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Baidu Announces First Quarter 2013 Results

                  Baidu Announces First Quarter 2013 Results

PR Newswire

BEIJING, April 25, 2013

BEIJING, April 25, 2013 /PRNewswire/ -- Baidu, Inc. (NASDAQ: BIDU), the
leading Chinese language Internet search provider, today announced its
unaudited financial results for the first quarter ended March 31, 2013[1].

(Logo: http://photos.prnewswire.com/prnh/20081103/BAIDULOGO)

First Quarter 2013 Highlights

  oTotal revenues in the first quarter of 2013 were RMB5.969 billion ($961.0
    million), a 40.0% increase from the corresponding period in 2012.
  oOperating profit in the first quarter of 2013 was RMB2.210 billion ($355.9
    million), a 5.7% increase from the corresponding period in 2012.
  oNet income attributable to Baidu in the first quarter of 2013 was RMB2.043
    billion ($328.9 million), an 8.5% increase from the corresponding period
    in 2012. Diluted earnings attributable to Baidu per ADS for the first
    quarter of 2013 were RMB5.88 ($0.95); diluted earnings attributable to
    Baidu per ADS excluding share-based compensation expenses (non-GAAP) for
    the first quarter of 2013 were RMB6.20 ($1.00).

"We saw healthy financial results in the first quarter of 2013 as we continued
to invest in establishing China's leading mobile ecosystem." said Robin Li,
chairman and chief executive officer of Baidu. "Our mobile offering is making
exciting progress, with our flagship mobile search product having now
surpassed 100 million daily active users, an over 25% increase from the end of
the fourth quarter."

Mr. Li continued, "Continually developing the most advanced search technology
remains central to Baidu's overall strategy, and we're very excited by the
possibilities opened up by innovation in image and voice recognition. Our
focus will remain on tightly integrating our leading search core with valuable
vertical products in areas such as travel, e-commerce and location based
services to bring users the information they want as quickly as possible on
both desktop and mobile devices."

Jennifer Li, Baidu's chief financial officer, commented, "We remain committed
to investing aggressively, particularly in marketing and R&D. By deploying
resources in the most strategically important areas of our business, we're
confident we can build exceptional long-term value for shareholders. For the
quarter, we also recognized a whole quarter consolidation of iQiyi."

First Quarter 2013 Results

Baidu reported total revenues of RMB5.969 billion ($961.0 million) for the
first quarter of 2013, representing a 40.0% increase from the corresponding
period in 2012.

Online marketing revenues for the first quarter of 2013 were RMB5.953 billion
($958.5 million), representing a 39.7% increase from the corresponding period
in 2012. Baidu had about 410,000 active online marketing customers in the
first quarter of 2013, representing a 27.7% increase from the corresponding
period in 2012 and a 1.0% increase from the fourth quarter of 2012.

Revenue per online marketing customer for the first quarter was approximately
RMB14,500 ($2,335), a 9.0% increase from the corresponding period in 2012 and
a 6.5% decrease compared to the fourth quarter of 2012.

Traffic acquisition cost (TAC) as a component of cost of revenues was RMB609.6
million ($98.2 million), representing 10.2% of total revenues, as compared to
7.8% in the corresponding period in 2012 and 9.6% in the fourth quarter of
2012. The increase mainly reflects increased contextual ads contributions and
hao123 promotions through our network.

Bandwidth costs as a component of cost of revenues were RMB404.9 million
($65.2million), representing 6.8% of total revenues, compared to 5.2% in the
corresponding period in 2012. Depreciation costs as a component of cost of
revenues were RMB333.1 million ($53.6 million), representing 5.6% of total
revenues, compared to 5.4% in the corresponding period in 2012. These
increases were mainly due to an increase in network infrastructure capacity.

Content costs as a component of cost of revenues were RMB95.8 million ($15.4
million), representing 1.6% of total revenues, compared to 0.7% in the
corresponding period in 2012. This increase mainly reflects the full quarter
impact of iQiyi's consolidation.

Selling, general and administrative expenses were RMB848.1 million ($136.6
million), representing an increase of 77.2% from the corresponding period in
2012, primarily due to an increase in promotional expenses.

Research and development expenses were RMB810.7 million ($130.5 million), an
82.9% increase from the corresponding period in 2012. The increase was
primarily due to an increase in the number of research and development
personnel.

Share-based compensation expenses, which were allocated to related operating
costs and expense line items, were RMB110.9 million ($17.9 million) in the
first quarter of 2013, compared to RMB35.2 million in the corresponding period
in 2012 and RMB66.6 million in the fourth quarter of 2012. The increase from
the corresponding period was a result of increased share grants to employees.

Operating profit was RMB2.210 billion ($355.9 million), representing a 5.7%
increase from the corresponding period in 2012. Operating profit excluding
share-based compensation expenses (non-GAAP) was RMB2.321 billion ($373.8
million), a 9.2% increase from the corresponding period in 2012.

Income tax expense was RMB388.9 million ($62.6 million), compared to an income
tax expense of RMB331.2 million in the corresponding period in 2012. The
effective tax rate for the first quarter of 2013 was 16.2% as compared to
15.1% for the corresponding period in 2012 and 16.2% in the fourth quarter of
2012.

Net income attributable to Baidu was RMB2.043 billion ($328.9 million),
representing an 8.5% increase from the corresponding period in 2012. Basic and
diluted earnings per ADS for the first quarter of 2013 amounted to RMB5.89
($0.95) and RMB5.88 ($0.95), respectively.

Net income attributable to Baidu excluding share-based compensation expenses
(non-GAAP) was RMB2.154 billion ($346.8 million), a 12.3% increase from the
corresponding period in 2012. Basic and diluted earnings per ADS excluding
share-based compensation expenses (non-GAAP) for the first quarter of 2013
amounted to RMB6.20 ($1.00) and RMB6.20 ($1.00), respectively.

As of March 31, 2013, the Company had cash, cash equivalents and short-term
investments of RMB33.817 billion ($5.445 billion). Net operating cash inflow
for the first quarter of 2013 was RMB2.186 billion ($351.9 million). Capital
expenditures for the first quarter of 2013 were RMB 468.2 million ($75.4
million).

Adjusted EBITDA (non-GAAP), defined in this announcement as earnings before
interest, taxes, depreciation, amortization, other non-operating income and
share-based compensation expenses, was RMB2.781 billion ($447.8million) for
the first quarter of 2013, representing a 13.9% increase from the
corresponding period in 2012.

Outlook for Second Quarter 2013

Baidu currently expects to generate total revenues in an amount ranging from
RMB7.370 billion ($1.187 billion) to RMB7.550 billion ($1.216 billion) for the
second quarter of 2013, representing a 35.1% to 38.4% year-over-year increase.
This forecast reflects Baidu's current and preliminary view, which is subject
to change.

Conference Call Information

Baidu's management will hold an earnings conference call at 8:00 PM on April
25, 2013 U.S. Eastern Time (8:00 AM on April 26, 2013 Beijing/Hong Kong Time).

Dial-in details for the earnings conference call are as follows:

International:         +65-6723-9381
US:            +1-718-354-1231
UK:            +44-20-3059-8139
Hong Kong:            +852-2475-0994
Passcode for all regions: 29340159

A replay of the conference call may be accessed by phone at the following
number until May 2, 2013:

International: +61-2-8199-0299
Passcode:      29340159

Additionally, a live and archived webcast of this conference call will be
available at http://ir.baidu.com.

About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a
technology-based media company, Baidu aims to provide the best way for people
to find information. In addition to serving individual Internet search users,
Baidu provides an effective platform for businesses to reach potential
customers. Baidu's ADSs trade on the NASDAQ Global Select Market under the
symbol "BIDU". Currently, ten ADSs represent one Class A ordinary share.

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," "confident" and similar
statements. Among other things, the outlook for the second quarter 2013 and
quotations from management in this announcement, as well as Baidu's strategic
and operational plans, contain forward-looking statements. Baidu may also make
written or oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission, 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 Baidu'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 growth strategies; our future
business development, including development of new products and services; our
ability to attract and retain users and customers; competition in the Chinese
and Japanese language Internet search markets; competition for online
marketing customers; changes in our revenues and certain cost or expense items
as a percentage of our revenues; the outcome of ongoing, or any future,
litigation or arbitration, including those relating to intellectual property
rights; the expected growth of the Chinese language Internet search market and
the number of Internet and broadband users in China; Chinese governmental
policies relating to the Internet and Internet search providers and general
economic conditions in China, Japan and elsewhere. Further information
regarding these and other risks is included in our annual report on Form 20-F
and other documents filed with the Securities and Exchange Commission. Baidu
does not undertake any obligation to update any forward-looking statement,
except as required under applicable law. All information provided in this
press release and in the attachments is as of the date of the press release,
and Baidu undertakes no duty to update such information, except as required
under applicable law.

About Non-GAAP Financial Measures

To supplement Baidu's consolidated financial results presented in accordance
with GAAP, Baidu uses the following measures defined as non-GAAP financial
measures by the SEC: adjusted EBITDA, operating profit excluding share-based
compensation expenses, net income excluding share-based compensation expenses,
and basic and diluted earnings per ADS excluding share-based compensation
expenses. The presentation of these non-GAAP financial measures is not
intended to be considered in isolation 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 tables
captioned "Reconciliations of non-GAAP results of operations measures to the
nearest comparable GAAP measures" and "Reconciliation from net cash provided
by operating activities to adjusted EBITDA" set forth at the end of this
release.

Baidu believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance and liquidity by excluding
certain expenses, particularly share-based compensation expenses, that may not
be indicative of its operating performance or financial condition from a cash
perspective. We believe that both management and investors benefit from
referring to these non-GAAP financial measures in assessing our performance
and when planning and forecasting future periods. These non-GAAP financial
measures also facilitate management's internal comparisons to Baidu's
historical performance and liquidity. Baidu has computed its non-GAAP
financial measures using the same consistent method from quarter to quarter
since April 1, 2006. We believe these non-GAAP financial measures are useful
to investors in allowing for greater transparency with respect to supplemental
information used by management in its financial and operational decision
making. A limitation of using these non-GAAP financial measures is that these
non-GAAP measures exclude share-based compensation charge that has been and
will continue to be for the foreseeable future a significant recurring expense
in our results of operations. A limitation of using non-GAAP adjusted EBITDA
is that it does not include all items that impact our net income for the
period. Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP measure.
The accompanying tables have more details on the reconciliations between GAAP
financial measures that are most directly comparable to the non-GAAP financial
measures.

For investor and media inquiries, please contact:

China

Victor Tseng
Baidu, Inc.
Tel: +86-10-5992-7244
Email: ir@baidu.com

Nick Beswick
Brunswick Group
Tel: +86-10-5960-8600
Email: baidu@brunswickgroup.com

U.S.

Cindy Zheng
Brunswick Group
Tel: +1-212-333-3810
Email: baidu@brunswickgroup.com

    This announcement contains translations of certain RMB amounts into U.S.
    dollars at specified rates solely for the convenience of the reader.
[1] Unless otherwise noted, all translations from RMB to U.S. dollars are made
    at a rate of RMB6.2108 to US$1.00, the effective noon buying rate as of
    March 29, 2013 in The City of New York for cable transfers of RMB as
    certified for customs purposes by the Federal Reserve Bank of New York.



Baidu, Inc.
Condensed Consolidated Statements of Income
                                                                            Three Months Ended
                                                                            March 31,   March 31,   December31,
(InRMBthousandsexceptforshare,pershare(orADS)information)         2013        2012        2012
                                                                            Unaudited   Unaudited   Unaudited
Revenues:
Online marketing services                                                 5,952,898   4,260,530   6,287,549
Other services                                                            15,640      3,197       47,797
Total revenues                                                            5,968,538   4,263,727   6,335,346
Operating costs and expenses:
Cost of revenues (note 1, 2)                                              (2,099,264) (1,250,550) (1,993,313)
Selling, general and administrative (note 2)                              (848,102)   (478,549)   (792,373)
Research and development (note 2)                                         (810,682)   (443,162)   (701,575)
Total operating costs and expenses                                        (3,758,048) (2,172,261) (3,487,261)
Operating profit                                                          2,210,490   2,091,466   2,848,085
Other income:
Interest income                                                           273,987     182,252     252,556
Interest expense                                                          (89,246)    (25,316)    (33,012)
Foreign exchange gain (loss), net                                         (461)       (10)        (3,028)
Loss from equity method investments                                       (5,453)     (45,868)    (121,719)
Other income (loss), net                                                  6,468       (3,510)     380,545
Total other income                                                        185,295     107,548     475,342
Income before income taxes                                                2,395,785   2,199,014   3,323,427
Income taxes                                                              (388,861)   (331,196)   (539,909)
Net income                                                                2,006,924   1,867,818   2,783,518
Less: net loss attributable to noncontrolling interests                   (35,908)    (15,157)    (11,964)
Net income attributable to Baidu, Inc.                                    2,042,832   1,882,975   2,795,482
Earnings per share for Class A and Class B ordinary shares:
Net income attributable to Baidu, Inc.-Basic                               58.86       53.93       79.96
Net income attributable to Baidu, Inc.-Diluted                              58.82       53.84       79.91
Earnings per ADS (1 Class A ordinary share equals 10 ADSs ):
Net income attributable to Baidu, Inc.-Basic                               5.89        5.39        8.00
Net income attributable to Baidu, Inc.-Diluted                              5.88        5.38        7.99
WeightedaveragenumberofClassAandClassBordinarysharesoutstanding:
Basic                                                                      34,968,420  34,918,054  34,963,019
Diluted                                                                     34,989,911  34,972,390  34,983,115
(1) Cost of revenues are detailed as follows:
Sales tax and surcharges                                                  (432,768)   (310,021)   (442,709)
Traffic acquisition costs                                                 (609,606)   (331,277)   (606,809)
Bandwidth costs                                                           (404,880)   (222,648)   (337,194)
Depreciation costs                                                        (333,101)   (228,436)   (312,739)
Operational costs                                                         (218,712)   (127,996)   (169,161)
Content costs                                                             (95,791)    (29,327)    (120,337)
Share-based compensation expenses                                         (4,406)     (845)       (4,364)
Total cost of revenues                                                    (2,099,264) (1,250,550) (1,993,313)
(2) Includes share-based compensation expenses as follows:
Cost of revenues                                                          (4,406)     (845)       (4,364)
Selling, general and administrative                                       (29,540)    (13,994)    (4,423)
Research and development                                                  (77,002)    (20,320)    (57,778)
Total share-based compensation expenses                                   (110,948)   (35,159)    (66,565)

Baidu, Inc.
Condensed Consolidated Balance Sheets
                                                        March 31   December 31
(In RMB thousands except for number of shares and per   2013       2012
share data)
                                                        Unaudited  Audited
ASSETS
Current assets:
Cash and cash equivalents                               8,727,262  11,880,632
Restricted cash                                         250,232    395,029
Short-term investments                                  25,089,511 20,604,223
Accounts receivable, net                                1,428,071  1,253,483
Deferred tax assets, net                                196,496    160,315
Other assets, current                                   337,295    380,407
Total current assets                                    36,028,867 34,674,089
Non-current assets:
Fixed assets, net                                       3,872,684  3,887,877
Intangible assets, net                                  1,974,236  1,587,665
Goodwill                                                4,151,258  3,877,564
Long-term investments, net                              909,297    803,499
Deferred tax assets, net                                53,625     53,303
Other assets, non-current                               850,298    784,893
Total non-current assets                                11,811,398 10,994,801
Total assets                                            47,840,265 45,668,890
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities                3,686,121  3,806,836
Customer advances and deposits                          1,950,181  2,067,586
Deferred revenue                                        54,591     94,121
Deferred income                                         65,838     64,506
Long-term loans, current portion                        2,169,741  2,170,978
Capital lease obligation                                33,036     32,502
Total current liabilities                               7,959,508  8,236,529
Non-current liabilities:
Deferred income                                         340,000    190,000
Long-term loans                                         352,525    356,589
Notes payable                                           9,306,273  9,336,686
Deferred tax liabilities                                308,785    289,482
Capital lease obligation                                36,019     44,479
Total non-current liabilities                           10,343,602 10,217,236
Total liabilities                                       18,303,110 18,453,765
Redeemable noncontrolling interests                     935,488    1,033,283
Equity
Class A Ordinary Shares, par value US$0.00005 per
share, 825,000,000 shares authorized, and 27,202,710    12         12
shares and 27,218,017 shares issued and outstanding as
at December 31, 2012 and March 31, 2013
Class B Ordinary Shares, par value US$0.00005 per
share, 35,400,000 shares authorized, and 7,763,000      3          3
shares and 7,753,000 shares issued and outstanding as
at December 31, 2012 and March 31, 2013
Additional paid-in capital                              2,270,772  2,095,273
Retained earnings                                       26,096,447 24,038,219
Accumulated other comprehensive loss                    (49,069)   (78,278)
Total Baidu, Inc. shareholders' equity                  28,318,165 26,055,229
Noncontrolling interests                                283,502    126,613
Total equity                                            28,601,667 26,181,842
Total liabilities, redeemable noncontrolling            47,840,265 45,668,890
interests, and equity



Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures (*) (in RMB thousands, unaudited)
                                       Three months ended March 31, 2012      ThreemonthsendedDecember31,2012 Three months ended March 31, 2013
                                       GAAP      Adjustment Non-GAAP          GAAP       Adjustment Non-GAAP       GAAP      Adjustment Non-GAAP
                                       Result               Results Result                Results  Result               Results
Operatingprofit      2,091,466 35,159     2,126,625         2,848,085  66,565     2,914,650      2,210,490 110,948    2,321,438
                                       Three months ended March 31, 2012      Three months ended December 31, 2012 Three months ended March 31, 2013
                                       GAAP      Adjustment Non-GAAP          GAAP       Adjustment Non-GAAP       GAAP      Adjustment Non-GAAP
                                       Result               Results   Result                Results Result               Results
NetincomeattributabletoBaidu,Inc. 1,882,975 35,159     1,918,134         2,795,482  66,565     2,862,047      2,042,832 110,948    2,153,780
(*) The adjustment is only for share-based compensation.



Reconciliation from net cash provided by operating activities to adjusted EBITDA(*) (in RMB thousands, unaudited)
                                                                      Threemonthsended As a % of      Threemonthsended As a % of      Threemonthsended As a % of
                                                                      March 31, 2012     totalrevenues December 31, 2012  totalrevenues March 31, 2013     totalrevenues
Netcashprovidedbyoperatingactivities 2,366,922          56%            2,809,658          45%            2,185,543          37%
 Changes in assets and liabilities, net of effects of acquisitions  (148,216)          -4%            450,111            7%             391,950            6%
 Income taxes expenses                                              331,196            8%             539,909            8%             388,861            7%
 Interest income and other, net                                     (107,548)          -3%            (475,342)          -8%            (185,295)          -3%
Adjusted EBITDA                                                       2,442,354          57%            3,324,336          52%            2,781,059          47%
(*) Definition of adjusted EBITDA: earnings before interest, taxes, depreciation, amortization, other non-operating income, and share-based compensation expenses.

SOURCE Baidu, Inc.

Website: http://www.baidu.com
 
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