BIDU » Topics » Capital Expenditures

This excerpt taken from the BIDU 20-F filed Apr 9, 2009.
Capital Expenditures
 
We made capital expenditures of RMB127.5 million, RMB569.1 million and RMB417.9 million (US$61.3 million) in 2006, 2007 and 2008, respectively, representing 15.2%, 32.6% and 13.1% of our total revenues, respectively. Our capital expenditures were used primarily to purchase servers, network equipment and other computer hardware for our business, the acquisition of the land use right and the construction for our new corporate headquarters. We funded our capital expenditures primarily with net cash flow from operating activities.
 
In late 2005, we entered into an agreement to acquire the land use right in Beijing to build our new corporate headquarters with a floor space of approximately 44,000 square meters. The floor space was increased to 59,000 square meters in 2006. We made a total payment of RMB97.6 million for the land use right. We have obtained necessary governmental approvals for the proposed development and use of the land, and our new office building is currently under construction. Our capital expenditures in connection with construction of our office building were RMB102.1 million in 2007 and RMB172.3 million (US$25.3 million) in 2008, excluding the above-mentioned payment for land use right. Our capital expenditures may increase substantially in the near term as our business continues to grow and as we expand and improve our network infrastructure.
 
This excerpt taken from the BIDU 20-F filed May 30, 2007.

Capital Expenditures

We made capital expenditures of RMB25.4 million, RMB88.7 million and RMB127.5 million (US$16.3 million) in 2004, 2005 and 2006, respectively, representing 21.6%, 27.8% and 15.2% of our total revenues, respectively. Our capital expenditures were used to purchase servers, network equipment and other computer hardware for our business.

In late 2005, we entered into an agreement to acquire the land use right in Beijing to build our new corporate headquarters with a floor space of approximately 44,000 square meters. The floor space was increased to 59,000 square meters in 2006. The aggregate prepayment for acquiring the land use right was approximately RMB92.4 million as of December 31, 2006. We are awaiting necessary governmental approval for the proposed development and use of the land. Our capital expenditures may increase substantially in the near term as our business continues to grow and as we expand and improve our network infrastructure. We also intend to upgrade our financial and accounting systems and infrastructure.

C. Research and Development

We have a team of experienced engineers who are mostly based at our headquarters in Beijing. We recruit most of our engineers locally and have established various recruiting and training programs with leading universities in China. We have also recruited experienced engineers from the United States. We compete aggressively for engineering talent to help us address challenges such as Chinese language processing, information retrieval and high performance computing. In each of the three years ended December 31, 2004, 2005 and 2006, our research and development expenditures, including share-based compensation expenses for research and development staff, were RMB14.5 million, RMB44.2 million and RMB79.2 million (US$8.4 million), representing 12.4%, 13.8% and 9.5% of our total revenues for 2004, 2005 and 2006, respectively.

 

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D. Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2006 to December 31, 2006 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

E. Off-Balance Sheet Commitments and Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity and are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

F. Contractual Obligations and Commercial Commitments

The following table sets forth our contractual obligations as of December 31, 2006:

 

     Payment Due by Period

(in RMB thousands)

   Total    Less than 1
year
   1-3 years    3-5 years    More than 5
years

Operating lease obligations (1)

   22,775    16,458    6,317    —      —  

Capital commitments (2)

   10,675    10,675    —      —      —  

Other long-term obligation reflected on balance sheets under U.S. GAAP (3)

   7,000    7,000    —      —      —  

Total

   40,450    34,133    6,317    —      —  

(1) Operating lease obligations represent the lease obligations for our premises and bandwidth obligations.
(2) Capital commitments relate primarily to leasehold improvements and building construction.
(3) Other long-term obligation represents the payment arrangement relating to an acquisition in 2006.

We do not have any long-term debt obligations, capital (finance) lease obligations or purchase obligations.

This excerpt taken from the BIDU 20-F filed Jun 21, 2006.

Capital Expenditures

 

We made capital expenditures of RMB6.4 million, RMB25.4 million and RMB88.7 million (US$11.0 million) in 2003, 2004 and 2005, respectively, representing 15.8%, 21.6% and 27.8% of our total revenues, respectively. In the past, our capital expenditures were used to purchase servers, network equipment and other computer hardware for our business. In late 2005, we entered into an agreement to acquire the land use right for approximately 44,000 square meters of land in Beijing to build our new corporate headquarters thereon. The aggregate consideration for acquiring the land use right is approximately RMB92.4 million, to be paid in installments until we obtain necessary governmental approval for the proposed development and use of the land. We expect to receive such approval by the end of 2006. Our capital expenditures may increase in the near term as our business continues to grow and as we expand and improve our network infrastructure. We also intend to upgrade our financial and accounting systems and infrastructure.

 

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