v3.22.1
Shareholders' Equity
 12 Months Ended
Dec. 31, 2021
Equity Abstract  
Shareholders' Equity
20
.
SHAREHOLDERS’ EQUITY
Shares
The authorized share capital consisted of 69,632,000,000 shares at a par value of US$0.000000625 per share (previously US$0.00005 per share before the Share Subdivision as detailed in Note 1), of which 66,000,000,000 shares were designated as Class A ordinary shares, 2,832,000,000 as Class B ordinary shares, and 800,000,000 shares designated as preferred shares (previously 825,000,000 shares were designated as Class A ordinary shares, 35,400,000 as Class B ordinary shares, and 10,000,000 shares designated as preferred shares before the Share Subdivision as detailed in Note 1). The rights of the holders of Class A and Class B ordinary shares are identical, except with respect to voting and conversion rights. Each share of Class A ordinary shares is entitled to one vote per share and is not convertible into Class B ordinary shares under any circumstances. Each share of Class B ordinary shares is entitled to ten votes per share and is convertible into one Class A ordinary share at any time by the holder thereof. Upon any transfer of Class B ordinary shares by a holder thereof to any person or entity that is not an affiliate of such holder, such Class B ordinary shares would be automatically converted into an equal number of Class A ordinary shares. The number of Class B ordinary shares transferred to Class A ordinary shares was nil, 4,200,000 and 12,600,000 in the years ended December 31, 2019, 2020 and 2021, respectively.
As of December 31, 2021, there were 2,205,032,472 and 559,300,320 Class A and Class B ordinary shares outstanding (previously 27,562,906 and 6,991,254 Class A and Class B ordinary shares before the Share Subdivision as detailed in Note 1), respectively. As of December 31, 2020 and 2021, there were no preferred shares issued and outstanding.
On June 27, 2018, the Company announced a share repurchase program under which the Company proposed to acquire up to an aggregate of US$1.0 billion of its ordinary shares over the next 12 months in the open market or through privately negotiated transactions, depending on market conditions and in accordance with applicable rules and regulations.
On May 16, 2019, the Company announced a share repurchase program under which the Company proposed to acquire up to an aggregate of US$1.0 billion of its ordinary shares, effective until July 1, 2020 in the open market or through privately negotiated transactions, depending on market conditions and in accordance with applicable rules and regulations.
On May 13, 2020, the Company announced a share repurchase program (“2020 share repurchase program”) under which the Company proposed to acquire up to an aggregate of US$1.0 billion of its ordinary shares, effective until July 1, 2021 in the open market or through privately negotiated transactions, depending on market conditions and in accordance with applicable rules and regulations. In August 2020, the board of directors approved a change to the 2020 share repurchase program, increasing the repurchase authorization from US$1.0 billion to US$3.0 billion, and in December 2020, the repurchase authorization was further increased from US$3.0 billion to US$4.5 billion, which is effective through December 31, 2022.
 
The Company repurchased 53,162,720, 126,096,000 and 57,343,528 Class A ordinary shares (previously 664,534, 1,576,200 and 716,794 Class A ordinary shares before the Share Subdivision as detailed in Note 1)
from the open market with an aggregate purchase price of RMB5.0 billion, RMB13.1 billion and RMB7.6 billion (US$1.2
billion) during the years ended December 31, 2019, 2020 and 2021. Before December 31, 2020, the repurchased shares were cancelled under Cayman Islands law upon repurchase and the difference between the par value and the repurchase price was debited to retained earnings.
In 2021, repurchased
shares were recorded in treasury stock account. 
Treasury stock
The treasury stock account includes nil ordinary shares and
 57,343,528
ordinary shares repurchased from the open market as of December 31, 2020 and 2021, respectively. 
Retained Earnings
In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, the Company’s PRC subsidiaries, being foreign invested enterprises established in China, are required to make appropriations to certain statutory reserves, namely a general reserve fund, an enterprise expansion fund, a staff welfare fund and a bonus fund, all of which are appropriated from net profit as reported in their PRC statutory accounts. Each of the Company’s PRC subsidiaries is required to allocate at least 10% of its
after-tax
profits to a general reserve fund until such fund has reached 50% of its respective registered capital. Appropriations to the enterprise expansion fund and staff welfare and bonus funds are at the discretion of the Company’s subsidiaries.
In accordance with the China Company Laws, the Company’s VIEs must make appropriations from their
after-tax
profits as reported in their PRC statutory accounts to
non-distributable
reserve funds, namely a statutory surplus fund, a statutory public welfare fund and a discretionary surplus fund. Each of the Company’s VIEs is required to allocate at least 10% of its
after-tax
profits to the statutory surplus fund until such fund has reached 50% of its respective registered capital. Appropriations to the statutory public welfare fund and the discretionary surplus fund are made at the discretion of the Company’s VIEs.
General reserve and statutory surplus funds are restricted to
set-off
against losses, expansion of production and operation and increasing registered capital of the respective company. Staff welfare and bonus fund and statutory public welfare funds are restricted to capital expenditures for the collective welfare of employees. The reserves are not allowed to be transferred to the Company in the form of cash dividends, loans or advances, nor are they allowed for distribution except under liquidation.
                         
    
As of December 31,
  
    
2020
     
2021
     
2021
  
    
RMB
     
RMB
     
US$
  
    
(In millions)
  
PRC statutory reserve funds
      806        1,098        172  
Unreserved retained earnings
      134,478        144,062        22,607  
    
 
 
     
 
 
     
 
 
  
Total retained earnings
      135,284        145,160        22,779  
    
 
 
     
 
 
     
 
 
  
 
 
Under PRC laws and regulations, there are restrictions on the Company’s PRC subsidiaries and VIEs with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. Amounts of net assets restricted include paid in capital and statutory reserve funds of the Company’s
PRC subsidiaries and the net assets of the VIEs in which the Company has no legal ownership, totaling RMB45.0 billion and RMB45.9 billion (US$7.2 billion) as of December 31, 2020 and 2021, respectively.
Furthermore, cash transfers from the Company’s PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the PRC subsidiaries and consolidated affiliated entities to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligations.
Accumulated Other Comprehensive Income (Loss)
The changes in accumulated other comprehensive income (loss) by component, net of tax, were as follows:
                                 
    
Foreign
currency
translation
adjustment
    
Unrealized
gains (losses) on
available-for-sale

investments
    
Unrealized
gain on
derivative
     
Total
  
    
RMB
    
RMB
           
RMB
  
    
(In millions)
  
Balance at December 31, 2018
   
 
(1,700
) 
  
 
1,910
 
  
 
—  
 
   
 
210
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Other comprehensive income before reclassification
      207       1,981    
 
—  
 
      2,188  
Amounts reclassified from accumulated other comprehensive income
      (989 )      (2,689 )   
 
—  
 
      (3,678 ) 
    
 
 
    
 
 
    
 
 
     
 
 
  
Net current-period other comprehensive loss
      (782 )      (708 )               (1,490 ) 
Other comprehensive income attribute to noncontrolling interests and redeemable noncontrolling interests
      (102 )      (1 )   
 
—  
 
      (103 ) 
    
 
 
    
 
 
    
 
 
     
 
 
  
Balance at December 31, 2019
   
 
(2,584
) 
  
 
1,201
 
  
 
—  
 
   
 
(1,383
) 
    
 
 
    
 
 
    
 
 
     
 
 
  
Other comprehensive income before reclassification
      1,936       380                2,316  
Amounts reclassified from accumulated other comprehensive income
      —         (541 )   
 
—  
 
      (541 ) 
    
 
 
    
 
 
    
 
 
     
 
 
  
Net current-period other comprehensive income (loss)
      1,936       (161 )               1,775  
Other comprehensive income attribute to noncontrolling interests and redeemable noncontrolling interests
      (192 )      (1 )   
 
—  
 
      (193 ) 
    
 
 
    
 
 
    
 
 
     
 
 
  
Balance at December 31, 2020
   
 
(840
) 
  
 
1,039
 
    
—  

     
 
199
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Other comprehensive (loss) income before reclassification
      (88 )      (190 )      149        (129 ) 
Amounts reclassified from accumulated other comprehensive income
      —         —         —          —    
    
 
 
    
 
 
    
 
 
     
 
 
  
Net current-period other comprehensive (loss) income
      (88 )      (190 )      149        (129 ) 
Other comprehensive (loss) income attribute to noncontrolling interests and redeemable noncontrolling interests
      (79 )      1      
—  

        (78 ) 
    
 
 
    
 
 
    
 
 
     
 
 
  
Balance at December 31, 2021
   
 
(1,007
) 
  
 
850
 
  
 
149
 
   
 
(8
) 
    
 
 
    
 
 
    
 
 
     
 
 
  
Balance at December 31, 2021, in US$
   
 
(157
) 
  
 
133
 
  
 
23
 
   
 
(1
) 
    
 
 
    
 
 
    
 
 
     
 
 
  
 
 
The amounts reclassified out of accumulated other comprehensive income (loss) represent realized foreign currency translation adjustments, which mainly arise from the disposal of partial interests in Trip and realized
gains (losses) on the sales of
available-for-sale
investments, which were recorded in “Others, net” in the consolidated statements of comprehensive (loss) income. The amounts reclassified were determined on the basis of specific identification. Losses on intracompany foreign currency transactions that are of a long-term-investment nature in the amount of nil, RMB1.2 billion and RMB537 million (US$84 million) were included in the foreign currency translation adjustment for the years ended December 31, 2019, 2020 and 2021, respectively.
In October 2019, the Company completed a partial disposal of its investment in Trip and the corresponding accumulated other comprehensive income of RMB989 million was reclassified to income and recorded as “Others, net” in the consolidated statement of comprehensive loss for the year ended December 31, 2019.
The following table sets forth the tax benefit (expense) allocated to each component of other comprehensive (loss) income for the years ended December 31, 2019, 2020 and 2021:
                                 
    
For the years ended
December 31,
  
    
2019
    
2020
    
2021
    
2021
  
    
RMB
    
RMB
    
RMB
    
US$
  
    
(In millions)
  
Unrealized gains (losses) on
available-for-sale
investments
                                 
Other comprehensive income before reclassification
      (280 )      (59 )      (3 )      —    
Amounts reclassified from accumulated other comprehensive income
      402       83       —         —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Net current-period other comprehensive (loss) income
     122       24       (3 )      —