TV GUIDE INTERNATIONAL, INC.
(FORMERLY GEMSTAR INTERNATIONAL GROUP LIMITED)
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Three Months Ended June 30, 2000
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Gemstar TV Guide Pro Forma
Historical Historical Adjustments Pro Forma
---------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
Revenues $ 63 $293 $ -- $ 356
Operating expenses, excluding
depreciation and amortization 27 236 6 (4) 269
Depreciation and amortization 1 36 123 (5) 160
----- ---- ------- ------
Operating income (loss) 35 21 (129) (73)
Other income (expense), net 5 (15) -- (10)
----- ---- ------- ------
Income (loss) before income taxes 40 6 (129) (83)
Provision (benefit) for income taxes 11 5 (18) (6) (2)
----- ---- ------- ------
Net income (loss) $ 29 $ 1 $ (111) $ (81)
===== ==== ======= ======
Earnings (loss) per share:
Basic $0.14 $(0.20)
Diluted $0.12 $(0.20)
Number of shares:
Basic 208 408
Diluted 250 408
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial
Statements.
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1 - Pro Forma Adjustments
The Pro Forma Statements give effect to the following pro forma
adjustments:
(1) To record the merger using the purchase method of accounting, reflecting the
estimated purchase price and purchase price allocation noted below (in
millions, except share and per share amounts).
Estimated Purchase Price:
<TABLE>
<S> <C>
Shares of TV Guide common stock outstanding at June 30, 2000 304,923,736
Exchange ratio per share .6573
-----------
Equivalent Gemstar shares 200,426,371
Gemstar share price based on the average closing price for
two days before and after the merger was agreed to and
announced $ 38.21
-----------
Consideration for TV Guide outstanding common stock $ 7,658
Fair value of TV Guide stock options assumed by Gemstar 214
Estimated transaction costs 32
-----------
Total estimated purchase price $ 7,904
===========
Purchase Price Allocation:
Historical net book value of TV Guide $ 1,480
Estimated fair value adjustments relating to:
Contracts 839
Patents and trademarks 633
Customer subscriber lists 981
Unearned compensation 88
Deferred income taxes (939)
Preliminary goodwill 4,822
-----------
Total $ 7,904
===========
</TABLE>
On a pro forma basis as of June 30, 2000, intangible assets are comprised of
the following amounts (in millions) and estimated average useful lives:
<TABLE>
<S> <C> <C>
Publishing rights $1,223 40 years
Contracts 839 10 years
Patents and trademarks 1,059 15 and 40 years, respectively
Customer subscriber lists 1,045 15 years
Goodwill 5,830 15 years
-------
$ 9,996
=======
</TABLE>
The above purchase price allocation and the lives assigned to the assets are
preliminary and have been made solely for the purpose of developing the Pro
Forma Statements. The Company, with the assistance of valuation consultants,
is in the process of evaluating the fair value and the lives of the assets
acquired. Accordingly, the allocation of the purchase price and the lives of
the assets acquired, which are based on preliminary estimates, may differ
from the final purchase price allocation and the final lives assigned to the
assets.
(2) As of June 30, 2000, TV Guide has outstanding $400 million of 8.125% senior
subordinated notes due 2009 that contain provisions whereby upon the
occurrence of a change in control, such as will result in the merger, the
noteholders will have the right to require TV Guide to repurchase all or any
part of such noteholders' securities at a purchase price equal to 101% of
the principal amount of the notes plus accrued and unpaid interest through
the repurchase date. The Pro Forma Statements assume that the noteholders
will require TV Guide to repurchase the notes and the cost of the repurchase
in excess of the principal amount of the notes plus
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accrued interest, $4 million, has been included in the estimated transaction
costs above. TV Guide has a secured bank credit facility comprised of a $300
million six-year revolving credit facility and a $300 million 364-day
revolving credit facility that converts into a four year term loan under
which $270 million of borrowings are outstanding as of June 30, 2000. The
Pro Forma Statements assume that TV Guide will finance the repurchase of the
notes, including accrued interest of $11 million as of June 30, 2000, using
its existing secured bank credit facility and $81 million in cash. However,
TV Guide may elect to obtain financing to fund the repurchase from an
alternate source or to fund all or additional amounts of the repurchase out
of then available cash.
An increase of 25 basis points in the historical interest rates, assuming
$600 million of borrowings under the secured bank credit facility remain
outstanding, would result in an additional interest expense of $1.5 million
annually.
(3) To reflect the costs incurred to register the Gemstar common stock to be
issued in the merger.
(4) To reflect the amortization of the unearned compensation related to the
unvested TV Guide stock options assumed by Gemstar.
(5) To reflect the amortization of the identified intangible assets and
preliminary goodwill resulting from the merger. The intangible assets and
goodwill will be amortized on a straight-line basis over their estimated
useful lives as described above. The Company, with the assistance of
valuation consultants, is in the process of evaluating the fair value and
the lives of the assets acquired. Accordingly, the allocation of the
purchase price and the lives of the assets acquired, which are based on
preliminary estimates, may differ from the final purchase price allocation
and the final lives assigned to the assets. The Company will continually
evaluate the periods of amortization to determine whether later events and
circumstances warrant revised estimates of useful lives.
(6) To reflect the statutory tax effects of the pro forma adjustments.
The following information reconciles the number of shares used to compute
Gemstar's historical basic and diluted earnings per share to pro forma basic and
diluted earnings per share (in millions):
Basic Diluted
----- --------
Weighted average number of shares--historical 208 250
Exclude historical dilutive potential shares
of common stock as shares would be antidilutive -- (42)
Common shares to be issued in connection with
the merger 200 200
--- ---
Weighted average number of shares--pro forma 408 408
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