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CONSOLIDATED STATEMENTS OF CASH FLOWS
¥ in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2017
CNY (¥)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
CNY (¥)
Dec. 31, 2015
CNY (¥)
Cash flows from operating activities        
Net income ¥ 2,508,391 $ 385,536 ¥ 1,511,576 ¥ 998,305
Adjustments to reconcile net income to net cash provided by operating activities        
Depreciation of property and equipment 176,715 27,161 173,625 122,098
Amortization of acquired intangible assets and land use right 62,419 9,594 100,892 64,201
Allowance for doubtful accounts 15,106 2,322 45,914 4,167
Loss on disposal of property and equipment 17,620 2,708 891 3,759
Impairment of investments 43,205 6,640 80,104 6,000
Impairment of intangible assets 0 0 3,828 57,199
Impairment of goodwill 2,527 [1],[2] 388 17,665 [2],[3] 310,124 [4]
Fair value change of contingent consideration 0 0 0 [3] (292,471) [4]
Share-based compensation 257,661 39,602 157,286 185,372
Share of income in equity method investments, net of income taxes (33,024) (5,076) (8,279) (14,120)
Gain on partial disposal of investments (45,861) (7,049) (25,061) 0
Gain on deconsolidation and disposal of subsidiaries (37,989) (5,839) (103,960) 0
Deferred income taxes, net 3,919 602 (7,768) (25,039)
Foreign currency exchange (gains) losses, net 2,176 334 (1,158) 38,099
Other non-operating expense 0 0 0 2,165
Changes in operating assets and liabilities, net of business acquisition and disposal of subsidiaries        
Accounts receivable, net 18,383 2,825 (34,293) 123,634
Prepayments and other assets (48,277) (7,420) (97,888) 45,128
Amounts due from related parties 155 24 1,839 (1,323)
Inventory 1,434 220 680 (11,080)
Amounts due to related parties (18,615) (2,861) 66,328 (13,743)
Accounts payable (39,060) (6,003) 36,888 (22,654)
Deferred revenue 366,634 56,351 81,513 25,519
Advances from customers 24,254 3,728 10,783 20,959
Income taxes payable 5,544 852 33,351 18,242
Accrued liabilities and other current liabilities 435,135 66,878 376,379 178,901
Net cash provided by operating activities 3,718,452 571,517 2,421,135 1,823,442
Cash flows from investing activities        
Placements of short-term deposits (9,667,447) (1,485,861) (8,027,325) (1,869,789)
Maturities of short-term deposits 7,361,225 1,131,400 6,324,897 4,257,609
Placements of restricted short-term deposits (1,000,000) (153,697) 0 (1,492,799)
Maturities of restricted short-term deposits 0 0 389,221 522,981
Placement of short-term investments (189,550) (29,133) 0 0
Maturities of short-term investments 65,000 9,990 0 0
Purchase of property and equipment (397,327) (61,068) (162,395) (219,843)
Purchase of intangible assets and land use right (17,749) (2,728) (70,029) (50,931)
Purchase of other non-current assets (82,645) (12,702) (5,403) (1,926,224)
Cash paid for equity investments (21,740) (3,341) (107,010) (500)
Cash paid for cost investments (301,848) (46,393) (90,234) (351,800)
Acquisition of an available-for-sale security (2,059) (316) 0 (6,117)
Cash received from disposal of investments 86,714 13,327 22,608 0
Cash dividend received from an equity investee 0 0 6,720 2,400
Acquisition of businesses, net of cash and cash equivalents acquired (6,161) (947) (1,946) 5,553
Deconsolidation and disposal of subsidiaries, net of cash disposed 117,005 17,983 (5,370) 0
Payment on behalf of related parties, net of repayment 23,116 3,553 (10,699) 60,870
Loans to related parties (24,962) (3,837) (44,500) (159,000)
Repayment of loans from related parties 35,462 5,450 0 160,000
Loans to employees and third parties (20,550) (3,158) (6,605) (6,037)
Repayment of loans from employees and third parties 4,641 713 4,751 13,237
Proceeds from disposal of property and equipment 1,359 209 181 12,368
Net cash used in investing activities (4,037,516) (620,556) (1,783,138) (1,048,022)
Cash flows from financing activities        
Proceeds from exercise of vested share options 20 3 9 245
Repurchase of common shares 0 0 0 (1,041,686)
Capital contributions from the non-controlling interests 64,875 9,971 10,642 7,798
Capital contributions from mezzanine equity holders 509,535 78,314 0 0
Proceeds from bank borrowings 621,118 95,464 0 1,148,500
Repayment of bank borrowings 0 0 0 (452,000)
Proceeds from issuance of common shares, net of issuance cost 2,950,607 453,500 0 0
Repayment of convertible bonds (2,753,630) (423,225) 0 0
Net cash (used in) provided by financing activities 1,392,525 214,027 10,651 (337,143)
Net increase in cash and cash equivalents 1,073,461 164,988 648,648 438,277
Cash and cash equivalents at the beginning of the year 1,579,743 242,802 928,934 475,028
Effect of exchange rate changes on cash and cash equivalents (35,772) (5,498) 2,161 15,629
Cash and cash equivalents at the end of the year 2,617,432 402,292 1,579,743 928,934
Supplemental disclosure of cash flows information:        
—Cash paid for interest, net of amounts capitalized (41,729) (6,414) (59,884) (78,186)
—Acquisition of property and equipment in form of accounts payable 16,865 2,592 37,649 66,673
—Income taxes paid ¥ (406,348) $ (62,455) ¥ (254,931) ¥ (185,124)
[1] Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting Total RMB RMB RMB Cost of revenues 39,882 2,877 42,759 Research and development expenses 113,174 9,174 122,348 Sales and marketing expenses 3,626 791 4,417 General and administrative expenses 60,871 27,266 88,137 Share based compensation expenses 217,553 40,108 257,661
[2] The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results.In December 2016, the Group has identified impairment indicator for 100-Online Education Technology (Beijing) Co., Ltd.(“100-Online”) as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB13,804 for 100-Online and an impairment charge of RMB3,861 for Bilin Online were recognized, respectively.In December 2017, the Group has identified impairment indicator for Guangzhou Zhuque Information Technology Co., Ltd. (“Zhuque”). Based on the results of the impairment assessment, an impairment charge of RMB2,527 for Zhuque was recognized.The above goodwill impairment assessments on 100-Online, Bilin Online and Zhuque adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business.
[3] Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 9,893 5,677 324 15,894 Research and development expenses 53,085 19,538 6,193 78,816 Sales and marketing expenses 2,781 326 - 3,107 General and administrative expenses 19,523 26,557 13,389 59,469 Share based compensation expenses 85,282 52,098 19,906 157,286
[4] Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 20,932 2,642 389 23,963 Research and development expenses 52,395 11,759 6,797 70,951 Sales and marketing expenses 2,628 655 - 3,283 General and administrative expenses 49,137 5,425 32,613 87,175 Share based compensation expenses 125,092 20,481 39,799 185,372