Common use of Financing Activities Clause in Contracts

Financing Activities. Net cash provided by financing activities amounted to RMB1,118.0 million (US$177.6 million) in 2011, primarily attributable to (1) proceeds of RMB961.4 million (US$152.7 million) from Tudou's initial public offering in August 2011, (2) proceeds of RMB160.4 million (US$25.5 million) from exercise of warrants to purchase Series E preferred shares and (3) RMB52.6 million (US$8.4 million) in short-term loans from commercial banks. These amounts were partially offset by RMB30.5 million (US$4.8 million) in repayment of short-term loans and RMB25.9 million (US$4.1 million) in expenses paid in connection with its initial public offering. Net cash provided by financing activities amounted to RMB396.1 million in 2010, resulting from (1) proceeds received from the issuance of Series E preferred shares in the amount of RMB236.4 million, (2) the issuance of a convertible loan in the amount of RMB102.4 million and (3) short-term loans in the amount of RMB81.2 million. These amounts were offset by RMB20.0 million in repayment of short-term loans. Tudou did not conduct any material financing activities in 2009. As a result, Tudou did not generate or use any cash from financing activities in 2009. Tudou had capital expenditures of RMB24.7 million, RMB27.6 million and RMB477.0 million (US$75.8 million) for 2009, 2010 and 2011, respectively. Tudou's capital expenditures were used primarily for (1) the purchase of computer hardware and equipment, including those purchased for building its CDN and (2) the acquisition of premium licensed content. Tudou expects to incur capital expenditures of RMB470.0 million in 2012, which will be primarily used for content procurement and expansion of Internet bandwidth capacity. Tudou also expects to incur additional costs in connection with its becoming a public company, including costs to prepare for its first Section 404 compliance testing and additional compliance costs associated with being a public company. Tudou is not able to estimate with reasonable certainty these additional expenses, but expects the additional costs not to exceed US$1.0 million in 2012.