Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information | |
Entity Registrant Name | SINA CORP |
Entity Central Index Key | 0001094005 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 69,368,140 |
Entity Shell Company | false |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,545,800 | $ 1,990,552 |
Short-term investments | 799,534 | 1,381,991 |
Restricted cash | 97,032 | 216,151 |
Accounts receivable, net of allowances for doubtful accounts of $20,214 and $27,964, respectively (including due from related parties of $75,037 and $189,522 as of December 31, 2017 and 2018, respectively, Note 9) | 527,897 | 285,681 |
Prepaid expenses and other current assets (including prepayment and receivables from related parties of $40,506 and $115,976 as of December 31, 2017 and 2018, respectively, Note 9) | 362,435 | 228,238 |
Total current assets | 3,332,698 | 4,102,613 |
Property and equipment, net (Note 9) | 262,846 | 262,676 |
Long-term investments, net (Note 4) | 1,889,843 | 1,288,816 |
Intangible assets, net (Note 6) | 225,335 | 22,811 |
Goodwill (Note 6) | 94,240 | 81,396 |
Other assets (Note 9) | 81,127 | 57,082 |
Total assets | 5,886,089 | 5,815,394 |
Current liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiaries of $671,205 and $627,037 as of December 31, 2017 and 2018, respectively. Note 2): | ||
Accounts payable (including due to related parties of $20,660 and $50,678 as of December 31, 2017 and 2018, respectively, Note 10) | 172,562 | 130,431 |
Amount due to customers | 97,032 | 216,151 |
Accrued expenses and other current liabilities (including due to related parties of $5,681 and $14,763 as of December 31, 2017 and 2018, respectively, Note 9) | 540,807 | 446,779 |
Short-term bank loans | 78,229 | 89,309 |
Income taxes payable | 115,725 | 102,458 |
Deferred revenues (including deferred revenue from related parties of $14,666 and $12,883 as of December 31, 2017 and 2018, respectively, Note 10) | 139,306 | 134,580 |
Convertible debt (Note 18) | 153,092 | |
Total current liabilities | 1,143,661 | 1,272,800 |
Long-term liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiaries of $6,483 and $51,002 as of December 31, 2017 and 2018, respectively. Note 2): | ||
Convertible debt (Note 18) | 884,123 | 879,983 |
Deferred revenues from related parties (Note 10) | 43,652 | 54,372 |
Other long-term liabilities | 51,781 | 8,510 |
Total long-term liabilities | 979,556 | 942,865 |
Total liabilities | 2,123,217 | 2,215,665 |
Commitments and contingencies (Note 19) | ||
SINA shareholders' equity: | ||
Preferred shares: $1.00 par value; 3,750,000 and 3,750,000 shares authorized; 7,150 shares issued and outstanding as of December 31, 2017 and 2018 (Note 15) | 7 | 7 |
Ordinary shares: $0.133 par value; 150,000,000 and 150,000,000 shares authorized; 81,489,677 shares issued and 71,409,729 shares outstanding as of December 31, 2017; 82,410,842 shares issued and 69,368,140 shares outstanding as of December 31, 2018. | 10,961 | 10,838 |
Treasury stock (10,079,948 and 13,042,702 shares as of December 31, 2017 and 2018, respectively, Note 18) | (733,705) | (484,442) |
Additional paid-in capital | 3,261,795 | 3,192,073 |
Accumulated other comprehensive income (loss) | (33,223) | 90,696 |
Retained earnings | 211,956 | 37,670 |
Total SINA shareholders' equity | 2,717,791 | 2,846,842 |
Non-controlling interests (Note 8) | 1,045,081 | 752,887 |
Total shareholders' equity | 3,762,872 | 3,599,729 |
Total liabilities and shareholders' equity | $ 5,886,089 | $ 5,815,394 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 27,964 | $ 20,214 |
Accounts receivable, net of allowances for doubtful accounts, due from related parties | 189,522 | 75,037 |
Prepayment and receivables from related parties | 115,976 | 40,506 |
Current liabilities | ||
Current liabilities | 1,143,661 | 1,272,800 |
Accounts payable, due to related parties | 50,678 | 20,660 |
Accrued expenses and other current liabilities, due to related parties | 14,763 | 5,681 |
Deferred revenue from related parties | 12,883 | 14,666 |
Long-term liabilities | ||
Long-term liabilities | $ 979,556 | $ 942,865 |
SINA shareholders' equity: | ||
Preferred shares, par value (in dollars per share) | $ 1 | $ 1 |
Preferred shares, shares authorized (in shares) | 3,750,000 | 3,750,000 |
Preferred shares, shares issued (in shares) | 7,150 | 7,150 |
Preferred shares, shares outstanding (in shares) | 7,150 | 7,150 |
Ordinary shares, par value (in dollars per share) | $ 0.133 | $ 0.133 |
Ordinary shares, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Ordinary shares, shares issued (in shares) | 82,410,842 | 81,489,677 |
Ordinary shares, shares outstanding (in shares) | 69,368,140 | 71,409,729 |
Treasury stock (in shares) | 13,042,702 | 10,079,948 |
Consolidated VIEs without recourse to the primary beneficiaries | ||
Current liabilities | ||
Current liabilities | $ 627,037 | $ 671,205 |
Long-term liabilities | ||
Long-term liabilities | $ 51,002 | $ 6,483 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net revenues: | |||
Net revenues | $ 2,108,327 | $ 1,583,884 | $ 1,030,936 |
Costs of revenues | |||
Costs of revenues | 452,040 | 414,137 | 354,696 |
Gross profit | 1,656,287 | 1,169,747 | 676,240 |
Operating expenses: | |||
Sales and marketing | 699,962 | 408,856 | 247,068 |
Product development | 345,942 | 267,392 | 216,228 |
General and administrative | 120,184 | 104,923 | 99,474 |
Goodwill and acquired intangibles impairment (Note 6) | 23,245 | 40,194 | |
Total operating expenses | 1,189,333 | 781,171 | 602,964 |
Income from operations | 466,954 | 388,576 | 73,276 |
Interest and other income, net | 69,355 | 42,696 | 26,213 |
Change in fair value of option liability (Note 4) | (28,456) | ||
Income (loss) from equity method investments, net | 1,120 | (16,070) | (11,766) |
Realized gain on investments | 2,729 | 132,007 | 289,693 |
Fair value changes through earnings on investments, net (Note 4) | 96,533 | ||
Investment related impairment | (81,281) | (122,970) | (44,433) |
Income before income tax expense | 555,410 | 424,239 | 304,527 |
Income tax expense (Note 11) | (129,084) | (74,676) | (27,219) |
Net income | 426,326 | 349,563 | 277,308 |
Less: Net income attributable to the non-controlling interests | 300,764 | 192,994 | 52,221 |
Net income attributable to SINA's ordinary shareholders | 125,562 | 156,569 | 225,087 |
Net income | 426,326 | 349,563 | 277,308 |
Available-for-sale investments: | |||
Change in unrealized gain (net of tax of nil, nil, and nil for 2016, 2017 and 2018, respectively) | 55,575 | 11,845 | |
Less: reclassification adjustment for net gain included in net income (net of tax of nil, nil, and nil for 2016, 2017 and 2018, respectively) | 91,182 | 92,640 | |
Net change in unrealized loss, net of tax | (35,607) | (80,795) | |
Currency translation adjustments | (119,647) | 87,258 | (72,399) |
Total other comprehensive income (loss) | (119,647) | 51,651 | (153,194) |
Total comprehensive income | 306,679 | 401,214 | 124,114 |
Less: Comprehensive income attributable to non-controlling interests | 266,326 | 214,354 | 43,536 |
Comprehensive income attributable to SINA's ordinary shareholders | $ 40,353 | $ 186,860 | $ 80,578 |
Basic net income per share (in dollars per share) | $ 1.79 | $ 2.20 | $ 3.20 |
Shares used in computing basic net income per share (in shares) | 70,296 | 71,284 | 70,301 |
Diluted net income per share (in dollars per share) | $ 1.70 | $ 2.09 | $ 3.01 |
Shares used in computing diluted net income per share (in shares) | 72,375 | 73,931 | 77,511 |
Advertising | |||
Net revenues: | |||
Net revenues | $ 1,789,285 | $ 1,311,866 | $ 871,187 |
Costs of revenues | |||
Costs of revenues | 341,153 | 325,494 | 288,044 |
Advertising | Third parties | |||
Net revenues: | |||
Net revenues | 1,505,690 | 1,131,500 | 732,724 |
Advertising | Related Parties | |||
Net revenues: | |||
Net revenues | 283,595 | 180,366 | 138,463 |
Non-advertising | |||
Net revenues: | |||
Net revenues | 319,042 | 272,018 | 159,749 |
Costs of revenues | |||
Costs of revenues | $ 110,887 | $ 88,643 | $ 66,652 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Non-advertising, amortization of deferred revenues related to the license to Leju | $ 106,700,000 | ||
Change in unrealized gain, tax | 0 | $ 0 | $ 0 |
Reclassification adjustment for net gain included in net income, tax | 0 | 0 | 0 |
Leju | |||
Non-advertising, amortization of deferred revenues related to the license to Leju | $ 10,435,000 | $ 10,435,000 | $ 10,435,000 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Ordinary Shares | Preferred Shares | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings | Non-controlling Interests | Total |
Balances at Dec. 31, 2015 | $ 10,522 | $ (410,693) | $ 2,211,901 | $ 204,914 | $ 548,628 | $ 311,396 | $ 2,876,668 | |
Balances (in shares) at Dec. 31, 2015 | 79,115,000 | (9,275,000) | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Issuance of ordinary shares pursuant to stock plans | $ 191 | 31,667 | 31,858 | |||||
Issuance of ordinary shares pursuant to stock plans (in shares) | 1,429,000 | |||||||
Non-cash stock-based compensation expenses | 36,926 | 36,902 | 73,828 | |||||
Repurchase of ordinary shares (Note 18) | $ (26,125) | (26,125) | ||||||
Repurchase of ordinary shares (Note 18) (in shares) | (332,000) | |||||||
In-kind distribution of Weibo's shares (Note 15) | 316,650 | (338,598) | 21,948 | |||||
Sale (Purchase) of subsidiaries' shares to/from non-controlling interests | 1,093 | 5,557 | 6,650 | |||||
Settlement of stock-based awards in a subsidiary | 11,936 | (7,950) | 3,986 | |||||
Net income | 225,087 | 52,221 | 277,308 | |||||
Unrealized gain (loss) on available-for-sale securities (Note 4) | (82,050) | 1,255 | (80,795) | |||||
Currency translation adjustments | (62,459) | (9,940) | (72,399) | |||||
Balances at Dec. 31, 2016 | $ 10,713 | $ (436,818) | 2,610,173 | 60,405 | 435,117 | 411,389 | 3,090,979 | |
Balances (in shares) at Dec. 31, 2016 | 80,544,000 | (9,607,000) | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Issuance of ordinary shares pursuant to stock plans | $ 125 | 808 | 933 | |||||
Issuance of ordinary shares pursuant to stock plans (in shares) | 946,000 | |||||||
Issuance of preferred shares to New Wave (Note 15) | $ 7 | 7 | ||||||
Issuance of preferred shares to New Wave (Note 15) (in shares) | 7,000 | |||||||
Non-cash stock-based compensation expenses | 43,011 | 48,376 | 91,387 | |||||
Repurchase of ordinary shares (Note 18) | $ (47,624) | (47,624) | ||||||
Repurchase of ordinary shares (Note 18) (in shares) | (473,000) | |||||||
In-kind distribution of Weibo's shares (Note 15) | 522,271 | (554,016) | 31,745 | |||||
Non-controlling interests arising from business acquisitions (Note 5) | 43,112 | 43,112 | ||||||
Sale (Purchase) of subsidiaries' shares to/from non-controlling interests | (1,868) | 19,382 | 17,514 | |||||
Settlement of stock-based awards in a subsidiary | 17,678 | (15,471) | 2,207 | |||||
Net income | 156,569 | 192,994 | 349,563 | |||||
Unrealized gain (loss) on available-for-sale securities (Note 4) | (35,075) | (532) | (35,607) | |||||
Currency translation adjustments | 65,366 | 21,892 | 87,258 | |||||
Balances at Dec. 31, 2017 | $ 10,838 | $ 7 | $ (484,442) | 3,192,073 | 90,696 | 37,670 | 752,887 | $ 3,599,729 |
Balances (in shares) at Dec. 31, 2017 | 81,490,000 | 7,000 | (10,080,000) | 81,489,677 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Issuance of ordinary shares pursuant to stock plans | $ 123 | 1,401 | $ 1,524 | |||||
Issuance of ordinary shares pursuant to stock plans (in shares) | 921,000 | |||||||
Issuance of ordinary shares pursuant to convertible debt conversion (Note 18) | 7 | 7 | ||||||
Non-cash stock-based compensation expenses | 51,548 | 43,521 | 95,069 | |||||
Impact of adoption of new investment guidance | ASU 2014-09 | (253) | (324) | (577) | |||||
Impact of adoption of new investment guidance | ASU 2016-01 | 10,267 | 10,267 | ||||||
Impact of adoption of new guidance for investments in equity securities (Note 4) | ASU 2016-01 | (38,710) | 38,710 | ||||||
Repurchase of ordinary shares (Note 18) | $ (249,263) | (249,263) | ||||||
Repurchase of ordinary shares (Note 18) (in shares) | (2,963,000) | |||||||
Sale (Purchase) of subsidiaries' shares to/from non-controlling interests | (1,341) | (1,341) | ||||||
Settlement of stock-based awards in a subsidiary | 16,766 | (15,988) | 778 | |||||
Net income | 125,562 | 300,764 | 426,326 | |||||
Currency translation adjustments | (85,209) | (34,438) | (119,647) | |||||
Balances at Dec. 31, 2018 | $ 10,961 | $ 7 | $ (733,705) | $ 3,261,795 | $ (33,223) | $ 211,956 | $ 1,045,081 | $ 3,762,872 |
Balances (in shares) at Dec. 31, 2018 | 82,411,000 | 7,000 | (13,043,000) | 82,410,842 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 426,326 | $ 349,563 | $ 277,308 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of property and equipment | 32,122 | 28,642 | 26,560 |
Amortization of intangible assets | 9,110 | 4,560 | 1,908 |
Amortization of convertible debt issuance cost (Note 18) | 4,140 | 690 | 4,266 |
Stock-based compensation | 95,069 | 91,387 | 73,828 |
Provision for allowance for doubtful accounts | 15,424 | 8,465 | 14,621 |
Deferred tax (benefits) provision | 33,560 | (3,214) | (5,470) |
Loss (income) from equity method investments, net | (1,120) | 16,070 | 11,766 |
Fair value changes through earnings on investments, net (Note 4) | (96,533) | ||
Dividends received from equity method investments | 4,236 | 7,680 | 3,103 |
Realized gain on investments | (2,729) | (132,007) | (289,693) |
Investment related impairment | 81,281 | 122,970 | 44,433 |
Goodwill and acquired intangibles impairment (Note 6) | 23,245 | 40,194 | |
Foreign exchange loss | 32 | ||
Loss (gain) on disposal of property and equipment | (249) | (178) | 57 |
Change in fair value of option liability (Note 4) | 28,456 | ||
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | (281,955) | (61,339) | (12,601) |
Prepaid expenses and other current assets | (39,127) | (15,578) | (18,160) |
Other assets | (9,440) | (1,008) | 2,554 |
Accounts payable | 49,649 | 15,963 | 14,329 |
Amount due to customers | (119,119) | (25,155) | 100,654 |
Accrued expenses and other current liabilities | 68,590 | 113,983 | 90,075 |
Income taxes payable | 17,029 | 58,825 | 24,913 |
Deferred revenues | 1,495 | 15,973 | 10,557 |
Others | 1 | (2) | (9) |
Net cash provided by operating activities | 311,037 | 596,290 | 443,649 |
Cash flows from investing activities: | |||
Purchases of short-term investments | (2,357,346) | (2,140,946) | (1,116,340) |
Maturities of short-term investments | 2,933,641 | 1,166,184 | 2,153,181 |
Cash paid for business combination, net of cash acquired (Note 5) | (47,042) | 242 | |
Purchases of property and equipment | (46,451) | (44,907) | (37,688) |
Purchases of land use rights | (216,050) | ||
Cash paid (including prepayments) on long-term investments | (1,008,444) | (150,448) | (862,848) |
RMB deposit received from (repaid to) E-House (Note 4) | (135,386) | 128,153 | |
Consideration received from E-House for share exchange with Leju (Note 4) | 127,600 | ||
Repayment from a third party | 21,000 | ||
Proceeds from disposal of investments/ refund of prepayment on long-term investments | 293,459 | 168,486 | 680,381 |
Others | 324 | 228 | 959 |
Net cash provided by (used in) investing activities | (447,909) | (987,947) | 945,798 |
Cash flows from financing activities: | |||
Proceeds from issuance of ordinary shares pursuant to stock plans | 2,305 | 3,220 | 36,045 |
Proceeds from issuance of shares to New Wave, a related party (Note 15) | 7 | ||
Proceeds received from non-controlling interests shareholders | 20,330 | 127 | |
Cash paid for purchase of non-controlling interests in subsidiary | (1,792) | (1,844) | (3,273) |
Proceeds from issuance of Weibo convertible senior notes, net of issuance cost (Note 18) | 879,293 | ||
Repayment of senior convertible notes of SINA (Note 18) | (153,085) | (646,908) | |
Repurchase of ordinary shares (Note 18) | (249,263) | (47,624) | (26,125) |
Proceeds from short-term bank loans | 143,873 | 87,560 | 103,951 |
Repayment of short-term bank loans | (150,552) | (33,733) | (68,113) |
Proceeds from third-party loans | 22,485 | ||
Repayment of third-party loans | (20,239) | (21,599) | |
Net cash provided by (used in) financing activities | (408,514) | 886,970 | (603,410) |
Effect of exchange rate change on cash, cash equivalents and restricted cash | (18,485) | 62,459 | (41,197) |
Net increase (decrease) in cash and cash equivalent and restricted cash | (563,871) | 557,772 | 744,840 |
Cash, cash equivalents and restricted cash at the beginning of the year | 2,206,703 | 1,648,931 | 904,091 |
Cash, cash equivalents and restricted cash at the end of the year | 1,642,832 | 2,206,703 | 1,648,931 |
Supplemental disclosures: | |||
Cash paid for income taxes | (77,937) | (17,313) | (8,210) |
Cash paid for interest, net of amounts capitalized | (16,836) | (1,987) | (8,330) |
Non-cash investing and financing activities | |||
Exchanges of long-term investments in E-House and Leju (Note 4) | 322,726 | ||
In-kind distribution of Weibo's shares (Note 15) | 554,016 | 338,598 | |
Unpaid consideration for acquisitions | 10,055 | 5,704 | |
Changes in account payable related to property and equipment addition | $ (395) | $ (12,369) | $ 19,923 |
Operations
Operations | 12 Months Ended |
Dec. 31, 2018 | |
Operations | |
Operations | 1. Operations Sina Corporation (“SINA,” “we” or the “Company”) is an online media company serving China and the global Chinese communities. The Company’s digital media network of SINA.com (portal), SINA mobile (mobile portal and mobile apps) and Weibo (social media) enables Internet users to access professional media and user generated content (UGC) in multi-media formats from desktop personal computers and mobile devices and share their interests with friends and acquaintances. SINA.com offers distinct and targeted professional content on each of its region specific websites and a full range of complementary offerings. SINA mobile provides news information and entertainment content from SINA.com customized for mobile users in WAP (mobile browser) format, SINA.cn and mobile application format. Weibo is a leading social media for people to create, share and discover Chinese-language content. By providing an unprecedented and simple way for people and organizations to publicly express themselves in real time, interact with others on a massive global platform and stay connected with the world, Weibo has had a profound social impact in China. Through these properties and other product lines, the Company offers an array of online media and social media services to users to create a rich canvas for businesses and advertisers to effectively connect and engage with their targeted audiences. The Company generates the majority of its revenues from online advertising and marketing services, and, to a lesser degree, from fee-based services. On April 17, 2014, Weibo completed its initial public offering (“IPO”) on the Nasdaq Global Select Market. After Weibo’s offering, SINA continues to control Weibo and consolidates Weibo as its controlling shareholder, but recognizes non-controlling interest reflecting the shares held by the shareholders other than SINA in the consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of presentation and use of estimates The preparation of the Company’s consolidated financial statements is in conformity with Generally Accepted Accounting Principles in the United States (“US GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods reported. Actual results may differ materially from such estimates. The Company believes the basis of consolidation, fair value, the recognition of non-controlling interests, revenue recognition, taxation, business combination, net income (loss) per share, goodwill and other long-lived assets, allowances for doubtful accounts, long-term investments, stock-based compensation and foreign currency represent critical accounting policies that reflect the more significant judgments and estimates used in the preparation of its consolidated financial statements. In May 2014, the Financial Accounting Standards Board ("FASB") issued, ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." The Company adopted new revenue guidance since January 1, 2018 using the modified retrospective method. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting method under ASC 605. The main impacts are a) the presentation of value added tax recognized in revenue from "gross" to "net", which results in equal decrease of revenues and cost of revenues, and b) the recognition of revenues and expenses at fair value for advertising barter transactions, which mainly results in the increase of revenue and advertising expenses. The cumulative-effect adjustment on the retained earnings as of January 1, 2018 related to the initial application of the new revenue standard was immaterial. In January 2016, the FASB issued an updated guidance, ASU 2016-1, Classification and Measurement of Financial Instruments, which intended to improve the recognition and measurement of financial instruments. The Company adopted the guidance as of the beginning of the fiscal year of 2018. After the adoption of this new accounting update in the first quarter of 2018, the Company measures equity investments other than equity method investments at fair value through earnings, which could vary significantly quarter to quarter. For those investments without readily determinable fair values, the Company elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Changes in the basis of these investments are reported in current earnings starting from January 1, 2018. The cumulative effects of initially applying the guidance mainly related to the reclassification of unrealized gain of $38.7 million from accumulated other comprehensive income to retained earnings in relation to the available-for-sale securities on January 1, 2018, the date of initially applying the guidance (Refer to Note 4 for details). Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned and majority-owned subsidiaries and its variable interest entities (“VIEs”), of which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated. To comply with PRC laws and regulations, the Company provides substantially all of its Internet content, online payment services and mobile value added service (“MVAS”) in China via its VIEs, which hold critical operating licenses that enable the Company to do business in China. Substantially all of the Company’s revenues, costs and net income (loss) in China are directly or indirectly generated through these VIEs. The Company has signed various agreements with its VIEs and legal shareholders of the VIEs to allow the transfer of economic benefits from the VIEs to the Company and to direct the activities of the VIEs. The Company’s VIEs are wholly or partially owned by nominee shareholders of the Company. The capital for the VIEs is funded by the Company and recorded as interest-free loans to these nominee shareholders. These loans were eliminated with the capital of the VIEs during consolidation. Under various contractual agreements, nominee shareholders of the VIEs are required to transfer their ownership in these entities to the Company’s subsidiaries in China when permitted by PRC laws and regulations or to designees of the Company at any time for the amount of loans outstanding. All voting rights of the VIEs are assigned to the Company, and the Company has the right to appoint all directors and senior management personnel of the VIEs. The Company has also entered into exclusive technical service agreements with the VIEs, under which the Company provided technical and other services to the VIEs. In addition, nominee shareholders of the VIEs have pledged their shares in the VIEs as collateral for the non-payment of loans or for the technical and other services fees due to the Company. As of December 31, 2017 and 2018, the total amount of interest-free loans to these nominee shareholders was $262.2 million and $294.9 million, respectively. The aggregate accumulated loss of all VIEs were approximately $34.9 million as of December 31, 2017 and the aggregate accumulated income were approximately $32.2 million as of December 31, 2018, which have been included in the consolidated financial statements. The following table sets forth the assets, liabilities, results of operations and changes in cash, cash equivalents and restricted cash of the VIEs and their subsidiaries taken as a whole, which were included in the Company’s consolidated balance sheets and statements of comprehensive income (loss) with intercompany transactions eliminated: As of December 31, 2017 2018 (In thousands) Total assets $ 1,007,355 $ 1,142,515 Total liabilities $ 689,459 $ 748,354 Year Ended December 31, 2016 2017 2018 (In thousands) Net revenues $ 893,010 $ 1,372,419 $ 1,842,602 Net income (loss) $ (26,627) $ 35,649 $ 67,063 Year Ended December 31, 2016 2017 2018 (In thousands) Net cash provided by (used in) operating activities $ 139,225 $ (78,813) $ (84,961) Net cash used in investing activities (152,719) (70,971) (443,588) Net cash provided by financing activities 37,021 128,730 399,182 Net increase (decrease) in cash, cash equivalents and restricted cash $ 23,527 $ (21,054) $ (129,367) As of December 31, 2017 and 2018, the total assets for the consolidated VIEs were $1,007.4 million and $1,142.5 million, respectively, which mainly comprised of $187.4 million and $184.6 million in cash, cash equivalents and short-term investments, $216.2 million and $97.0 million in restricted cash and the remaining balances include goodwill, intangible assets, accounts receivable, long-term investments and property and equipment. As of December 31, 2017 and 2018, total liabilities for the consolidated VIEs were $689.5 million and $748.4 million, respectively, which mainly included $327.1 million and $400.7 million in accrued expenses and other current liabilities, $216.2 million and $97.0 million in amounts due to customers related to SINA Pay, $29.0 million and $31.5 million in income taxes payable, $99.0 million and $97.8 million in deferred revenues, and nil and $59.2 million in short-term bank loan, respectively. Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs and can have assets transferred freely out of the VIEs without restrictions. Therefore, the Company considers that there is no asset of VIEs that can only be used to settle obligations of the respective VIEs, except for registered capital and PRC statutory reserves of VIEs amounting to a total of $336.8 million and $374.2 million as of December 31, 2017 and 2018, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Company is conducting certain businesses mainly through its VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. The following is a summary of the Company’s major VIEs and subsidiary of VIEs as of December 31, 2018: · Beijing SINA Internet Information Service Co., Ltd. (the “ICP Company”), a Chinese company controlled through business agreements, is responsible for operating www.sina.com and www.sina.cn in connection with its Internet content company license, sell online advertising and provide MVAS with its Value-Added Telecommunication Services Operating License via third-party operators in China. It is owned by four nominee shareholders of the Company. The register capital of the ICP Company is $121.7 million. · Beijing Star-Village Online Cultural Development Co., Ltd. (“StarVI”), formerly Beijing Star-Village.com Cultural Development Co., Ltd, a Chinese company controlled through business agreements, mainly is responsible for providing online advertising services through SINA News APP and www.sina.cn since April 2017. Before this, Star VI mainly provided MVAS in China via third-party operators under its Value-Added Telecommunication Services Operating License. It is owned by three nominee shareholders of the Company. The registered capital of the StarVI is $1.2 million. · Jinzhuo Hengbang Technology (Beijing) Co., Ltd. (“the IAD Company”), formerly Beijing SINA Infinity Advertising Co., Ltd., is an advertising agency in China controlled through business agreements and approved for the design, production, issuance and serving as an agency of advertisements. It is owned by two nominee shareholders of the Company. The registered capital of the IAD Company is $24.8 million. · Beijing Weimeng Technology Co., Ltd (“Weimeng”), a Chinese company controlled through business agreement, is responsible for operating www.weibo.com and www.weibo.cn in connection with its Internet content company license and providing MVAS in China via third-party operators under its Value-Added Telecommunication Services Operating License. It is owned by four nominee shareholders of the Company. The registered capital of Weimeng is $84.9 million. · Beijing Weibo Interactive Internet Technology Co., Ltd. (‘‘Weibo Interactive’’), an online-game platform company, was acquired by the IAD Company in May 2013. All of the equity interest in Weibo Interactive was transferred to Weimeng in December 2013. The registered capital of Weibo Interactive is $8.7 million. · Beijing Sina Payment Technology Co., Ltd. (“SINA Pay”), an online payment service company wholly owned by the ICP Company. The registered capital of SINA Pay is $15.7 million. · Beijing Weiju Future Technology Co. Ltd. ("Weiju"), a lending related service company, was acquired by the Company in July 2017. The registered capital of Weiju is $3.7 million. Unrecognized revenue-producing assets held by the VIEs mainly include licenses, such as the Internet Content Provision License, the Value-Added Telecommunication Services Operating License, the Online Culture Operating Permit, Payment Service License and trademarks, patents, copy rights and the domain names. Recognized revenue-producing assets held by the VIEs include core technology, vendor-relationship contracts, trademarks, domain names, customer lists relating to game-related services, lending-related service, living streaming and online payment platform technology, arising from acquisitions. Unrecognized revenue-producing assets, held by the Wholly Foreign Owned Enterprises (“WFOEs”), include customer lists relating to advertising and marketing services, game-related services, Weibo VIP memberships and data licensing, as well as trademarks. The following is a summary of the VIE agreements between our wholly owned subsidiary, Sina.com Technology (China) Co., Ltd. ("STC"), our VIE ICP Company and ICP Company's shareholders: Loan Agreements. STC has granted interest-free loans to the shareholders of the VIEs with the sole purpose of providing funds necessary for the capital injection into the VIEs. The terms of the loans in general are for 10 years. STC, at its own discretion, has the right to shorten or extend the terms of the loans if necessary. These loans were eliminated with the capital of the VIEs during consolidation. Share Transfer Agreements. Each shareholder of the ICP Company has granted STC an option to purchase his/her shares in the respective VIEs at a purchase price equal to the amount of capital injection. STC may exercise such option at any time until it has acquired all shares of such VIE, subject to applicable PRC laws. The options will be effective until the earlier of (i) the shareholders of the ICP Company and STC have fully performed their obligations under this agreement, or (ii) the respective shareholders of the ICP Company and STC agree to terminate the share transfer agreement in writing. Agreements on Authorization to Exercise Shareholder’s Voting Power. Each shareholder of the ICP Company has authorized STC to exercise all of his/her voting power as a shareholder of the ICP Company. The authorizations are irrevocable and will not expire until the ICP Company dissolves. Modification, supplement or adjustment of the terms may only be made with the consents from STC. Share Pledge Agreements. Each shareholder of the ICP Company has pledged all of his/her shares in ICP Company and all other rights relevant to the share rights to STC, as a collateral security for his/her obligations to pay off all debts to STC under the loan agreement and for the payment obligations of the ICP Company under the trademark license agreement and the technical services agreement. In the event of default of any payment obligations, STC will be entitled to certain rights, including transferring the pledged shares to itself and disposing of the pledged shares through a sale or auction. During the term of each agreement, STC is entitled to receive all dividends and distributions paid on the pledged shares. The pledges will be effective until the earlier of (i) the three-year anniversary of the due date of the last guaranteed debt, (ii) the ICP Company and its shareholders have fully performed their obligations under the above-referred agreements, or (iii) STC has unilaterally consented to terminate the respective share pledge agreement. Loan Repayment Agreements. Each shareholder of the ICP Company has agreed that the interest-free loans under the loan agreements shall only be repaid through share transfer. Once the share transfers are completed, the purchase price for the share transfer will be offset against the loan repayment. The loan repayment agreements will be effective until the earlier of (i) the shareholders of the ICP Company and STC have fully performed their obligations under the respective agreement, and (ii) the respective shareholders of the ICP Company and STC agree to terminate the share transfer agreement in writing. Exclusive Technical Services Agreements. Each shareholder of the ICP Company below has entered into an exclusive technical services agreement with STC pursuant to which STC is engaged to provide certain technical services to the ICP Company. The exclusive technical services agreement can only be prematurely terminated by STC and will not expire until the ICP Company dissolves, and the service fees are adjusted annually through written agreements. Due to its control over the respective VIEs, the Company’s wholly owned subsidiaries have the right to determine the service fees to be charged to the respective VIEs by considering, among others, the technical complexity of the services, the actual costs that may be incurred for providing the services, the operations of each VIE, applicable tax rates, planned capital expenditures and business strategies. The ICP Company has engaged STC to provide technical services for its (i) online advertising and other related businesses, and (ii) value-added telecommunication and other related businesses. The ICP Company is obligated to pay service fees to STC. Exclusive Sales Agency Agreements. The ICP Company has granted STC the exclusive right to distribute, sell and provide agency services for all the products and services provided by the ICP Company. These exclusive sale agency agreements will not expire until the ICP Company is dissolved. The Exclusive Sales Agency Agreements enable us to collect sales agency fees from the ICP Company if we decide to do so. Trademark License Agreements. STC has granted the ICP Company trademark licenses to use the trademarks held by STC, in specific areas, and the ICP Company is obligated to pay license fees to STC. The terms of these agreements are for one year and are automatically renewed provided that there is no objection from STC. In addition, only STC can terminate its trade license agreement prematurely. (i) STC, our VIE IAD Company and IAD Company’s shareholders, (ii) our subsidiary Starshining Mobile Technology (China) Ltd. (“Star Shining”), our VIE StarVI and StarVI’s shareholders, and (iii) our subsidiary Weibo Internet Technology (China) Ltd. (“Weibo Technology”), our VIE Weimeng and Weimeng’s shareholders have also entered into VIE agreements in substantially the same form as described above, except for the below specific services provided under the exclusive technical services agreement. The IAD Company has engaged STC to provide technical services for its (i) online advertising and other related businesses, and (ii) value-added telecommunication and other related businesses. Pursuant to changes in applicable PRC laws in 2008, SINA established two wholly owned subsidiaries to engage directly in online advertising and related businesses. StarVI has engaged Star Shining to provide technical services for its Internet information service, and Star Shining has the sole right to appoint any company or companies at its discretion to perform such technical services. Weimeng has engaged Weibo Technology to provide technical services for its online advertising and other related businesses. The service fees that the Company's wholly owned subsidiaries charged to the major VIEs amounted to $467.6 million, $784.8 million and $985.6 million, respectively, for the fiscal years ended December 31, 2016, 2017 and 2018, respectively. The Company believes that the contractual arrangements among its subsidiaries, the VIEs and its shareholders are in compliance with the current PRC laws and legally enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and its subsidiary in the consolidated financial statements. The Company’s ability to control its VIEs also depends on the authorization by the shareholders of the VIEs to exercise voting rights on all matters requiring shareholders’ approval in the VIEs. The Company believes that the agreements on authorization to exercise shareholder’s voting power are legally enforceable. In addition, if the legal structure and contractual arrangements with its VIEs were found to be in violation of any future PRC laws and regulations, the Company may be subject to fines or other actions. The Company believes the possibility that it will no longer be able to control and consolidate its VIEs as a result of the aforementioned risks and uncertainties is remote. Non-controlling interests For the Company’s majority-owned subsidiaries and VIEs, non-controlling interests are recognized to reflect the portion of their equity that are not attributable, directly or indirectly, to the Company as the controlling shareholders. The majority of the Company’s non-controlling interests relate to Weibo Corporation and its subsidiaries. To reflect the economic interest in Weibo held by non-controlling shareholders, Weibo’s net income (loss) attributable to the non-controlling ordinary shareholders is recorded as non-controlling interests in the Company’s consolidated statements of comprehensive income (loss). Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated financial statements to distinguish the interests from that of the Company. Fair value All financial assets and liabilities are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The Company remeasures the equity method investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. For those investments without readily determinable fair value, the Company measures them at fair value when observable price changes or impairments are identified. The fair values of the Company’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The fair values of the Company’s equity investments in the equity securities of publicly listed companies are measured using quoted market prices. The fair values of the Company's investments in private equity funds are measured using net asset value per share as a practical expedient, provided certain criteria are met. The Company’s non-financial assets, such as intangible assets, goodwill and fixed assets, would be measured at fair value only if they were determined to be impaired. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: · Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. · Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. · Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company uses significant unobservable inputs to measure the fair value of guarantee liabilities. Guarantee liabilities are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors. The carrying amount of cash and cash equivalents, short-term investments, restricted cash, accounts receivable and other current assets, accounts payable, amount due to customers and accrued expenses and other current liabilities (excluded for guarantee liabilities) approximates fair value. Net income (loss) per share Basic net income (loss) per share is computed using the weighted average number of ordinary shares outstanding during the period. Options to purchase ordinary shares and restricted share units are not considered outstanding in computation of basic earnings per share. Diluted net income (loss) per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period, which include options to purchase ordinary shares, restricted share units and conversion of the convertible debt. The computation of diluted net income (loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net income (loss) per share. Additionally, the Company takes into account the effect on consolidated net income (loss) per share of dilutive shares of entities in which the Company holds equity interests and interest expenses along with relevant amortized issuance costs of convertible debt under certain circumstances. The dilutive impact from equity interests mainly include long-term investments accounted for using the equity method and the consolidated subsidiaries, such as Weibo. Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less as cash equivalents. Cash equivalents are comprised of investments in time deposits that mature within three months, which are stated at cost plus accrued interest, and money market funds are stated at fair market value. Restricted cash and amount due to customers The restricted cash primarily represents the cash balances temporarily held on account for the merchant customers of the Company through the SINA Pay online payment platform and is considered legally restricted with the release of Measures for Online Payment Business of Non-financial Institutions by the People’s Bank of China (“PBOC”) in December 2015. The Company can only use segregated bank accounts for such customer amounts and the cash in the segregated accounts can only be used for the online payment business as designated by the customers. Amount due to customers represents the balances that are payable on demand to customers and therefore reflected as current liability on the consolidated balance sheets. The SINA Pay customer accounts are used to facilitate payments to online merchants or third party banks and are deemed as pass through accounts between the payor and the online merchant. The balances are in-transit to customers and the payments are normally made within the normal trade settlement dates. The changes in amount due to customers are presented within operating activities in the consolidated statements of cash flows. Short-term bank loans Short-term bank loans as of December 31, 2017 and 2018 amounted to $89.3 million and $78.2 million, respectively, which consisted of several bank borrowings denominated in RMB. All of these bank borrowings were repayable within one year. The effective interest rate for the outstanding borrowings for 2017 and 2018 ranged from approximately 4.6% and 4.8% per annum. Business combination Business combinations are recorded using the purchase method of accounting, and the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of the (i) the total of consideration of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the subsidiary acquired over (ii) the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the consideration of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of comprehensive income (loss). In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings. The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets, forecasted life cycle and forecasted cash flows over that period. Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Company’s acquisitions of interests in its subsidiaries and consolidated VIEs. The Company assesses goodwill for impairment in accordance with ASC subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill, which requires that goodwill be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20. US GAAP provides the option to apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. The qualitative approach starts the goodwill impairment test by assessing qualitative factors by taking into consideration of macroeconomics, overall financial performance, industry and market conditions and the share price of the Company, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the quantitative impairment test is performed; otherwise, no further testing is required. When the Company performs the quantitative impairment test, the Company firstly determines whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. For those reporting units where it is determined that it is more likely than not that their fair values are less than the units’ carrying amounts, the Company performs the second step of a two-step quantitative goodwill impairment test to allocate the fair value of reporting units to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. Long-lived assets Intangible assets mainly include land use rights and certain intangible assets arising from acquisitions. Land use rights represent the land use rights acquired for the purpose of constructing offices, which is being amortized on a straight-line basis over the term of the land use right period, approximately 50 years. The acquisition related intangible assets are recognized at fair value upon acquisition and amortized on a straight-line basis over t |
Cash, Cash Equivalents, Restric
Cash, Cash Equivalents, Restricted Cash and Short-term Investments | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents, Restricted Cash and Short-term Investments | |
Cash, Cash Equivalents, Restricted Cash and Short-term Investments | 3. Cash, Cash Equivalents, Restricted Cash and Short-term Investments Cash, cash equivalents and restricted cash consisted of the following: As of December 31, 2017 2018 (In thousands) Cash and cash equivalents: Cash $ 1,766,927 $ 1,383,610 Cash equivalents: Bank time deposits (maturing within 3 months) 24,966 75,367 Money market funds 198,659 86,823 223,625 162,190 1,990,552 1,545,800 Restricted cash 216,151 97,032 Total cash, cash equivalents and restricted cash $ 2,206,703 $ 1,642,832 Short-term investments: Bank time deposits $ 1,381,991 $ 799,534 The carrying amounts of cash, cash equivalents, restricted cash and short-term investments approximate fair values. Interest income for the years ended December 31, 2016, 2017 and 2018 was $38.0 million, $43.2 million and $83.2 million, respectively. The maturity dates of the bank time deposits are within one year. |
Long-term Investments
Long-term Investments | 12 Months Ended |
Dec. 31, 2018 | |
Long-term Investments | |
Long-term Investments | 4. Long-term Investments Long-term investments comprised investments in publicly traded companies, privately held companies and limited partnerships. The following sets forth the changes in the Company’s long-term investments. Available for Cost Sale Securities/ Method/Equity Equity Securities Securities Readily Without Readily Equity Method Determinable Determinable Fair (E-House) (Leju) (Others) Fair Values Values Total (In thousands) Balance at January1, 2016 $ $ $ 131,417 $ $ $ New investments/transferred from prepayments 195,126 56,160 52,449 775,637 Income (loss) from investments (3,760) 308 (8,314) — — (11,766) Investment impairment — — (2,455) (4,822) (29,032) (36,309) Unrealized loss, net — — — (80,795) — (80,795) Disposal/dilution of investments (341,052) — 10,902 (124,040) (67,658) (521,848) Dividend received — — (3,103) — — (3,103) Others* (5,602) (116) (2,642) — (7,889) (16,249) Balance at December 31, 2016 $ — $ 199,662 $ 181,965 $ 154,289 $ 782,291 $ 1,318,207 New investments/transferred from prepayments — — 26,204 10,000 132,079 168,283 Income (loss) from investments — (30,796) 14,726 — — (16,070) Investment impairment — (113,103) (1,207) (1,275) (6,513) (122,098) Unrealized loss, net — — — (35,607) — (35,607) Disposal/dilution/refund of investments — — 19,112 (22,248) (10,410) (13,546) Changes from cost method to consolidation (Note 5) — — — — (29,071) (29,071) Changes from cost method to equity method — — 19,121 — (19,121) — Changes from cost method to available-for-sale securities — — — 2,213 (2,213) — Dividend received/entitled — — (7,829) — — (7,829) Others* — 1,646 5,330 — 19,571 26,547 Balance at December 31, 2017 $ — $ 57,409 $ 257,422 $ 107,372 $ 866,613 $ 1,288,816 Impact of adoption of new investment guidance ** — — — 37,686 (27,419) 10,267 New investments/transferred from prepayments — — 140,379 149,140 382,031 671,550 Income (loss) from equity method investments — (9,080) 10,200 — — 1,120 Investment impairment — — (5,699) — (55,289) (60,988) Disposal/dilution/refund of investments — — 3,235 (87,351) — (84,116) Changes from investments without readily determinable fair value to readily determinable fair value — — — 30,000 (30,000) — Fair value change through earnings (including adjustment of subsequent observable price changes) — — — (70,020) 166,553 96,533 Dividend received/entitled — — (4,087) — — (4,087) Others* — (186) (8,235) (891) (19,940) (29,252) Balance at December 31, 2018 $ — $ 48,143 $ 393,215 $ 165,936 $ 1,282,549 $ 1,889,843 * Others mainly represents the impacts from foreign exchange change. For equity method investments, others represents the equity pick-up of other comprehensive income (loss) of investees caused by foreign exchange change. ** Upon the adoption of ASU 2016-01, $27.4 million of investments in private equity funds were adjusted to their NAV of $37.7 million and reclassified from cost method to equity investments with readily determinable fair value on January 1, 2018. Equity Method As of December 31, 2018, investments accounted for under the equity method totaled $441.4 million, which included a $48.1 million investment in Leju Holdings Limited (“Leju ") and a $110.1 million investment in Tian Ge Interactive Holding Limited ("Tian Ge”) ($57.4 million in Leju and $98.1 million in Tian Ge as of December 31, 2017, respectively). Investments are accounted for under the equity method when the Company has significant influence in the investment and the investment is considered as in substance ordinary shares. Investments in limited partnerships, whose operating and financial policies the Company had significant influence over were also accounted for using the equity method. On April 15, 2016, E-House entered into a definitive agreement and plan of merger, or the Merger Agreement, with E-House Holdings Ltd., or Parent. Pursuant to the Merger Agreement, Parent acquired E-House for a cash consideration equal to US$6.85 per ordinary share, and upon the closing of the merger, E-House continued as the surviving corporation and a wholly owned subsidiary of Parent. In connection with the transaction contemplated by the Merger Agreement, the Company made an equity contribution of approximately $140 million to Parent in August 2016 to subscribe newly issued shares of Parent. At the same time, the shares of E-House held by the Company were also rolled over and converted into the shares of Parent. On August 12, 2016, or the closing date, the Company held 49,764,809 ordinary shares of Parent, which represented 43% of Parent’s then total outstanding shares and had a cost basis then to the Company of $340.7 million. The Company also entered into a Shareholders Agreement with Parent and certain other shareholders of Parent on the closing date, under which the Company granted an option (‘E-House Option’) to Parent to repurchase all the equity interest held by the Company in Parent during the 18-month period following the closing date for a consideration consisting of (i) 30% of the total outstanding ordinary shares of Leju at the time of the repurchase, and (ii) certain cash payment. In accordance with ASC Subtopic 815-10, the option is deemed legally detachable and separately exercisable from the repurchase of ordinary shares of Leju and, thus, accounted for as a freestanding instrument. The option was initially recognized as an option liability valued at $ 3.1 million on the basis of its fair value at the grant date, together with its subsequent changes in fair value were reflected in the fair value change in option liability. The fair value of option liability was determined by i) the number of Leju shares the Company received in this transaction, ii) the difference between the designated unit price of Leju shares agreed in the Shareholders Agreement by transaction parties and the fair value of unit price of Leju in the open market at each period end and iii) time value of the option liability. Immediately prior to the exercise of the option, the fair value of the investor option liability was approximately $28.5 million. On December 30, 2016, Parent exercised such option right and repurchased 49,764,809 of its ordinary shares from the Company, for the aggregate consideration comprised of 40,651,187 shares of Leju with a fair value of $195.1 million and approximately $127.6 million in cash. As a result, together with Leju Dividend Shares received in 2014 by the Company, on December 31, 2016, the Company totally held 42,117,874 Leju shares with a fair value of $202.2 million, which represented 31.1% of Leju’s then total outstanding shares, and ceased to hold any beneficial ownership in Parent. The Company used the equity method to account for the investment in Leju. During 2017, the U.S. dollar cash consideration was received from Parent, and an equivalent RMB deposit received in 2016 to ensure the later payment of cash consideration in U.S. dollar was repaid to the Parent. As a result of the share exchange, the Company recognized a one-time gain of $4.6 million, which was the difference between all the considerations received and the carrying value of the investment in E-House on the transaction date, after offsetting the cumulative currency translation adjustments previously recorded for E-House as other comprehensive loss. Earning/(loss) from Parent for the period from October 1, 2016 to December 30, 2016 was included in the disposal gain of $4.6 million from this transaction. For the year ended December 31, 2016, a loss of $28.5 million was recognized as fair value change in option liability when marked to market in the Company’s consolidated statements of comprehensive income. In 2017, the Company recorded a $30.8 million of loss and a $113.1 million of other- than-temporary impairment loss on its investments in Leju related to changes in the government policy in real estate industry in China and to the decline of Leju’s stock price after the investment. In 2018, the Company recorded a $9.1 million of loss. The closing price of Leju as of December 31, 2018 was $1.4 per ADS/share, higher than its carrying amount per share (approximately $1.14). The aggregate market value of the Company’s investment in Leju is approximately $59.0 million. On July 9, 2014, Tian Ge, an equity method investee of the Company, completed its initial public offering on the Main Board of The Stock Exchange of Hong Kong Limited with the new issuance of 349.9 million ordinary shares (“Tian Ge IPO”). Immediately after the Tian Ge IPO, the Company’s equity interest in Tian Ge was diluted from 36% to 25% and the Company in substance disposed part of its interest in Tian Ge. The closing price of Tian Ge as of December 31, 2018 was HK$3.06 (equivalent to $0.39) per ADS/share, as compared to the carrying amount per share of approximately $0.37. The aggregate market value of the Company's investment in Tian Ge was approximately $117.2 million. The Company made an investment in an investing fund of $48.0 million in 2018, which was accounted for under equity method. Other investments under equity method made during the presented periods were individually immaterial. None of the Company's equity method investments meets the SEC’s definition of a significant subsidiary for the years ended December 31, 2016, 2017 and 2018. The Company summarizes the condensed financial information of the Company’s equity investments as a group below in accordance with Rule 4-08 of Regulation S-X. Year Ended December 31, 2016 2017 2018 (In thousands) Operating data: Revenue $ 1,884,793 $ 626,402 $ 926,219 Gross profit $ 1,385,828 $ 470,681 $ 550,181 Loss from operations $ (21,238) $ (128,034) $ (2,014) Net loss $ (57,894) $ (34,455) $ (41,682) Net loss attributable to the investees $ (27,895) $ (33,053) $ (39,600) As of December 31, 2017 2018 (In thousands) Balance sheet data: Current assets $ 918,942 $ 946,459 Long-term assets $ 733,487 $ 1,402,989 Current liabilities $ 257,650 $ 283,495 Long-term liabilities $ 24,875 $ 33,148 Non-controlling interests $ (1,445) $ (572) The investment in Leju was accounted for using the equity method with the cost allocated as follows: As of December 31, 2017 2018 (In thousands) Carrying value of investment in Leju $ 57,409 $ 48,143 Proportionate share of Leju's net tangible and intangible assets * 80,753 75,723 Carrying value of investment less proportionate share of Leju's net tangible and intangible assets $ (23,344) $ (27,580) The difference above has been primarily assigned to: Goodwill and amortizable intangible assets * $ (23,344) $ (27,580) Deferred tax liabilities — — $ (23,344) $ (27,580) Cumulative loss in equity interest $ (30,243) $ (39,323) * The weighted average remaining life of the intangible assets recorded in Leju’s financial statements was 5 years, and the intangible assets not included in Leju’s financial statements was fully impaired in the end of June 2017. The negative basis difference mainly arising from intangible assets is being amortized over 5 years, the weighted average remaining lives of primary assets. Equity Securities with Readily Determinable Fair Values Equity securities with readily determinable fair values include i) marketable equity securities, which are publicly traded stocks or funds measured at fair value and ii) private equity funds, which are qualified NAV under ASC 820. Prior to January 1, 2018, the Company accounted for the marketable equity securities at fair value with unrealized gains and losses recognized in accumulated other comprehensive income. Upon the adoption of ASU 2016-01, the Company measures equity securities with readily determinable fair values at fair value through earnings. Due to the initial application of the ASU 2016-01, The Company reclassified a cumulative unrealized gain of $38.7 million in accumulated other comprehensive income arising from marketable securities to the retained earnings and also recognized a cumulative-effect adjustment of $10.3 million to increase its carrying amount for the investments qualified for NAV and credited to the retained earnings as of January 1, 2018. The following table shows the carrying amount and fair value of equity securities with readily determinable fair values and private equity funds: Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value (In thousands) Jupai $ 23,068 44,107 — 67,175 Other equity securities 45,594 10,163 (15,560) 40,197 December 31, 2017 $ 68,662 $ 54,270 $ (15,560) $ 107,372 Jupai $ 23,068 $ — $ (7,119) $ 15,949 Pintec 30,000 — (2,776) 27,224 Other equity securities 74,844 4,562 (29,317) 50,089 Private equity funds 58,246 16,277 (1,849) 72,674 December 31, 2018 $ 186,158 $ 20,839 $ (41,061) $ 165,936 The Company invested Jupai Holding Limited (“JP”) with a total cost of $7.8 million under cost method since 2014. In July 2015, JP completed its listing on the New York Stock Exchange (“JP IPO") and the investment was transferred to marketable securities which measures at fair value. As of December 31, 2018, the Company had an unrealized loss of $7.1 million in relation to the investment in JP. In June 2018, the Company invested Pintec Technology Holding Limited ("Pintec") with a total cost of $30 million, which was initially recorded under the investment without readily determinable fair value. In October 2018, Pintec completed its listing on the NASDQ Stock Exchange ("Pintec IPO") and the investment was transferred to marketable securities which measures at fair value from marked to market. As of December 31, 2018, the Company had the unrealized loss of $2.8 million. The marketable securities are valued using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. Private equity funds pursue various investment strategies, including event driven and multi-strategy. Investments in private equity generally are not redeemable due to the closed-ended nature of these funds. Instead, distributions from each fund will be received as the underlying investments of the funds are disposed and monetized. As of December 31, 2018, the unfunded commitments related to investments in private equity funds was $53.5 million. Investments in private equity funds may be subject to lock-up period, which is usually from 5 to 10 years and restricts an investor from withdrawing from the fund during the investment period. As of December 31, 2018, equity securities with readily determinable fair values were $165.9 million. In 2018, the Company recognized a net loss of $74.2 million from the fair value change of marketable equity securities, which substantially was unrealized. The Company also recognized unrealized gain of $4.2 million for the equity investments qualified NAV in 2018. Equity Securities without Readily Determinable Fair Values Prior to January 1, 2018, the Company accounted for equity securities under cost method at cost less impairment. As of December 31, 2017, the equity securities previously accounted for under the cost method had a carrying value of $866.6 million. Started from January 1, 2018, the Company elected measurement alternative and recorded equity investments without readily determinable fair values at cost, less impairment, adjusted for subsequent observable price changes. $27.4 million of investment in private equity funds were adjusted to their fair values of $37.7 million and reclassified from cost method to equity securities with readily determinable fair value. Based on ASU 2016-01, entities that elect the measurement alternative will report changes in the carrying value of the equity investments in current earnings. If this measurement alternative is elected, changes in the carrying value of the equity investment will be required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The implementation guidance notes that an entity should make a "reasonable efforts" to identify price changes that are known or that can reasonably be known. In 2016, the Company further invested $120 million in the preference shares of a private company, which primarily focus on developing social applications. In 2018, the Company invested in a) preference shares of two private companies in Fintech industry, which primarily focus on the insurance business and Fintech services, with the consideration of $96.4 million and $91.5 million, respectively; and b) preference shares of a private company, which primarily focus on developing artificial intelligence of automobile, with the consideration of $90.0 million. Other investments without readily determinable fair values made during the presented periods were individually immaterial. In 2018, the Company recognized $55.3 million impairment related to investments without readily determinable fair value and no other downward adjustment was related to investments without readily determinable fair value. These impairments were primarily driven by revised projections of future operating results reflecting unfavorable macroeconomic conditions and performance of the investees. The fair value of each of these investments was derived using discounted cash flow analysis based on Level 3 inputs. As of December 31, 2018, investments accounted for without readily determinable fair values were $1,282.5 million. During 2018, the Company recorded $166.6 million gains from upward adjustments, mainly from two investments, which were based on identified observable price changes indicated by new issuance of identical securities of the same investee or transaction of identical securities between other existing shareholders. The Company did not dispose any interests of these investments and all of gains were unrealized as of December 31, 2018. The Company classifies the valuation techniques on those investments that use similar identifiable transaction prices as Level 2 of fair value measurements. The following table summarizes the total carrying value of the equity securities accounted for alternative measures as of December 31, 2018 including cumulative unrealized upward and downward adjustments made to the initial cost basis of the securities (in thousands): Initial cost basis $ 1,191,225 Upward adjustments 166,553 Impairment (55,289) Foreign currency translation (19,940) Total carrying value at the end of the period $ 1,282,549 Subsequently, in the first quarter of 2019,the Company noted impairment indicators for two equity investments without readily determinable fair value, as the respective investees suffered significant performance deterioration caused by loss of certain significant cooperation agreement and financing difficulties coupled with investment losses that all occurred in the first quarter of 2019. As a result, the investees made business plan changes and scaled down their operations and employees. The Company expects to recognize $75.2 million impairment for these two equity investments in the first quarter of 2019. The Company also expects to recognize $163.3 million gains from upward adjustment of fair value for one equity investment, as the identical shares of the same investee were listed for the first quarter of 2019 on the Shenzhen Stock Exchange in China. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions | |
Acquisitions | 5. Acquisitions The Company accounts for business combinations using the purchase method of accounting, which requires the acquisition cost be allocated to the assets and liabilities of the Company acquired, including separately identifiable intangible assets, based on their estimated fair values. The Company makes estimates and judgments in determining the fair value of the acquired assets and liabilities based on independent appraisal reports as well as its experience with similar assets and liabilities in similar industries. If different judgments or assumptions were used, the amounts assigned to the individual acquired assets or liabilities could be materially different. Yizhibo On October 1, 2018(“Acquisition Date”), Weibo entered into a series of business and asset transfer agreements with Yixia Tech Co., Ltd. (“Yixia Tech”) to acquire the whole live streaming business of Yizhibo, which was previously operated by Yixia Tech. The acquisition included the Yizhibo APP and related assets/technology, employees and business contracts with a cash consideration of US$50.0 million. As of December 31, 2018, Weibo had paid $40.0 million to Yixia Tech, with the remaining $10.0 million scheduled to be paid in 2019. Weibo engaged an independent valuation firm to help its management determine the value of assets and liabilities from the acquisition. Total identifiable intangible assets acquired on acquisition date included supplier-relationship of $9.7 million with estimated useful life of five years, core technology of $6.6 million with estimated useful life of eight years, and trademark and domain name of $5.6 million with estimated useful life of ten years. The acquisition mentioned above resulted in an increase of $28.0 million to revenue and an immaterial impact to net income for 2018. The consideration of acquisition of Yizhibo was allocated based on their fair value of the assets acquired and the liabilities assumed as follows: As of October 1, 2018 (In thousands) Consideration $ 50,000 Property and equipment, net 466 Identifiable intangible assets acquired 21,942 Other tangible assets 2,874 Liabilities assumed (2,434) Goodwill 27,152 Total $ 50,000 Weihui Prior to 2017, the Company held a 45% equity interest of Weihui, which is primarily engaged in providing technology service for financial service platforms, including design and develop online platform, payment system integration, etc. Pursuant to the investment agreement, the Company had contingent redemption right on its investment in Weihui, so the interest held by the Company did not meet the definition of “in-substance common shares” under ASC 323-10-15. As there was no readily determinable fair value for the Company’s investment in Weihui, it was accounted for an investment under the cost method prior to 2017. The carrying amount of the investment in Weihui prior to the acquisition was $29.1 million. In April 2017, the Company entered into a new share purchase agreement and purchased additional 10% equity interest of Weihui with consideration of $12.2 million and obtained control, holding aggregate 55% of Weihui’s equity interest with contingent redemption rights upon the completion of the transaction. In accordance with ASC 805 accounting for step-up acquisition, the Company’s previously held 45% equity interest was re-measured to fair value at the acquisition date, which was valued with the assistance of an independent valuation firm and a re-measurement gain of $6.0 million was recognized. The Company began to consolidate Weihui’s financial statements from April 2017 and the remaining 45% of its common shares without any preference right was recognized as non-controlling interests on the balance sheet. Total identifiable intangible assets acquired upon acquisition mainly included core technology of $15.9 million valued by the excess earnings method, customer relationships of $3.8 million, which have an estimated useful life of five years. Consideration for Weihui was allocated on the acquisition date based on their fair value of the assets acquired and the liabilities assumed as follows: As of acquisition date (In thousands) Consideration $ 12,222 Fair value of previously held 45% equity interest 35,119 Non-controlling interests 24,707 Total 72,048 Cash and cash equivalents 12,078 Other tangible assets 1,602 Identifiable intangible assets acquired 19,748 Liabilities assumed (2,687) Goodwill 41,307 Total $ 72,048 Weiju In July 2017, the Company acquired 60% equity interest of Weiju, which primarily provides online loan facilitation services to the borrowers, with total consideration of $36.4 million, including $5.5 million paid to selling shareholders and $30.9 million paid to Weiju for its newly issued shares. Total consideration was paid by the Company in March 2018. The Company began to consolidate Weiju's financial statements from July 2017 and the remaining 40% equity interest of Weiju was recognized as non-controlling interests on the balance sheet. Total identifiable intangible assets acquired upon acquisition mainly included core technology of $5.3 million, which have an estimated useful life of five years. The Company has engaged an independent valuer to assist management in assessing the enterprise value of Weiju and preparing the purchase price allocation as follows: As of acquisition date (In thousands) Consideration $ 36,405 Non-controlling interests 18,405 Total 54,810 Tangible assets 27,423 Identifiable intangible assets acquired 5,278 Liabilities assumed (1,319) Goodwill 23,428 Total $ 54,810 The acquisitions above did not have a material impact on the Company’s consolidated financial statements, and, therefore, pro forma disclosures have not been presented. In 2017 and 2018, no other significant acquisition has material impact on the Company’s consolidated financial statements. No acquisition incurred in 2016. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Goodwill The changes in the carrying value of goodwill by segment are as follows (in thousands): Portal Advertising Others Total Balance as of January 1, 2016 41,745 11,117 — 52,862 Impairment provided in 2016 (36,726) — — (36,726) Foreign exchange impact (5,019) (851) — (5,870) Balance as of December 31, 2016 $ — $ 10,266 $ — $ 10,266 New acquisitions (Note 5) — 2,318 64,735 67,053 Foreign exchange impact — 836 3,241 4,077 Balance as of December 31, 2017 $ — $ 13,420 $ 67,976 $ 81,396 New acquisitions (Note 5) — 27,152 652 27,804 Impairment provided in 2018 — (10,554) — (10,554) Foreign exchange impact — (672) (3,734) (4,406) Balance as of December 31, 2018 $ — $ 29,346 $ 64,894 $ 94,240 The Company tests goodwill for impairment at the reporting unit level on an annual basis as of December 31 and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The Company’s goodwill as of December 31, 2017 and 2018 was $81.4 million and $94.2 million respectively. No new acquisition incurred in 2016. For the portal advertising segment, the Company witnessed a decrease trend in revenue in 2016, which was mainly caused by an increasingly competitive online advertising market landscape. This led to a shift of advertising budget of brand advertisers, the largest customer segment in terms of revenue contribution for portal advertising business, from portal to APPs. As of December 31, 2016, the Company performed a quantitative analysis for the reporting unit under portal advertising business, with the assistance of an independent third party valuer to determine the fair value of reporting units and the implied fair value of their goodwill. Based on the assessment, the Company provided a full impairment charges of $36.7 million for the goodwill arising from the acquisitions made under portal advertising segment as of December 31, 2016. As to Weibo, no impairment provision was made in 2016 and 2017. In 2018, the Company also performed a quantitative analysis on its reporting units considering the fact of under expectation performance and decreased revenue. The Company estimated the fair value by using the income approach or market approach. The income approach considered a number of factors, which included, but were not limited to, expected future cash flows, growth rates, discount rates, and comparable multiples from publicly traded companies in the industry and required the Company to make certain assumptions and estimates regarding industry economic factors and future profitability of the Company’s business. Based on the assessment, the Company provided $10.6 million of impairment charge on goodwill related to Weibo VAS business as of December 31, 2018. For other reporting units, the Company performed a qualitative analysis by taking into consideration the macroeconomics, overall financial performance, industry and market conditions and the share price of the Company, on the goodwill arising from newly acquired businesses, in addition to other entity specific factors. Based on the assessment, the Company determined that it was not necessary to perform a quantitative goodwill impairment test and concluded that no impairment indicators on its goodwill were noted as of December 31, 2017. In 2018, considering the strict government policy in Fintech industry in China and the increasing market competition, the Company performed a quantitative analysis on the reporting unit as of December 31, 2018, with the assistance of an independent third party valuer to determine the fair value of reporting unit and concluded that there was no impairment. Intangible assets The following table summarizes the Company’s intangible assets arising from acquisitions and land use rights: As of December 31, 2017 As of December 31, 2018 Accumulated Accumulated Accumulated Accumulated Cost Amortization Impairment Net Cost Amortization Impairment Net (In thousands) (In thousands) Land use rights $ — $ — $ — $ — $ 202,340 $ (2,341) $ — $ 199,999 Technology 38,547 (18,582) (1,243) 18,722 44,342 (22,747) (11,598) 9,997 Supplier-relationship — — — — 9,738 (495) — 9,243 Trademark and Domain name — — — — 5,623 (147) — 5,476 Software 1,861 (1,861) — — 1,859 (1,859) — — Others 12,090 (5,776) (2,225) 4,089 11,275 (5,998) (4,657) 620 Total $ 52,498 $ (26,219) $ (3,468) $ 22,811 $ 275,177 $ (33,587) $ (16,255) $ 225,335 Land use rights represent the land rights acquired for the purpose of constructing offices. In 2018, the Company obtained the land use rights from local authorities with cash consideration, which was amortized on a straight-line basis over the term of the land use right period, approximately 50 years. Amortization expense related to land use rights for the year ended December 31, 2018 was $2.4 million. Other intangible assets mainly include technology arising from acquisition, which are amortized over the estimated useful lives ranging from one to ten years. Amortization expense related to intangible assets for the years ended December 31, 2016, 2017 and 2018 was $1.9 million, $4.6 million and $9.1 million, respectively. In 2016, the Company recognized $3.5 million impairment loss of acquired intangible assets, which is related to the All Sure business acquired in 2013, as a result of the management’s assessment that the impairment existed based on its conclusion that All Sure was unable to provide expected synergies with the portal business. The impaired intangible assets consisted primarily of core technology, trademark and domain names. No impairment on acquired intangible assets was made for the year ended December 31, 2017. In 2018, the Company recognized $12.7 million impairment loss of acquired intangible assets, which is related to Weihui business acquired in April 2017, as a result of the management's assessment that the impairment existed based on the under expectation performance of Weihui and its conclusion that Weihui was unable to provide expected synergies with the Company’s Fintech business. The impaired intangible assets consisted primarily of core technology and customer list. As of December 31, 2018, estimated amortization expenses for future periods are expected to be as follows: Year Ended December 31, (In thousands) 2019 $ 8,491 2020 8,487 2021 8,447 2022 7,931 2023 and thereafter 191,443 Total expected amortization expense* $ 224,799 * The table above excludes $0.5 million of indefinite lived intangible assets which was included in the category of Others. |
Investment in Weibo
Investment in Weibo | 12 Months Ended |
Dec. 31, 2018 | |
Investment in Weibo | |
Investment in Weibo | 7. Investment in Weibo In April 2014, Weibo completed an initial public offering (the "IPO") with the new issuance of 19,320,000 Class A ordinary shares, of which 6,000,000 Class A ordinary shares were allotted to Alibaba Group. Prior to the completion of the IPO, a wholly owned subsidiary of Alibaba Group Holding Limited (“Alibaba”) invested $585.8 million to purchase 30.0 million of preferred shares and 4.8 million of ordinary shares of Weibo, representing an ownership interest of 18% on a fully diluted basis. With the completion of the IPO, all the ordinary shares held by SINA were converted into an equal number of the Class B ordinary shares, all the ordinary shares held by other shareholders were converted into an equal number of the Class A ordinary shares, and all of its outstanding preferred shares were automatically converted into 30,046,154 Class A ordinary shares. Concurrent with the IPO, Alibaba Group further acquired an additional 2,923,478 Class A ordinary shares of Weibo in a private placement and 21,067,300 Class A ordinary shares from the Company. Each Class A ordinary share is entitled to one vote per share and each Class B ordinary share is entitled to three votes per share. Each Class B ordinary share can be converted into one Class A ordinary share at any time, while Class A ordinary shares cannot be converted into Class B ordinary shares. Share Ownership As of December 31, 2018, the share ownership of Weibo was as follows: Ownership Voting Shareholder Name Shares Type Percentage Power* SINA Class B Ordinary shares 45.3 % 71.3 % Alibaba Class A Ordinary shares 30.2 % 15.8 % Others Class A Ordinary shares 24.5 % 12.9 % Total 100.0 % 100.0 % The Company has been the controlling shareholder of Weibo from inception and has consolidated Weibo’s financial results for the periods presented. * Class A ordinary shares are entitled to one vote per share and Class B ordinary shares, which the Company holds, are entitled to three votes per share. |
Non-controlling interests
Non-controlling interests | 12 Months Ended |
Dec. 31, 2018 | |
Non-controlling interests | |
Non-controlling interests | 8. Non-controlling interests The following table summarizes the Company’s non-controlling interests: As of December 31, As of December 31, 2017 2018 (In thousands) $ 666,141 $ 969,803 Others 86,746 75,278 Total $ 752,887 $ 1,045,081 Non-controlling interests related to Weibo mainly represent Weibo’s cumulative results of operations and changes in equity (deficit) attributable to non-controlling shareholders, along with non-controlling shareholders’ original investments for the ordinary and preferred shares issued by Weibo. The increase in non-controlling interests related to Weibo both for 2017 and 2018 mainly resulted from a) the pick-up of Weibo’s results of operations and changes in equity attributable to non-controlling shareholders (Note 7 — Investment in Weibo), and b) the declaration of in-kind dividend to SINA’s shareholders in 2017, which resulted in an increase of non-controlling interests based on the change in equity interest held by the Company in Weibo as of the declaration date (Note 15 —Shareholders’ Equity—In-kind Distribution). |
Other Balance Sheet Components
Other Balance Sheet Components | 12 Months Ended |
Dec. 31, 2018 | |
Other Balance Sheet Components | |
Other Balance Sheet Components | 9. Other Balance Sheet Components As of December 31, 2016 2017 2018 (In thousands) Accounts receivable, net: Accounts receivable — $ 305,895 $ 555,861 Allowance for doubtful accounts: Balance at the beginning of year $ (14,980) (14,068) (20,214) Additional provision charged to expenses (14,621) (8,465) (15,424) Write-off 15,533 2,319 7,674 Balance at the end of year $ (14,068) $ (20,214) $ (27,964) — $ 285,681 $ 527,897 Prepaid expenses and other current assets: Prepayments and loan to investees 1 (including prepayment and receivables from related parties of $40,506 and $115,976 as of December 31, 2017 and 2018) — $ 62,172 $ 190,444 Secured loan to a founder of a related party 2 — 80,000 80,000 Rental and other operation deposits — 30,191 9,842 Amounts deposited by Weibo users 3 — 25,277 30,631 Content fees and revenue share — 12,013 14,769 Advertising and marketing fees — 2,926 4,742 Deductible value added tax — 10,304 Others — 15,659 21,703 — $ 228,238 $ 362,435 Property and equipment, net: Office building — $ 208,731 $ 197,337 Office building related facilities — 3,499 3,308 Computers and equipment — 214,644 217,335 Leasehold improvements — 14,258 17,328 Furniture and fixtures — 11,355 11,558 Other — 2,473 2,996 — 454,960 449,862 Less: Accumulated depreciation — (192,284) (187,016) — $ 262,676 $ 262,846 Other assets: Investment related deposits — $ 38,897 $ 46,777 Deferred tax assets — 16,158 23,213 Deposits for land use rights — — 6,321 Others — 2,027 4,816 — $ 57,082 $ 81,127 Accrued expenses and other current liabilities: Accrued sales rebates — $ 104,117 $ 149,371 Accrued payroll related expenses (including sales commission) — 141,129 117,562 Advertising and marketing expenses — 88,614 83,893 Guarantee liabilities (Note 17) — 10,143 10,952 Deposit for secured loan 2 — — 43,614 Turnover tax — 32,367 44,280 Amounts due to Weibo users 3 — 25,277 30,631 Employee reimbursement — 8,055 8,934 Professional fee — 9,253 10,014 Unpaid consideration for acquisitions — 5,704 10,055 Others — 22,120 31,501 — $ 446,779 $ 540,807 1 Prepayment and loan balance to investees as of December 31, 2017 and 2018 were individually immaterial. The Company recognized $8.1 million, $0.9 million and $20.3 million of impairment on the prepayment of investments as a result of the deterioration of the investees’ operation for the year ended December 31, 2016, 2017 and 2018, respectively. 2 The Company issued a one-year loan of $100 million to a founder of a related party in August 2016 with an annual interest rate of 5%. $20 million was repaid as of December 31, 2017 and the remaining were extended to August 15, 2018 and then August 15, 2019, with an annual interest rate of 7.5%, and secured by an RMB deposits included in accrued expenses and other current liabilities (equivalent to $43.6 million) and mortgaged shares of the related party provided by its founder as of December 31, 2018. Subsequently, as of March 31, 2019, all the loan amount was fully secured by RMB deposits received by the Company. 3 Weibo wallet enables Weibo users to conduct hobby-oriented activities on Weibo, such as handing out “red envelops” and coupons to users. Weibo wallet also enables users to purchase different types of products and services on Weibo, including those offered by the Company, such as marketing services and VIP membership, and those offered by the Company’s platform partners, such as e-commerce merchandises, financial products and virtual gifts. The amounts deposited by users primarily represent the receivables temporarily held on account for Weibo wallet users through a third party online payment platform. Amounts due to users represent the balances that are payable on demand to Weibo wallet users and therefore are reflected as current liability on the consolidated balance sheets. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | 10. Related Party Transactions The following sets forth significant related parties and their relationships with the Company: Name of related parties Relationship with the Company Leju and its subsidiaries (“Leju”) An investee of the Company Alibaba and its subsidiaries (“Alibaba”) Strategic partner and significant shareholder of Weibo New Wave MMXV Limited (“New Wave”) An entity controlled by Mr. Charles Chao (a) Service provided to related parties The Company entered into the following transactions with related parties: Year ended December 31, Transactions 2016 2017 2018 (In thousands) Revenues: License revenue from Leju 1 $ 10,435 $ 10,435 $ 10,435 Agency and advertising service earned from Leju 1 9,265 16,091 20,754 Promotion and advertising service to Alibaba 2 82,021 91,724 126,882 Others 3 47,809 94,107 160,184 $ 149,530 $ 212,357 $ 318,255 Other related parties mainly include investee companies over on which the Company has significant influence. These investees are mainly high-tech companies operating in different internet-related industries, such as short video applications, social and new media marketing services and so on. 1 The amended and restated advertising agency agreement, the domain name and content license agreement, the trademark license agreement and the software license and support services agreement (“License Agreements”) were entered into with Leju, a subsidiary of E-House, and such amount allocated to the fair value of the License Agreements was $187.4 million, which represents the difference between the total consideration and the fair value of equity interests disposed. This amount was recorded as deferred revenues and amortized over ten years prior to March 2014, when the License Agreement was extended for another ten years. Accordingly, the remaining deferred revenue balance as of March 2014 will be amortized prospectively under the straight-line method until 2024. For the years ended December 31, 2016, 2017 and 2018, the Company recorded $10.4 million revenue from License Agreements from such deferred revenue account, respectively. As of December 31, 2017 and 2018, the total amount of deferred revenue from Leju was $64.5 million and $54.1 million, respectively, which includes $54.1 million and $43.7 million of non-current portion of deferred revenue, respectively. Based on the amended and restated advertising agency agreements with Leju, agency fees and advertising revenue earned from Leju for 2016, 2017 and 2018, generated from the sales of advertising through SINA were amounting to $9.3 million, $16.1 million and $20.8 million, respectively. 2 On April 29, 2013, affiliated entities of the Company formed a strategic alliance with affiliated entities of Alibaba to jointly explore social commerce and develop marketing solutions to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo’s users. Alibaba purchased advertising from the Company and continued to do so subsequently. The Company has continued to keep strategic collaboration and work with Alibaba in the area of social commerce and other areas after the expiration of the strategic framework agreement in January 2016 and recorded $82.0 million, $91.6 million and $126.7 million in advertising and marketing revenues from Alibaba in 2016, 2017 and 2018, respectively. 3 Within other related parties, one related party that is an equity investee in the short video business contributed $53.9 million of advertising and marketing revenues in 2018 and represented $80.9 million of accounts receivable due from other related parties at December 31, 2018. (b) Balances with related parties The Company had the following balances with related parties: As of December 31, 2017 2018 (In thousands) Accounts receivable from Leju $ 1,513 $ 4,905 Accounts receivable from Alibaba 43,676 53,480 Accounts receivable from other related parties 3 29,848 131,137 $ 75,037 $ 189,522 Deferred revenues in relation to License Agreement with Leju $ 64,521 $ 54,087 Account payable to related parties $ 20,660 $ 50,678 Accrued and other liabilities to related parties $ 5,681 $ 14,763 (c) Shares Issuance to Management On November 6, 2015, the Company completed an issuance of 11,000,000 ordinary shares to New Wave, a holding company that holds ordinary shares on behalf of our senior management and controlled by Mr. Charles Chao, Chairman and chief executive officer (“CEO”) of the Company, for an aggregate price of $456,390,000 pursuant to a legally binding subscription agreement signed in June 2015. The shares acquired in this transaction are subject to a contractual lock-up restriction for six months after the closing on November 6, 2015. The per share purchase price of US$41.49 represents the average closing trading price of SINA’s ordinary shares for the 30 trading days ended May 29, 2015, the last trading day before the signing of the subscription agreement. No stock-based compensation expenses arose from this placement. On November 6, 2017, the Company entered into a share subscription agreement with New Wave, which held 7,944,386 ordinary shares of the Company then. Pursuant to the agreement, the Company issued to New Wave 7,150 newly created class A preference shares with 10,000 votes per share initially (the "Class A Preference Shares"), at par value of US$1.00 per share. Immediately following the share issuance, New Wave's aggregate voting power in the Company increased from approximately 11.1% to approximately 55.5%. The Class A Preference Shares have no economic rights and no participant rights to any dividend, and as a result, the Company concluded that the transfer of economic benefits from the Company or shareholders to New Wave and the fair value of these Class A Preferred Shares was immaterial. See Note 15 to Consolidated Financial statements Shares Issuance to Management. (d) Other transactions with related parties Transactions with related parties included in cost and operating expenses represented 4.4%, 4.4%, and 4.1% of total cost and operating expenses for 2016, 2017 and 2018, respectively. The Company believes that the terms of the agreements with the related parties are comparable to the terms of market rate transactions with third-party customers and vendors. Other than the transactions disclosed above or elsewhere in the consolidated financial statements, the Company had no material loan and interest income /expense with related parties for the years ended December 31, 2016, 2017 and 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 11. Income Taxes The Company is registered in the Cayman Islands and has operations in four tax jurisdictions — the PRC, the U.S., Hong Kong and Taiwan. The operations in Taiwan represent a branch office of the subsidiary in the U.S. For operations in the U.S., Hong Kong and Taiwan, the Company has incurred net accumulated operating losses for income tax purposes. The Company believes that it is more likely than not that these net accumulated operating losses will not be utilized in the future. Therefore, the Company has provided full valuation allowance for the deferred tax assets arising from the losses at these locations as of December 31, 2017 and 2018. The components of income before income taxes are as follows: Year Ended December 31, 2016 2017 2018 (In thousands, except percentage) Income before income tax expense $ 304,527 $ 424,239 $ 555,410 Income (loss) from non-China operations $ 125,064 $ (79,945) $ (143,680) Income from China operations $ 179,463 $ 504,184 $ 699,090 Income tax expense applicable to China operations $ 11,985 $ 73,165 $ 129,406 Effective tax rate for China operations 7 % 15 % 19 % The Company has recorded income tax provisions from its PRC operations for the years ended December 31, 2016, 2017 and 2018. The income (loss) from non-China operation mainly resulted from the disposal/dilution gain (loss) or impairment loss related to overseas investments, stock-based compensation and fair value change in option liability, etc. In 2016, the Company’s non-China operations recorded (i) aggregated gains of $156.4 million from disposing a series of investments under cost method (ii) a gain of $44.2 million related to disposal of its partial investment in Alibaba, (iii) a gain of $34.5 million related to disposal of its remaining investment in Youku Tudou due to its privatization and (iv) a loss of $28.5 million in change in fair value of option liability related to E-House. A portion of the non-China operations in 2016 resulted in the recognition of non-China income tax expense. In 2017, the Company's non-China operations recorded (i) a gain of $92.3 million related to disposal of its investment in Alibaba, offset by (ii) impairment of $113.1 million provided in Leju investment and (iii) stock based compensation expenses recognized in the financial statements. In 2018, the Company's non-China operations recorded (i) an aggregated loss of $66.3 million in fair value change on overseas investments and (ii) stock based compensation expenses recognized in the financial statements. Cayman Islands Under the current tax laws of Cayman Islands, the Company is not subject to tax on income or capital gain. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. As such, the significant income from the disposition gain of Alibaba and certain private foreign entity’s shares are not subject to tax. U.S. As of December 31, 2018, the Company’s subsidiary in the U.S. had approximately $88.8 million of federal and $7.9 million of state net operating loss carryforwards available to offset future taxable income. The federal net operating loss carryforwards will expire, if unused, in the years ending June 30, 2019 through December 31, 2038, and the state net operating loss carryforwards will expire, if unused, in the years ending December 31, 2028 through December 31, 2038. Included in the net operating loss carryforwards were $40.4 million and $4.2 million of federal and state net operating loss carryforwards relating to employee stock options, the benefit of which will be credited to equity when realized. The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations when changes occur in the stock ownership of a company. In the event the Company has a change in ownership, utilization of carryforwards could be restricted. The deferred tax assets for the U.S. subsidiary as at December 31, 2018 consisted mainly of net operating loss carryforwards, for which a full valuation allowance has been provided, as management believes it is more likely than not that these assets will not be realized in the future. The following table sets forth the significant components of the net deferred tax assets for operation in the U.S.: As of December 31, 2017 2018 (In thousands) Deferred tax assets: Net operating loss carry-forwards $ 30,557 $ 30,484 Other tax credits, allowances for doubtful accounts, accruals and other liabilities 563 539 Total deferred tax assets 31,120 31,023 Less: valuation allowance (31,120) (31,023) Deferred tax assets, net $ — $ — Hong Kong As of December 31, 2018, the Company’s Hong Kong subsidiaries had approximately $36.5 million of net operating loss carryforwards which can be carried forward indefinitely to offset future taxable income. As of December 31, 2018, the deferred tax assets for the Hong Kong subsidiary, consist mainly of net operating loss carryforwards, for which a full valuation allowance has been provided. Management believes it is more likely than not that these assets will not be realized in the future. The following table sets forth the significant components of the net deferred tax assets for Hong Kong operation: As of December 31, 2017 2018 (In thousands) Deferred tax assets: Net operating loss carry-forwards $ 5,776 $ 6,023 Less: valuation allowance (5,776) (6,023) Deferred tax assets $ — $ — China Effective January 1, 2008, the Enterprise Income Tax Law (the “EIT Law”) in China unifies the enterprise income tax rate for the entities incorporated in China at 25% if they are not eligible for any preferential tax treatment. High and new technology enterprises enjoy a preferential tax rate of 15% under the EIT Law. As of December 31, 2018, some of the Company’s subsidiaries in China,such as SINA.com Technology (China) Co., Ltd., SINA Technology (China) Co., Ltd., Beijing New Media Information Technology Co., Ltd., and Sina (Shanghai) Management Co., Ltd., were qualified as high and new technology enterprises and enjoyed a preferential tax rate of 15% under the new EIT Law. On February 22, 2008, relevant governmental regulatory authorities released qualification criteria, application procedures and assessment processes for “software enterprise”, which were updated in April 2013. An entity qualified as a software enterprise, may enjoy an income tax exemption for two years beginning with its first profit making year and a reduced tax at a rate of 12.5% for the subsequent three years. Weibo Technology, qualified as software enterprises, started to enjoy the relevant tax holiday from its first accumulative profitable year in 2015 and has been subject to a reduced enterprise income tax rate of 12.5% since 2017. In late 2018, Weibo Technology was approved to be qualified as a “key software enterprise” for 2017 and thus entitled to enjoy a further reduced preferential tax rate of 10% for 2017. Weibo Technology used the tax credit of its “key software enterprise” status of 2017 and recognized $10.8 million of tax credit related to 2017 in 2018. The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC should be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Company does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should SINA be treated as a resident enterprise for PRC tax purposes, the Company has accrued PRC tax on worldwide income at a uniform tax rate of 25% retroactive to January 1, 2008. The EIT Law also imposes a withholding income tax of 10% on dividends distributed by an FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Such withholding income tax was exempted under the Previous EIT Law. The Cayman Islands, where the Company is incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% (if the foreign investor owns directly at least 25% of the shares of the FIE). The State Administration of Taxation further promulgated Circular 601 on October 27, 2009, which provides that tax treaty benefits will be denied to “conduit” or shell companies without business substance and that a beneficial ownership analysis will be used based on a “substance-over-form” principle to determine whether or not to grant the tax treaty benefits. A majority of the Company’s FIEs’ operations in China are invested and held by Hong Kong registered entities. If the Company is regarded as a non-resident enterprise and our Hong Kong subsidiaries are regarded as resident enterprises, then our Hong Kong subsidiaries may be required to pay a 10% withholding tax on any dividends payable to us. If our Hong Kong entities are regarded as non-resident enterprises, then the Company’s PRC subsidiaries may be required to pay a 5% withholding tax for any dividends payable to our Hong Kong subsidiaries. However, it is still unclear at this stage whether Circular 601 applies to dividends from the Company’s PRC subsidiaries paid to our Hong Kong subsidiaries and if our Hong Kong subsidiaries were not considered as “beneficial owners” of any dividends from their PRC subsidiaries, the dividends payable to our Hong Kong subsidiaries would be subject to withholding tax at a rate of 10%. In accordance with accounting guidance, all undistributed earnings are presumed to be transferred to the parent company and are subject to the withholding taxes. Based on the subsequently issued interpretation of the EIT, Article 4 of Cai Shui (2008) Circular No. 1, dividends on earnings prior to 2008 but distributed after 2008 are not subject to withholding income tax. The Company decided that its foreign invested enterprises will not distribute PRC earnings made since 2008 beyond to their immediate foreign holding companies and will maintain such cash onshore to reinvest in its PRC operations. As of December 31, 2017 and 2018, the Company did not record any withholding tax on the retained earnings of its FIEs in the PRC as the Company intends to reinvest all earnings in China since 2008 to further expand its business in China, and its FIEs do not intend to declare dividends on the retained earnings made since 2008 to their immediate foreign holding companies. The Company’s VIEs are wholly owned by the Company’s employees and controlled by the Company through various contractual agreements. To the extent that these VIEs have undistributed earnings, the Company accrued appropriate expected tax associated with repatriation of such undistributed earnings. The Company did not recognize any amount of unrecognized tax benefits and related interest and penalties in its financial statement during the presented periods in accordance with ASC740-10. Included in the long-term liabilities as of December 31, 2017 and 2018, there was both approximately $0.6 million unrecognized tax liability, respectively, arising from transferring pricing arrangements between subsidiaries and VIEs in previous periods, which is immaterial to the consolidated financial statements for all periods presented. The Company also did not expect any significant increase or decrease in this unrecognized tax liability within 12 months following the reporting date. In general, the PRC tax authorities have up to five years to review a company’s tax filings. Accordingly, tax filings of the Company’s PRC subsidiaries and VIEs for tax years 2014 through 2018 remain subject to the review by the relevant PRC tax authorities. In the case of a transferring pricing related adjustment, the statute of limitation is ten years, which indicates that such arrangement will open for examination by PRC tax authorities. In December 2009, the State Administration of Tax (“SAT”) in China issued a circular on strengthening the management of proceeds from equity transfers by non-China tax resident enterprises and requires foreign entities to report indirect sales of China tax resident enterprises. If the existence of the overseas intermediary holding company is disregarded due to lack of reasonable business purpose or substance, gains on such sale are subject to PRC withholding tax. In February 2015, SAT issued the Circular on Several Issues Related to Enterprise Income Tax for Indirect Asset Transfer by Non-PRC Resident Enterprises , or SAT Circular 7, if a non-resident enterprise transfers the equity interests of or similar rights or interests in overseas companies which directly or indirectly own PRC taxable assets through an arrangement without a reasonable commercial purpose, but rather to avoid PRC corporate income tax, the transaction will be re-characterized and treated as a direct transfer of PRC taxable assets subject to PRC corporate income tax. SAT Circular 7 specifies certain factors that should be considered in determining whether an indirect transfer has a reasonable commercial purpose. However, as SAT Circular 7 is newly issued, there is uncertainty as to the application of SAT Circular 7 and the interpretation of the term “reasonable commercial purpose.” SAT Circular 7 became effective on February 2015, but it also applies to indirect transfers which occurred before its issuance but have not received assessment from the tax authorities. Although the Company believes that it is more likely than not all the transactions made by the Company during all the presented periods would be determined to have reasonable commercial purpose, should this not be the case, the Company would be subject to a significant withholding tax that could materially and adversely impact its financial position, results of operations and cash flows. Composition of income tax expenses for China operations The following table sets forth current and deferred portion of income tax expenses of the Company’s China subsidiaries and VIEs: Year Ended December 31, 2016 2017 2018 (In thousands) Current tax provision $ 17,455 $ 76,379 $ 95,846 Deferred tax (benefits) provision (5,470) (3,214) 33,560 Income tax expense $ 11,985 $ 73,165 $ 129,406 The deferred tax provision in 2018 mainly consisted of $40.8 million deferred tax provision for those gains recognized from fair value changes on investments with the adoption of the new guidance on accounting for investment in equity securities starting from 2018, and deferred tax benefits in relation to the increase in deferred tax assets. Reconciliation of the differences between statutory tax rate and the effective tax rate for China operations The following table sets forth reconciliation between the statutory EIT rate and the effective tax rate for China operations: Year Ended December 31, 2016 2017 2018 Statutory EIT rate 25 % 25 % 25 % Effect on tax holiday and preferential tax rate 1 (29) % (11) % (11) % Permanent differences (1) % (1) % 1 % Change in valuation allowance 12 % 2 % 4 % Effective tax rate for China operations 7 % 15 % 19 % 1 Included the impact of Weibo Technology’s preferential tax treatment of “key software enterprise” status of 2017 in 2018 The provisions for income taxes for the years ended December 31, 2016, 2017 and 2018 differ from the amounts computed by applying the EIT primarily due to the tax holidays and the preferential tax rate enjoyed by certain of the Company’s entities in the PRC. The increase in effective tax rate for China operations in 2017 as compared to 2016 was mainly due to the change in tax status of Weibo Technology in 2017 from being fully tax exempted to being subject to a reduced enterprise income tax rate of 12.5%. The increase in effective tax rate for China operations in 2018 as compared to 2017 was mainly due to higher impact from the change of valuation allowance and permanent differences, which was offset in part by the preferential tax rate effect of Weibo Technology’s key software enterprise qualification obtained in 2018. The following table sets forth the effect of tax holiday related to China operations: Year Ended December 31, 2016 2017 2018 (In thousands, except per share amount) Tax holiday effect $ 51,829 $ 56,377 $ 76,246 Basic net income per share effect $ 0.74 $ 0.79 $ 1.08 Diluted net income per share effect $ 0.67 $ 0.76 $ 1.05 The following table sets forth the significant components of deferred tax assets and liabilities for China operations: As of December 31, 2017 2018 (In thousands) Deferred tax assets: Allowances for doubtful accounts $ 21,454 $ 24,267 Net operating loss carry forwards 14,913 31,016 Accruals 17,330 21,989 Depreciation and other liabilities 23,294 33,020 Total deferred tax assets 76,991 110,292 Less: valuation allowance (60,833) (87,079) Net deferred tax assets $ 16,158 $ 23,213 Deferred tax liabilities: Depreciation $ (650) $ (821) Investment gain — (40,781) Acquired intangible assets (3,836) (3,213) Others (3,274) (6,278) Total deferred tax liabilities $ (7,760) $ (51,093) A valuation allowance is provided against deferred tax assets when the Company determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Company considered factors including (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carry-forwards; and (iii) tax planning strategies. Historically, deferred tax assets were valued using the previous statutory rate of 25% or applicable preferential rates. As of December 31, 2017 and 2018, the Company provided a full valuation allowance of the deferred tax assets for China operations mainly related to the allowance for doubtful accounts. Given that the Company has been unsuccessful in getting approval from the relevant tax authorities for the deduction of the tax allowance on bad debt in recent years, the Company believes it is more likely than not that these deferred tax assets will not be utilized. As of December 31, 2017 and 2018, the Company had net operating loss carry forwards for China operations totaling $70.5 million and $149.9 million to offset against future net profit for income tax purposes, resulting in $14.9 million and $31.0 million deferred tax assets. The Company anticipates that it is more likely than not that these net operating losses may not be fully utilized based on its estimate of the operation performance of these PRC entities; therefore, deferred tax assets generated from net operating losses were offset by a valuation allowance of $14.8 million and $29.8 million, respectively. The deferred tax liabilities arising from investments was related to the deferred tax provision on the fair value changes of investments since the adoption of new investment guidance starting from 2018. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Net Income (Loss) Per Share | |
Net Income (Loss) Per Share | 12. Net Income (Loss) Per Share Basic net income (loss) per share is computed using the weighted average number of the ordinary shares outstanding during the period. Restricted share units are not considered outstanding in the computation of basic earnings per share (“EPS”). Diluted EPS is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in EPS amounts or a decrease in loss per share amounts) on net income per share. For the years ended December 31, 2016, 2017 and 2018, the interest expenses and amortized issuance costs of $10.8 million, $1.5 million and $1.4 million, respectively, as well as the number of “if converted” shares related to convertible debt were recognized as dilutive factors and included in the calculation of diluted net income per share. For the years ended December 31, 2016, 2017 and 2018, stock options and unvested restricted share units that were anti-dilutive and excluded from the calculation of diluted net income per share were immaterial on a weighted average basis. In calculating the Company’s consolidated basic and diluted EPS, the numerator include SINA’s share of income (loss) from Weibo based on Weibo’s basic and diluted EPS, respectively, multiplied by the number of Weibo shares held by SINA. In 2016, 2017 and 2018, the effect on consolidated net income per share of dilutive shares from Weibo was $2.1 million, $3.6 million and $3.3 million, respectively. The Company also believes that it is not necessary to make any allocation to the preferred shareholders when applying the two class method of calculating EPS in accordance with ASC 260, because the preferred shares are not participant securities (see Note 15- preferred shares for details) The following table sets forth the computation of basic and diluted net income per share for the periods indicated: Year Ended December 31, 2016 2017 2018 (In thousands, except per share amounts) Basic net income per share calculation: Numerator: Net income attributable to SINA’s ordinary shareholders $ 225,087 $ 156,569 $ 125,562 Denominator: Weighted average ordinary shares outstanding 70,301 71,284 70,296 Basic net income per share $ 3.20 $ 2.20 $ 1.79 Diluted net income per share calculation: Numerator: Net income attributable to SINA’s ordinary shareholders $ 225,087 $ 156,569 $ 125,562 Less: Effect on consolidated net income per share of dilutive shares of the Company’s equity interests 2,275 3,915 3,699 Add: Effect on interest expenses and amortized issuance cost of convertible debt 10,831 1,531 1,403 Net income attributable for calculating diluted net income per share 233,643 154,185 123,266 Denominator: Weighted average ordinary shares outstanding 70,301 71,284 70,296 Weighted average ordinary shares equivalents: Effects of dilutive securities Stock options 112 94 87 Unvested restricted share units 958 1,172 683 Convertible debt 6,140 1,381 1,309 Shares used in computing diluted net income per share attributable to SINA 77,511 73,931 72,375 Diluted net income per share $ 3.01 $ 2.09 $ 1.70 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans | |
Employee Benefit Plans | 13. Employee Benefit Plans China Contribution Plan The Company’s subsidiaries and VIEs in China participate in a government-mandated, multi-employer, defined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees. Chinese labor laws require the Company’s subsidiaries to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution. For the years ended December 31, 2016, 2017 and 2018, the Company contributed a total of $59.7 million, $69.9 million and $93.8 million to the government funds, respectively. 401(k) Savings Plan The Company’s U.S. subsidiary has a savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). Under the 401(k) Plan, participating employees may defer 100% of their eligible pretax earnings up to the Internal Revenue Service’s annual contribution limit. All employees on the U.S. payroll of the Company age 21 years or older are eligible to participate in the 401(k) Plan. The Company has not been required to contribute to the 401(k) Plan. |
Profit Appropriation
Profit Appropriation | 12 Months Ended |
Dec. 31, 2018 | |
Profit Appropriation | |
Profit Appropriation | 14. Profit Appropriation Relevant PRC laws and regulations permit PRC companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The Company’s subsidiaries and VIEs in China are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to China’s Foreign-Invested Enterprises (“FIEs”), its subsidiaries have to make appropriations from its after-tax profit (as determined under Generally Accepted Accounting Principles in the PRC (“PRC GAAP”) to non-distributable reserve funds including the (i) general reserve fund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. General reserve fund is at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the respective company. The appropriation of the other two reserve funds is at the Company’s discretion. At the same time, the Company’s VIEs, in accordance with the China Company Laws, must make appropriations from its after-tax profit (as determined under the PRC GAAP) to non-distributable reserve funds including (i) statutory surplus fund and (ii) discretionary surplus fund. Statutory surplus fund is at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the respective company. General reserve fund and statutory surplus fund are restricted for setting off against losses, expansion of production and operation or increase in register capital of the respective company. As a result of these PRC laws and regulations, the general reserve, statutory surplus and registered capital of PRC subsidiaries and VIEs are restricted in terms of being transferred to the Company either in the form of dividends, loans or advances. The balance of restricted net assets was $514.6 million or 18.9% of the Company’s total consolidated net assets as of December 31, 2018. Except for the above, there is no other restriction on the use of proceeds generated by the Company’s subsidiaries and VIEs to satisfy any obligations of the Company. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity | |
Shareholders' Equity | 15. Shareholders’ Equity Stockholder Rights Plan In 2005, the Company adopted a Rights Plan (the "2005 Rights Plan") to protect the best interests of all shareholders. The 2005 Rights Plan expired on February 22, 2015. In order to continue to protect the best interests of our shareholders, the Company’s board of directors approved a continuation of the 2005 Rights Plan (the "2015 Rights Plan") in April 2015. In general, the 2015 Rights Plan has substantially the same terms as the 2005 Rights Plan. Pursuant to the 2015 Rights Plan, stockholders of SINA have rights to purchase ordinary shares of the Company at a substantial discount from those securities’ fair market value upon a person or group acquiring, without the approval of the Board of Directors, more than 10% of the Company’s ordinary shares. Any person or group who triggers the purchase right distribution becomes ineligible to participate in the Plan, causing substantial dilution of such person or group’s holdings. The 2015 Rights Plan has a record date of May 4, 2015 and will expire on April 23, 2025 unless extended by the Company’s board of directors before then. In addition, the Company’s Board of Directors has the authority, without further action by its shareholders, to issue up to 3,750,000 preference shares in one or more series and to fix the powers and rights of these shares, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with its ordinary shares. Preference shares could thus be issued quickly with terms calculated to delay or prevent a change in control or make removal of management more difficult. Similarly, the Board of Directors may approve the issuance of debentures convertible into voting shares, which may limit the ability of others to acquire control of the Company. Shares Issuance to Management Preferred Shares On November 6, 2017, the Company entered into the Share Subscription Agreement with New Wave, which held 7,944,386 ordinary shares of the Company then. Pursuant to the agreement, the Company issued to New Wave 7,150 newly created the Class A Preference Shares with 10,000 votes per share initially, at par value of US$1.00 per share. Immediately following the share issuance, New Wave’s aggregate voting power in the Company increased from approximately 11.1% to approximately 55.5%. The following is a summary of the key terms of the Class A Preference Shares: · The Class A Preference Shares have no economic rights nor any right to any dividend or other distribution by the Company. · The Class A Preference Shares are entitled to vote on all matters submitted to a general meeting of the Company. When New Wave sells or otherwise transfers any number of Ordinary Shares held by it to a third party which is not an affiliate of New Wave, the number of votes that each Class A Preference Share is entitled to will be reduced proportionally. · On any resolution to elect a director where the nominee is an executive officer of the Company, the votes attaching to the Class A Preference Shares on such resolution shall not be counted if a majority of the votes cast by the holders of the Company’s ordinary shares is against the appointment of such nominee. · For all matters that are required to be subject to shareholder approval under Rule 5635 of the Nasdaq Stock Market Rules, New Wave shall vote the Class A Preference Shares in accordance with the Board’s recommendation to the extent the board determines to submit any such matter to shareholder approval. · If New Wave transfers the Class A Preference Shares to a third party which is not an affiliate of New Wave, or when New Wave ceases to be controlled by any person holding executive office in the Company, the Class A Preference Shares shall cease to have any voting right. The Class A Preference Shares have no economic rights and no participant rights to any dividend, and as a result, the Company concluded that the transfer of economic benefits from the Company or shareholders to New Wave and the fair value of these Class A Preferred Shares was immaterial. In-kind Distribution On August 31, 2016 and May 26, 2017, the Company announced its planned distribution of shares of Weibo to SINA’s shareholders as of the record date on a pro rata basis, or one Weibo Share for each ten outstanding SINA ordinary shares, respectively (the “2016 Distribution” and the “2017 Distribution”). As of distribution date, the Company has distributed Class A ordinary shares of Weibo, based on the ordinary shares of SINA outstanding as of the record date. Distribution Record Date Distribution Date Distributed Share SINA’s Ordinary Shares 2016 Distribution September 12, 2016 October 14, 2016 7,088,116 70,881,168 2017 Distribution June 7, 2017 July 10, 2017 7,142,148 71,421,480 The 2016 Distribution resulted in a decrease of $338.6 million in retained earnings, which was equal to the fair value of Weibo shares distributed and also led an increase of $21.9 million in the non-controlling interests related to Weibo, which represented the change in the underlying net assets related to the equity interest held by the Company in Weibo as of the declaration date. The 2017 Distribution resulted in a decrease of $554.0 million in retained earnings, which was equal to the fair value of Weibo shares distributed and also led an increase of $31.7 million in the non-controlling interests related to Weibo, which represented the change in the underlying net assets related to the equity interest held by the Company in Weibo as of the declaration date. The remaining difference has been reflected as an increase in additional paid-in capital in 2016 and 2017, respectively. As of December 31, 2018, the Company held 45.3% economic interest and 71.3% voting interest in Weibo. 2015 Share Incentive Plan On June 29, 2007, the Company adopted the 2007 Share Incentive Plan (the “2007 Plan”), which plan was amended and restated on August 2, 2010 (the “Amended and Restated 2007 Plan”). The Amended and Restated 2007 Plan permits the granting of share options, share appreciation rights, restricted share units and restricted shares. The Amended and Restated 2007 Plan terminated on August 1, 2015. Under the 2007 Plan, a total of 10,000,000 ordinary shares of the Company are available for issuance. As of December 31, 2018, there were 155,000 options and 92,000 restricted share units outstanding under the Amended and Restated 2007 Plan. In July, 2015, the Company adopted the 2015 Share Incentive Plan (the “2015 Plan”), which permits the granting of share options, share appreciation rights, restricted share units and restricted shares. Under the 2015 Plan, a total of 6,000,000 ordinary shares of the Company is available for issuance. The maximum number of ordinary shares available for issuance will be reduced by one share for every one share issued pursuant to a share option or share appreciation right and by 1.75 share for every one share issued as restricted shares or pursuant to a restricted shares unit. The maximum number of ordinary shares that may be granted subject to awards under the 2015 Plan during any given fiscal year will be limited to 3% of the total outstanding shares of the Company as of the end of the immediately preceding fiscal year, plus any shares remaining available under the share pool for the immediately preceding fiscal year. Share options and share appreciation rights must be granted with an exercise price of at least 110% of the fair market value on the date of grant. Upon adoption, the 2015 Plan replaced the existing 2007 Plan and, as a result, no additional awards could be granted under the 2007 Plan. As of December 31, 2018, there were nil options and 2,065,000 restricted share units outstanding under the 2015 Plan. Stock-Based Compensation The following table sets stock-based compensation included in each of the accounts, including amount arising from Weibo’s incentive plan: Year Ended December 31, 2016 2017 2018 (In thousands) Costs of revenues $ 7,742 $ 9,257 $ 10,128 Sales and marketing 15,496 20,790 21,942 Product development 20,793 29,163 30,830 General and administrative 29,797 32,177 32,169 $ 73,828 $ 91,387 $ 95,069 The following table sets forth the summary of number of shares available for issuance: Shares Available (In thousands) January 1, 2016 5,728 Granted* (2,456) Cancelled/forfeited 353 Expired (279) December 31, 2016 3,346 Granted* (673) Cancelled/forfeited 320 Expired (85) December 31, 2017 2,908 Granted* (2,456) Cancelled/forfeited 128 Expired (13) December 31, 2018 567 * In 2016, 2017 and 2018, 1,403,000, 385,000 and 1,404,000, restricted shares units, or 2,456,000, 673,000 and 2,456,000 equivalent option shares, respectively, were granted. Stock Option No options were granted during the presented periods under 2015 Incentive Plan. The following table sets forth the summary of option activities under the Company’ stock option program: Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) January 1, 2016 923 $ 44.83 3.37 $ 5,208 Exercised (674) $ 47.26 Cancelled/expired/forfeited (15) $ 35.69 December 31, 2016 234 $ 38.41 3.63 $ 5,226 Exercised (26) $ 35.69 Cancelled/expired/forfeited (18) $ 37.61 December 31, 2017 190 $ 38.86 2.56 $ 11,693 Exercised (34) $ 43.85 Cancelled/expired/forfeited (1) $ 35.69 December 31, 2018 155 $ 37.75 $ 2,467 Vested and expected to vest as of December 31, 2017 190 $ 38.86 2.56 $ 11,693 Exercisable as of December 31, 2017 117 $ 39.74 2.31 $ 7,063 Vested and expected to vest as of December 31, 2018 155 $ 37.75 $ 2,467 Exercisable as of December 31, 2018 153 $ 37.77 $ 2,435 The total intrinsic value of options exercised during 2016, 2017 and 2018 was $22.0 million, $1.6 million and $1.5 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares. Cash received from the exercises of stock option of the Company during 2016, 2017 and 2018 was $31.9 million, $0.9 million and $1.5 million. As reported by the NASDAQ Global Selected Market, the Company’s ending stock price as of December 31, 2017 and 2018 was $100.31 and $53.64, respectively. As of December 31, 2017 and 2018, there was $1.2 million and $0.02 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options granted to the Company’s employees and directors, respectively. Total unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.04 years as of December 31, 2018. Total unrecognized compensation cost may be adjusted for future changes in estimated forfeitures. Information regarding the stock options outstanding as of December 31, 2017 and 2018 are summarized below: Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) As of December 31, 2017 $35.69 - $35.69 36 $ 35.69 13 $ 35.69 3.04 $38.27 - $38.27 124 $ 38.27 74 $ 38.27 2.90 $45.13 - $45.13 30 $ 45.13 30 $ 45.13 0.55 190 $ 38.86 117 $ 39.74 As of December 31, 2018 $35.69 - $35.69 31 $ 35.69 29 $ 35.69 2.04 $38.27 - $38.27 124 $ 38.27 124 $ 38.27 1.90 155 $ 37.75 153 $ 37.77 1.93 Restricted Share Units Summary of Service-Based Restricted Share Units The following table sets forth the summary of service-based restricted share unit (“RSU”) activities: Weighted-Average Grant Date Shares Granted Fair Value (In thousands) January 1, 2016 1,967 $ 40.85 Awarded* 1,384 $ 49.89 Vested (754) $ 42.91 Cancelled/forfeited (192) $ 40.10 December 31, 2016 2,405 $ 45.47 Awarded* 365 $ 75.05 Vested (905) $ 45.45 Cancelled/forfeited (165) $ 44.57 December 31, 2017 1,700 $ 51.92 Awarded* 1,383 $ 77.67 Vested (874) $ 48.44 Cancelled/forfeited (64) $ 57.78 December 31, 2018 2,145 $ 69.76 *24,000, 20,000 and 25,000 RSUs were granted to non-employee directors in 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, there was $77.5 million and $118.2 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested, service-based RSUs granted to the Company’s employees and non-employee directors, which is expected to be recognized over a weighted-average period of 2.3 years and 3.0 years respectively. The total fair value based on the respective vesting dates of the restricted share units vested was $43.6 million, $92.2 million and $69.7 million during the years ended December 31, 2016, 2017 and 2018, respectively. The following table sets forth a summary of performance-based RSU activities for the years ended December 31, 2016, 2017 and 2018: Weighted-Average Grant Date Shares Granted Fair Value (In thousands) January 1, 2016 — $ — Awarded 19 $ 47.47 Cancelled/forfeited (1) $ 47.47 December 31, 2016 18 $ 47.47 Awarded 19 $ 65.18 Vested (15) $ 47.47 Cancelled/forfeited (8) $ 58.51 December 31, 2017 14 $ 65.18 Awarded 21 $ 102.88 Vested (12) $ 65.18 Cancelled/forfeited (11) $ 98.10 December 31, 2018 12 $ 101.86 As of December 31, 2016, 2017 and 2018, all performance-based restricted shares granted but not cancelled had been fully vested. Weibo’s Stock-Based Compensation In August 2010, the Company’s subsidiary Weibo Corporation adopted the 2010 Share Incentive Plan (the “2010 Weibo Incentive Plan”), which has a term of ten years and permits the granting of options, share appreciation rights, restricted share units and restricted shares of Weibo to employees, directors and consultants of Weibo and its affiliates. Under the plan, a total of 35 million ordinary shares were initially reserved for issuance. The maximum number of ordinary shares available for issuance will be reduced by one share for every one share issued pursuant to a share option or share appreciation right and by 1.75 share for every one share issued as restricted share or pursuant to a restricted share unit. No options were granted during the periods presented. In March 2014, Weibo’s shareholders adopted the 2014 Share Incentive Plan (the “2014 Plan”), which has a term of ten years. At the same time, the 2010 Weibo Incentive Plan was terminated and all remaining shares were forwarded to the 2014 Plan. Initially, the 2014 Plan were funded by the remaining 4,647,872 shares from the 2010 Share Incentive Plan and another 1,000,000 new added shares and by 1 share for every one share issued as restricted share or pursuant to a restricted share unit. On January 1, 2015, shares in the 2014 Plan was allowed a one-time increase in the amount equal to 10% of the total number of Weibo shares issued and outstanding on a fully-diluted basis as of December 31, 2014 (“One-time Addition”). The ordinary shares for issuance under the 2014 plan are on one-for-one basis for each share issued as restricted shares or pursuant to a restricted share unit. Weibo intends to use such share incentive plan to attract and retain employee talent. The following table sets forth the stock-based compensation included in each of the relevant accounts arising from Weibo’s incentive plan: Year Ended December 31, 2016 2017 2018 (In thousands) Cost of revenues $ 2,616 $ 3,716 $ 3,522 Sales and marketing 5,357 8,264 6,837 Product development 15,076 21,879 21,187 General and administrative 13,853 14,178 9,465 $ 36,902 $ 48,037 $ 41,011 Stock compensation expenses related to the grants for Weibo were $36.9 million, $48.0 million and $41.0 million in 2016, 2017 and 2018, respectively, which were amortized over four years on a straight-line basis. The following table sets forth a summary of the number of shares available for issuance under Weibo’s incentive plan: Shares Available (In thousands) January 1, 2016 20,217 Granted (1,917) Cancelled/expired/forfeited 578 December 31, 2016 18,878 Granted (736) Cancelled/expired/forfeited 398 December 31, 2017 18,540 Granted (1,597) Cancelled/expired/forfeited 350 December 31, 2018 17,293 The following table sets forth a summary of option activities under Weibo’ stock option program: Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) January 1, 2016 6,303 $ 1.26 2.4 $ 114,975 Exercise (3,625) $ 1.10 Cancelled/expired/forfeited (91) $ 3.37 December 31, 2016 2,587 $ 1.41 1.6 $ 101,403 Exercise (2,122) $ 1.04 Cancelled/expired/forfeited (28) $ 0.68 December 31, 2017 437 $ 3.24 2.0 $ 43,800 Exercise (248) $ 3.14 Cancelled/expired/forfeited (5) $ 1.16 December 31, 2018 184 $ 3.45 $ 10,089 Vested and expected to vest as of December 31, 2017 437 $ 3.24 2.0 $ 43,800 Exercisable as of December 31, 2017 437 $ 3.24 2.0 $ 43,800 Vested and expected to vest as of December 31, 2018 184 $ 3.45 $ 10,089 Exercisable as of December 31, 2018 184 $ 3.45 $ 10,089 No options were granted in the years ended December 31, 2016, 2017 and 2018. The total intrinsic value of options exercised for the years ended December 31, 2016, 2017 and 2018 was $129.3 million, $135.2 million and $25.6 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares. Cash received from the exercises of stock option for Weibo during the years ended December 31, 2016, 2017 and 2018 was $4.2 million, $2.3 million and $0.8 million, respectively. As reported by the NASDAQ Global Selected Market, the Company’s ending stock price as of December 31, 2017 and 2018 was $103.46 and $58.43, respectively. All unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options granted to Weibo’s employees and directors has been fully amortized in 2017. Information regarding stock options of Weibo outstanding is summarized below: Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) As of December 31, 2017 $ 0.96 - $1.80 31 $ 0.97 31 $ 0.97 0.2 $ 3.25 - $3.36 179 $ 3.33 179 $ 3.33 1.4 $ 3.43 - $3.50 227 $ 3.48 227 $ 3.48 2.6 437 $ 3.24 437 $ 3.24 2.0 As of December 31, 2018 $ 3.25 - $3.36 32 $ 3.30 32 $ 3.30 $ 3.43 - $3.50 152 $ 3.48 152 $ 3.48 184 $ 3.45 184 $ 3.45 Weibo’s Restricted Share Units The following table sets forth the summary of service-based restricted share unit activities for Weibo: Weighted-Average Shares Grant Date Granted Fair Value (In thousands) As at January 1, 2016 6,501 $ 13.98 Awarded 1,806 $ 24.94 Vested (2,274) $ 14.73 Cancelled/forfeited (575) $ 14.58 As at December 31, 2016 5,458 $ 17.23 Awarded 581 $ 62.87 Vested (2,406) $ 17.01 Cancelled/forfeited (366) $ 17.72 As at December 31, 2017 3,267 $ 25.45 Awarded 1,406 $ 68.18 Vested (1,757) $ 21.59 Cancelled/forfeited (160) $ 44.00 As at December 31, 2018 2,756 $ 48.62 As of December 31, 2018, unrecognized compensation cost, adjusted for estimated forfeitures and related to non-vested, service-based restricted share units granted to Weibo’s employees and directors, was $112.5 million. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 3.5 years. The total fair value based on the vesting date of the restricted share units vested was $33.5 million, $40.9 million and $37.9 million during the years ended December 31, 2016, 2017 and 2018, respectively. Weibo’s Summary of Performance-Based RSUs The following table sets forth a summary of Weibo’s performance-based RSU activities for the year ended December 31, 2016, 2017 and 2018: Weighted-Average Grant Date Shares Granted Fair Value (In thousands) January 1, 2016 — $ — Awarded 111 $ 27.00 Cancelled/forfeited (3) $ 27.00 December 31, 2016 108 $ 27.00 Awarded 155 $ 50.45 Vested (102) $ 27.00 Cancelled/forfeited (32) $ 46.42 December 31, 2017 129 $ 50.32 Awarded 191 $ 86.63 Vested (126) $ 50.32 Cancelled/forfeited (190) $ 86.90 December 31, 2018 4 $ 87.14 As of December 31, 2017 and 2018, there was $0.7 million and $0.02 million unrecognized compensation cost related to performance-based restricted share units granted to Weibo’s employees, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information | |
Segment Information | 16. Segment Information The Company currently operates in three principal business segments globally — Portal advertising, Weibo and Others. Information regarding the business segments provided to the Company’s chief operating decision makers (“CODM”) are at the revenue or gross margin level. The Company currently does not allocate operating expenses or assets to its segments, as its CODM does not use such information to allocate resources or evaluate the performance of the operating segments of Portal advertising and Others. The Company currently does not allocate other long-lived assets to the geographic operations, except for property and equipment. With the increased revenues arising from Fintech business, mainly include online payment service and newly acquired loan facilitation service, the CODM started to evaluate the performance of Fintech business. However, the Fintech business was not deemed to be significant enough to qualify as a separate reportable segment, therefore together with other non-reportable segments it was included in “Others”. The following tables present summary information by segment: For the Year Ended December 31, 2016: Portal Portal advertising Others advertising & Others Elimination* Total (In thousands, except percentages) Net revenues $ 304,090 $ 74,931 $ 379,021 $ 655,800 $ (3,885) $ 1,030,936 - Advertising 304,090 — 304,090 570,982 (3,885) 871,187 - Non-advertising — 74,931 74,931 84,818 — 159,749 Costs of revenues 136,196 47,555 183,751 171,231 (286) 354,696 Gross margin 55 % 37 % 52 % 74 % 66 % Operating expenses: Sales and marketing $ 102,384 $ 148,283 $ (3,599) $ 247,068 Product development 62,140 154,088 — 216,228 General and administrative 58,256 41,218 — 99,474 Goodwill and acquired intangibles impairment 40,194 — — 40,194 Total operating expenses $ 262,974 $ 343,589 $ (3,599) $ 602,964 Income (loss) from operations (67,704) 140,980 — 73,276 Interest and other income, net 17,456 8,757 26,213 Change in fair value of option liability (28,456) — (28,456) Loss from equity method investments, net (11,636) (130) (11,766) Realized gain on long-term investments 289,159 534 289,693 Investment related impairment (4,272) (40,161) (44,433) Income before income tax expense 194,547 109,980 304,527 Income tax expense (22,903) (4,316) (27,219) Net income $ 171,644 $ 105,664 $ 277,308 For the Year Ended December 31, 2017: Portal Portal advertising Others advertising & Others Elimination* Total (In thousands, except percentages) Net revenues $ 320,473 $ 122,535 $ 443,008 $ 1,150,054 $ (9,178) $ 1,583,884 - Advertising 320,473 — 320,473 996,745 (5,352) 1,311,866 - Non-advertising — 122,535 122,535 153,309 (3,826) 272,018 Costs of revenues 121,278 65,733 187,011 231,255 (4,129) 414,137 Gross margin 62 % 46 % 58 % 80 % 74 % Operating expenses: Sales and marketing $ 138,368 $ 275,537 $ (5,049) $ 408,856 Product development 73,999 193,393 — 267,392 General and administrative 62,608 42,315 — 104,923 Total operating expenses $ 274,975 $ 511,245 $ (5,049) $ 781,171 Income (loss) from operations (18,978) 407,554 — 388,576 Interest and other income, net 29,436 13,260 42,696 Income (loss) from equity method investments, net (17,100) 1,030 (16,070) Realized gain on long-term investments 131,993 14 132,007 Investment related impairment (118,223) (4,747) (122,970) Income before income tax expense 7,128 417,111 424,239 Income tax expense (7,930) (66,746) (74,676) Net income (loss) $ (802) $ 350,365 $ 349,563 For the Year Ended December 31, 2018: Portal Portal advertising Others advertising & Others Elimination* Total (In thousands, except percentages) Net revenues $ 290,215 $ 111,412 $ 401,627 $ 1,718,518 $ (11,818) $ 2,108,327 - Advertising 290,215 — 290,215 1,499,180 (110) 1,789,285 - Non-advertising — 111,412 111,412 219,338 (11,708) 319,042 Costs of revenues 117,600 68,500 186,100 277,648 (11,708) 452,040 Gross margin 59 % 39 % 54 % 84 % 79 % Operating expenses: Sales and marketing $ 172,648 $ 527,424 $ (110) $ 699,962 Product development 96,069 249,873 — 345,942 General and administrative 76,429 43,755 — 120,184 Goodwill and acquired intangibles impairment 12,691 10,554 — 23,245 Total operating expenses $ 357,837 $ 831,606 $ (110) $ 1,189,333 Income (loss) from operations (142,310) 609,264 — 466,954 Interest and other income, net 25,547 43,808 69,355 Income (loss) from equity method investments, net 1,063 57 1,120 Realized gain (loss) on long-term investments 3,016 (287) 2,729 Fair value changes through earnings on investments, net 56,459 40,074 96,533 Investment related impairment (57,207) (24,074) (81,281) Income (loss) before income tax expense (113,432) 668,842 555,410 Income tax expense (32,862) (96,222) (129,084) Net income (loss) $ (146,294) $ 572,620 $ 426,326 * Weibo has provided advertising service to portal advertising business since 2016 and started to provide channel service to other business since 2017. The related revenue, cost of revenue and expenses were eliminated at the consolidation level. The following is a summary of the Company’s geographic operations: PRC International Total (In thousands) Year ended and as of December 31, 2016: Net revenues $ 1,016,210 $ 14,726 $ 1,030,936 Long-lived assets $ 243,288 $ 234 $ 243,522 Year ended and as of December 31, 2017: Net revenues $ 1,571,035 $ 12,849 $ 1,583,884 Long-lived assets $ 285,208 $ 279 $ 285,487 Year ended and as of December 31, 2018: Net revenues $ 2,096,179 $ 12,148 $ 2,108,327 Long-lived assets $ 487,844 $ 337 $ 488,181 Revenues are attributed to the countries in which the invoices are issued. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments | |
Financial Instruments | 17. Financial Instruments Fair Value The following table sets forth the major financial instruments, measured at fair value, by level within the fair value hierarchy as of December 31, 2017 and 2018: Fair Value Measurements (In thousands) Quoted Prices in Active Market Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs Total (Level 1) (Level 2) (Level 3) As of December 31, 2017 Assets Money market funds* $ 198,659 $ 198,659 $ — $ — Bank time deposits** 1,406,957 — 1,406,957 — Available for sale securities*** 107,372 107,372 — — Total $ 1,712,988 $ 306,031 $ 1,406,957 $ — Liabilities Guarantee liabilities $ 10,143 $ — $ — $ 10,143 As of December 31, 2018 Assets Money market funds* $ 86,823 $ 86,823 $ — $ — Bank time deposits** 874,901 — 874,901 — Equity securities with readily determinable fair value *** 93,262 93,262 — — Total $ 1,054,986 $ 180,085 $ 874,901 $ — Liabilities Guarantee liabilities $ 10,952 $ — $ — $ 10,952 * Included in cash and cash equivalents on the Company’s consolidated balance sheets. ** Included in cash and cash equivalents and short-term investments on the Company’s consolidated balance sheets. *** Included in long-term investments on the Company’s consolidated balance sheets. Recurring The Company measures money market funds, bank time deposits and marketable securities with readily determinable fair value on a recurring basis. The fair values of the Company’s money market funds and equity securities with readily determinable fair value are determined based on the quoted market price (Level 1). The fair value of the Company’s bank time deposits are determined based on the quoted market price for similar products (Level 2). The Company reviews its equity securities investments regularly to determine if an investment is other-than-temporarily impaired due to changes in quoted market price or other impairment indicators prior to 2018. In 2016 and 2017, the Company recognized an impairment charge of $4.8 million and $1.3 million on equity securities investments. With the adoption of new investment guidance under ASC 820, the available-for-sale securities were reclassified as investment with readily determinable fair values beginning January 1, 2018 with their fair value change recognized in earnings immediately. The fair values of the Company’s equity investments in the equity securities are measured using quoted market prices. Non-recurring For those investments without readily determinable fair value, the Company measures them at fair value when observable price changes are identified or impairment charge were recognized. The fair values of the Company’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The Company classifies the valuation techniques on those investments that use similar identifiable transaction prices as Level 2 of fair value measurements. The Company also measures equity investments without readily determinable fair values at fair value on a non-recurring basis when an impairment charge were to be recognized. As of December 31, 2017 and 2018, certain investments were measured using significant unobservable inputs (Level 3) and written down from their respective carrying values to fair values, considering the stage of development, the business plan, the financial condition, the sufficiency of funding and the operating performance of the investee companies and strategic collaboration with and the prospects of the investee companies, with impairment charges incurred and recorded in earnings for the years then ended. The Company recognized an impairment charge of $31.5 million and $120.8 million for those investments under cost method and equity method in 2016 and 2017, respectively. The Company recognized an impairment charge of $61.0 million for those investments without readily determinable fair values and equity method investments in 2018. The fair value of the privately held investments is valued based on the discounted cash flow model with unobservable inputs including the discount curve of market interest rates, which ranges from 12% to 33%. The Company’s non-financial assets, such as intangible assets, goodwill and fixed assets, would be measured at fair value only if they were determined to be impaired. The Company reviews the long-lived assets and certain identifiable intangible assets other than goodwill for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. For the years ended December 31, 2016, 2017 and 2018, the Company provided $3.5 million, nil and $12.7 million of impairment on the acquired intangible assets based on management’s assessment. The Company has a policy to perform impairment assessment of its goodwill on an annual basis as of the balance sheet date, or when facts and circumstances warrant a review. Based on the assessment of declined revenue and near-term outlook, considering a number of factors, which include, but are not limited to, expected future cash flows, growth rates, discount rates, and comparable multiples from publicly traded companies in the industry, the Company performed goodwill impairment assessment at the reporting unit level. With the assistance of an independent valuation firm, the Company recognized a goodwill impairment of $36.7 million, nil and $10.6 million for the years ended December 31, 2016, 2017 and 2018, respectively and the remaining carrying values were zero after the impairment for the respective reporting units. The fair value of reporting units were determined using Level 3 inputs. The Company measures its guarantee liabilities at inception at fair value and estimates the fair value of the guarantee liabilities by estimating with the consideration of discounting expected future payouts, accumulative expected loss rates and incorporating a markup margin. The expected net accumulative expected loss rates applied in the valuation models which ranged from 2.0% to 3.7% at inception. These inputs in isolation can cause significant increases or decreases in fair value. Guarantee liabilities are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. The following table sets forth the Company's guarantee liabilities movement activities for the period from the acquisition date to December 31, 2017 and the year ended December 31, 2018. For the period from the acquisition date to For the year ended December 31, 2017 December 31, 2018 (In thousands) Balance at the beginning of year/period $ — $ 10,143 Addition in the opening balance at the acquisition date (Note 5) 2,227 — Provision at the inception of new loans 16,013 39,291 Payment for the guarantee (13,166) (37,082) Subsequent adjustments to the provisions 1 4,812 (792) Foreign exchange impacts 257 (608) Balance at the end of the year $ 10,143 $ 10,952 1 The subsequent adjustment to the provisions in 2017 was to reflect an increased default rate at the end of 2017, as a result of certain borrower’s reaction to a government regulation release in December 2017 over the cash loan business. Concentration of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. In addition, with the majority of its operations in China, the Company is subject to RMB currency risk and offshore remittance risk, both of which have been difficult to hedge and the Company has not done so. The Company limits its exposure to credit loss by depositing its cash and cash equivalents with financial institutions in the U.S., the PRC, Hong Kong, Singapore and Taiwan, which are among the largest and most respected with high ratings from internationally-recognized rating agencies, that management believes are of high credit quality. The Company periodically reviews these institutions’ reputations, track records and reported reserves. As of December 31, 2017 and 2018, the Company had $3.0 billion and $2.2 billion in cash and bank deposits, such as time deposits (with terms generally up to twelve months), with large domestic banks in China, respectively. Historically, deposits in Chinese banks were secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go bankrupt. In addition, since China’s concession to WTO, foreign banks have been gradually permitted to operate in China and have become significant competitors to Chinese banks in many aspects, especially since the opening of RMB business to foreign banks in late 2006. Therefore, the risk of bankruptcy on Chinese banks in which the Company holds cash and bank deposits has increased. In the event that a Chinese bank that holds the Company’s deposits goes bankrupt, the Company is unlikely to claim its deposits back in full, since it is unlikely to be classified as a secured creditor to the bank under the PRC laws. Accounts receivable consist primarily of advertising agencies, direct advertising customers and mobile operators. As of December 31, 2017 and 2018, substantially all accounts receivable have been derived from the Company’s China operations. No customer accounted for more than 10% of the Company’s total net revenues in 2016, 2017 and 2018. Only three customers accounted for more than 10% of the Company’s net accounts receivable as of December 31, 2017 and 2018 as follows: As of December 31, As of December 31, 2017 2018 Customer Customer A 15 % 10 % Customer B 15 % 13 % Customer C * 15 % The majority of the Company’s net operating income was derived from China. The operations in China are carried out by the subsidiaries and VIEs. The Company depends on dividend payments from its subsidiaries in China after these subsidiaries receive payments from VIEs in China under various services and other arrangements. In addition, under Chinese law, its subsidiaries are only allowed to pay dividends to the Company out of their accumulated profits, if any, as determined in accordance with Chinese accounting standards and regulations. Moreover, these Chinese subsidiaries are required to set aside at least 10% of their respective accumulated profits, if any, up to 50% of their registered capital to fund certain mandated reserve funds that are not payable or distributable as cash dividends. The appropriation to mandated reserve funds are assessed annually. In 2016, 2017 and 2018, the majority of the Company’s revenues derived and expenses incurred were in RMB. As of December 31, 2017 and 2018, the Company’s cash, cash equivalents and short-term investments balance denominated in RMB was $1.2 billion and $1.1 billion, accounting for 34.5% and 47.2% of the Company’s total cash, cash equivalents and short-term investments balance, respectively. As of December 31, 2017 and 2018, the Company’s accounts receivable balance denominated in RMB was $284.5 million and $527.9 million, which accounted for almost all of its net accounts receivable balance, respectively. As of December 31, 2017 and 2018, the Company’s current liabilities balance denominated in RMB was $1,074.6 million and $1,091.9 million, which accounted for 84% and 95% of its total current liabilities balance, respectively. Accordingly, the Company may experience economic losses and negative impacts on earnings and equity as a result of exchange rate fluctuations of RMB. Moreover, the Chinese government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The Company may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency. The Company performed a test on the restricted net assets of consolidated subsidiaries and VIEs (the “Restricted Net Assets”) in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that the restricted net assets did not exceed 25% of the consolidated net assets of the Company as of December 31, 2018 (Note 14). |
Convertible Debt and Treasury S
Convertible Debt and Treasury Stock | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Debt and Treasury Stock | |
Convertible Debt and Treasury Stock | 18. Convertible Debt and Treasury Stock As of December 31, As of December 31, 2017 2018 Convertible Debt Current Liabilities 2018 1% Convertible Senior Notes (the “ 2018 Notes”) $ 153,092 $ — Long-term liabilities 2022 1.25% Weibo Convertible Senior Notes ( the “ 2022 Notes”) 900,000 900,000 Less: Issuance costs (20,017) (15,877) Total $ 879,983 $ 884,123 Description of 2018 Convertible Senior Notes In November 2013, the Company issued $800 million in aggregate principal amount of 1.00% coupon interest convertible senior notes due on December 1, 2018 (the “2018 Notes”) at par. The Notes were convertible into ordinary shares of the Company proceeding December 1, 2018 in $1,000 principal amount or an integral multiple of $1,000 in excess thereof, at the option of the holder, at an initial conversion price of approximately $123.70 per ordinary share, subject to adjustment. The conversion rate may be adjusted under certain circumstances, such as distribution of dividends and stock splits. In addition, upon a make-whole fundamental change, the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its notes in connection with such make-whole fundamental change. The Company believes that the likelihood of occurrence of events considered a fundamental change is remote. The net proceeds to the Company from the issuance of the 2018 Notes were $783.2 million, net of issuance cost of $16.8 million. Concurrently, the Company repurchased its shares of $100.0 million from the open market. The Company pays cash interest at an annual rate of 1.00% on the 2018 Notes, payable semiannually in arrears in cash on June 1 and December 1 of each year, beginning June 1, 2014. The issuance costs of the 2018 Notes are being amortized to interest expense to the earliest redemption date of the 2018 Notes (“December 1, 2016”). Concurrently with the issuance of the Notes, the Company offered a put option (the “Put Option”) to the holders of the Notes, which enable the holders to have the right to require the Company to repurchase for cash all or part of the Notes at a price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest to the repurchase date (“December 1, 2016”). If a fundamental change (as defined in the Indenture) occurs prior to the maturity date, the 2018 Notes holders may require the Company to purchase for cash all or any portion of the Notes at a purchase price equal to 100% of the principal amount of the Notes to be purchased plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date. On December 1, 2016, the Company repurchased $646.9 million principal amount of convertible debt upon the exercise of the put option by the holders of 2018 Notes. Upon the election of notes holder, the Company converted $7,000 principal amount of convertible debt into ordinary shares in 2018 and the remaining notes were repaid in December 2018. In accordance with ASC 815-10-15, the Put Option related to the 2018 Notes is considered clearly and closely related to its debt host and does not meet the requirement for bifurcation as the 2018 Notes holders can only recover its initial investment upon exercise of its option, there are no interest rate scenarios under which the embedded derivative would at least double the investor’s initial rate of return. Therefore, the 2018 Notes and the embedded put option should be accounted for as a single instrument in accordance with the accounting rule. Description of 2022 Weibo Convertible Senior Notes In October 2017, Weibo, a subsidiary of the Company, issued $900 million in aggregate principal amount of 1.25% coupon interest convertible senior notes due on November 15, 2022 (the “2022 Notes”) at par. The Notes may be converted into ADSs of Weibo proceeding November 15, 2022 in $1,000 principal amount or an integral multiple of $1,000 in excess thereof, at the option of the holder, at an initial conversion price of approximately $133.27 per ADS, subject to adjustment. The conversion rate may be adjusted under certain circumstances, such as distribution of dividends and stock splits. In addition, upon a make-whole fundamental change, Weibo will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its notes in connection with such make-whole fundamental change. As of November 15, 2022, unless earlier converted, Weibo is required to redeem the notes. The net proceeds to the Company from the issuance of the 2022 Notes were $879.3 million, net of issuance cost of $20.7 million. The Company pays cash interest at an annual rate of 1.25% on the 2022 Notes, payable semiannually in arrears in cash on May 15 and November 15 of each year, beginning May 15, 2018. The issuance costs of the 2022 Notes are being amortized to interest expense over the contractual period to the maturity date of the 2022 Notes (“November 15, 2022”). Accounting assessment The Company assessed the accounting for 2018 Notes and 2022 Notes (collectively as “Notes”) in accordance with ASC 470 and concluded that: · The bifurcation of the conversion feature from the debt host, the Notes, is not required as the conversion option is considered indexed to the entity’s own stock and classified in stockholders’ equity, and therefore meets the scope exception prescribed in ASC 815-10-15; · There is no beneficial conversion feature noted at the issuance date as the conversion price of the Notes is greater than the stock price of the offering company at the date of issuance. Therefore, the Company has accounted for the respective Notes as a single instruments in accordance with ASC 470, and classified them as a long-term debt. The issuance cost were recorded as reduction to convertible notes balance, and are amortized as interest expenses over the period from the issuance date to the earliest conversion date. The Company recognized total interest expenses related to the Notes of $10.8 million, $4.2 million and $16.8 million for the year ended December 31, 2016, 2017 and 2018. Treasury Stock In February 2016, the board of directors of the Company approved a new share repurchase plan whereby the Company is authorized to repurchase its own ordinary shares with an aggregate value of up to $500 million for a period through the end of June 2017 (the “2016 Program”). In 2017, the 2016 Program was extended to be effective until June 30, 2018. Up to the expiration date, approximately 3.4 million shares were repurchased for approximately $302.6 million in cash under the 2016 Program. Following the expiration of the 2016 Program, the board of directors approved a new share repurchase plan whereby the Company was authorized to repurchase its own ordinary shares with an aggregate value of up to $500 million for a period through the end of December 2019 (the “2018 Program”). As of December 31, 2018, approximately 0.3 million shares were repurchased for approximately $20.4 million in cash under the 2018 Program. All the ordinary shares repurchased above are no longer outstanding and pending for cancellation and are included as treasury stock. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 19. Commitments and Contingencies Operating lease commitments include the commitments under the lease agreements for the Company’s office premises. The Company leases its office facilities under non-cancelable operating leases with various expiration dates through 2023. For the years ended December 31, 2016, 2017, and 2018, rental expense was $24.5 million, $13.7 million and $17.9 million, respectively. Based on the current rental lease agreements, future minimum rental payments required as of December 31, 2018 were as follows: Less than One One to Three to More than Total Year Three Years Five Years Five Years (In thousands) Operating lease commitments $ 45,873 $ 16,692 $ 25,607 $ 3,574 $ — Purchase commitments mainly include minimum commitments for Internet connection, content and services related to website operation, and marketing activities. Capital commitment was primarily related to commitments on the purchase of fixed assets and the payment on leasehold improvements Purchase commitments as of December 31, 2018 were as follows: Less than One One to Three to More than Total Year Three Years Five Years Five Years (In thousands) Purchase commitments $ 675,510 $ 651,333 $ 23,950 $ 227 $ — Capital commitments $ 12,817 $ 12,715 $ 102 $ — $ — Other commitment represents future maximum commitment relating to the principal amount and interests in connection with a) the issuance of $900 million in aggregate principle amount of 1.25% coupon interest convertible senior notes by Weibo, which will due in 2022 b) the principal amount and interests of short-term bank loans c) commitment on equity investment. Other commitments as of December 31, 2018 were as follows: Less than One One to Three to More than Total Year Three Years Five Years Five Years (In thousands) 2022 Notes 945,000 12,750 22,500 909,750 — Short-term bank loans 79,434 79,434 — — — Equity investments 167,633 167,633 — — — Total other commitments $ 1,192,067 $ 259,817 $ 22,500 $ 909,750 $ — There are uncertainties regarding the legal basis of the Company’s ability to operate an Internet business and telecommunication value-added services in China as of December 31, 2018. Although China has implemented a wide range of market-oriented economic reforms, the telecommunication, information and media industries remain highly regulated. Not only are such restrictions currently in place, but in addition regulations are unclear as to in which specific segments of these industries companies with foreign investors, including the Company, may operate. Therefore, the Company might be required to limit the scope of its operations in China, and this could have a material adverse effect on its financial position, results of operations and cash flows. In June and August 2017, Weibo and certain of its current and former directors and officers were named as defendants in two putative securities class actions filed in the United States District Court for the District of New Jersey, respectively. The actions - purportedly brought on behalf of a class of persons who allegedly suffered damages as a result of their trading in Weibo’s ADSs between April 27 and June 22, 2017 or between April 28, 2016 and June 19, 2017, allege that Weibo’s public filings contained material misstatements and omissions in violation of the U.S. federal securities laws. On September 28, 2017, the court entered an order appointing a lead plaintiff and consolidating the two cases. On November 27, 2017, the lead plaintiff filed a consolidated class action complaint. On January 26, 2018, Weibo and one individual defendant filed a motion to dismiss the amended complaint. On June 7, 2018, the court granted the motion to dismiss the class action complaint in its entirety with prejudice. The Company and a few of its subsidiaries have been named as respondents in an arbitration initiated with the Netherlands Arbitrage Institute and China International Economic and Trade Arbitration Commission in which the claimant claimed damages amount based on the alleged use by the respondents of certain intellectual property of the claimants in breach of certain license agreements. The Company is currently unable to estimate the possible loss or a range of reasonably possible loss, if any. As of December 31, 2018, there are no other claims, lawsuits, investigations and proceedings, including unasserted claims that are probable to be assessed, that have in the recent past had, or to the Company’s knowledge, are reasonably possible to have, a material effect on the Company’s financial position, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | 20. Subsequent Events The Company has performed an evaluation of subsequent events through the date of this report, which is the date the financial statements were issued. Except for the events mentioned in Note 4 regarding potential impairments and upward adjustments for certain equity investments without readily determinable fair value, there is no other material events or transactions needing recognition or disclosure. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | |
Basis of presentation and use of estimates | Basis of presentation and use of estimates The preparation of the Company’s consolidated financial statements is in conformity with Generally Accepted Accounting Principles in the United States (“US GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods reported. Actual results may differ materially from such estimates. The Company believes the basis of consolidation, fair value, the recognition of non-controlling interests, revenue recognition, taxation, business combination, net income (loss) per share, goodwill and other long-lived assets, allowances for doubtful accounts, long-term investments, stock-based compensation and foreign currency represent critical accounting policies that reflect the more significant judgments and estimates used in the preparation of its consolidated financial statements. In May 2014, the Financial Accounting Standards Board ("FASB") issued, ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." The Company adopted new revenue guidance since January 1, 2018 using the modified retrospective method. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting method under ASC 605. The main impacts are a) the presentation of value added tax recognized in revenue from "gross" to "net", which results in equal decrease of revenues and cost of revenues, and b) the recognition of revenues and expenses at fair value for advertising barter transactions, which mainly results in the increase of revenue and advertising expenses. The cumulative-effect adjustment on the retained earnings as of January 1, 2018 related to the initial application of the new revenue standard was immaterial. In January 2016, the FASB issued an updated guidance, ASU 2016-1, Classification and Measurement of Financial Instruments, which intended to improve the recognition and measurement of financial instruments. The Company adopted the guidance as of the beginning of the fiscal year of 2018. After the adoption of this new accounting update in the first quarter of 2018, the Company measures equity investments other than equity method investments at fair value through earnings, which could vary significantly quarter to quarter. For those investments without readily determinable fair values, the Company elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Changes in the basis of these investments are reported in current earnings starting from January 1, 2018. The cumulative effects of initially applying the guidance mainly related to the reclassification of unrealized gain of $38.7 million from accumulated other comprehensive income to retained earnings in relation to the available-for-sale securities on January 1, 2018, the date of initially applying the guidance (Refer to Note 4 for details). |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned and majority-owned subsidiaries and its variable interest entities (“VIEs”), of which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated. To comply with PRC laws and regulations, the Company provides substantially all of its Internet content, online payment services and mobile value added service (“MVAS”) in China via its VIEs, which hold critical operating licenses that enable the Company to do business in China. Substantially all of the Company’s revenues, costs and net income (loss) in China are directly or indirectly generated through these VIEs. The Company has signed various agreements with its VIEs and legal shareholders of the VIEs to allow the transfer of economic benefits from the VIEs to the Company and to direct the activities of the VIEs. The Company’s VIEs are wholly or partially owned by nominee shareholders of the Company. The capital for the VIEs is funded by the Company and recorded as interest-free loans to these nominee shareholders. These loans were eliminated with the capital of the VIEs during consolidation. Under various contractual agreements, nominee shareholders of the VIEs are required to transfer their ownership in these entities to the Company’s subsidiaries in China when permitted by PRC laws and regulations or to designees of the Company at any time for the amount of loans outstanding. All voting rights of the VIEs are assigned to the Company, and the Company has the right to appoint all directors and senior management personnel of the VIEs. The Company has also entered into exclusive technical service agreements with the VIEs, under which the Company provided technical and other services to the VIEs. In addition, nominee shareholders of the VIEs have pledged their shares in the VIEs as collateral for the non-payment of loans or for the technical and other services fees due to the Company. As of December 31, 2017 and 2018, the total amount of interest-free loans to these nominee shareholders was $262.2 million and $294.9 million, respectively. The aggregate accumulated loss of all VIEs were approximately $34.9 million as of December 31, 2017 and the aggregate accumulated income were approximately $32.2 million as of December 31, 2018, which have been included in the consolidated financial statements. The following table sets forth the assets, liabilities, results of operations and changes in cash, cash equivalents and restricted cash of the VIEs and their subsidiaries taken as a whole, which were included in the Company’s consolidated balance sheets and statements of comprehensive income (loss) with intercompany transactions eliminated: As of December 31, 2017 2018 (In thousands) Total assets $ 1,007,355 $ 1,142,515 Total liabilities $ 689,459 $ 748,354 Year Ended December 31, 2016 2017 2018 (In thousands) Net revenues $ 893,010 $ 1,372,419 $ 1,842,602 Net income (loss) $ (26,627) $ 35,649 $ 67,063 Year Ended December 31, 2016 2017 2018 (In thousands) Net cash provided by (used in) operating activities $ 139,225 $ (78,813) $ (84,961) Net cash used in investing activities (152,719) (70,971) (443,588) Net cash provided by financing activities 37,021 128,730 399,182 Net increase (decrease) in cash, cash equivalents and restricted cash $ 23,527 $ (21,054) $ (129,367) As of December 31, 2017 and 2018, the total assets for the consolidated VIEs were $1,007.4 million and $1,142.5 million, respectively, which mainly comprised of $187.4 million and $184.6 million in cash, cash equivalents and short-term investments, $216.2 million and $97.0 million in restricted cash and the remaining balances include goodwill, intangible assets, accounts receivable, long-term investments and property and equipment. As of December 31, 2017 and 2018, total liabilities for the consolidated VIEs were $689.5 million and $748.4 million, respectively, which mainly included $327.1 million and $400.7 million in accrued expenses and other current liabilities, $216.2 million and $97.0 million in amounts due to customers related to SINA Pay, $29.0 million and $31.5 million in income taxes payable, $99.0 million and $97.8 million in deferred revenues, and nil and $59.2 million in short-term bank loan, respectively. Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs and can have assets transferred freely out of the VIEs without restrictions. Therefore, the Company considers that there is no asset of VIEs that can only be used to settle obligations of the respective VIEs, except for registered capital and PRC statutory reserves of VIEs amounting to a total of $336.8 million and $374.2 million as of December 31, 2017 and 2018, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Company is conducting certain businesses mainly through its VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. The following is a summary of the Company’s major VIEs and subsidiary of VIEs as of December 31, 2018: · Beijing SINA Internet Information Service Co., Ltd. (the “ICP Company”), a Chinese company controlled through business agreements, is responsible for operating www.sina.com and www.sina.cn in connection with its Internet content company license, sell online advertising and provide MVAS with its Value-Added Telecommunication Services Operating License via third-party operators in China. It is owned by four nominee shareholders of the Company. The register capital of the ICP Company is $121.7 million. · Beijing Star-Village Online Cultural Development Co., Ltd. (“StarVI”), formerly Beijing Star-Village.com Cultural Development Co., Ltd, a Chinese company controlled through business agreements, mainly is responsible for providing online advertising services through SINA News APP and www.sina.cn since April 2017. Before this, Star VI mainly provided MVAS in China via third-party operators under its Value-Added Telecommunication Services Operating License. It is owned by three nominee shareholders of the Company. The registered capital of the StarVI is $1.2 million. · Jinzhuo Hengbang Technology (Beijing) Co., Ltd. (“the IAD Company”), formerly Beijing SINA Infinity Advertising Co., Ltd., is an advertising agency in China controlled through business agreements and approved for the design, production, issuance and serving as an agency of advertisements. It is owned by two nominee shareholders of the Company. The registered capital of the IAD Company is $24.8 million. · Beijing Weimeng Technology Co., Ltd (“Weimeng”), a Chinese company controlled through business agreement, is responsible for operating www.weibo.com and www.weibo.cn in connection with its Internet content company license and providing MVAS in China via third-party operators under its Value-Added Telecommunication Services Operating License. It is owned by four nominee shareholders of the Company. The registered capital of Weimeng is $84.9 million. · Beijing Weibo Interactive Internet Technology Co., Ltd. (‘‘Weibo Interactive’’), an online-game platform company, was acquired by the IAD Company in May 2013. All of the equity interest in Weibo Interactive was transferred to Weimeng in December 2013. The registered capital of Weibo Interactive is $8.7 million. · Beijing Sina Payment Technology Co., Ltd. (“SINA Pay”), an online payment service company wholly owned by the ICP Company. The registered capital of SINA Pay is $15.7 million. · Beijing Weiju Future Technology Co. Ltd. ("Weiju"), a lending related service company, was acquired by the Company in July 2017. The registered capital of Weiju is $3.7 million. Unrecognized revenue-producing assets held by the VIEs mainly include licenses, such as the Internet Content Provision License, the Value-Added Telecommunication Services Operating License, the Online Culture Operating Permit, Payment Service License and trademarks, patents, copy rights and the domain names. Recognized revenue-producing assets held by the VIEs include core technology, vendor-relationship contracts, trademarks, domain names, customer lists relating to game-related services, lending-related service, living streaming and online payment platform technology, arising from acquisitions. Unrecognized revenue-producing assets, held by the Wholly Foreign Owned Enterprises (“WFOEs”), include customer lists relating to advertising and marketing services, game-related services, Weibo VIP memberships and data licensing, as well as trademarks. The following is a summary of the VIE agreements between our wholly owned subsidiary, Sina.com Technology (China) Co., Ltd. ("STC"), our VIE ICP Company and ICP Company's shareholders: Loan Agreements. STC has granted interest-free loans to the shareholders of the VIEs with the sole purpose of providing funds necessary for the capital injection into the VIEs. The terms of the loans in general are for 10 years. STC, at its own discretion, has the right to shorten or extend the terms of the loans if necessary. These loans were eliminated with the capital of the VIEs during consolidation. Share Transfer Agreements. Each shareholder of the ICP Company has granted STC an option to purchase his/her shares in the respective VIEs at a purchase price equal to the amount of capital injection. STC may exercise such option at any time until it has acquired all shares of such VIE, subject to applicable PRC laws. The options will be effective until the earlier of (i) the shareholders of the ICP Company and STC have fully performed their obligations under this agreement, or (ii) the respective shareholders of the ICP Company and STC agree to terminate the share transfer agreement in writing. Agreements on Authorization to Exercise Shareholder’s Voting Power. Each shareholder of the ICP Company has authorized STC to exercise all of his/her voting power as a shareholder of the ICP Company. The authorizations are irrevocable and will not expire until the ICP Company dissolves. Modification, supplement or adjustment of the terms may only be made with the consents from STC. Share Pledge Agreements. Each shareholder of the ICP Company has pledged all of his/her shares in ICP Company and all other rights relevant to the share rights to STC, as a collateral security for his/her obligations to pay off all debts to STC under the loan agreement and for the payment obligations of the ICP Company under the trademark license agreement and the technical services agreement. In the event of default of any payment obligations, STC will be entitled to certain rights, including transferring the pledged shares to itself and disposing of the pledged shares through a sale or auction. During the term of each agreement, STC is entitled to receive all dividends and distributions paid on the pledged shares. The pledges will be effective until the earlier of (i) the three-year anniversary of the due date of the last guaranteed debt, (ii) the ICP Company and its shareholders have fully performed their obligations under the above-referred agreements, or (iii) STC has unilaterally consented to terminate the respective share pledge agreement. Loan Repayment Agreements. Each shareholder of the ICP Company has agreed that the interest-free loans under the loan agreements shall only be repaid through share transfer. Once the share transfers are completed, the purchase price for the share transfer will be offset against the loan repayment. The loan repayment agreements will be effective until the earlier of (i) the shareholders of the ICP Company and STC have fully performed their obligations under the respective agreement, and (ii) the respective shareholders of the ICP Company and STC agree to terminate the share transfer agreement in writing. Exclusive Technical Services Agreements. Each shareholder of the ICP Company below has entered into an exclusive technical services agreement with STC pursuant to which STC is engaged to provide certain technical services to the ICP Company. The exclusive technical services agreement can only be prematurely terminated by STC and will not expire until the ICP Company dissolves, and the service fees are adjusted annually through written agreements. Due to its control over the respective VIEs, the Company’s wholly owned subsidiaries have the right to determine the service fees to be charged to the respective VIEs by considering, among others, the technical complexity of the services, the actual costs that may be incurred for providing the services, the operations of each VIE, applicable tax rates, planned capital expenditures and business strategies. The ICP Company has engaged STC to provide technical services for its (i) online advertising and other related businesses, and (ii) value-added telecommunication and other related businesses. The ICP Company is obligated to pay service fees to STC. Exclusive Sales Agency Agreements. The ICP Company has granted STC the exclusive right to distribute, sell and provide agency services for all the products and services provided by the ICP Company. These exclusive sale agency agreements will not expire until the ICP Company is dissolved. The Exclusive Sales Agency Agreements enable us to collect sales agency fees from the ICP Company if we decide to do so. Trademark License Agreements. STC has granted the ICP Company trademark licenses to use the trademarks held by STC, in specific areas, and the ICP Company is obligated to pay license fees to STC. The terms of these agreements are for one year and are automatically renewed provided that there is no objection from STC. In addition, only STC can terminate its trade license agreement prematurely. (i) STC, our VIE IAD Company and IAD Company’s shareholders, (ii) our subsidiary Starshining Mobile Technology (China) Ltd. (“Star Shining”), our VIE StarVI and StarVI’s shareholders, and (iii) our subsidiary Weibo Internet Technology (China) Ltd. (“Weibo Technology”), our VIE Weimeng and Weimeng’s shareholders have also entered into VIE agreements in substantially the same form as described above, except for the below specific services provided under the exclusive technical services agreement. The IAD Company has engaged STC to provide technical services for its (i) online advertising and other related businesses, and (ii) value-added telecommunication and other related businesses. Pursuant to changes in applicable PRC laws in 2008, SINA established two wholly owned subsidiaries to engage directly in online advertising and related businesses. StarVI has engaged Star Shining to provide technical services for its Internet information service, and Star Shining has the sole right to appoint any company or companies at its discretion to perform such technical services. Weimeng has engaged Weibo Technology to provide technical services for its online advertising and other related businesses. The service fees that the Company's wholly owned subsidiaries charged to the major VIEs amounted to $467.6 million, $784.8 million and $985.6 million, respectively, for the fiscal years ended December 31, 2016, 2017 and 2018, respectively. The Company believes that the contractual arrangements among its subsidiaries, the VIEs and its shareholders are in compliance with the current PRC laws and legally enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and its subsidiary in the consolidated financial statements. The Company’s ability to control its VIEs also depends on the authorization by the shareholders of the VIEs to exercise voting rights on all matters requiring shareholders’ approval in the VIEs. The Company believes that the agreements on authorization to exercise shareholder’s voting power are legally enforceable. In addition, if the legal structure and contractual arrangements with its VIEs were found to be in violation of any future PRC laws and regulations, the Company may be subject to fines or other actions. The Company believes the possibility that it will no longer be able to control and consolidate its VIEs as a result of the aforementioned risks and uncertainties is remote. |
Non-controlling interests | Non-controlling interests For the Company’s majority-owned subsidiaries and VIEs, non-controlling interests are recognized to reflect the portion of their equity that are not attributable, directly or indirectly, to the Company as the controlling shareholders. The majority of the Company’s non-controlling interests relate to Weibo Corporation and its subsidiaries. To reflect the economic interest in Weibo held by non-controlling shareholders, Weibo’s net income (loss) attributable to the non-controlling ordinary shareholders is recorded as non-controlling interests in the Company’s consolidated statements of comprehensive income (loss). Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated financial statements to distinguish the interests from that of the Company. |
Fair value | Fair value All financial assets and liabilities are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The Company remeasures the equity method investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. For those investments without readily determinable fair value, the Company measures them at fair value when observable price changes or impairments are identified. The fair values of the Company’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The fair values of the Company’s equity investments in the equity securities of publicly listed companies are measured using quoted market prices. The fair values of the Company's investments in private equity funds are measured using net asset value per share as a practical expedient, provided certain criteria are met. The Company’s non-financial assets, such as intangible assets, goodwill and fixed assets, would be measured at fair value only if they were determined to be impaired. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: · Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. · Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. · Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company uses significant unobservable inputs to measure the fair value of guarantee liabilities. Guarantee liabilities are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors. The carrying amount of cash and cash equivalents, short-term investments, restricted cash, accounts receivable and other current assets, accounts payable, amount due to customers and accrued expenses and other current liabilities (excluded for guarantee liabilities) approximates fair value. |
Net income (loss) per share | Net income (loss) per share Basic net income (loss) per share is computed using the weighted average number of ordinary shares outstanding during the period. Options to purchase ordinary shares and restricted share units are not considered outstanding in computation of basic earnings per share. Diluted net income (loss) per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period, which include options to purchase ordinary shares, restricted share units and conversion of the convertible debt. The computation of diluted net income (loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net income (loss) per share. Additionally, the Company takes into account the effect on consolidated net income (loss) per share of dilutive shares of entities in which the Company holds equity interests and interest expenses along with relevant amortized issuance costs of convertible debt under certain circumstances. The dilutive impact from equity interests mainly include long-term investments accounted for using the equity method and the consolidated subsidiaries, such as Weibo. |
Cash equivalents | Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less as cash equivalents. Cash equivalents are comprised of investments in time deposits that mature within three months, which are stated at cost plus accrued interest, and money market funds are stated at fair market value. |
Restricted cash and amount due to customers | Restricted cash and amount due to customers The restricted cash primarily represents the cash balances temporarily held on account for the merchant customers of the Company through the SINA Pay online payment platform and is considered legally restricted with the release of Measures for Online Payment Business of Non-financial Institutions by the People’s Bank of China (“PBOC”) in December 2015. The Company can only use segregated bank accounts for such customer amounts and the cash in the segregated accounts can only be used for the online payment business as designated by the customers. Amount due to customers represents the balances that are payable on demand to customers and therefore reflected as current liability on the consolidated balance sheets. The SINA Pay customer accounts are used to facilitate payments to online merchants or third party banks and are deemed as pass through accounts between the payor and the online merchant. The balances are in-transit to customers and the payments are normally made within the normal trade settlement dates. The changes in amount due to customers are presented within operating activities in the consolidated statements of cash flows. |
Short-term bank loans | Short-term bank loans Short-term bank loans as of December 31, 2017 and 2018 amounted to $89.3 million and $78.2 million, respectively, which consisted of several bank borrowings denominated in RMB. All of these bank borrowings were repayable within one year. The effective interest rate for the outstanding borrowings for 2017 and 2018 ranged from approximately 4.6% and 4.8% per annum. |
Business combination | Business combination Business combinations are recorded using the purchase method of accounting, and the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of the (i) the total of consideration of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the subsidiary acquired over (ii) the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the consideration of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of comprehensive income (loss). In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings. The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets, forecasted life cycle and forecasted cash flows over that period. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Company’s acquisitions of interests in its subsidiaries and consolidated VIEs. The Company assesses goodwill for impairment in accordance with ASC subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill, which requires that goodwill be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20. US GAAP provides the option to apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. The qualitative approach starts the goodwill impairment test by assessing qualitative factors by taking into consideration of macroeconomics, overall financial performance, industry and market conditions and the share price of the Company, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the quantitative impairment test is performed; otherwise, no further testing is required. When the Company performs the quantitative impairment test, the Company firstly determines whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. For those reporting units where it is determined that it is more likely than not that their fair values are less than the units’ carrying amounts, the Company performs the second step of a two-step quantitative goodwill impairment test to allocate the fair value of reporting units to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. |
Long-lived assets | Long-lived assets Intangible assets mainly include land use rights and certain intangible assets arising from acquisitions. Land use rights represent the land use rights acquired for the purpose of constructing offices, which is being amortized on a straight-line basis over the term of the land use right period, approximately 50 years. The acquisition related intangible assets are recognized at fair value upon acquisition and amortized on a straight-line basis over their estimated useful lives, generally from one to ten years. The amortization of intangible assets was $1.9 million, $4.6 million and $9.1 million for 2016, 2017 and 2018, respectively. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows: Office building - 45 years Office building related facilities - 20 years Furniture and fixtures - 5 years Computers and equipment - 3 to 4 years Leasehold improvements - over the shorter of the estimated useful lives of the assets or the remaining lease term Depreciation expenses were $26.6 million, $28.6 million and $32.1 million for 2016, 2017 and 2018, respectively. All direct and indirect costs that are related to the construction of fixed assets and incurred before the assets are ready for their intended use are capitalized as prepayment for office building in other assets. Prepayment for office building is transferred to specific fixed assets items and depreciation of these assets commences when they are ready for their intended use. Long-lived assets and certain identifiable intangible assets other than goodwill to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold or use is based on the amount by which the carrying value exceeds the fair value of the asset. The impairment charges of intangible assets for the years ended December 31, 2016, 2017 and 2018 was $3.5 million, nil and $12.7 million, respectively (Note 6). |
Long-term investments | Long-term investments Long-term investments are comprised of investments in publicly traded companies, privately-held companies and limited partnerships. Equity Securities Accounting For Under the Equity Method The Company uses the equity method to account for common-stock-equivalent equity investments and limited-partnership investments in entities over which it has significant influence but does not own a majority equity interest or otherwise control. Equity Securities Other Than Equity Method Investments Prior To 2018 Before adopting ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, for long-term investments over which the Company does not have significant influence, the cost method accounting is used. For long-term investments in shares that are not ordinary shares or in-substance ordinary shares and that do not have readily determinable fair value, the cost method accounting is used. Investments in limited partnerships over whose operating and financing policies the Company has virtually no influence are accounted for using the cost method. Marketable equity securities were reported at fair value, classified and accounted for as available-for-sale securities prior to 2018 and its changes in fair value were previously reported in other comprehensive income. The Company assessed its available-for-sale securities for other-than-temporary impairment by considering factors including, but not limited to, its ability and intent to hold the individual security, severity of the impairment, expected duration of the impairment and forecasted recovery of fair value. Investments classified as available-for-sale securities are reported at fair value with unrealized gains or losses, if any, recorded in accumulated other comprehensive income in shareholders’ equity. If the Company determined a decline in fair value is other-than-temporary, the cost basis of the individual security was written down to fair value as a new cost basis and the amount of the write-down was accounted for as a realized loss charged to the consolidated statements of comprehensive income. The fair value of the investment would then become the new cost basis of the investment and are not adjusted for subsequent recoveries in fair value. Adoption of ASU 2016-01 Beginning January 1, 2018, the Company measures equity investments other than equity method investments at fair value through earnings. For those equity investments without readily determinable fair values, the Company elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment will be required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company makes reasonable efforts to identify price changes that are known or that can reasonably be known. The marketable equity securities were reclassified as investment with readily determinable fair values beginning January 1, 2018. There will no longer be an available-for-sale classification for equity securities. Prior to the adoption of ASU 2016-01,the Company recorded investments in private equity funds without significant influence exerted by the Company under cost method. Under the new guidance, investments in private equity funds using the Net Asset Value (“NAV”) practical expedient under ASC 820 are required to be measured at fair value on a recurring basis. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Company does not assess whether those securities are impaired. For those equity investments that the Company elects to use the measurement alternative, the Company makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Company has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Company has to recognize an impairment loss in net income equal to the difference between the carrying value and fair value. Prior to 2018, these securities were classified as available-for-sale securities and measured and recorded at fair value with unrealized changes in fair value recorded through other comprehensive income. Investments in entities which the Company can exercise significant influence and holds an investment in voting common shares or in-substance common shares (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investment — Equity Method and Joint Ventures. Under the equity method, the Company initially records its investments at cost and the difference between the cost of the equity investee and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is included in the equity method investment on the consolidated balance sheets. The Company subsequently adjusts the carrying amount of the investments to recognize the Company’s proportionate share of each equity investee’s net income or loss into earnings after the date of investment. The Company evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. |
Convertible debt | Convertible debt The Company determines the appropriate accounting treatment of its convertible debts in accordance with the terms in relation to the conversion feature, call and put option, and beneficial conversion feature. After considering the impact of such features, the Company may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the guidance described under ASC 815 Derivatives and Hedging and ASC 470 Debt. The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense over the period from the issuance date to the earliest conversion date. The Company presented the issuance cost of debt in the balance sheet as a direct deduction from the related debt. |
Treasury stock | Treasury stock The Company accounted for those shares repurchased and no longer outstanding as treasury stock at cost. |
Revenue recognition | Revenue recognition The Company adopted the new revenue guidance as of January 1, 2018 using the modified retrospective method. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting method under ASC 605. Impact on Adoption of New Revenue Recognition Pursuant to the adoption of ASC606, the main impacts are a) the presentation of VAT recognized in revenue from "gross" to "net", which results in equal decreases of revenues and cost of revenues, and b) the recognition of revenues and expenses at fair value for advertising barter transactions ("Barter Transaction"), which mainly results in the increase of revenue and advertising expenses. Under the previous guidance of ASC 605, advertising barter transactions for which the fair value of the advertising services was not determinable was recorded at the carrying amount of the advertising surrendered since the Company did not settle such barter transactions with the counterparties in cash. Under the new guidance of ASC 606, advertising barter transactions are recorded at the fair value of the advertising received by reference to the fair value of advertising services provided to other customers. The Company recorded a net reduction to opening retained earnings of $0.3 million resulting from Barter Transactions as of January 1, 2018 due to the cumulative impact of adopting ASC 606. Adoption of the standards related to revenue recognition which impacted the Company’s current period reported results are as follows: Year Ended December 31, 2018 Adjustments Barter ASC 605 VAT Transaction ASC 606 (In thousands, except for percentage) Net revenues $ 2,113,954 $ (118,006) $ 112,379 $ 2,108,327 - Advertising 1,776,944 (100,038) 112,379 1,789,285 - Non-advertising 337,010 (17,968) — 319,042 Cost of revenues 570,046 (118,006) — 452,040 Operating expenses 1,076,520 — 112,813 1,189,333 - Sales and marketing 587,149 — 112,813 699,962 Income from operations $ 467,388 $ — $ (434) $ 466,954 Gross margin 73.0 % 78.6 % Operating margin 22.1 % 22.1 % No other material impacts on the consolidated financial statements of 2018 arising from the adjustments on VAT and Barter Transaction. Other than the above, the Company’s revenue recognition under ASC 606 did not change from that under ASC 605. Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company identifies its contracts with customers and all performance obligations within those contracts. The Company then determines the transaction price and allocates the transaction price to the performance obligations within the Company's contracts with customers, recognizing revenue when, or as, the Company satisfies its performance obligations when control of the promised goods or services transferred to the customers. Certain customers may receive sales rebates, which are accounted for as variable consideration. The Company estimates annual expected revenue volume of each individual agent with reference to their historical results. The Company recognizes revenue for the amount of fees it receives from its advertisers, after deducting sales rebates and net of value-added tax (“VAT”) under ASC 606. The Company believes that there will not be significant changes to its estimates of variable consideration. The following table presents our revenues disaggregated by revenue source. Year Ended December 31, 2016 2017 2018 (In thousands) Portal advertising $ 304,090 $ 320,473 $ 290,215 Weibo advertising 570,982 996,745 1,499,180 Elimination (3,885) (5,352) (110) Advertising revenues 871,187 1,311,866 1,789,285 Portal non-advertising 74,931 122,535 111,412 Weibo value added services (“VAS”) 84,818 153,309 219,338 Elimination — (3,826) (11,708) Non-advertising revenues 159,749 272,018 319,042 Net revenue $ 1,030,936 $ 1,583,884 $ 2,108,327 Advertising Revenues The Company generates revenues primarily by delivering advertising on the Company's portal properties and Weibo's social media's properties. Advertising revenues are derived principally from online advertising and marketing, including display advertising and promoted marketing, and, to a lesser extent, sponsorship arrangements. The majority of the Company's revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. Display advertising arrangements allow advertisers to place advertisements on particular areas of the Company’s websites or platform, in particular formats and over particular periods of time. Advertising revenues from display advertising arrangements are recognized ratably over the contract period of display, when the collectability is reasonably assured. The Company enters into cost per day (“CPD”) advertising arrangements with customers, under which the Company recognizes revenues ratably over the contract period. The Company also enters into cost per mille (“CPM”), or cost per thousand impressions, advertising arrangements with the customers. Promoted marketing arrangements are primarily priced based on CPM. Under the CPM model, customers are obligated to pay when the advertisement is displayed and the Company recognizes revenues based on the number of times that the advertisement has been displayed. Sponsorship arrangements allow advertisers to sponsor a particular area on its websites in exchange for a fixed payment over the contract period. Advertising revenues from sponsorship are recognized ratably over the contract period. Advertising revenues derived from the design, coordination and integration of online advertising and sponsorship arrangements to be placed on the Company’s websites are recognized ratably over the term of such arrangements. The Company’s contracts with customers may include multiple performance obligations, which primarily consist of combination of services to allow customer to place advertisements on different areas of the Company’s websites or platform. For such arrangements, advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their stand-alone selling price for revenue recognition purposes. For the deliverables that have not been sold separately, the best estimate of the stand-alone selling price is taken into consideration of the pricing of advertisings of the Company’s platform with similar characteristics and advertisements with similar formats and quoted prices from competitors and other market conditions. Revenues recognized with reference to best estimates of selling price were immaterial for all periods presented. Most of such contracts have all performance obligations completed within one year. Non-advertising Revenue Portal non-advertising services Loan facilitation services The Company provides lending related services through which the Company matches lenders to borrowers and facilitates the execution of loan agreements between the lenders and the borrowers, with the terms of loan generally within one year. The Company is obligated to recommends borrowers to the lenders from certain mobile platform and to provide a credit assessment on the potential borrowers to facilitate the lenders in making their own investment decision. In light of the above, the Company determined that the Company is not the legal lender and does not record loans receivable and payable arising from the loan. The Company earns loan matching servicing fees and the post origination services from the borrowers base on an agreed fixed percentage of loan amount. The Company also provides guarantee on the principal, interest payment and penalty fee of the defaulted loans to the lenders. Although the Company did not sell these services separately, the Company determined that all deliverables have standalone value. The Company determined that the financial guarantee is within the scope of ASC 460-10 “Guarantees” and recognized it as a separate liability at inception, with the remaining consideration recognized as revenues under ASC 606-25. The value of guarantee liability is estimated taking into consideration discounting expected future payouts, net expected loss rates and incorporating a markup margin. Subsequent to the inception of the loan, the guarantee liability initially recognized is reassessed in each period end of financial statements as the Company is released from risk under the guarantee either through expiry or cash out. Upon the occurrence of any triggering event or condition under the guarantee, the Company compensates the lenders for their principal and interest losses and obtains the recourse rights from the lender to recover the amounts paid under the guarantee. The Company considers the loan matching services and the post origination services as a multiple element revenue arrangement, and first allocates the consideration to the guarantee liability equaling to the fair value of the guarantee liability. Then the remaining consideration is allocated to the loan matching services and post-origination services using their relative estimated selling prices under ASC 606. The revenue from loan matching service is recognized when the facilitation obligation is completed, which is generally at the loan inception date. Post-origination revenue is recognized when service is provided. Online payment services The Company provides online payment service for Internet merchants and earns transaction fees from fund transfer transactions. Revenues resulting from these transactions are recognized when transactions are completed. Transaction fee is charged based on certain criteria (such as account type and volume of payments) for funds they receive. Weibo VAS Weibo fee-based services allow the Company’s users to subscribe to services on its websites or platform, mainly including Weibo VIP membership, living stream and game-related service. Revenues from these services are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Weibo VIP membership Weibo VIP membership is a service package consisting of one performance obligation of providing user certification and preferential benefits, such as daily priority listings and higher quota for following user accounts. Prepaid VIP membership fees are recorded as deferred revenue and recognized as revenue ratably over the contract period of the membership service. Live streaming Live streaming generates revenue from sales of virtual items in the Yizhibo platform. Users can access the platform and view the live streaming content and interact with the broadcasters for free. The Company designs, creates and offers various virtual items for sales to users with pre-determined selling price. Each virtual item is considered as a distinctive performance obligation. Sales proceeds are recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. Users can purchase and present virtual items to broadcasters to show support for their favorite ones. Under the arrangements with broadcasters or broadcaster agencies, the Company shares with them a portion of the revenues derived from the consumption of virtual items. Revenues derived from the sale of virtual items are recorded on a gross basis as the Company has determined that it acts as the principal to fulfill all obligations related to the live streaming services. The portion paid to broadcasters and/or broadcaster agencies is recognized as cost of revenues. The Company does not have further obligations to the user after the virtual items are consumed. Game related services The majority of the game related service revenues are generated from purchasing of virtual items through its game platform. Each virtual item is considered as a distinctive performance obligation. The Company collects payments from the game players in connection with the sale of virtual currency, which are converted into in-game credits (game tokens) that can be used to purchase virtual items in the third party developed games. The Company remits certain predetermined percentages of the proceeds to the game developers when the virtual currency is converted into in-game credits. The Company has determined that the game developers are the primary obligors for the web game services, based on whether the game developers are responsible for developing, maintaining and updating the game related services and have reasonable latitude to establish the prices of virtual items for which in-game credits are used. Revenue is recorded on a gross basis for games when the Company is acting as the principal in fulfilling all obligations related to the games and revenue is recorded net of predetermined revenue sharing with the game developers for games. The Company’s primary responsibility is to promote the games of the developers, provide virtual currency exchange service, maintain the platform for game players to easily access the games and offer customer support to resolve registration, log-in, currency exchange and other related issues. Virtual currencies in general are not refundable once they have been sold unless there are unused in-game credits at the time a game is discontinued. Sale of virtual items are recognized as revenues over the estimated consumption period of in-game virtual items, which is typically from a few days to one month after the purchase of in-game credits. Contract Balances The Company enters into contracts with its customers, which may give rise to contract assets (unbilled revenue) or contract liabilities (deferred revenue). The payment terms and conditions within the Company's contracts vary by the type and location of its customer and products or services purchased, the substantial majority of which are due in less than one year. No material impact on the contract assets was arising from the new guidance of revenue recognition. Deferred revenue related to unsatisfied performance obligations at the end of the period and consist of a) the unamortized balance of license fees, which are mostly derived from a licensing agreement to Leju, a subsidiary of E-House (China) Holdings Limited (“E-House”) and b) the unamortized balance of service fee paid by third parties, which are mainly received from the customer advance of advertising and marketing services and online gaming business. The deferred revenues are amortized on a straight-line basis through the service period. Due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized that was included in the deferred revenue balance at the beginning of the period was $106.7 million for the year ended December 31, 2018. Practical Expedients and Exemptions The Company generally expenses sales commissions when incurred because the amortization periods are generally one year or less. These costs are recorded within sales and marketing expenses. |
Allowance for doubtful accounts | Allowance for doubtful accounts The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts based on a historical, rolling average, bad debt rate in the prior year and other factors, such as credit-worthiness of the customers and the age of the receivable balances. The Company also provides specific provisions for bad debts when facts and circumstances indicate that the receivable is unlikely to be collected. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, or if the company incurs more bad debt than the original estimates, additional allowances would be required that could materially impact the Company’s financial position and results of operations. |
Cost of revenues | Cost of revenues Advertising. Cost of advertising revenues consists mainly of costs associated with the production of websites, which includes fees paid to third parties for Internet connection, content and costs of revenue shared with third parties, payroll-related expenses and equipment depreciation associated with the website production. Non-advertising. Costs of non-advertising revenues mainly consist of fees or royalties paid to third-party content and service providers, costs of revenue shared with third parties, costs for providing the enterprise services and employee related cost for non-advertising business. Prior to January 1, 2018, the Company presents taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction on a gross basis in the financial statements. The Company is subject to 6.7% Value-Added Tax (“VAT” or “turnover tax”) and surcharges for its revenues and an additional 3% cultural business construction fees for its advertising and marketing revenues. Pursuant to the adoption of ASC 606 effectively beginning January 1, 2018, the Company changed the presentation of the VAT from gross basis to net against revenue, which results in equal decrease of revenues and cost of revenues. The total amounts of such taxes for 2016, 2017 and 2018 were $88.1 million, $138.3 million and $65.7 million, respectively, with VAT excluded from the cost of sales since 2018. |
Advertising expenses | Advertising expenses Advertising expenses consist primarily of costs for the promotion of corporate image, marketing expenses related to advertising barter transaction, product marketing and direct marketing. The Company expenses all advertising costs as incurred and classifies these costs under sales and marketing expenses. The Company expenses all such direct marketing expenses. Advertising expenses for 2016, 2017 and 2018 were $123.4 million, $268.3 million and $521.4 million, respectively. |
Product development expenses | Product development expenses Product development expenses consist primarily of payroll-related expenses incurred for enhancement to and maintenance of the Company’s websites as well as costs associated with new product development and product enhancements. The Company expenses all costs incurred for the planning and post implementation phases of development and costs associated with repair or maintenance of the existing site or the development of website content. Since inception, the amount of costs qualifying for capitalization has been immaterial and, as a result, all product development costs have been expensed as incurred. |
Operating leases | Operating leases The Company leases office space under operating lease agreements with initial lease term up to six years. Rental expense is recognized from the date of initial possession of the leased property on a straight-line basis over the term of the lease. Certain lease agreements contain rent holidays, which are recognized on a straight-line basis over the lease term. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease terms. |
Stock-based compensation | Stock-based compensation All stock-based awards to employees and directors, including stock options and restricted share units (“RSUs”), are measured at the grant date based on the fair value of the awards. Stock-based compensation, net of forfeitures, is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Options granted generally vest over four years. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options. The determination of the estimated fair value of stock-based payment awards on the grant date using an option pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the expected term of the awards, actual and projected employee stock option exercise behaviors, a risk-free interest rate and any expected dividends. Shares of the Company’s subsidiary, which do not have quoted market prices before they were publicly listed, were valued based on the income approach, if a revenue model had been established, or valued based on the market approach, if information from comparable companies had been available or a weighted blend of these approaches if more than one is applicable. The Company recognizes the estimated compensation cost of service-based restricted share units based on the fair value of its ordinary shares on the date of the grant. The Company recognizes the compensation cost, net of estimated forfeitures, over a vesting term of generally four years. For service-based restricted stock awards and performance-based restricted stock awards, the Company recognizes the compensation expense only when it is probable that those awards will meet the performance and service vesting condition on a straight-line basis over the requisite service period. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option and restricted share units forfeitures and records stock-based compensation expense only for those awards that are expected to vest. See Note 15 for further discussion on stock-based compensation. |
Taxation | Taxation Income taxes Income taxes are accounted for using the asset and liability approach. Under this approach, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry-forwards. The Company records a valuation allowance against the amount of deferred tax assets that it determines is not more-likely-than-not to be realized. Uncertain tax positions To assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. |
Foreign currency | Foreign currency The Company’s reporting currency and functional currency are the U.S. dollar. The Company’s operations in China and in international regions use their respective currencies as their functional currencies. The financial statements of these subsidiaries are re-measured into U.S. dollars using period-end rates of exchange for assets and liabilities and average rates of exchange in the period for revenues and expenses. Translation gains and losses are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity. Translation gains or losses are not released to net income unless the associated net investment has been sold, liquidated, or substantially liquidated. Foreign currency transactions denominated in currencies other than the functional currency are re-measured into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are re-measured into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in interest and other income, net. Foreign currency translation adjustments included in the Company’s comprehensive income were losses of $72.4 million and $119.6 million for 2016 and 2018, respectively, and an income of $87.3 million for 2017. The Company recorded a net foreign currency transaction income of $0.3 million and $0.8 million in 2016 and 2018, respectively, and net losses of $2.0 million in 2017, which is recorded in the interest and other income, net in the consolidated statements of comprehensive income. |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Comprehensive income (loss) for the periods presented includes net income (loss), net change in unrealized gains (losses) on marketable securities classified as available-for-sale (net of tax), foreign currency translation adjustments, and share of change in other comprehensive income of equity investments one quarter in arrears. On January 1, 2018, the date of initially applying ASU 2016-1, an unrealized gains of $38.7 million on marketable securities previously classified as available-for-sale was reclassified from accumulated other comprehensive income to retained earnings. Subsequently all the fair value changes arising from marketable securities will be recognized in the earnings. |
Recent accounting pronouncements | Recent accounting pronouncements In February 2016, the FASB issued a new standard on leases, ASU 2016-2, which requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of use representing its right to use the underlying asset for the lease term in the statements of financial position. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.In July 2018, the FASB issued an amendment on leases, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new leases standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company will adopt the new lease standard beginning the first quarter of fiscal year 2019 using the transition method provided by ASU 2018-11 and will not retrospectively adjust the prior comparative periods. The impact of initially applying the guidance on the opening balance of 2019 is estimated mainly to be recognition of approximately $35 million to $40 million of leasing related assets and liabilities that arise from operating leases, respectively. In June 2016, the FASB issued of ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments", which will be effective for the Company in the fiscal year of 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which an entity recognizes an allowance based on the estimate of expected credit loss. In November 2018, the FASB issued an amendment of Topic 326, ASU No. 2018-19, which clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 and should be accounted for in accordance with Topic 842, Leases. The Company is currently evaluating the impact of adopting ASU No. 2016-13 on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The amendments in this ASU simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying value, which eliminates the current requirement to calculate a goodwill impairment charge by comparing the implied fair value of goodwill with its carrying amount. The amendments will be effective beginning the first quarter of fiscal year 2020. The Company will early adopt the guidance in 2019 on a prospective basis and no impact is expected from the amendments. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | |
Schedule of assets, liabilities, results of operations and changes in cash, cash equivalents and restricted cash of the VIEs and their subsidiaries included in the Company's consolidated balance sheets and statements of comprehensive income (loss) with intercompany transactions eliminated | As of December 31, 2017 2018 (In thousands) Total assets $ 1,007,355 $ 1,142,515 Total liabilities $ 689,459 $ 748,354 Year Ended December 31, 2016 2017 2018 (In thousands) Net revenues $ 893,010 $ 1,372,419 $ 1,842,602 Net income (loss) $ (26,627) $ 35,649 $ 67,063 Year Ended December 31, 2016 2017 2018 (In thousands) Net cash provided by (used in) operating activities $ 139,225 $ (78,813) $ (84,961) Net cash used in investing activities (152,719) (70,971) (443,588) Net cash provided by financing activities 37,021 128,730 399,182 Net increase (decrease) in cash, cash equivalents and restricted cash $ 23,527 $ (21,054) $ (129,367) |
Schedule of estimated useful lives for property and equipment | Office building - 45 years Office building related facilities - 20 years Furniture and fixtures - 5 years Computers and equipment - 3 to 4 years Leasehold improvements - over the shorter of the estimated useful lives of the assets or the remaining lease term |
Schedule of adoption of the standards related to revenue recognition | Year Ended December 31, 2018 Adjustments Barter ASC 605 VAT Transaction ASC 606 (In thousands, except for percentage) Net revenues $ 2,113,954 $ (118,006) $ 112,379 $ 2,108,327 - Advertising 1,776,944 (100,038) 112,379 1,789,285 - Non-advertising 337,010 (17,968) — 319,042 Cost of revenues 570,046 (118,006) — 452,040 Operating expenses 1,076,520 — 112,813 1,189,333 - Sales and marketing 587,149 — 112,813 699,962 Income from operations $ 467,388 $ — $ (434) $ 466,954 Gross margin 73.0 % 78.6 % Operating margin 22.1 % 22.1 % |
Schedule of revenues disaggregated by revenue source | Year Ended December 31, 2016 2017 2018 (In thousands) Portal advertising $ 304,090 $ 320,473 $ 290,215 Weibo advertising 570,982 996,745 1,499,180 Elimination (3,885) (5,352) (110) Advertising revenues 871,187 1,311,866 1,789,285 Portal non-advertising 74,931 122,535 111,412 Weibo value added services (“VAS”) 84,818 153,309 219,338 Elimination — (3,826) (11,708) Non-advertising revenues 159,749 272,018 319,042 Net revenue $ 1,030,936 $ 1,583,884 $ 2,108,327 |
Cash, Cash Equivalents, Restr_2
Cash, Cash Equivalents, Restricted Cash and Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents, Restricted Cash and Short-term Investments | |
Schedule of cash, cash equivalents, restricted cash and short-term investments | As of December 31, 2017 2018 (In thousands) Cash and cash equivalents: Cash $ 1,766,927 $ 1,383,610 Cash equivalents: Bank time deposits (maturing within 3 months) 24,966 75,367 Money market funds 198,659 86,823 223,625 162,190 1,990,552 1,545,800 Restricted cash 216,151 97,032 Total cash, cash equivalents and restricted cash $ 2,206,703 $ 1,642,832 Short-term investments: Bank time deposits $ 1,381,991 $ 799,534 |
Long-term Investments (Tables)
Long-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of changes in long-term investments | Available for Cost Sale Securities/ Method/Equity Equity Securities Securities Readily Without Readily Equity Method Determinable Determinable Fair (E-House) (Leju) (Others) Fair Values Values Total (In thousands) Balance at January1, 2016 $ $ $ 131,417 $ $ $ New investments/transferred from prepayments 195,126 56,160 52,449 775,637 Income (loss) from investments (3,760) 308 (8,314) — — (11,766) Investment impairment — — (2,455) (4,822) (29,032) (36,309) Unrealized loss, net — — — (80,795) — (80,795) Disposal/dilution of investments (341,052) — 10,902 (124,040) (67,658) (521,848) Dividend received — — (3,103) — — (3,103) Others* (5,602) (116) (2,642) — (7,889) (16,249) Balance at December 31, 2016 $ — $ 199,662 $ 181,965 $ 154,289 $ 782,291 $ 1,318,207 New investments/transferred from prepayments — — 26,204 10,000 132,079 168,283 Income (loss) from investments — (30,796) 14,726 — — (16,070) Investment impairment — (113,103) (1,207) (1,275) (6,513) (122,098) Unrealized loss, net — — — (35,607) — (35,607) Disposal/dilution/refund of investments — — 19,112 (22,248) (10,410) (13,546) Changes from cost method to consolidation (Note 5) — — — — (29,071) (29,071) Changes from cost method to equity method — — 19,121 — (19,121) — Changes from cost method to available-for-sale securities — — — 2,213 (2,213) — Dividend received/entitled — — (7,829) — — (7,829) Others* — 1,646 5,330 — 19,571 26,547 Balance at December 31, 2017 $ — $ 57,409 $ 257,422 $ 107,372 $ 866,613 $ 1,288,816 Impact of adoption of new investment guidance ** — — — 37,686 (27,419) 10,267 New investments/transferred from prepayments — — 140,379 149,140 382,031 671,550 Income (loss) from equity method investments — (9,080) 10,200 — — 1,120 Investment impairment — — (5,699) — (55,289) (60,988) Disposal/dilution/refund of investments — — 3,235 (87,351) — (84,116) Changes from investments without readily determinable fair value to readily determinable fair value — — — 30,000 (30,000) — Fair value change through earnings (including adjustment of subsequent observable price changes) — — — (70,020) 166,553 96,533 Dividend received/entitled — — (4,087) — — (4,087) Others* — (186) (8,235) (891) (19,940) (29,252) Balance at December 31, 2018 $ — $ 48,143 $ 393,215 $ 165,936 $ 1,282,549 $ 1,889,843 * Others mainly represents the impacts from foreign exchange change. For equity method investments, others represents the equity pick-up of other comprehensive income (loss) of investees caused by foreign exchange change. ** Upon the adoption of ASU 2016-01, $27.4 million of investments in private equity funds were adjusted to their NAV of $37.7 million and reclassified from cost method to equity investments with readily determinable fair value on January 1, 2018. |
Summary of condensed financial information | Year Ended December 31, 2016 2017 2018 (In thousands) Operating data: Revenue $ 1,884,793 $ 626,402 $ 926,219 Gross profit $ 1,385,828 $ 470,681 $ 550,181 Loss from operations $ (21,238) $ (128,034) $ (2,014) Net loss $ (57,894) $ (34,455) $ (41,682) Net loss attributable to the investees $ (27,895) $ (33,053) $ (39,600) As of December 31, 2017 2018 (In thousands) Balance sheet data: Current assets $ 918,942 $ 946,459 Long-term assets $ 733,487 $ 1,402,989 Current liabilities $ 257,650 $ 283,495 Long-term liabilities $ 24,875 $ 33,148 Non-controlling interests $ (1,445) $ (572) |
Schedule of the carrying amount and fair value of equity securities with readily determinable fair values and private equity funds | Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value (In thousands) Jupai $ 23,068 44,107 — 67,175 Other equity securities 45,594 10,163 (15,560) 40,197 December 31, 2017 $ 68,662 $ 54,270 $ (15,560) $ 107,372 Jupai $ 23,068 $ — $ (7,119) $ 15,949 Pintec 30,000 — (2,776) 27,224 Other equity securities 74,844 4,562 (29,317) 50,089 Private equity funds 58,246 16,277 (1,849) 72,674 December 31, 2018 $ 186,158 $ 20,839 $ (41,061) $ 165,936 |
Schedule of carrying value of equity securities accounted for alternative measures | The following table summarizes the total carrying value of the equity securities accounted for alternative measures as of December 31, 2018 including cumulative unrealized upward and downward adjustments made to the initial cost basis of the securities (in thousands): Initial cost basis $ 1,191,225 Upward adjustments 166,553 Impairment (55,289) Foreign currency translation (19,940) Total carrying value at the end of the period $ 1,282,549 |
Leju | |
Schedule of investment with cost allocated | As of December 31, 2017 2018 (In thousands) Carrying value of investment in Leju $ 57,409 $ 48,143 Proportionate share of Leju's net tangible and intangible assets * 80,753 75,723 Carrying value of investment less proportionate share of Leju's net tangible and intangible assets $ (23,344) $ (27,580) The difference above has been primarily assigned to: Goodwill and amortizable intangible assets * $ (23,344) $ (27,580) Deferred tax liabilities — — $ (23,344) $ (27,580) Cumulative loss in equity interest $ (30,243) $ (39,323) * The weighted average remaining life of the intangible assets recorded in Leju’s financial statements was 5 years, and the intangible assets not included in Leju’s financial statements was fully impaired in the end of June 2017. The negative basis difference mainly arising from intangible assets is being amortized over 5 years, the weighted average remaining lives of primary assets. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Yizhibo | |
Acquisitions | |
Schedule of consideration allocated on the acquisition date based on fair value of assets acquired and liabilities assumed | As of October 1, 2018 (In thousands) Consideration $ 50,000 Property and equipment, net 466 Identifiable intangible assets acquired 21,942 Other tangible assets 2,874 Liabilities assumed (2,434) Goodwill 27,152 Total $ 50,000 |
Weihui | |
Acquisitions | |
Schedule of consideration allocated on the acquisition date based on fair value of assets acquired and liabilities assumed | As of acquisition date (In thousands) Consideration $ 12,222 Fair value of previously held 45% equity interest 35,119 Non-controlling interests 24,707 Total 72,048 Cash and cash equivalents 12,078 Other tangible assets 1,602 Identifiable intangible assets acquired 19,748 Liabilities assumed (2,687) Goodwill 41,307 Total $ 72,048 |
Weiju | |
Acquisitions | |
Schedule of consideration allocated on the acquisition date based on fair value of assets acquired and liabilities assumed | As of acquisition date (In thousands) Consideration $ 36,405 Non-controlling interests 18,405 Total 54,810 Tangible assets 27,423 Identifiable intangible assets acquired 5,278 Liabilities assumed (1,319) Goodwill 23,428 Total $ 54,810 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying value of goodwill by segment | The changes in the carrying value of goodwill by segment are as follows (in thousands): Portal Advertising Others Total Balance as of January 1, 2016 41,745 11,117 — 52,862 Impairment provided in 2016 (36,726) — — (36,726) Foreign exchange impact (5,019) (851) — (5,870) Balance as of December 31, 2016 $ — $ 10,266 $ — $ 10,266 New acquisitions (Note 5) — 2,318 64,735 67,053 Foreign exchange impact — 836 3,241 4,077 Balance as of December 31, 2017 $ — $ 13,420 $ 67,976 $ 81,396 New acquisitions (Note 5) — 27,152 652 27,804 Impairment provided in 2018 — (10,554) — (10,554) Foreign exchange impact — (672) (3,734) (4,406) Balance as of December 31, 2018 $ — $ 29,346 $ 64,894 $ 94,240 |
Schedule of intangible assets arising from acquisitions and land use rights | As of December 31, 2017 As of December 31, 2018 Accumulated Accumulated Accumulated Accumulated Cost Amortization Impairment Net Cost Amortization Impairment Net (In thousands) (In thousands) Land use rights $ — $ — $ — $ — $ 202,340 $ (2,341) $ — $ 199,999 Technology 38,547 (18,582) (1,243) 18,722 44,342 (22,747) (11,598) 9,997 Supplier-relationship — — — — 9,738 (495) — 9,243 Trademark and Domain name — — — — 5,623 (147) — 5,476 Software 1,861 (1,861) — — 1,859 (1,859) — — Others 12,090 (5,776) (2,225) 4,089 11,275 (5,998) (4,657) 620 Total $ 52,498 $ (26,219) $ (3,468) $ 22,811 $ 275,177 $ (33,587) $ (16,255) $ 225,335 |
Schedule of estimated amortization expenses | Year Ended December 31, (In thousands) 2019 $ 8,491 2020 8,487 2021 8,447 2022 7,931 2023 and thereafter 191,443 Total expected amortization expense* $ 224,799 * The table above excludes $0.5 million of indefinite lived intangible assets which was included in the category of Others. |
Investment in Weibo (Tables)
Investment in Weibo (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investment in Weibo | |
Schedule of share ownership of Weibo on an if converted basis | As of December 31, 2018, the share ownership of Weibo was as follows: Ownership Voting Shareholder Name Shares Type Percentage Power* SINA Class B Ordinary shares 45.3 % 71.3 % Alibaba Class A Ordinary shares 30.2 % 15.8 % Others Class A Ordinary shares 24.5 % 12.9 % Total 100.0 % 100.0 % * Class A ordinary shares are entitled to one vote per share and Class B ordinary shares, which the Company holds, are entitled to three votes per share. |
Non-controlling interests (Tabl
Non-controlling interests (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Non-controlling interests | |
Summary of non-controlling interests | As of December 31, As of December 31, 2017 2018 (In thousands) $ 666,141 $ 969,803 Others 86,746 75,278 Total $ 752,887 $ 1,045,081 |
Other Balance Sheet Components
Other Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Balance Sheet Components | |
Schedule of other balance sheet components | As of December 31, 2016 2017 2018 (In thousands) Accounts receivable, net: Accounts receivable — $ 305,895 $ 555,861 Allowance for doubtful accounts: Balance at the beginning of year $ (14,980) (14,068) (20,214) Additional provision charged to expenses (14,621) (8,465) (15,424) Write-off 15,533 2,319 7,674 Balance at the end of year $ (14,068) $ (20,214) $ (27,964) — $ 285,681 $ 527,897 Prepaid expenses and other current assets: Prepayments and loan to investees 1 (including prepayment and receivables from related parties of $40,506 and $115,976 as of December 31, 2017 and 2018) — $ 62,172 $ 190,444 Secured loan to a founder of a related party 2 — 80,000 80,000 Rental and other operation deposits — 30,191 9,842 Amounts deposited by Weibo users 3 — 25,277 30,631 Content fees and revenue share — 12,013 14,769 Advertising and marketing fees — 2,926 4,742 Deductible value added tax — 10,304 Others — 15,659 21,703 — $ 228,238 $ 362,435 Property and equipment, net: Office building — $ 208,731 $ 197,337 Office building related facilities — 3,499 3,308 Computers and equipment — 214,644 217,335 Leasehold improvements — 14,258 17,328 Furniture and fixtures — 11,355 11,558 Other — 2,473 2,996 — 454,960 449,862 Less: Accumulated depreciation — (192,284) (187,016) — $ 262,676 $ 262,846 Other assets: Investment related deposits — $ 38,897 $ 46,777 Deferred tax assets — 16,158 23,213 Deposits for land use rights — — 6,321 Others — 2,027 4,816 — $ 57,082 $ 81,127 Accrued expenses and other current liabilities: Accrued sales rebates — $ 104,117 $ 149,371 Accrued payroll related expenses (including sales commission) — 141,129 117,562 Advertising and marketing expenses — 88,614 83,893 Guarantee liabilities (Note 17) — 10,143 10,952 Deposit for secured loan 2 — — 43,614 Turnover tax — 32,367 44,280 Amounts due to Weibo users 3 — 25,277 30,631 Employee reimbursement — 8,055 8,934 Professional fee — 9,253 10,014 Unpaid consideration for acquisitions — 5,704 10,055 Others — 22,120 31,501 — $ 446,779 $ 540,807 1 Prepayment and loan balance to investees as of December 31, 2017 and 2018 were individually immaterial. The Company recognized $8.1 million, $0.9 million and $20.3 million of impairment on the prepayment of investments as a result of the deterioration of the investees’ operation for the year ended December 31, 2016, 2017 and 2018, respectively. 2 The Company issued a one-year loan of $100 million to a founder of a related party in August 2016 with an annual interest rate of 5%. $20 million was repaid as of December 31, 2017 and the remaining were extended to August 15, 2018 and then August 15, 2019, with an annual interest rate of 7.5%, and secured by an RMB deposits included in accrued expenses and other current liabilities (equivalent to $43.6 million) and mortgaged shares of the related party provided by its founder as of December 31, 2018. Subsequently, as of March 31, 2019, all the loan amount was fully secured by RMB deposits received by the Company. 3 Weibo wallet enables Weibo users to conduct hobby-oriented activities on Weibo, such as handing out “red envelops” and coupons to users. Weibo wallet also enables users to purchase different types of products and services on Weibo, including those offered by the Company, such as marketing services and VIP membership, and those offered by the Company’s platform partners, such as e-commerce merchandises, financial products and virtual gifts. The amounts deposited by users primarily represent the receivables temporarily held on account for Weibo wallet users through a third party online payment platform. Amounts due to users represent the balances that are payable on demand to Weibo wallet users and therefore are reflected as current liability on the consolidated balance sheets. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
Schedule of significant related parties and their relationships with the Company | Name of related parties Relationship with the Company Leju and its subsidiaries (“Leju”) An investee of the Company Alibaba and its subsidiaries (“Alibaba”) Strategic partner and significant shareholder of Weibo New Wave MMXV Limited (“New Wave”) An entity controlled by Mr. Charles Chao |
Schedule of transactions and balances with related parties | (a) Service provided to related parties The Company entered into the following transactions with related parties: Year ended December 31, Transactions 2016 2017 2018 (In thousands) Revenues: License revenue from Leju 1 $ 10,435 $ 10,435 $ 10,435 Agency and advertising service earned from Leju 1 9,265 16,091 20,754 Promotion and advertising service to Alibaba 2 82,021 91,724 126,882 Others 3 47,809 94,107 160,184 $ 149,530 $ 212,357 $ 318,255 Other related parties mainly include investee companies over on which the Company has significant influence. These investees are mainly high-tech companies operating in different internet-related industries, such as short video applications, social and new media marketing services and so on. 1 The amended and restated advertising agency agreement, the domain name and content license agreement, the trademark license agreement and the software license and support services agreement (“License Agreements”) were entered into with Leju, a subsidiary of E-House, and such amount allocated to the fair value of the License Agreements was $187.4 million, which represents the difference between the total consideration and the fair value of equity interests disposed. This amount was recorded as deferred revenues and amortized over ten years prior to March 2014, when the License Agreement was extended for another ten years. Accordingly, the remaining deferred revenue balance as of March 2014 will be amortized prospectively under the straight-line method until 2024. For the years ended December 31, 2016, 2017 and 2018, the Company recorded $10.4 million revenue from License Agreements from such deferred revenue account, respectively. As of December 31, 2017 and 2018, the total amount of deferred revenue from Leju was $64.5 million and $54.1 million, respectively, which includes $54.1 million and $43.7 million of non-current portion of deferred revenue, respectively. Based on the amended and restated advertising agency agreements with Leju, agency fees and advertising revenue earned from Leju for 2016, 2017 and 2018, generated from the sales of advertising through SINA were amounting to $9.3 million, $16.1 million and $20.8 million, respectively. 2 On April 29, 2013, affiliated entities of the Company formed a strategic alliance with affiliated entities of Alibaba to jointly explore social commerce and develop marketing solutions to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo’s users. Alibaba purchased advertising from the Company and continued to do so subsequently. The Company has continued to keep strategic collaboration and work with Alibaba in the area of social commerce and other areas after the expiration of the strategic framework agreement in January 2016 and recorded $82.0 million, $91.6 million and $126.7 million in advertising and marketing revenues from Alibaba in 2016, 2017 and 2018, respectively. 3 Within other related parties, one related party that is an equity investee in the short video business contributed $53.9 million of advertising and marketing revenues in 2018 and represented $80.9 million of accounts receivable due from other related parties at December 31, 2018. (b) Balances with related parties The Company had the following balances with related parties: As of December 31, 2017 2018 (In thousands) Accounts receivable from Leju $ 1,513 $ 4,905 Accounts receivable from Alibaba 43,676 53,480 Accounts receivable from other related parties 3 29,848 131,137 $ 75,037 $ 189,522 Deferred revenues in relation to License Agreement with Leju $ 64,521 $ 54,087 Account payable to related parties $ 20,660 $ 50,678 Accrued and other liabilities to related parties $ 5,681 $ 14,763 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of components of income before income taxes | Year Ended December 31, 2016 2017 2018 (In thousands, except percentage) Income before income tax expense $ 304,527 $ 424,239 $ 555,410 Income (loss) from non-China operations $ 125,064 $ (79,945) $ (143,680) Income from China operations $ 179,463 $ 504,184 $ 699,090 Income tax expense applicable to China operations $ 11,985 $ 73,165 $ 129,406 Effective tax rate for China operations 7 % 15 % 19 % |
Schedule of current and deferred portion of income tax expenses | Year Ended December 31, 2016 2017 2018 (In thousands) Current tax provision $ 17,455 $ 76,379 $ 95,846 Deferred tax (benefits) provision (5,470) (3,214) 33,560 Income tax expense $ 11,985 $ 73,165 $ 129,406 |
Schedule of reconciliation between the statutory EIT rate and the effective tax rate | Year Ended December 31, 2016 2017 2018 Statutory EIT rate 25 % 25 % 25 % Effect on tax holiday and preferential tax rate 1 (29) % (11) % (11) % Permanent differences (1) % (1) % 1 % Change in valuation allowance 12 % 2 % 4 % Effective tax rate for China operations 7 % 15 % 19 % 1 Included the impact of Weibo Technology’s preferential tax treatment of “key software enterprise” status of 2017 in 2018 |
Schedule of effect of tax holiday related to China operations | Year Ended December 31, 2016 2017 2018 (In thousands, except per share amount) Tax holiday effect $ 51,829 $ 56,377 $ 76,246 Basic net income per share effect $ 0.74 $ 0.79 $ 1.08 Diluted net income per share effect $ 0.67 $ 0.76 $ 1.05 |
U.S. | |
Income Taxes | |
Schedule of significant components of deferred tax assets and liabilities | As of December 31, 2017 2018 (In thousands) Deferred tax assets: Net operating loss carry-forwards $ 30,557 $ 30,484 Other tax credits, allowances for doubtful accounts, accruals and other liabilities 563 539 Total deferred tax assets 31,120 31,023 Less: valuation allowance (31,120) (31,023) Deferred tax assets, net $ — $ — |
Hong Kong | |
Income Taxes | |
Schedule of significant components of deferred tax assets and liabilities | As of December 31, 2017 2018 (In thousands) Deferred tax assets: Net operating loss carry-forwards $ 5,776 $ 6,023 Less: valuation allowance (5,776) (6,023) Deferred tax assets $ — $ — |
China | |
Income Taxes | |
Schedule of significant components of deferred tax assets and liabilities | As of December 31, 2017 2018 (In thousands) Deferred tax assets: Allowances for doubtful accounts $ 21,454 $ 24,267 Net operating loss carry forwards 14,913 31,016 Accruals 17,330 21,989 Depreciation and other liabilities 23,294 33,020 Total deferred tax assets 76,991 110,292 Less: valuation allowance (60,833) (87,079) Net deferred tax assets $ 16,158 $ 23,213 Deferred tax liabilities: Depreciation $ (650) $ (821) Investment gain — (40,781) Acquired intangible assets (3,836) (3,213) Others (3,274) (6,278) Total deferred tax liabilities $ (7,760) $ (51,093) |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net Income (Loss) Per Share | |
Schedule of basic and diluted net income per share | Year Ended December 31, 2016 2017 2018 (In thousands, except per share amounts) Basic net income per share calculation: Numerator: Net income attributable to SINA’s ordinary shareholders $ 225,087 $ 156,569 $ 125,562 Denominator: Weighted average ordinary shares outstanding 70,301 71,284 70,296 Basic net income per share $ 3.20 $ 2.20 $ 1.79 Diluted net income per share calculation: Numerator: Net income attributable to SINA’s ordinary shareholders $ 225,087 $ 156,569 $ 125,562 Less: Effect on consolidated net income per share of dilutive shares of the Company’s equity interests 2,275 3,915 3,699 Add: Effect on interest expenses and amortized issuance cost of convertible debt 10,831 1,531 1,403 Net income attributable for calculating diluted net income per share 233,643 154,185 123,266 Denominator: Weighted average ordinary shares outstanding 70,301 71,284 70,296 Weighted average ordinary shares equivalents: Effects of dilutive securities Stock options 112 94 87 Unvested restricted share units 958 1,172 683 Convertible debt 6,140 1,381 1,309 Shares used in computing diluted net income per share attributable to SINA 77,511 73,931 72,375 Diluted net income per share $ 3.01 $ 2.09 $ 1.70 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity | |
Schedule of distributions of shares of Weibo to SINA's shareholders | Distribution Record Date Distribution Date Distributed Share SINA’s Ordinary Shares 2016 Distribution September 12, 2016 October 14, 2016 7,088,116 70,881,168 2017 Distribution June 7, 2017 July 10, 2017 7,142,148 71,421,480 |
Schedule of stock-based compensation | Year Ended December 31, 2016 2017 2018 (In thousands) Costs of revenues $ 7,742 $ 9,257 $ 10,128 Sales and marketing 15,496 20,790 21,942 Product development 20,793 29,163 30,830 General and administrative 29,797 32,177 32,169 $ 73,828 $ 91,387 $ 95,069 |
Summary of number of shares available for issuance | Shares Available (In thousands) January 1, 2016 5,728 Granted* (2,456) Cancelled/forfeited 353 Expired (279) December 31, 2016 3,346 Granted* (673) Cancelled/forfeited 320 Expired (85) December 31, 2017 2,908 Granted* (2,456) Cancelled/forfeited 128 Expired (13) December 31, 2018 567 * In 2016, 2017 and 2018, 1,403,000, 385,000 and 1,404,000, restricted shares units, or 2,456,000, 673,000 and 2,456,000 equivalent option shares, respectively, were granted. |
Summary of option activities under the Company' stock option program | Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) January 1, 2016 923 $ 44.83 3.37 $ 5,208 Exercised (674) $ 47.26 Cancelled/expired/forfeited (15) $ 35.69 December 31, 2016 234 $ 38.41 3.63 $ 5,226 Exercised (26) $ 35.69 Cancelled/expired/forfeited (18) $ 37.61 December 31, 2017 190 $ 38.86 2.56 $ 11,693 Exercised (34) $ 43.85 Cancelled/expired/forfeited (1) $ 35.69 December 31, 2018 155 $ 37.75 $ 2,467 Vested and expected to vest as of December 31, 2017 190 $ 38.86 2.56 $ 11,693 Exercisable as of December 31, 2017 117 $ 39.74 2.31 $ 7,063 Vested and expected to vest as of December 31, 2018 155 $ 37.75 $ 2,467 Exercisable as of December 31, 2018 153 $ 37.77 $ 2,435 |
Schedule of stock options outstanding | Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) As of December 31, 2017 $35.69 - $35.69 36 $ 35.69 13 $ 35.69 3.04 $38.27 - $38.27 124 $ 38.27 74 $ 38.27 2.90 $45.13 - $45.13 30 $ 45.13 30 $ 45.13 0.55 190 $ 38.86 117 $ 39.74 As of December 31, 2018 $35.69 - $35.69 31 $ 35.69 29 $ 35.69 2.04 $38.27 - $38.27 124 $ 38.27 124 $ 38.27 1.90 155 $ 37.75 153 $ 37.77 1.93 |
Shareholders' Equity | |
Schedule of stock-based compensation | Year Ended December 31, 2016 2017 2018 (In thousands) Cost of revenues $ 2,616 $ 3,716 $ 3,522 Sales and marketing 5,357 8,264 6,837 Product development 15,076 21,879 21,187 General and administrative 13,853 14,178 9,465 $ 36,902 $ 48,037 $ 41,011 |
Summary of number of shares available for issuance | Shares Available (In thousands) January 1, 2016 20,217 Granted (1,917) Cancelled/expired/forfeited 578 December 31, 2016 18,878 Granted (736) Cancelled/expired/forfeited 398 December 31, 2017 18,540 Granted (1,597) Cancelled/expired/forfeited 350 December 31, 2018 17,293 |
Summary of option activities under the Company' stock option program | Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) January 1, 2016 6,303 $ 1.26 2.4 $ 114,975 Exercise (3,625) $ 1.10 Cancelled/expired/forfeited (91) $ 3.37 December 31, 2016 2,587 $ 1.41 1.6 $ 101,403 Exercise (2,122) $ 1.04 Cancelled/expired/forfeited (28) $ 0.68 December 31, 2017 437 $ 3.24 2.0 $ 43,800 Exercise (248) $ 3.14 Cancelled/expired/forfeited (5) $ 1.16 December 31, 2018 184 $ 3.45 $ 10,089 Vested and expected to vest as of December 31, 2017 437 $ 3.24 2.0 $ 43,800 Exercisable as of December 31, 2017 437 $ 3.24 2.0 $ 43,800 Vested and expected to vest as of December 31, 2018 184 $ 3.45 $ 10,089 Exercisable as of December 31, 2018 184 $ 3.45 $ 10,089 |
Schedule of stock options outstanding | Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) As of December 31, 2017 $ 0.96 - $1.80 31 $ 0.97 31 $ 0.97 0.2 $ 3.25 - $3.36 179 $ 3.33 179 $ 3.33 1.4 $ 3.43 - $3.50 227 $ 3.48 227 $ 3.48 2.6 437 $ 3.24 437 $ 3.24 2.0 As of December 31, 2018 $ 3.25 - $3.36 32 $ 3.30 32 $ 3.30 $ 3.43 - $3.50 152 $ 3.48 152 $ 3.48 184 $ 3.45 184 $ 3.45 |
Service-based restricted share units | |
Shareholders' Equity | |
Schedule of restricted share unit activity | Weighted-Average Grant Date Shares Granted Fair Value (In thousands) January 1, 2016 1,967 $ 40.85 Awarded* 1,384 $ 49.89 Vested (754) $ 42.91 Cancelled/forfeited (192) $ 40.10 December 31, 2016 2,405 $ 45.47 Awarded* 365 $ 75.05 Vested (905) $ 45.45 Cancelled/forfeited (165) $ 44.57 December 31, 2017 1,700 $ 51.92 Awarded* 1,383 $ 77.67 Vested (874) $ 48.44 Cancelled/forfeited (64) $ 57.78 December 31, 2018 2,145 $ 69.76 *24,000, 20,000 and 25,000 RSUs were granted to non-employee directors in 2016, 2017 and 2018, respectively. |
Service-based restricted share units | Weibo | |
Shareholders' Equity | |
Schedule of restricted share unit activity | Weighted-Average Shares Grant Date Granted Fair Value (In thousands) As at January 1, 2016 6,501 $ 13.98 Awarded 1,806 $ 24.94 Vested (2,274) $ 14.73 Cancelled/forfeited (575) $ 14.58 As at December 31, 2016 5,458 $ 17.23 Awarded 581 $ 62.87 Vested (2,406) $ 17.01 Cancelled/forfeited (366) $ 17.72 As at December 31, 2017 3,267 $ 25.45 Awarded 1,406 $ 68.18 Vested (1,757) $ 21.59 Cancelled/forfeited (160) $ 44.00 As at December 31, 2018 2,756 $ 48.62 |
Performance-based RSU | |
Shareholders' Equity | |
Schedule of restricted share unit activity | Weighted-Average Grant Date Shares Granted Fair Value (In thousands) January 1, 2016 — $ — Awarded 19 $ 47.47 Cancelled/forfeited (1) $ 47.47 December 31, 2016 18 $ 47.47 Awarded 19 $ 65.18 Vested (15) $ 47.47 Cancelled/forfeited (8) $ 58.51 December 31, 2017 14 $ 65.18 Awarded 21 $ 102.88 Vested (12) $ 65.18 Cancelled/forfeited (11) $ 98.10 December 31, 2018 12 $ 101.86 |
Performance-based RSU | Weibo | |
Shareholders' Equity | |
Schedule of restricted share unit activity | Weighted-Average Grant Date Shares Granted Fair Value (In thousands) January 1, 2016 — $ — Awarded 111 $ 27.00 Cancelled/forfeited (3) $ 27.00 December 31, 2016 108 $ 27.00 Awarded 155 $ 50.45 Vested (102) $ 27.00 Cancelled/forfeited (32) $ 46.42 December 31, 2017 129 $ 50.32 Awarded 191 $ 86.63 Vested (126) $ 50.32 Cancelled/forfeited (190) $ 86.90 December 31, 2018 4 $ 87.14 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information | |
Summary information by segment | For the Year Ended December 31, 2016: Portal Portal advertising Others advertising & Others Elimination* Total (In thousands, except percentages) Net revenues $ 304,090 $ 74,931 $ 379,021 $ 655,800 $ (3,885) $ 1,030,936 - Advertising 304,090 — 304,090 570,982 (3,885) 871,187 - Non-advertising — 74,931 74,931 84,818 — 159,749 Costs of revenues 136,196 47,555 183,751 171,231 (286) 354,696 Gross margin 55 % 37 % 52 % 74 % 66 % Operating expenses: Sales and marketing $ 102,384 $ 148,283 $ (3,599) $ 247,068 Product development 62,140 154,088 — 216,228 General and administrative 58,256 41,218 — 99,474 Goodwill and acquired intangibles impairment 40,194 — — 40,194 Total operating expenses $ 262,974 $ 343,589 $ (3,599) $ 602,964 Income (loss) from operations (67,704) 140,980 — 73,276 Interest and other income, net 17,456 8,757 26,213 Change in fair value of option liability (28,456) — (28,456) Loss from equity method investments, net (11,636) (130) (11,766) Realized gain on long-term investments 289,159 534 289,693 Investment related impairment (4,272) (40,161) (44,433) Income before income tax expense 194,547 109,980 304,527 Income tax expense (22,903) (4,316) (27,219) Net income $ 171,644 $ 105,664 $ 277,308 For the Year Ended December 31, 2017: Portal Portal advertising Others advertising & Others Elimination* Total (In thousands, except percentages) Net revenues $ 320,473 $ 122,535 $ 443,008 $ 1,150,054 $ (9,178) $ 1,583,884 - Advertising 320,473 — 320,473 996,745 (5,352) 1,311,866 - Non-advertising — 122,535 122,535 153,309 (3,826) 272,018 Costs of revenues 121,278 65,733 187,011 231,255 (4,129) 414,137 Gross margin 62 % 46 % 58 % 80 % 74 % Operating expenses: Sales and marketing $ 138,368 $ 275,537 $ (5,049) $ 408,856 Product development 73,999 193,393 — 267,392 General and administrative 62,608 42,315 — 104,923 Total operating expenses $ 274,975 $ 511,245 $ (5,049) $ 781,171 Income (loss) from operations (18,978) 407,554 — 388,576 Interest and other income, net 29,436 13,260 42,696 Income (loss) from equity method investments, net (17,100) 1,030 (16,070) Realized gain on long-term investments 131,993 14 132,007 Investment related impairment (118,223) (4,747) (122,970) Income before income tax expense 7,128 417,111 424,239 Income tax expense (7,930) (66,746) (74,676) Net income (loss) $ (802) $ 350,365 $ 349,563 For the Year Ended December 31, 2018: Portal Portal advertising Others advertising & Others Elimination* Total (In thousands, except percentages) Net revenues $ 290,215 $ 111,412 $ 401,627 $ 1,718,518 $ (11,818) $ 2,108,327 - Advertising 290,215 — 290,215 1,499,180 (110) 1,789,285 - Non-advertising — 111,412 111,412 219,338 (11,708) 319,042 Costs of revenues 117,600 68,500 186,100 277,648 (11,708) 452,040 Gross margin 59 % 39 % 54 % 84 % 79 % Operating expenses: Sales and marketing $ 172,648 $ 527,424 $ (110) $ 699,962 Product development 96,069 249,873 — 345,942 General and administrative 76,429 43,755 — 120,184 Goodwill and acquired intangibles impairment 12,691 10,554 — 23,245 Total operating expenses $ 357,837 $ 831,606 $ (110) $ 1,189,333 Income (loss) from operations (142,310) 609,264 — 466,954 Interest and other income, net 25,547 43,808 69,355 Income (loss) from equity method investments, net 1,063 57 1,120 Realized gain (loss) on long-term investments 3,016 (287) 2,729 Fair value changes through earnings on investments, net 56,459 40,074 96,533 Investment related impairment (57,207) (24,074) (81,281) Income (loss) before income tax expense (113,432) 668,842 555,410 Income tax expense (32,862) (96,222) (129,084) Net income (loss) $ (146,294) $ 572,620 $ 426,326 * Weibo has provided advertising service to portal advertising business since 2016 and started to provide channel service to other business since 2017. The related revenue, cost of revenue and expenses were eliminated at the consolidation level. |
Schedule of geographic operations | PRC International Total (In thousands) Year ended and as of December 31, 2016: Net revenues $ 1,016,210 $ 14,726 $ 1,030,936 Long-lived assets $ 243,288 $ 234 $ 243,522 Year ended and as of December 31, 2017: Net revenues $ 1,571,035 $ 12,849 $ 1,583,884 Long-lived assets $ 285,208 $ 279 $ 285,487 Year ended and as of December 31, 2018: Net revenues $ 2,096,179 $ 12,148 $ 2,108,327 Long-lived assets $ 487,844 $ 337 $ 488,181 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments | |
Schedule of financial instruments, measured at fair value, by level within the fair value hierarchy | Fair Value Measurements (In thousands) Quoted Prices in Active Market Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs Total (Level 1) (Level 2) (Level 3) As of December 31, 2017 Assets Money market funds* $ 198,659 $ 198,659 $ — $ — Bank time deposits** 1,406,957 — 1,406,957 — Available for sale securities*** 107,372 107,372 — — Total $ 1,712,988 $ 306,031 $ 1,406,957 $ — Liabilities Guarantee liabilities $ 10,143 $ — $ — $ 10,143 As of December 31, 2018 Assets Money market funds* $ 86,823 $ 86,823 $ — $ — Bank time deposits** 874,901 — 874,901 — Equity securities with readily determinable fair value *** 93,262 93,262 — — Total $ 1,054,986 $ 180,085 $ 874,901 $ — Liabilities Guarantee liabilities $ 10,952 $ — $ — $ 10,952 * Included in cash and cash equivalents on the Company’s consolidated balance sheets. ** Included in cash and cash equivalents and short-term investments on the Company’s consolidated balance sheets. *** Included in long-term investments on the Company’s consolidated balance sheets. |
Schedule of guarantee liability movement activities | For the period from the acquisition date to For the year ended December 31, 2017 December 31, 2018 (In thousands) Balance at the beginning of year/period $ — $ 10,143 Addition in the opening balance at the acquisition date (Note 5) 2,227 — Provision at the inception of new loans 16,013 39,291 Payment for the guarantee (13,166) (37,082) Subsequent adjustments to the provisions 1 4,812 (792) Foreign exchange impacts 257 (608) Balance at the end of the year $ 10,143 $ 10,952 1 The subsequent adjustment to the provisions in 2017 was to reflect an increased default rate at the end of 2017, as a result of certain borrower’s reaction to a government regulation release in December 2017 over the cash loan business. |
Schedule of concentration risk, by customers with more than 10% of the Company's net accounts receivable | As of December 31, As of December 31, 2017 2018 Customer Customer A 15 % 10 % Customer B 15 % 13 % Customer C * 15 % |
Convertible Debt and Treasury_2
Convertible Debt and Treasury Stock (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Debt and Treasury Stock | |
Schedule of Convertible Debt | As of December 31, As of December 31, 2017 2018 Convertible Debt Current Liabilities 2018 1% Convertible Senior Notes (the “ 2018 Notes”) $ 153,092 $ — Long-term liabilities 2022 1.25% Weibo Convertible Senior Notes ( the “ 2022 Notes”) 900,000 900,000 Less: Issuance costs (20,017) (15,877) Total $ 879,983 $ 884,123 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Schedule of future minimum rental payments | Based on the current rental lease agreements, future minimum rental payments required as of December 31, 2018 were as follows: Less than One One to Three to More than Total Year Three Years Five Years Five Years (In thousands) Operating lease commitments $ 45,873 $ 16,692 $ 25,607 $ 3,574 $ — |
Schedule of purchase commitments | Purchase commitments as of December 31, 2018 were as follows: Less than One One to Three to More than Total Year Three Years Five Years Five Years (In thousands) Purchase commitments $ 675,510 $ 651,333 $ 23,950 $ 227 $ — Capital commitments $ 12,817 $ 12,715 $ 102 $ — $ — |
Schedule of other commitments | Other commitments as of December 31, 2018 were as follows: Less than One One to Three to More than Total Year Three Years Five Years Five Years (In thousands) 2022 Notes 945,000 12,750 22,500 909,750 — Short-term bank loans 79,434 79,434 — — — Equity investments 167,633 167,633 — — — Total other commitments $ 1,192,067 $ 259,817 $ 22,500 $ 909,750 $ — |
Significant Accounting Polici_4
Significant Accounting Policies - Basis of presentation and use of estimates (Details) $ in Millions | Jan. 01, 2018USD ($) |
ASU 2016-01 | |
Basis of presentation and use of estimates | |
Reclassification from AOCI to retained earnings | $ 38.7 |
Significant Accounting Polici_5
Significant Accounting Policies - Consolidated VIEs (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)shareholdersubsidiary | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
VIEs | |||
Interest-free loans to nominee shareholders of VIEs | $ 294,900,000 | $ 262,200,000 | |
Aggregate accumulated (loss) income | 32,200,000 | (34,900,000) | |
Results of operations of the VIEs and their subsidiaries | |||
Net revenues | 2,108,327,000 | 1,583,884,000 | $ 1,030,936,000 |
Net income (loss) | 426,326,000 | 349,563,000 | 277,308,000 |
Net increase (decrease) in cash and cash equivalents | |||
Net cash provided by (used in) operating activities | 311,037,000 | 596,290,000 | 443,649,000 |
Net cash used in investing activities | (447,909,000) | (987,947,000) | 945,798,000 |
Net cash provided by financing activities | (408,514,000) | 886,970,000 | (603,410,000) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (563,871,000) | 557,772,000 | 744,840,000 |
Restricted cash | 97,032,000 | 216,151,000 | |
Accrued expenses and other current liabilities | 540,807,000 | 446,779,000 | |
Amount due to customers related to SINA Pay | 97,032,000 | 216,151,000 | |
Income taxes payable | 115,725,000 | 102,458,000 | |
Short-term bank loans | $ 78,229,000 | 89,309,000 | |
Number of wholly owned subsidiaries established to engage directly in advertising business | subsidiary | 2 | ||
Service fees revenue charged by wholly owned subsidiaries | $ 985,600,000 | 784,800,000 | 467,600,000 |
Consolidated VIEs | |||
Assets and liabilities of the VIEs and their subsidiaries | |||
Total assets | 1,142,515,000 | 1,007,355,000 | |
Total liabilities | 748,354,000 | 689,459,000 | |
Results of operations of the VIEs and their subsidiaries | |||
Net revenues | 1,842,602,000 | 1,372,419,000 | 893,010,000 |
Net income (loss) | 67,063,000 | 35,649,000 | (26,627,000) |
Net increase (decrease) in cash and cash equivalents | |||
Net cash provided by (used in) operating activities | (84,961,000) | (78,813,000) | 139,225,000 |
Net cash used in investing activities | (443,588,000) | (70,971,000) | (152,719,000) |
Net cash provided by financing activities | 399,182,000 | 128,730,000 | 37,021,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (129,367,000) | (21,054,000) | $ 23,527,000 |
Cash, cash equivalents and short-term investments | 184,600,000 | 187,400,000 | |
Restricted cash | 97,000,000 | 216,200,000 | |
Accrued expenses and other current liabilities | 400,700,000 | 327,100,000 | |
Amount due to customers related to SINA Pay | 97,000,000 | 216,200,000 | |
Income taxes payable | 31,500,000 | 29,000,000 | |
Deferred revenues | 97,800,000 | 99,000,000 | |
Short-term bank loans | 59,200,000 | 0 | |
Assets, except for registered capital and PRC statutory reserves of VIEs, that can only be used to settle obligations of the respective VIEs | 0 | ||
Registered capital and PRC statutory reserves of VIEs | $ 374,200,000 | $ 336,800,000 | |
Term of loan agreements (in years) | 10 years | ||
Period of due date of the last guaranteed debt (in years) | 3 years | ||
Term of trademark license agreements (in years) | 1 year | ||
ICP Company | |||
Net increase (decrease) in cash and cash equivalents | |||
Registered capital | $ 121,700,000 | ||
StarVI | |||
Net increase (decrease) in cash and cash equivalents | |||
Number of nominee shareholder who hold ownership interest in VIEs | shareholder | 3 | ||
Registered capital | $ 1,200,000 | ||
IAD Company | |||
Net increase (decrease) in cash and cash equivalents | |||
Number of nominee shareholder who hold ownership interest in VIEs | shareholder | 2 | ||
Registered capital | $ 24,800,000 | ||
Weimeng | |||
Net increase (decrease) in cash and cash equivalents | |||
Number of nominee shareholder who hold ownership interest in VIEs | shareholder | 4 | ||
Registered capital | $ 84,900,000 | ||
Weibo Interactive | |||
Net increase (decrease) in cash and cash equivalents | |||
Registered capital | 8,700,000 | ||
SINA Pay | |||
Net increase (decrease) in cash and cash equivalents | |||
Registered capital | 15,700,000 | ||
Weiju | |||
Net increase (decrease) in cash and cash equivalents | |||
Registered capital | $ 3,700,000 |
Significant Accounting Polici_6
Significant Accounting Policies - Short-term bank Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Short-term bank loans | $ 78,229 | $ 89,309 |
Minimum | ||
Interest rate for the outstanding short-term bank loans (as a percent) | 4.60% | 4.60% |
Maximum | ||
Interest rate for the outstanding short-term bank loans (as a percent) | 4.80% | 4.80% |
Significant Accounting Polici_7
Significant Accounting Policies - Long-lived assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Long-lived assets | |||
Amortization of intangible assets | $ 9,110,000 | $ 4,560,000 | $ 1,908,000 |
Depreciation expenses | 32,122,000 | 28,642,000 | 26,560,000 |
Impairment charges of intangible assets | $ 12,700,000 | $ 0 | $ 3,500,000 |
Office building | |||
Long-lived assets | |||
Estimated useful lives of assets | 45 years | ||
Office building related facilities | |||
Long-lived assets | |||
Estimated useful lives of assets | 20 years | ||
Furniture and fixtures | |||
Long-lived assets | |||
Estimated useful lives of assets | 5 years | ||
Land use rights | |||
Long-lived assets | |||
Estimated useful lives of intangible assets | 50 years | ||
Amortization of intangible assets | $ 2,400,000 | ||
Minimum | |||
Long-lived assets | |||
Estimated useful lives of intangible assets | 1 year | ||
Minimum | Computers and equipment | |||
Long-lived assets | |||
Estimated useful lives of assets | 3 years | ||
Maximum | |||
Long-lived assets | |||
Estimated useful lives of intangible assets | 10 years | ||
Maximum | Computers and equipment | |||
Long-lived assets | |||
Estimated useful lives of assets | 4 years |
Significant Accounting Polici_8
Significant Accounting Policies - Impact on Adoption of New Revenue Recognition (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | $ 2,108,327 | $ 1,583,884 | $ 1,030,936 | |
Costs of revenues | 452,040 | 414,137 | 354,696 | |
Operating expenses | 1,189,333 | 781,171 | 602,964 | |
Sales and marketing | 699,962 | 408,856 | 247,068 | |
Income from operations | $ 466,954 | 388,576 | 73,276 | |
Gross margin | 78.60% | |||
Operating margin | 22.10% | |||
Contract Balances | ||||
Maximum payment terms of majority of contracts with customers | 1 year | |||
Revenue recognized | $ 106,700 | |||
Practical Expedients and Exemptions | ||||
Expense sales commissions when incurred because the amortization period are generally one year or less | true | |||
Advertising | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | $ 1,789,285 | 1,311,866 | 871,187 | |
Costs of revenues | 341,153 | 325,494 | 288,044 | |
Non-advertising | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | 319,042 | 272,018 | 159,749 | |
Costs of revenues | 110,887 | $ 88,643 | $ 66,652 | |
ASC 605 | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | 2,113,954 | |||
Costs of revenues | 570,046 | |||
Operating expenses | 1,076,520 | |||
Sales and marketing | 587,149 | |||
Income from operations | $ 467,388 | |||
Gross margin | 73.00% | |||
Operating margin | 22.10% | |||
ASC 605 | Advertising | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | $ 1,776,944 | |||
ASC 605 | Non-advertising | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | 337,010 | |||
Before topic 606 | Adjustments VAT | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | (118,006) | |||
Costs of revenues | (118,006) | |||
Before topic 606 | Adjustments VAT | Advertising | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | (100,038) | |||
Before topic 606 | Adjustments VAT | Non-advertising | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | (17,968) | |||
Before topic 606 | Barter Transaction | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | 112,379 | |||
Operating expenses | 112,813 | |||
Sales and marketing | 112,813 | |||
Income from operations | (434) | |||
Before topic 606 | Barter Transaction | Advertising | ||||
Impact on Adoption of New Revenue Recognition | ||||
Net revenues | 112,379 | |||
ASU 2014-09 | ||||
Impact on Adoption of New Revenue Recognition | ||||
Impact of adoption of new investment guidance | $ 300 | $ (577) |
Significant Accounting Polici_9
Significant Accounting Policies - Revenue recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues disaggregated by revenue source | |||
Net revenues | $ 2,108,327 | $ 1,583,884 | $ 1,030,936 |
Eliminations | |||
Revenues disaggregated by revenue source | |||
Net revenues | (11,818) | (9,178) | (3,885) |
Portal advertising | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | 290,215 | 320,473 | 304,090 |
Weibo | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | 1,718,518 | 1,150,054 | 655,800 |
Others | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | 111,412 | 122,535 | 74,931 |
Advertising | |||
Revenues disaggregated by revenue source | |||
Net revenues | 1,789,285 | 1,311,866 | 871,187 |
Advertising | Eliminations | |||
Revenues disaggregated by revenue source | |||
Net revenues | (110) | (5,352) | (3,885) |
Advertising | Portal advertising | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | 290,215 | 320,473 | 304,090 |
Advertising | Weibo | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | 1,499,180 | 996,745 | 570,982 |
Non-advertising | |||
Revenues disaggregated by revenue source | |||
Net revenues | $ 319,042 | 272,018 | 159,749 |
Maximum period for recognition of revenues after purchase of in-game credits | 1 month | ||
Non-advertising | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | $ 111,412 | 122,535 | 74,931 |
Non-advertising | Eliminations | |||
Revenues disaggregated by revenue source | |||
Net revenues | (11,708) | (3,826) | |
Non-advertising | Weibo | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | 219,338 | 153,309 | 84,818 |
Non-advertising | Others | Operating segments | |||
Revenues disaggregated by revenue source | |||
Net revenues | $ 111,412 | $ 122,535 | $ 74,931 |
Significant Accounting Polic_10
Significant Accounting Policies - Other (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Costs of revenues | ||||
Value-Added Tax (as a percent) | 6.70% | |||
Additional cultural business construction fee (as a percent) | 3.00% | |||
Taxes assessed by governmental authority | $ 65,700 | $ 138,300 | $ 88,100 | |
Advertising expenses | ||||
Advertising expenses | $ 521,400 | 268,300 | 123,400 | |
Operating leases | ||||
Maximum initial lease term of office space | 6 years | |||
Foreign currency | ||||
Foreign currency translation adjustments recorded in other comprehensive (loss)/income | $ (119,647) | 87,258 | (72,399) | |
Net foreign currency transaction income (loss) | $ 800 | $ (2,000) | $ 300 | |
Comprehensive income (loss) | ||||
Period of time within which results of equity method earnings are recognized in arrears | 3 months | |||
ASU 2016-01 | ||||
Comprehensive income (loss) | ||||
Reclassification from AOCI to retained earnings | $ 38,700 | |||
Stock Options | ||||
Stock-based compensation | ||||
Vesting period | 4 years | |||
Service-based restricted share units | ||||
Stock-based compensation | ||||
Vesting period | 4 years |
Significant Accounting Polic_11
Significant Accounting Policies - Recent accounting pronouncements (Details) - ASU 2016-02 - Restatement Adjustment $ in Millions | Dec. 31, 2018USD ($) |
Minimum | |
Recent accounting pronouncements | |
Right-of use asset | $ 35 |
Lease liability | 35 |
Maximum | |
Recent accounting pronouncements | |
Right-of use asset | 40 |
Lease liability | $ 40 |
Cash, Cash Equivalents, Restr_3
Cash, Cash Equivalents, Restricted Cash and Short-term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and cash equivalents: | ||||
Cash | $ 1,383,610 | $ 1,766,927 | ||
Cash equivalents: | ||||
Bank time deposits (maturing within 3 months) | 75,367 | 24,966 | ||
Money market funds | 86,823 | 198,659 | ||
Total cash equivalents | 162,190 | 223,625 | ||
Total cash and cash equivalents | 1,545,800 | 1,990,552 | ||
Restricted cash | 97,032 | 216,151 | ||
Total cash, cash equivalents and restricted cash | 1,642,832 | 2,206,703 | $ 1,648,931 | $ 904,091 |
Short-term investments: | ||||
Bank time deposits | 799,534 | 1,381,991 | ||
Interest income | $ 83,200 | $ 43,200 | $ 38,000 |
Long-term Investments - Roll Fo
Long-term Investments - Roll Forward (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term Investments | ||||
Balance at the beginning of the year | $ 1,288,816 | $ 1,288,816 | $ 1,318,207 | $ 1,212,640 |
New investments/transferred from prepayments | 671,550 | 168,283 | 775,637 | |
Income (loss) from investments | 1,120 | (16,070) | (11,766) | |
Investment impairment | (60,988) | (122,098) | (36,309) | |
Unrealized loss, net | (35,607) | (80,795) | ||
Disposal/dilution of investments | (521,848) | |||
Disposal/dilution/refund of investments | (84,116) | (13,546) | ||
Changes from cost method to consolidation (Note 5) | (29,071) | |||
Fair value change through earnings (including adjustment of subsequent observable price changes) | 96,533 | |||
Dividend received/entitled | (4,087) | (7,829) | (3,103) | |
Others | (29,252) | 26,547 | (16,249) | |
Balance at the end of the year | 1,889,843 | 1,288,816 | 1,318,207 | |
ASU 2016-01 | ||||
Long-term Investments | ||||
Impact of adoption of new investment guidance | 10,300 | 10,267 | ||
Cost Method/ Equity Securities Without Readily Determinable Fair Values | ||||
Long-term Investments | ||||
Balance at the beginning of the year | 866,613 | 866,613 | 782,291 | 554,921 |
New investments/transferred from prepayments | 382,031 | 132,079 | 331,949 | |
Investment impairment | (55,289) | (6,513) | (29,032) | |
Disposal/dilution of investments | (67,658) | |||
Disposal/dilution/refund of investments | (10,410) | |||
Changes from cost method to consolidation (Note 5) | (29,071) | |||
Changes from cost method to equity method | (19,121) | |||
Changes from cost method to available-for-sale securities | (2,213) | |||
Changes from investments without readily determinable fair value to readily determinable fair value | (30,000) | |||
Fair value change through earnings (including adjustment of subsequent observable price changes) | 166,553 | |||
Others | (19,940) | 19,571 | (7,889) | |
Balance at the end of the year | 1,282,549 | 866,613 | 782,291 | |
Cost Method/ Equity Securities Without Readily Determinable Fair Values | ASU 2016-01 | ||||
Long-term Investments | ||||
Impact of adoption of new investment guidance | (27,419) | |||
Cost Method/ Equity Securities Without Readily Determinable Fair Values | Private equity funds | ASU 2016-01 | ||||
Long-term Investments | ||||
Impact of adoption of new investment guidance | 27,400 | |||
Available for Sale Securities/ Equity Securities Readily Determinable Fair Values | ||||
Long-term Investments | ||||
Balance at the beginning of the year | 107,372 | 107,372 | 154,289 | 311,497 |
New investments/transferred from prepayments | 149,140 | 10,000 | 52,449 | |
Investment impairment | (1,275) | (4,822) | ||
Unrealized loss, net | (35,607) | (80,795) | ||
Disposal/dilution of investments | (124,040) | |||
Disposal/dilution/refund of investments | (87,351) | (22,248) | ||
Changes from cost method to available-for-sale securities | 2,213 | |||
Changes from investments without readily determinable fair value to readily determinable fair value | 30,000 | |||
Fair value change through earnings (including adjustment of subsequent observable price changes) | (70,020) | |||
Others | (891) | |||
Balance at the end of the year | 165,936 | 107,372 | 154,289 | |
Available for Sale Securities/ Equity Securities Readily Determinable Fair Values | ASU 2016-01 | ||||
Long-term Investments | ||||
Impact of adoption of new investment guidance | 37,686 | |||
Available for Sale Securities/ Equity Securities Readily Determinable Fair Values | Private equity funds | ASU 2016-01 | ||||
Long-term Investments | ||||
Impact of adoption of new investment guidance | 37,700 | |||
Equity Method | E-House | ||||
Long-term Investments | ||||
Balance at the beginning of the year | 210,461 | |||
New investments/transferred from prepayments | 139,953 | |||
Income (loss) from investments | (3,760) | |||
Disposal/dilution of investments | (341,052) | |||
Others | (5,602) | |||
Equity Method | Leju | ||||
Long-term Investments | ||||
Balance at the beginning of the year | 57,409 | 57,409 | 199,662 | 4,344 |
New investments/transferred from prepayments | 195,126 | |||
Income (loss) from investments | (9,080) | (30,796) | 308 | |
Investment impairment | (113,103) | |||
Others | (186) | 1,646 | (116) | |
Balance at the end of the year | 48,143 | 57,409 | 199,662 | |
Equity Method | Other equity securities | ||||
Long-term Investments | ||||
Balance at the beginning of the year | $ 257,422 | 257,422 | 181,965 | 131,417 |
New investments/transferred from prepayments | 140,379 | 26,204 | 56,160 | |
Income (loss) from investments | 10,200 | 14,726 | (8,314) | |
Investment impairment | (5,699) | (1,207) | (2,455) | |
Disposal/dilution of investments | 10,902 | |||
Disposal/dilution/refund of investments | 3,235 | 19,112 | ||
Changes from cost method to equity method | 19,121 | |||
Dividend received/entitled | (4,087) | (7,829) | (3,103) | |
Others | (8,235) | 5,330 | (2,642) | |
Balance at the end of the year | $ 393,215 | $ 257,422 | $ 181,965 |
Long-term Investments - Equity
Long-term Investments - Equity Method (Details) $ / shares in Units, $ in Thousands | Dec. 30, 2016USD ($)shares | Aug. 12, 2016USD ($)shares | Jul. 09, 2014shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2018$ / shares | Dec. 31, 2018USD ($)$ / shares | Aug. 31, 2016USD ($) | Aug. 11, 2016USD ($) | Apr. 15, 2016$ / shares | Dec. 31, 2015USD ($) | Jul. 08, 2014 |
Marketable equity securities designated as available-for-sale | |||||||||||||
Long-term investments, net | $ 1,288,816 | $ 1,318,207 | $ 1,889,843 | $ 1,212,640 | |||||||||
Closing price (in dollars per share) | $ / shares | $ 100.31 | $ 53.64 | |||||||||||
Change in fair value of option liability (Note 4) | (28,456) | ||||||||||||
E-House | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Ownership percentage (as a percent) | 43.00% | ||||||||||||
Equity contribution | $ 340,700 | $ 140,000 | |||||||||||
Shares held for investment under equity method investment (in shares) | shares | 49,764,809 | ||||||||||||
Period for repurchase of equity interest held by entity under equity method investment | 18 months | ||||||||||||
Option liability | $ 3,100 | $ 28,500 | |||||||||||
Repurchase of ordinary shares upon exercising option right (in shares) | shares | 49,764,809 | ||||||||||||
Realized gain on equity method investment | $ 4,600 | ||||||||||||
Recognized loss as fair value change in option liability | $ 28,500 | ||||||||||||
Leju | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Ownership percentage (as a percent) | 31.10% | ||||||||||||
Shares held for investment under equity method investment (in shares) | shares | 42,117,874 | ||||||||||||
Repurchase of ordinary shares upon exercising option right (in shares) | shares | 40,651,187 | ||||||||||||
Repurchase of ordinary shares upon exercise with a fair value | $ (195,100) | $ 202,200 | |||||||||||
Cash consideration | $ 127,600 | ||||||||||||
Loss pick up | $ 9,100 | $ 30,800 | |||||||||||
Impairment charge for equity method investments | 113,100 | ||||||||||||
Closing price (in dollars per share) | $ / shares | $ 1.14 | ||||||||||||
Aggregate market value | $ 59,000 | ||||||||||||
Leju | ADS | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Closing price (in dollars per share) | $ / shares | $ 1.4 | ||||||||||||
Tian Ge | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Ownership percentage (as a percent) | 25.00% | 36.00% | |||||||||||
Aggregate market value | $ 117,200 | ||||||||||||
E-House | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Cash consideration (in dollars per share) | $ / shares | $ 6.85 | ||||||||||||
Tian Ge | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Closing price (in dollars per share) | $ / shares | $ 0.37 | ||||||||||||
Tian Ge | ADS | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Closing price (in dollars per share) | (per share) | $ 3.06 | $ 0.39 | |||||||||||
Equity Method | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Long-term investments, net | $ 441,400 | ||||||||||||
Equity Method | Leju | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Long-term investments, net | 57,400 | 48,100 | |||||||||||
Equity Method | Tian Ge | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Long-term investments, net | $ 98,100 | 110,100 | |||||||||||
Equity Method | Investing fund | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Long-term investments, net | $ 48,000 | ||||||||||||
Leju | E-House | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Percentage of outstanding common shares considered for repurchase of equity (as a percent) | 30.00% | ||||||||||||
IPO | Tian Ge | |||||||||||||
Marketable equity securities designated as available-for-sale | |||||||||||||
Number of shares issued (in shares) | shares | 349,900,000 |
Long-term Investments - Equit_2
Long-term Investments - Equity Method Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating data: | |||
Revenue | $ 926,219 | $ 626,402 | $ 1,884,793 |
Gross profit | 550,181 | 470,681 | 1,385,828 |
Loss from operations | (2,014) | (128,034) | (21,238) |
Net loss | (41,682) | (34,455) | (57,894) |
Net loss attributable to the investees | (39,600) | (33,053) | $ (27,895) |
Balance sheet data: | |||
Current assets | 946,459 | 918,942 | |
Long-term assets | 1,402,989 | 733,487 | |
Current liabilities | 283,495 | 257,650 | |
Long-term liabilities | 33,148 | 24,875 | |
Non-controlling interests | $ (572) | $ (1,445) |
Long-term Investments - Equit_3
Long-term Investments - Equity Method Cost Allocation (Details) - Equity Method - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
The difference above has been primarily assigned to: | ||
Weighted average remaining life of the intangible assets | 5 years | |
Leju | ||
Allocation of cost | ||
Carrying value of investment | $ 48,143 | $ 57,409 |
Proportionate share of net tangible and intangible assets | 75,723 | 80,753 |
Carrying value of investment less proportionate share of net tangible and intangible | (27,580) | (23,344) |
The difference above has been primarily assigned to: | ||
Goodwill and amortizable intangible assets | (27,580) | (23,344) |
Carrying value of investment less proportionate share of net tangible and intangible | (27,580) | (23,344) |
Cumulative loss in equity interest | $ (39,323) | $ (30,243) |
Weighted average remaining life of the intangible assets | 5 years |
Long-term Investments - Equit_4
Long-term Investments - Equity Securities with Readily Determinable Fair Values (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2015 |
Equity Securities with Readily Determinable Fair Values | ||||||
Cost Basis | $ 186,158 | $ 186,158 | $ 68,662 | |||
Gross Unrealized Gains | 20,839 | 20,839 | 54,270 | |||
Gross Unrealized Losses | (41,061) | (41,061) | (15,560) | |||
Fair Value | 165,936 | 165,936 | 107,372 | |||
Total cost | 1,282,549 | 1,282,549 | ||||
Unrealized loss, net | 74,200 | |||||
Unrealized gain | 4,200 | |||||
Private equity funds | ||||||
Equity Securities with Readily Determinable Fair Values | ||||||
Cost Basis | 58,246 | 58,246 | ||||
Gross Unrealized Gains | 16,277 | 16,277 | ||||
Gross Unrealized Losses | (1,849) | (1,849) | ||||
Fair Value | 72,674 | 72,674 | ||||
Unfunded commitments related to investments | $ 53,500 | 53,500 | ||||
Private equity funds | Minimum | ||||||
Equity Securities with Readily Determinable Fair Values | ||||||
Investment lock-up period | 5 years | |||||
Private equity funds | Maximum | ||||||
Equity Securities with Readily Determinable Fair Values | ||||||
Investment lock-up period | 10 years | |||||
Jupai | ||||||
Equity Securities with Readily Determinable Fair Values | ||||||
Cost Basis | $ 23,068 | 23,068 | 23,068 | |||
Gross Unrealized Gains | 44,107 | |||||
Gross Unrealized Losses | (7,119) | (7,119) | ||||
Fair Value | 15,949 | 15,949 | 67,175 | |||
Total cost | $ 7,800 | |||||
Other equity securities | ||||||
Equity Securities with Readily Determinable Fair Values | ||||||
Cost Basis | 74,844 | 74,844 | 45,594 | |||
Gross Unrealized Gains | 4,562 | 4,562 | 10,163 | |||
Gross Unrealized Losses | (29,317) | (29,317) | (15,560) | |||
Fair Value | 50,089 | 50,089 | $ 40,197 | |||
Pintec | ||||||
Equity Securities with Readily Determinable Fair Values | ||||||
Cost Basis | 30,000 | 30,000 | $ 30,000 | |||
Gross Unrealized Losses | (2,776) | (2,776) | ||||
Fair Value | $ 27,224 | 27,224 | ||||
ASU 2016-01 | ||||||
Equity Securities with Readily Determinable Fair Values | ||||||
Reclassification from AOCI to retained earnings | $ 38,700 | |||||
Impact on Adoption of Cumulative Effect on Retained earnings | $ 10,300 | $ 10,267 |
Long-term Investments - Equit_5
Long-term Investments - Equity Securities without Readily Determinable Fair Values (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018USD ($)company | Dec. 31, 2016USD ($)company | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) | |
Equity Securities without Readily Determinable Fair Values | |||||
Long-term investments, net | $ 1,889,843 | $ 1,318,207 | $ 1,288,816 | $ 1,212,640 | |
Number of private companies | company | 2 | 2 | |||
Initial cost basis | $ 1,191,225 | ||||
Upward adjustments | 166,553 | ||||
Impairment | (55,289) | ||||
Foreign currency translation | (19,940) | ||||
Total carrying amount at the end of the period | 1,282,549 | ||||
Private company one | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Initial cost basis | $ 120,000 | ||||
Private company two | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Initial cost basis | 96,400 | ||||
Private company three | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Initial cost basis | 91,500 | ||||
Private company four | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Initial cost basis | 90,000 | ||||
Cost Method/ Equity Securities Without Readily Determinable Fair Values | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Long-term investments, net | 1,282,549 | 782,291 | 866,613 | 554,921 | |
Cost Method/ Equity Securities Without Readily Determinable Fair Values | ASU 2016-01 | Private equity funds | Pintec | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Long-term investments, net | $ 27,400 | ||||
Available for Sale Securities/ Equity Securities Readily Determinable Fair Values | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Long-term investments, net | $ 165,936 | $ 154,289 | $ 107,372 | $ 311,497 | |
Available for Sale Securities/ Equity Securities Readily Determinable Fair Values | ASU 2016-01 | Private equity funds | Pintec | |||||
Equity Securities without Readily Determinable Fair Values | |||||
Long-term investments, net | $ 37,700 |
Long-term Investments - Equit_6
Long-term Investments - Equity Securities without Readily Determinable Fair Values (Subsequent events) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)company | Dec. 31, 2018USD ($)company | Dec. 31, 2016company | |
Equity Securities without Readily Determinable Fair Values | |||
Impairment | $ 55,289 | ||
Number of private companies | company | 2 | 2 | |
Upward adjustments | $ 166,553 | ||
Subsequent Event | |||
Equity Securities without Readily Determinable Fair Values | |||
Upward adjustments | $ 163,300 | ||
Cost Method/ Equity Securities Without Readily Determinable Fair Values | Subsequent Event | |||
Equity Securities without Readily Determinable Fair Values | |||
Impairment | $ 75,200 | ||
Number of private companies | company | 2 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Oct. 01, 2018USD ($) | Jul. 31, 2017USD ($) | Apr. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2015USD ($) |
Acquisitions | ||||||||||
Goodwill | $ 94,240 | $ 94,240 | $ 10,266 | $ 81,396 | $ 52,862 | |||||
Number of acquisitions | item | 0 | |||||||||
Yizhibo | ||||||||||
Acquisitions | ||||||||||
Cash consideration paid to selling shareholders | $ 10,000 | $ 40,000 | ||||||||
Increase in revenue due to acquisition | $ 28,000 | |||||||||
Consideration | $ 50,000 | |||||||||
Property and equipment, net | 466 | |||||||||
Identifiable intangible assets acquired | 21,942 | |||||||||
Other tangible assets | 2,874 | |||||||||
Liabilities assumed | (2,434) | |||||||||
Goodwill | 27,152 | |||||||||
Total consideration | $ 50,000 | |||||||||
Yizhibo | Supplier-relationship | ||||||||||
Acquisitions | ||||||||||
Estimated useful life of identifiable intangible assets acquired | 5 years | |||||||||
Identifiable intangible assets acquired | $ 9,700 | |||||||||
Yizhibo | Core technology | ||||||||||
Acquisitions | ||||||||||
Estimated useful life of identifiable intangible assets acquired | 8 years | |||||||||
Identifiable intangible assets acquired | $ 6,600 | |||||||||
Yizhibo | Trademark and Domain name | ||||||||||
Acquisitions | ||||||||||
Estimated useful life of identifiable intangible assets acquired | 10 years | |||||||||
Identifiable intangible assets acquired | $ 5,600 | |||||||||
Weihui | ||||||||||
Acquisitions | ||||||||||
Estimated useful life of identifiable intangible assets acquired | 5 years | |||||||||
Equity interest acquired (as a percent) | 10.00% | |||||||||
Total equity interest with contingent redemption rights held after step-up acquisition (as a percent) | 55.00% | |||||||||
Remeasurement gain upon obtaining control | $ 6,000 | |||||||||
Consideration | 12,222 | |||||||||
Fair value of previously held 45% equity interest | 35,119 | |||||||||
Non-controlling interests | 24,707 | |||||||||
Total consideration | 72,048 | |||||||||
Cash and cash equivalents | 12,078 | |||||||||
Identifiable intangible assets acquired | 19,748 | |||||||||
Other tangible assets | 1,602 | |||||||||
Liabilities assumed | (2,687) | |||||||||
Goodwill | 41,307 | |||||||||
Total consideration | $ 72,048 | |||||||||
Weihui | Less than wholly owned subsidiaries | ||||||||||
Acquisitions | ||||||||||
Percentage of non-controlling interests (as a percent) | 45.00% | |||||||||
Weihui | Core technology | ||||||||||
Acquisitions | ||||||||||
Identifiable intangible assets acquired | $ 15,900 | |||||||||
Weihui | Customer relationships | ||||||||||
Acquisitions | ||||||||||
Identifiable intangible assets acquired | $ 3,800 | |||||||||
Weiju | ||||||||||
Acquisitions | ||||||||||
Estimated useful life of identifiable intangible assets acquired | 5 years | |||||||||
Equity interest acquired (as a percent) | 60.00% | |||||||||
Consideration paid to selling shareholders | $ 5,500 | |||||||||
Consideration paid to Weiju for its newly issued shares | 30,900 | |||||||||
Consideration | 36,405 | |||||||||
Non-controlling interests | 18,405 | |||||||||
Total consideration | 54,810 | |||||||||
Tangible assets | 27,423 | |||||||||
Identifiable intangible assets acquired | 5,278 | |||||||||
Liabilities assumed | (1,319) | |||||||||
Goodwill | 23,428 | |||||||||
Total consideration | $ 54,810 | |||||||||
Weiju | Less than wholly owned subsidiaries | ||||||||||
Acquisitions | ||||||||||
Percentage of non-controlling interests (as a percent) | 40.00% | |||||||||
Weiju | Core technology | ||||||||||
Acquisitions | ||||||||||
Identifiable intangible assets acquired | $ 5,300 | |||||||||
Weihui | ||||||||||
Acquisitions | ||||||||||
Equity interest previously held (as a percent) | 45.00% | |||||||||
Consideration for amount accounted for under the cost method of accounting | $ 29,100 |
Goodwill and Intangible Assets-
Goodwill and Intangible Assets- Changes in the carrying value of goodwill (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)item | |
Changes in the carrying value of goodwill by segment | |||
Balance at the beginning of the period | $ 81,396 | $ 10,266 | $ 52,862 |
New acquisitions (Note 5) | 27,804 | 67,053 | |
Impairment provided | (10,554) | (36,726) | |
Foreign exchange impact | 4,406 | 4,077 | (5,870) |
Balance at the end of the period | 94,240 | 81,396 | $ 10,266 |
Number of acquisitions | item | 0 | ||
Portal advertising | |||
Changes in the carrying value of goodwill by segment | |||
Balance at the beginning of the period | $ 41,745 | ||
Impairment provided | (36,726) | ||
Foreign exchange impact | (5,019) | ||
Changes in the carrying value of goodwill by segment | |||
Balance at the beginning of the period | 13,420 | 10,266 | 11,117 |
New acquisitions (Note 5) | 27,152 | 2,318 | |
Impairment provided | (10,554) | ||
Foreign exchange impact | 672 | 836 | (851) |
Balance at the end of the period | 29,346 | 13,420 | $ 10,266 |
Others | |||
Changes in the carrying value of goodwill by segment | |||
Balance at the beginning of the period | 67,976 | ||
New acquisitions (Note 5) | 652 | 64,735 | |
Foreign exchange impact | 3,734 | 3,241 | |
Balance at the end of the period | $ 64,894 | $ 67,976 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible assets | |||
Cost | $ 275,177,000 | $ 52,498,000 | |
Accumulated Amortization | (33,587,000) | (26,219,000) | |
Accumulated Impairment | (16,255,000) | (3,468,000) | |
Net | 225,335,000 | 22,811,000 | |
Amortization expenses related to intangible assets | 9,110,000 | 4,560,000 | $ 1,908,000 |
Year Ended December 31 | |||
2019 | 8,491,000 | ||
2020 | 8,487,000 | ||
2021 | 8,447,000 | ||
2022 | 7,931,000 | ||
2023 and thereafter | 191,443,000 | ||
Total expected amortization expense | $ 224,799,000 | ||
Minimum | |||
Intangible assets | |||
Estimated useful lives of intangible assets | 1 year | ||
Maximum | |||
Intangible assets | |||
Estimated useful lives of intangible assets | 10 years | ||
All Sure | |||
Intangible assets | |||
Impairment loss of acquired intangible assets | 0 | $ 3,500,000 | |
Weihui | |||
Intangible assets | |||
Impairment loss of acquired intangible assets | $ 12,700,000 | ||
Land use rights | |||
Intangible assets | |||
Cost | 202,340,000 | ||
Accumulated Amortization | (2,341,000) | ||
Net | $ 199,999,000 | ||
Estimated useful lives of intangible assets | 50 years | ||
Amortization expenses related to intangible assets | $ 2,400,000 | ||
Technology | |||
Intangible assets | |||
Cost | 44,342,000 | 38,547,000 | |
Accumulated Amortization | (22,747,000) | (18,582,000) | |
Accumulated Impairment | (11,598,000) | (1,243,000) | |
Net | 9,997,000 | 18,722,000 | |
Supplier-relationship | |||
Intangible assets | |||
Cost | 9,738,000 | ||
Accumulated Amortization | (495,000) | ||
Net | 9,243,000 | ||
Trademark and Domain name | |||
Intangible assets | |||
Cost | 5,623,000 | ||
Accumulated Amortization | (147,000) | ||
Net | 5,476,000 | ||
Software | |||
Intangible assets | |||
Cost | 1,859,000 | 1,861,000 | |
Accumulated Amortization | (1,859,000) | (1,861,000) | |
Other | |||
Intangible assets | |||
Cost | 11,275,000 | 12,090,000 | |
Accumulated Amortization | (5,998,000) | (5,776,000) | |
Accumulated Impairment | (4,657,000) | (2,225,000) | |
Net | 620,000 | $ 4,089,000 | |
Indefinite lived intangible assets | |||
Indefinite lived intangible assets | $ 500,000 | ||
Other | Minimum | |||
Intangible assets | |||
Estimated useful lives of intangible assets | 1 year | 1 year | |
Other | Maximum | |||
Intangible assets | |||
Estimated useful lives of intangible assets | 10 years | 10 years |
Investment in Weibo (Details)
Investment in Weibo (Details) $ in Millions | Apr. 30, 2014shares | Apr. 30, 2014Voteshares | Mar. 31, 2014USD ($)shares | Dec. 31, 2018Vote |
Investment in Weibo | ||||
Number of Class A shares converted from Class B shares | 1 | |||
Weibo | Class A ordinary shares | ||||
Investment in Weibo | ||||
Shares issued from conversion of preferred shares (in shares) | 30,046,154 | 30,046,154 | ||
Number of votes each share is entitled to | Vote | 1 | |||
Weibo | Class A ordinary shares | IPO | ||||
Investment in Weibo | ||||
Number of shares issued (in shares) | 19,320,000 | |||
Weibo | Class B ordinary shares | ||||
Investment in Weibo | ||||
Number of votes each share is entitled to | Vote | 3 | |||
Weibo | Alibaba | Class A ordinary shares | ||||
Investment in Weibo | ||||
Number of shares issued (in shares) | 6,000,000 | |||
Investment in Weibo | ||||
Voting Power (as a percent) | 100.00% | |||
Total share ownership | 100.00% | |||
Weibo | Class A ordinary shares | ||||
Investment in Weibo | ||||
Number of votes each share is entitled to | Vote | 1 | |||
Weibo | Class B ordinary shares | ||||
Investment in Weibo | ||||
Number of votes each share is entitled to | Vote | 3 | |||
Voting Power (as a percent) | 71.30% | |||
Weibo | Less than wholly owned subsidiaries | Class B ordinary shares | ||||
Investment in Weibo | ||||
Ownership Percentage | 45.30% | |||
Weibo | Alibaba | ||||
Investment in Weibo | ||||
Amount invested in Weibo | $ | $ 585.8 | |||
Weibo | Alibaba | Preferred shares | ||||
Investment in Weibo | ||||
Number of shares of Weibo's purchased | 30,000,000 | |||
Weibo | Alibaba | Class A ordinary shares | ||||
Investment in Weibo | ||||
Number of shares of Weibo's purchased | 4,800,000 | |||
Number of ordinary shares acquired by investor | 21,067,300 | |||
Voting Power (as a percent) | 15.80% | |||
Weibo | Alibaba | Class A ordinary shares | Private placement | ||||
Investment in Weibo | ||||
Number of ordinary shares acquired by investor | 2,923,478 | |||
Weibo | Alibaba | Alibaba | ||||
Investment in Weibo | ||||
Ownership interest on a fully diluted basis (as a percent) | 18.00% | |||
Weibo | Alibaba | Alibaba | Class A ordinary shares | ||||
Investment in Weibo | ||||
Ownership interest on a fully diluted basis (as a percent) | 30.20% | |||
Weibo | Others | Class A ordinary shares | ||||
Investment in Weibo | ||||
Voting Power (as a percent) | 12.90% | |||
Weibo | Others | Others | Class A ordinary shares | ||||
Investment in Weibo | ||||
Ownership interest on a fully diluted basis (as a percent) | 24.50% |
Non-controlling interests (Deta
Non-controlling interests (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Non-controlling interests | ||
Total | $ 1,045,081 | $ 752,887 |
Non-controlling interests | ||
Total | 969,803 | 666,141 |
Others | ||
Non-controlling interests | ||
Total | $ 75,278 | $ 86,746 |
Other Balance Sheet Component_2
Other Balance Sheet Components (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts receivable, net: | ||||
Accounts receivable | $ 555,861 | $ 305,895 | ||
Allowance for doubtful accounts: | ||||
Balance at the beginning of year | (20,214) | (14,068) | $ (14,980) | |
Additional provision charged to expenses | (15,424) | (8,465) | (14,621) | |
Write-off | 7,674 | 2,319 | 15,533 | |
Balance at the end of year | (27,964) | (20,214) | (14,068) | |
Accounts receivable, net | 527,897 | 285,681 | ||
Prepaid expenses and other current assets: | ||||
Prepayments and loan to investees (including prepayment and receivables from related parties of $40,506 and $115,976 as of December 31, 2017 and 2018) | 190,444 | 62,172 | ||
Prepayment and receivables from related parties | 115,976 | 40,506 | ||
Secured loan to a founder of a related party | $ 100,000 | 80,000 | 80,000 | |
Rental and other operation deposits | 9,842 | 30,191 | ||
Amounts deposited by Weibo users | 30,631 | 25,277 | ||
Content fees and revenue share | 14,769 | 12,013 | ||
Advertising and marketing fees | 4,742 | 2,926 | ||
Deductible value added tax | 10,304 | |||
Others | 21,703 | 15,659 | ||
Prepaid expenses and other current assets | 362,435 | 228,238 | ||
Impairment on prepayment of investments | 20,300 | 900 | $ 8,100 | |
Secured loan term to a founder of a related party (in years) | 1 year | |||
Annual interest rate of secured loan to a founder of a related party (as a percent) | 5.00% | |||
Property and equipment, net: | ||||
Property and equipment, gross | 449,862 | 454,960 | ||
Less: Accumulated depreciation | (187,016) | (192,284) | ||
Property and equipment, net | 262,846 | 262,676 | ||
Other assets: | ||||
Investment related deposits | 46,777 | 38,897 | ||
Deferred tax assets | 23,213 | 16,158 | ||
Deposits for land use rights | 6,321 | |||
Others | 4,816 | 2,027 | ||
Total Other assets | 81,127 | 57,082 | ||
Accrued expenses and other current liabilities: | ||||
Accrued sales rebates | 149,371 | 104,117 | ||
Accrued payroll related expenses (including sales commission) | 117,562 | 141,129 | ||
Advertising and marketing expenses | 83,893 | 88,614 | ||
Guarantee liabilities (Note 17) | 10,952 | 10,143 | ||
Deposit for secured loan | 43,614 | |||
Turnover tax | 44,280 | 32,367 | ||
Amount due to Weibo users | 30,631 | 25,277 | ||
Employee reimbursement | 8,934 | 8,055 | ||
Professional fee | 10,014 | 9,253 | ||
Unpaid consideration for acquisitions | 10,055 | 5,704 | ||
Others | 31,501 | 22,120 | ||
Total accrued expenses and other current liabilities | 540,807 | 446,779 | ||
RMB Deposits | Other current liabilities | ||||
Prepaid expenses and other current assets: | ||||
Secured deposits | $ 43,600 | |||
Loans Receivable | ||||
Prepaid expenses and other current assets: | ||||
Loan repaid | 20,000 | |||
Annual interest rate (as a percent) | 7.50% | |||
Office building | ||||
Property and equipment, net: | ||||
Property and equipment, gross | $ 197,337 | 208,731 | ||
Office building related facilities | ||||
Property and equipment, net: | ||||
Property and equipment, gross | 3,308 | 3,499 | ||
Computers and equipment | ||||
Property and equipment, net: | ||||
Property and equipment, gross | 217,335 | 214,644 | ||
Leasehold improvements | ||||
Property and equipment, net: | ||||
Property and equipment, gross | 17,328 | 14,258 | ||
Furniture and fixtures | ||||
Property and equipment, net: | ||||
Property and equipment, gross | 11,558 | 11,355 | ||
Other | ||||
Property and equipment, net: | ||||
Property and equipment, gross | $ 2,996 | $ 2,473 |
Related Party Transactions (Det
Related Party Transactions (Details) | Nov. 06, 2017Vote$ / sharesshares | Nov. 05, 2017 | Nov. 06, 2015USD ($)$ / sharesshares | Feb. 28, 2014USD ($) | Mar. 31, 2014 | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) |
Related Party Transactions | ||||||||
Revenue from related parties | $ 318,255,000 | $ 212,357,000 | $ 149,530,000 | |||||
Amortized deferred revenues | 106,700,000 | |||||||
Accounts receivable from related parties | 189,522,000 | 75,037,000 | ||||||
Deferred revenue from related parties | 12,883,000 | 14,666,000 | ||||||
Account payable to related parties | 50,678,000 | 20,660,000 | ||||||
Accrued and other liabilities to related parties | $ 14,763,000 | 5,681,000 | ||||||
Issuance of ordinary shares to the chief executive officer | $ 7,000 | |||||||
Per share purchase price (in dollars per share) | $ / shares | $ 53.64 | $ 100.31 | ||||||
Stock-based compensation expense | $ 95,069,000 | $ 91,387,000 | $ 73,828,000 | |||||
Number of ordinary shares | shares | 82,410,842 | 81,489,677 | ||||||
Number of preferred shares issued | shares | 7,150 | 7,150 | ||||||
Preferred shares, par value per share (in dollars per share) | $ / shares | $ 1 | $ 1 | ||||||
Percentage of cost and operating expenses that are with related parties (as a percent) | 4.10% | 4.40% | 4.40% | |||||
License revenue | ||||||||
Related Party Transactions | ||||||||
Revenue from related parties | $ 10,435,000 | $ 10,435,000 | $ 10,435,000 | |||||
Agency and advertising service earned | ||||||||
Related Party Transactions | ||||||||
Revenue from related parties | 20,754,000 | 16,091,000 | 9,265,000 | |||||
Promotion and advertising service | ||||||||
Related Party Transactions | ||||||||
Revenue from related parties | 126,882,000 | 91,724,000 | 82,021,000 | |||||
Others | ||||||||
Related Party Transactions | ||||||||
Revenue from related parties | 160,184,000 | 94,107,000 | 47,809,000 | |||||
Leju | ||||||||
Related Party Transactions | ||||||||
Revenue from related parties | 20,800,000 | 16,100,000 | 9,300,000 | |||||
Amount allocated to fair value of License Agreements | $ 187,400,000 | |||||||
License Agreements, period of amortization of deferred revenues | 10 years | |||||||
Extended license agreements, period of amortization of deferred revenues | 10 years | |||||||
Amortized deferred revenues | 10,435,000 | 10,435,000 | 10,435,000 | |||||
Deferred revenue | 54,100,000 | 64,500,000 | ||||||
Non-current portion of deferred revenue | 43,700,000 | 54,100,000 | ||||||
Accounts receivable from related parties | 4,905,000 | 1,513,000 | ||||||
Deferred revenue from related parties | 54,087,000 | 64,521,000 | ||||||
Alibaba | ||||||||
Related Party Transactions | ||||||||
Revenue from related parties | 126,700,000 | 91,600,000 | $ 82,000,000 | |||||
Accounts receivable from related parties | 53,480,000 | 43,676,000 | ||||||
Related parties other than Leju and Alibaba | ||||||||
Related Party Transactions | ||||||||
Accounts receivable from related parties | 131,137,000 | $ 29,848,000 | ||||||
Chief executive officer | ||||||||
Related Party Transactions | ||||||||
Issuance of preferred shares to New Wave (Note 15) (in shares) | shares | 11,000,000 | |||||||
Issuance of ordinary shares to the chief executive officer | $ 456,390,000 | |||||||
Contractual lock-up restriction period | 6 months | |||||||
Per share purchase price (in dollars per share) | $ / shares | $ 41.49 | |||||||
Number of consecutive trading days ended May 29, 2015 | 30 days | |||||||
Stock-based compensation expense | $ 0 | |||||||
New Wave | ||||||||
Related Party Transactions | ||||||||
Number of ordinary shares | shares | 7,944,386 | |||||||
Preferred shares, par value per share (in dollars per share) | $ / shares | $ 1 | |||||||
Equity investee in the short video business | ||||||||
Related Party Transactions | ||||||||
Accounts receivable from related parties | 80,900,000 | |||||||
Equity investee in the short video business | Promotion and advertising service | ||||||||
Related Party Transactions | ||||||||
Accounts receivable from related parties | $ 53,900,000 | |||||||
Class A Preference Shares | New Wave | ||||||||
Related Party Transactions | ||||||||
Number of preferred shares issued | shares | 7,150 | |||||||
Number of votes per share | Vote | 10,000 | |||||||
Percentage of aggregate voting power | 55.50% | 11.10% | ||||||
Economic rights (as a percent) | 0.00% | |||||||
Participant rights (as a percent) | 0.00% |
Income Taxes (Details)
Income Taxes (Details) $ / shares in Units, $ in Thousands | Feb. 22, 2008 | Dec. 31, 2018USD ($)jurisdiction$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 |
Income Taxes | ||||||||||||
Number of tax jurisdictions | jurisdiction | 4 | |||||||||||
Components of income before income taxes | ||||||||||||
Income before income tax expense | $ 555,410 | $ 424,239 | $ 304,527 | |||||||||
Income (loss) from non-China operations | (143,680) | (79,945) | 125,064 | |||||||||
Income from China operations | 699,090 | 504,184 | 179,463 | |||||||||
Income tax expense applicable to China operations | $ 129,084 | $ 74,676 | $ 27,219 | |||||||||
Effective tax rate for China operations (as a percent) | 19.00% | 15.00% | 7.00% | |||||||||
Loss on change in fair value of investor option liability | $ 28,456 | |||||||||||
Impairment charge related to investments | $ 60,988 | $ 122,098 | 36,309 | |||||||||
Deferred tax assets: | ||||||||||||
Allowances for doubtful accounts | 24,267 | 21,454 | ||||||||||
Net operating loss carry-forwards | 31,016 | 14,913 | ||||||||||
Accruals | 21,989 | 17,330 | ||||||||||
Depreciation, and other liabilities | 33,020 | 23,294 | ||||||||||
Total deferred tax assets | 110,292 | 76,991 | ||||||||||
Less: valuation allowance | (87,079) | (60,833) | ||||||||||
Net deferred tax assets | 23,213 | 16,158 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Depreciation | (821) | (650) | ||||||||||
Investment gain | (40,781) | |||||||||||
Acquired intangible assets | (3,213) | (3,836) | ||||||||||
Others | (6,278) | (3,274) | ||||||||||
Total deferred tax liabilities | (51,093) | (7,760) | ||||||||||
Unrecognized tax liability | 600 | 600 | ||||||||||
Composition of income tax expenses for China operations | ||||||||||||
Deferred tax (benefits) provision | 33,560 | (3,214) | (5,470) | |||||||||
Income tax expense | $ 129,084 | $ 74,676 | $ 27,219 | |||||||||
Reconciliation of the differences between statutory tax rate and the effective tax rate for China operations | ||||||||||||
Statutory EIT rate (as a percent) | 25.00% | 25.00% | 25.00% | |||||||||
Effect on tax holiday and preferential tax rate (as a percent) | (11.00%) | (11.00%) | (29.00%) | |||||||||
Permanent differences (as a percent) | 1.00% | (1.00%) | (1.00%) | |||||||||
Change in valuation allowance (as a percent) | 4.00% | 2.00% | 12.00% | |||||||||
Effective tax rate for China operations (as a percent) | 19.00% | 15.00% | 7.00% | |||||||||
Tax holiday on China operations | ||||||||||||
Tax holiday effect | $ 76,246 | $ 56,377 | $ 51,829 | |||||||||
Basic net income per share effect (in dollars per share) | $ / shares | $ 1.08 | $ 0.79 | $ 0.74 | |||||||||
Diluted net income per share effect (in dollars per share) | $ / shares | $ 1.05 | $ 0.76 | $ 0.67 | |||||||||
Historical rate for valuing deferred tax assets (as a percent) | 25.00% | |||||||||||
Operating losses, valuation allowance | $ 29,800 | $ 14,800 | ||||||||||
Key software enterprise | Weibo Technology | ||||||||||||
Deferred tax liabilities: | ||||||||||||
Reduction in preferential tax rate (as a percent) | 10.00% | |||||||||||
Reversal Of Income tax Provision | $ 10,800 | |||||||||||
Non-China operations | ||||||||||||
Components of income before income taxes | ||||||||||||
Aggregated gains on disposal of cost method investments | $ 156,400 | |||||||||||
Loss in fair value change on overseas investments | $ 66,300 | |||||||||||
Non-China operations | Alibaba | ||||||||||||
Components of income before income taxes | ||||||||||||
Aggregated gains on disposal of series of investments | 92,300 | 44,200 | ||||||||||
Non-China operations | Youku Tudou | ||||||||||||
Components of income before income taxes | ||||||||||||
Aggregated gains on disposal of series of investments | 34,500 | |||||||||||
Non-China operations | E-House | ||||||||||||
Components of income before income taxes | ||||||||||||
Loss on change in fair value of investor option liability | 28,500 | |||||||||||
Non-China operations | Leju | ||||||||||||
Components of income before income taxes | ||||||||||||
Impairment charge related to investments | 113,100 | |||||||||||
Cayman Islands | ||||||||||||
Components of income before income taxes | ||||||||||||
Withholding income tax on dividends distributed by an FIE to its immediate holding company outside China (as a percent) | 0.00% | |||||||||||
U.S. | ||||||||||||
Deferred tax assets: | ||||||||||||
Net operating loss carry-forwards | $ 30,484 | 30,557 | ||||||||||
Other tax credits, allowances for doubtful accounts, accruals and other liabilities | 539 | 563 | ||||||||||
Total deferred tax assets | 31,023 | 31,120 | ||||||||||
Less: valuation allowance | (31,023) | (31,120) | ||||||||||
U.S. | Federal | ||||||||||||
Components of income before income taxes | ||||||||||||
Net operating loss carryforwards | 88,800 | |||||||||||
Net operating loss carryforwards related to employee stock options | 40,400 | |||||||||||
U.S. | State | ||||||||||||
Components of income before income taxes | ||||||||||||
Net operating loss carryforwards | 7,900 | |||||||||||
Net operating loss carryforwards related to employee stock options | 4,200 | |||||||||||
Hong Kong | ||||||||||||
Components of income before income taxes | ||||||||||||
Net operating loss carryforwards | 36,500 | |||||||||||
Deferred tax assets: | ||||||||||||
Net operating loss carry-forwards | 6,023 | 5,776 | ||||||||||
Less: valuation allowance | (6,023) | (5,776) | ||||||||||
China | ||||||||||||
Components of income before income taxes | ||||||||||||
Income tax expense applicable to China operations | $ 129,406 | 73,165 | 11,985 | |||||||||
Withholding income tax on dividends distributed by an FIE to its immediate holding company outside China (as a percent) | 10.00% | |||||||||||
Net operating loss carryforwards | $ 149,900 | 70,500 | ||||||||||
Deferred tax assets: | ||||||||||||
Total deferred tax assets | $ 31,000 | 14,900 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Maximum percentage of withholding income tax on dividends distributed by an FIE to its immediate holding company in Hong Kong (as a percent) | 5.00% | |||||||||||
Minimum percentage of ownership interests held by foreign investors (as a percent) | 25.00% | |||||||||||
Percentage of withholding income tax on dividends distributed by PRC subsidiaries to its immediate holding company in Hong Kong (as a percent) | 5.00% | |||||||||||
Maximum examination period | 5 years | |||||||||||
Statute of limitation of transferring pricing related adjustment | 10 years | |||||||||||
Composition of income tax expenses for China operations | ||||||||||||
Current tax provision | $ 95,846 | 76,379 | 17,455 | |||||||||
Deferred tax (benefits) provision | 33,560 | (3,214) | (5,470) | |||||||||
Income tax expense | 129,406 | $ 73,165 | $ 11,985 | |||||||||
Deferred Tax Provision for gains on investments | $ 40,800 | |||||||||||
Reconciliation of the differences between statutory tax rate and the effective tax rate for China operations | ||||||||||||
Statutory EIT rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | |
China | High and new technology enterprises | ||||||||||||
Deferred tax liabilities: | ||||||||||||
Preferential statutory rate (as a percent) | 15.00% | 15.00% | ||||||||||
China | Software enterprise | ||||||||||||
Deferred tax liabilities: | ||||||||||||
Preferential statutory rate (as a percent) | 12.50% | |||||||||||
Period of special tax holidays | 2 years | |||||||||||
Reduction in preferential tax rate (as a percent) | 12.50% | |||||||||||
Period of reduced preferential income tax rate | 3 years | |||||||||||
China | Software enterprise | Weibo Technology | ||||||||||||
Deferred tax liabilities: | ||||||||||||
Preferential statutory rate (as a percent) | 12.50% |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||
Net income attributable to SINA's ordinary shareholders | $ 125,562 | $ 156,569 | $ 225,087 |
Denominator: | |||
Weighted average ordinary shares outstanding (in shares) | 70,296 | 71,284 | 70,301 |
Basic net income per share (in dollars per share) | $ 1.79 | $ 2.20 | $ 3.20 |
Numerator: | |||
Net income attributable to SINA's ordinary shareholders | $ 125,562 | $ 156,569 | $ 225,087 |
Less: Effect on consolidated net income per share of dilutive shares of the Company's equity interests | 3,699 | 3,915 | 2,275 |
Add: Effect on interest expenses and amortized issuance cost of convertible debt | 1,403 | 1,531 | 10,831 |
Net income attributable for calculating diluted net income per share | $ 123,266 | $ 154,185 | $ 233,643 |
Denominator: | |||
Weighted average ordinary shares outstanding (in shares) | 70,296 | 71,284 | 70,301 |
Weighted average ordinary shares equivalents: Effects of dilutive securities | |||
Stock options (in shares) | 87 | 94 | 112 |
Unvested restricted share units (in shares) | 683 | 1,172 | 958 |
Convertible debt (in shares) | 1,309 | 1,381 | 6,140 |
Shares used in computing diluted net income per share attributable to SINA (in shares) | 72,375 | 73,931 | 77,511 |
Diluted net income per share (in dollars per share) | $ 1.70 | $ 2.09 | $ 3.01 |
Numerator: | |||
Less: Effect on consolidated net income per share of dilutive shares of the Company's equity interests | $ 3,300 | $ 3,600 | $ 2,100 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
China | China Contribution Plan | |||
Employee benefit plans | |||
Employer contribution under China Contribution Plan | $ 93.8 | $ 69.9 | $ 59.7 |
U.S. | 401(k) Savings Plan | |||
Employee benefit plans | |||
Maximum percentage of eligible pretax earnings to be deferred by employees of U.S. subsidiary under 401(k) Savings Plan | 100.00% |
Profit Appropriation (Details)
Profit Appropriation (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)fund | |
Profit Appropriation | |
Minimum percentage of after-tax profit transferred by Chinese subsidiaries to general reserve fund (as a percent) | 10.00% |
Maximum percentage criteria for appropriation of after-tax profit of Chinese subsidiaries to general reserve fund (as a percent) | 50.00% |
Number of reserve funds except general reserve fund, appropriation at the entity's discretion | fund | 2 |
Minimum percentage of after-tax profit transferred by VIEs to statutory reserve fund (as a percent) | 10.00% |
Maximum percentage criteria for in appropriation of after-tax profit by VIEs to certain statutory reserve funds (as a percent) | 50.00% |
Restricted net assets | $ | $ 514.6 |
Percent of restricted net assets of total consolidated net assets (as a percent) | 18.90% |
Shareholders' Equity - Stockhol
Shareholders' Equity - Stockholder Rights Plan (Details) | 12 Months Ended |
Dec. 31, 2018seriesshares | |
Shareholders' Equity | |
Unapproved share purchase percentage needed to initiate Shareholders' Rights Plan (as a percent) | 10.00% |
Maximum preference shares to be issued by board of directors without approval of shareholders (in shares) | shares | 3,750,000 |
Minimum number of series in which preference shares is to be issued | series | 1 |
Shareholders' Equity - Preferre
Shareholders' Equity - Preferred Shares (Details) | Nov. 06, 2017Vote$ / sharesshares | Nov. 05, 2017 | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Shareholders' Equity | ||||
Number of ordinary shares | 82,410,842 | 81,489,677 | ||
Number of preferred shares issued | 7,150 | 7,150 | ||
Preferred shares, par value per share (in dollars per share) | $ / shares | $ 1 | $ 1 | ||
New Wave | ||||
Shareholders' Equity | ||||
Number of ordinary shares | 7,944,386 | |||
New Wave | Class A Preference Shares | ||||
Shareholders' Equity | ||||
Number of preferred shares issued | 7,150 | |||
Number of votes per share | Vote | 10,000 | |||
Preferred shares, par value per share (in dollars per share) | $ / shares | $ 1 | |||
New Wave | Class A Preference Shares | ||||
Shareholders' Equity | ||||
Percentage of aggregate voting power | 55.50% | 11.10% |
Shareholders' Equity - In kind
Shareholders' Equity - In kind Distribution (Details) $ in Thousands | Jul. 10, 2017shares | Oct. 14, 2016shares | Dec. 31, 2018shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | May 26, 2017 | Aug. 31, 2016 |
Stock-based compensation | |||||||
Number of ordinary shares of SINA outstanding | shares | 71,421,480 | 70,881,168 | 69,368,140 | 71,409,729 | |||
Stock-based compensation | |||||||
Economic interest (as a percent) | 45.30% | ||||||
Voting interest (as percent) | 71.30% | ||||||
Retained Earnings | |||||||
Stock-based compensation | |||||||
Increase (decrease) resulting from In-Kind distribution of consolidated entity's shares | $ | $ (554,016) | $ (338,598) | |||||
Non-controlling Interests | |||||||
Stock-based compensation | |||||||
Increase (decrease) resulting from In-Kind distribution of consolidated entity's shares | $ | $ 31,745 | $ 21,948 | |||||
Class A ordinary shares | Weibo | |||||||
Stock-based compensation | |||||||
Ratio of Weibo share to each outstanding parent company's ordinary shares | 0.1 | 0.1 | |||||
Shares issued under In-Kind distribution (in shares) | shares | 7,142,148 | 7,088,116 |
Shareholders' Equity - 2015 Sha
Shareholders' Equity - 2015 Share Incentive Plan (Details) - shares | 1 Months Ended | 12 Months Ended | ||||
Jul. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 02, 2010 | |
Stock-based compensation | ||||||
Awards that could be granted | 567,000 | 2,908,000 | 3,346,000 | 5,728,000 | ||
Stock Options | ||||||
Stock-based compensation | ||||||
Outstanding stock options at the end of the period (in shares) | 155,000 | 190,000 | 234,000 | 923,000 | ||
Amended and Restated 2007 Plan | ||||||
Stock-based compensation | ||||||
Ordinary shares available for issuance (in shares) | 10,000,000 | |||||
Awards that could be granted | 0 | |||||
Amended and Restated 2007 Plan | Stock Options | ||||||
Stock-based compensation | ||||||
Outstanding stock options at the end of the period (in shares) | 155,000 | |||||
Amended and Restated 2007 Plan | Restricted share units | ||||||
Stock-based compensation | ||||||
Outstanding other than stock options at the end of the period (in shares) | 92,000 | |||||
2015 Share Incentive Plan | ||||||
Stock-based compensation | ||||||
Ordinary shares available for issuance (in shares) | 6,000,000 | |||||
Maximum number of ordinary shares available for issuance is reduced for every share issued pursuant to share option or share appreciation right (in shares) | 1 | |||||
Maximum number of ordinary shares available for issuance is reduced for every share issued as restricted shares or pursuant to restricted share units (in shares) | 1.75 | |||||
Maximum shares available for grant as a percentage of total outstanding shares (as a percent) | 3.00% | |||||
Minimum exercise price of shares granted as a percentage of fair market value on the date of grants (as a percent) | 110.00% | |||||
2015 Share Incentive Plan | Stock Options | ||||||
Stock-based compensation | ||||||
Outstanding stock options at the end of the period (in shares) | 0 | |||||
2015 Share Incentive Plan | Restricted share units | ||||||
Stock-based compensation | ||||||
Outstanding other than stock options at the end of the period (in shares) | 2,065,000 |
Shareholders' Equity - Expense
Shareholders' Equity - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based Compensation | |||
Stock-based compensation expense | $ 95,069 | $ 91,387 | $ 73,828 |
Costs of revenues | |||
Stock-based Compensation | |||
Stock-based compensation expense | 10,128 | 9,257 | 7,742 |
Sales and marketing | |||
Stock-based Compensation | |||
Stock-based compensation expense | 21,942 | 20,790 | 15,496 |
Product development | |||
Stock-based Compensation | |||
Stock-based compensation expense | 30,830 | 29,163 | 20,793 |
General and administrative | |||
Stock-based Compensation | |||
Stock-based compensation expense | $ 32,169 | $ 32,177 | $ 29,797 |
Shareholders' Equity - Shares A
Shareholders' Equity - Shares Available (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of shares available for issuance | |||
Outstanding number of shares available for issuance at the beginning of the year | 2,908,000 | 3,346,000 | 5,728,000 |
Granted (in shares) | (2,456,000) | (673,000) | (2,456,000) |
Cancelled/forfeited (in shares) | 128,000 | 320,000 | 353,000 |
Expired (in shares) | (13,000) | (85,000) | (279,000) |
Outstanding number of shares available for issuance at the end of the year | 567,000 | 2,908,000 | 3,346,000 |
Restricted share units | |||
Number of shares available for issuance | |||
Restricted shares units granted (in shares) | 1,404,000 | 385,000 | 1,403,000 |
Shareholders' Equity - Stock Op
Shareholders' Equity - Stock Options Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Aggregate Intrinsic Value | ||||
Ending stock price (in dollars per share) | $ 53.64 | $ 100.31 | ||
Stock Options | ||||
Stock options activity | ||||
Outstanding at the beginning of the year (in shares) | 190 | 234 | 923 | |
Exercised (in shares) | (34) | (26) | (674) | |
Cancelled/expired/forfeited (in shares) | (1) | (18) | (15) | |
Outstanding at the end of the year (in shares) | 155 | 190 | 234 | 923 |
Vested and expected to vest at the end of the year (in shares) | 155 | 190 | ||
Exercisable at the end of the year (in shares) | 153 | 117 | ||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the year (in dollars per share) | $ 38.86 | $ 38.41 | $ 44.83 | |
Exercised (in dollars per share) | 43.85 | 35.69 | 47.26 | |
Cancelled/expired/forfeited (in dollars per share) | 35.69 | 37.61 | 35.69 | |
Outstanding at the end of the year (in dollars per share) | 37.75 | 38.86 | $ 38.41 | $ 44.83 |
Vested and expected to vest at the end of the year (in dollars per share) | 37.75 | 38.86 | ||
Exercisable at the end of the year (in dollars per share) | $ 37.77 | $ 39.74 | ||
Weighted Average Remaining Contractual Life (In years) | ||||
Outstanding at end of the year | 1 year 11 months 5 days | 2 years 6 months 22 days | 3 years 7 months 17 days | 3 years 4 months 13 days |
Vested and expected to vest at the end of the year | 1 year 11 months 5 days | 2 years 6 months 22 days | ||
Exercisable at the end of the year | 1 year 11 months 5 days | 2 years 3 months 22 days | ||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the year | $ 2,467 | $ 11,693 | $ 5,226 | $ 5,208 |
Vested and expected to vest at the end of the year | 2,467 | 11,693 | ||
Exercisable at the end of the year | 2,435 | 7,063 | ||
Total intrinsic value of options exercised | 1,500 | 1,600 | 22,000 | |
Cash received from the exercises of stock option | 1,500 | 900 | $ 31,900 | |
Unrecognized compensation cost | $ 20 | $ 1,200 | ||
Weighted-average period of unrecognized compensation cost | 15 days |
Shareholders' Equity - Stock _2
Shareholders' Equity - Stock Options Price Ranges (Details) - Stock Options - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Range of Exercise Prices | ||
Options Outstanding (in shares) | 155 | 190 |
Weighted Average Exercise Price (in dollars per share) | $ 37.75 | $ 38.86 |
Options Exercisable (in shares) | 153 | 117 |
Weighted Average Exercise Price (in dollars per share) | $ 37.77 | $ 39.74 |
Weighted Average Remaining Contractual Life (In years) | 1 year 11 months 5 days | 2 years 6 months 22 days |
Range of Exercise Prices $35.69 - $35.69 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 35.69 | $ 35.69 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 35.69 | $ 35.69 |
Options Outstanding (in shares) | 31 | 36 |
Weighted Average Exercise Price (in dollars per share) | $ 35.69 | $ 35.69 |
Options Exercisable (in shares) | 29 | 13 |
Weighted Average Exercise Price (in dollars per share) | $ 35.69 | $ 35.69 |
Weighted Average Remaining Contractual Life (In years) | 2 years 15 days | 3 years 15 days |
Range of Exercise Prices $38.27 - $38.27 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 38.27 | $ 38.27 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 38.27 | $ 38.27 |
Options Outstanding (in shares) | 124 | 124 |
Weighted Average Exercise Price (in dollars per share) | $ 38.27 | $ 38.27 |
Options Exercisable (in shares) | 124 | 74 |
Weighted Average Exercise Price (in dollars per share) | $ 38.27 | $ 38.27 |
Weighted Average Remaining Contractual Life (In years) | 1 year 10 months 24 days | 2 years 10 months 24 days |
Range of Exercise Prices $45.13 - $45.13 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 45.13 | |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 45.13 | |
Options Outstanding (in shares) | 30 | |
Weighted Average Exercise Price (in dollars per share) | $ 45.13 | |
Options Exercisable (in shares) | 30 | |
Weighted Average Exercise Price (in dollars per share) | $ 45.13 | |
Weighted Average Remaining Contractual Life (In years) | 6 months 18 days |
Shareholders' Equity - RSUs (De
Shareholders' Equity - RSUs (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Service-based restricted share units | |||
Shares Granted | |||
Outstanding at the beginning of the year (in shares) | 1,700,000 | 2,405,000 | 1,967,000 |
Awarded (in shares) | 1,383,000 | 365,000 | 1,384,000 |
Vested (in shares) | (874,000) | (905,000) | (754,000) |
Cancelled/forfeited (in shares) | (64,000) | (165,000) | (192,000) |
Outstanding at the end of the year (in shares) | 2,145,000 | 1,700,000 | 2,405,000 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 51.92 | $ 45.47 | $ 40.85 |
Awarded (in dollars per share) | 77.67 | 75.05 | 49.89 |
Vested (in dollars per share) | 48.44 | 45.45 | 42.91 |
Cancelled/forfeited (in dollars per share) | 57.78 | 44.57 | 40.10 |
Outstanding at the end of the year (in dollars per share) | $ 69.76 | $ 51.92 | $ 45.47 |
Unrecognized compensation cost | $ 118.2 | $ 77.5 | |
Expected weighted-average recognition period for unrecognized compensation cost | 3 years | 2 years 3 months 18 days | |
Total fair value vested | $ 69.7 | $ 92.2 | $ 43.6 |
Service-based restricted share units | Non-employee directors | |||
Shares Granted | |||
Awarded (in shares) | 25,000 | 20,000 | 24,000 |
Performance-based RSU | |||
Shares Granted | |||
Outstanding at the beginning of the year (in shares) | 14,000 | 18,000 | |
Awarded (in shares) | 21,000 | 19,000 | 19,000 |
Vested (in shares) | (12,000) | (15,000) | |
Cancelled/forfeited (in shares) | (11,000) | (8,000) | (1,000) |
Outstanding at the end of the year (in shares) | 12,000 | 14,000 | 18,000 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 65.18 | $ 47.47 | |
Awarded (in dollars per share) | 102.88 | 65.18 | $ 47.47 |
Vested (in dollars per share) | 65.18 | 47.47 | |
Cancelled/forfeited (in dollars per share) | 98.10 | 58.51 | 47.47 |
Outstanding at the end of the year (in dollars per share) | $ 101.86 | $ 65.18 | $ 47.47 |
Shareholders' Equity - Weibo Sh
Shareholders' Equity - Weibo Share Based Plan (Details) - USD ($) $ in Thousands | Jan. 01, 2015 | Mar. 28, 2014 | Aug. 31, 2010 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Stock-based compensation | ||||||
Stock-based compensation expense | $ 95,069 | $ 91,387 | $ 73,828 | |||
Stock-based compensation | ||||||
Stock-based compensation expense | $ 41,011 | $ 48,037 | $ 36,902 | |||
Amortization period | 4 years | |||||
Weibo | 2010 Weibo Incentive Plan | ||||||
Stock-based compensation | ||||||
Ordinary shares reserved for issuance (in shares) | 35,000,000 | |||||
Maximum number of ordinary shares available for issuance is reduced for every share issued pursuant to share option or share appreciation right (in shares) | 1 | |||||
Maximum number of ordinary shares available for issuance is reduced for every share issued as restricted shares or pursuant to restricted share units (in shares) | 1.75 | |||||
Shares granted (in shares) | 0 | 0 | 0 | |||
Term of share incentive plan | 10 years | |||||
Weibo | 2014 Plan | ||||||
Stock-based compensation | ||||||
Ordinary shares reserved for issuance (in shares) | 4,647,872 | |||||
Maximum number of ordinary shares available for issuance is reduced for every share issued as restricted shares or pursuant to restricted share units (in shares) | 1 | 1 | ||||
Term of share incentive plan | 10 years | |||||
Number of shares from new added shares (in shares) | 1,000,000 | |||||
One-time percentage increase on January 1, 2015 for maximum aggregate number of shares which may be issued (as a percent) | 10.00% | |||||
Costs of revenues | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | $ 10,128 | $ 9,257 | $ 7,742 | |||
Costs of revenues | Weibo | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | 3,522 | 3,716 | 2,616 | |||
Sales and marketing | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | 21,942 | 20,790 | 15,496 | |||
Sales and marketing | Weibo | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | 6,837 | 8,264 | 5,357 | |||
Product development | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | 30,830 | 29,163 | 20,793 | |||
Product development | Weibo | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | 21,187 | 21,879 | 15,076 | |||
General and administrative | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | 32,169 | 32,177 | 29,797 | |||
General and administrative | Weibo | ||||||
Stock-based compensation | ||||||
Stock-based compensation expense | $ 9,465 | $ 14,178 | $ 13,853 |
Shareholders' Equity - Weibo Av
Shareholders' Equity - Weibo Available Shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of shares available for issuance | |||
Outstanding number of shares available for issuance at the beginning of the year | 2,908,000 | 3,346,000 | 5,728,000 |
Granted (in shares) | (2,456,000) | (673,000) | (2,456,000) |
Outstanding number of shares available for issuance at the end of the year | 567,000 | 2,908,000 | 3,346,000 |
Number of shares available for issuance | |||
Outstanding number of shares available for issuance at the beginning of the year | 18,540,000 | 18,878,000 | 20,217,000 |
Granted (in shares) | (1,597,000) | (736,000) | (1,917,000) |
Cancelled/expired/forfeited (in shares) | 350,000 | 398,000 | 578,000 |
Outstanding number of shares available for issuance at the end of the year | 17,293,000 | 18,540,000 | 18,878,000 |
Shareholders' Equity - Weibo Op
Shareholders' Equity - Weibo Option Activities (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Aggregate Intrinsic Value | ||||
Fair value per ordinary share of Weibo (in dollars per share) | $ 53.64 | $ 100.31 | ||
Stock Options | ||||
Stock options activity | ||||
Outstanding at the beginning of the year (in shares) | 190,000 | 234,000 | 923,000 | |
Exercised (in shares) | (34,000) | (26,000) | (674,000) | |
Cancelled/expired/forfeited (in shares) | (1,000) | (18,000) | (15,000) | |
Outstanding at the end of the year (in shares) | 155,000 | 190,000 | 234,000 | 923,000 |
Vested and expected to vest at the end of the year (in shares) | 155,000 | 190,000 | ||
Exercisable at the end of the year (in shares) | 153,000 | 117,000 | ||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the year (in dollars per share) | $ 38.86 | $ 38.41 | $ 44.83 | |
Exercised (in dollars per share) | 43.85 | 35.69 | 47.26 | |
Cancelled/expired/forfeited (in dollars per share) | 35.69 | 37.61 | 35.69 | |
Outstanding at the end of the year (in dollars per share) | 37.75 | 38.86 | $ 38.41 | $ 44.83 |
Vested and expected to vest at the end of the year (in dollars per share) | 37.75 | 38.86 | ||
Exercisable at the end of the year (in dollars per share) | $ 37.77 | $ 39.74 | ||
Weighted Average Remaining Contractual Life (In years) | ||||
Outstanding at end of the year | 1 year 11 months 5 days | 2 years 6 months 22 days | 3 years 7 months 17 days | 3 years 4 months 13 days |
Vested and expected to vest at the end of the year | 1 year 11 months 5 days | 2 years 6 months 22 days | ||
Exercisable at the end of the year | 1 year 11 months 5 days | 2 years 3 months 22 days | ||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the year | $ 2,467 | $ 11,693 | $ 5,226 | $ 5,208 |
Vested and expected to vest at the end of the year | 2,467 | 11,693 | ||
Exercisable at the end of the year | 2,435 | 7,063 | ||
Total intrinsic value of options exercised | 1,500 | 1,600 | 22,000 | |
Cash received from the exercises of stock option | $ 1,500 | $ 900 | $ 31,900 | |
Aggregate Intrinsic Value | ||||
Fair value per ordinary share of Weibo (in dollars per share) | $ 58.43 | $ 103.46 | ||
Weibo | Stock Options | ||||
Stock options activity | ||||
Outstanding at the beginning of the year (in shares) | 437,000 | 2,587,000 | 6,303,000 | |
Exercised (in shares) | (248,000) | (2,122,000) | (3,625,000) | |
Cancelled/expired/forfeited (in shares) | (5,000) | (28,000) | (91,000) | |
Outstanding at the end of the year (in shares) | 184,000 | 437,000 | 2,587,000 | 6,303,000 |
Vested and expected to vest at the end of the year (in shares) | 184,000 | 437,000 | ||
Exercisable at the end of the year (in shares) | 184,000 | 437,000 | ||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the year (in dollars per share) | $ 3.24 | $ 1.41 | $ 1.26 | |
Exercised (in dollars per share) | 3.14 | 1.04 | 1.10 | |
Cancelled/expired/forfeited (in dollars per share) | 1.16 | 0.68 | 3.37 | |
Outstanding at the end of the year (in dollars per share) | 3.45 | 3.24 | $ 1.41 | $ 1.26 |
Vested and expected to vest at the end of the year (in dollars per share) | 3.45 | 3.24 | ||
Exercisable at the end of the year (in dollars per share) | $ 3.45 | $ 3.24 | ||
Weighted Average Remaining Contractual Life (In years) | ||||
Outstanding at end of the year | 1 year 6 months | 2 years | 1 year 7 months 6 days | 2 years 4 months 24 days |
Vested and expected to vest at the end of the year | 1 year 6 months | 2 years | ||
Exercisable at the end of the year | 1 year 6 months | 2 years | ||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the year | $ 10,089 | $ 43,800 | $ 101,403 | $ 114,975 |
Vested and expected to vest at the end of the year | 10,089 | 43,800 | ||
Exercisable at the end of the year | $ 10,089 | $ 43,800 | ||
Granted (in shares) | 0 | 0 | 0 | |
Total intrinsic value of options exercised | $ 25,600 | $ 135,200 | $ 129,300 | |
Cash received from the exercises of stock option | $ 800 | $ 2,300 | $ 4,200 |
Shareholders' Equity - Weibo St
Shareholders' Equity - Weibo Stock Option Price Range (Details) - Stock Options - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Range of Exercise Prices | ||
Options Outstanding (in shares) | 155 | 190 |
Weighted Average Exercise Price (in dollars per share) | $ 37.75 | $ 38.86 |
Options Exercisable (in shares) | 153 | 117 |
Weighted Average Exercise Price (in dollars per share) | $ 37.77 | $ 39.74 |
Weighted Average Remaining Contractual Life (In years) | 1 year 11 months 5 days | 2 years 6 months 22 days |
Range of Exercise Prices | ||
Options Outstanding (in shares) | 184 | 437 |
Weighted Average Exercise Price (in dollars per share) | $ 3.45 | $ 3.24 |
Options Exercisable (in shares) | 184 | 437 |
Weighted Average Exercise Price (in dollars per share) | $ 3.45 | $ 3.24 |
Weighted Average Remaining Contractual Life (In years) | 1 year 6 months | 2 years |
Weibo | Range of Exercise Prices $0.96 - $1.80 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 0.96 | |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 1.80 | |
Options Outstanding (in shares) | 31 | |
Weighted Average Exercise Price (in dollars per share) | $ 0.97 | |
Options Exercisable (in shares) | 31 | |
Weighted Average Exercise Price (in dollars per share) | $ 0.97 | |
Weighted Average Remaining Contractual Life (In years) | 2 months 12 days | |
Weibo | Range of Exercise Prices $3.25 - $3.36 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 3.25 | $ 3.25 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 3.36 | $ 3.36 |
Options Outstanding (in shares) | 32 | 179 |
Weighted Average Exercise Price (in dollars per share) | $ 3.30 | $ 3.33 |
Options Exercisable (in shares) | 32 | 179 |
Weighted Average Exercise Price (in dollars per share) | $ 3.30 | $ 3.33 |
Weighted Average Remaining Contractual Life (In years) | 9 months 18 days | 1 year 4 months 24 days |
Weibo | Range of Exercise Prices $3.43 - $3.50 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 3.43 | $ 3.43 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 3.50 | $ 3.50 |
Options Outstanding (in shares) | 152 | 227 |
Weighted Average Exercise Price (in dollars per share) | $ 3.48 | $ 3.48 |
Options Exercisable (in shares) | 152 | 227 |
Weighted Average Exercise Price (in dollars per share) | $ 3.48 | $ 3.48 |
Weighted Average Remaining Contractual Life (In years) | 1 year 8 months 12 days | 2 years 7 months 6 days |
Shareholders' Equity - Weibo RS
Shareholders' Equity - Weibo RSUs (Details) - Service-based restricted share units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares Granted | |||
Outstanding at the beginning of the year (in shares) | 1,700 | 2,405 | 1,967 |
Awarded (in shares) | 1,383 | 365 | 1,384 |
Vested (in shares) | (874) | (905) | (754) |
Cancelled/forfeited (in shares) | (64) | (165) | (192) |
Outstanding at the end of the year (in shares) | 2,145 | 1,700 | 2,405 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 51.92 | $ 45.47 | $ 40.85 |
Awarded (in dollars per share) | 77.67 | 75.05 | 49.89 |
Vested (in dollars per share) | 48.44 | 45.45 | 42.91 |
Cancelled/forfeited (in dollars per share) | 57.78 | 44.57 | 40.10 |
Outstanding at the end of the year (in dollars per share) | $ 69.76 | $ 51.92 | $ 45.47 |
Unrecognized compensation cost | $ 118.2 | $ 77.5 | |
Expected weighted-average recognition period for unrecognized compensation cost | 3 years | 2 years 3 months 18 days | |
Total fair value vested | $ 69.7 | $ 92.2 | $ 43.6 |
Shares Granted | |||
Outstanding at the beginning of the year (in shares) | 3,267 | 5,458 | 6,501 |
Awarded (in shares) | 1,406 | 581 | 1,806 |
Vested (in shares) | (1,757) | (2,406) | (2,274) |
Cancelled/forfeited (in shares) | (160) | (366) | (575) |
Outstanding at the end of the year (in shares) | 2,756 | 3,267 | 5,458 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 25.45 | $ 17.23 | $ 13.98 |
Awarded (in dollars per share) | 68.18 | 62.87 | 24.94 |
Vested (in dollars per share) | 21.59 | 17.01 | 14.73 |
Cancelled/forfeited (in dollars per share) | 44 | 17.72 | 14.58 |
Outstanding at the end of the year (in dollars per share) | $ 48.62 | $ 25.45 | $ 17.23 |
Unrecognized compensation cost | $ 112.5 | ||
Expected weighted-average recognition period for unrecognized compensation cost | 3 years 6 months | ||
Total fair value vested | $ 37.9 | $ 40.9 | $ 33.5 |
Shareholders' Equity - Weibo Pe
Shareholders' Equity - Weibo Performance Based RSU (Details) - Performance-based RSU - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares Granted | |||
Outstanding at the beginning of the year (in shares) | 14 | 18 | |
Awarded (in shares) | 21 | 19 | 19 |
Vested (in shares) | (12) | (15) | |
Cancelled/forfeited (in shares) | (11) | (8) | (1) |
Outstanding at the end of the year (in shares) | 12 | 14 | 18 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 65.18 | $ 47.47 | |
Awarded (in dollars per share) | 102.88 | 65.18 | $ 47.47 |
Vested (in dollars per share) | 65.18 | 47.47 | |
Cancelled/forfeited (in dollars per share) | 98.10 | 58.51 | 47.47 |
Outstanding at the end of the year (in dollars per share) | $ 101.86 | $ 65.18 | $ 47.47 |
Shares Granted | |||
Outstanding at the beginning of the year (in shares) | 129 | 108 | |
Awarded (in shares) | 191 | 155 | 111 |
Vested (in shares) | (126) | (102) | |
Cancelled/forfeited (in shares) | (190) | (32) | (3) |
Outstanding at the end of the year (in shares) | 4 | 129 | 108 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 50.32 | $ 27 | |
Awarded (in dollars per share) | 86.63 | 50.45 | $ 27 |
Vested (in dollars per share) | 50.32 | 27 | |
Cancelled/forfeited (in dollars per share) | 86.90 | 46.42 | 27 |
Outstanding at the end of the year (in dollars per share) | $ 87.14 | $ 50.32 | $ 27 |
Unrecognized compensation cost | $ 20 | $ 700 |
Segment Information - Summary (
Segment Information - Summary (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Summary information by segment | |||
Number of principal business segments | segment | 3 | ||
Net revenues | $ 2,108,327 | $ 1,583,884 | $ 1,030,936 |
Costs of revenues | $ 452,040 | $ 414,137 | $ 354,696 |
Gross margin (as a percent) | 79.00% | 74.00% | 66.00% |
Operating expenses: | |||
Sales and marketing | $ 699,962 | $ 408,856 | $ 247,068 |
Product development | 345,942 | 267,392 | 216,228 |
General and administrative | 120,184 | 104,923 | 99,474 |
Goodwill and acquired intangibles impairment | 23,245 | 40,194 | |
Total operating expenses | 1,189,333 | 781,171 | 602,964 |
Income (loss) from operations | 466,954 | 388,576 | 73,276 |
Interest and other income, net | 69,355 | 42,696 | 26,213 |
Change in fair value of option liability | (28,456) | ||
Income (loss) from equity method investments, net | 1,120 | (16,070) | (11,766) |
Realized gain (loss) on long-term investments | 2,729 | 132,007 | 289,693 |
Fair value changes through earnings on investments, net | 96,533 | ||
Investment related impairment | (81,281) | (122,970) | (44,433) |
Income before income tax expense | 555,410 | 424,239 | 304,527 |
Income tax expense | (129,084) | (74,676) | (27,219) |
Net income | 426,326 | 349,563 | 277,308 |
Advertising | |||
Summary information by segment | |||
Net revenues | 1,789,285 | 1,311,866 | 871,187 |
Costs of revenues | 341,153 | 325,494 | 288,044 |
Non-advertising | |||
Summary information by segment | |||
Net revenues | 319,042 | 272,018 | 159,749 |
Costs of revenues | 110,887 | 88,643 | 66,652 |
Operating segments | Non-advertising | |||
Summary information by segment | |||
Net revenues | 111,412 | 122,535 | 74,931 |
Operating segments | Portal advertising & Others | |||
Summary information by segment | |||
Net revenues | 401,627 | 443,008 | 379,021 |
Costs of revenues | $ 186,100 | $ 187,011 | $ 183,751 |
Gross margin (as a percent) | 54.00% | 58.00% | 52.00% |
Operating expenses: | |||
Sales and marketing | $ 172,648 | $ 138,368 | $ 102,384 |
Product development | 96,069 | 73,999 | 62,140 |
General and administrative | 76,429 | 62,608 | 58,256 |
Goodwill and acquired intangibles impairment | 12,691 | 40,194 | |
Total operating expenses | 357,837 | 274,975 | 262,974 |
Income (loss) from operations | (142,310) | (18,978) | (67,704) |
Interest and other income, net | 25,547 | 29,436 | 17,456 |
Change in fair value of option liability | (28,456) | ||
Income (loss) from equity method investments, net | 1,063 | (17,100) | (11,636) |
Realized gain (loss) on long-term investments | 3,016 | 131,993 | 289,159 |
Fair value changes through earnings on investments, net | 56,459 | ||
Investment related impairment | (57,207) | (118,223) | (4,272) |
Income before income tax expense | (113,432) | 7,128 | 194,547 |
Income tax expense | (32,862) | (7,930) | (22,903) |
Net income | (146,294) | (802) | 171,644 |
Operating segments | Portal advertising & Others | Advertising | |||
Summary information by segment | |||
Net revenues | 290,215 | 320,473 | 304,090 |
Operating segments | Portal advertising & Others | Non-advertising | |||
Summary information by segment | |||
Net revenues | 111,412 | 122,535 | 74,931 |
Operating segments | Portal advertising | |||
Summary information by segment | |||
Net revenues | 290,215 | 320,473 | 304,090 |
Costs of revenues | $ 117,600 | $ 121,278 | $ 136,196 |
Gross margin (as a percent) | 59.00% | 62.00% | 55.00% |
Operating segments | Portal advertising | Advertising | |||
Summary information by segment | |||
Net revenues | $ 290,215 | $ 320,473 | $ 304,090 |
Operating segments | Others | |||
Summary information by segment | |||
Net revenues | 111,412 | 122,535 | 74,931 |
Costs of revenues | $ 68,500 | $ 65,733 | $ 47,555 |
Gross margin (as a percent) | 39.00% | 46.00% | 37.00% |
Operating segments | Others | Non-advertising | |||
Summary information by segment | |||
Net revenues | $ 111,412 | $ 122,535 | $ 74,931 |
Operating segments | Weibo | |||
Summary information by segment | |||
Net revenues | 1,718,518 | 1,150,054 | 655,800 |
Costs of revenues | $ 277,648 | $ 231,255 | $ 171,231 |
Gross margin (as a percent) | 84.00% | 80.00% | 74.00% |
Operating expenses: | |||
Sales and marketing | $ 527,424 | $ 275,537 | $ 148,283 |
Product development | 249,873 | 193,393 | 154,088 |
General and administrative | 43,755 | 42,315 | 41,218 |
Goodwill and acquired intangibles impairment | 10,554 | ||
Total operating expenses | 831,606 | 511,245 | 343,589 |
Income (loss) from operations | 609,264 | 407,554 | 140,980 |
Interest and other income, net | 43,808 | 13,260 | 8,757 |
Income (loss) from equity method investments, net | 57 | 1,030 | (130) |
Realized gain (loss) on long-term investments | (287) | 14 | 534 |
Fair value changes through earnings on investments, net | 40,074 | ||
Investment related impairment | (24,074) | (4,747) | (40,161) |
Income before income tax expense | 668,842 | 417,111 | 109,980 |
Income tax expense | (96,222) | (66,746) | (4,316) |
Net income | 572,620 | 350,365 | 105,664 |
Operating segments | Weibo | Advertising | |||
Summary information by segment | |||
Net revenues | 1,499,180 | 996,745 | 570,982 |
Operating segments | Weibo | Non-advertising | |||
Summary information by segment | |||
Net revenues | 219,338 | 153,309 | 84,818 |
Eliminations | |||
Summary information by segment | |||
Net revenues | (11,818) | (9,178) | (3,885) |
Costs of revenues | (11,708) | (4,129) | (286) |
Operating expenses: | |||
Sales and marketing | (110) | (5,049) | (3,599) |
Total operating expenses | (110) | (5,049) | (3,599) |
Eliminations | Advertising | |||
Summary information by segment | |||
Net revenues | (110) | (5,352) | $ (3,885) |
Eliminations | Non-advertising | |||
Summary information by segment | |||
Net revenues | $ (11,708) | $ (3,826) |
Segment Information - By Geogra
Segment Information - By Geographic Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Company's geographic operations | |||
Net revenues | $ 2,108,327 | $ 1,583,884 | $ 1,030,936 |
Long-lived assets | 488,181 | 285,487 | 243,522 |
China | |||
Company's geographic operations | |||
Net revenues | 2,096,179 | 1,571,035 | 1,016,210 |
Long-lived assets | 487,844 | 285,208 | 243,288 |
International | |||
Company's geographic operations | |||
Net revenues | 12,148 | 12,849 | 14,726 |
Long-lived assets | $ 337 | $ 279 | $ 234 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value Measurements By Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Money market funds | $ 86,823 | $ 198,659 |
Equity securities with readily determinable fair value | 165,936 | 107,372 |
Financial instruments measured on a recurring basis | ||
Assets | ||
Money market funds | 86,823 | 198,659 |
Available for sale securities | 107,372 | |
Equity securities with readily determinable fair value | 93,262 | |
Total | 1,054,986 | 1,712,988 |
Liabilities | ||
Guarantee liabilities | 10,952 | 10,143 |
Financial instruments measured on a recurring basis | Bank time deposits | ||
Assets | ||
Bank time deposits | 874,901 | 1,406,957 |
Financial instruments measured on a recurring basis | Quoted Prices in Active Market for Identical Assets (Level 1) | ||
Assets | ||
Money market funds | 86,823 | 198,659 |
Available for sale securities | 107,372 | |
Equity securities with readily determinable fair value | 93,262 | |
Total | 180,085 | 306,031 |
Financial instruments measured on a recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total | 874,901 | 1,406,957 |
Financial instruments measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Bank time deposits | ||
Assets | ||
Bank time deposits | 874,901 | 1,406,957 |
Financial instruments measured on a recurring basis | Significant Unobservable Inputs (Level 3) | ||
Liabilities | ||
Guarantee liabilities | $ 10,952 | $ 10,143 |
Financial Instruments - Fair _2
Financial Instruments - Fair Value Measurements on a Recurring and Non-recurring Basis (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Key inputs used in investor option liability valuation | |||
Goodwill impairment | $ 10,554,000 | $ 36,726,000 | |
Guarantee liabilities | |||
Balance at the beginning of year/period | 10,143,000 | ||
Addition in the opening balance at the acquisition date (Note 5) | $ 2,227,000 | ||
Provision at the inception of new loans | 39,291,000 | 16,013,000 | |
Payment for the guarantee | (37,082,000) | (13,166,000) | |
Subsequent adjustments to the provisions | (792,000) | 4,812,000 | |
Foreign exchange impacts | (608,000) | 257,000 | |
Balance at the end of the year | $ 10,952,000 | 10,143,000 | |
Minimum | |||
Guarantee liabilities | |||
Expected net accumulative expected loss rates (as a percent) | 2.00% | ||
Maximum | |||
Guarantee liabilities | |||
Expected net accumulative expected loss rates (as a percent) | 3.70% | ||
Financial instruments measured on a recurring basis | |||
Key inputs used in investor option liability valuation | |||
Impairment charge for equity securities investments | 1,300,000 | 4,800,000 | |
Non-recurring | |||
Key inputs used in investor option liability valuation | |||
Impairment on the acquired intangible assets | $ 12,700,000 | 0 | 3,500,000 |
Goodwill impairment | 10,600,000 | 0 | 36,700,000 |
Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Key inputs used in investor option liability valuation | |||
Impairment charges under cost method and equity method investments | $ 120,800,000 | $ 31,500,000 | |
Impairment charge reconized for those investments without readily determinable fair values and equity method investments | $ 61,000,000 | ||
Non-recurring | Significant Unobservable Inputs (Level 3) | Discounted cash flow model | Minimum | Discounted cash flow model | |||
Key inputs used in investor option liability valuation | |||
Fair value input of the privately held investments, discount curve of market interest rates (as a percent) | 12 | ||
Non-recurring | Significant Unobservable Inputs (Level 3) | Discounted cash flow model | Maximum | Discounted cash flow model | |||
Key inputs used in investor option liability valuation | |||
Fair value input of the privately held investments, discount curve of market interest rates (as a percent) | 33 |
Financial Instruments - Concent
Financial Instruments - Concentration of Risk (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)customer | Dec. 31, 2017USD ($)customer | Dec. 31, 2016customer | |
Concentration of Risk | |||
Minimum percentage of after-tax profit transferred by Chinese subsidiaries to general reserve fund (as a percent) | 10.00% | ||
Maximum percentage criteria for appropriation of after-tax profit of Chinese subsidiaries to general reserve fund (as a percent) | 50.00% | ||
Accounts receivable denominated in RMB | $ 527,897 | $ 285,681 | |
Current liabilities denominated in RMB | $ 1,143,661 | 1,272,800 | |
Percentage of consolidated net assets that restricted net assets did not exceed (as a percent) | 25.00% | ||
Exposure to credit loss | Cash, cash equivalents and short-term investments | China | |||
Concentration of Risk | |||
Cash, cash equivalents and short-term investments | $ 2,200,000 | $ 3,000,000 | |
Maximum term of original maturity of time deposits | 12 months | 12 months | |
Customer concentration risk | Consolidated net revenues benchmark | Customers | |||
Concentration of Risk | |||
Number of customers accounted for more than 10% | customer | 0 | 0 | 0 |
Customer concentration risk | Consolidated net accounts receivables benchmark | Customers | |||
Concentration of Risk | |||
Number of customers accounted for more than 10% | customer | 3 | 3 | |
Customer concentration risk | Consolidated net accounts receivables benchmark | Customer A | |||
Concentration of Risk | |||
Percentage of benchmark derived from specified source (as a percent) | 10.00% | 15.00% | |
Customer concentration risk | Consolidated net accounts receivables benchmark | Customer B | |||
Concentration of Risk | |||
Percentage of benchmark derived from specified source (as a percent) | 13.00% | 15.00% | |
Customer concentration risk | Consolidated net accounts receivables benchmark | Customer C | |||
Concentration of Risk | |||
Percentage of benchmark derived from specified source (as a percent) | 15.00% | ||
Currency concentration risk | Cash, cash equivalents and short-term investments | RMB | |||
Concentration of Risk | |||
Cash, cash equivalents and short-term investments | $ 1,100,000 | $ 1,200,000 | |
Percentage of benchmark derived from specified source (as a percent) | 47.20% | 34.50% | |
Currency concentration risk | Consolidated net accounts receivables benchmark | RMB | |||
Concentration of Risk | |||
Accounts receivable denominated in RMB | $ 527,900 | $ 284,500 | |
Currency concentration risk | Current liabilities | RMB | |||
Concentration of Risk | |||
Percentage of benchmark derived from specified source (as a percent) | 95.00% | 84.00% | |
Current liabilities denominated in RMB | $ 1,091,900 | $ 1,074,600 |
Convertible Debt and Treasury_3
Convertible Debt and Treasury Stock (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2017 | Nov. 30, 2013 | Dec. 31, 2018 | Dec. 31, 2017 | |
Convertible debt | ||||
Current Liabilities | $ 153,092 | |||
Less: Issuance costs | $ (15,877) | (20,017) | ||
Total | 884,123 | 879,983 | ||
2018 Notes | ||||
Convertible debt | ||||
Current Liabilities | $ 153,092 | |||
Convertible debt | $ 800,000 | |||
Coupon rate of the convertible notes (as a percent) | 1.00% | 1.00% | ||
2022 Notes | ||||
Convertible debt | ||||
Convertible debt | $ 900,000 | $ 900,000 | $ 900,000 | |
Coupon rate of the convertible notes (as a percent) | 1.25% | 1.25% | 1.25% |
Convertible Debt and Treasury_4
Convertible Debt and Treasury Stock - Convertible Debt (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2017 | Nov. 30, 2013 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 01, 2016 | |
Convertible debt | ||||||
Net proceeds from issuance of notes | $ 879,293,000 | |||||
Shares repurchased | $ 249,263,000 | 47,624,000 | $ 26,125,000 | |||
Interest expenses | 16,800,000 | $ 4,200,000 | $ 10,800,000 | |||
2018 Notes | ||||||
Convertible debt | ||||||
Aggregate principal amount of notes issued | $ 800,000,000 | |||||
Coupon rate of the convertible notes (as a percent) | 1.00% | 1.00% | ||||
Denomination of principal amount of debt which is used for conversion calculation | $ 1,000 | |||||
Conversion price of the Notes (in dollars per share) | $ 123.70 | |||||
Net proceeds from issuance of notes | $ 783,200,000 | |||||
Issuance cost | 16,800,000 | |||||
Shares repurchased | $ 100,000,000 | |||||
Interest rate of convertible notes (as a percent) | 1.00% | |||||
Redemption price (as a percent) | 100.00% | |||||
Redemption price of Notes upon fundamental change (as a percent) | 100.00% | |||||
Principal amount of convertible debt repurchased upon the exercise of the put option | $ 646,900,000 | |||||
Principal amount of convertible debt converted into ordinary shares | 7,000 | |||||
2022 Notes | ||||||
Convertible debt | ||||||
Aggregate principal amount of notes issued | $ 900,000,000 | $ 900,000,000 | $ 900,000,000 | |||
Coupon rate of the convertible notes (as a percent) | 1.25% | 1.25% | 1.25% | |||
Denomination of principal amount of debt which is used for conversion calculation | $ 1,000 | |||||
Conversion price of the Notes (in dollars per share) | $ 133.27 | |||||
Net proceeds from issuance of notes | $ 879,300,000 | |||||
Issuance cost | $ 20,700,000 | |||||
Interest rate of convertible notes (as a percent) | 1.25% |
Convertible Debt and Treasury_5
Convertible Debt and Treasury Stock - Treasury Stock (Details) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 01, 2018 | Feb. 29, 2016 | |
Treasury Stock | |||||
Payment for repurchase of ordinary shares | $ 249,263 | $ 47,624 | $ 26,125 | ||
2016 Program | |||||
Treasury Stock | |||||
Number of ordinary shares repurchased | 3.4 | ||||
Payment for repurchase of ordinary shares | $ 302,600 | ||||
2016 Program | Maximum | |||||
Treasury Stock | |||||
Amount authorized to repurchase | $ 500,000 | ||||
2018 Program | |||||
Treasury Stock | |||||
Amount authorized to repurchase | $ 500,000 | ||||
Number of ordinary shares repurchased | 0.3 | ||||
Payment for repurchase of ordinary shares | $ 20,400 | ||||
2018 Program | Maximum | |||||
Treasury Stock | |||||
Amount authorized to repurchase | $ 500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Operating leases, purchase, and capital (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating lease commitments | |||
Rental expense of operating lease | $ 17,900 | $ 13,700 | $ 24,500 |
Operating leases commitments | |||
Total | 45,873 | ||
Less than One Year | 16,692 | ||
One to Three Years | 25,607 | ||
Three to Five Years | 3,574 | ||
Purchase commitments | |||
Total | 675,510 | ||
Less than One Year | 651,333 | ||
One to Three Years | 23,950 | ||
Three to Five Years | 227 | ||
Capital commitments | |||
Total | 12,817 | ||
Less than One Year | 12,715 | ||
One to Three Years | $ 102 |
Commitments and Contingencies_2
Commitments and Contingencies - Other (Details) $ in Thousands | Sep. 28, 2017item | Oct. 31, 2017USD ($) | Aug. 31, 2017item | Jun. 30, 2017item | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) |
Other commitment | ||||||
Total | $ 1,192,067 | |||||
Less than One Year | 259,817 | |||||
One to Three Years | 22,500 | |||||
Three to Five Years | $ 909,750 | |||||
Number of other claims, lawsuits, investigations and proceedings, including unasserted claims that are probable to be assessed, are likely to have, a material change on the Company's financial position results of operations or cash flow | item | 0 | |||||
Litigation of Weibo's Public Filings Contained Material Misstatements and Omissions [Member] | ||||||
Other commitment | ||||||
Number of putative securities | item | 2 | 2 | ||||
Number of cases | item | 2 | |||||
Equity investments | ||||||
Other commitment | ||||||
Total | $ 167,633 | |||||
Less than One Year | 167,633 | |||||
2022 Notes | ||||||
Other commitment | ||||||
Aggregate principal amount of notes issued | $ 900,000 | $ 900,000 | $ 900,000 | |||
Coupon rate of the convertible notes (as a percent) | 1.25% | 1.25% | 1.25% | |||
2022 Notes | Future maximum commitment in connection with issuance of debt | ||||||
Other commitment | ||||||
Total | $ 945,000 | |||||
Less than One Year | 12,750 | |||||
One to Three Years | 22,500 | |||||
Three to Five Years | 909,750 | |||||
Short-term bank loans | Future maximum commitment in connection with issuance of debt | ||||||
Other commitment | ||||||
Total | 79,434 | |||||
Less than One Year | $ 79,434 |