REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
or |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For |
the fiscal year ended |
or |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For |
the transition period from |
or |
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 | ||
representing eight Class A ordinary share, par value US$0.000000625 per share) |
(The Nasdaq Global Select Market) | |||
(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 | ||||||
1 | ||||||
2 | ||||||
Item 1. | 2 | |||||
Item 2. | 2 | |||||
Item 3. | 2 | |||||
Item 4. | 64 | |||||
Item 4A. | 113 | |||||
Item 5. | 113 | |||||
Item 6. | 143 | |||||
Item 7. | 155 | |||||
Item 8. | 157 | |||||
Item 9. | 159 | |||||
Item 10. | 160 | |||||
Item 11. | 168 | |||||
Item 12. | 169 | |||||
170 | ||||||
Item 13. | 170 | |||||
Item 14. | 171 | |||||
Item 15. | 171 | |||||
Item 16A. | 171 | |||||
Item 16B. | 171 | |||||
Item 16C. | 172 | |||||
Item 16D. | 172 | |||||
Item 16E. | 172 | |||||
Item 16F. | 173 | |||||
Item 16G. | 173 | |||||
Item 16H. | 173 | |||||
173 | ||||||
Item 17. | 173 | |||||
Item 18. | 174 | |||||
Item 19. | 174 | |||||
186 | ||||||
F-1 |
• | “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; “iQIYI” refers to iQIYI, Inc. (formerly known as “Ding Xin, Inc.” and “Qiyi.com, Inc.”), a company incorporated in the Cayman Islands listed on Nasdaq under the symbol “IQ” and one of our subsidiaries; |
• | “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”, or daily active user, refers to the average number of mobile devices that launched our mobile apps at least once during a day within a specific period; |
• | “MAU’, or monthly active user, refers to the number of mobile devices that launched our mobile apps during a given 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; |
• | “Class A ordinary shares” refers to Class A ordinary shares of the share capital of our company with a par value of US$0.000000625 each, conferring a holder of a Class A ordinary share one vote per share on all matters submitted for voting at general meetings of our company; |
• | “Class B ordinary shares” refers to Class B ordinary shares of the share capital of our company with a par value of US$0.000000625 each, conferring weighted voting rights in our company such that a holder of a Class B ordinary share is entitled to 10 votes per share on all matters submitted for voting at general meetings of our company; |
• | “ADSs” refers to our American depositary shares, each ADSs representing eight Class A ordinary shares; |
• | “U.S. GAAP” refers to generally accepted accounting principles in the United States; |
• | “RMB” or “Renminbi” refers to the legal currency of China; |
• | “$,” “dollars,” “US$” or “U.S. dollars” refers to the legal currency of the United States; and |
• | all discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding. |
• | our operations and business prospects; |
• | our business and operating strategies and our ability to implement such strategies; |
• | our ability to develop and manage our operations and business; |
• | competition for, among other things, capital, technology and skilled personnel; |
• | our ability to control costs; |
• | our ability to identify and conduct investments and acquisitions, as well as integrate acquired target(s); |
• | changes to regulatory and operating conditions in the industry and geographical markets in which we operate; |
• | our dividend policy; and |
• | all other risks and uncertainties described in “Item 3.D. Key Information—Risk Factors.” |
Item 1. |
Identity of Directors, Senior Management and Advisers |
Item 2. |
Offer Statistics and Expected Timetable |
Item 3. |
Key Information |
A. |
Selected Financial Data |
Year Ended December 31, |
||||||||||||||||||||||||
2016 (1) |
2017 (1) |
2018 (2) |
2019 (2) |
2020 (2) |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(In millions, except per share and per ADS data) |
||||||||||||||||||||||||
Consolidated Statements of Comprehensive Income Data: |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Online marketing services |
64,525 | 73,146 | 81,912 | 78,093 | 72,840 | 11,163 | ||||||||||||||||||
Others |
6,024 | 11,663 | 20,365 | 29,320 | 34,234 | 5,247 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
70,549 | 84,809 | 102,277 | 107,413 | 107,074 | 16,410 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating costs and expenses: |
||||||||||||||||||||||||
Cost of revenues |
35,278 | 43,062 | 51,744 | 62,850 | 55,158 | 8,454 | ||||||||||||||||||
Selling, general and administrative |
15,071 | 13,128 | 19,231 | 19,910 | 18,063 | 2,769 | ||||||||||||||||||
Research and development |
10,151 | 12,928 | 15,772 | 18,346 | 19,513 | 2,989 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating costs and expenses |
60,500 | 69,118 | 86,747 | 101,106 | 92,734 | 14,212 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating profit |
10,049 | 15,691 | 15,530 | 6,307 | 14,340 | 2,198 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total other income (loss), net |
4,460 | 5,592 | 11,795 | (6,647 | ) | 8,750 | 1,341 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before income taxes |
14,509 | 21,283 | 27,325 | (340 | ) | 23,090 | 3,539 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income taxes |
2,913 | 2,995 | 4,743 | 1,948 | 4,064 | 623 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
11,596 | 18,288 | 22,582 | (2,288 | ) | 19,026 | 2,916 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Less: Net loss attributable to non-controlling interests |
(36 | ) | (13 | ) | (4,991 | ) | (4,345 | ) | (3,446 | ) | (528 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to Baidu, Inc. |
11,632 | 18,301 | 27,573 | 2,057 | 22,472 | 3,444 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
Consolidated Balance Sheets Data: |
||||||||||||||||||||||||
Cash and cash equivalents |
10,898 | 11,084 | 27,638 | 33,443 | 35,782 | 5,484 | ||||||||||||||||||
Restricted cash |
318 | 252 | 2,189 | 996 | 758 | 117 | ||||||||||||||||||
Short-term investments, net (1) |
71,196 | 89,381 | 111,626 | 112,924 | 126,402 | 19,372 | ||||||||||||||||||
Total assets (2) |
181,997 |
251,728 |
297,566 |
301,316 |
332,708 |
50,990 |
||||||||||||||||||
Short-term loans |
1,115 | 1,244 | 3,046 | 2,618 | 3,016 | 462 | ||||||||||||||||||
Long-term loans, current portion |
3,468 | 10 | 84 | 737 | 7,427 | 1,138 | ||||||||||||||||||
Long-term loans |
6,822 | 6,701 | 7,456 | 7,804 | — | — | ||||||||||||||||||
Notes payable, current portion |
5,203 | 6,500 | 6,871 | 5,219 | — | — | ||||||||||||||||||
Notes payable |
27,648 | 29,111 | 42,735 | 38,090 | 48,408 | 7,419 | ||||||||||||||||||
Convertible senior notes, current portion |
— | — | — | — | 4,752 | 728 | ||||||||||||||||||
Convertible senior notes |
— | — | 4,712 | 12,297 | 11,927 | 1,828 | ||||||||||||||||||
Total liabilities |
84,254 |
121,356 |
121,814 |
128,501 |
140,865 |
21,589 |
||||||||||||||||||
Total Baidu, Inc. shareholders’ equity |
92,274 |
115,346 |
162,897 |
163,599 |
182,696 |
27,999 |
(1) | We adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 2016-13”) on January 1, 2020, which requires the |
measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. |
(2) | We adopted Accounting Standards Update (“ASU”) No. 2016-02: Leases Right-of-use non-current) for operating leases are presented on the face of the consolidated balance sheets as of December 31, 2019 and 2020, while the consolidated balance sheet data for the years ended December 31, 2016, 2017 and 2018 have been prepared in accordance with ASC topic 840 (“ASC 840”), Leases |
Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
Consolidated Cash Flow Data: |
||||||||||||||||||||||||
Net cash provided by operating activities |
22,480 | 32,828 | 35,967 | 28,458 | 24,200 | 3,709 | ||||||||||||||||||
Net cash used in investing activities |
(35,911 | ) | (76,949 | ) | (34,460 | ) | (19,974 | ) | (27,552 | ) | (4,223 | ) | ||||||||||||
Net cash provided by (used in) financing activities |
14,447 | 44,557 | 15,082 | (3,873 | ) | 5,665 | 869 | |||||||||||||||||
Net increase in cash, cash equivalents and restricted cash |
1,160 | 120 | 18,491 | 4,612 | 2,101 | 323 |
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, for example, resulting from an oversupply of advertising inventory released into the market; |
• | 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 online 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. |
• | the online live streaming business is based on a relatively new business model in a relatively new market in which user demand may change or decrease substantially; |
• | challenges in the integration of operations and systems and in managing the expanded operations of a larger and more complex company; |
• | challenges in achieving anticipated business opportunities and growth prospects from combining the businesses of YY Live with the rest of our businesses; |
• | rules and measures governing online live streaming businesses and hosts are complex and evolving, and we may not be able to navigate such complex regulatory environment or to respond to future changes in regulatory environment in an effective and timely manner; |
• | we may face significant risks related to the content and communications on YY Live, as a majority of the communications on YY Live are conducted in real time, and we are unable to verify the sources of all information posted thereon or examine the content generated by users before it is posted; |
• | the revenue model for online live streaming may not remain effective, and we may not be able to retain existing users, attract new users, keep users engaged and attract more paying users; |
• | we may not be able to retain or attract popular talents such as performers, channel managers, professional game players, commentators and hosts for our live streaming platform or these talents may fail to draw fans or participants; and |
• | unanticipated additional costs and expenses resulting from integrating into our business additional personnel, operations, products, services, technology, internal controls and financial reporting responsibilities. |
• | 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 DuerOS 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, |
• | non-occurrence of anticipated or speculative transactions and any resulting negative impact; |
• | 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 unsatisfactory operational or financial performance, including financial loss, or fraudulent activities of a target business; |
• | 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. |
• | the online live streaming business is based on a relatively new business model in a relatively new market in which user demand may change or decrease substantially; |
• | rules and measures governing online live streaming businesses and hosts are complex and evolving, and we may not be able to navigate such complex regulatory environment; |
• | we may face significant risks related to the content and communications on YY Live, as a majority of the communications on YY Live are conducted in real time, and we are unable to verify the sources of all information posted thereon or examine the content generated by users before it is posted; |
• | the revenue model for online live streaming may not remain effective, and we may not be able to retain existing users, attract new users, keep users engaged and attract more paying users; and |
• | we may not be able to retain or attract popular talents such as performers, channel managers, professional game players, commentators and hosts for our live streaming platform or these talents may fail to draw fans or participants. |
• | 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 distribution channels 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; |
• | evaluate the credit worthiness and collectability of accounts receivables from an evolving variety of customers, whose failure to pay us in a timely manner may adversely affect our liquidity position; |
• | retain members and attract new members of iQIYI’s membership services; |
• | upgrade our technology to support increased traffic and expanded product-and-service |
• | 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 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 third-party agents during the pandemic, which may in turn materially adversely affect our financial condition and operating results; |
• | the business operations of our third-party agents have been and could continue to be negatively impacted by the pandemic, 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, third-party agents, 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 a pandemic and slowing macroeconomic conditions. If the SMEs that we work with cannot weather COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged pandemic, 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 pandemic 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 COVID-19, 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 pandemic, 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 (the corresponding regulatory body currently known as National Radio and Television Administration, or the NRTA), a Radio and Television Program Production License, which is issued by the local bureau of 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 or without the permitted scope of business covering online game operation and online game virtual currency issuance or trading, which is issued by the local bureau of the then Ministry of Culture, or the Ministry of Culture and Tourism which has replaced the Ministry of Culture, an Internet Publication Service License, which is issued by the SAPPRFT (the corresponding regulatory body currently known as the National Press and Publication Administration, or the NPPA), a Publication Business Operating License, which is issued by the local bureau of the SAPPRFT or NPPA, a Qualification Certificate for Internet Drug Information Services, which is issued by provincial branch of the State Food and Drug Administration (the corresponding regulatory body currently known |
as the National Medical Products Administration), a Human Resource Services License, which is issued by the local bureau of the Ministry of Human Resources and Social Security, and a Commercial Performances License, which is issued by the Municipal Bureau of Culture and Tourism. 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 and internet cultural activities. Other aspects of our online operations may be further 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. |
• | order to immediately terminate prohibited investment activities and to take certain measures to return to the pre-investment status; |
• | order to rectify within prescribed period and to take necessary measures to comply with such laws, administrative regulations or provisions; |
• | revocation of such entities’ business licenses and/or operating licenses; |
• | shutting down of our website, or discontinuance or restriction on any transactions between certain of our PRC subsidiaries with them; |
• | fines, confiscation of the income from our PRC subsidiaries or VIEs, or other requirements with which we or our VIEs may not be able to comply; |
• | order to restructure our ownership structure, corporate governance and business operations, including terminating the contractual arrangements with our VIEs and deregistering the equity pledges of our VIEs, which in turn would affect our ability to consolidate, derive economic interests from, or impose effective control over our VIEs; or |
• | restriction or prohibition on our use of the proceeds of any financing outside PRC to finance our business operations in PRC, and other regulatory or enforcement actions that could be harmful to our business. |
• | actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results, as well as our margins and profitability; |
• | 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 product-and-service |
• | success or failure of our new business initiatives or the development or growth of the new markets we enter into; |
• | addition to or departure of key personnel; |
• | public perception or negative news about our products or services or potential investments or acquisitions; |
• | 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. |
• | On June 26, 2018, our board of directors authorized a share repurchase program, under which we may repurchase up to US$1.0 billion of our ADSs or ordinary shares over 12 months from June 27, 2018 through June 26, 2019. |
• | On May 16, 2019, our board of directors authorized a new share repurchase program, under which we may repurchase up to US$1.0 billion of our ADSs or ordinary shares, effective until July 1, 2020. |
• | On May 13, 2020, our board of directors authorized a share repurchase program, under which we may repurchase up to US$1.0 billion of our ADSs or shares, effective until July 1, 2021. On August 6, 2020, our board of directors approved a change to the 2020 share repurchase program, increasing the repurchase authorization from US$1 billion to US$3 billion and extending the effective time through December 31, 2022. On December 8, 2020, our board of directors approved a further increase in the repurchase authorization from US$3 billion to US$4.5 billion. |
• | 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 800,000,000 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 |
• | Mobile Ecosystem |
• | AI Cloud |
• | Intelligent Driving & Other Growth Initiatives (OGI) |
• | Baidu Search. AI-powered voice search and visual search. Voice search integrates speech recognition and search technologies to enhance the user experience by providing a more natural and convenient input modality. Visual search enables the use of smart phone cameras to capture images and retrieve related content and services on the Internet. For example, users can take a photo of a plant or a pet, to identify the species. We also endeavor to improve the search experience, through other AI-powered products, such as Top 1, to satisfy user queries with the first displayed search result, which we believe will be an important capability with the adoption of smart devices with smaller screens. In addition, we offer vertical search, such as video search and online literature search to our users. |
• | Baidu Feed. text-to-speech |
• | Baijiahao (BJH Accounts) |
• | Smart Mini Program native-app like experience through increasingly popular applets, known as Smart Mini Program. Users can now search for and access content and services that historically were only available in standalone apps within Baidu App, without having to download and maintain so many apps on their phones. Launched in July 2018, Smart Mini Program has seen large user growth, with MAUs of Smart Mini Program reaching 414 million in December 2020. |
• | Managed Page |
(i) | Original content. iQIYI’s original content includes both content produced in-house and content produced in collaboration with quality third-party partners. 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. In the content production process, iQIYI leverages its deep understanding of entertainment, users and content, as well as advanced technology, to identify original literary titles or scripts with the most potential, nurture promising artistic talents and execute impactful marketing campaigns. For content produced in-house, iQIYI staffs the production with its own highly professional development team of well-recognized producers, production professionals, artists and a post-production editing professionals. For content produced in collaboration with quality third-party partners, iQIYI typically engages quality production companies through individual negotiation or through a competitive bidding process for the right to produce content, and iQIYI pays such production companies in the form of a guaranteed fee and/or revenue sharing. |
(ii) | Licensed content. iQIYI provides users with a curated selection of high-quality PPC from third parties. Leveraging its expertise in content selection, iQIYI have successfully debuted well-received titles such as drama series iPartment In the Name of People Go Go Squid Qing Yu Nian Reunion: The Sound of the Providence Season 2 Keep Running Season IV |
• | a foundation layer, consisting of PaddlePaddle, our open source deep learning framework and platform, as software, Kunlun AI chips as hardware and databases as fuel; |
• | a perception layer, aggregating internally developed algorithms for speech recognition and synthesis, computer vision and augmented reality & virtual reality; |
• | a cognition layer, consisting of algorithms for natural language processing and knowledge graph; |
• | a platform layer, opening our technologies to partners and developers to develop a strong AI ecosystem; and |
• | an AI security module that ensures Baidu Brain’s security, safety and privacy. |
• | We provided tens of millions of free online doctor consultations on our healthcare platform and made available our online healthcare services, such as pneumonia screening, to third-party medical apps, to free up hospitals for critical emergencies. |
• | We donated nearly 20,000 Xiaodu Smart Displays to frontline doctors and their families, allowing them to use contact-less, voice-enabled Internet and conveniently video conference home to stay in touch with their loved ones, while minimizing virus infection. DuerOS also partnered with online education organizations to enable home teaching for kids, while schools were closed down. |
• | More than 100 Apollo-powered autonomous vehicles have been deployed across 17 cities in China, including Wuhan, Beijing, Shanghai, Shenzhen and Xiamen, to provide medication, face mask and food deliveries, as well as unmanned fever screening and sterilization services. |
• | Baidu AI call center solution was retooled to allow local municipalities and health commissions to call people and survey their health conditions and travel information. Our smart call center handled over 3 million calls in the first two months, which is equivalent to the workload of approximately 1,000 full-time employees over a month’s period. Our smart call center was also used to update the new hours of operation for businesses on Baidu Maps, as restaurants, shops and supermarkets re-opened for business. |
• | We open-sourced LinearFold, our RNA analysis algorithm, to researchers worldwide for research on COVID-19. LinearFold can accelerate the prediction time of a virus’s RNA secondary structure, potentially from 55 minutes to 27 seconds, affording researchers an opportunity to better understand the pandemic and develop effective vaccines. |
• | 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 | ||
Beijing QIYI Century Science & Technology Co., Ltd. |
China |
Majority-owned subsidiary | ||
Beijing iQIYI Science & Technology Co., Ltd. |
China |
Consolidated affiliated entity | ||
Baidu Cloud Computing Technology (Beijing) Co., Ltd. |
China |
Wholly 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 details of 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. |
(3) | Beijing iQIYI Science & Technology Co., Ltd. is wholly-owned by Mr. Xiaohua Geng, senior vice president of iQIYI. Mr. Xiaohua Geng is not beneficially interested in any shares of our company. |
• | 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, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in millions) |
||||||||||||||||
Consolidated Statements of Comprehensive Income Data |
||||||||||||||||
Revenues: |
||||||||||||||||
Online marketing services |
81,912 | 78,093 | 72,840 | 11,163 | ||||||||||||
Others |
20,365 | 29,320 | 34,234 | 5,247 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
102,277 | 107,413 | 107,074 | 16,410 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating costs and expenses (1) : |
||||||||||||||||
Cost of revenues |
51,744 | 62,850 | 55,158 | 8,454 | ||||||||||||
Selling, general and administrative |
19,231 | 19,910 | 18,063 | 2,769 | ||||||||||||
Research and development |
15,772 | 18,346 | 19,513 | 2,989 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating costs and expenses |
86,747 | 101,106 | 92,734 | 14,212 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit |
15,530 | 6,307 | 14,340 | 2,198 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (loss), net |
11,795 | (6,647 | ) | 8,750 | 1,341 | |||||||||||
Income (loss) before income taxes |
27,325 | (340 | ) | 23,090 | 3,539 | |||||||||||
Income taxes |
4,743 | 1,948 | 4,064 | 623 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
22,582 | (2,288 | ) | 19,026 | 2,916 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Less: Net loss attributable to non-controlling interests |
(4,991 | ) | (4,345 | ) | (3,446 | ) | (528 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income attributable to Baidu, Inc. |
27,573 | 2,057 | 22,472 | 3,444 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
||||||||||||||||
(1) Share-based compensation expenses are allocated in operating costs and expenses as follows: |
| |||||||||||||||
Cost of revenues |
224 | 327 | 360 | 55 | ||||||||||||
Selling, general and administrative |
1,725 | 1,768 | 1,897 | 290 | ||||||||||||
Research and development |
2,727 | 3,531 | 4,471 | 686 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
4,676 | 5,626 | 6,728 | 1,031 | ||||||||||||
|
|
|
|
|
|
|
|
• | A decrease of RMB2.7 billion in traffic acquisition costs, which reflected decreasing union revenues, as we focused on growing in-app search and optimizing profitability over union revenue growth. |
• | A decrease of RMB1.7 billion in sales tax and surcharges, which resulted from an exemption of cultural business construction fee for 2020. |
• | A decrease of RMB1.6 billion in content cost, which related to less recorded expense of produced content, more shorter-length content with less total costs to satisfy diversified users demand, as well as revisions to accounting estimates of future viewership consumption patterns and useful lives of content assets. |
• | An increase of RMB3.3 billion in depreciation and bandwidth costs, resulted from increased investment in infrastructure. |
• | An increase of RMB3.1 billion in cost of goods sold, which was in line with the growth in sales of Xiaodu smart devices. |
• | An increase of RMB2.0 billion in content costs, resulted from iQIYI’s higher content costs recorded relating to licensed copyrights and produced content as iQIYI continued to invest in comprehensive and diversified content library. |
• | An increase of RMB1.5 billion in traffic acquisition costs, resulted from increasing TAC prices. |
Year ended December 31, |
||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||
RMB |
RMB |
YoY% |
RMB |
US$ |
YoY% |
|||||||||||||||||||
(In millions, except percentages) |
||||||||||||||||||||||||
Baidu Core: |
||||||||||||||||||||||||
Online marketing services |
72,645 | 70,038 | (4 | ) | 66,283 | 10,158 | (5 | ) | ||||||||||||||||
Cloud services |
3,005 | 6,370 | 112 | 9,173 | 1,406 | 44 | ||||||||||||||||||
Interest income earned from provision of financial services |
1,724 | — | (100 | ) | — | — | — | |||||||||||||||||
Others |
897 | 3,303 | 268 | 3,228 | 495 | (2 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Subtotal |
78,271 |
79,711 |
2 |
78,684 |
12,059 |
(1 |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
iQIYI: |
||||||||||||||||||||||||
Online advertising services |
9,329 | 8,271 | (11 | ) | 6,822 | 1,046 | (18 | ) | ||||||||||||||||
Membership services |
10,623 | 14,436 | 36 | 16,491 | 2,527 | 14 | ||||||||||||||||||
Content distribution |
2,163 | 2,544 | 18 | 2,660 | 408 | 5 | ||||||||||||||||||
Others |
2,874 | 3,743 | 30 | 3,734 | 572 | (0 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Subtotal |
24,989 |
28,994 |
16 |
29,707 |
4,553 |
2 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Intersegment eliminations |
(983 |
) |
(1,292 |
) |
31 |
(1,317 |
) |
(202 |
) |
2 |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenue |
102,277 |
107,413 |
5 |
107,074 |
16,410 |
(0 |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
Year ended December 31, |
||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||
RMB |
RMB |
YoY% |
RMB |
US$ |
YoY% |
|||||||||||||||||||
(In millions, except percentages) |
||||||||||||||||||||||||
Operating Costs and Expenses: |
||||||||||||||||||||||||
Baidu Core |
54,463 | 64,450 | 18 | 58,146 | 8,911 | (10 | ) | |||||||||||||||||
iQIYI |
33,295 | 38,252 | 15 | 35,748 | 5,478 | (7 | ) |
• | The content distinction for capitalization of production costs of an episodic television series and production costs of films is removed; |
• | Entities are required to test films and license agreements for program material for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements; |
• | Entities shall assess estimates of the use of a film in a film group and account for such changes prospectively; and |
• | Cash outflows for the costs incurred to obtain rights for both produced and licensed content are required to be reported as operating cash outflows in the statement of cash flows. |
(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 US$ denominated floating rate loan of US$1.0 billion with a term of five years and to borrow an unsecured US$ 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. In June 2016, we drew down two tranches of US$250 million each under the facility commitment. In November 2016, we drew down 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 RMB909 million (US$139 million) as of December 31, 2020, primarily used for working capital purposes, see note 12 to our audited consolidated financial statements included elsewhere in this annual report for further information. |
• | In February 2021, we entered into a non-binding term sheet for a term and revolving facility with a group of five mandated lead arrangers, bookrunners and underwriters, pursuant to which we are entitled to borrow an unsecured US$ denominated floating rate term loan of US$1.5 billion with a term of 5 years and to borrow an unsecured US$ denominated revolving loan of US$1.5 billion for 5 years. The facility is intended to finance the general corporate purposes and pay all transaction related fees and expenses. |
• | 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, 2020, the total carrying value and estimated fair value of these notes were US$750 million and US$786 million, respectively. The estimated fair value was based on quoted prices for our publicly-traded debt securities as of December 31, 2020. We are not subject to any financial covenants or other significant restrictions under the notes. In 2020, we paid an aggregate of US$26 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 Ten-year Notes”), with stated annual interest rate of 4.13%. The net proceeds from the sale of the notes were used for general corporate purposes. In June 2020, notes with carrying value of US$750 million were fully repaid when they became due. As of December 31, 2020, the total carrying value and estimated fair value were US$500 million and US$559 million, respectively, with respect to the 2025 Ten-year Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2020. We are not subject to any financial covenants or other significant restrictions under the notes. In 2020, we paid an aggregate of US$32 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, 2020, the total carrying value and estimated fair value were US$900 million and US$926 million, respectively, with respect to the 2022 Five-year Notes, and US$600 million and US$663 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, 2020. We are not subject to any financial covenants or other significant restrictions under the notes. In 2020, we paid an aggregate of US$48 million in interest payments related to these notes. |
• | 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, 2020, the total carrying value and estimated fair value were US$1.0 billion and US$1.1 billion, respectively, with respect to the 2023 Notes, and US$500 million and US$576 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, 2020. We are not subject to any financial covenants or other significant restrictions under the notes. In 2020, we paid an aggregate of US$61 million in interest payments related to these notes. |
• | 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, 2020, the total carrying value and estimated fair value were US$600 million and US$659 million, respectively, with respect to the 2024 November Notes, US$400 million and US$480 million, respectively, with respect to the 2028 November Notes, and US$250 million and US$275 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, 2020. We are not subject to any financial covenants or other significant restrictions under the notes. In 2020, we paid an aggregate of US$57 million in interest payments related to these notes. |
• | In April 2020, we issued an aggregate of US$600 million senior unsecured notes due in 2025 (“2025 Five-year Notes”), with stated annual interest rate of 3.075%, and an aggregate of US$400 million senior unsecured notes due in 2030 (“2030 April Notes”), with stated annual interest rate of 3.425%. The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. As of December 31, 2020, the total carrying value and estimated fair value were US$600 million and US$642 million, respectively, with respect to the 2025 Five-Year Notes, US$400 million and US$444 million, respectively, with respect to the 2030 April Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2020. We are not subject to any financial covenants or other significant restrictions under the notes. |
• | In October 2020, we issued an aggregate of US$650 million senior unsecured notes due in 2026 (“2026 Notes”), with stated annual interest rate of 1.720%, and an aggregate of US$300 million senior unsecured notes due in 2030 (“2030 October Notes”), with stated annual interest rate of 2.375%. The net proceeds from the sale of the notes are to be used to repay existing indebtedness. As of December 31, 2020, the total carrying value and estimated fair value were US$650 million and US$663 million, respectively, with respect to the 2026 Notes, and US$300 million and US$307 million, respectively, with respect to the 2030 October Notes. The estimated fair values were |
based on quoted prices for our publicly-traded debt securities as of December 31, 2020. We are not subject to any financial covenants or other significant restrictions under the notes. |
• | 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. |
• | In January 2021, iQIYI completed the issuance of US$900 million convertible senior notes due 2026 (“iQIYI 2026 Convertible Notes”). The iQIYI 2026 Convertible Notes are senior, unsecured obligations of iQIYI, and interest is payable semi-annually in cash at a rate of 4.00% per annum with a maturity date of December 15, 2026, unless previously repurchased, redeemed or converted prior to such date. The initial conversion rate of the iQIYI 2026 Convertible Notes is 44.8179 ADSs of iQIYI per US$1,000 principal amount of the iQIYI 2026 Convertible Notes. Upon conversion, iQIYI will pay or deliver to such converting holders, as the case may be, cash, iQIYI ADSs, or a combination of cash and iQIYI ADSs, at its election. |
Year ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in millions) |
||||||||||||||||
Net cash provided by operating activities |
35,967 | 28,458 | 24,200 | 3,709 | ||||||||||||
Net cash used in investing activities |
(34,460 | ) | (19,974 | ) | (27,552 | ) | (4,223 | ) | ||||||||
Net cash provided by (used in) financing activities |
15,082 | (3,873 | ) | 5,665 | 869 | |||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
1,902 | 1 | (212 | ) | (32 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase in cash, cash equivalents and restricted cash |
18,491 | 4,612 | 2,101 | 323 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at beginning of the year |
11,336 | 29,827 | 34,439 | 5,278 | ||||||||||||
Cash, cash equivalents and restricted cash at end of the year |
29,827 | 34,439 | 36,540 | 5,601 |
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) |
84,842 | 9,807 | 26,366 | 22,953 | 25,716 | |||||||||||||||
Operating lease obligations (2) |
7,839 | 2,430 | 3,289 | 1,496 | 624 | |||||||||||||||
Purchase obligations for fixed assets |
754 | 729 | 13 | 5 | 7 | |||||||||||||||
Purchase obligations for bandwidth and property management fees |
1,373 | 742 | 458 | 126 | 47 | |||||||||||||||
Purchase obligations for content assets (3) |
21,771 | 10,480 | 9,660 | 1,631 | — | |||||||||||||||
Investment commitment obligations (4) |
1,454 | NA | NA | NA | NA | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
118,033 | 24,188 | 39,786 | 26,211 | 26,394 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Including estimated interest payments of RMB10.9 billion in total (RMB2.4 billion, RMB4.2 billion, RMB2.4 billion and RMB1.9 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, 2020, respectively). Please see “Loans Payable” under Note 12, “Notes Payable” under Note 13 and “Convertible Notes” under Note 14 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 content assets consist primarily of expenditures for content assets 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 |
52 | Chairman of the Board of Directors and Chief Executive Officer | ||||
James Ding |
55 | Independent Director | ||||
Brent Callinicos |
55 | Independent Director | ||||
Yuanqing Yang |
56 | Independent Director | ||||
Jixun Foo |
52 | Independent Director | ||||
Herman Yu |
50 | Chief Financial Officer | ||||
Haifeng Wang |
49 | Chief Technology Officer | ||||
Dou Shen |
41 | Executive Vice President | ||||
Shanshan Cui |
45 | Senior Vice President | ||||
Victor Zhixiang Liang |
47 | Senior Vice President* |
* | Subsequent to the end of the fiscal year ended December 31, 2020, we determined that Mr. Liang, holding the position of senior vice president, is an executive officer of our company. |
B. |
Compensation |
Name |
Ordinary Shares Underlying Outstanding Options |
Exercise Price (US$/Share) |
Grant Date |
Expiration Date | ||||||||
Robin Yanhong Li |
342,320 | 17.729 | February 16, 2012 | February 16, 2022 | ||||||||
847,840 | 13.538 | January 31, 2013 | January 31, 2023 | |||||||||
193,200 | 21.566 | February 24, 2014 | February 24, 2024 | |||||||||
958,160 | 26.834 | February 11, 2015 | February 11, 2025 | |||||||||
3,512,320 | 25.863 | April 16, 2015 | April 16, 2025 | |||||||||
211,040 | 19.778 | February 25, 2016 | February 25, 2026 | |||||||||
724,800 | 21.888 | October 27, 2016 | October 27, 2026 | |||||||||
469,120 | 23.251 | February 22, 2017 | February 22, 2027 | |||||||||
110,400 | (1) |
— | February 22, 2017 | N/A | ||||||||
397,280 | (1) |
— | February 9, 2018 | N/A | ||||||||
786,240 | (1) |
— | February 18, 2019 | N/A | ||||||||
212,560 | (1) |
— | May 23, 2019 | N/A | ||||||||
1,317,760 | (1) |
— | February 5, 2020 | N/A | ||||||||
Herman Yu |
* | 0.001 | February 9, 2018 | February 9, 2028 | ||||||||
* | 0.001 | February 18, 2019 | February 1, 2029 | |||||||||
* | 0.001 | May 23, 2019 | May 23, 2029 | |||||||||
* | 0.001 | February 5, 2020 | February 5, 2030 | |||||||||
Dou Shen |
* | (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 | ||||||||
* | 12.486 | August 8, 2019 | August 8, 2029 | |||||||||
* | (1) |
— | August 8, 2019 | N/A | ||||||||
* | (1) |
— | October 28, 2019 | N/A | ||||||||
* | (1) |
— | February 5, 2020 | N/A | ||||||||
Haifeng Wang |
* | (1) |
— | February 22, 2017 | N/A | |||||||
* | 23.483 | 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 | ||||||||
* | 12.486 | August 8, 2019 | August 8, 2029 | |||||||||
* | (1) |
— | February 5, 2020 | N/A | ||||||||
Shanshan Cui |
* | (1) |
— | February 9, 2018 | N/A | |||||||
* | (1) |
— | February 18, 2019 | N/A | ||||||||
* | (1) |
— | May 23, 2019 | N/A | ||||||||
* | (1) |
— | February 5, 2020 | N/A | ||||||||
Victor Zhixiang Liang |
* | 26.834 | February 11, 2015 | February 11, 2025 | ||||||||
* | 23.251 | February 22, 2017 | February 22, 2027 | |||||||||
* | (1) |
— | February 22, 2017 | N/A | ||||||||
* | (1) |
— | February 9, 2018 | N/A | ||||||||
* | (1) |
— | February 18, 2019 | N/A | ||||||||
* | (1) |
— | May 23, 2019 | N/A | ||||||||
* | (1) |
— | February 5, 2020 | N/A | ||||||||
Jixun Foo |
* | (1) |
— | February 5, 2020 | N/A | |||||||
James Ding |
* | (1) |
— | February 5, 2020 | N/A | |||||||
Brent Callinicos |
* | (1) |
— | February 5, 2020 | N/A | |||||||
Yuanqing Yang |
* | (1) |
— | February 5, 2020 | N/A | |||||||
Other individuals as a group |
137,893,360 | — | — | — |
* | The options and restricted shares in aggregate held by each of these directors and officers represent less than 1% of our total outstanding shares. The options held by these directors and officers represent less than 1% of our outstanding shares. |
(1) | Restricted shares. |
• | options (incentive share options, or ISO); |
• | restricted shares; |
• | restricted share units; and |
• | any other form of awards granted to a participant pursuant to the 2008 plan. |
• | options (incentive share options, or ISO); |
• | 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 directors and executive officers; and |
• | each person known to us to own beneficially more than 5% of our total outstanding shares. |
Class A Ordinary Shares |
Class B Ordinary Shares |
Total Ordinary Shares |
% of Total Ordinary Shares |
% of Aggregate Voting Power † |
||||||||||||||||
Directors and Executive Officers: |
||||||||||||||||||||
Robin Yanhong Li (1) |
18,291,280 | 439,200,000 | 457,491,280 | 17.0 | 57.0 | |||||||||||||||
Herman Yu |
* | — | * | * | * | |||||||||||||||
Dou Shen |
* | — | * | * | * | |||||||||||||||
Haifeng Wang |
* | — | * | * | * | |||||||||||||||
Shanshan Cui |
* | — | * | * | * | |||||||||||||||
Victor Zhixiang Liang |
* | — | * | * | * | |||||||||||||||
James Ding |
* | — | * | * | * | |||||||||||||||
Brent Callinicos |
* | — | * | * | * | |||||||||||||||
Yuanqing Yang |
* | — | * | * | * | |||||||||||||||
Jixun Foo |
* | — | * | * | * | |||||||||||||||
All Directors and Executive Officers as a Group |
20,209,280 | 439,200,000 | 459,409,280 | 17.1 | 57.1 | |||||||||||||||
Principal Shareholders: |
||||||||||||||||||||
Handsome Reward Limited (2) |
12,689,200 | 439,200,000 | 451,889,200 | 16.8 | 57.0 |
† | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A ordinary shares and Class B ordinary shares as a single class. Each holder of Class A ordinary shares is entitled to one vote per share and each holder of our Class B ordinary shares is entitled to 10 votes per share on all matters submitted to them for a vote. Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders and other matters as may otherwise be required by law. Each Class B ordinary share is convertible at any time by the holder thereof into one Class A ordinary share. |
* | Less than 1% of our total outstanding 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, Shangdi 10th Street, Haidian District, Beijing 100085, PRC. |
(1) | Includes (i) 3,013,200 Class A Ordinary Shares directly held by Mr. Robin Yanhong Li on record, (ii) 2,232,000 Class A ordinary shares in the form of ADSs held by Mr. Robin Yanhong Li in the brokerage account of the administrator of our employee stock option program, (iii) 342,320 Class A ordinary shares issuable to Mr. Robin Yanhong Li upon exercise of options within 60 days after March 3, 2021, (iv) 14,560 Class A ordinary shares issuable to Mr. Robin Yanhong Li upon vesting of restricted shares within 60 days after March 3, 2021, (v) 439,200,000 Class B ordinary shares held on record by Handsome Reward Limited, a British Virgin Islands company wholly owned by Mr. Robin Yanhong Li, (vi) 5,772,720 Class A ordinary shares in the form of ADSs held by Handsome Reward Limited in the brokerage account of the administrator of our employee stock option program, (vii) 6,916,480 Class A ordinary shares issuable to Handsome Reward Limited upon exercise of options within 60 days after the date of March 3, 2021, and (viii) excludes 116,600,000 Class B ordinary shares owned by Ms. Melissa Ma, Mr. Robin Yanhong Li’s wife, who also had owned an aggregate of 50,000 ADSs, an additional 25,645 ADSs in the brokerage account of the administrator of our employee stock option program and the right to acquire 575 ADSs upon the vesting of restricted share units granted under our share incentive plan within 60 days after March 3, 2021 of which Mr. Robin Yanhong Li disclaims beneficial ownership. The voting power of the shares beneficially owned by Mr. Robin Yanhong Li represented 57.0% of the total outstanding voting power of our company as of March 3, 2021. |
(2) | Includes (i) 439,200,000 Class B ordinary shares held by Handsome Reward Limited, a British Virgin Islands company wholly owned and controlled by Mr. Robin Yanhong Li, (ii) 5,772,720 Class A ordinary shares in the form of ADSs held by Handsome Reward Limited in the brokerage account of the administrator of our employee stock option program, and (iii) 6,916,480 Class A Ordinary Shares issuable to Handsome Reward Limited upon exercise of options within 60 days after the date of March 3, 2021. |
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 to ADS holders 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 (to the extent that a fee of $0.02 was not charged as a result of any cash distribution during that calendar 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 |
2019 (RMB in thousands) |
2020 (RMB in thousands) |
|||||||
Audit fees (1) |
30,503 | 33,526 | ||||||
Audit-related fees (2) |
1,068 | 5,546 |
(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 statements and assistance with and review of documents filed with the SEC. In 2019 and 2020, 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 2019 and 2020 for professional services rendered by our principal auditors associated with certain due diligence projects and services in connection with a bond offering. |
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 ADSs that May Yet Be Purchased Under the Plan |
||||||||||||
February 1 – February 28, 2020 |
400 | US$ | 114.98 | 400 | US$ | 290,500,506 | ||||||||||
March 1 – March 31, 2020 |
1,827,789 | US$ | 101.01 | 1,827,789 | US$ | 105,867,731 | ||||||||||
May 13 – May 31, 2020 |
5,022,715 | US$ | 107.50 | 5,022,715 | US$ | 4,065,927,328 | ||||||||||
August 1 – August 31,2020 |
3,812,255 | US$ | 125.05 | 3,812,255 | US$ | 3,483,326,261 | ||||||||||
September 1 – September 30,2020 |
976,584 | US$ | 122.33 | 976,584 | US$ | 3,363,860,520 | ||||||||||
October 1 – October 31, 2020 |
37,987 | US$ | 123.00 | 37,987 | US$ | 3,359,188,267 | ||||||||||
November 1 – November 30, 2020 |
1,419,289 | US$ | 137.80 | 1,419,289 | US$ | 3,163,615,488 | ||||||||||
December 1 – December 31, 2020 |
2,664,972 | US$ | 143.06 | 2,664,972 | US$ | 2,782,363,579 | ||||||||||
Total |
15,761,991 |
US$ |
120.69 |
15,761,991 |
US$ |
2,782,363,579 |
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 | ||
2.8 | ||
2.9 | ||
2.10 | ||
2.11 | ||
2.12 |
Exhibit Number |
Description of Document | |
2.13 | ||
2.14 | ||
2.15 | ||
2.16 | ||
2.17 | ||
2.18 | ||
2.19 | ||
2.20 | ||
2.21 | ||
2.22 | ||
2.23 | ||
2.24 | ||
2.23 | ||
2.24 | ||
2.25 | ||
2.26 |
Exhibit Number |
Description of Document | |
2.27 | 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) | |
2.28 | 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) | |
2.29 | 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) | |
2.30 | 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) | |
2.31 | 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) | |
2.32 | 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 |
Exhibit Number |
Description of Document | |
4.49 | ||
4.50 | ||
4.51 | ||
4.54 | ||
4.55 | ||
4.56 | ||
4.58 | ||
4.59 | ||
4.60 | ||
4.61 | ||
4.62 | ||
4.63 | ||
4.64 |
Exhibit Number |
Description of Document | |
4.65 | ||
4.66 | ||
4.67 | ||
4.69 | ||
4.70 | ||
4.71 | ||
4.72 | ||
4.73 | ||
4.74 | ||
4.75 | ||
4.76 | ||
4.77 |
Exhibit Number |
Description of Document | |
4.78 | ||
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* | ||
4.92* | ||
4.93* |
Exhibit Number |
Description of Document | |
4.94 | ||
4.95 | ||
4.96 | ||
4.97 | ||
4.98 | ||
4.99 | ||
4.100 | ||
4.101 | ||
4.102 | ||
4.103 | ||
4.104 | ||
4.105 |
Exhibit Number |
Description of Document | |
8.1* | ||
11.1 | ||
12.1* | ||
12.2* | ||
13.1** | ||
13.2** | ||
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 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-7 | ||||
F-8 | ||||
F-9 | ||||
F-10 – F-11 | ||||
F-12 – F-13 | ||||
F-14 – F-95 |
Description of the Matter |
As of December 31, 2020, the carrying amount of the Company’s equity investments accounted for using the measurement alternative was RMB24,603 million. As discussed in Notes 2, 4 and 25 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, 2020, gross unrealized gains (upward adjustments) of RMB3,726 million and gross unrealized losses (downward adjustments excluding impairment) of RMB100 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 observable price change of the same issuer is an orderly transaction and identical or similar to an investment held by the Company, and, if so, 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 observable price changes are orderly transactions and identical or similar to the instruments held by the Company. 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 procedures that included, among others, evaluating management’s assessment for identifying observable price changes and whether they are orderly transactions and identical or similar to the instruments held by the Company by considering differences in rights and obligations of the two instruments. 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 evaluated management’s assessment of the probability of exit events as it relates to liquidation and redemption preferences, based on information available as of the observable transaction date. For instruments which management assessed as similar, 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 comparing expected volatility to those of comparable companies, |
when applicable. In addition, we recalculated the adjustments made to carrying values of the equity investments held and compared the unrealized gains or losses to the amounts recorded in the Company’s accounting records. |
Description of the Matter |
As described in Notes 2, 4 and 25 to the consolidated financial statements, as of December 31, 2020, the Company’s consolidated balance of equity method investments and equity investments accounted for using the measurement alternative was RMB24,067 million and RMB24,603 million, respectively. For the year ended December 31, 2020, the Company recognized impairment losses of RMB297 million and RMB2,310 million for equity method investments and equity investments accounted for using the measurement alternative, respectively. The Company evaluates its equity method investments for impairment at each reporting date, or more frequently if events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when determining whether an equity method investment has been other-than-temporarily-impaired, include, but are not limited to, the length of the time and the extent to which the fair value has been less than cost and the Company’s intent and ability to retain the investment until the recovery of its cost. An impairment loss is recognized in earnings when the decline in value is determined to be other-than-temporary. For equity investments accounted for using the measurement alternative, the Company makes a qualitative assessment considering impairment indicators to evaluate whether investments are impaired at each reporting date. If a qualitative assessment indicates that an investment is impaired, the Company estimates the investment’s fair value and records an impairment loss if the fair value is less than the investment’s carrying value. |
Auditing the Company’s impairment assessment was complex and highly judgmental due to the significant uncertainties of COVID-19’s future impact and the significant judgment involved in (i) management’s assessment of whether indicators of impairment existed, and if so, determining whether (ii) a decline in value of equity method investments was other-than-temporary and (iii) investments in equity investments accounted for using the measurement alternative were impaired. In addition, auditing the fair value of the Company’s investments in investees without observable market prices was highly judgmental due to the subjectivity of the unobservable inputs used by management in the valuation methodologies to determine the fair value for these investments, such as selection of comparable companies and multiples, expected volatility, discount for lack-of-marketability and probability of exit events as it relates to liquidation and redemption preferences when applicable, especially considering the increased market volatility in the global financial markets after the COVID-19 outbreak. These |
unobservable inputs and resulting fair value estimates may be affected by unexpected changes in future market or economic conditions. |
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 impairment review processes for equity method investments and equity investments accounted for using the measurement alternative. For example, we tested controls over management’s identification and review of impairment indicators for these investments, and as necessary, management’s review of the subsequent determination of whether impairment existed and the measurement of fair value. |
To test the impairment assessment of equity method investments and equity investments accounted for using the measurement alternative, we performed audit procedures that included, among others, evaluating management’s assessment as to whether indicators of impairment existed and investments were impaired by considering the financial condition and operating results of the investees, the expected impact of COVID-19 on the Company’s investees and the industries they operate in, as well as other relevant market information. |
For equity method investments, we also evaluated management’s determination as to whether an indicated impairment was other-than-temporary, considering factors such as the duration and magnitude of the decline in value and the Company’s intent and ability to retain the investment until the recovery of its cost. We tested the completeness, accuracy and relevance of the underlying data used by management in the valuation models to determine fair value. With the assistance of our internal valuation specialists, we evaluated the appropriateness of the valuation methodologies used by management to determine the fair value of investments and tested the unobservable inputs used in the valuation methodologies by comparing certain assumptions to industry, business and market data/information available from third-party sources. We also independently developed fair value estimates and compared them to the Company’s results and involved our internal valuation specialists to assist with the application of these procedures. |
As of December 31, |
||||||||||||||||
Notes |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
US$ |
||||||||||||||
ASSETS |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Restricted cash |
||||||||||||||||
Short-term investments, net of allowances for credit losses of |
4 | |||||||||||||||
Accounts receivable, net of allowance of RMB |
7 | |||||||||||||||
Amounts due from related parties |
23 | |||||||||||||||
Other current assets, net |
8 | |||||||||||||||
|
|
|
|
|
|
|||||||||||
Total current assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Non-current assets: |
||||||||||||||||
Fixed assets, net |
9 | |||||||||||||||
Licensed copyrights, net |
5 | |||||||||||||||
Produced content, net |
6 | |||||||||||||||
Intangible assets, net |
10 | |||||||||||||||
Goodwill |
10 | |||||||||||||||
Long-term investments, net |
4 | |||||||||||||||
Amounts due from related parties |
23 | |||||||||||||||
Deferred tax assets, net |
16 | |||||||||||||||
Operating lease right-of-use |
15 | |||||||||||||||
Other non-current assets |
8 | |||||||||||||||
|
|
|
|
|
|
|||||||||||
Total non-current assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||
Current liabilities |
1 | |||||||||||||||
Short-term loans |
12 | |||||||||||||||
Accounts payable and accrued liabilities |
11 | |||||||||||||||
Customer deposits and deferred revenue |
||||||||||||||||
Deferred income |
||||||||||||||||
Long-term loans, current portion |
12 | |||||||||||||||
Convertible senior notes, current portion |
14 | |||||||||||||||
Notes payable, current portion |
13 | |||||||||||||||
Amounts due to related parties |
23 | |||||||||||||||
Operating lease liabilities |
15 | |||||||||||||||
|
|
|
|
|
|
|||||||||||
Total current liabilities |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Non-current liabilities |
1 | |||||||||||||||
Deferred income |
||||||||||||||||
Deferred revenue |
||||||||||||||||
Amounts due to related parties |
23 | |||||||||||||||
Long-term loans |
12 | |||||||||||||||
Notes payable |
13 | |||||||||||||||
Convertible senior notes |
14 | |||||||||||||||
Deferred tax liabilities |
16 | |||||||||||||||
Operating lease liabilities |
15 | |||||||||||||||
Other non-current liabilities |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total non-current liabilities |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Commitments and contingencies |
18 | |||||||||||||||
Redeemable noncontrolling interests |
19 | |||||||||||||||
Equity |
||||||||||||||||
Class A Ordinary Shares, par value US$ per share, (Note) |
20 | |||||||||||||||
Class B Ordinary Shares, par value US$ per share, (Note) |
20 | |||||||||||||||
Additional paid-in capital |
||||||||||||||||
Retained earnings |
20 | |||||||||||||||
Accumulated other comprehensive (loss) income |
20 | ( |
) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total Baidu, Inc. shareholders’ equity |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Noncontrolling interests |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total equity |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities, redeemable noncontrolling interests and equity |
||||||||||||||||
|
|
|
|
|
|
For the Years Ended December 31, |
||||||||||||||||||||
Notes |
2018 |
2019 |
2020 |
2020 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
Revenues: |
||||||||||||||||||||
Online marketing services |
||||||||||||||||||||
Others |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
24 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating costs and expenses: |
||||||||||||||||||||
Cost of revenues |
||||||||||||||||||||
Selling, general and administrative |
||||||||||||||||||||
Research and development |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating costs and expenses |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating profit |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Other income (loss): |
||||||||||||||||||||
Interest income |
||||||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Foreign exchange loss, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Share of losses from equity method investments |
4 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Others, net |
4 | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total other income (loss), net |
( |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before income taxes |
( |
) |
||||||||||||||||||
Income taxes |
16 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
( |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Less: net loss attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to Baidu, Inc. |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Earnings per share for Class A and Class B ordinary shares (Note): |
21 | |||||||||||||||||||
Basic |
||||||||||||||||||||
Diluted |
||||||||||||||||||||
Earnings per ADS (1 ADS equals (Note) |
21 | |||||||||||||||||||
Basic |
||||||||||||||||||||
Diluted |
||||||||||||||||||||
Weighted average number of Class A and Class B ordinary shares outstanding ( in millions ) (Note) |
||||||||||||||||||||
Basic |
||||||||||||||||||||
Diluted |
||||||||||||||||||||
Other comprehensive income (loss): |
20 | |||||||||||||||||||
Foreign currency translation adjustments |
( |
) | ||||||||||||||||||
Unrealized gains (losses) on available-for-sale |
( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income (loss), net of tax |
( |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income (loss) |
( |
) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Less: comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income attributable to Baidu, Inc. |
||||||||||||||||||||
|
|
|
|
|
|
|
|
For the Years Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income (loss) |
( |
) | ||||||||||||||
Adjustments to reconcile net income (loss) 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 |
||||||||||||||||
Allowance for credit losses |
||||||||||||||||
Investment and interest income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amortization and impairment of licensed copyrights |
||||||||||||||||
Amortization and impairment of produced content |
||||||||||||||||
Impairment of other assets |
||||||||||||||||
Share of losses from equity method investments |
||||||||||||||||
(Gain)/loss on disposal of subsidiaries |
( |
) | ||||||||||||||
Barter transaction revenue |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Accretion on convertible senior notes and asset-backed debt securities |
||||||||||||||||
Other non-cash expenses |
||||||||||||||||
Others |
( |
) | ( |
) | ||||||||||||
Changes in operating assets and liabilities, net of effects of |
||||||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amounts due from related parties |
( |
) | ||||||||||||||
Licensed copyrights |
( |
) | ( |
) | ||||||||||||
Produced content |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other assets |
( |
) | ( |
) | ( |
) | ||||||||||
Customer deposits and deferred revenue |
||||||||||||||||
Accounts payable and accrued liabilities |
( |
) | ||||||||||||||
Deferred income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amounts due to related parties |
( |
) | ( |
) | ( |
) | ||||||||||
Net cash generated from 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 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Purchases of held-to-maturity |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Maturities of held-to-maturity |
||||||||||||||||
Purchases of available-for-sale |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Sales and maturities of available-for-sale |
||||||||||||||||
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 (Note) |
( |
) | ||||||||||||||
Principal payments received on micro loans (Note) |
||||||||||||||||
Purchases of other invested securities (Note) |
( |
) | ||||||||||||||
Sales and maturities of other invested securities (Note) |
||||||||||||||||
Other investing activities |
( |
) | ( |
) | ||||||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
For the Years Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
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 |
||||||||||||||||
Repayment of 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 calls |
( |
) | ( |
) | ||||||||||||
Proceeds from issuance of subsidiaries’ shares |
||||||||||||||||
Repurchase of ordinary shares |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Proceeds from exercise of share options |
||||||||||||||||
Proceeds from issuance of redeemable noncontrolling interests |
||||||||||||||||
Proceeds from third-party investors for sale of financial products ( Note) |
||||||||||||||||
Repayment to third-party investors for sale of financial products ( Note) |
( |
) | ||||||||||||||
Proceeds from secured borrowings from third-party financial institutions ( Note) |
||||||||||||||||
Repayment of secured borrowings from third-party financial institutions ( Note) |
( |
) | ||||||||||||||
Other financing activities |
( |
) | ( |
) | ( |
) | ||||||||||
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 |
||||||||||||||||
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 income (loss) |
|||||||||||||||||||||||||
Number of shares ( Note) |
Amount |
|||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||
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 to noncontrolling interest |
— | ( |
) | |||||||||||||||||||||||||
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 issued by iQIYI, net of issuance costs |
— | |||||||||||||||||||||||||||
Purchase of capped calls |
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
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 issued by iQIYI, net of issuance costs |
— | |||||||||||||||||||||||||||
Purchase of capped calls |
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2019 |
( |
) |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 ( Note) |
Amount |
|||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||
Balances at December 31, 2019 |
( |
) |
||||||||||||||||||||||||||
Cumulative effect of accounting change |
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
Net income |
— | ( |
) | |||||||||||||||||||||||||
Other comprehensive income |
— | |||||||||||||||||||||||||||
Business combinations |
— | |||||||||||||||||||||||||||
Issuance of shares by the Company’s subsidiaries to noncontrolling interest |
— | |||||||||||||||||||||||||||
Exercise of share-based awards |
||||||||||||||||||||||||||||
Share-based compensation |
— | |||||||||||||||||||||||||||
Dividends payable by the Company’s subsidiaries |
— | ( |
) | ( |
) | |||||||||||||||||||||||
Return of equity to noncontrolling interest shareholders |
— | ( |
) | ( |
) | |||||||||||||||||||||||
Accretion of redeemable noncontrolling interests |
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
Repurchase and retirement of ordinary shares |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Equity component of convertible senior notes issued by iQIYI, net of issuance costs |
— | |||||||||||||||||||||||||||
Others |
( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2020 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2020, in US$ |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1. |
ORGANIZATION AND BASIS OF PRESENTATION |
• | 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, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Assets |
||||||||||||
Cash and cash equivalents |
||||||||||||
Short-term investments, net |
||||||||||||
Accounts receivable, net |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Fixed assets, net |
||||||||||||
Intangible assets, net |
||||||||||||
Licensed copyrights, net |
||||||||||||
Produced content, net |
||||||||||||
Long-term investments, net |
||||||||||||
Operating lease right-of-use |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
|||||||
Liabilities |
||||||||||||
Accounts payable and accrued liabilities |
||||||||||||
Customer deposits and deferred revenue |
||||||||||||
Operating lease liabilities |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total current third-party liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Operating lease 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, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Total revenues |
||||||||||||||||
Net (loss) income |
( |
) | ( |
) | ||||||||||||
Net cash provided by operating activities |
||||||||||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net cash provided by financing activities |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
• | The content distinction for capitalization of production costs of an episodic television series and production costs of films is removed; |
• | Entities are required to test films and license agreements for program material for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements; |
• | Entities shall assess estimates of the use of a film in a film group and account for such changes prospectively; |
• | Cash outflows for the costs incurred to obtain rights for both produced and licensed content are required to be reported as operating cash outflows in the statement of cash flows. |
Office building |
– | |
Office building related facility, machinery and equipment |
– | |
Computer equipment |
– | |
Office equipment |
– | |
Vehicles |
– | |
Leasehold improvements |
– |
Trademarks |
– | |
Technology |
– | |
Intellectual property right |
– | |
Online literature |
– | |
Others |
– |
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 19) |
( |
) | ||
Goodwill |
||||
RMB |
||||
(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 19) |
( |
) | ||
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 |
( |
) | ( |
) | ||||
Pre-existing equity interests and debt investment |
( |
) | ( |
) | ||||
Noncontrolling interests |
( |
) | ( |
) | ||||
Goodwill |
||||||||
4. |
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 |
|||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
Held-to-maturity |
— | — | — | |||||||||||||||||||||
Available-for-sale |
— | — | — |
As of December 31, 2020 |
||||||||||||||||||||||||||||
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 |
— | — | — | |||||||||||||||||||||||||
Available-for-sale |
— | — | — |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Equity investments at fair value with readily determinable fair value |
||||||||||||
Available-for-sale debt investment |
||||||||||||
Equity investments without readily determinable fair value |
||||||||||||
Equity method investments |
||||||||||||
Investments accounted for at fair value |
||||||||||||
Long-term held-to-maturity investments |
||||||||||||
|
|
|
|
|
|
|||||||
Total long-term investments |
||||||||||||
|
|
|
|
|
|
As of December 31, 2019 |
As of December 31, 2020 |
As of December 31, 2020 |
||||||||||
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 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Gross unrealized gains |
||||||||||||||||
Gross unrealized losses (including impairment) (i) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net unrealized gains (losses) on equity securities held |
( |
) | ||||||||||||||
Net realized gains on equity securities sold |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net gains recognized |
||||||||||||||||
|
|
|
|
|
|
|
|
(i) | Gross unrealized losses (downward adjustments excluding impairment) were RMB |
As of September 30, (i) |
||||||||||||
2019 (ii) |
2020 |
2020 |
||||||||||
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) |
||||||||||||||||
2018 (ii) |
2019 (ii) |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Total revenues |
||||||||||||||||
Gross profit |
||||||||||||||||
Income (loss) from operations |
( |
) | ( |
) | ||||||||||||
Net income (loss) |
( |
) | ( |
) | ||||||||||||
Net income (loss) attributable to the investees |
( |
) | ( |
) |
(i) | The Company adopted a one-quarter lag in reporting its share of equity income (loss) in Trip. |
(ii) | Trip 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 was immaterial, and prior period financial information of Trip was not restated. |
As of September 30, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
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) |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
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 share of losses in all of its equity investees. |
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 |
|||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||
Equity investments at fair value with readily determinable fair value |
— |
— |
( |
) |
||||||||||||||||||||||||
Available-for-sale |
— |
— |
( |
) |
||||||||||||||||||||||||
Investments accounted for at fair value |
— |
— |
( |
) |
As of December 31, 2020 |
||||||||||||||||||||||||||||
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 |
( |
) | ||||||||||||||||||||||||||
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 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Long-term held-to-maturity investments |
— |
( |
) |
— |
— |
As of December 31, 2020 |
||||||||||||||||||||||||||||
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) |
||||||||||||||||||||||||||||
Long-term held-to-maturity investments |
— |
— |
— |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Due in 1 year |
||||||||||||
Due in 1 year through 2 years |
||||||||||||
Due in 2 years through 3 years |
||||||||||||
Total |
||||||||||||
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Due in 1 year |
||||||||||||
Due in 1 year through 5 years |
||||||||||||
Due in 5 years through 10 years |
||||||||||||
Not due at a single maturity date |
||||||||||||
Total |
||||||||||||
5. |
LICENSED COPYRIGHTS, NET |
As of December 31, 2019 |
||||||||||||||||
Gross carrying value |
Accumulated amortization |
Impairment amount |
Net carrying value |
|||||||||||||
RMB |
RMB |
RMB |
RMB |
|||||||||||||
(In millions) |
||||||||||||||||
Licensed copyrights |
||||||||||||||||
—Broadcasting rights |
( |
) | ( |
) | ||||||||||||
—Sublicensing rights |
( |
) | — | — | ||||||||||||
( |
) | ( |
) | |||||||||||||
Less: current portion: |
||||||||||||||||
—Broadcasting rights |
( |
) | ( |
) | ||||||||||||
—Sublicensing rights |
( |
) | — | — | ||||||||||||
( |
) | ( |
) | |||||||||||||
Licensed copyrights—non-current |
||||||||||||||||
—Broadcasting rights |
( |
) | — | |||||||||||||
—Sublicensing rights |
— | — | ||||||||||||||
( |
) | — | ||||||||||||||
As of December 31, 2020 |
||||||||||||||||||||
Gross carrying value |
Accumulated amortization |
Impairment amount |
Net carrying value |
|||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
||||||||||||||||
(In millions) |
||||||||||||||||||||
Licensed copyrights |
||||||||||||||||||||
—Broadcasting rights |
( |
) | ( |
) | ||||||||||||||||
—Sublicensing rights |
( |
) | — | — | — | |||||||||||||||
( |
) | ( |
) | |||||||||||||||||
Less: current portion: |
||||||||||||||||||||
—Broadcasting rights |
( |
) | ( |
) | ||||||||||||||||
—Sublicensing rights |
( |
) | — | — | — | |||||||||||||||
( |
) | ( |
) | |||||||||||||||||
Licensed copyrights—non-current |
||||||||||||||||||||
—Broadcasting rights |
( |
) | ( |
) | ||||||||||||||||
—Sublicensing rights |
— | — | — | — | — | |||||||||||||||
( |
) | ( |
) | |||||||||||||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
Within 1 year |
||||||||
Between 1 and 2 years |
||||||||
Between 2 and 3 years |
6. |
PRODUCED CONTENT, NET |
As of December 31, |
||||
2019 |
||||
RMB |
||||
(In millions) |
||||
Released, less amortization |
||||
In production |
||||
In development |
||||
|
|
|||
|
|
As of December 31, |
||||||||
2020 |
2020 |
|||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
Released, less amortization and impairment |
||||||||
—Predominantly monetized with other content assets |
||||||||
—Predominantly monetized on its own |
||||||||
|
|
|
|
|||||
In production, less impairment |
||||||||
—Predominantly monetized with other content assets |
||||||||
— |
||||||||
|
|
|
|
|||||
In development, less impairment |
||||||||
—Predominantly monetized with other content assets |
||||||||
—Predominantly monetize d on its own |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
RMB |
US$ |
|||||||
(In millions) |
||||||||
Due in 1 year |
||||||||
Between 1 and 2 years |
||||||||
Between 2 and 3 years |
7. |
ACCOUNTS RECEIVABLE |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Accounts receivable |
||||||||||||
Allowance for credit losses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Balance as of January 1 |
||||||||||||||||
Adoption of ASU 2016-13 |
— | — | ||||||||||||||
Amounts charged to expenses |
||||||||||||||||
Amounts written off |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 31 |
||||||||||||||||
|
|
|
|
|
|
|
|
8. |
OTHER ASSETS |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Prepaid expenses |
||||||||||||
Advances to suppliers |
||||||||||||
Receivables from online payment agencies |
||||||||||||
Deposits |
||||||||||||
Prepaid licensed copyrights |
||||||||||||
Contract assets, net (i) |
||||||||||||
VAT prepayments |
||||||||||||
Income tax prepayments |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total other current assets |
||||||||||||
Long-term prepaid expenses |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total other non-current assets |
||||||||||||
|
|
|
|
|
|
(i) | The allowance for credit losses on contract assets was RMB |
9. |
FIXED ASSETS |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
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 |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
10. |
GOODWILL AND INTANGIBLE ASSETS |
Baidu Core |
iQIYI |
Total |
||||||||||
RMB |
RMB |
RMB |
||||||||||
(In millions) |
||||||||||||
Balance at December 31, 2018 |
||||||||||||
|
|
|
|
|
|
|||||||
Goodwill acquired (Note 3) |
— | |||||||||||
Goodwill disposed (i) |
( |
) | — | ( |
) | |||||||
Foreign currency translation and other adjustments |
— | |||||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019 |
||||||||||||
Goodwill acquired (Note 3) |
— | |||||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2020 |
||||||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2020, in US$ |
||||||||||||
|
|
|
|
|
|
(i) | Disposition during the year ended December 31, 2019 was primarily related to the deconsolidation of a subsidiary (Note 4). |
As of December 31, 2019 |
||||||||||||||||
Gross carrying value |
Accumulated impairment |
Accumulated amortization |
Net carrying value |
|||||||||||||
RMB |
RMB |
RMB |
RMB |
|||||||||||||
(In millions) |
||||||||||||||||
Trademarks |
( |
) | ( |
) | ||||||||||||
Technology |
( |
) | ( |
) | ||||||||||||
Intellectual property right |
( |
) | ( |
) | ||||||||||||
Online literature |
( |
) | ||||||||||||||
Others |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
As of December 31, 2020 |
||||||||||||||||||||
Gross carrying value |
Accumulated impairment |
Accumulated amortization |
Net carrying value |
Net carrying value |
||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
||||||||||||||||
(In millions) |
||||||||||||||||||||
Trademarks |
( |
) | ( |
) | ||||||||||||||||
Technology |
( |
) | ( |
) | ||||||||||||||||
Intellectual property right |
( |
) | ( |
) | ||||||||||||||||
Online literature |
— | ( |
) | |||||||||||||||||
Others |
( |
) | ( |
) | ||||||||||||||||
( |
) | ( |
) | |||||||||||||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
For the years ending December 31, |
||||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
11. |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Accrued other operating expenses |
||||||||||||
Content acquisition costs |
||||||||||||
Tax payable |
||||||||||||
Accrued payroll and welfare |
||||||||||||
Payable to noncontrolling interest shareholders |
||||||||||||
Traffic acquisition costs |
||||||||||||
Bandwidth costs |
||||||||||||
Accruals for purchases of fixed assets |
||||||||||||
Funds collected on behalf of service providers |
||||||||||||
Interest payable |
||||||||||||
Payable to merchants |
||||||||||||
Users’ and third party agents’ deposits |
||||||||||||
Others |
||||||||||||
12. |
LOANS PAYABLE |
13. |
NOTES PAYABLE |
Issue date |
Principal amount (US$ million) |
Mature date |
Effective interest rate |
|||||||||
2022 Ten-year Notes |
% | |||||||||||
2019 Notes |
% * | |||||||||||
2020 Notes |
% * | |||||||||||
2025 Ten-year Notes |
% | |||||||||||
2022 Five-year Notes |
% | |||||||||||
2027 Notes |
% | |||||||||||
2023 Notes |
% | |||||||||||
2028 March Notes |
% | |||||||||||
2024 Notes |
% | |||||||||||
2024 Notes |
|
|
|
|
|
|
|
|
|
|
|
% |
2028 November Notes |
% | |||||||||||
2025 Five-year Notes |
% | |||||||||||
2030 April Notes |
% | |||||||||||
2026 Notes |
% | |||||||||||
2030 October Notes |
% |
* | The 2019 Notes and 2020 Notes were fully repaid when they became due |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Principal amount |
||||||||||||
Unamortized discount and debt issuance costs |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
RMB |
US$ |
|||||||
(In millions) |
||||||||
For the years ending December 31, |
||||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
Thereafter |
14. |
CONVERTIBLE NOTES |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Liability component: |
||||||||||||
Principal |
||||||||||||
Less: unamortized debt discount |
||||||||||||
Net carrying amount |
||||||||||||
Equity component: |
||||||||||||
Carrying amount |
||||||||||||
|
|
|
|
|
|
15. |
LEASES |
For the years ended December 31, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
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, |
||||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
Thereafter |
||||||||
|
|
|
|
|||||
Total future lease payments |
||||||||
Less: Imputed interest |
||||||||
|
|
|
|
|||||
Total lease liability balance |
||||||||
|
|
|
|
16. |
INCOME TAXES |
For the years ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
PRC |
||||||||||||||||
Non-PRC |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
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) expense |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
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 ( Note |
||||||||||||||||
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Deferred tax assets: |
||||||||||||
Allowance for credit loss |
||||||||||||
Accrued expenses, payroll and others |
||||||||||||
Fixed assets depreciation |
||||||||||||
Net operating loss carry-forward |
||||||||||||
Less: valuation allowance |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Deferred tax assets, net |
||||||||||||
|
|
|
|
|
|
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
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 |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
17. |
EMPLOYEE DEFINED CONTRIBUTION PLAN |
18. |
COMMITMENTS AND CONTINGENCIES |
RMB |
US$ |
|||||||
(In millions) |
||||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
Thereafter |
||||||||
RMB |
US$ |
|||||||
(In millions) |
||||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
Thereafter |
||||||||
19. |
REDEEMABLE NONCONTROLLING INTERESTS |
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Balance as of January 1 |
||||||||||||||||
Business combinations (Note 3) |
||||||||||||||||
Issuance of subsidiary shares |
— | |||||||||||||||
Accretion of redeemable noncontrolling interests |
||||||||||||||||
Conversion of iQIYI preferred shares recognized as redeemable noncontrolling interests to ordinary shares |
( |
) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 31 |
||||||||||||||||
|
|
|
|
|
|
|
|
20. |
SHAREHOLDERS’ EQUITY |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
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, 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 before reclassification |
||||||||||||
Amounts reclassified from accumulated other comprehensive income |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net current-period other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Other comprehensive income attribute to noncontrolling interests and redeemable noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019 |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Other comprehensive income before reclassification |
||||||||||||
Amounts reclassified from accumulated other comprehensive income |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Net current-period other comprehensive income (loss) |
( |
) | ||||||||||
Other comprehensive income attribute to noncontrolling interests and redeemable noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2020 |
( |
) |
||||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2020, in US$ |
( |
) |
||||||||||
|
|
|
|
|
|
* |
Adjustment of net unrealized gains related to available-for-sale |
For the years ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Unrealized gains on available-for-sale |
||||||||||||||||
Other comprehensive income before reclassification |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amounts reclassified from accumulated other comprehensive income |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net current-period other comprehensive income (loss) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
21. |
EARNINGS PER SHARE (“EPS”) |
For the years ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions, including number of shares and ADS, except for per share and per ADS data) |
||||||||||||||||
Net income attributable to Baidu, Inc. |
||||||||||||||||
Accretion of the redeemable noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Numerator for basic EPS computation |
||||||||||||||||
Impact of subsidiaries’ and investees’ diluted earnings per share |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Numerator for diluted EPS computation |
||||||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||||||||||||||||||
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, including number of shares and ADS, except for per share and per ADS data) |
||||||||||||||||||||||||||||||||
Earnings per share—basic: |
||||||||||||||||||||||||||||||||
Numerator |
||||||||||||||||||||||||||||||||
Allocation of net income attributable to Baidu, Inc. |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Denominator |
||||||||||||||||||||||||||||||||
Weighted average ordinary shares outstanding (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Denominator used for basic EPS (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share—basic (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share—diluted: |
||||||||||||||||||||||||||||||||
Numerator |
||||||||||||||||||||||||||||||||
Allocation of net income attributable to Baidu, Inc. for diluted computation |
||||||||||||||||||||||||||||||||
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 |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Denominator |
||||||||||||||||||||||||||||||||
Weighted average ordinary shares outstanding (Note) |
||||||||||||||||||||||||||||||||
Conversion of Class B to Class A ordinary shares (Note) |
||||||||||||||||||||||||||||||||
Share-based awards (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Denominator used for diluted EPS (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per share—diluted (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earnings per ADS (1 ADS equals 8 Class A ordinary shares): |
||||||||||||||||||||||||||||||||
Denominator used for earnings per ADS—basic (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Denominator used for earnings per ADS—diluted (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Earnings per ADS—basic (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Earnings per ADS—diluted (Note) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
22. |
SHARE-BASED AWARDS PLAN |
Number of share options (Note) |
Weighted average exercise price (US$) (Note) |
Weighted average remaining contractual life (Years) |
Aggregate intrinsic value (US$ in millions) |
|||||||||||||
Incentive share options |
||||||||||||||||
Outstanding, December 31, 2019 |
|
|||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) | ||||||||||||||
Forfeited/Cancelled |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding, December 31, 2020 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Vested and expected to vest at December 31, 2020 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at December 31, 2020 |
||||||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Risk-free interest rate |
% | % | % | |||||||||
Dividend yield |
||||||||||||
Expected volatility range |
% | % | % | |||||||||
Expected life (in years) |
Number of shares (Note) |
Weighted average grant date fair value (US$) (Note) |
|||||||
Restricted Shares |
||||||||
Unvested, December 31, 2019 |
||||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited/Cancelled |
( |
) | ||||||
|
|
|
|
|||||
Unvested, December 31, 2020 |
||||||||
|
|
|
|
Number of share options |
Weighted average exercise price ( US$) |
Weighted average remaining contractual life (Years) |
Aggregate intrinsic value ( US$ in millions) |
|||||||||||||
Outstanding, December 31, 2019 |
||||||||||||||||
Granted |
||||||||||||||||
Forfeited |
( |
) | ||||||||||||||
Exercised |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding, December 31, 2020 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Vested and expected to vest at December 31, 2020 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at December 31, 2020 |
||||||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
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, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Expensed as cost of revenues |
||||||||||||||||
Expensed as selling, general and administrative |
||||||||||||||||
Expensed as research and development |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
23. |
RELATED PARTY TRANSACTIONS |
For the years ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Revenues: |
||||||||||||||||
Trip |
||||||||||||||||
Du Xiaoman |
||||||||||||||||
Investee C (i) |
||||||||||||||||
Others |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
|
|
|
|
|
|
|
|
(i) | Investee C is one of the Company’ investees, over which the Company has significant influence. |
As of December 31, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(In millions) |
||||||||||||
Amounts due from related parties, current: |
||||||||||||
Trip (i) |
||||||||||||
Du Xiaoman (ii) |
||||||||||||
Investee A (iii) |
— | — | ||||||||||
Investee C (iv) |
||||||||||||
Other related parties (v) |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
|||||||
Amounts due from related parties, non-current: |
||||||||||||
Du Xiaoman (ii) |
||||||||||||
Other related parties (vi) |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
|||||||
Amounts due to related parties, current: |
||||||||||||
Trip (vii) |
||||||||||||
Du Xiaoman (viii) |
||||||||||||
Investee A (ix) |
— | — | ||||||||||
Investee B (x) |
||||||||||||
Other related parties (xi) |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
|||||||
Amounts due to related parties, non-current: |
||||||||||||
Du Xiaoman (xii) |
||||||||||||
Investee B (x) |
||||||||||||
Other related parties (xiii) |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
(i) | The balances mainly represent amounts arising from services the Company provided to Trip. |
(ii) | The balances represent non-trade long-term loans due from Du Xiaoman with interest rates ranging from |
(iii) | The balance mainly represents a non-trade interest-bearing loan provided to Investee A, which was an equity investee as of December 31, 2019. The Company acquired Investee A on July 16, 2020, and accordingly, all corresponding outstanding balance has been eliminated in the consolidated balance sheet. |
(iv) | The balances mainly represent amounts arising from services including online marketing services and cloud services the Company provided to Investee C. |
(v) | The balances mainly represent amounts arising from services the Company provided to its investees in ordinary course of business. |
(vi) | The balance consists of amount due from the Company’s investees in the ordinary course of business. |
(vii) | The balances mainly represent amounts arising from services provided by Trip. |
(viii) | 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 non-trade loans provided by Du Xiaoman with interest rates of nil in 2020. |
(ix) | The balances mainly represent amounts arising from hardware products purchased from Investee A, and a non-trade interest-bearing loan provided by the Investee A, as of December 31, 2019. The Company acquired Investee A on July 16, 2020, and accordingly, all corresponding outstanding balances have been eliminated in the consolidated balance sheet. |
(x) | 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 investee. |
(xi) | The balances mainly represent amounts arising from services including advertising services and licensing of content assets provided by the Company’s investees and non-trade amounts payable for acquiring the equity interest of the Company’s investees. |
(xii) | The balances mainly represent non-trade interest-free long-term loans provided by Du Xiaoman. |
(xiii) | The balance represents mainly deferred revenue relating to the future services to be provided by the Company to investees. |
24. |
SEGMENT REPORTING |
For the year ended December 31, 2018 |
||||||||||||||||
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, 2019 |
||||||||||||||||
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, 2020 |
||||||||||||||||||||||||||||||||
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. |
( |
) |
( |
) |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended |
||||||||||||||||
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
December 31, 2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(In millions) |
||||||||||||||||
Online marketing services |
||||||||||||||||
Cloud services ( N ote 1) |
||||||||||||||||
Interest income earned from provision of financial services |
— | — | — | |||||||||||||
Others N ote 1) |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Baidu Core Subtotal |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Membership services N ote 1) |
||||||||||||||||
Online advertising services ( Note 2 ) |
||||||||||||||||
Content distribution N ote 1) |
||||||||||||||||
Others N ote 1) |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
iQIYI Subtotal |
||||||||||||||||
Intersegment eliminations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
||||||||||||||||
|
|
|
|
|
|
|
|
25. |
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, 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 |
RMB |
RMB |
RMB |
|||||||||||||
(In millions) |
||||||||||||||||
Fair value disclosure |
|
|||||||||||||||
Cash equivalents: |
||||||||||||||||
Time deposits |
||||||||||||||||
Money market funds |
||||||||||||||||
Short-term investments: |
||||||||||||||||
Held-to-maturity |
||||||||||||||||
Long-term investments: |
||||||||||||||||
Held-to-maturity |
||||||||||||||||
Long-term notes payable |
||||||||||||||||
Convertible senior notes |
||||||||||||||||
Fair value measurements on a recurring basis |
||||||||||||||||
Short-term investments: |
||||||||||||||||
Available-for-sale |
||||||||||||||||
Long-term investments: |
||||||||||||||||
Equity investments at fair value with readily determinable fair value |
||||||||||||||||
Investments accounted for at fair value |
||||||||||||||||
Available-for-sale |
||||||||||||||||
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, 2020 using |
||||||||||||||||||||
Total fair value at December 31, 2020 |
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 funds |
||||||||||||||||||||
Short-term investments: |
||||||||||||||||||||
Held-to-maturity |
||||||||||||||||||||
Convertible senior notes, current portion |
||||||||||||||||||||
Long-term investments: |
||||||||||||||||||||
Held-to-maturity |
||||||||||||||||||||
Long-term notes payable |
||||||||||||||||||||
Convertible senior notes, non-current portion |
||||||||||||||||||||
Fair value measurements on a recurring basis |
||||||||||||||||||||
Short-term investments: |
||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||
Long-term investments: |
||||||||||||||||||||
Equity investments at fair value with readily determinable fair value |
||||||||||||||||||||
Investments accounted for at fair value |
||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
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, 2018 |
||||
Additions |
||||
Disposals |
( |
) | ||
Net unrealized fair value increase recognized in earnings |
||||
Foreign currency translation adjustments |
||||
|
|
|||
Balance at December 31, 2019 |
||||
Additions |
||||
Disposals |
( |
) | ||
Net unrealized fair value increase recognized in earnings |
||||
Foreign currency translation adjustments |
( |
) | ||
|
|
|||
Balance at December 31, 2020 |
||||
|
|
|||
Balance at December 31, 2020, in US$ |
||||
|
|
Amounts |
||||
RMB |
||||
(In millions) |
||||
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 |
||||
Additions |
||||
Disposals |
( |
) | ||
Reclassification |
||||
Conversion to equity investment |
( |
) | ||
Share of losses in excess of equity method investment in ordinary shares |
( |
) | ||
Net unrealized fair value increase recognized in other comprehensive income |
||||
Accrued interest |
||||
Foreign currency translation adjustments |
( |
) | ||
|
|
|||
Balance at December 31, 2020 |
||||
|
|
|||
Balance at December 31, 2020, in US$ |
||||
|
|
Total Balance |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant 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, 2019 |
||||||||||||||||||||||||||||||||||||
Long-term investments |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Intangible assets |
— | — | ( |
) | ||||||||||||||||||||||||||||||||
As of December 31, 2020 |
||||||||||||||||||||||||||||||||||||
Long-term investments (i) |
— |
( |
) | ( |
) | |||||||||||||||||||||||||||||||
Intangible assets (i) |
— |
— |
( |
) | ( |
) | ||||||||||||||||||||||||||||||
Mainland China film group—Licensed copyrights as of March 31, 2020 (ii) |
— |
— |
( |
) | ( |
) | ||||||||||||||||||||||||||||||
Mainland China film group—Produced contents as of March 31, 2020 (ii) |
— |
— |
( |
) | ( |
) | ||||||||||||||||||||||||||||||
Produced content monetized on its own (iii) |
— |
— |
( |
) | ( |
) |
(i) | Due to factors such as the outbreak of coronavirus (COVID-19) resulting in declined financial performances and changes in business circumstances of certain investees, the Company recognized impairment charges of long-term investments as of March 31, 2020 June 30, 2020 and December 31, 2020. For equity securities accounted for under the measurement alternative, when there are observable price changes in orderly transactions for identical or similar investments of the same issuer, the investments are re-measured to fair value. The Company also recognized impairment loss on intangible assets as of March 31, 2020. |
(ii) | The outbreak of COVID-19 during the first quarter of 2020 also has resulted in a downward adjustment to forecasted advertising revenues for the Mainland China film group. As a result, the Company performed an assessment to determine whether the fair value of the Mainland China film group was less than its unamortized film costs as of March 31, 2020 with the assistance of a third-party valuation firm. The Company uses a discounted cash flow approach to estimate the fair value. The Company estimated the most likely future cash flows based on historical results, economic useful lives or license periods and perception of future performance. The Company has incorporated those cash outflows necessary to generate the cash inflows, including future production, operation, exploitation and administrative costs, which were estimated at |
(iii) | In addition, due to adverse changes in the expected performance of certain produced content and the reduced amount of ultimate revenue expected to be recognized, an impairment charge of RMB |
26. |
SUBSEQUENT EVENTS |