Additional Information - Financial Statement Schedule I Condensed Financial Information of Parent Company

12 Months Ended

Dec. 31, 2012

Additional Information - Financial Statement Schedule I Condensed Financial Information of Parent Company [Abstract]

Condensed Financial Information of Parent Company

ADDITIONAL INFORMATION – FINANCAL STATEMENT SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

BALANCE SHEETS

(U.S. dollars in thousands, except for shares and per share data)

	December 31,
		2011		2012
ASSETS
Current assets:
Cash and cash equivalents	$	241,842	$	220,236
Restricted cash		-		300
Trading securities		231		179
Prepaid expenses and other current assets		1,092		8,416
Amounts due from subsidiaries and VIEs		7,988		29,805
Deferred tax assets - current		-		195
Total current assets		251,153		259,131
Acquired intangible assets, net		1,505		3,923
Investments in subsidiaries and VIEs		120,617		219,380
Cost method investment		929		1,379
Deferred tax assets - noncurrent		457		440
TOTAL ASSETS	$	374,661	$	484,253
LIABILITIES
Current liabilities:
Accrued expenses and other current		821		2,470
Deferred revenue-current		-		730
Amounts due to subsidiaries and VIEs		1,316		1,316
Total current liabilities		2,137		4,516
Deferred revenue-noncurrent		1,671		1,641
TOTAL LIABILITIES	$	3,808	$	6,157
EQUITY
Qihoo 360 Technology Co. Ltd. shareholders' equity
Class A ordinary shares ($0.001 par value; 378,000,000 and 378,000,000 shares authorized as of
December 31, 2011 and 2012, respectively; 109,392,815 and 123,472,524 shares issued
and outstanding as of December 31, 2011 and 2012, respectively)		109		123
Class B ordinary shares ($0.001 par value; 122,000,000 and 122,000,000 shares authorized as of
December 31, 2011 and 2012, respectively; 69,636,436 and 60,684,573 shares issued
and outstanding as of December 31, 2011 and 2012, respectively)		70		61
Additional paid-in capital		363,021		420,662
Accumulated other comprehensive income		6,263		9,114
Retained earnings		1,390		48,136
Total shareholders' equity		370,853		478,096
TOTAL EQUITY		370,853		478,096
TOTAL LIABILITIES AND EQUITY	$	374,661	$	484,253

ADDITIONAL INFORMATION – FINANCIAL STATEMENT SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except for shares and per share data)

	For the year ended December 31,
		2010			2011			2012
Cost of revenues		-			16			4
Operating expenses:
Selling and marketing		524			31,473			21,289
General and administrative		359			6,788			10,815
Product development		3,394			12,283			21,782
Total operating expenses		4,277			50,544			53,886
Loss from operations		(4,277	)		(50,560	)		(53,890	)
Interest income		72			1,662			4,702
Other income		-			-			1,277
Exchange (loss) gain		(148	)		6,514			412
Impairment loss on long-term investments		-			(666	)		-
Change in unrealized holding loss of trading securities		-			(220	)		(52	)
Loss before income tax expense and earnings from subsidiary and VIEs		(4,353	)		(43,270	)		(47,551	)
Income in earnings of subsidiaries and VIEs		12,861			58,873			94,639
Income before income tax expense		8,508			15,603			47,088
Income tax expense		-			-			(342	)
Net income attributable to Qihoo 360 Technology Co. Ltd.		8,508			15,603			46,746
Accretion of Series A convertible participating redeemable preferred shares		815			203			-
Accretion of Series B convertible participating redeemable preferred shares		1,250			313			-
Accretion of Series C convertible participating redeemable preferred shares		978			255			-
Net income attributable to ordinary shareholders of Qihoo 360 Technology Co. Ltd.	$	5,465		$	14,832		$	46,746

ADDITIONAL INFORMATION – FINANCIAL STATEMENT SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF COMPREHENSIVE INCOME

(U.S. dollars in thousands, except for shares and per share data)

	For the year ended December 31,
		2010		2011		2012
Net income	$	8,508	$	15,603	$	46,746
Other comprehensive income, net of tax:
Foreign currency translation adjustments		1,325		3,246		2,851
Other comprehensive income		1,325		3,246		2,851
Comprehensive income		9,833		18,849		49,597
Add: Comprehensive loss attributable to noncontrolling interest		-		-		-
Comprehensive income attributable to Qihoo 360 Technology Co. Ltd.	$	9,833	$	18,849	$	49,597

ADDITIONAL INFORMATION – FINANCIAL STATEMENT SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF CHANGES IN EQUITY

(U.S. dollars in thousands, except share data and per share data, or otherwise noted)

																	Total
																	Qihoo 360
												Accumulated		(Accumulated			Technology
										Additional		other		deficit)			Co. Ltd.
	Ordinary shares			Shares to be issued						paid-in		comprehensive		retained			shareholders'
	Shares		Amount	Shares			Amount			capital		income		earnings			equity
Balance as of January 1, 2010	65,339,960	$	65	2,703,236		$	3,558		$	5,011	$	1,692	$	(18,907	)	$	(8,581	)
Issuance of ordinary shares in connection with business acquisitions and share-based compensation arrangement	5,642,720		6	(2,125,176	)		(3,183	)		3,177		-					-
Issuance of ordinary shares in connection with exercise of share options	578,060		1	(578,060	)		(375	)		374		-					-
Share-based compensation	-		-	-			-			4,006		-					4,006
Accretion of Series A convertible participating redeemable preferred shares	-		-	-			-			-		-		(815	)		(815	)
Accretion of Series B convertible participating redeemable preferred shares	-		-	-			-			-		-		(1,250	)		(1,250	)
Accretion of Series C convertible participating redeemable preferred shares	-		-	-			-			-		-		(978	)		(978	)
Net income	-		-	-			-			-		-		8,508			8,508
Foreign currency translation adjustments	-		-	-			-			-		1,325		-			1,325
Balance as of December 31, 2010	71,560,740		72	-			-			12,568		3,017		(13,442	)		2,215
Accretion of Series A convertible participating redeemable preferred shares	-		-	-			-			-		-		(203	)		(203	)
Accretion of Series B convertible participating redeemable preferred shares	-		-	-			-			-		-		(313	)		(313	)
Accretion of Series C convertible participating redeemable preferred shares	-		-	-			-			-		-		(255	)		(255	)
Issuance of ordinary shares in connection with share-based compensation arrangements	3,059,779		3	-			-			-		-		-			3
Share-based compensation	-		-	-			-			47,989		-		-			47,989
Issuance of ordinary shares in connection with exercise of options	31,172		-	-			-			48		-		-			48
Issuance of ordinary shares upon initial public offering ("IPO"), net of offering costs of $2,342	26,063,544		26	-			-			231,523		-		-			231,549
Conversion of participating redeemable preferred shares to ordinary shares	78,314,016		78	-			-			70,893		-		-			70,971
Net income	-		-	-			-			-		-		15,603			15,603
Foreign currency translation adjustments	-		-	-			-			-		3,246					3,246
Balance as of December 31, 2011	179,029,251	$	179	-		$	-		$	363,021	$	6,263	$	1,390		$	370,853
Issuance of ordinary shares in connection with share-based
compensation arrangements	3,512,394		3	-			-			-		-		-			3
Share-based compensation										50,605		-		-			50,605
Issuance of ordinary shares in connection with exercise of options	1,615,452		2	-			-			6,963		-		-			6,965
Disposal of noncontrolling interest in subsidiaries	-		-	-			-			73		-		-			73
Net income	-		-	-			-			-		-		46,746			46,746
Foreign currency translation adjustments	-		-	-			-			-		2,851		-			2,851
Balance as of December 31, 2012	184,157,097	$	184	-		$	-		$	420,662	$	9,114	$	48,136		$	478,096

ADDITIONAL INFORMATION – FINANCIAL STATEMENT SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF CASH FLOW

(U.S. dollars in thousands, except for shares and per share data)

	For the year ended December 31,
	2010			2011			2012
Cash flows from operating activities:
Net income		8,508			15,603			46,746
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation		4,006			47,989			50,605
Gain from investments in subsidiaries and VIEs		(12,861	)		(58,873	)		(94,639	)
Depreciation and amortization		149			243			582
Unrealized holding loss on trading securities		-			220			52
Loss from impairment of long-term investments		-			666			-
Prepaid expenses and other current assets		(599	)		(352	)		(2,307	)
Deferred taxes		-			(457	)		(178	)
Accrued expenses and other current liabilities		269			92			149
Deferred revenue		-			1,671			700
Amount due from/to subsidiaries and VIEs		(19	)		(20	)		(21,816	)
Net cash (used in) provided by operating activities		(547	)		6,782			(20,106	)
Cash flows from investing activities:
Restricted cash		-			-			(300	)
Purchase of intangible assets		(1,096	)		-			(1,500	)
Net cash paid for business acquisition		(2,260	)		-			-
Purchase of trading securities		-			(451	)		-
Capital contribution for cost method investments		-			(929	)		(450	)
Investment in subsidiaries		-			(21,500	)		(1,200	)
Net cash used in investing activities		(3,356	)		(22,880	)		(3,450	)
Cash flows from financing activities:
Proceeds from issuance of Series C convertible participating
redeemable preferred shares		20,000			-			-
Payment of issuance costs of Series C convertible participating
redeemable preferred shares		(78	)		-			-
Proceeds from exercise of share options		375			20			2,089
Proceeds from issuance of ordinary shares upon IPO		-			234,312			-
Payment of IPO costs		-			(2,339	)		-
Payment for share repurchase		-			-			(139	)
Net cash provided by financing activities		20,297			231,993			1,950
Net increase (decrease) in cash and cash equivalents		16,394			215,895			(21,606	)
Cash and cash equivalents at beginning of year		9,553			25,947			241,842
Cash and cash equivalents at end of year		25,947			241,842			220,236

1. BASIS FOR PREPARATION

The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that the Company has used the equity method to account for investments in its subsidiaries and VIEs.

2. INVESTMENTS IN SUBSIDIARIES AND VIEs

The Company and its subsidiaries and VIEs were included in the consolidated financial statements where the inter-company transactions and balances were eliminated upon consolidation. For purpose of the Company’s stand-alone financial statements, its investments in subsidiaries and VIEs were reported using the equity method of accounting. The Company’s share of income and losses from its subsidiaries and VIEs were reported as equity in earnings of subsidiaries and VIEs in the accompanying parent company financial statements.