REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered | ||
The (The NASDAQ Global Select Market) | ||||
The (The NASDAQ Global Select Market) |
* |
Not for trading, but only in connection with the listing on The NASDAQ Global Select Market of American depositary shares. |
☒ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Emerging growth company |
☒ |
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |
Other ☐ |
1 |
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1 |
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2 |
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Item 1. |
2 |
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Item 2. |
2 |
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Item 3. |
2 |
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Item 4. |
49 |
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Item 4A. |
87 |
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Item 5. |
87 |
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Item 6. |
115 |
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Item 7. |
125 |
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Item 8. |
126 |
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Item 9. |
128 |
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Item 10. |
128 |
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Item 11. |
136 |
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Item 12. |
137 |
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139 |
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Item 13. |
139 |
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Item 14. |
139 |
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Item 15. |
139 |
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Item 16A. |
140 |
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Item 16B. |
140 |
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Item 16C. |
140 |
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Item 16D. |
141 |
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Item 16E. |
141 |
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Item 16F. |
141 |
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Item 16G. |
141 |
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Item 16H. |
142 |
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142 |
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Item 17. |
142 |
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Item 18. |
142 |
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Item 19. |
142 |
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153 |
• | “we,” “us,” “our company,” “our,” or “Baidu” refers to Baidu, Inc., its subsidiaries, and, in the context of describing our operations and consolidated financial information, our consolidated affiliated entities in China, including but not limited to Beijing Baidu Netcom Science Technology Co., Ltd., or Baidu Netcom; |
• | “user traffic” or “traffic” refers generally to page views of a website, with “page views” measuring the number of web pages viewed by internet users over a specified period of time except that multiple page views of the same page viewed by the same user on the same day are counted only once; |
• | “DAU” for Baidu App refers to the number of unique mobile devices that have accessed Baidu App at least once during a day; “mobile DAUs,” for our iQIYI platform, refers to the number of unique mobile devices that have accessed our platform through our iQIYI mobile app at least once during a day; “mobile MAUs,” for our iQIYI platform, refers to the number of unique mobile devices that have accessed our platform through our iQIYI mobile app at least once during a month; |
• | “China” or “PRC” refers to the People’s Republic of China, and solely for the purpose of this annual report, excluding Taiwan, Hong Kong and Macau; |
• | “shares” or “ordinary shares” refers to our ordinary shares, which include both Class A ordinary shares and Class B ordinary shares; |
• | “ADSs” refers to our American depositary shares, and we effected a change of the ADS to Class A ordinary share ratio from 1 ADS representing 1 Class A ordinary share to 10 ADSs representing 1 Class A ordinary share on May 12, 2010, which has the same effect as a 10-for-1 ADS split; |
• | “U.S. GAAP” refers to generally accepted accounting principles in the United States; |
• | “RMB” or “Renminbi” refers to the legal currency of China; |
• | “$,” “dollars,” “US$” or “U.S. dollars” refers to the legal currency of the United States; and |
• | all discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding. |
• | our growth strategies; |
• | our future business development, results of operations and financial condition; |
• | our ability to attract and retain users and customers and generate revenue and profit from our customers; |
• | our ability to retain key personnel and attract new talent; |
• | competition in the internet search and feed, online marketing and other businesses in which we engage; |
• | the outcome of ongoing or any future litigation, including those relating to intellectual property rights; and |
• | PRC governmental regulations and policies relating to the internet, internet search and feed, online marketing and the implementation of a corporate structure involving variable interest entities in China. |
Item 1. |
Identity of Directors, Senior Management and Advisers |
Item 2. |
Offer Statistics and Expected Timetable |
Item 3. |
Key Information |
A. |
Selected Financial Data |
Year Ended December 31, |
||||||||||||||||||||||||
2015 (1) |
2016 (1) |
2017 (1) |
2018 (2) |
2019 (2) |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(In millions, except per share and per ADS data) |
||||||||||||||||||||||||
Consolidated Statements of Comprehensive Income Data: |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Online marketing services |
64,037 |
64,525 |
73,146 |
81,912 |
78,093 |
11,217 |
||||||||||||||||||
Others |
2,345 |
6,024 |
11,663 |
20,365 |
29,320 |
4,212 |
||||||||||||||||||
Total revenues |
66,382 |
70,549 |
84,809 |
102,277 |
107,413 |
15,429 |
||||||||||||||||||
Operating costs and expenses: |
||||||||||||||||||||||||
Cost of revenues |
27,458 |
35,278 |
43,062 |
51,744 |
62,850 |
9,028 |
||||||||||||||||||
Selling, general and administrative |
17,076 |
15,071 |
13,128 |
19,231 |
19,910 |
2,860 |
||||||||||||||||||
Research and development |
10,176 |
10,151 |
12,928 |
15,772 |
18,346 |
2,635 |
||||||||||||||||||
Total operating costs and expenses |
54,710 |
60,500 |
69,118 |
86,747 |
101,106 |
14,523 |
||||||||||||||||||
Operating profit |
11,672 |
10,049 |
15,691 |
15,530 |
6,307 |
906 |
||||||||||||||||||
Total other income (loss), net |
26,235 |
4,460 |
5,592 |
11,795 |
(6,647 |
) | (955 |
) | ||||||||||||||||
Income (loss) before income taxes |
37,907 |
14,509 |
21,283 |
27,325 |
(340 |
) | (49 |
) | ||||||||||||||||
Income taxes |
5,475 |
2,913 |
2,995 |
4,743 |
1,948 |
279 |
||||||||||||||||||
Net income (loss) |
32,432 |
11,596 |
18,288 |
22,582 |
(2,288 |
) | (328 |
) | ||||||||||||||||
Less: Net loss attributable to non-controlling interests |
(1,232 |
) | (36 |
) | (13 |
) | (4,991 |
) | (4,345 |
) | (624 |
) | ||||||||||||
Net income attributable to Baidu, Inc. |
33,664 |
11,632 |
18,301 |
27,573 |
2,057 |
296 |
||||||||||||||||||
(1) | VAT is presented in cost of revenues rather than net against revenues in accordance with the legacy revenue accounting standard (ASC 605). |
(2) | VAT is presented as net against revenues rather than in cost of revenues in accordance with the new revenue accounting standard (ASC 606). |
As of December 31, |
||||||||||||||||||||||||
2015 |
2016 |
2017 |
2018 |
2019 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
Consolidated Balance Sheets Data: |
||||||||||||||||||||||||
Cash and cash equivalents |
9,960 |
10,898 |
11,084 |
27,638 |
33,443 |
4,804 |
||||||||||||||||||
Restricted cash |
96 |
318 |
252 |
2,189 |
996 |
143 |
||||||||||||||||||
Short-term investments |
57,969 |
71,196 |
89,381 |
111,626 |
112,924 |
16,221 |
||||||||||||||||||
Total assets (3) |
147,853 |
181,997 |
251,728 |
297,566 |
301,316 |
43,280 |
||||||||||||||||||
Short-term loans |
100 |
1,115 |
1,244 |
3,046 |
2,618 |
376 |
||||||||||||||||||
Long-term loans, current portion |
975 |
3,468 |
10 |
84 |
737 |
106 |
||||||||||||||||||
Long-term loans |
3,240 |
6,822 |
6,701 |
7,456 |
7,804 |
1,121 |
||||||||||||||||||
Notes payable, current portion |
— |
5,203 |
6,500 |
6,871 |
5,219 |
750 |
||||||||||||||||||
Notes payable |
30,702 |
27,648 |
29,111 |
42,735 |
38,090 |
5,471 |
||||||||||||||||||
Convertible senior notes |
— |
— |
— |
4,712 |
12,297 |
1,766 |
||||||||||||||||||
Total liabilities |
63,638 |
84,254 |
121,356 |
121,814 |
128,501 |
18,458 |
||||||||||||||||||
Total Baidu, Inc. shareholders’ equity |
80,256 |
92,274 |
115,346 |
162,897 |
163,599 |
23,499 |
(3) | We adopted Accounting Standards Update (“ASU”) No. 2016-02: Leases of-use assets (“ROU assets”) and lease liabilities (including current and non-current) for operating leases are presented on the face of the consolidated balance sheets as of December 31, 2019, while the consolidated balance sheet data for the years ended December 31, 2015, 2016, 2017 and 2018 have been prepared in accordance with ASC topic 840 (“ASC 840”), Accounting for Leases |
Year Ended December 31, |
||||||||||||||||||||||||
2015 |
2016 |
2017 |
2018 |
2019 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
Consolidated Cash Flow Data: |
||||||||||||||||||||||||
Net cash provided by operating activities |
19,771 |
22,480 |
32,828 |
35,967 |
28,458 |
4,088 |
||||||||||||||||||
Net cash used in investing activities |
(31,621 |
) | (35,911 |
) | (76,949 |
) | (34,460 |
) | (19,974 |
) | (2,869 |
) | ||||||||||||
Net cash provided by (used in) financing activities |
7,778 |
14,447 |
44,557 |
15,082 |
(3,873 |
) | (556 |
) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents (4) |
(3,893 |
) | — |
— |
— |
— |
— |
|||||||||||||||||
Net increase in cash, cash equivalents and restricted cash (4) |
— |
1,160 |
120 |
18,491 |
4,612 |
663 |
(4) | We adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on January 1, 2018 using the retrospective transition method. Restricted cash presented on the face of the consolidated balance sheets are included in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts presented in the statements of cash flows for the periods of 2016, 2017, 2018 and 2019. |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | difficulties associated with developing and maintaining a larger user base with demographic characteristics attractive to online marketing customers and maintaining and increasing user engagement; |
• | increased competition and potential re-allocation of marketing budgets and downward pressure on online marketing prices; |
• | higher customer acquisition costs due in part to the limited experience of small to medium-sized enterprises, or SMEs, with the internet as a marketing channel or due to competition; |
• | decreased use of our search and paid click because search queries are increasingly being undertaken via voice-activated smart devices, apps, social media or other platforms; |
• | growing reluctance of users to click on search results marked as advertisements; |
• | ineffectiveness of our online marketing delivery, tracking and reporting systems; and |
• | decreased use of internet or online marketing in China. |
• | anticipate technology and market trends; |
• | develop innovative new products and enhancements on a timely basis; |
• | distinguish our products from those of our competitors; |
• | manufacture and deliver high-quality products in sufficient volumes at competitive cost structure; |
• | establish strong, efficient online and offline distribution channels; |
• | price our products competitively; |
• | develop a vibrant skills store and a large developer community to increase user stickiness and loyalty; and |
• | innovate post-hardware sales monetization models. |
• | potential ongoing financial obligations and unforeseen or hidden liabilities, including liability for infringement of third-party copyrights or other intellectual property; |
• | failure to achieve the intended objectives, benefits or revenue-enhancing opportunities; |
• | costs and difficulties of integrating acquired businesses and managing a larger business; |
• | in the case of investments where we do not obtain management and operational control, lack of influence over the controlling partner or shareholder, which may prevent us from achieving our strategic goals in the investments; |
• | possible loss of key employees of a target business; |
• | potential claims or litigation regarding our board’s exercise of its duty of care and other duties required under applicable law in connection with any of our significant acquisitions or investments approved by the board; |
• | diversion of resources and management attention; |
• | regulatory hurdles and compliance risks, including the anti-monopoly and competition laws, rules and regulations of China and other jurisdictions and the enhanced compliance requirement for outbound acquisitions and investment under the laws and regulations of China; and |
• | in the case of acquisitions of businesses or assets outside of China, the need to integrate operations across different business cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries. |
• | maintain our leading position in the Chinese-language internet search market; |
• | offer attractive, useful and innovative products and services to attract and retain a larger user base; |
• | procure content from studios and other content providers, as well as distributors and other licensors of content; |
• | attract users’ continuing use of internet search services; |
• | retain existing customers and attract additional customers and increase spending per customer; |
• | retain members and attract new members of iQIYI’s membership services; |
• | upgrade our technology to support increased traffic and expanded product and service offerings; |
• | further enhance our brand; |
• | respond to competitive market conditions; |
• | respond to evolving user preferences or industry changes; |
• | respond to changes in the regulatory environment and manage legal risks, including those associated with intellectual property rights; |
• | maintain effective control of our costs and expenses; |
• | execute our strategic investments and acquisitions and post-acquisition integrations effectively; |
• | attract, retain and motivate qualified personnel and maintain good relations with a young and growing work force; and |
• | build profitable operations in new markets and other overseas internet markets we have entered into. |
• | iQIYI’s business development, financial condition and results of operations; |
• | general market conditions for financing activities by companies in iQIYI’s industry; and |
• | macro-economic and other conditions in China and elsewhere. |
• | general economic conditions in China and economic conditions specific to the internet, internet search and feed, and online marketing industries; |
• | our ability to continue to attract users to our platform despite the emergence of mobile apps and other services; |
• | our ability to attract additional customers and increase spending per customer; |
• | the announcement or introduction of new or enhanced products and services by us or our competitors; |
• | the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our businesses, operations and infrastructure; |
• | the results of our acquisitions of, or investments in, other businesses or assets; |
• | PRC regulations or government actions pertaining to activities on the internet, including various forms of entertainment, online payment and activities otherwise affecting our online marketing customers, and those relating to the products and services we provide; |
• | unforeseen events, such as negative publicity arising from widespread media coverage and other sources and labor disputes; and |
• | geopolitical events, natural disasters or epidemics. |
• | difficulties in developing, staffing and simultaneously managing a foreign operation as a result of distance, language and cultural differences; |
• | challenges in formulating effective local sales and marketing strategies targeting users from various jurisdictions and cultures, who have a diverse range of preferences and demands; |
• | challenges in identifying appropriate local business partners and establishing and maintaining good working relationships with them; |
• | dependence on local platforms in marketing our international products and services overseas; |
• | challenges in selecting suitable geographical regions for international business; |
• | longer customer payment cycles; |
• | currency exchange rate fluctuations; |
• | political or social unrest or economic instability; |
• | compliance with applicable foreign laws and regulations and unexpected changes in laws or regulations; |
• | exposure to different tax jurisdictions that may subject us to greater fluctuations in our effective tax rate and potentially adverse tax consequences; and |
• | increased costs associated with doing business in foreign jurisdictions. |
• | temporary closure of offices, travel restrictions or suspension of services of our customers and suppliers have negatively affected, and could continue to negatively affect, the demand for our services; |
• | our customers in industries that are negatively impacted by the outbreak of COVID-19, including healthcare, travel, offline education, franchising, auto/transportation and real estate/home furnishing sectors, may reduce their budgets on online advertising and marketing, which may materially adversely impact our revenue from online marketing services; |
• | our customers may require additional time to pay us or fail to pay us at all, which could significantly increase the amount of accounts receivable and require us to record additional allowances for doubtful accounts. We have provided and may continue to provide significant sales incentives to our customers and distributors during the outbreak, which may in turn materially adversely affect our financial condition and operating results; |
• | the business operations of our distributors have been and could continue to be negatively impacted by the outbreak, which may negatively impact our distribution channel, or result in loss of customers or disruption of our services, which may in turn materially adversely affect our financial condition and operating results; |
• | any disruption of our supply chain, logistics providers or customers could adversely impact our business and results of operations, including causing us or our suppliers to cease manufacturing Xiaodu smart devices for a period of time or materially delay delivery to customers, which may also lead to loss of customers, as well as reputational, competitive and business harm to us; |
• | many of our customers, distributors, suppliers and other partners are small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions. If the SMEs that we work with cannot weather the COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged outbreak, our revenues and business operations may be materially and adversely impacted; |
• | the global stock markets have experienced, and may continue to experience, significant decline from the COVID-19 outbreak and the private and public companies that we have invested in could be materially adversely affected, which may lead to significant impairment in the fair values of our investments and in turn materially adversely affect our financial condition and operating results; and |
• | corporate social responsibility initiatives we put forth in response to the outbreak, such as the RMB300 million charitable initiative with the goal of providing awareness education and improving public health in China, and many other efforts to leverage our technology, products and services to help contain the epidemic, may negatively affect our financial condition and operating results. |
• | We only have contractual control over our websites. We do not own the websites due to the restriction of foreign investment in businesses providing value-added telecommunications services in China, including online information services. |
• | The licensing requirements relating to the internet business in China are uncertain and evolving. This means that permits, licenses or operations at some of our PRC subsidiaries and consolidated affiliated entities may be subject to challenge, or we may not be able to obtain or renew certain permits or licenses, including without limitation, a Value-Added Telecommunication Business Operating License, which is issued by the MIIT, an Internet News License, which is issued by the Cyberspace Administration of China, or the CAC, a Short Messaging Service Access Code Certificate, which is issued by the MIIT, an Online Audio/Video Program Transmission License, which is issued by the State Administration of Press Publication, Radio, Film and Television, or the SAPPRFT (currently known as National Radio and Television Administration, or the NRTA), a Radio and Television Program Production License, which is issued by the NRTA, a Surveying and Mapping Qualification Certificate for internet map services, which is issued by the National Administration of Surveying, Mapping and Geo-information, an Internet Culture Business Permit with the permitted scope of business covering online game operation and online game virtual currency issuance or trading, which is issued by the Ministry of Culture, an Internet Publication Service License, which is issued by the National News and Publication Bureau, or the NNPB, a Publication Business Operating License, which is issued by NNPB, a Qualification Certificate for Internet Drug Information Services, which is issued by provincial branch of the State Food and Drug Administration, a Human Resource Services License, which is issued by the Ministry of Human Resources and Social Security, and a Commercial Performances License, which is issued by the municipal bureau of culture. Failure to obtain or renew these permits and licenses may significantly disrupt our business, or subject us to sanctions, |
requirements to increase capital or other conditions or enforcement, or compromise enforceability of related contractual arrangements, or have other harmful effects on us. |
• | New laws and regulations may be promulgated to regulate internet activities, including online advertising. Other aspects of our online operations may be regulated in the future. If these new laws and regulations are promulgated, additional licenses may be required for our online operations. If our operations do not comply with these new regulations at the time they become effective, or if we fail to obtain any licenses required under these new laws and regulations, we could be subject to penalties. |
• | actual or anticipated fluctuations in our quarterly results of operations; |
• | changes in financial estimates by securities research analysts; |
• | conditions in internet search and online marketing markets; |
• | changes in the operating performance or market valuations of other internet search or internet companies; |
• | announcements by us or our competitors or other internet companies of new products, acquisitions, strategic partnerships, joint ventures or capital commitments; |
• | addition or departure of key personnel; |
• | public perception or negative news about our products or services; |
• | our share repurchase program; |
• | fluctuations of exchange rates between RMB and the U.S. dollar; |
• | litigation, government investigation or other legal or regulatory proceeding; and |
• | general economic or political conditions in China or elsewhere in the world. |
• | A dual-class ordinary share structure. |
• | Our board of directors has the authority, without approval by the shareholders, to issue up to a total of 10,000,000 preferred shares in one or more series. Our board of directors may establish the number of shares to be included in each such series and may fix the designations, preferences, powers and other rights of the shares of a series of preferred shares. |
• | Our board of directors has the right to elect directors to fill a vacancy created by the increase of the board of directors or the resignation, death or removal of a director, which prevents shareholders from having the sole right to fill vacancies on our board of directors. |
Item 4. |
Information on the Company |
A. |
History and Development of the Company |
B. |
Business Overview |
• | Video ads |
• | oCPX pre-defined results other than on a cost-per-click basis, such as on a cost-per-impression, cost-per-action or cost-per-view basis. |
• | Action ads click-to-call, click-to-chat, click-to-download, and click-to-buy, to help marketing customers achieve better conversion. |
• | Customer relationship management (CRM) ad-to-order processes and to increase the return of the ad spending. |
• | Original content. iQIYI’s original content includes high quality content produced in-house and those produced in collaboration with third-parties. iQIYI obtains the intellectual property rights through production, adaptation or purchase from third parties, while the partners, typically established entertainment production companies, are responsible for content development and production. iQIYI maintains a high degree of control during the content development and production process. |
• | Licensed content. iQIYI provides users with a curated selection of high-quality PPC from third parties. iQIYI licenses video content typically at fixed rates for a specified term, and pay licensing fees generally in installments upon signing of the contacts and during the licenses period. iQIYI also exchanges rights to distribute licensed content with other internet video streaming services to enrich our content library. In certain cases, iQIYI has the right of first refusal to purchase new content produced by the licensor. |
• | opposes the fundamental principles stated in the PRC constitution; |
• | compromises national security, divulges state secrets, subverts state power or damages national unity; |
• | harms the dignity or interests of the state; |
• | incites ethnic hatred or racial discrimination or damages inter-ethnic unity; |
• | undermines the PRC’s religious policy or propagates heretical teachings or feudal superstitions; |
• | disseminates rumors, disturbs social order or disrupts social stability; |
• | disseminates obscenity or pornography, encourages gambling, violence, murder or fear or incites the commission of a crime; |
• | insults or slanders a third party or infringes upon the lawful rights and interests of a third party; or |
• | is otherwise prohibited by law or administrative regulations. |
C. |
Organizational Structure |
Name |
Place of Formation |
Relationship |
||||||
Baidu Holdings Limited |
British Virgin Islands |
Wholly owned subsidiary |
||||||
Baidu (Hong Kong) Limited |
Hong Kong |
Wholly owned subsidiary |
||||||
Baidu Online Network Technology (Beijing) Co., Ltd. |
China |
Wholly owned subsidiary |
||||||
Baidu (China) Co., Ltd. |
China |
Wholly owned subsidiary |
||||||
Baidu.com Times Technology (Beijing) Co., Ltd. |
China |
Wholly owned subsidiary |
||||||
Baidu International Technology (Shenzhen) Co., Ltd. |
China |
Wholly owned subsidiary |
||||||
Beijing Baidu Netcom Science Technology Co., Ltd. |
China |
Consolidated affiliated entity |
||||||
Beijing Perusal Technology Co., Ltd. |
China |
Consolidated affiliated entity |
||||||
iQIYI, Inc. |
Cayman Islands |
Majority-owned subsidiary |
* | The diagram above omits the names of subsidiaries and consolidated affiliated entities that are insignificant individually and in the aggregate. |
(1) | Beijing Baidu Netcom Science Technology Co., Ltd. is 99.5% owned by Mr. Robin Yanhong Li, our chairman and chief executive officer, and 0.5% owned by Ms. Shanshan Cui, an executive officer of ours. Please see “Item 6.E. Directors, Senior Management and Employees—Share Ownership” for Mr. Robin Yanhong Li’s beneficial ownership in our company. Ms. Shanshan Cui’s beneficial ownership of our company is less than 1% of our total outstanding shares. |
(2) | Beijing Perusal Technology Co., Ltd. is 50% owned by Ms. Shanshan Cui and 50% owned by Mr. Zhixiang Liang. Both Ms. Shanshan Cui and Mr. Zhixiang Liang are our employees, and their respective beneficial ownership in our company is less than 1% of our total outstanding shares. |
• | receive the economic benefits that could potentially be significant to our consolidated affiliated entities in consideration for the services provided by our subsidiaries; |
• | exercise effective control over our consolidated affiliated entities; and |
• | hold an exclusive option to purchase all or part of the equity interests in our consolidated affiliated entities when and to the extent permitted by PRC law. |
D. |
Property, Plant and Equipment |
Item 4A. |
Unresolved Staff Comments |
Item 5. |
Operating and Financial Review and Prospects |
A. |
Operating Results |
Year ended December 31, |
||||||||||||||||
2017 (2) |
2018 (3) |
2019 (3) |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Consolidated Statements of Comprehensive Income Data |
||||||||||||||||
Revenues: |
||||||||||||||||
Online marketing services |
73,146 |
81,912 |
78,093 |
11,217 |
||||||||||||
Others |
11,663 |
20,365 |
29,320 |
4,212 |
||||||||||||
Total revenues |
84,809 |
102,277 |
107,413 |
15,429 |
||||||||||||
Operating costs and expenses (1) : |
||||||||||||||||
Cost of revenues |
43,062 |
51,744 |
62,850 |
9,028 |
||||||||||||
Selling, general and administrative |
13,128 |
19,231 |
19,910 |
2,860 |
||||||||||||
Research and development |
12,928 |
15,772 |
18,346 |
2,635 |
||||||||||||
Total operating costs and expenses |
69,118 |
86,747 |
101,106 |
14,523 |
||||||||||||
Operating profit |
15,691 |
15,530 |
6,307 |
906 |
||||||||||||
Total other income (loss) |
5,592 |
11,795 |
(6,647 |
) | (955 |
) | ||||||||||
Income taxes |
2,995 |
4,743 |
1,948 |
279 |
||||||||||||
Net income (loss) |
18,288 |
22,582 |
(2,288 |
) | (328 |
) | ||||||||||
Less: Net loss attributable to non-controlling interests |
(13 |
) | (4,991 |
) | (4,345 |
) | (624 |
) | ||||||||
Net income attributable to Baidu, Inc. |
18,301 |
27,573 |
2,057 |
296 |
||||||||||||
(1) Share-based compensation expenses are allocated in operating costs and expenses as follows: |
||||||||||||||||
Cost of revenues |
183 |
224 |
327 |
47 |
||||||||||||
Selling, general and administrative |
973 |
1,725 |
1,768 |
254 |
||||||||||||
Research and development |
2,088 |
2,727 |
3,531 |
507 |
||||||||||||
3,244 |
4,676 |
5,626 |
808 |
|||||||||||||
(2) | VAT is presented in the cost of revenues rather than net against revenues in accordance with the legacy revenue accounting standard (ASC 605). |
(3) | VAT is presented as net against revenues rather than in the cost of revenues in accordance with the new revenue accounting standard (ASC 606). |
For the years ended |
||||||||||||||||
December 31, 2017 |
December 31, 2018 |
December 31, 2019 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Online marketing services |
4,036 |
4,834 |
4,625 |
664 |
||||||||||||
Others |
732 |
1,246 |
1,812 |
261 |
||||||||||||
Total impact of VAT |
4,768 |
6,080 |
6,437 |
925 |
||||||||||||
Year ended December 31, |
||||||||||||||||||||||||
2017 |
2018 |
2019 |
||||||||||||||||||||||
RMB |
RMB |
YoY% |
RMB |
US$ |
YoY% |
|||||||||||||||||||
(In millions, except percentages) |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Baidu Core |
67,681 |
(1) |
78,271 |
22 |
(1) |
79,711 |
11,450 |
2 |
||||||||||||||||
iQIYI |
17,378 |
(2) |
24,989 |
52 |
(2) |
28,994 |
4,165 |
16 |
(1) | Baidu Core net revenue for 2017, excluding the impact of RMB3,778 million in VAT, was RMB63,903 million. |
(2) | iQIYI net revenue for 2017, excluding the impact of RMB982 million in VAT, was RMB16,396 million. |
Year ended December 31, |
||||||||||||||||||||||||
2017 |
2018 |
2019 |
||||||||||||||||||||||
RMB |
RMB |
YoY% |
RMB |
US$ |
YoY% |
|||||||||||||||||||
(In millions, except percentages) |
||||||||||||||||||||||||
Operating Costs and Expenses: |
||||||||||||||||||||||||
Baidu Core |
47,966 |
(1) |
54,463 |
23 |
64,450 |
9,258 |
18 |
|||||||||||||||||
iQIYI |
21,331 |
(2) |
33,295 |
64 |
38,252 |
5,495 |
15 |
(1) | The operating costs and expenses in 2017 was RMB44,188 million excluding the impact of RMB3,778 million of VAT. |
(2) | The operating costs and expenses in 2017 was RMB20,349 million excluding the impact of RMB982 million of VAT. |
(1) |
Performance-based online marketing services |
(2) |
Online display advertising services |
(3) |
Baidu Union online marketing services |
(4) |
Collection |
(5) |
Sales incentives |
(6) |
Membership services |
(7) |
Content distribution |
(8) |
Financial services |
(9) |
Cloud services |
(10) |
Sales of hardware |
(11) |
Other revenue recognition related policies |
B. |
Liquidity and Capital Resources |
• | In June 2016, we entered into a five-year term and revolving facility agreement with a group of 21 syndicated bankers, pursuant to which we are entitled to borrow an unsecured USD denominated floating rate loan of US$1.0 billion with a term of five years and to borrow an unsecured USD denominated revolving loan of US$1.0 billion for five years. The facility was priced at 110 basis points over LIBOR and is intended for our general working capital purposes. In June 2016, we drew down two tranches of US$250 million each under the facility commitment. In November 2016, we drew down another two tranches of US$250 million each under the facility commitment. In connection with the facility agreements, we entered into four interest rate swap agreements, pursuant to which the loans would be settled with a fixed annual interest rate of 2.11%, 2.10%, 2.78% and 2.78% respectively, during the respective term of the loans. |
• | iQIYI has other bank borrowings of RMB1.6 billion (US$232 million), primarily used for working capital purposes, see note 10 to our audited consolidated financial statements included elsewhere in this annual report for further information. |
• | In November 2012, we issued US$750 million senior unsecured notes due in 2017, with stated annual interest rates of 2.25%, and US$750 million senior unsecured notes due in 2022 (“2022 Ten-year Notes”), with stated annual interest rates of 3.50%. The net proceeds from the sale of the notes were used for general corporate purposes. In November 2017, notes with carrying value of US$750 million were fully repaid when they became due. As of December 31, 2019, the total carrying value and estimated fair value of these notes were US$750 million and US$769 million. The estimated fair value was based on quoted prices for our publicly-traded debt securities as of December 31, 2019. We are not subject to any financial covenants or other significant restrictions under the notes. In 2019, we paid an aggregate of US$26 million in interest payments related to these notes. |
• | In August 2013, we issued an aggregate of US$1.0 billion senior unsecured notes due in 2018 (“2018 Notes”), with stated annual interest rate of 3.25%. The net proceeds from the sale of the notes were used for general corporate purposes, including merger and acquisition activities. In August 2018, the notes with carrying value of US$1.0 billion were fully repaid when they became due. |
• | In June 2014, we issued an aggregate of US$1.0 billion senior unsecured notes due in 2019 (“2019 Notes”), with stated annual interest rate of 2.75%. The net proceeds from the sale of the notes were used for general corporate purposes. In June 2019, notes with carrying value of US$1.0 billion were fully repaid when they became due. We are not subject to any financial covenants or other significant restrictions under the notes. In 2019, we paid an aggregate of US$14 million in interest payments related to these notes. |
• | In June 2015, we issued an aggregate of US$750 million senior unsecured notes due in 2020 (“2020 Notes”), with stated annual interest rate of 3.00%, and an aggregate of US$500 million senior unsecured notes due in 2025 (“2025 Notes”), with stated annual interest rate of 4.13%. The net proceeds from the sale of the notes were used for general corporate purposes. As of December 31, 2019, the total carrying value and estimated fair value were US$750 million and US$753 million, respectively, with respect to the 2020 Notes, and US$500 million and US$531 million, respectively, with respect to the 2025 Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2019. We are not subject to any financial covenants or other significant restrictions under the notes. During 2019, we paid an aggregate of US$43 million in interest payments related to these notes. |
• | In July 2017, we issued an aggregate of US$900 million senior unsecured notes due in 2022 (“2022 Five-year Notes”), with stated annual interest rate of 2.88%, and an aggregate of US$600 million senior unsecured notes due in 2027 (“2027 Notes”), with stated annual interest rate of 3.63%. The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. As of December 31, 2019, the total carrying value and estimated fair value were US$900 million and US$907 million, respectively, with respect to the 2022 Five-year Notes, and US$600 million and US$616 million, respectively, with respect to the 2027 Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2019. We are not subject to any financial covenants or other significant restrictions under the notes. In 2019, the interest payments related to these notes were US$48 million. |
• | In March 2018, we issued an aggregate of US$1.0 billion senior unsecured notes due in 2023 (“2023 Notes”), with stated annual interest rate of 3.88%, and an aggregate of US$500 million senior unsecured notes due in 2028 (“2028 March Notes”), with stated annual interest rate of 4.38%. The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. As of December 31, 2019, the total carrying value and estimated fair value were US$1.0 billion and US$1.0 billion, respectively, with respect to the 2023 Notes, and US$500 million and US$539 million, respectively, with respect to the 2028 March Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2019. We are not subject to any financial covenants or other significant restrictions under the notes. In 2019, the interest payments related to these notes were US$61 million. |
• | In November 2018, we issued an aggregate of US$600 million senior unsecured notes due in 2024 (“2024 November Notes”), with stated annual interest rate of 4.38%, and an aggregate of US$400 million senior unsecured notes due in 2028 (“2028 November Notes”), with stated annual interest rate of 4.88%. In December 2018, we issued an aggregate of US$250 million senior unsecured notes due in 2024 (“2024 December Notes”), with stated annual interest rate of 4.38%, which constitute a further issuance of, and be fungible with and be consolidated and form a single series with the 2024 November Notes. The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. As of December 31, 2019, the total carrying value and estimated fair value were US$600 million and US$637 million, respectively, with respect to the 2024 November Notes, US$400 million and US$448 million, respectively, with respect to the 2028 November Notes, and US$250 million and US$265 million, respectively, with respect to the 2024 December Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2019. We are not subject to any financial covenants or other significant restrictions under the notes. In 2019, the interest payments related to these notes were US$57 million. |
• | In December 2018, iQIYI issued US$750 million convertible senior notes due 2023 (“iQIYI 2023 Convertible Notes”). The iQIYI 2023 Convertible Notes are senior, unsecured obligations of iQIYI, and interest is payable semi-annually in cash at a rate of 3.75% per annum with a maturity date of December 1, 2023, unless previously repurchased, redeemed or converted prior to such date. The initial conversion rate of the iQIYI 2023 Convertible Notes is 37.1830 of iQIYI’s ADSs per US$1,000 principal amount of the iQIYI 2023 Convertible Notes. Upon conversion, iQIYI will pay or deliver to such converting holders, as the case may be, cash, ADSs, or a combination of cash and ADSs, at its election. |
• | In March 2019, iQIYI issued US$1.2 billion convertible senior notes due 2025 (“iQIYI 2025 Convertible Notes”). The iQIYI 2025 Convertible Notes are senior, unsecured obligations of iQIYI, and interest is payable semi-annually in cash at a rate of 2.00% per annum with a maturity date of April 1, 2025, unless previously repurchased, redeemed or converted prior to such date. The initial conversion rate of the iQIYI 2025 Convertible Notes is 33.0003 of iQIYI’s ADSs per US$1,000 principal amount of the iQIYI 2025 Convertible Notes. Upon conversion, iQIYI will pay or deliver to such converting holders, as the case may be, cash, ADSs, or a combination of cash and ADSs, at its election. |
Year ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Net cash provided by operating activities |
32,828 |
35,967 |
28,458 |
4,088 |
||||||||||||
Net cash used in investing activities |
(76,949 |
) | (34,460 |
) | (19,974 |
) | (2,869 |
) | ||||||||
Net cash provided by (used in) financing activities |
44,557 |
15,082 |
(3,873 |
) | (556 |
) | ||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(316 |
) | 1,902 |
1 |
— |
|||||||||||
Net increase in cash, cash equivalents and restricted cash |
120 |
18,491 |
4,612 |
663 |
||||||||||||
Cash, cash equivalents and restricted cash at beginning of the year |
11,216 |
11,336 |
29,827 |
4,284 |
||||||||||||
Cash, cash equivalents and restricted cash at end of the year |
11,336 |
29,827 |
34,439 |
4,947 |
C. |
Research and Development |
D. |
Trend Information |
E. |
Off-Balance Sheet Arrangements |
F. |
Contractual Obligations |
Payment Due by Period |
||||||||||||||||||||
Total |
Less Than 1 Year |
1-3 Years |
3-5 Years |
More Than 5 Years |
||||||||||||||||
(In RMB millions) |
||||||||||||||||||||
Long-term debt obligations (1) |
75,655 |
8,085 |
23,149 |
20,456 |
23,965 |
|||||||||||||||
Operating lease obligations (2) |
7,465 |
2,350 |
3,012 |
1,708 |
395 |
|||||||||||||||
Purchase obligations for fixed assets |
560 |
559 |
1 |
— |
— |
|||||||||||||||
Purchase obligations for bandwidth and property management fees |
1,029 |
652 |
186 |
128 |
63 |
|||||||||||||||
Purchase obligations for video content (3) |
22,300 |
8,935 |
10,742 |
2,308 |
315 |
|||||||||||||||
Investment commitment obligations (4) |
1,277 |
NA |
NA |
NA |
NA |
|||||||||||||||
Total |
108,286 |
20,581 |
37,090 |
24,600 |
24,738 |
(1) | Including estimated interest payments of RMB10.0 billion in total (RMB2.2 billion, RMB3.8 billion, RMB2.3 billion and RMB1.7 billion over the periods of less than one year, one to three years, three to five years and more than five years from December 31, 2019, respectively). Please see “Loans Payable” under Note 10, “Notes Payable” under Note 11 and “Convertible Notes” under Note 12 to our audited consolidated financial statements. |
(2) | Operating lease obligations represent our obligations for leasing internet data center facilities and office premises, which include all future cash outflows under ASC Topic 842, Leases |
(3) | Purchase obligations for video content consist primarily of expenditures for video content under non-cancelable agreements for licensed copyrights and produced content. |
(4) | Our investment commitments primarily relate to capital contributions obligation under certain arrangements which do not have contractual maturity date. |
Item 6. |
Directors, Senior Management and Employees |
A. |
Directors and Senior Management |
Directors and Executive Officers |
Age |
Position/Title | ||||
Robin Yanhong Li |
51 |
Chairman of the Board of Directors and Chief Executive Officer | ||||
Herman Yu |
49 |
Chief Financial Officer | ||||
Haifeng Wang |
48 |
Chief Technology Officer | ||||
Dou Shen |
40 |
Executive Vice President | ||||
Shanshan Cui |
44 |
Senior Vice President | ||||
James Ding |
54 |
Independent Director | ||||
Brent Callinicos |
54 |
Independent Director | ||||
Yuanqing Yang |
55 |
Independent Director | ||||
Jixun Foo |
51 |
Independent Director |
B. |
Compensation |
Name |
Ordinary Shares Underlying Outstanding Options |
Exercise Price (US$/Share) |
Grant Date |
Expiration Date |
||||||||||||
Robin Yanhong Li |
4,247 |
1,058.90 |
January 25, 2011 |
January 25, 2021 |
||||||||||||
4,279 |
1,418.30 |
February 16, 2012 |
February 16, 2022 |
|||||||||||||
10,598 |
1,083.00 |
January 31, 2013 |
January 31, 2023 |
|||||||||||||
2,415 |
1,725.30 |
February 24, 2014 |
February 24, 2024 |
|||||||||||||
11,977 |
2,146.70 |
February 11, 2015 |
February 11, 2025 |
|||||||||||||
43,904 |
2,069.00 |
April 16, 2015 |
April 16, 2025 |
|||||||||||||
14,634 |
(1) |
— |
April 16, 2015 |
N/A |
||||||||||||
2,638 |
1,582.20 |
February 25, 2016 |
February 25, 2026 |
|||||||||||||
9,060 |
1,751.00 |
October 27, 2016 |
October 27, 2026 |
|||||||||||||
883 |
(1) |
— |
October 27, 2016 |
N/A |
||||||||||||
5,864 |
1,860.10 |
February 22, 2017 |
February 22, 2027 |
|||||||||||||
2,760 |
(1) |
— |
February 22, 2017 |
N/A |
||||||||||||
7,449 |
(1) |
— |
February 9, 2018 |
N/A |
||||||||||||
13,105 |
(1) |
— |
February 18, 2019 |
N/A |
||||||||||||
3,757 |
(1) |
— |
May 23, 2019 |
N/A |
||||||||||||
Herman Yu |
* |
0.1 |
February 9, 2018 |
February 9, 2028 |
||||||||||||
* |
0.1 |
February 18, 2019 |
February 18, 2029 |
|||||||||||||
* |
0.1 |
May 23, 2019 |
May 23, 2029 |
|||||||||||||
Dou Shen |
* |
(1) |
— |
February 25, 2016 |
N/A |
|||||||||||
* |
(1) |
— |
April 28, 2016 |
N/A |
||||||||||||
* |
(1) |
— |
February 22, 2017 |
N/A |
||||||||||||
* |
(1) |
— |
July 26, 2017 |
N/A |
||||||||||||
* |
(1) |
— |
February 9, 2018 |
N/A |
||||||||||||
* |
(1) |
— |
February 18, 2019 |
N/A |
||||||||||||
* |
(1) |
— |
May 23, 2019 |
N/A |
||||||||||||
* |
998.90 |
August 8, 2019 |
August 8, 2029 |
|||||||||||||
* |
(1) |
— |
August 8, 2019 |
N/A |
||||||||||||
* |
(1) |
— |
October 28, 2019 |
N/A |
||||||||||||
Haifeng Wang |
* |
(1) |
— |
February 25, 2016 |
N/A |
|||||||||||
* |
(1) |
— |
February 22, 2017 |
N/A |
||||||||||||
* |
1,878.60 |
April 27, 2017 |
April 27, 2027 |
|||||||||||||
* |
(1) |
— |
April 27, 2017 |
N/A |
||||||||||||
* |
(1) |
— |
February 9, 2018 |
N/A |
||||||||||||
* |
(1) |
— |
July 21, 2018 |
N/A |
||||||||||||
* |
(1) |
— |
February 18, 2019 |
N/A |
||||||||||||
* |
(1) |
— |
May 23, 2019 |
N/A |
||||||||||||
* |
998.90 |
August 8, 2019 |
August 8, 2029 |
|||||||||||||
Shanshan Cui |
* |
(1) |
— |
February 9, 2018 |
N/A |
|||||||||||
* |
(1) |
— |
February 18, 2019 |
N/A |
||||||||||||
* |
(1) |
— |
May 23, 2019 |
N/A |
||||||||||||
Jixun Foo |
* |
(1) |
— |
August 8, 2019 |
N/A |
|||||||||||
James Ding |
* |
(1) |
— |
February 9, 2018 |
N/A |
|||||||||||
Brent Callinicos |
* |
(1) |
— |
February 9, 2018 |
N/A |
|||||||||||
Yuanqing Yang |
* |
(1) |
— |
February 9, 2018 |
N/A |
|||||||||||
Other individuals as a group |
1,595,131 |
— |
— |
— |
* | The options and restricted shares in aggregate held by each of these directors and officers represent less than 1% of our total outstanding shares. |
(1) | Restricted shares. |
• | options; |
• | restricted shares; |
• | restricted share units; and |
• | any other form of awards granted to a participant pursuant to the 2008 plan. |
• | options; |
• | restricted shares; |
• | restricted share units; and |
• | any other form of awards granted to a participant pursuant to the 2018 plan. |
C. |
Board Practices |
• | appointing, retaining and overseeing the work of the independent auditors, including resolving disagreements between the management and the independent auditors relating to financial reporting; |
• | pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
• | reviewing annually the independence and quality control procedures of the independent auditors; |
• | reviewing and approving all proposed related party transactions; |
• | discussing the annual audited financial statements with the management; |
• | meeting separately with the independent auditors to discuss critical accounting policies, management letters, recommendations on internal controls, the auditor’s engagement letter and independence letter and other material written communications between the independent auditors and the management; and |
• | attending to such other matters that are specifically delegated to our audit committee by our board of directors from time to time. |
• | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; |
• | reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; |
• | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
• | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
• | recommending to the board nominees for election or re-election to the board or for appointments to fill any vacancies; |
• | reviewing annually the performance of each incumbent director in determining whether to recommend such director for an additional term; |
• | overseeing the board in the board’s annual review of its own performance and the performance of the management; and |
• | considering, preparing and recommending to the board such policies and procedures with respect to corporate governance matters as may be required or required to be disclosed under the applicable laws or otherwise considered to be material. |
D. |
Employees |
E. |
Share Ownership |
• | each of our current directors and executive officers; and |
• | each person known to us to own beneficially more than 5% of our shares. |
Shares Beneficially Owned |
||||||||
Directors and Executive Officers: |
Number (1) |
% (2) |
||||||
Robin Yanhong Li (3) |
5,692,798 |
16.4 |
% | |||||
Herman Yu |
* |
* |
||||||
Dou Shen |
* |
* |
||||||
Haifeng Wang |
* |
* |
||||||
Shanshan Cui |
* |
* |
||||||
James Ding (4) |
* |
* |
||||||
Brent Callinicos (5) |
* |
* |
||||||
Yuanqing Yang (6) |
* |
* |
||||||
Jixun Foo (7) |
* |
* |
||||||
All Directors and Executive Officers as a Group (8) |
5,713,741 |
16.5 |
% | |||||
Principal Shareholders: |
||||||||
Handsome Reward Limited (9) |
5,490,000 |
15.8 |
% |
* | Less than 1% of our total outstanding Class A ordinary shares and Class B ordinary shares. |
** | Except for James Ding, Yuanqing Yang, Brent Callinicos and Jixun Foo, the business address of our directors and executive officers is c/o Baidu, Inc., Baidu Campus, No. 10 Shangdi 10th Street, Haidian District, Beijing 100085, PRC. |
(1) | The number of shares beneficially owned by each named director and executive officer includes the shares beneficially owned by such person, the shares underlying all options held by such person that have vested or will vest within 60 days after January 31, 2020, and restricted shares held by such person that will vest within 60 days after January 31, 2020. The options and restricted shares were granted under our 2008 share incentive plan and 2018 share incentive plan. |
(2) | Percentage of beneficial ownership of each named director and executive officer is based on 34,584,829 ordinary shares (consisting of 27,383,575 Class A ordinary shares and 7,201,254 Class B ordinary shares) of our company outstanding as of January 31, 2020, the number of ordinary shares underlying options that have vested or will vest within 60 days after January 31, 2020, and the number of restricted shares that will vest within 60 days after January 31, 2020, each as held by such person as of that date. |
(3) | Includes (i) 37,665 Class A Ordinary Shares directly held by Mr. Li on record, (ii) 21,897 Class A ordinary shares in the form of ADSs held in the brokerage account of the administrator of our employee stock option program, (iii) 44,668 restricted Class A Ordinary Shares that had vested as of January 31, 2020, (iv) 98,568 Class A Ordinary Shares issuable upon exercise of options and vesting of restricted shares within 60 days after the date of January 31, 2020, (v) 5,490,000 Class B Ordinary Shares held by Handsome Reward Limited, a British Virgin Islands company wholly owned and controlled by Mr. Li, and (vi) excludes 1,510,000 Class B Ordinary Shares owned by Melissa Ma, Mr. Li’s wife, who also had 8,722 ADSs in the brokerage account of the administrator of our employee stock option program and the right to acquire 1,523 Class A Ordinary Shares upon the vesting of restricted share units granted under the Company’s share incentive plan within 60 days after January 31, 2020, of which Mr. Li disclaims beneficial ownership. The voting power of the shares beneficially owned by Mr. Li represented 55.4% of the total outstanding voting power of our company as of January 31, 2020. |
(4) | The business address of Mr. Ding is 56/F, China World Tower 3, No. 1 Jianguomenwai Street, Chaoyang District, Beijing 100004, PRC. |
(5) | The residential address of Mr. Callinicos is 4110 Woodleigh Lane, La Canada Flintridge, CA 91011. USA. |
(6) | The business address of Mr. Yang is Lenovo Headquarter East, Building 1, No. 10 Courtyard Xibeiwang East Road, Haidian District, Beijing 100094, PRC. |
(7) | The business address of Mr. Foo is 35/F, Shanghai International Finance Center 2, No. 8 Century Avenue, Pudong, Shanghai 200120, PRC. |
(8) | Includes ordinary shares, ordinary shares issuable upon exercise of options and restricted shares, held by all of our directors and executive officers as a group. |
(9) | Represents 5,490,000 Class B ordinary shares held by Handsome Reward Limited, a British Virgin Island company wholly owned and controlled by Mr. Robin Yanhong Li. The business address of Handsome Reward Limited is c/o Robin Yanhong Li, Baidu, Inc., Baidu Campus, No. 10 Shangdi 10th Street, Haidian District, Beijing 100085, PRC. |
Item 7. |
Major Shareholders and Related Party Transactions |
A. |
Major Shareholders |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
Item 8. |
Financial Information |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
Item 9. |
The Offer and Listing |
A. |
Offering and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
Item 10. |
Additional Information |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
• | banks; |
• | financial institutions; |
• | insurance companies; |
• | broker dealers; |
• | persons that elect to mark their securities to market; |
• | tax-exempt entities; |
• | persons liable for the alternative minimum tax; |
• | regulated investment companies; |
• | certain expatriates or former long-term residents of the United States; |
• | governments or agencies or instrumentalities thereof; |
• | persons holding an ADS or ordinary share as part of a straddle, hedging, conversion or integrated transaction; |
• | persons that actually or constructively own ADSs or ordinary shares representing 10% or more of our voting power or value; |
• | persons who are required to recognize income for U.S. federal income tax purposes no later than when such income is taken into account in applicable financial statements; |
• | persons whose functional currency is other than the U.S. dollar; or |
• | persons who acquired our ADSs or ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation. |
• | a citizen or individual resident of the United States; |
• | a corporation (or other entity subject to tax as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States, any State or the District of Columbia; |
• | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
• | a trust that (i) is subject to the supervision of a court within the United States and the control of one or more U.S. persons or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
• | the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares, |
• | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income, and |
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for you for such year and would be increased by an additional tax equal to interest on the resulting tax deemed deferred with respect to each such other taxable year. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
Item 11. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 12. |
Description of Securities Other than Equity Securities |
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
Persons depositing or withdrawing shares must pay: |
For: | |
US$5.00 or less per 100 ADSs (or portion thereof) |
• Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property | |
US$5.00 or less per 100 ADS (or portion thereof) |
• Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates | |
US$0.02 or less per ADS (or portion thereof) |
• Any cash distribution to ADS holders | |
A fee equivalent to the fee that would be payable if securities distributed had been shares and the shares had been deposited for issuance of ADSs |
• Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders | |
US$0.02 or less per ADS (or portion thereof) per calendar year (if the depositary has not collected any cash distribution fee during that year) |
• Depositary services | |
Expenses of the depositary |
• Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) | |
• Converting foreign currency to U.S. dollars | ||
Registration or transfer fees |
• Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes |
• As necessary | |
Any charges incurred by the depositary or its agents for servicing the deposited securities |
• As necessary |
Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. |
Controls and Procedures |
Item 16A. |
Audit Committee Financial Expert |
Item 16B. |
Code of Ethics |
Item 16C. |
Principal Accountant Fees and Services |
2018 (RMB in thousands) |
2019 (RMB in thousands) |
|||||||
Audit fees (1) |
29,074 |
30,503 |
||||||
Audit-related fees (2) |
4,697 |
1,068 |
||||||
Tax fees (3) |
208 |
— |
(1) | “Audit fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors for the audit of our annual financial statements and assistance with and review of documents filed with the SEC. In 2018 and 2019, the audit refers to financial audit and audit pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. |
(2) | “Audit-related fees” means fees billed in 2018 and 2019 for professional services rendered by our principal auditors associated with certain due diligence projects. |
(3) | “Tax fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors for tax compliance, tax advice, and tax planning. In 2018, the tax fees refer to fees paid to our principal auditors for reviewing the compliance of our tax documentation and providing tax advices. |
Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Period |
Total Number of ADSs Purchased |
Average Price Paid Per ADS |
Total Number of ADSs Purchased as Part of the Publicly Announced Plan |
Approximate Dollar Value of ADSs that May Yet Be Purchased Under the Plan |
||||||||||||
May 1 – May 31, 2019 |
2,591,417 |
US$ | 112.15 |
2,591,417 |
US$ | 709,379,925 |
||||||||||
August 1 – August 31, 2019 |
2,582,880 |
US$ | 104.28 |
2,582,880 |
US$ | 440,045,461 |
||||||||||
October 1 – October 31, 2019 |
1,277,274 |
US$ | 99.61 |
1,277,274 |
US$ | 312,814,075 |
||||||||||
December 1 – December 31, 2019 |
193,767 |
US$ | 114.92 |
193,767 |
US$ | 290,546,496 |
||||||||||
Total |
6,645,338 |
US$ |
106.76 |
6,645,338 |
US$ |
290,546,496 |
Item 16F. |
Change in Registrant’s Certifying Accountant |
Item 16G. |
Corporate Governance |
Item 16H. |
Mine Safety Disclosure |
Item 17. |
Financial Statements |
Item 18. |
Financial Statements |
Item 19. |
Exhibits |
Exhibit Number |
Description of Document | |||
1.1 |
||||
2.1 |
||||
2.2 |
||||
2.3 |
||||
2.4 |
||||
2.5 |
||||
2.6 |
||||
2.7 |
Exhibit Number |
Description of Document | |||
2.8 |
||||
2.9 |
||||
2.10 |
||||
2.11 |
||||
2.12 |
||||
2.13 |
||||
2.14 |
||||
2.15 |
||||
2.16 |
||||
2.17 |
||||
2.18 |
||||
2.19 |
||||
2.20 |
||||
2.21 |
||||
2.22 |
Exhibit Number |
Description of Document | |||
2.23 |
Description of American Depositary Shares of the Registrant (incorporated herein by reference to the section titled “Description of American Depositary Shares” in the Registrant’s registration statement on Form F-1 (File No. 333-126534), originally filed with the Securities and Exchange Commission on July 12, 2005, as amended, including any form of prospectus contained therein pursuant to Rule 424(b) under the Securities Act of 1933 and (ii) the Registrant’s registration statement on Form 8-A (File No. 000-51469), filed with the Securities and Exchange Commission on August 1, 2005) | |||
2.24 |
Description of the Registrant’s US$750,000,000 3.50% Notes Due 2022 (incorporated herein by reference to (i) the section titled “Description of Debt Securities” in the Registrants’ registration statement on Form F-3 (File No. 333-184757) filed with the Securities and Exchange Commission on November 5, 2012 and (ii) the section titled “Description of the Notes” in the prospectus supplement, in the form filed by the Registrant with the Securities and Exchange Commission on November 20, 2012 pursuant to Rule 424(b) under the Securities Act of 1933, as amended) | |||
2.25 |
Description of the Registrant’s US$750,000,000 3.00% Notes Due 2020 and US$500,000,000 4.13% Notes Due 2025 (incorporated herein by reference to (i) the section titled “Description of Debt Securities” in the Registrants’ registration statement on Form F-3 (File No. 333-184757) filed with the Securities and Exchange Commission on November 5, 2012 and (ii) the section titled “Description of the Notes” in the prospectus supplement, in the form filed by the Registrant with the Securities and Exchange Commission on June 23, 2015 pursuant to Rule 424(b) under the Securities Act of 1933, as amended) | |||
2.26 |
Description of the Registrant’s US$900,000,000 2.88% Notes Due 2022 and US$600,000,000 3.63% Notes Due 2027 (incorporated herein by reference to (i) the section titled “Description of Debt Securities” in the Registrants’ registration statement on Form F-3 (File No. 333-218972) filed with the Securities and Exchange Commission on June 26, 2017 and (ii) the section titled “Description of the Notes” in the prospectus supplement, in the form filed by the Registrant with the Securities and Exchange Commission on June 28, 2017 pursuant to Rule 424(b) under the Securities Act of 1933, as amended) | |||
2.27 |
Description of the Registrant’s US$1,000,000,000 3.88% Notes Due 2023 and US$500,000,000 4.38% Notes Due 2028 (incorporated herein by reference to (i) the section titled “Description of Debt Securities” in the Registrants’ registration statement on Form F-3 (File No. 333-218972) filed with the Securities and Exchange Commission on June 26, 2017 and (ii) the section titled “Description of the Notes” in the prospectus supplement, in the form filed by the Registrant with the Securities and Exchange Commission on March 22, 2018 pursuant to Rule 424(b) under the Securities Act of 1933, as amended) | |||
2.28 |
Description of the Registrant’s US$600,000,000 4.38% Notes Due 2024 and US$400,000,000 4.88% Notes Due 2028 (incorporated herein by reference to (i) the section titled “Description of Debt Securities” in the Registrants’ registration statement on Form F-3 (File No. 333-218972) filed with the Securities and Exchange Commission on June 26, 2017 and (ii) the section titled “Description of the Notes” in the prospectus supplement, in the form filed by the Registrant with the Securities and Exchange Commission on November 8, 2018 pursuant to Rule 424(b) under the Securities Act of 1933, as amended) | |||
4.1 |
||||
4.2 |
Exhibit Number |
Description of Document | |||
4.3 |
||||
4.4 |
||||
4.5 |
||||
4.6 |
||||
4.7 |
||||
4.8 |
||||
4.9 |
||||
4.10 |
||||
4.11 |
||||
4.12 |
||||
4.13 |
||||
4.14 |
Exhibit Number |
Description of Document | |||
4.15 |
||||
4.16 |
||||
4.17 |
||||
4.18 |
||||
4.19 |
||||
4.20 |
||||
4.21 |
||||
4.22 |
||||
4.23 |
||||
4.24 |
||||
4.25 |
Exhibit Number |
Description of Document | |||
4.26 |
||||
4.27 |
||||
4.28 |
||||
4.29 |
||||
4.30 |
||||
4.31 |
||||
4.32 |
||||
4.33 |
||||
4.34 |
||||
4.35 |
||||
4.36 |
Exhibit Number |
Description of Document | |||
4.37 |
||||
4.38 |
||||
4.39 |
||||
4.40 |
||||
4.41 |
||||
4.42 |
||||
4.43 |
||||
4.44 |
||||
4.45 |
||||
4.46 |
||||
4.47 |
||||
4.48 |
||||
4.49 |
Exhibit Number |
Description of Document | |||
4.50 |
||||
4.51 |
||||
4.54 |
||||
4.55 |
||||
4.56 |
||||
4.58 |
||||
4.59 |
||||
4.60 |
||||
4.61 |
||||
4.62 |
||||
4.63 |
||||
4.64 |
||||
4.65 |
Exhibit Number |
Description of Document | |||
4.66 |
||||
4.67 |
||||
4.69 |
||||
4.70 |
||||
4.71 |
||||
4.72 |
||||
4.73 |
||||
4.74 |
||||
4.75 |
||||
4.76 |
||||
4.77 |
||||
4.78 |
Exhibit Number |
Description of Document | |||
4.79 |
||||
4.80 |
||||
4.81 |
||||
4.82 |
||||
4.83* |
||||
4.84* |
||||
4.85* |
||||
4.86* |
||||
4.87* |
||||
4.88* |
||||
4.89* |
||||
4.90* |
||||
4.91* |
||||
8.1* |
||||
11.1 |
||||
12.1* |
||||
12.2* |
||||
13.1** |
||||
13.2** |
Exhibit Number |
Description of Document | |||
15.1* |
||||
15.2* |
||||
15.3* |
||||
101.INS* |
Inline XBRL Instance Document—this instance document does not appear in the Interactive Data File because its XBRL tags are not embedded within the Inline XBRL document | |||
101.SCH* |
Inline XBRL Taxonomy Extension Schema Document | |||
101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed herewith |
** | Furnished herewith |
Baidu, Inc. | ||
By: |
/s/ Robin Yanhong Li | |
Name: Robin Yanhong Li | ||
Title: Chairman and Chief Executive Officer |
Page(s) |
||||
F-2 – F-5 |
||||
F-6 |
||||
F-7 |
||||
F-8 – F-9 |
||||
F-10 – F-11 |
||||
F-12 – F-80 |
Description of the Matter |
As of December 31, 2019, the carrying amount of the Company’s equity investments accounted for using the measurement alternative was RMB24,686 million. As discussed in Notes 2, 4 and 23 to the consolidated financial statements, the Company elected to use the measurement alternative to measure equity investments without readily determinable fair values at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. For the year ended December 31, 2019, gross unrealized gains (upward adjustments) of RMB1,447 million and gross unrealized losses (downward adjustments excluding impairment) of RMB863 million were recognized on equity investments still held at the reporting date in other income. Auditing the valuation of equity investments accounted for using the measurement alternative was complex as significant judgment is required in the determination of whether an investment held by the Company is similar to an instrument of the same issuer with an observable price change in an orderly transaction, and the resulting price adjustment for the different rights and obligations of the instruments. This process entails an evaluation of the difference in rights and obligations between the two instruments, such as liquidation preferences and redemption features, and the selection of appropriate valuation methodologies and underlying assumptions to measure the price adjustment. | |
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s processes of identifying similar instruments and determining the price adjustment of equity investments accounted for using the measurement alternative. For example, we tested controls over management’s assessment of whether the instruments with observable price changes in orderly transactions compared to those held by the Company are similar. We also tested controls over management’s review of the price adjustments recognized for the equity investments held. To audit the valuation of equity investments accounted for using the measurement alternative, we performed audit procedures that included, among others, obtaining an understanding of management’s process for identifying observable price changes in orderly transactions and their framework for considering differences in rights and obligations for assessing whether instruments are similar. On a sample basis, we read the investment agreements to compare the rights and obligations of the instruments with observable price changes in orderly transactions to the instruments held by the Company. We assessed the reasonableness of the probability of exit events as it relates to liquidation and redemption preferences, based on information available as of the observable transaction date. We evaluated the appropriateness of the valuation methodologies and underlying assumptions used by management to derive the price adjustments with the assistance of our internal valuation specialists, including benchmarking expected volatility to those of comparable companies. In addition, we recalculated the adjustments made to carrying values of the equity investments held and traced the unrealized gains or losses to the amounts recorded in the Company’s accounting records. |
As of December 31, |
||||||||||||||||
Notes |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
US$ |
||||||||||||||
ASSETS |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
|
|
|
|||||||||||||
Restricted cash |
|
|
|
|||||||||||||
Short-term investments |
4 |
|
|
|
||||||||||||
Accounts receivable, net of allowance of RMB ) for 2018 and 2019, respectively |
5 |
|
|
|
||||||||||||
Amounts due from related parties |
21 |
|
|
|
||||||||||||
Other current assets, net |
6 |
|
|
|
||||||||||||
Total current assets |
|
|
|
|||||||||||||
Non-current assets: |
||||||||||||||||
Fixed assets, net |
7 |
|
|
|
||||||||||||
Intangible assets, net |
8 |
|
|
|
||||||||||||
Goodwill |
8 |
|
|
|
||||||||||||
Long-term investments, net |
4 |
|
|
|
||||||||||||
Amounts due from related parties |
21 |
|
|
|
||||||||||||
Deferred tax assets, net |
14 |
|
|
|
||||||||||||
Operating lease right-of-use assets |
13 |
|
|
|
||||||||||||
Other non-current assets |
6 |
|
|
|
||||||||||||
Total non-current assets |
|
|
|
|||||||||||||
Total assets |
|
|
|
|||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||
Current liabilities |
1 |
|||||||||||||||
Short-term loans |
10 |
|
|
|
||||||||||||
Accounts payable and accrued liabilities |
9 |
|
|
|
||||||||||||
Customer deposits and deferred revenue |
|
|
|
|||||||||||||
Deferred income |
|
|
|
|||||||||||||
Long-term loans, current portion |
10 |
|
|
|
||||||||||||
Notes payable, current portion |
11 |
|
|
|
||||||||||||
Amounts due to related parties |
21 |
|
|
|
||||||||||||
Operating lease liabilities |
13 |
|
|
|
||||||||||||
Total current liabilities |
|
|
|
|||||||||||||
Non-current liabilities |
1 |
|||||||||||||||
Deferred income |
|
|
|
|||||||||||||
Deferred revenue |
|
|
|
|||||||||||||
Amounts due to related parties |
21 |
|
|
|
||||||||||||
Long-term loans |
10 |
|
|
|
||||||||||||
Notes payable |
11 |
|
|
|
||||||||||||
Convertible senior notes |
12 |
|
|
|
||||||||||||
Deferred tax liabilities |
14 |
|
|
|
||||||||||||
Operating lease liabilities |
13 |
|
|
|
||||||||||||
Other non-current liabilities |
|
|
|
|||||||||||||
Total non-current liabilities |
|
|
|
|||||||||||||
Total liabilities |
|
|
|
|||||||||||||
Commitments and contingencies |
16 |
|||||||||||||||
Redeemable noncontrolling interests |
17 |
|
|
|
||||||||||||
Equity |
||||||||||||||||
Class A ordinary shares, par value US$ |
18 |
|
|
|
||||||||||||
Class B ordinary shares, par value US$ |
18 |
|
|
|
||||||||||||
Additional paid-in capital |
|
|
|
|||||||||||||
Retained earnings |
18 |
|
|
|
||||||||||||
Accumulated other comprehensive income ( loss ) |
18 |
|
( |
) | ( |
) | ||||||||||
Total Baidu, Inc. shareholders’ equity |
|
|
|
|||||||||||||
Noncontrolling interests |
|
|
|
|||||||||||||
Total equity |
|
|
|
|||||||||||||
Total liabilities, redeemable noncontrolling interests and equity |
|
|
|
|||||||||||||
For the Years Ended December 31, |
||||||||||||||||||||
Notes |
2017 |
2018 |
2019 |
2019 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
Revenues: |
||||||||||||||||||||
Online marketing services |
|
|
|
|
||||||||||||||||
Others |
|
|
|
|
||||||||||||||||
Total revenues |
2 |
|
|
|
|
|||||||||||||||
Operating costs and expenses: |
||||||||||||||||||||
Cost of revenues |
|
|
|
|
||||||||||||||||
Selling, general and administrative |
|
|
|
|
||||||||||||||||
Research and development |
|
|
|
|
||||||||||||||||
Total operating costs and expenses |
|
|
|
|
||||||||||||||||
Operating profit |
|
|
|
|
||||||||||||||||
Other income: |
||||||||||||||||||||
Interest income |
|
|
|
|
||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Foreign exchange gain (loss), net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Loss from equity method investments |
4 |
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Others, net |
4 |
|
|
( |
) | ( |
) | |||||||||||||
Total other income |
|
|
( |
) |
( |
) | ||||||||||||||
Income (loss) before income taxes |
|
|
( |
) |
( |
) | ||||||||||||||
Income taxes |
14 |
|
|
|
|
|||||||||||||||
Net income (loss) |
|
|
( |
) |
( |
) | ||||||||||||||
Less: net income (loss) attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Net income attributable to Baidu, Inc. |
|
|
|
|
||||||||||||||||
Earnings per share for Class A and Class B ordinary shares: |
19 |
|||||||||||||||||||
Basic |
|
|
|
|
||||||||||||||||
Diluted |
|
|
|
|
||||||||||||||||
Earnings per ADS (1 Class A ordinary share equals |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of Class A and Class B ordinary shares outstanding: |
||||||||||||||||||||
Basic |
|
|
|
|
||||||||||||||||
Diluted |
|
|
|
|
||||||||||||||||
Other comprehensive income (loss): |
18 |
|||||||||||||||||||
Foreign currency translation adjustments |
|
|
( |
) | ( |
) | ||||||||||||||
Unrealized gains (losses) on available-for-sale investments, net of reclassification |
|
|
( |
) | ( |
) | ||||||||||||||
Other comprehensive income (loss), net of tax |
|
|
( |
) |
( |
) | ||||||||||||||
Comprehensive income ( loss ) |
|
|
( |
) |
( |
) | ||||||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Comprehensive income attributable to Baidu, Inc. |
|
|
|
|
For the Years Ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income ( loss ) |
|
|
( |
) | ( |
) | ||||||||||
Adjustments to reconcile net income to net cash generated from operating activities: |
||||||||||||||||
Depreciation of fixed assets and computer parts |
|
|
|
|
||||||||||||
Amortization of intangible assets |
|
|
|
|
||||||||||||
Deferred income tax, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Share-based compensation |
|
|
|
|
||||||||||||
Provision for doubtful accounts |
|
|
|
|
||||||||||||
Investment and interest income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amortization and impairment of produced content |
|
|
|
|
||||||||||||
Impairment of other assets |
|
|
|
|
||||||||||||
Loss from equity method investments |
|
|
|
|
||||||||||||
(Gain) loss on disposal of subsidiaries |
( |
) | ( |
) | |
|
||||||||||
Barter transaction revenue |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other non-cash expenses |
|
|
|
|
||||||||||||
Other |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Changes in operating assets and liabilities, net of effects of acquisitions and disposals: |
||||||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amounts due from related parties |
|
|
( |
) | ( |
) | ||||||||||
Other assets |
|
( |
) | ( |
) | ( |
) | |||||||||
Customer deposits and deferred revenue |
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities |
|
|
( |
) | ( |
) | ||||||||||
Deferred income |
|
( |
) | ( |
) | ( |
) | |||||||||
Amounts due to related parties |
( |
) | |
( |
) | ( |
) | |||||||||
Net cash provided by operating activities |
|
|
|
|
||||||||||||
Cash flows from investing activities: |
||||||||||||||||
Acquisition of fixed assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Acquisition of businesses, net of cash acquired |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Acquisition of licensed copyrights |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Acquisition of intangible assets excluding licensed copyrights |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Purchases of held-to-maturity investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Maturities of held-to-maturity investments |
|
|
|
|
||||||||||||
Purchases of available-for-sale debt investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Sales and maturities of available-for-sale investmentsdebt |
|
|
|
|
||||||||||||
Purchases of other long-term investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Proceeds from disposal of long-term investments |
|
|
|
|
||||||||||||
Disposal of subsidiaries’ shares |
|
|
( |
) | ( |
) | ||||||||||
Loans provided to related parties |
|
( |
) | |
|
|||||||||||
Repayment of loans provided to related parties |
|
|
|
|
||||||||||||
Micro loan origination and disbursement |
( |
) | ( |
) | |
|
||||||||||
Principal payments received on micro loans |
|
|
|
|
||||||||||||
Purchases of other invested securities |
( |
) | ( |
) | |
|
||||||||||
Sales and maturities of other invested securities |
|
|
|
|
||||||||||||
Other investing ac tivities |
|
|
|
|
||||||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
For the Years Ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Cash flows from financing activities: |
||||||||||||||||
Proceeds from short-term loans |
|
|
|
|
||||||||||||
Repayments of short-term loans |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Proceeds from long-term loans |
|
|
|
|
||||||||||||
Repayments of long-term loans |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Loans borrowed from related parties |
|
|
|
|
||||||||||||
Proceeds from issuance of long-term notes, net of issuance costs |
|
|
( |
) | ( |
) | ||||||||||
Repayment of long-term notes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Proceeds from issuance of convertible notes, net of issuance costs |
|
|
|
|
||||||||||||
Purchase of capped call s |
|
( |
) | ( |
) | ( |
) | |||||||||
Proceeds from issuance of subsidiaries’ shares |
|
|
|
|
||||||||||||
Repurchase of ordinary shares |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Proceeds from exercise of share options |
|
|
|
|
||||||||||||
Proceeds from third-party investors for sale of financial products |
|
|
|
|
||||||||||||
Repayment to third-party investors for sale of financial products |
( |
) | ( |
) | |
|
||||||||||
Proceeds from secured borrowings from third-party financial institutions |
|
|
|
|
||||||||||||
Repayment of secured borrowings from third-party financial institutions |
( |
) | ( |
) | |
|
||||||||||
Other financing activit ies |
( |
) | |
( |
) | ( |
) | |||||||||
Net cash provided by (used in) financing activities |
|
|
( |
) |
( |
) | ||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
( |
) | |
|
|
|||||||||||
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
||||||||||||
Cash, cash equivalents and restricted cash at beginning of the year |
|
|
|
|
||||||||||||
Cash, cash equivalents and restricted cash at end of the year |
|
|
|
|
||||||||||||
Supplemental disclosures: |
||||||||||||||||
Interest paid |
|
|
|
|
||||||||||||
Income taxes paid |
|
|
|
|
||||||||||||
Non-cash investing and financing activities: |
||||||||||||||||
Acquisition of fixed assets included in accounts payable and accrued liabilities |
|
|
|
|
||||||||||||
Acquisition of licensed copyrights included in accounts payable and accrued liabilities |
|
|
|
|
||||||||||||
Acquisition of licensed copyrights from nonmonetary content exchanges |
|
|
|
|
||||||||||||
Non-cash acquisitions of investments |
|
|
|
|
Attributable to Baidu, Inc. |
Noncontrolling interests |
Total shareholders’ equity |
||||||||||||||||||||||||||
Ordinary shares |
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive (loss) income |
|||||||||||||||||||||||||
Number of shares |
Amount |
|||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||
Balances at December 31, 2016 |
|
|
|
|
( |
) |
( |
) |
|
|||||||||||||||||||
Net income |
— |
|
|
|
|
( |
) | |
||||||||||||||||||||
Other comprehensive income |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Issuance of shares by the Company’s subsidiaries |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Acquisition of noncontrolling interests in a subsidiary |
— |
|
|
|
|
( |
) | |
||||||||||||||||||||
Exercise of share-based awards |
|
|
|
|
|
|
|
|||||||||||||||||||||
Share-based compensation |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Accretion of redeemable noncontrolling interests |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Repurchase and retirement of ordinary shares |
( |
) | |
|
( |
) | |
|
( |
) | ||||||||||||||||||
Disposal of subsidiaries’ shares |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Balances at December 31, 2017 |
|
|
|
|
|
|
|
|||||||||||||||||||||
Cumulative effect of accounting change |
— |
|
|
|
( |
) | |
|
||||||||||||||||||||
Net income |
— |
|
|
|
|
( |
) | |
||||||||||||||||||||
Other comprehensive income |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Business combinations |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Issuance of shares by the Company’s subsidiaries |
— |
|
|
|
|
( |
) | |
||||||||||||||||||||
Exercise of share-based awards |
|
|
|
|
|
|
|
|||||||||||||||||||||
Share-based compensation |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Accretion of redeemable noncontrolling interests |
— |
|
|
( |
) | |
( |
) | ( |
) | ||||||||||||||||||
Repurchase and retirement of ordinary shares |
( |
) | |
( |
) | |
|
( |
) | |||||||||||||||||||
Disposal of subsidiaries’ shares |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Conversion of iQIYI preferred shares recognized as redeemable noncontrolling interests to ordinary shares |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Equity component of convertible senior notes, net of issuance costs |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Purchase of capped call |
— |
|
( |
) | |
|
( |
) | ( |
) | ||||||||||||||||||
Balances at December 31, 2018 |
|
|
|
|
|
|
|
|||||||||||||||||||||
Attributable to Baidu, Inc. |
||||||||||||||||||||||||||||
Ordinary shares |
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive income (loss) |
Noncontrolling interests |
Total shareholders’ equity |
|||||||||||||||||||||||
Number of shares |
Amount |
|||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||
Balances at December 31, 2018 |
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income |
— |
|
|
|
|
( |
) | ( |
) | |||||||||||||||||||
Other comprehensive income |
— |
|
|
|
( |
) | |
( |
) | |||||||||||||||||||
Business combinations |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Acquisition of non-controlling interests in a subsidiary |
— |
|
( |
) | |
|
( |
) | ( |
) | ||||||||||||||||||
Issuance of shares by the Company’s subsidiaries to noncontrolling interest |
— |
|
( |
) | |
|
|
|
||||||||||||||||||||
Exercise of share-based awards |
|
|
|
|
|
|
|
|||||||||||||||||||||
Share-based compensation |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Dividends paid and payable by the Company’s subsidiaries |
— |
|
|
|
|
( |
) |
( |
) | |||||||||||||||||||
Accretion of redeemable noncontrolling interests |
— |
|
|
( |
) | |
( |
) | ( |
) | ||||||||||||||||||
Repurchase and retirement of ordinary shares |
( |
) | |
|
( |
) | |
|
( |
) | ||||||||||||||||||
Disposal of subsidiaries’ shares |
— |
|
|
|
|
( |
) | ( |
) | |||||||||||||||||||
Equity component of convertible senior notes, net of issuance costs |
— |
|
|
|
|
|
|
|||||||||||||||||||||
Purchase of capped call |
— |
|
( |
) | |
|
( |
) | ( |
) | ||||||||||||||||||
Balances at December 31, 2019 |
|
|
|
|
( |
) |
|
|
||||||||||||||||||||
Balances at December 31, 2019, in US$ |
|
|
|
( |
) |
|
|
|||||||||||||||||||||
1. |
ORGANIZATION, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS |
• |
Beijing Baidu Netcom Science Technology Co., Ltd. (“Baidu Netcom”), controlled by the Company; |
• |
Beijing Perusal Technology Co., Ltd. (“Beijing Perusal”), controlled by the Company; |
• |
Beijing iQIYI Science & Technology Co., Ltd. (“Beijing iQIYI”), and other VIEs controlled by iQIYI, Inc. (“iQIYI VIEs”); and |
• |
Other VIEs controlled by the Company or the Company’s subsidiaries . |
a. |
Exclusive equity purchase and transfer option agreement |
b. |
Proxy Agreements/Power of Attorney |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Assets |
||||||||||||
Cash and cash equivalents |
||||||||||||
Short-term investments |
||||||||||||
Accounts receivable, net |
||||||||||||
Others |
||||||||||||
Total current assets |
||||||||||||
Fixed assets, net |
||||||||||||
Intangible assets, net |
||||||||||||
Long-term investments, net |
||||||||||||
Operating lease right-of-use assets |
||||||||||||
Others |
||||||||||||
Total non-current assets |
||||||||||||
Total |
||||||||||||
Liabilities |
||||||||||||
Accounts payable and accrued liabilities |
||||||||||||
Customer deposits and deferred revenue |
||||||||||||
Operating l ease liabilities |
||||||||||||
Others |
||||||||||||
Total current third-party liabilities |
||||||||||||
Operating l ease liabilities |
||||||||||||
Others |
||||||||||||
Total non-current third-party liabilities |
||||||||||||
Amounts due to the Company and its non-VIE subsidiaries, net |
||||||||||||
Total |
||||||||||||
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Total revenues |
||||||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net cash provided by operating activities |
||||||||||||||||
Net cash used in by investing activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net cash provided by financing activities |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Office building |
– | |
Office building related facility, machinery and equipment |
– | |
Computer equipment |
– | |
Office equipment |
– | |
Vehicles |
– | |
Leasehold improvements |
– |
Customer relationships |
– | |
Software |
– | |
Trademarks |
– | |
User list |
– | |
Licensed copyrights of video contents |
– | |
Others |
– |
For the years ended |
||||||||||||||||
December 31, 2017 |
December 31, 2018 |
December 31, 2019 |
December 31, 2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Online marketing |
||||||||||||||||
iQIYI membership service |
||||||||||||||||
iQIYI content distribution |
||||||||||||||||
Interest income earned from provision of financial services |
— |
— |
||||||||||||||
Others |
||||||||||||||||
Other revenue |
||||||||||||||||
Total revenue |
||||||||||||||||
3. |
BUSINESS COMBINATIONS |
RMB |
||||
(In millions) |
||||
Purchase consideration |
||||
Net assets acquired, excluding intangible assets and the related deferred tax liabilities |
||||
Intangible assets, net |
||||
Deferred tax liabilities |
( |
) | ||
Pre-existing equity interests |
( |
) | ||
Noncontrolling interests |
( |
) | ||
Redeemable non-controlling interests (Note 17) |
( |
) | ||
Goodwill |
||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
Purchase consideration |
||||||||
Net assets acquired, excluding intangible assets and the related deferred tax liabilities |
||||||||
Intangible assets, net |
||||||||
Deferred tax liabilities |
( |
) |
( |
) | ||||
Noncontrolling interests |
( |
) |
( |
) | ||||
Redeemable non-controlling interests (Note 17 ) |
( |
) |
( |
) | ||||
Goodwill |
||||||||
4. |
INVESTMENTS |
As of December 31, 2018 |
||||||||||||||||||||||||
Cost or Amortized cost |
Gross unrecognized holding gains |
Gross unrecognized holding losses |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
Held-to-maturity debt investments |
— |
— |
— |
|||||||||||||||||||||
Available-for-sale debt investments |
— |
— |
( |
) |
As of December 31, 2019 |
||||||||||||||||||||||||||||
Cost or Amortized cost |
Gross unrecognized holding gains |
Gross unrecognized holding losses |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
|||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||
Held-to-maturity debt investments |
— |
— |
— |
|||||||||||||||||||||||||
Available-for-sale debt investments |
— |
— |
— |
As of December 31, 2018 |
As of December 31, 2019 |
As of December 31, 2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Initial cost basis |
||||||||||||
Cumulative unrealized gains |
||||||||||||
Cumulative unrealized losses (including impairment) |
( |
) | ( |
) | ( |
) | ||||||
Total carrying value |
||||||||||||
For the years ended December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Gross unrealized gains |
||||||||||||
Gross unrealized losses (including impairment) (1) |
( |
) | ( |
) | ( |
) | ||||||
Net unrealized gains (losses) on equity securities held |
( |
) | ( |
) | ||||||||
Net realized gains on equity securities sold |
||||||||||||
Total net gains recognized in other income, net |
||||||||||||
(1) |
Gross unrealized losses (downward adjustments excluding impairment) were RMB m illion and RMB million (US$ million) for the years ended December 31, 2018 and 2019, respectively. |
As of September 30, (i) |
||||||||||||
2018 (ii) |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Current assets |
||||||||||||
Non-current assets |
||||||||||||
Current liabilities |
||||||||||||
Non-current liabilities |
||||||||||||
Noncontrolling interests |
For the twelve months ended September 30, (i) |
||||||||||||||||
2017 (ii) |
2018 (ii) |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Total revenues |
||||||||||||||||
Gross profit |
||||||||||||||||
Income from operations |
||||||||||||||||
Net income |
||||||||||||||||
Net income attributable to the investees |
(i) | The Company adopted a one-quarter lag in reporting its share of equity income in T rip. |
(ii) | T rip adopted ASC 606, on a fully retrospective basis, and ASC 321 (collectively “new standards”) from January 1, 2018. The impact of the new standards on the Company’s financial statements is immaterial, and prior period financial information of T rip was not restated. |
As of September 30, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Current assets |
||||||||||||
Non-current assets |
||||||||||||
Current liabilities |
||||||||||||
Non-current liabilities |
||||||||||||
Noncontrolling interests |
For the twelve months ended September 30, (i) |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Total revenues |
||||||||||||||||
Gross profit |
||||||||||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net loss attributable to the investees |
( |
) | ( |
) | ( |
) | ( |
) |
(i) | The Company adopted a one-quarter lag in reporting its shares of equity income in all of its investees. |
As of December 31, 2018 |
||||||||||||||||||||||||
Cost or Amortized cost |
Gross unrecognized holding gains |
Gross unrecognized holding losses |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
Equity investments at fair value with readily determinable fair value |
— |
— |
( |
) | ||||||||||||||||||||
Available-for-sale debt investment |
— |
— |
— |
— |
||||||||||||||||||||
Investments accounted for at fair value |
— |
— |
— |
As of December 31, 2019 |
||||||||||||||||||||||||||||
Cost or Amortized cost |
Gross unrecognized holding gains |
Gross unrecognized holding losses |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
|||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||
Equity investments at fair value with readily determinable fair value |
— |
— |
( |
) | ||||||||||||||||||||||||
Available-for-sale debt investments |
— |
— |
( |
) | ||||||||||||||||||||||||
Investments accounted for at fair value |
— |
— |
( |
) | ||||||||||||||||||||||||
Long-term held-to-maturity investments |
— |
( |
) |
— |
— |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Due in 1 year |
— |
|||||||||||
Due in 1 year through 5 years |
— |
|||||||||||
Due in 5 year through 10 years |
— |
|||||||||||
Not due at a single maturity date |
||||||||||||
Total |
||||||||||||
5. |
ACCOUNTS RECEIVABLE |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Accounts receivable |
||||||||||||
Allowance for doubtful accounts |
( |
) | ( |
) | ( |
) | ||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Balance as of January 1 |
||||||||||||||||
Amounts charged to expenses |
||||||||||||||||
Amounts written off |
( |
) | ( |
) | ( |
) | — |
|||||||||
Balance as of December 31 |
||||||||||||||||
6. |
OTHER ASSETS |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Prepaid expenses |
||||||||||||
Advances to suppliers |
||||||||||||
Receivables from online payment agencies |
||||||||||||
Deposits |
||||||||||||
Licensed copyrights |
||||||||||||
Contract assets, net |
||||||||||||
VAT prepayments |
||||||||||||
Income tax prepayments |
||||||||||||
Others |
||||||||||||
Total other current assets |
||||||||||||
Long-term prepaid expenses |
||||||||||||
Produced content, net |
||||||||||||
Others |
||||||||||||
Total other non-current assets |
||||||||||||
7. |
FIXED ASSETS |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Computer equipment |
||||||||||||
Office building |
||||||||||||
Office building related facility, machinery and equipment |
||||||||||||
Vehicles |
||||||||||||
Office equipment |
||||||||||||
Leasehold improvements |
||||||||||||
Construction in progress |
||||||||||||
Accumulated depreciation and impairment |
( |
) | ( |
) | ( |
) | ||||||
8. |
GOODWILL AND INTANGIBLE ASSETS |
Baidu Core |
iQIYI |
Total |
||||||||||
RMB |
RMB |
RMB |
||||||||||
(In millions) |
||||||||||||
Balance at December 31, 2017 |
||||||||||||
Goodwill acquired |
||||||||||||
Goodwill disposed |
( |
) | — |
( |
) | |||||||
Foreign currency translation and other adjustments |
( |
) | — |
( |
) | |||||||
Balance at December 31, 2018 |
||||||||||||
Goodwill acquired |
— |
|||||||||||
Goodwill disposed (i) |
( |
) | — |
( |
) | |||||||
Foreign currency translation and other adjustments |
— |
|||||||||||
Balance at December 31, 2019 |
||||||||||||
Balance at December 31, 2019, in US$ |
||||||||||||
(i) | Disposition during the year ended December 31, 2019 was primarily related to the disposal of a subsidiary (Note 4). |
As of December 31, 2018 |
||||||||||||||||
Gross carrying value |
Accumulated impairment |
Accumulated amortization |
Net carrying value |
|||||||||||||
RMB |
RMB |
RMB |
RMB |
|||||||||||||
(In millions) |
||||||||||||||||
Land use right |
( |
) |
( |
) | ||||||||||||
Customer relationships |
— |
( |
) | |||||||||||||
Software |
( |
) |
( |
) | ||||||||||||
Trademarks |
( |
) |
( |
) | ||||||||||||
User list |
( |
) |
( |
) | ||||||||||||
Licensed copyrights |
— |
( |
) | |||||||||||||
Others |
( |
) |
( |
) | ||||||||||||
( |
) |
( |
) | |||||||||||||
As of December 31, 2019 |
||||||||||||||||||||
Gross carrying value |
Accumulated impairment |
Accumulated amortization |
Net carrying value |
Net carrying value |
||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
||||||||||||||||
(In millions) |
||||||||||||||||||||
Customer relationships |
— |
( |
) | — |
— |
|||||||||||||||
Software |
( |
) |
( |
) | ||||||||||||||||
Trademarks |
( |
) |
( |
) | ||||||||||||||||
User list |
( |
) |
( |
) | — |
|||||||||||||||
Licensed copyrights |
— |
( |
) | |||||||||||||||||
Others |
( |
) |
( |
) | ||||||||||||||||
( |
) |
( |
) | |||||||||||||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
For the years ending December 31, 2020 |
|
|
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
2024 |
|
|
9. |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Accrued payroll and welfare |
|
|
|
|||||||||
Tax payable |
|
|
|
|||||||||
Interest payable |
|
|
|
|||||||||
Users’ and distributors’ deposits |
|
|
|
|||||||||
Purchase of fixed assets and computer parts |
|
|
|
|||||||||
Traffic acquisition costs |
|
|
|
|||||||||
Bandwidth costs |
|
|
|
|||||||||
Content acquisition costs |
|
|
|
|||||||||
Funds collected on behalf of service providers |
|
|
|
|||||||||
Payable to merchants |
|
|
|
|||||||||
Accrued other operating expenses |
|
|
|
|||||||||
Others |
|
|
|
|||||||||
|
|
|
||||||||||
10. |
LOANS PAYABLE |
11. |
NOTES PAYABLE |
Issue date |
Principal amount (US$ million) |
Mature date |
Effective rate |
|||||||||||||
2017 Notes |
|
|
|
|
|
|
|
|
|
|
|
%* | ||||
2022 Ten-year Notes |
|
|
|
|
% | |||||||||||
2018 Notes |
|
|
|
|
%* | |||||||||||
2019 Notes |
|
|
|
|
%* | |||||||||||
2020 Notes |
|
|
|
|
% | |||||||||||
2025 Notes |
|
|
|
|
% | |||||||||||
2022 Five-year Notes |
|
|
|
|
% | |||||||||||
2027 Notes |
|
|
|
|
% | |||||||||||
2023 Notes |
|
|
|
|
% | |||||||||||
2028 March Notes |
|
|
|
|
% | |||||||||||
2024 Notes |
|
|
|
|
% | |||||||||||
2028 November Notes |
|
|
|
|
% |
* | 2017 Notes, 2018 Notes and 2019 Notes were fully repaid when they became due. |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Principal amount |
|
|
|
|||||||||
Unamortized discount and debt issuance costs |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
||||||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
For the years ending December 31, 2020 |
|
|
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
2024 |
|
|
||||||
Thereafter |
|
|
12. |
CONVERTIBLE NOTES |
13. |
LEASES |
For the year ended December 31, 2019 |
||||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
Cash payments for operating leases |
||||||||
ROU assets obtained in exchange for operating lease liabilities |
Operating leases |
||||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
Year ending December 31, |
||||||||
2020 |
||||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
Thereafter |
||||||||
Total future lease payments |
||||||||
Less: Imputed interest |
||||||||
Total lease liability balance |
||||||||
14. |
INCOME TAXES |
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
PRC |
|
|
|
|
||||||||||||
Non-PRC |
( |
) | |
( |
) | ( |
) | |||||||||
|
|
( |
) | ( |
) | |||||||||||
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Current income tax |
|
|
|
|
||||||||||||
Income tax refund due to reduced tax rate |
( |
) | ( |
) | ( |
) |
( |
) | ||||||||
Adjustments of deferred tax assets due to change in tax rates |
|
— |
|
|
||||||||||||
Deferred income tax benefit |
( |
) | ( |
) | ( |
) |
( |
) | ||||||||
|
|
|
|
|||||||||||||
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions, except for per share data) |
||||||||||||||||
Expected taxation at PRC statutory tax rate |
|
|
( |
) | ( |
) | ||||||||||
Effect of differing tax rates in different jurisdictions |
|
|
|
|
||||||||||||
Non-taxable income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Non-deductible expenses |
|
|
|
|
||||||||||||
Research and development super-deduction |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Effect of PRC preferential tax rates and tax holiday |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Effect of tax rate changes on deferred taxes |
|
|
|
|
||||||||||||
Reversal of prior year’s EIT |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
PRC withholding tax |
|
|
( |
) | ( |
) | ||||||||||
Addition to valuation allowance |
|
|
|
|
||||||||||||
Taxation for the year |
|
|
|
|
||||||||||||
Effective tax rate |
|
|
( |
) | ( |
) | ||||||||||
Effect of preferential tax rates inside the PRC on basic earnings per Class A and Class B ordinary share |
|
|
|
|
||||||||||||
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Deferred tax assets: |
||||||||||||
Provision for doubtful receivables |
|
|
|
|||||||||
Accrued expenses, payroll and others |
|
|
|
|||||||||
Fixed assets depreciation |
|
|
|
|||||||||
Net operating loss carry-forward |
|
|
|
|||||||||
Less: valuation allowance |
( |
) | ( |
) | ( |
) | ||||||
Deferred tax assets, net |
|
|
|
|||||||||
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Deferred tax liabilities: |
||||||||||||
Long-lived assets arising from acquisitions |
|
|
|
|||||||||
Withholding tax on PRC subsidiaries’ undistributed earnings |
|
|
|
|||||||||
Tax on capital gains |
|
|
|
|||||||||
Other |
|
|
|
|||||||||
|
|
|
||||||||||
15. |
EMPLOYEE DEFINED CONTRIBUTION PLAN |
16. |
COMMITMENTS AND CONTINGENCIES |
RMB |
US$ |
|||||||
(In millions) |
||||||||
2020 |
|
|
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
2024 |
|
|
||||||
Thereafter |
|
|
||||||
|
|
|||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
2020 |
|
|
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
2024 |
|
|
||||||
Thereafter |
|
|
||||||
|
|
|||||||
17. |
REDEEMABLE NONCONTROLLING INTERESTS |
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Balance as of January 1 |
|
|
|
|
||||||||||||
Business combination (Note 3) |
— |
|
|
|
||||||||||||
Other comprehensive (loss) |
( |
) | — |
— |
— |
|||||||||||
Issuance of subsidiary shares |
— |
— |
|
|
||||||||||||
Disposal of subsidiary shares |
( |
) | — |
— |
— |
|||||||||||
Accretion of redeemable noncontrolling interests |
( |
) | |
|
|
|||||||||||
Conversion of convertible notes of iQIYI |
|
— |
— |
— |
||||||||||||
Conversion of iQIYI preferred shares recognized as redeemable noncontrolling interests to ordinary shares |
— |
( |
) | — |
— |
|||||||||||
Balance as of December 31 |
|
|
|
|
||||||||||||
18. |
SHAREHOLDERS’ EQUITY |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
PRC statutory reserve funds |
||||||||||||
Unreserved retained earnings |
||||||||||||
Total retained earnings |
||||||||||||
Foreign currency translation adjustment |
Unrealized gains on available-for- sale investments |
Total |
||||||||||
RMB |
RMB |
RMB |
||||||||||
(In millions) |
||||||||||||
Balance at December 31, 2016 |
( |
) |
|
( |
) | |||||||
Other comprehensive income before reclassification |
|
|
|
|||||||||
Amounts reclassified from accumulated other comprehensive income |
|
( |
) | ( |
) | |||||||
Net current-period other comprehensive income |
|
|
|
|||||||||
Other comprehensive loss attribute to noncontrolling interests and redeemable noncontrolling interests |
|
— |
|
|||||||||
Balance at December 31, 2017 |
( |
) |
|
|
||||||||
Cumulative effect of accounting change * |
— |
( |
) | ( |
) | |||||||
Other comprehensive income before reclassification |
|
|
|
|||||||||
Amounts reclassified from accumulated other comprehensive income |
|
( |
) | ( |
) | |||||||
Net current-period other comprehensive income |
|
|
|
|||||||||
Other comprehensive income attribute to noncontrolling interests and redeemable noncontrolling interests |
( |
) | — |
( |
) | |||||||
Balance at December 31, 2018 |
( |
) |
|
|
||||||||
Other comprehensive income (loss) before reclassification |
|
|
|
|||||||||
Amounts reclassified from accumulated other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||
Net current-period other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||
Other comprehensive loss (income) attribute to noncontrolling interests and redeemable noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||
Balance at December 31, 2019 |
( |
) |
|
( |
) | |||||||
Balance at December 31, 2019, in US$ |
( |
) |
|
( |
) | |||||||
* |
Adjustment of net unrealized gains related to available-for-sale equity investments from accumulated other comprehensive income to opening retained earnings as a result of the adoption of ASC 321 on January 1, 2018. |
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Unrealized gains on available-for-sale investments |
||||||||||||||||
Other comprehensive income (loss) before reclassification |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) |
|
|
|
|
||||||||||||
Net current-period other comprehensive income (loss) |
( |
) | ( |
) | |
|
||||||||||
19. |
EARNINGS PER SHARE (“EPS”) |
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Net income attributable to Baidu, Inc. |
|
|
|
|
||||||||||||
Accretion of the redeemable noncontrolling interests |
|
( |
) | ( |
) | ( |
) | |||||||||
Numerator for basic EPS computation |
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|
|
|
|
Impact of subsidiaries’ and investees’ diluted earnings per share |
— |
— |
( |
) |
( |
) | ||||||||||
Numerator for diluted EPS computation |
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|
|
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For the years ended December 31, |
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2017 |
2018 |
2019 |
2019 |
|||||||||||||||||||||||||||||
Class A |
Class B |
Class A |
Class B |
Class A |
Class A |
Class B |
Class B |
|||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
US$ |
|||||||||||||||||||||||||
(In millions, except for number of shares, per share and per ADS data) |
||||||||||||||||||||||||||||||||
Earnings per share – basic: |
||||||||||||||||||||||||||||||||
Numerator |
||||||||||||||||||||||||||||||||
Allocation of net income attributable to Baidu, Inc. |
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Denominator |
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Weighted average ordinary shares outstanding |
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Denominator used for basic EPS |
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||||||||||||||||||||||||
Earnings per share – basic |
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||||||||||||||||||||||||
Earnings per share – diluted: |
||||||||||||||||||||||||||||||||
Numerator |
||||||||||||||||||||||||||||||||
Allocation of net income attributable to Baidu, Inc. for diluted computation |
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|
||||||||||||||||||||||||
Reallocation of net income attributable to Baidu, Inc. as a result of conversion of Class B to Class A shares |
|
— |
|
— |
|
|
— |
— |
||||||||||||||||||||||||
Numerator for diluted EPS calculation |
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|
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Denominator |
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Weighted average ordinary shares outstanding |
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|
||||||||||||||||||||||||
Conversion of Class B to Class A ordinary shares |
|
— |
|
— |
|
|
— |
— |
||||||||||||||||||||||||
Share-based awards |
|
— |
|
— |
|
|
— |
— |
||||||||||||||||||||||||
Denominator used for diluted EPS |
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|
||||||||||||||||||||||||
Earnings per share – diluted |
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|
||||||||||||||||||||||||
Earnings per ADS: |
||||||||||||||||||||||||||||||||
Denominator used for earnings per ADS – basic |
|
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|
|
||||||||||||||||||||||||||||
Denominator used for earnings per ADS – diluted |
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|
|
||||||||||||||||||||||||||||
Earnings per ADS – basic |
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Earnings per ADS – diluted |
|
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20. |
SHARE-BASED AWARDS PLAN |
Number of shares |
Weighted average exercise price (US$) |
Weighted average remaining contractual life (Years) |
Aggregate intrinsic value (US$ in millions) |
|||||||||||||
Share options |
||||||||||||||||
Outstanding, December 31, 2018 |
||||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) | ||||||||||||||
Forfeited/Cancelled |
( |
) | ||||||||||||||
Outstanding, December 31, 2019 |
||||||||||||||||
Vested and expected to vest at December 31, 2019 |
||||||||||||||||
Exercisable at December 31, 2019 |
||||||||||||||||
For the years ended December 31 |
||||||||||||
2017 |
2018 |
2019 |
||||||||||
Risk-free interest rate |
% | % | % | |||||||||
Dividend yield |
||||||||||||
Expected volatility range |
% | % | % | |||||||||
Expected life (in years) |
Number of shares |
Weighted average grant date fair value (US$) |
|||||||
Restricted Shares |
||||||||
Unvested, December 31, 2018 |
||||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited/Cancelled |
( |
) | ||||||
Unvested, December 31, 2019 |
||||||||
Number of shares |
Weighted average exercise price ( ) |
Weighted average remaining contractual life (Years) |
Aggregate intrinsic value ( US$ in millions) |
|||||||||||||
Outstanding, December 31, 2018 |
||||||||||||||||
Granted |
||||||||||||||||
Forfeited |
( |
) | ||||||||||||||
Exercised |
( |
) | ||||||||||||||
Outstanding, December 31, 2019 |
||||||||||||||||
Vested and expected to vest at December 31, 2019 |
||||||||||||||||
Exercisable at December 31, 2019 |
||||||||||||||||
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Expensed as cost of revenues |
||||||||||||||||
Expensed as selling, general and administrative |
||||||||||||||||
Expensed as research and development |
||||||||||||||||
For the years ended December 31, |
||||||||||||||||
2017 |
2018 |
2019 |
2019 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Expensed as cost of revenues |
||||||||||||||||
Expensed as selling, general and administrative |
||||||||||||||||
Expensed as research and development |
||||||||||||||||
21. |
RELATED PARTY TRANSACTIONS |
As of December 31, |
||||||||||||
2018 |
2019 |
2019 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Amounts due from related parties, current: |
||||||||||||
Trip (i) |
||||||||||||
Du Xiaoman (ii) |
||||||||||||
Investee A (iii) |
||||||||||||
Other related parties (iv) |
||||||||||||
Total |
||||||||||||
Amounts due from related parties, non-current: |
||||||||||||
Du Xiaoman (ii) |
||||||||||||
Other related parties (v) |
||||||||||||
Total |
||||||||||||
Amounts due to related parties, current: |
||||||||||||
Trip (vi) |
||||||||||||
Du Xiaoman (vii) |
||||||||||||
Investee A (viii) |
||||||||||||
Investee B (ix) |
||||||||||||
Other related parties (x) |
||||||||||||
Total |
||||||||||||
Amounts due to related parties, non-current: |
||||||||||||
Du Xiaoman (xi) |
||||||||||||
Investee B (ix) |
||||||||||||
Other related parties (xii) |
||||||||||||
Total |
||||||||||||
(i) |
The balances mainly represent amounts arising from services the Company provided to Trip. |
(ii) |
The balance represents long-term loans due from Du Xiaoman with interest rate ranging from agreements , and amounts arising from services the Company provided to Du Xiaoman. In 2018, the Company provided a long-term loan in the amount of RMB |
(iii) |
The balances mainly represent an interest-bearing loan provided to Investee A, which is an equity investee. The Company is in the process of acquiring the equity interest that it does not currently own for approximately US$ |
(iv) |
The balances mainly represent amounts arising from services the Company provided to its investees in ordinary course of business. |
(v) |
The balance consists of amount due from the Company’s investees in the ordinary course of business. |
(vi) |
The balances mainly represent amounts arising from services provided by Trip. |
(vii) |
The balance represents amount due to Du Xiaoman arising from services provided by Du Xiaoman to the Company in the ordinary course of business and for other unsettled payments, and loans provided by Du Xiaoman. |
(viii) |
The balances mainly represent amounts arising from hardware products purchased from Investee A, and an interest-bearing loan provided by the Investee A. |
(ix) |
The balances mainly represent deferred revenue relating to the future services to be provided by the Company to Investee B which is an equity method investment investee. |
(x) |
The balances mainly represent amounts arising from services provided by the Company’s investees. |
(xi) |
The balance represents mainly long-term loans provided by Du Xiaoman with interest rates ranging from |
(xii) |
The balance represents mainly deferred revenue relating to the future services to be provided over |
22. |
SEGMENT REPORTING |
For the year ended December 31, 2017 |
||||||||||||||||
Baidu Core |
iQIYI |
Intersegment eliminations & adjustments |
Consolidated |
|||||||||||||
RMB |
RMB |
RMB |
RMB |
|||||||||||||
(In millions) |
||||||||||||||||
Total revenues |
( |
) |
||||||||||||||
Operating costs and expenses: |
||||||||||||||||
Cost of revenues |
( |
) | ||||||||||||||
Selling, general and administrative |
( |
) | ||||||||||||||
Research and development |
( |
) | ||||||||||||||
Total operating costs and expenses |
( |
) |
||||||||||||||
Operating profit (loss) |
( |
) |
( |
) |
||||||||||||
Total other income (loss), net |
( |
) |
||||||||||||||
Income (loss) before income taxes |
( |
) |
( |
) |
||||||||||||
Income taxes |
( |
) | ||||||||||||||
Net income (loss) |
( |
) |
( |
) |
||||||||||||
Less: net income (loss) attributable to noncontrolling interests |
( |
) | — |
( |
) | ( |
) | |||||||||
Net income (loss) attributable to Baidu, Inc. |
( |
) |
( |
) |
||||||||||||
For the year ended December 31, 2018 |
||||||||||||||||
Baidu Core |
iQIYI |
Intersegment eliminations |
Consolidated |
|||||||||||||
RMB |
RMB |
RMB |
RMB |
|||||||||||||
(In millions) |
||||||||||||||||
Total revenues |
( |
) |
||||||||||||||
Operating costs and expenses: |
||||||||||||||||
Cost of revenues |
( |
) | ||||||||||||||
Selling, general and administrative |
( |
) | ||||||||||||||
Research and development |
( |
) | ||||||||||||||
Total operating costs and expenses |
( |
) |
||||||||||||||
Operating profit (loss) |
( |
) |
||||||||||||||
Total other income (loss), net |
( |
) |
( |
) |
||||||||||||
Income (loss) before income taxes |
( |
) |
( |
) |
||||||||||||
Income taxes |
— |
|||||||||||||||
Net income (loss) |
( |
) |
( |
) |
||||||||||||
Less: net income (loss) attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||||||
Net income (loss) attributable to Baidu, Inc. |
( |
) |
||||||||||||||
For the year ended December 31, 2019 |
||||||||||||||||||||||||||||||||
Baidu Core |
iQIYI |
Intersegment eliminations |
Consolidated |
|||||||||||||||||||||||||||||
RMB |
US$ |
RMB |
US$ |
RMB |
US$ |
RMB |
US$ |
|||||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||||||
Total revenues |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Operating costs and expenses: |
||||||||||||||||||||||||||||||||
Cost of revenues |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Selling, general and administrative |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Research and development |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Total operating costs and expenses |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Operating profit (loss) |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Total other income (loss), net |
( |
) |
( |
) |
( |
) |
( |
) |
— |
— |
( |
) |
( |
) | ||||||||||||||||||
Income (loss) before income taxes |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||
Income taxes |
— |
— |
||||||||||||||||||||||||||||||
Net income (loss) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||
Less: net income (loss) attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Net income (loss) attributable to Baidu, Inc. |
( |
) |
( |
) |
||||||||||||||||||||||||||||
23. |
FAIR VALUE MEASUREMENTS |
Level 1 |
– |
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||
Level 2 |
– |
Include observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. | ||||
Level 3 |
– |
Unobservable inputs which are supported by little or no market activity. |
Fair value measurement or disclosure at December 31, 2018 using |
||||||||||||||||
Total fair value at December 31, 2018 |
Quoted prices in active markets for identical assets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
|||||||||||||
RMB |
RMB |
RMB |
RMB |
|||||||||||||
(In millions) |
||||||||||||||||
Fair value disclosure |
||||||||||||||||
Cash equivalents |
||||||||||||||||
Time deposits |
||||||||||||||||
Money market fund |
||||||||||||||||
Short-term investments |
||||||||||||||||
Held-to-maturity debt investments |
||||||||||||||||
Long-term notes payable |
||||||||||||||||
Convertible senior notes |
||||||||||||||||
Fair value measurements on a recurring basis |
||||||||||||||||
Short-term investments |
||||||||||||||||
Available-for-sale debt investments |
||||||||||||||||
Long-term investments |
||||||||||||||||
Equity investments at fair value with readily determinable fair value |
||||||||||||||||
Investments accounted for at fair value |
||||||||||||||||
Available-for-sale debt investments |
||||||||||||||||
Other non-current assets |
||||||||||||||||
Derivative instruments |
||||||||||||||||
Total assets measured at fair value |
||||||||||||||||
Accounts payable and accrued liabilities |
||||||||||||||||
Derivative instruments |
||||||||||||||||
Amounts due to related parties, non-current |
||||||||||||||||
Financial liability |
||||||||||||||||
Total liabilities measured at fair value |
— |
|||||||||||||||
Fair value measurement or disclosure at December 31, 2019 using |
||||||||||||||||||||
Total fair value at December 31, 2019 |
Quoted prices in active markets for identical assets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
|||||||||||||||||
RMB |
US$ |
RMB |
RMB |
RMB |
||||||||||||||||
(In millions) |
||||||||||||||||||||
Fair value disclosure |
||||||||||||||||||||
Cash equivalents |
||||||||||||||||||||
Time deposits |
||||||||||||||||||||
Money market fund |
||||||||||||||||||||
Short-term investments |
||||||||||||||||||||
Held-to-maturity debt investments |
||||||||||||||||||||
Long-term investments: |
||||||||||||||||||||
Held-to-maturity debt investment |
||||||||||||||||||||
Long -term notes payable |
||||||||||||||||||||
Convertible senior notes |
||||||||||||||||||||
Fair value measurements on a recurring basis |
||||||||||||||||||||
Short-term investments |
||||||||||||||||||||
Available-for-sale debt investments |
||||||||||||||||||||
Long-term investments |
||||||||||||||||||||
Equity investments at fair value with readily determinable fair value |
||||||||||||||||||||
Investments accounted for at fair value |
||||||||||||||||||||
Available-for-sale debt investments |
||||||||||||||||||||
Other non-current assets |
||||||||||||||||||||
Derivative instruments |
||||||||||||||||||||
Total assets measured at fair value |
||||||||||||||||||||
Accounts payable and accrued liabilities |
||||||||||||||||||||
Derivative instruments |
||||||||||||||||||||
Amounts due to related parties, current |
||||||||||||||||||||
Financial liability |
||||||||||||||||||||
Total liabilities measured at fair value |
— |
|||||||||||||||||||
Amounts |
||||
RMB |
||||
(In millions) |
||||
Balance at December 31, 201 7 |
||||
Additions |
||||
Disposals |
( |
) | ||
Net unrealized fair value increase recognized in earning |
||||
Foreign currency translation adjustments |
||||
Balance at December 31, 2018 |
||||
Additions |
||||
Disposals |
( |
) | ||
Net unrealized fair value increase recognized in earning |
||||
Foreign currency translation adjustments |
||||
Balance at December 31, 2019 |
||||
Balance at December 31, 2019, in US$ |
||||
Amounts |
||||
RMB |
||||
(In millions) |
||||
Balance at December 31, 2017 |
||||
Additions |
||||
Balance at December 31, 2018 |
||||
Additions |
||||
Disposals |
( |
) | ||
Net unrealized fair value increase recognized in other comprehensive income |
||||
Accrued interest |
||||
Impairment |
( |
) | ||
Foreign currency translation adjustments |
( |
) | ||
Balance at December 31, 2019 |
||||
Balance at December 31, 2019, in US$ |
||||
Total fair value |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Signific ant Other Observable inputs (Level 2 ) |
Significant unobservable inputs (Level 3) |
Fair value adjustment |
Impairment |
|||||||||||||||||||||||||||||||
RMB |
US$ |
RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
US$ |
||||||||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||||||||||
Fair value measurements on a non-recurring basis |
||||||||||||||||||||||||||||||||||||
As of December 31, 2018 |
||||||||||||||||||||||||||||||||||||
Long-term investments |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Intangible assets |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
As of December 31, 2019 |
||||||||||||||||||||||||||||||||||||
Long-term investments |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Intangible assets |
( |
) |
( |
) |
24. |
SUBSEQUENT EVENTS |