33. Parent company only condensed financial information

The Company performed a test on the restricted net assets of consolidated subsidiaries, VIEs and VIEs’ subsidiaries in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial information for the parent company only.

The subsidiaries did not pay any dividend to the Company for the years presented. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company.

The Company did not have significant capital and other commitments, or guarantees as of December 31, 2016.

Condensed Balance Sheets

	As of December 31,
	2015		2016
	RMB		RMB		US$
					Note 2(h)
ASSETS
Current assets:
Cash and cash equivalents	8,942,549		6,116,574		880,970
Prepayments and other current assets	11,349		38,160		5,496

Total current assets	8,953,898		6,154,734		886,466

Non-current assets:
Investments in subsidiaries, VIEs and VIEs’ subsidiaries	16,523,355		30,006,536		4,321,840
Investment securities	103,363		38,226		5,506
Intangible assets, net	5,056,644		4,615,708		664,800

Total non-current assets	21,683,362		34,660,470		4,992,146

Total assets	30,637,260		40,815,204		5,878,612


LIABILITIES
Current liabilities:
Accrued expenses and other liabilities	54,227		91,292		13,150

Total current liabilities	54,227		91,292		13,150

Non-current liabilities:
Unsecured senior notes	—		6,831,012		983,870

Total non-current liabilities	—		6,831,012		983,870

Total liabilities	54,227		6,922,304		997,020


SHAREHOLDERS’ EQUITY:
Ordinary shares (US$0.00002 par value; 100,000,000,000 shares authorized; 2,313,578,195 Class A ordinary shares issued and 2,287,701,055 outstanding, 480,178,455 Class B ordinary shares issued and 454,289,431 outstanding as of December 31, 2015; 2,467,134,904 Class A ordinary shares issued and 2,384,954,010 outstanding, 471,573,995 Class B ordinary shares issued and 451,490,387 outstanding as of December 31, 2016)	358		377		54
Additional paid-in capital	48,393,126		59,258,417		8,534,987
Statutory reserves	55,560		132,938		19,147
Treasury stock	(3	)	(5,181,880	)	(746,346	)
Accumulated deficit	(18,420,834	)	(21,860,345	)	(3,148,545	)
Accumulated other comprehensive income	554,826		1,543,393		222,295

Total shareholders’ equity	30,583,033		33,892,900		4,881,592

Total liabilities and shareholders’ equity	30,637,260		40,815,204		5,878,612

Condensed Statements of Operations and Comprehensive Loss

	For the year ended December 31,
	2014		2015		2016
	RMB		RMB		RMB		US$
							Note 2(h)
Operating expenses
Marketing	(915,455	)	(1,221,580	)	(1,218,760	)	(175,538	)
General and administrative	(3,834,699	)	(445,095	)	(577,350	)	(83,156	)

Loss from operations	(4,750,154	)	(1,666,675	)	(1,796,110	)	(258,694	)
Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries	(449,816	)	(7,520,216	)	(1,948,761	)	(280,678	)
Interest income	183,294		143,757		55,373		7,975
Interest expense	—		—		(164,910	)	(23,752	)
Others, net	20,318		(64,806	)	47,618		6,858

Net loss	(4,996,358	)	(9,107,940	)	(3,806,790	)	(548,291	)
Preferred shares redemption value accretion	(7,957,640	)	—		—		—

Net loss attributable to ordinary shareholders	(12,953,998	)	(9,107,940	)	(3,806,790	)	(548,291	)


Net loss	(4,996,358	)	(9,107,940	)	(3,806,790	)	(548,291	)
Other comprehensive loss:
Foreign currency translation adjustments	(121,612	)	953,573		943,616		135,909
Net change in unrealized gains/(losses) on available-for-sale securities:
Unrealized gains/(losses), nil of tax	71,286		(238,852	)	(78,792	)	(11,349	)
Reclassification adjustment for (gains)/losses recorded in net income, nil of tax	(57,181	)	216,230		123,743		17,823

Net unrealized gains/(losses) on available-for-sale securities	14,105		(22,622	)	44,951		6,474

Total other comprehensive income/(loss)	(107,507	)	930,951		988,567		142,383

Total comprehensive loss	(5,103,865	)	(8,176,989	)	(2,818,223	)	(405,908	)

Condensed Statements of Cash Flows

	For the year ended December 31,
	2014		2015		2016
	RMB		RMB		RMB		US$
							Note 2(h)
Net cash provided by/(used in) operating activities	101,150		169,018		(33,756	)	(4,861	)

Cash flows from investing activities:
Purchase of short-term investments	(6,119,000	)	—		—		—
Maturity of short-term investments	—		6,367,600		—		—
Purchases of investment securities	—		(92,090	)	—		—
Cash received from disposal of investment securities	—		—		16,440		2,368
Prepayments and investments in subsidiaries, VIEs and VIEs’ subsidiaries	(4,264,147	)	(5,695,660	)	(3,733,972	)	(537,804	)
Cash received from business combination, net of cash acquired	1,313,753		—		—		—

Net cash provided by/(used in) investing activities	(9,069,394	)	579,850		(3,717,532	)	(535,436	)


Cash flows from financing activities:
Proceeds from issuance of ordinary shares, net	17,447,653		—		—		—
Repurchase of ordinary shares	—		—		(5,338,274	)	(768,871	)
Purchase of capped call options	—		—		(2,007,100	)	(289,083	)
Proceeds from settlement of capped call options	—		—		1,463,218		210,747
Proceeds from issuance of ordinary shares pursuant to stock plans	—		75,713		82,396		11,867
Proceeds from unsecured senior notes, net of discount and debt issuance costs	—		—		6,355,969		915,450

Net cash provided by financing activities	17,447,653		75,713		556,209		80,110


Effect of exchange rate changes on cash and cash equivalents	(363,082	)	(10,834	)	369,104		53,162

Net increase/(decrease) in cash and cash equivalents	8,116,327		813,747		(2,825,975	)	(407,025	)
Cash and cash equivalents at beginning of year	12,475		8,128,802		8,942,549		1,287,995

Cash and cash equivalents at end of year	8,128,802		8,942,549		6,116,574		880,970

Basis of presentation

The Company’s accounting policies are the same as the Group’s accounting policies with the exception of the accounting for the investments in subsidiaries, VIEs and VIEs’ subsidiaries.

For the Company only condensed financial information, the Company records its investments in subsidiaries, VIEs and VIEs’ subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures. Such investments are presented in the Condensed Balance Sheets as “Investment in subsidiaries, VIEs and VIEs’ subsidiaries” and shares in the subsidiaries, VIEs and VIEs’ subsidiaries’ loss are presented as “Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries” in the Condensed Statements of Operations and Comprehensive Loss. The parent company only condensed financial information should be read in conjunction with the Group’ consolidated financial statements.