Gemstar-TV Guide Announces Fourth Quarter and Full Year 2004 Results

Business Wire, Feb 23, 2005

LOS ANGELES -- Gemstar-TV Guide International, Inc. (NASDAQ:GMST) announced that for the fourth quarter ended December 31, 2004, revenues increased to $186.6 million, compared with revenues of $176.3 million in the fourth quarter ended December 31, 2003. Net income for the fourth quarter of 2004 was $1.6 million, or $0.00 cents per share, compared with a net loss of $(491.4) million, or $(1.18) per share, for the fourth quarter of 2003.

Operating loss for the fourth quarter of 2004 was $(2.8) million, which included stock compensation, depreciation, and amortization charges of $8.0 million. Operating loss for the fourth quarter of 2003 was $(483.9) million, which included stock compensation, depreciation and amortization charges of $8.2 million and a $391.0 million impairment charge.

For the full year 2004, revenues increased to $732.3 million, from $695.1 million for 2003. Operating loss for 2004 was $(97.3) million, versus a loss of $(639.5) million for 2003. Net loss for 2004 was $(94.5) million, or $(0.22) per diluted share, compared with a net loss of $(577.4) million, or $(1.41) per diluted share, for 2003.

Gemstar-TV Guide's Chief Executive Officer Richard Battista commented, "Gemstar-TV Guide made good progress towards stabilizing its various businesses in 2004. We entered into new IPG patent license agreements, substantially increased distribution for our television networks, formed Guideworks, an IPG product development joint venture with Comcast, and launched our new I-Guide interactive programming guide. We also began implementing a new programming strategy for TV Guide Channel, recruited very strong editorial talent for our magazine group, and put the majority of our legal and regulatory issues behind us."

Battista continued, "As we continue to evaluate the markets in which we operate, we foresee a number of strategic and executional challenges across its businesses and have a great deal of work ahead of us in 2005. The coming year will be a period of significant investment in both our new and existing businesses, including Inside TV, our new magazine. Over the longer term, we believe our strategies will generate positive returns for the Company, but it is clear that dramatic improvements in performance will not come overnight."

At December 31, 2004, the Company's cash, cash equivalents and current marketable securities were $569.7 million, excluding restricted cash of $38.9 million. Outstanding debt and capital lease obligations, both short and long term, were $13.8 million, resulting in cash and cash equivalents and current marketable securities in excess of debt and capital lease obligations of $555.9 million, excluding $38.9 million in restricted cash. During the fourth quarter of 2004, the Company spent $6.5 million on capital expenditures and a total of $13.4 million in 2004.

Fourth Quarter and Full Year 2004 Segment Performance

The schedule below reflects Gemstar-TV Guide's performance for the fourth quarter and full year periods ended December 31, 2004 and 2003 by segment. More detailed information will be contained in the Company's Form 10-K to be filed in the next week.

GEMSTAR-TV GUIDE INTERNATIONAL, INC.
            CONSOLIDATED CONTINUING SEGMENT PERFORMANCE(1)
                            (In thousands)

                                  Three months Ended     Year Ended
                                     December 31,       December 31,
                                --------------------------------------
                                    2004      2003     2004      2003
                                --------------------------------------
                                    (unaudited)
                                -------------------
Publishing Segment:
   Revenues                      $99,716  $107,418 $383,811  $423,567
   Operating expenses, exclusive
    of lease settlement (2)      102,832   109,174  380,216   415,619
   Lease Settlement                    -         -  (10,088)       --
                                --------------------------------------
   Adjusted EBITDA (3)            (3,116)   (1,756)  13,683     7,948
                                --------------------------------------
Cable and Satellite Segment:
   Revenues                       64,267    44,547  230,948   161,776
   Operating expenses (2)         44,017    36,987  133,040   121,657
                                --------------------------------------
   Adjusted EBITDA (3)            20,250     7,560   97,908    40,119
                                --------------------------------------
CE Licensing Segment:
   Revenues                       22,591    24,335  117,541   109,767
   Operating expenses (2)         18,373    19,093   74,941    69,911
                                --------------------------------------
   Adjusted EBITDA (3)             4,218     5,242   42,600    39,856
                                --------------------------------------
Corporate Segment:
   Operating expenses (2)         16,188    95,745   78,870   169,257
                                --------------------------------------
   Adjusted EBITDA (3)           (16,188)  (95,745) (78,870) (169,257)
                                --------------------------------------
Consolidated:
   Revenues                      186,574   176,300  732,300   695,110
   Operating expenses, exclusive
    of lease settlement (2)      181,410   260,999  667,067   776,444
   Lease Settlement                    -         -  (10,088)       --
                                --------------------------------------
   Adjusted EBITDA (3)             5,164   (84,699)  75,321   (81,334)
   Stock compensation               (111)     (442)    (437)  (33,551)
   Depreciation and amortization  (7,880)   (7,727) (40,548) (133,577)
   Impairment of intangible
    assets                             -  (391,003)(131,637) (391,003)
                                --------------------------------------
   Operating loss                 (2,827) (483,871) (97,301) (639,465)
   Interest income (expense),
    net                            2,856      (719)   5,705    (4,240)
   Other income, net               1,391       638   14,722     3,842
                                --------------------------------------
   Income (loss) from continuing
    operations before income
    taxes                         $1,420 $(483,952)$(76,874)$(639,863)
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