Capital Commitments

The

Group’s

capital commitments primarily relate to commitments in connection with the expansion and improvement of its network infrastructure and its plan to build additional office buildings and cloud computing

based data centers. Total capital commitments contracted but not yet reflected in the financial statements amounted to RMB

560

million (US$

million) as of December

2019

Almost all

of the commitments relating to the network infrastructure

office building and cloud computing based data centers

are to be fulfilled within one year.

Commitments for bandwidth and property management fees

Future minimum payments under

non-cancelable

agreements for bandwidth and property management fees

consist of the following as of December 31, 2019:


	RMB		US$
	(In millions)
2020		652		94
2021		109		16
2022		77		11
2023		65		9
2024		63		9
Thereafter		63		9

		1,029		148

Upon the adoption of ASC 842 on January 1, 2019, future minimum lease payments for operating lease commitments as of December 31, 2019 are disclosed in Note 13.

Licensed Copyrights and Produced Content Commitments

Future minimum payments under

non-cancelable

agreements for licensed copyrights and produced content consist of the following as of December 31, 2019:


	RMB		US$
	(In millions)
2020		8,935		1,284
2021		6,496		933
2022		4,246		610
2023		1,534		220
2024		774		111
Thereafter		315		45

		22,300		3,203

Investment Commitments

The

Group’s

investment commitments primarily relate to capital contributions obligation under certain arrangements

which do not have contractual maturity date.

The total investment commitments contracted but not yet reflected in the financial statements amounted to RMB1.3 billion (US$183 million).

Guarantees

The

Group

accounts for guarantees in accordance with ASC Topic 460,

Guarantees

(“ASC 460”)

Accordingly, the Company evaluates its guarantees if any to determine whether (a) the guarantee is specifically excluded from the scope of ASC 460, (b) the guarantee is subject to ASC 460 disclosure requirements only, but not subject to the initial recognition and measurement provisions, or (c) the guarantee is required to be recorded in the financial statements at fair value.

The corporate

by-laws

require that the Company indemnify its officers and directors, as well as those who act as directors and officers of other entities at the Company’s request, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceedings arising out of their services to the Company. In addition, the Company entered into separate indemnification agreements with each director and each executive officer of the Company that provide for indemnification of these directors and officers under similar circumstances and under additional circumstances. The indemnification obligations are more fully described in the

by-laws

and the indemnification agreements. The Company purchases standard directors and officers insurance to cover claims or a portion of the claims made against its directors and officers. Since a maximum obligation is not explicitly stated in the Company’s

by-laws

or in the indemnification agreements and will depend on the facts and circumstances that arise out of any future claims, the overall maximum amount of the obligations cannot be reasonably estimated.

Historically, the Company was not required to make payments related to these obligations, and the fair value for these obligations was

nil

on the consolidated balance sheets as of December 31, 2018 and 2019.

Litigation

The Group was involved in certain cases pending in various PRC, Japan, U.S. and Brazil courts and arbitration as of December 31, 2019. These cases include copyright infringement cases, unfair competition cases, and

defamation cases, among others. Adverse results in these lawsuits may include awards of damages and may also result in, or even compel, a change in the Company’s business practices, which could result in a loss of revenue or otherwise harm the business of the Company.

For many proceedings, the Company is currently unable to estimate the reasonably possible loss or a range of reasonably possible losses as the proceedings are in the early stages, and/or there is a lack of clear or consistent interpretation of laws specific to the industry-specific complaints among different jurisdictions. As a result, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, which includes eventual loss, fine, penalty or business impact, if any, and therefore, an estimate for the reasonably possible loss or a range of reasonably possible losses cannot be made. However, the Company believes that such matters, individually and in the aggregate, when finally resolved, are not reasonably likely to have a material adverse effect on the Company’s consolidated results of operations, financial position and cash flows. With respect to the limited number of proceedings for which the Company was able to estimate the reasonably possible losses or the range of reasonably possible losses, such loss estimates were insignificant.