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Baidu Announces Fourth Quarter and Fiscal Year 2009 Results
Feb 09, 2010 (03:02 PM EST)


BEIJING, Feb. 9 /PRNewswire-Asia/ -- Baidu, Inc. (Nasdaq: BIDU), the leading Chinese language Internet search provider, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2009(1).

    (Logo:  http://www.newscom.com/cgi-bin/prnh/20081103/BAIDULOGO )

    Fourth Quarter and Fiscal Year 2009 Highlights
    -- Total revenues in the fourth quarter of 2009 were RMB1.261 billion
       ($184.7 million), a 39.8% increase from the corresponding period in
       2008.
    -- Total revenues in fiscal year 2009 were RMB4.448 billion
       ($651.6 million), a 39.1% increase from 2008.
    -- Operating profit in the fourth quarter of 2009 was RMB462.2 million
       ($67.7 million), a 51.7% increase from the corresponding period in 2008.
    -- Operating profit in fiscal year 2009 was RMB1.605 billion
       ($235.1 million), a 46.3% increase from 2008.
    -- Net income in the fourth quarter of 2009 was RMB427.9 million
       ($62.7 million), a 48.2% increase from the corresponding period in 2008.
       Diluted earnings per share ("EPS") for the fourth quarter of 2009 was
       RMB12.27 ($1.80); diluted EPS excluding share-based compensation
       expenses (non-GAAP) for the fourth quarter of 2009 was RMB12.80 ($1.88).
       Costs and expenses related to Baidu's Japan operations for the fourth
       quarter of 2009 were RMB43.2 million ($6.3 million), which reduced
       diluted EPS by RMB1.24 ($0.18).
    -- Net income in fiscal year 2009 was RMB1.485 billion ($217.6 million), a
       41.7% increase from 2008. Diluted EPS for fiscal year 2009 was RMB42.70
       ($6.26); diluted EPS excluding share-based compensation expenses
       (non-GAAP) for fiscal year 2009 was RMB45.19 ($6.62). Costs and
       expenses related to Baidu's Japan operations for fiscal year 2009 were
       RMB162.7 million ($23.8 million), which reduced diluted EPS by RMB4.68
       ($0.69).

    (1) This announcement contains translations of certain RMB amounts into
        U.S. dollars at specified rates solely for the convenience of the
        reader. Unless otherwise noted, all translations from RMB to U.S.
        dollars are made at a rate of RMB6.8259 to US$1.00, the effective noon
        buying rate as of December 31, 2009 in The City of New York for cable
        transfers of RMB as certified for customs purposes by the Federal
        Reserve Bank of New York.

"The year ended on a positive note as Phoenix Nest's better than anticipated performance helped us to exceed expectations for the fourth quarter," said Robin Li, Baidu's chairman and chief executive officer. "This encouraging performance is a reflection of Baidu's relentless focus on execution and innovation. With a solid base of users and customers, our foundation is stronger than ever and we will continue to drive innovation to capture market opportunities ahead."

Jennifer Li, Baidu's chief financial officer, commented, "With the transition to Phoenix Nest now behind us, we will focus on investing in both sales and marketing and R&D as we work on fulfilling user needs, enhancing monetization and driving the development of online marketing with our leading pay-for-performance platform."

Fourth Quarter 2009 Results

Baidu reported total revenues of RMB1.261 billion ($184.7 million) for the fourth quarter of 2009, representing a 39.8% increase from the corresponding period in 2008.

Online marketing revenues for the fourth quarter of 2009 were RMB1.260 billion ($184.6 million), representing a 39.8% increase from the corresponding period in 2008. Baidu had about 223,000 active online marketing customers in the fourth quarter of 2009, representing a 13.2% increase from the corresponding period in 2008 and a 3.2% increase from the previous quarter. Revenue per online marketing customer for the fourth quarter was approximately RMB5,700 ($828), a 23.9% increase from the corresponding period in 2008 and a 3.4% decrease from the previous quarter, primarily due to the effects of the transition from Baidu Online Marketing Classic Edition to Phoenix Nest.

Traffic acquisition cost (TAC) as a component of cost of revenues was RMB201.9 million ($29.6 million), representing 16.0% of total revenues, as compared to 14.6% in the corresponding period in 2008 and 15.3% in the third quarter of 2009. The increases in TAC as a percentage of total revenues reflect normal fluctuation.

Bandwidth costs as a component of cost of revenues were RMB54.4 million ($8.0 million), representing 4.3% of total revenues, compared to 5.5% in the corresponding period in 2008. Depreciation costs as a component of cost of revenues were RMB67.6 million ($9.9 million), representing 5.4% of total revenues, compared to 6.4% in the corresponding period in 2008.

Selling, general and administrative expenses were RMB221.8 million ($32.5 million), representing an increase of 26.5% from the corresponding period in 2008.

Research and development expenses were RMB124.4 million ($18.2 million), a 45.4% increase from the corresponding period in 2008. The increase was primarily due to the increased number of research and development personnel.

Share-based compensation expenses, which were allocated to related operating costs and expense line items, were RMB18.7 million ($2.7 million) in the fourth quarter of 2009, compared to RMB21.3 million in the previous quarter and RMB21.5 million in the corresponding period in 2008.

Operating profit was RMB462.2 million ($67.7 million), representing a 51.7% increase from the corresponding period in 2008. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB480.9 million ($70.5 million), a 47.4% increase from the corresponding period in 2008.

Income tax expense was RMB70.9 million ($10.4 million), compared to an income tax expense of RMB41.8 million in the corresponding period in 2008. The effective tax rate for the fourth quarter of 2009 was 14.2% as compared to 9.1% in the previous quarter and 12.7% for the corresponding period in 2008. The effective tax rate for the full year 2009 was 11.8%.

Net income was RMB427.9 million ($62.7 million), representing a 48.2% increase from the corresponding period in 2008. Basic and diluted EPS for the fourth quarter of 2009 amounted to RMB12.33 ($1.81) and RMB12.27 ($1.80), respectively.

Net income excluding share-based compensation expenses (non-GAAP) was RMB446.6 million ($65.4 million), a 44.0% increase from the corresponding period in 2008. Basic and diluted EPS excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2009 amounted to RMB12.87 ($1.89) and RMB12.80 ($1.88), respectively.

As of December 31, 2009, the Company had cash, cash equivalents and short-term investments of RMB4.581 billion ($671.1 million). Net operating cash inflow and capital expenditures for the fourth quarter of 2009 were RMB779.1 million ($114.1 million) and RMB146.3 million ($21.4 million), respectively.

Adjusted EBITDA (non-GAAP), defined in this announcement as earnings before interest, taxes, depreciation, amortization, other non-operating income and share-based compensation expenses, was RMB568.7 million ($83.3 million) for the fourth quarter of 2009, representing a 42.6% increase from the corresponding period in 2008.

Fiscal Year 2009 Results

Total revenues in 2009 were RMB4.448 billion ($651.6 million), representing a 39.1% increase from 2008.

Online marketing revenues in 2009 were RMB4.445 billion ($651.2 million), representing a 39.2 % increase from 2008. The growth was driven by increases in both the number of active online marketing customers and revenue per customer. Baidu had more than 317,000 active online marketing customers in 2009, representing an 11.6% increase from 2008. Revenue per online marketing customer for 2009 was RMB14,000 ($2,051), an increase of 25.0% from 2008.

Traffic acquisition costs in 2009 were RMB697.7 million ($102.2 million), representing 15.7% of total revenues, compared to 13.1% in 2008. The increase in TAC as a percentage of total revenues reflects the continued growth of revenue contribution from Baidu Union members.

Selling, general and administrative expenses in 2009 were RMB804.0 million ($117.8 million), representing an increase of 21.9% from the previous year, mainly due to the increase in marketing expenses and compensation.

Research and development expenses totaled RMB422.6 million ($61.9 million) in 2009, representing a 47.6% increase from 2008 primarily due to increased spending on research and development staff.

Operating profit in 2009 was RMB1.605 billion ($235.1 million), a 46.3% increase from 2008. Operating profit excluding share-based compensation expenses (non-GAAP) in 2009 was RMB1.691 billion ($247.8 million), representing a 43.2% increase from 2008.

Net income in 2009 was RMB1.485 billion ($217.6 million), representing a 41.7% increase from 2008. Basic and diluted EPS for 2009 amounted to RMB42.96 ($6.29) and RMB42.70 ($6.26), respectively.

Net income excluding share-based compensation expenses (non-GAAP) in 2009 was RMB1.571 billion ($230.2 million), reflecting a 38.8% increase from 2008. Basic and diluted EPS excluding share-based compensation expenses (non-GAAP) in 2009 were RMB45.46 ($6.66) and RMB45.19 ($6.62), respectively.

Full year net operating cash inflow and capital expenditures were RMB2.279 billion ($333.9 million) and RMB399.3 million ($58.5 million), respectively.

Adjusted EBITDA (non-GAAP) was RMB2.008 billion ($294.2 million) in 2009, representing a 37.4% increase from 2008.

Outlook for First Quarter 2010

Baidu currently expects to generate total revenues in an amount ranging from RMB1.200 billion ($176 million) to RMB1.235 billion ($181 million) for the first quarter of 2010, representing a 48% to 52% year-over-year increase. This forecast reflects Baidu's current and preliminary view, which is subject to change.

Conference Call Information

Baidu's management will hold an earnings conference call at 8 PM on February 9, 2010 U.S. Eastern Time (9 AM on February 10, 2010 Beijing/Hong Kong time).

    Dial-in details for the earnings conference call are as follows:

     US:                       +1-617-786-2905
     UK:                       +44-207-365-8426
     Hong Kong:                +852-3002-1672
     Passcode for all regions: 19218446

A replay of the conference call may be accessed by phone at the following number until February 17, 2010:

International: +1-617-801-6888

Passcode: 82003079

Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com .

About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs, each of which represents one Class A ordinary share, currently trade on the NASDAQ Global Select Market under the symbol "BIDU."

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the outlook for the first quarter 2010 and quotations from management in this announcement, as well as Baidu's strategic and operational plans, contain forward-looking statements. Baidu may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including statements about Baidu's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our growth strategies; our future business development, including development of new products and services; our ability to attract and retain users and customers; competition in the Chinese and Japanese language Internet search markets; competition for online marketing customers; changes in our revenues and certain cost or expense items as a percentage of our revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to intellectual property rights; the expected growth of the Chinese language Internet search market and the number of Internet and broadband users in China; Chinese governmental policies relating to the Internet and Internet search providers and general economic conditions in China, Japan and elsewhere. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of February 9, 2010, and Baidu undertakes no duty to update such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Baidu's consolidated financial results presented in accordance with GAAP, Baidu uses the following measures defined as non-GAAP financial measures by the SEC: adjusted EBITDA, operating profit excluding share-based compensation expenses, net income excluding share-based compensation expenses, and basic and diluted EPS excluding share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures" and "Reconciliation from net cash provided by operating activities to adjusted EBITDA" set forth at the end of this release.

Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain expenses, particularly share-based compensation expenses, that may not be indicative of its operating performance or financial condition from a cash perspective. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Baidu's historical performance and liquidity. Baidu has computed its non-GAAP financial measures using the same consistent method from quarter to quarter since April 1, 2006. We believe these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude share-based compensation charge that has been and will continue to be for the foreseeable future a significant recurring expense in our results of operations. A limitation of using non-GAAP adjusted EBITDA is that it does not include all items that impact our net income for the period. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures.

    For investor and media inquiries, please contact:

    China

    Baidu, Inc.
     Victor Tseng
     Tel:   +86-10-5992-7244
     Email: ir@baidu.com

    Brunswick Group LLC
     Cynthia He
     Tel:   +86-10-6566-2256
     Email: che@brunswickgroup.com

    U.S.

    Brunswick Group LLC
     Ms. Kate Tellier
     Tel:   +1-212-333-3810
     Email: ktellier@brunswickgroup.com



    Baidu, Inc.
    Condensed Consolidated Balance Sheets

                                         December 31 September 30 December 31
    (in RMB thousands)                       2009        2009        2008
                                          Unaudited   Unaudited    Audited

    ASSETS
     Current assets:
      Cash and cash equivalents            4,199,889   3,418,572   2,362,171
      Short-term investments                 381,149     546,084     301,244
      Accounts receivable, net               161,610     164,396      92,777
      Other assets,current                    91,067      88,372      80,007
      Receivables from a shareholder              --          --      10,697
      Deferred tax assets, net                 9,157      16,726       5,580
     Total current assets                  4,842,872   4,234,150   2,852,476

     Non-current assets:
      Fixed assets, net                      997,557     941,430     789,714
      Intangible assets, net                 122,595     125,162     125,783
      Goodwill                                63,691      63,691      51,082
      Long-term investments, net              14,308      13,575      12,281
      Deferred tax assets, net                33,799      27,679      26,537
      Other assets,non-current                82,153      81,972      80,118
     Total non-current assets              1,314,103   1,253,509   1,085,515

    TOTAL ASSETS                           6,156,975   5,487,659   3,937,991

    LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
      Accounts payable and accrued
       liabilities, current                  749,861     665,092     423,029
      Customer advances and deposits,
       current                               607,828     494,967     422,526
      Deferred revenue                        42,035      20,675       3,441
      Deferred income                             --          --         332
     Total current liabilities             1,399,724   1,180,734     849,328

     Non-current liabilities:
      Long-term payable for business
       acquisition                             4,150       4,150           --
     Total non-current liabilities             4,150       4,150           --

    Total liabilities                      1,403,874   1,184,884     849,328

    Shareholders' equity
     Class A Ordinary Shares, Par value
      US$0.00005 per share, 825,000,000
      shares authorized, and 25,641,847
      shares and 26,298,960 shares issued
      and outstanding as at December 31,
      2008 and December 31, 2009                  11          11          11
     Class B Ordinary Shares, Par value
      US$0.00005 per share, 35,400,000
      shares authorized, and 8,873,986
      shares and 8,454,332 shares issued
      and outstanding as at December 31,
      2008 and December 31, 2009                   4           4           4
     Additional paid-in capital            1,426,070   1,400,790   1,218,356
     Accumulated other comprehensive loss   (113,513)   (110,695)   (109,552)
     Retained earnings                     3,440,529   3,012,665   1,979,844
     Total shareholders' equity            4,753,101   4,302,775   3,088,663

    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                6,156,975   5,487,659   3,937,991



    Baidu, Inc.
    Condensed Consolidated Statements of Income

                                               For the Three Months Ended
    (in RMB thousands except for share,      December    December   September
     per share information)                  31, 2009    31, 2008    30, 2009
                                            Unaudited   Unaudited   Unaudited
     Revenues:
     Online marketing services              1,260,301     901,389   1,278,192
     Other services                               593         731         511
     Total revenues                         1,260,894     902,120   1,278,703

     Operating costs and expenses:
     Cost of revenues (note 1, 2)            (452,559)   (336,543)   (442,851)
     Selling, general and administrative
      (note 2)                               (221,767)   (175,313)   (197,717)
     Research and development (note 2)       (124,402)    (85,541)   (116,691)
     Total operating costs and expenses      (798,728)   (597,397)   (757,259)

     Operating profit                         462,166     304,723     521,444

     Other income:
     Interest income                            9,313      15,320       6,637
     Exchange loss, net                           (40)         (2)         (1)
     Other income, net                         27,507      10,451      13,989
     Loss from Equity Method Investments         (167)         --         (62)
     Total other income                        36,613      25,769      20,563

     Income before income taxes               498,779     330,492     542,007

     Income taxes                             (70,915)    (41,826)    (49,145)

     Net income                               427,864     288,666     492,862


    Earnings per share for Class A and
     Class B ordinary shares:
    Basic                                       12.33        8.39       14.23
    Diluted                                     12.27        8.31       14.14

    Weighted average aggregate number of
     Class A and Class B ordinary shares
     outstanding:
    Basic                                  34,702,168  34,392,036  34,639,268
    Diluted                                34,877,586  34,740,057  34,849,020

     (1) Cost of revenues are detailed as
      follows:
     Business tax and surcharges              (78,822)    (58,215)    (80,357)
     Traffic acquisition costs               (201,880)   (131,352)   (196,229)
     Bandwidth costs                          (54,403)    (49,245)    (51,194)
     Depreciation costs                       (67,628)    (57,908)    (63,619)
     Operational costs                        (48,298)    (38,317)    (49,880)
     Share-based compensation expenses         (1,528)     (1,506)     (1,572)
     Total cost of revenues                  (452,559)   (336,543)   (442,851)

     (2) Includes share-based compensation
      expenses as follows:
     Cost of revenues                          (1,528)     (1,506)     (1,572)
     Selling, general and administrative       (7,472)    (10,220)     (9,142)
     Research and development                  (9,728)     (9,765)    (10,539)
     Total share-based compensation
      expenses                                (18,728)    (21,491)    (21,253)


                                                      Twelve Months Ended
    (in RMB thousands except for share,           December          December
     per share information)                       31, 2009          31, 2008
                                                 Unaudited           Audited
     Revenues:
     Online marketing services                   4,445,310         3,194,461
     Other services                                  2,466             3,791
     Total revenues                              4,447,776         3,198,252

     Operating costs and expenses:
     Cost of revenues (note 1, 2)               (1,616,236)       (1,155,457)
     Selling, general and administrative
      (note 2)                                    (803,988)         (659,804)
     Research and development (note 2)            (422,615)         (286,256)
     Total operating costs and expenses         (2,842,839)       (2,101,517)

     Operating profit                            1,604,937         1,096,735

     Other income:
     Interest income                                32,661            47,677
     Exchange loss, net                                (42)           (1,920)
     Other income, net                              45,794            21,687
     Loss from Equity Method Investments              (229)               --
     Total other income                             78,184            67,444

     Income before income taxes                  1,683,121         1,164,179

     Income taxes                                 (198,017)         (116,071)

     Net income                                  1,485,104         1,048,108


    Earnings per share for Class A and
     Class B ordinary shares:
    Basic                                            42.96             30.63
    Diluted                                          42.70             30.19

    Weighted average aggregate number of
     Class A and Class B ordinary shares
     outstanding:
    Basic                                       34,570,790        34,217,443
    Diluted                                     34,776,366        34,717,489

     (1) Cost of revenues are detailed as
      follows:
     Business tax and surcharges                  (275,924)         (200,085)
     Traffic acquisition costs                    (697,673)         (418,474)
     Bandwidth costs                              (203,927)         (178,651)
     Depreciation costs                           (250,969)         (225,799)
     Operational costs                            (181,369)         (127,906)
     Share-based compensation expenses              (6,374)           (4,542)
     Total cost of revenues                     (1,616,236)       (1,155,457)

     (2) Includes share-based
      compensation expenses as follows:
     Cost of revenues                               (6,374)           (4,542)
     Selling, general and administrative           (38,681)          (41,651)
     Research and development                      (41,263)          (37,784)
     Total share-based compensation
      expenses                                     (86,318)          (83,977)



    Reconciliations of non-GAAP results of operations measures to the nearest
           comparable GAAP measures (*) (in RMB thousands, unaudited)

                                         Three months ended December 31, 2008
                                                                    Non-GAAP
                                          GAAP Result  Adjustment    Results
    Operating profit                          304,723    21,491      326,214

                                         Three months ended December 31, 2008
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Net income                                288,666    21,491      310,157

    (*) The adjustment is only for share-
     based compensation.
                                        Three months ended September 30, 2009
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Operating profit                          521,444    21,253      542,697

                                       Three months ended September 30, 2009
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Net income                                492,862    21,253      514,115


                                         Three months ended December 31, 2009
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Operating profit                          462,166    18,728      480,894

                                         Three months ended December 31, 2009
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Net income                                427,864    18,728      446,592


                                        Twelve months ended December 31, 2009
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Operating profit                        1,604,937    86,318    1,691,255

                                        Twelve months ended December 31, 2009
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Net income                              1,485,104    86,318    1,571,422

                                        Twelve months ended December 31, 2008
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Operating profit                        1,096,735    83,977    1,180,712

                                        Twelve months ended December 31, 2008
                                          GAAP Result  Adjustment   Non-GAAP
                                                                     Results
    Net income                              1,048,108    83,977    1,132,085




    Reconciliation from net cash provided by operating activities to adjusted
    EBITDA(*) (in RMB thousands, unaudited)

                                          Three months ended        As a % of
                                           December 31, 2008   total revenues
    Net cash provided by operating
     activities                                      611,773             68%

       Changes in assets and liabilities,
        net of effects of acquisitions              (228,942)           -25%
       Income taxes expenses                          41,826              4%
       Interest income and other, net                (25,769)            -3%

    Adjusted EBITDA                                  398,888             44%

                                          Three months ended       As a % of
                                          September 30, 2009  total revenues
    Net cash provided by operating
     activities                                      733,866             57%

       Changes in assets and liabilities,
        net of effects of acquisitions              (140,338)           -11%
       Income taxes expenses                          49,145              4%
       Interest income and other, net                (20,563)            -1%

    Adjusted EBITDA                                  622,110             49%


                                          Three months ended       As a % of
                                           December 31, 2009  total revenues
    Net cash provided by operating
     activities                                      779,079             62%

       Changes in assets and liabilities,
        net of effects of acquisitions              (244,723)           -20%
       Income taxes expenses                          70,915              6%
       Interest income and other, net                (36,613)            -3%

    Adjusted EBITDA                                  568,658             45%

                                          Twelve months ended       As a % of
                                            December 31, 2009  total revenues
    Net cash provided by operating
     activities                                     2,279,435             51%

       Changes in assets and liabilities,
        net of effects of acquisitions               (391,002)            -9%
       Income taxes expenses                          198,017              5%
       Interest income and other, net                 (78,184)            -2%

    Adjusted EBITDA                                 2,008,266             45%


                                          Twelve months ended       As a % of
                                            December 31, 2008  total revenues
    Net cash provided by operating
     activities                                     1,746,199             55%

       Changes in assets and liabilities,
        net of effects of acquisitions               (333,401)           -11%
       Income taxes expenses                          116,071              4%
       Interest income and other, net                 (67,444)            -2%

    Adjusted EBITDA                                 1,461,425             46%

SOURCE Baidu, Inc.