Youku Tudou Announces Third Quarter 2012 Unaudited Financial Results

     Youku Tudou Announces Third Quarter 2012 Unaudited Financial Results

Net Revenues Increased by 84% Year-over-Year; Youku Standalone Turns
Profitable at Operational Level

PR Newswire

BEIJING, Nov. 29, 2012

BEIJING, Nov. 29, 2012 /PRNewswire/ --Youku Tudou Inc. (NYSE: YOKU, and
formerly Youku Inc. or "Youku"), China's leading Internet television company
("Youku Tudou" or the "Company"), today announced its unaudited financial
results for the third quarter 2012.

Basis of Presentation

On August 23, 2012, the Company and Tudou Holdings Limited ("Tudou") announced
the completion of the merger between Youku and Tudou. Following the completion
of the merger, Youku's name was changed from "Youku Inc." to "Youku Tudou
Inc." and Tudou's financial results were consolidated into the Company from
the date of the completion of the merger. Due to the fact that the sales
activities of Youku and Tudou were separately operated until the end of the
third quarter 2012, the financial results of Youku and Tudou are separately
disclosed to reflect the Company's actual operational results and performance.
In addition, comparison of Tudou's financial results with previous periods
cannot be provided because the cut-off date of previous periods would not
reflect a consistent basis of comparison. From the fourth quarter 2012
onwards, consolidated financials of Youku Tudou for the full periods will only
be presented on a consolidated basis.

The preliminary allocation of the purchase price for Tudou is based upon
estimates and assumptions that are subject to change within the purchase price
allocation period, which may last as long as one year from the date of the
completion of the merger, as further information becomes available. As a
result, the actual amounts allocated to the identifiable assets acquired and
liabilities assumed may vary from the amounts initially recorded.

Third Quarter  Highlights[1]

  oConsolidated net revenues were RMB502.2 million (US$79.9 million), of
    which Youku's net revenues were RMB483.5 million (US$76.9 million), an 84%
    increase from the corresponding period in 2011, exceeding the high end of
    the revenue guidance previously announced.
  oConsolidated gross profit was RMB125.4 million (US$20.0 million), of which
    Youku's gross profit was RMB181.4 million (US$28.9 million), a 168%
    increase from the corresponding period in 2011. Youku's non-GAAP gross
    profit, which is herein defined as Youku's gross profit excluding
    share-based compensation expenses, was RMB185.0 million (US$29.4 million)
    in the third quarter of 2012, a 167% increase from the corresponding
    period in 2011.
  oConsolidated net loss was RMB91.5 million (US$14.6 million), of which
    Youku's net loss was RMB91.5 million (US$14.6 million) as compared to a
    net loss of RMB47.5 million (US$7.6 million) for the same period in 2011.
  oYouku's non-GAAP net profit, which is herein defined as Youku's net loss
    excluding share-based compensation expenses, investment loss and business
    combination related expenses, was RMB25.3 million (US$4.0 million) in the
    third quarter of 2012, as compared to Youku's non-GAAP net loss of RMB28.2
    million (US$4.5 million) in the corresponding period in 2011.
  oConsolidated basic and diluted loss per ADS, each representing 18 Class A
    ordinary shares, for the third quarter of 2012 amounted to RMB0.67
    (US$0.11) and RMB0.67 (US$0.11), respectively.
  oConsolidated cash, cash equivalents, restricted cash and short-term
    investments totaled RMB3.8 billion (US$603.5 million) as of September 30,
    2012.
  oConsolidated acquisition of property and equipment for the third quarter
    of 2012 was RMB33.2 million (US$5.3 million) of which Youku's acquisition
    of property and equipment for the third quarter of 2012 was RMB32.3
    million (US$5.1 million), as compared to RMB11.8 million (US$1.9 million)
    for the corresponding period in 2011.
  oConsolidated acquisition of intangible assets for the third quarter of
    2012 was RMB148.9 million (US$23.7 million), of which Youku's acquisition
    of intangible assets for the third quarter of 2012 was RMB122.6 million
    (US$19.5 million), as compared to RMB189.9 million (US$30.2 million) for
    the corresponding period in 2011.

[1] The reporting currency of the Company is Renminbi ("RMB"), but for the
convenience of the reader, the amounts presented throughout the release are in
US dollars ("US$"). Unless otherwise noted, all conversions from RMB to US$
are made at a rate of RMB6.2848 to US$1.00, the effective noon buying rate as
of September 28, 2012 in the City of New York for cable transfers of RMB as
certified for customs purposes by the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or could be,
converted into US$ at such rate.

"We are pleased with another solid quarter of revenue growth and continuing
improvement in cost structure, particularly in bandwidth and personnel related
expenses. Youku standalone has achieved profitability at the operational level
in the third quarter. This is an important milestone for the Company," said
Victor Koo, Chairman and Chief Executive Officer of Youku Tudou. "Youku Tudou
owns the #1 and #2 online video websites, in terms of daily and weekly unique
visitors according to iResearch, and brands in China. With the merger of Youku
Tudou, the Company becomes a unique one-stop solution for advertisers, content
partners and users. We are confident to see further synergies to be realized
in 2013."

"We are very excited by the progress we made in the mobile Internet sector as
we witnessed significant traffic growth from mobile devices since the
beginning of the year. Youku Paike, our smartphone cam-recording and uploading
service program, is also gaining traction and further contributing to our UGC
content. We believe that mobile Internet is quickly becoming an important
business unit that contributes significantly to our growth and further improve
our overall economics," Dele Liu, President of Youku Tudou, added. "While we
are excited by the opportunities ahead of us, we did not underestimate the
challenges that may arise from this unprecedented large scale merger in
China's Internet industry. We did anticipate short-term fluctuations arising
from our decisive moves to improve user experience and advertising environment
in order to unlock the intrinsic value of Tudou. However I believe we will
cross-over the most difficult terrain soon."

Third Quarter 2012 Results

Consolidated net revenues were RMB502.2 million (US$79.9 million), of which
Youku's net revenues were RMB483.5 million (US$76.9 million) in the third
quarter of 2012, representing an 84% increase from the corresponding period in
2011. The increase exceeds the high end of the revenue guidance previously
announced by Youku Inc. The growth was primarily attributable to the increased
average spending per advertiser from RMB 1.0 million to RMB1.7 million and
increased number of advertisers from 296 to 316, representing an increase of
70% and 7%, respectively, from the corresponding period in 2011.

Consolidated bandwidth costs as a component of cost of revenues were RMB136.6
million (US$21.7 million), of which Youku's bandwidth costs were RMB112.9
million (US$18.0 million) in the third quarter of 2012, representing 23% of
Youku's net revenues, as compared to 35% in the corresponding period in 2011.

Consolidated content costs as a component of cost of revenues were RMB182.0
million (US$29.0million) in the third quarter of 2012, of which Youku's
content costs as a component of cost of revenues were RMB136.4 million
(US$21.7million) in the third quarter of 2012, representing 28% of Youku's
net revenues, as compared to 26% in the corresponding period in 2011. The
increase was primarily due to content price increase during 2011, which we
amortize using accelerated method, broadening of our content portfolio and
increase in salaries and benefits for our content team. Consolidated in-house
content production cost was RMB 9.5 million (US$1.5million) in the third
quarter of 2012, of which Youku's in-house content production cost was RMB8.0
million (US$1.3million) in the third quarter of 2012, as compared to RMB8.6
million (US$1.4million) in the corresponding period in 2011.

Consolidated gross profit was RMB125.4 million (US$20.0 million) of which
Youku's gross profit was RMB181.4 million (US$28.9 million), an increase of
168% compared to RMB67.8 million (US$10.8 million) for the same period in
2011. Consolidated non-GAAP gross profit, which is herein defined as
consolidated gross profit excluding share-based compensation expenses and
amortization of intangible assets from business combination in relations to
user generated content, was RMB147.2 million (US$23.4 million). Youku's
non-GAAP gross profit, which is herein defined as Youku's gross profit
excluding share-based compensation expenses, was RMB185.0 million (US$29.4
million) in the third quarter of 2012, an increase of 167% compared to RMB69.2
million (US$11.0 million) in the corresponding period in 2011 due to strong
operating leverage.

Consolidated operating expenses were RMB227.6 million (US$36.2 million) in the
third quarter of 2012, of which Youku's operating expenses were RMB198.4
million (US$31.6 million) in the third quarter of 2012 as compared to RMB120.1
million (US$19.1 million) in the corresponding period in 2011. Consolidated
non-GAAP operating expenses, which is herein defined as consolidated operating
expenses excluding share-based compensation expenses , business combination
related expenses and amortization of intangible assets from business
combination in relations to customer relationship, technology and non-compete
provisions, were RMB195.7 million (US$31.1 million). Youku's non-GAAP
operating expenses, which is herein defined as Youku's operating expenses
excluding share-based compensation expenses and business combination related
expenses, were RMB168.2 million (US$26.8 million) in the third quarter of
2012, an increase of 64% compared to RMB102.3 million (US$16.3 million) in the
corresponding period in 2011. The increase was primarily due to increases in
sales and marketing expenses, product development expenses and general and
administrative expenses as a result of the substantial growth of our business.
Detailed discussion of each component of operating expenses is as follows:

Consolidated sales and marketing expenses were RMB109.3 million (US$17.4
million) in the third quarter of 2012, of which Youku's sales and marketing
expenses were RMB93.3 million (US$14.9 million) in the third quarter of 2012,
as compared to RMB74.2 million (US$11.8 million) in the corresponding period
in 2011. Consolidated non-GAAP sales and marketing expenses, which is herein
defined as consolidated sales and marketing expenses excluding share-based
compensation expenses and amortization of intangible assets from business
combination in relations to customer relationship, were RMB101.1 million
(US$16.1 million) in the third quarter of 2012. Youku's non-GAAP sales and
marketing expenses, which is herein defined as Youku's sales and marketing
expenses excluding share-based compensation expenses, were RMB86.1 million
(US$13.7 million) in the third quarter of 2012, an increase of 26% compared to
RMB68.2 million (US$10.9 million) in the corresponding period in 2011. This
increase was primarily due to increases in marketing expenses and commission
expenses paid to our sales force in line with our revenue growth.

Consolidated product development expenses were RMB44.9 million (US$7.1
million) in the third quarter of 2012, of which Youku's product development
expenses were RMB37.7 million (US$6.0 million) in the third quarter of 2012 as
compared to RMB24.1 million (US$3.8 million) in the corresponding period in
2011. Consolidated non-GAAP product development expenses, which is herein
defined as consolidated product development expenses excluding share-based
compensation expenses and amortization of intangible assets from business
combination in relations to technology, were RMB38.1 million (US$6.1 million)
in the third quarter of 2012. Youku's non-GAAP product development expenses,
which is herein defined as Youku's product development expenses excluding
share-based compensation expenses, were RMB31.5 million (US$5.0 million) in
the third quarter of 2012, an increase of 70% compared to RMB18.5 million
(US$2.9 million) in the corresponding period in 2011. This increase was
primarily due to increases in salaries and benefits for our product
development personnel in mobile, search, social and paid services.

Consolidated general and administrative expenses were RMB73.4 million (US$11.7
million) in the third quarter of 2012, of which Youku's general and
administrative expenses were RMB67.3 million (US$10.7 million) in the third
quarter of 2012, as compared to RMB21.8 million (US$3.5 million) in the
corresponding period in 2011. Consolidated non-GAAP general and administrative
expenses, which is herein defined as consolidated general and administrative
expenses excluding share-based compensation expenses, business combination
related expenses and amortization of intangible assets from business
combination in relations to non-compete provisions,  were RMB56.5 million
(US$9.0 million) in the third quarter of 2012. Youku's non-GAAP general and
administrative expenses, which is herein defined as Youku's general and
administrative expenses excluding share-based compensation expenses and
business combination related expenses, were RMB50.6 million (US$8.1 million)
in the third quarter of 2012, representing an increase of 225% compared to
RMB15.6 million (US$2.5 million) in the corresponding period in 2011. This
increase was primarily due to an increase in personnel related expenses and
one-time tax charges.

Consolidated net loss was RMB91.5 million (US$14.6 million) of which Youku's
net loss was RMB91.5 million (US$14.6 million), as compared to a net loss of
RMB47.5 million (US$7.6 million) for the same period in 2011.This increase was
primarily due to Youku as the holding company recorded Tudou's incurred loss
after the completion of the merger.

Consolidated non-GAAP net loss,  which is herein defined as consolidated net
loss excluding share-based compensation expenses, amortization of intangible
assets from business combination and business combination related expenses, 
was RMB37.7 million (US$6.0 million) in the third quarter of 2012. Youku's
non-GAAP net profit was RMB25.3 million (US$4.0 million) in the third quarter
of 2012, as compared to the non-GAAP net loss of RMB28.2 million (US$4.5
million) in the corresponding period in 2011. The change to profitability at
the operational level was due to strong revenue growth and cost savings from
bandwidth and personnel-related expenses.

Consolidated non-GAAP adjusted EBITDA loss, which is herein defined as
consolidated net loss before income taxes, interest expenses, interest income,
depreciation and amortization (excluding amortization of acquired content),
further adjusted for share-based compensation expenses, amortization of
intangible assets from business combination business combination related
expenses and other non-operating items, was RMB26.8 million (US$4.3 million)
in the third quarter of 2012. Youku's non-GAAP adjusted EBITDA profit, which
is herein defined as Youku's net loss before income taxes, interest expenses,
interest income, depreciation and amortization (excluding amortization of
acquired content), further adjusted for share-based compensation expenses,
business combination related expenses, investment loss and other non-operating
items, was RMB33.9 million (US$5.4 million) in the third quarter of 2012, as
compared to non-GAAP adjusted EBITDA loss of RMB21.5 million (US$3.4 million)
in the corresponding period in 2011.

Business Outlook

For the fourth quarter of 2012, the Company expects net revenues will be
between RMB610 million and RMB630 million, with advertising net revenues grow
by RMB560 million to RMB585 million. This forecast reflects the Company's
current and preliminary view, which is subject to change.

Conference Call Information

Youku's management will host an earnings conference call at 8:00 p.m. U.S.
Eastern Time on November 29, 2012 (9:00 a.m. Beijing/Hong Kong Time on
November 30, 2012).

Interested parties may participate in the conference call by dialing one of
the following numbers below and entering passcode Youku# (i.e., 96858#)
starting 10-15 minutes prior to the beginning of the call.

U.S. Toll Free Dial In: 1-866-519-4004
International Dial In: 1-718-354-1231
Mainland China Toll Free Dial In: 86-4006208038 / 86-8008190121
Hong Kong Dial In: 852-2475-0994

A replay of the call will be available by dialing +61 2 8199 0299 and entering
passcode 74064968#. The replay will be available through December 7, 2012.

This call will be webcast live and the replay will be available for 12 months.
Both will be available on the Investor Relations section of Youku's corporate
website at http://ir.youku.com.

About Youku Tudou Inc.

Youku Tudou Inc.(NYSE: YOKU) isChina's leading Internet television company.
Its Internet television platform enables users to search, view and share
high-quality video content quickly and easily across multiple devices. Youku,
which stands for "what's best and what's cool" in Chinese, is the most
recognized online video brand inChina. Youku Tudou's American depositary
shares, each representing 18 of Youku Tudou's Class A ordinary shares, are
traded on theNYSEunder the symbol "YOKU".

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" and similar statements. Among
other things, the business outlook and quotations from management in this
announcement, as well as Youku Tudou's strategic and operational plans,
contain forward-looking statements. Youku Tudou may also make written or oral
forward-looking statements in its filings with the U.S. Securities and
Exchange Commission ("SEC"), 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 third parties. Statements that are not
historical facts, including statements about Youku Tudou'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
goals and strategies; our future business development, financial condition and
results of operations; the expected growth of the online video market in
China; our expectations regarding demand for and market acceptance of our
services; our expectations regarding the retention and strengthening of our
relationships with key advertisers and customers; our plans to enhance user
experience, infrastructure and service offerings; competition in our industry
in China; and relevant government policies and regulations relating to our
industry. Further information regarding these and other risks is included in
our annual report on Form 20-F and other documents filed with the SEC. All
information provided in this press release and in the attachments is as of the
date of this press release, and Youku Tudou does not undertake any obligation
to update any forward-looking statement, except as required under applicable
law.

About Non-GAAP Financial Measures

To supplement Youku Tudou's consolidated financial results presented in
accordance with United States Generally Accepted Accounting Principles
("GAAP"), Youku Tudou uses the following measures defined as non-GAAP
financial measures by the SEC in evaluating its business: consolidated
non-GAAP gross profit or loss, consolidated non-GAAP operating expenses,
consolidated non-GAAP sales and marketing expense, consolidated non-GAAP
product development expenses, consolidated non-GAAP general and administrative
expenses, consolidated non-GAAP profit or loss from operations, consolidated
non-GAAP net profit or loss and consolidated non-GAAP adjusted EBITDA profit
or loss. We define consolidated non-GAAP gross profit or loss as the
respective nearest comparable GAAP financial measure to exclude share-based
compensation expenses and amortization of intangible assets from business
combination in relations to user generated content. We define consolidated
non-GAAP operating expenses as operating expenses excluding share-based
compensation expenses, business combination related expenses and amortization
of intangible assets from business combination in relations to customer
relationship, technology and non-compete provisions. We define consolidated
non-GAAP sales and marketing expenses as consolidated sales and marketing
expenses excluding share-based compensation expenses and amortization of
intangible assets from business combination in relations to customer
relationship. We define consolidated non-GAAP product development expense as
consolidated product development expenses excluding share-based compensation
expenses and amortization of intangible assets from business combination in
relations to technology. We define consolidated non-GAAP general and
administrative expenses as consolidated general and administrative expenses
excluding share-based compensation expenses, business combination related
expenses and amortization of intangible assets from business combination in
relations to non-compete provisions. We define consolidated non-GAAP profit or
loss from operations as consolidated profit or loss from operations excluding
share-based compensation expenses, amortization of intangible assets from
business combination and business combination related expenses. We define
consolidated non-GAAP net profit or loss as consolidated net loss excluding
share-based compensation expenses, amortization of intangible assets from
business combination and business combination related expenses. We define
consolidated non-GAAP adjusted EBITDA profit or loss as consolidated net loss
before income taxes, interest expenses, interest income, depreciation and
amortization (excluding amortization of acquired content), further adjusted
for share-based compensation expenses, amortization of intangible assets from
business combination, business combination related expenses and other
non-operating items.

Due to the fact that the sales activities of Youku and Tudou were separately
operated until the end of the third quarter 2012, the financial results of
Youku and Tudou are separately disclosed to reflect the Company's actual
operational results and performance. On a standalone basis, Youku uses the
following non-GAAP financial measures in evaluating its business: non-GAAP
gross profit or loss, non-GAAP operating expenses, non-GAAP sales and
marketing expense, non-GAAP product development expenses, non-GAAP general and
administrative expenses, non-GAAP profit or loss from operations, non-GAAP net
profit or loss and non-GAAP adjusted EBITDA profit or loss. We define Youku's
non-GAAP gross profit or loss, non-GAAP sales and marketing expense and
non-GAAP product development expenses as the respective nearest comparable
GAAP financial measure to exclude share-based compensation expenses. We define
Youku's non-GAAP operating expenses as operating expenses excluding
share-based compensation expenses and business combination related expenses.
We define Youku's non-GAAP general and administrative expenses as general and
administrative expenses excluding share-based compensation expenses and
business combination related expenses. We define Youku's non-GAAP profit or
loss from operations as profit or loss from operations excluding share-based
compensation expenses and business combination related expenses. We define
Youku's non-GAAP net profit or loss as net profit or loss excluding
share-based compensation expenses, investment loss and business combination
related expenses. We define Youku's non-GAAP adjusted EBITDA profit or loss as
net profit or loss before income taxes, interest expenses, interest income,
depreciation and amortization (excluding amortization of acquired content),
further adjusted for share-based compensation expenses, investment loss,
business combination related expenses and other non-operating items.

We present non-GAAP financial measures because they are used by our management
to evaluate our operating performance. We also believe that these non-GAAP
financial measures provide useful information to investors and others in
understanding and evaluating our consolidated results of operations in the
same manner as our management and in comparing financial results across
accounting periods and to those of our peer companies. A limitation of using
non-GAAP financial measures is that non-GAAP measures exclude share-based
compensation charges that have been and will continue to be significant
recurring expenses in Youku Tudou's business for the foreseeable future.

The presentation of these non-GAAP financial measures is not intended to be
considered in isolation from, 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 table
captioned "Reconciliations of non-GAAP results of operations measures to the
nearest comparable GAAP financial measures" at the end of this release.

For more information, please contact:

Ryan Cheung
Corporate Finance Director
Youku Tudou Inc.
Tel: (+8610) 5885-1881 x6090
Email: ryan.cheung@youku.com

------------------------------------------------------------------------------



YOUKU TUDOU INC.
CONSOLIDATED BALANCE SHEETS
                                                     December31,2011  September 30,
(Amountsinthousands,exceptfornumberofshares)                     2012
                                                     Youku               Consolidated
                                                     RMB                 RMB          US$
ASSETS                                                                   (Unaudited)  (Unaudited)
Current assets:
      Cash and cash equivalents                    2,292,538           2,591,782    412,389
      Restricted cash                              -                   25,364       4,036
      Short-term investments                       1,400,858           1,176,037    187,124
      Accounts receivable, net                     420,706             1,028,992    163,727
      Intangible assets, net                       16,078              19,072       3,035
      Amounts due from related party               768                 -            -
      Prepayments and other assets                 16,832              43,067       6,854
Total current assets                                 4,147,780           4,884,314    777,165
Non-current assets:
      Property and equipment, net                  96,567              210,286      33,459
      Long-term investment in related party        1,707               -            -
      Intangible assets, net                       211,978             1,277,401    203,252
      Capitalized content production costs         7,782               3,496        556
      Amounts due from related party               65,352              -            -
      Prepayments and other assets                 144,392             341,469      54,334
      Goodwill                                     -                   4,242,750    675,081
Total non-current assets                           527,778             6,075,402    966,682
TOTAL ASSETS                                         4,675,558           10,959,716   1,743,847
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
      Accounts payable                             57,276              187,768      29,877
      Advances from customers and deferred revenue 3,140               32,414       5,158
      Amounts due to related party                 2,794               -            -
      Accrued expenses and other liabilities       390,607             933,177      148,481
      Current portion of long-term debt            9,182               30,900       4,917
Total current liabilities                            462,999             1,184,259    188,433
Non-current liabilities:
      Deferred tax liability                       -                   229,356      36,494
      Other liabilities                            -                   97,645       15,537
      Long-term debt                               7,382               -            -
Total non-current liabilities                        7,382               327,001      52,031
Total liabilities                                    470,381             1,511,260    240,464
Commitments and contingencies
Shareholders' equity:
      Class A Ordinary Shares (US$0.00001 par
      value, 9,340,238,793 authorized,
      1,395,435,339 and 2,283,779,288 issued and    93                  149          24
      outstanding as of December 31, 2011 and
      September 30, 2012, respectively)
      Class B Ordinary Shares (US$0.00001 par
      value, 659,761,207 authorized, 659,561,893
      and 659,561,893 issued and outstanding as of   49                  49           8
      December 31, 2011 and September 30, 2012,
      respectively)
      Additional paid-in capital                   5,185,257           10,725,570   1,706,589
      Accumulated deficit                          (871,644)           (1,182,077)  (188,085)
      Accumulated other comprehensive loss         (108,578)           (95,235)     (15,153)
Total shareholders' equity                           4,205,177           9,448,456    1,503,383
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           4,675,558           10,959,716   1,743,847



YOUKU TUDOU INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
                                             For the Three Months Ended,                               For the Nine Months Ended
(Amountsinthousands,exceptfornumberof Youku          Tudou          Consolidated                  Consolidated
sharesandADSand                          September30,  September30,  September30,  September30,  September30,  September30,
pershareandperADSdata)                  2012           2012           2012           2012           2012           2012
                                             RMB            RMB            RMB            US$            RMB            US$
                                             (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
Net revenues                                 483,510        18,680         502,190        79,906         1,159,744      184,532
Cost of revenues (Note 1)                    (302,087)      (74,706)       (376,793)      (59,953)       (979,992)      (155,930)
Gross profit (loss)                          181,423        (56,026)       125,397        19,953         179,752        28,602
Operating expenses:
 Product development                   (37,723)       (7,184)        (44,907)       (7,145)        (108,786)      (17,309)
 Sales and marketing                   (93,348)       (15,911)       (109,259)      (17,385)       (255,920)      (40,720)
 General and administrative            (67,288)       (6,137)        (73,425)       (11,683)       (165,028)      (26,258)
Total operating expenses                     (198,359)      (29,232)       (227,591)      (36,213)       (529,734)      (84,287)
(Loss) profit from operations                (16,936)       (85,258)       (102,194)      (16,260)       (349,982)      (55,685)
Interest income                              11,177         335            11,512         1,832          35,490         5,646
Interest expenses                            (802)          (224)          (1,026)        (163)          (3,159)        (503)
Investment loss^(1)                          (82,965)       -              -              -              -              -
Other, net                                   655            (96)           559            89             8,714          1,387
Total other income (expenses), net           (71,935)       15             11,045         1,758          41,045         6,530
(Loss) profit before income taxes            (88,871)       (85,243)       (91,149)       (14,502)       (308,937)      (49,155)
Income taxes                                 (2,589)        2,278          (311)          (49)           (1,496)        (239)
Net (loss) profit                            (91,460)       (82,965)       (91,460)       (14,551)       (310,433)      (49,394)
Net loss per share, basic and diluted        (0.04)                        (0.04)         (0.01)         (0.14)         (0.02)
Net loss per ADS (each ADS represents
18 class A ordinary shares),                (0.67)                        (0.67)         (0.11)         (2.54)         (0.40)
basic and diluted
Shares used in computation,                  2,454,198,684                 2,454,198,684  2,454,198,684  2,201,121,902  2,201,121,902
basic and diluted
ADSs used in computation,                    136,344,371                   136,344,371    136,344,371    122,284,550    122,284,550
basic and diluted
(1)Represents picking up investment loss occurred in combination with Tudou



YOUKU STANDALONE
CONSOLIDATED STATEMENTS OF OPERATIONS
                                              For the Three Months Ended,                               For the Nine Months Ended,
(Amountsinthousands,exceptfornumberof  September 30,  June 30,       September 30,  September 30,  September 30,  September 30,  September 30,
shares and ADS and
per share and per ADS data)                   2011           2012           2012           2012           2011           2012           2012
                                              RMB            RMB            RMB            US$            RMB            RMB            US$
                                              (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
Net revenues                                  262,471        387,387        483,510        76,933         588,315        1,141,064      181,559
Cost of revenues (Note 1)                     (194,686)      (310,463)      (302,087)      (48,066)       (453,602)      (905,286)      (144,044)
Gross profit (loss)                           67,785         76,924         181,423        28,867         134,713        235,778        37,515
Operating expenses:
 Product development                    (24,053)       (35,046)       (37,723)       (6,002)        (48,839)       (101,602)      (16,166)
 Sales and marketing                    (74,205)       (80,255)       (93,348)       (14,853)       (163,606)      (240,009)      (38,189)
 General and administrative             (21,845)       (43,017)       (67,288)       (10,706)       (48,178)       (158,891)      (25,282)
Total operating expenses                      (120,103)      (158,318)      (198,359)      (31,561)       (260,623)      (500,502)      (79,637)
(Loss) profit from operations                 (52,318)       (81,394)       (16,936)       (2,694)        (125,910)      (264,724)      (42,122)
Interest income                               8,677          12,375         11,177         1,778          12,923         35,155         5,594
Interest expenses                             (1,542)        (982)          (802)          (128)          (5,498)        (2,935)        (467)
Investment loss                               -              -              (82,965)       (13,201)       -              (82,965)       (13,201)
Other, net                                    (2,291)        4,762          655            104            (4,005)        8,810          1,402
Total other income (expenses), net            4,844          16,155         (71,935)       (11,447)       3,420          (41,935)       (6,672)
(Loss) profit before income taxes             (47,474)       (65,239)       (88,871)       (14,141)       (122,490)      (306,659)      (48,794)
Income taxes                                  -              2,391          (2,589)        (410)          -              (3,774)        (600)
Net (loss) profit                             (47,474)       (62,848)       (91,460)       (14,551)       (122,490)      (310,433)      (49,394)
Net loss per share, basic and diluted         (0.02)         (0.03)         (0.04)         (0.01)         (0.06)         (0.14)         (0.02)
Net loss per ADS (each ADS represents
18 class A ordinary shares),                 (0.42)         (0.54)         (0.67)         (0.11)         (1.12)         (2.54)         (0.40)
basic and diluted
Shares used in computation,                   2,051,993,011  2,079,698,573  2,454,198,684  2,454,198,684  1,972,240,249  2,201,121,902  2,201,121,902
basic and diluted
ADSs used in computation,                     113,999,611    115,538,809    136,344,371    136,344,371    109,568,902    122,284,550    122,284,550
basic and diluted



The accompanying notes are an integral part of the press release.
Note1.CostofRevenues                      For the Three Months Ended,                                 For the Nine Months Ended
                                              Youku          Tudou          Consolidated                    Consolidated
                                              September30,  September30,  September30,  September30,    September30,  September30,
                                              2012           2012           2012           2012             2012           2012
                                              RMB            RMB            RMB            US$              RMB            US$
(Amounts in thousands)                        (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)      (Unaudited)    (Unaudited)
Cost of revenues:
Valueadded,businesstaxesandsurcharges  38,563         1,711          40,274         6,408            109,946        17,494
Bandwidth costs                             112,937        23,699         136,636        21,741           361,664        57,546
Depreciation of servers and other            14,212         3,634          17,846         2,839            42,266         6,724
equipment
Content costs                               136,375        45,662         182,037        28,965           466,116        74,166
Total Cost of Revenues                      302,087        74,706         376,793        59,953           979,992        155,930





YOUKU TUDOU INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       For the Three Months Ended,                             For the Nine Months Ended
                                                       Youku                       Consolidated                Consolidated
(Amountsinthousands)                                 September30,  June30,     September30,  September30,  September30,  September30,
                                                       2011           2012         2012           2012           2012           2012
                                                       RMB            RMB          RMB            US$            RMB          US$
                                                       (Unaudited)    (Unaudited)  (Unaudited)    (Unaudited)    (Unaudited)  (Unaudited)
Cashflowsfromoperatingactivities:
Net loss                                               (47,474)       (62,848)     (91,460)       (14,551)       (310,433)      (49,394)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
     Depreciation                                      11,557         14,742       21,617         3,440          50,360         8,013
     Bad debt expense                                  1,066          1,669        9,388          1,494          11,715         1,864
     Amortization of intangible assets and             43,111         77,338       112,367        17,879         280,888        44,693
     capitalized content production costs
     Amortization of long-term debt discounts          839            535          441            70             1,592          253
     Gain on disposal of property and equipment       -              -            52             8              52             8
     Foreign exchange loss                             1,971          (374)        (172)          (27)           (357)          (57)
     Share-based compensation                          19,295         26,197       30,175         4,802          79,439         12,640
     Capital gain from step business combination     -              -            -              -              (3,344)        (532)
     Change in deferred tax expenses                   -              -            (2,278)        (362)          (2,278)        (362)
     Change in operating assets and liabilities:
      Accounts receivable                       (135,309)      (232,847)    (62,026)       (9,870)        (296,921)      (47,244)
      Prepayments and other assets              (6,911)        19,167       12,277         1,953          42,609         6,780
      Capitalizedcontentproductioncosts      (5,384)        (2,872)      (7,755)        (1,234)        (15,652)       (2,491)
      Accounts payable                          -              (2,504)      (14,026)       (2,232)        (16,517)       (2,628)
      Advances from customers                   4,444          (12,392)     (13,026)       (2,073)        3,568          568
      Accruedexpensesandotherliabilities    111,676        83,026       61,651         9,809          154,026        24,508
Netcash(usedin)providedbyoperatingactivities   (1,119)        (91,163)     57,225         9,106          (21,253)       (3,381)
Cash flows from investing activities:
     Acquisition of property and equipment             (11,797)       (22,603)     (33,168)       (5,278)        (65,840)       (10,476)
     Proceeds from short-term investments              65,059         1,145,908    255,923        40,721         1,655,504      263,414
     Purchase of short-term investments                (233,190)      -            (1,168,773)    (185,968)      (1,423,247)    (226,459)
     Proceeds from disposal of property and            -              -            8              1              8              1
     equipment
     Cash acquired, net of cash paid for acquired      -              -            404,444        64,353         378,666        60,251
     subsidiaries
     Acquisition of intangible assets from related     -              -            (7,200)        (1,146)        (7,200)        (1,146)
     party
     Acquisition of intangible assets                  (189,884)      (51,625)     (141,675)      (22,542)       (243,720)      (38,779)
Net cash (used in) provided by investing activities    (369,812)      1,071,680    (690,441)      (109,859)      294,171        46,806
Cash flows from financing activities:
     Exercise of employee stock options                2,390          8,483        4,597          731            18,924         3,011
     Proceeds from restricted cash                     -              -            12,705         2,022          12,705         2,022
     Principal repayments on long-term debt            (5,594)        (2,956)      (14,061)       (2,237)        (19,004)       (3,024)
     Proceeds from IPO and secondary offering, net     (539)          -            -              -              -              -
     of issuance costs
Net cash (used in) provided by financing activities    (3,743)        5,527        3,241          516            12,625         2,009
Effect of exchange rate changes on cash and cash       (44,041)       9,527        6,651          1,058          13,701         2,180
equivalents
Net (decrease) increase in cash and                    (418,715)      995,571      (623,324)      (99,179)       299,244        47,614
cash equivalents
Cash and cash equivalents at the beginning of          2,806,562      2,219,535    3,215,106      511,568        2,292,538      364,775
the period
Cash and cash equivalents at the end of                2,387,847      3,215,106    2,591,782      412,389        2,591,782      412,389
the period



Reconciliations of Non-GAAP results of operations measures to the nearest comparable GAAP financial measures ^(2)(Amounts in thousands of Renminbi ("RMB") and
U.S. dollars ("US$"), unaudited)
1. Non-GAAP Gross Profit (Loss)                                        For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September30,  September30,  September30,  September30,    September30,  September30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
Gross profit (loss)                                                     181,423        (56,026)       125,397        19,953           179,752        28,602
Add back: share-based compensation                                   3,602          -              3,602          573              8,215          1,307
Addback:amortizationofintangibleassetsfrombusinesscombination -              18,237         18,237         2,902            18,237         2,902
Non-GAAP gross profit (loss)                                            185,025        (37,789)       147,236        23,428           206,204        32,811
2. Non-GAAP Operating Expenses                                         For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September 30,  September 30,  September 30,  September 30,    September 30,  September 30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
Operating expenses                                                      198,359        29,232         227,591        36,213           529,734        84,287
Deduct: share-based compensation                                     26,573         -              26,573         4,229            71,224         11,333
Deduct: business combination related expenses                         3,622          -              3,622          576              28,627         4,555
Deduct:amortizationofintangibleassetsfrombusinesscombination   -              1,709          1,709          272              1,709          272
Non-GAAPoperating expenses                                             168,164        27,523         195,687        31,136           428,174        68,127
3. Non-GAAP Sales and Marketing Expenses                               For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September 30,  September 30,  September 30,  September 30,    September 30,  September 30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
Sales and marketing expenses                                            93,348         15,911         109,259        17,385           255,920        40,720
Deduct: share-based compensation                                     7,289          -              7,289          1,160            18,135         2,886
Deduct: amortization of intangible assets from business combination   -              854            854            136              854            136
Non-GAAPsales and marketing expenses                                   86,059         15,057         101,116        16,089           236,931        37,698
4. Non-GAAP Product Development Expenses                                For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September 30,  September 30,  September 30,  September 30,    September 30,  September 30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
Product development expenses                                            37,723         7,184          44,907         7,145            108,786        17,309
Deduct: share-based compensation                                     6,221          -              6,221          990              17,749         2,824
Deduct: amortization of intangible assets from business combination   -              574            574            91               574            91
Non-GAAPproduct development expenses                                   31,502         6,610          38,112         6,064            90,463         14,394
5. Non-GAAP General and Administrative Expenses                         For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September 30,  September 30,  September 30,  September 30,    September 30,  September 30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
General and administrative expenses                                     67,288         6,137          73,425         11,683           165,028        26,258
Deduct: share-based compensation                                     13,063         -              13,063         2,079            35,340         5,623
Deduct: business combination related expenses                         3,622          -              3,622          576              28,627         4,555
Deduct: amortization of intangible assets from business combination   -              281            281            45               281            45
Non-GAAPgeneral and administrative expenses                            50,603         5,856          56,459         8,983            100,780        16,035
6. Non-GAAP (Loss) Profit from Operations                              For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September 30,  September 30,  September 30,  September 30,    September 30,  September 30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
(Loss) profit from operations                                           (16,936)       (85,258)       (102,194)      (16,260)         (349,982)      (55,685)
Add back: share-based compensation                                   30,175         -              30,175         4,802            79,439         12,640
Add back: business combination related expenses                       3,622          -              3,622          576              28,627         4,555
Add back: amortization of intangible assets from business combination -              19,946         19,946         3,174            19,946         3,174
Non-GAAP(loss) profit from operations                                  16,861         (65,312)       (48,451)       (7,708)          (221,970)      (35,316)
7. Non-GAAPNet (Loss) Profit                                           For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September 30,  September 30,  September 30,  September 30,    September 30,  September 30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
Net (loss) profit                                                     (91,460)       (82,965)       (91,460)       (14,551)         (310,433)      (49,394)
Add back: share-based compensation                                   30,175         -              30,175         4,802            79,439         12,640
Add back: amortization of intangible assets from business combination -              19,946         19,946         3,174            19,946         3,174
Add back: investment loss                                             82,965         -              -              -                -              -
Add back: business combination related expenses                       3,622          -              3,622          576              28,627         4,555
Non-GAAP net (loss) profit                                            25,302         (63,019)       (37,717)       (5,999)          (182,421)      (29,025)
8. Non-GAAP EBITDA (Loss) Profit                                       For the Three Months Ended,                                 For the Nine Months Ended
                                                                        Youku          Tudou          Consolidated                    Consolidated
                                                                        September 30,  September 30,  September 30,  September 30,    September 30,  September 30,
                                                                        2012           2012           2012           2012             2012           2012
                                                                        RMB            RMB            RMB            US$              RMB            US$
Net (loss) profit                                                     (91,460)       (82,965)       (91,460)       (14,551)         (310,433)      (49,394)
Add back:
Depreciation and amortization (excluding amortization                                                                                           
 of acquired content) ^(3)                                       17,030
                                                                                       4,601          21,631         3,442            50,404         8,020
Interest income                                                       (11,177)       (335)          (11,512)       (1,832)          (35,490)       (5,646)
Interest expenses                                                     802            224            1,026          163              3,159          503
Income taxes                                                          2,589          (2,278)        311            49               1,496          239
EBITDA (loss) profit                                                  (82,216)       (80,753)       (80,004)       (12,729)         (290,864)      (46,278)
Adjustments:
Share-based compensation                                             30,175         -              30,175         4,802            79,439         12,640
Business combination related expenses                                 3,622          -              3,622          576              28,627         4,555
Amortization of intangible assets from business combination                          19,946         19,946         3,174            19,946         3,174
Investment loss                                                       82,965         -              -              -                -              -
Others, net                                                           (655)          96             (559)          (89)             (8,714)        (1,387)
Non-GAAP EBITDA (loss) profit                                           33,891         (60,711)       (26,820)       (4,266)          (171,566)      (27,296)
(2)For more information on the Non-GAAP financial measures, please see the section captioned "About Non-GAAP Financial Measures" in this earnings release.
(3) The amortization expense was related to an advertising license acquired in April 2010. The amortization of acquired content was not treated as a Non-GAAP
adjustment.





SOURCE Youku Tudou Inc.

Website: http://ir.youku.com
 
Press spacebar to pause and continue. Press esc to stop.