Common use of Operating Activities Clause in Contracts

Operating Activities. Tudou's net cash provided by operating activities in 2011 was RMB1.5 million (US$0.2 million). This was primarily due to its net loss of RMB511.2 million (US$81.2 million) in 2011, partially offset by (1) RMB113.7 million (US$18.1 million) from fair value changes in warrant liabilities that resulted from an increase in the fair value of warrants issued in connection with the issuance of a convertible loan in April 2010 and warrants issued in connection with the issuance of Tudou's Series E preferred shares in July 2010, (2) a RMB105.6 million (US$16.8 million) increase in other payables and accruals primarily consisting of higher payroll and welfare costs, promotional costs, fees payable to advertising agencies, litigation losses and professional fees, (3) RMB105.0 million (US$16.7 million) of share-based compensation expenses and (4) RMB97.5 million (US$15.5 million) in amortization of licensed content that mainly resulted from Tudou's increased purchase of premium licensed content. Tudou's net cash used in operating activities in 2010 was RMB98.8 million. This was primarily due to (1) its net loss of RMB347.4 million in the period and (2) a RMB179.4 million increase in accounts receivable primarily attributable to a substantial increase in its online advertising service revenues. These amounts were partially offset by (1) RMB124.7 million from fair value changes in its warrants that resulted from an increase in the fair value of warrants issued in connection with the issuance of a convertible loan in April 2010 and warrants issued in connection with the issuance of Tudou's Series E preferred shares in July 2010, (2) RMB104.6 million of share-based compensation expenses, (3) a RMB70.9 million increase in other payables and accruals that primarily consisted of higher tax levies, fees payable to advertising agencies, litigation losses and professional fees and (4) a RMB45.9 million increase in accounts payable primarily attributable to fees payable to bandwidth vendors. Tudou's net cash used in operating activities in 2009 was RMB94.8 million. This was primarily due to (1) its net loss of RMB144.8 million and (2) a RMB50.9 million increase in accounts receivable primarily attributable to a substantial increase in its online advertising service revenues. These amounts were partially offset by (1) a RMB42.2 million increase in other payables and accruals primarily consisting of higher payroll and welfare expenses, fees payable to advertising agencies, Internet bandwidth costs, tax levies, potential litigation loss and professional fees and (2) RMB19.6 million in depreciation of equipment primarily attributable to servers.