EX-99.5

EX-99.5 6 d282677dex995.htm EX-99.5 EX-99.5

Exhibit 99.5

CHINDATA GROUP HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2021 AND UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2022

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)


			As of
	Notes		December 31, 2021		September 30, 2022		September 30, 2022
			RMB		RMB		US$
					(unaudited)		(unaudited)
ASSETS
Current assets
Cash and cash equivalents				4,390,293		4,204,410		591,047
Restricted cash				460,174		642,373		90,303
Short-term investments				193,672		110,048		15,470
Accounts receivable, net of allowance of RMB924 and RMB2,379 (US$334) as of December 31, 2021 and September 30, 2022, respectively		4		661,027		1,719,980		241,791
Value added taxes recoverable				327,553		431,172		60,613
Prepayments and other current assets				314,604		348,742		49,026

Total current assets				6,347,323		7,456,725		1,048,250

Non-current assets
Property and equipment, net		5		9,427,591		11,741,979		1,650,661
Operating lease right-of-use assets				803,544		939,706		132,102
Finance lease right-of use assets				136,825		134,621		18,925
Intangible assets		6		305,800		296,196		41,639
Goodwill				472,883		499,880		70,272
Deferred tax assets				30,866		52,891		7,435
Restricted cash				390,535		141,151		19,843
Value added taxes recoverable				424,011		356,997		50,186
Other non-current assets				342,573		643,334		90,436

Total non-current assets				12,334,628		14,806,755		2,081,499

Total assets				18,681,951		22,263,480		3,129,749

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities (including current liabilities of the consolidated VIEs without recourse to the primary beneficiary of RMB114,478 and RMB115,014 (US$16,168) as of December 31, 2021 and September 30, 2022, respectively):
Short-term bank loans		8		260,980		455,443		64,025
Current portion of long-term bank loans		8		1,689,545		576,141		80,993
Accounts payable				1,701,299		1,863,021		261,899
Amounts due to related parties		11		38,832		71,612		10,067
Income taxes payable				49,168		101,200		14,226
Current portion of operating lease liabilities				45,501		33,646		4,730
Current portion of finance lease liabilities				4,765		4,854		682
Derivative liabilities		2		—		2,829		398
Accrued expenses and other current liabilities		7		511,257		312,117		43,877

Total current liabilities				4,301,347		3,420,863		480,897

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CHINDATA GROUP HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2021 AND UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2022 (CONTINUED)

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)


			As of
	Notes		December 31, 2021			September 30, 2022			September 30, 2022
			RMB			RMB			US$
						(unaudited)			(unaudited)
Non-current liabilities (including non-current liabilities of the consolidated VIEs without recourse to the primary beneficiary of RMB196,730 and RMB172,810 (US$24,293) as of December 31, 2021 and September 30, 2022, respectively):
Long-term bank loans		8		3,526,460			7,384,510			1,038,098
Operating lease liabilities				198,806			181,752			25,550
Finance lease liabilities				57,002			57,383			8,067
Deferred tax liabilities				270,950			319,299			44,886
Derivative liabilities		2		16,354			—			—
Other non-current liabilities				196,400			217,132			30,524

Total non-current liabilities				4,265,972			8,160,076			1,147,125

Total liabilities				8,567,319			11,580,939			1,628,022

Commitments and contingencies		15
Shareholders’ equity:
Ordinary shares (par value of US$0.00001 per share, 4,500,000,000 Class A ordinary shares authorized, 359,099,633 Class A ordinary shares issued and 358,376,753 Class A ordinary shares outstanding; 500,000,000 Class B ordinary shares authorized, 373,459,748 Class B ordinary shares issued and 368,500,979 Class B ordinary shares outstanding as of December 31, 2021; 4,500,000,000 Class A ordinary shares authorized, 375,494,439 Class A ordinary shares issued and 369,590,431 Class A ordinary shares outstanding; 500,000,000 Class B ordinary shares authorized, 360,264,942 Class B ordinary shares issued and 360,264,942 Class B ordinary shares outstanding as of September 30, 2022				46			46			6
Additional paid-in capital				10,646,328			10,804,542			1,518,878
Statutory reserves				189,700			189,700			26,668
Accumulated other comprehensive loss		13		(257,977	)		(383,450	)		(53,905	)
(Accumulated deficit)/retained earnings				(463,465	)		71,703			10,080

Total shareholders’ equity				10,114,632			10,682,541			1,501,727

Total liabilities and shareholders’ equity				18,681,951			22,263,480			3,129,749

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CHINDATA GROUP HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2022

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),

except for number of shares and per share data)


			For the nine months ended September 30,
	Notes		2021			2022			2022
			RMB			RMB			US$
			(unaudited)			(unaudited)			(unaudited)
Revenue
Colocation services				1,917,651			2,950,317			414,749
Colocation rental				85,894			98,425			13,836
Others				67,003			112,666			15,838

Total Revenue		3		2,070,548			3,161,408			444,423

Cost of revenue
Colocation services				(1,061,744	)		(1,634,933	)		(229,835	)
Colocation rental				(94,141	)		(105,298	)		(14,802	)
Others				(61,546	)		(98,078	)		(13,788	)

Gross profit				853,117			1,323,099			185,998

Operating expenses
Selling and marketing expenses				(70,960	)		(52,900	)		(7,437	)
General and administrative expenses				(267,992	)		(335,086	)		(47,106	)
Research and development expenses				(60,502	)		(56,029	)		(7,876	)

Total operating expenses				(399,454	)		(444,015	)		(62,419	)

Operating income				453,663			879,084			123,579
Interest income				47,120			38,276			5,381
Interest expense				(226,609	)		(239,906	)		(33,726	)
Foreign exchange gain				790			6,963			979
Changes in fair value of financial instruments		2		12,886			36,023			5,064
Others, net				15,376			33,235			4,672

Income before income taxes				303,226			753,675			105,949
Income tax expense				(101,471	)		(218,507	)		(30,717	)

Net income				201,755			535,168			75,232

Earnings per share (Class A and B ordinary shares):
Basic		12		0.28			0.73			0.10
Diluted		12		0.28			0.73			0.10
Shares (Class A and B ordinary shares) used in earnings per share:
Basic		12		725,828,527			728,747,018			728,747,018
Diluted		12		729,140,771			731,642,984			731,642,984
Other comprehensive loss, net of tax of nil:
Foreign currency translation adjustments		13		(64,090	)		(125,473	)		(17,639	)

Comprehensive income				137,665			409,695			57,593

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CHINDATA GROUP HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2022

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for number of shares)

Number of
ordinary
shares

Ordinary
shares

Additional
paid-in
capital

Statutory
reserves

Accumulated
other
comprehensive
loss

(Accumulated
deficit)
Retained earnings

Total Chindata
Group Holdings
Limited
shareholders’
equity

RMB

Balance as of January 1, 2021

724,792,217

10,510,516

82,792

(172,586

)

(681,300

)

9,739,468

Cumulative effect of adoption of ASU 2016-13

8,323

Net income

201,755

Share-based compensation

100,941

Exercise of share options

1,641,337

12,337

Other comprehensive loss

(64,090

)

(64,090

)

Balance as of September 30, 2021 (unaudited)

726,433,554

10,623,794

82,792

(236,676

)

(471,222

)

9,998,734

Balance as of January 1, 2022

726,877,732

10,646,328

189,700

(257,977

)

(463,465

)

10,114,632

Net income

535,168

Share-based compensation

141,360

Exercise of share options

2,977,641

16,854

Other comprehensive loss

(125,473

)

(125,473

)

Balance as of September 30, 2022 (unaudited)

729,855,373

10,804,542

189,700

(383,450

)

71,703

10,682,541

Balance as of September 30, 2022 (US$) (unaudited)

729,855,373

1,518,878

26,668

(53,905

)

10,080

1,501,727

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CHINDATA GROUP HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2022

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)


	For the nine months ended September 30,
	2021			2022			2022
	RMB			RMB			US$
	(unaudited)			(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		201,755			535,168			75,232
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation and amortization		434,426			583,172			81,981
Non-cash expense relating to prepaid land use rights		2,743			3,237			455
Share-based compensation		102,436			148,563			20,885
Allowance for credit losses		5,863			1,949			274
Deferred income taxes		21,534			22,564			3,172
Changes in fair value of financial instruments		(12,886	)		(36,023	)		(5,064	)
Foreign exchange gain		(790	)		(6,963	)		(979	)
Amortization of debt issuance cost		23,891			63,216			8,887
Others		1,879			9,349			1,315
Changes in operating assets and liabilities:
Accounts receivable		(165,128	)		(1,040,536	)		(146,276	)
Value added taxes recoverable		42,889			85,941			12,081
Prepayments and other current assets		(67,254	)		123,570			17,371
Operating lease right-of-use assets		(2,280	)		38,680			5,438
Other non-current assets		(7,169	)		(3,467	)		(487	)
Accounts payable		3,824			60,323			8,480
Income taxes payable		(10,529	)		52,032			7,315
Amounts due to related parties		—			34,089			4,792
Accrued expenses and other current liabilities		91,477			(176,574	)		(24,822	)
Operating lease liabilities		272			(45,027	)		(6,330	)
Other non-current liabilities		101,044			16,631			2,337

Net cash generated from operating activities		767,997			469,894			66,057

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment and intangible assets, net of proceeds from sale of property and equipment		(2,494,589	)		(3,225,564	)		(453,443	)
Purchase of land use rights		(108,417	)		(103,711	)		(14,579	)
Cash paid for investment and business combination, net of cash acquired		—			(228,878	)		(32,175	)
Purchase of short-term investments		(249,485	)		(110,000	)		(15,464	)
Sales and maturities of short-term investments		—			196,749			27,659

Net cash used in investing activities		(2,852,491	)		(3,471,404	)		(488,002	)

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CHINDATA GROUP HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2022 (CONTINUED)

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)


	For the nine months ended September 30,
	2021			2022			2022
	RMB			RMB			US$
	(unaudited)			(unaudited)			(unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of issuance cost for ordinary shares issued in prior year		(14,734	)		—			—
Proceeds from exercise of share options		7,510			6,575			924
Principal portion of finance lease payments		(6,483	)		(3,958	)		(556	)
Proceeds from short-term bank loans		257,680			184,536			25,942
Proceeds from long-term bank loans		1,327,788			5,815,436			817,521
Payment of debt issuance cost		(28,258	)		(109,498	)		(15,393	)
Repayment of short-term bank loans		—			(258,579	)		(36,350	)
Repayment of long-term bank loans		(255,252	)		(3,048,637	)		(428,571	)

Net cash generated from financing activities		1,288,251			2,585,875			363,517

Exchange rate effect on cash, cash equivalents and restricted cash		(46,148	)		162,567			22,853

Net decrease in cash, cash equivalents and restricted cash		(842,391	)		(253,068	)		(35,575	)

Cash, cash equivalents and restricted cash at the beginning of the period		6,911,463			5,241,002			736,768

Cash, cash equivalents and restricted cash at the end of the period		6,069,072			4,987,934			701,193

Supplemental disclosures of non-cash information:
Purchase of property and equipment included in accounts payable		1,184,636			1,681,504			236,382
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		5,603,703			4,204,410			591,047
Restricted cash		465,369			783,524			110,146

Total cash, cash equivalents and restricted cash shown in the statements of cash flows		6,069,072			4,987,934			701,193

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

1. ORGANIZATION

Chindata Group Holdings Limited (the “Company”) is a limited liability company incorporated in the Cayman Islands on December 27, 2018. The Company, its subsidiaries, the variable interest entities, and subsidiaries of the variable interest entities are hereinafter collectively referred to as the “Group”. The Group is principally engaged in the provision of internet data center (“IDC”) colocation and rental services in Asia-Pacific emerging markets. The Company does not conduct any substantive operations on its own but instead conducts its primary business operations through its subsidiaries, the variable interest entities, and subsidiaries of the variable interest entities, which are primarily located in the People’s Republic of China (the “PRC” or “China”), Malaysia and India.

As of September 30, 2022, there have been no changes to the Company’s principal subsidiaries, variable interest entities, and subsidiaries of the variable interest entities since December 31, 2021.

To comply with PRC laws and regulations which prohibit foreign control of companies that engage in value-added telecommunication services, the Group primarily conducts its business in the PRC through its variable interest entities, Sitan (Beijing) Data Technology Company Limited and Hebei Qinshu Information Technology Company Limited, and subsidiaries of the variable interest entities (collectively, the “VIEs”). The equity interests of the VIEs are legally held by PRC shareholders (the “Nominee Shareholders”). Despite the lack of technical majority ownership, the Company has effective control of the VIEs through a series of contractual arrangements (the “Contractual Agreements”) and a parent-subsidiary relationship exists between the Company and the VIEs. Through the Contractual Agreements, the Nominee Shareholders effectively assigned all of their voting rights underlying their equity interests in the VIEs to Suzhou Stack Data Technology Company Limited and Hebei Stack Data Technology Company Limited, the WFOEs, who immediately assigned the voting rights underlying their equity interests in the VIEs to Stack Midco Limited, which is a wholly-owned subsidiary of the Company. Therefore, the Company has the power to direct the activities of the VIEs that most significantly impact its economic performance. The Company also has the ability and obligation to absorb substantially all of the profits and all the expected losses of the VIEs that potentially could be significant to the VIEs. Based on the above, the Company consolidates the VIEs in accordance with SEC Regulation SX-3A-02 and Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”).

The carrying amounts of the assets, liabilities and the results of operations of the VIEs are presented in aggregate due to the similarity of the purpose and design of the VIEs, the nature of the assets in these VIEs and the type of the involvement of the Company in these VIEs.

The following table sets forth the assets, liabilities, results of operations and cash flows of the VIEs included in the Company’s consolidated balance sheets, consolidated statements of comprehensive income and cash flows:

As of

December 31,
2021

September 30,
2022

RMB

US$

(unaudited)

Total current assets

1,927,697

2,920,856

410,607

Total non-current assets

608,317

579,003

81,395

Total assets

2,536,014

3,499,859

492,002

Total current liabilities

2,225,938

3,184,363

447,651

Total non-current liabilities

196,730

172,810

24,293

Total liabilities

2,422,668

3,357,173

471,944

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

1. ORGANIZATION (Continued)


	For the nine months ended September 30,
	2021			2022			2022
	RMB			RMB			US$
	(unaudited)			(unaudited)			(unaudited)
Revenues		1,921,106			3,007,419			422,776
Net income		5,976			25,471			3,581
Net cash generated from operating activities		577,600			212,406			29,860
Net cash used in investing activities		(185,141	)		(216,147	)		(30,385	)
Net cash used in financing activities		(1,071	)		—			—

The revenue-producing assets that are held by the VIEs comprise of property and equipment, and operating lease right-of-use assets. The revenues of the VIEs are presented after elimination of inter-entity transactions. The VIEs contributed an aggregate of 93% and 95% of the Group’s consolidated revenue for the nine months ended September 30, 2021 and 2022, respectively.

As of September 30, 2022, there was no pledge or collateralization of the VIEs’ assets that can only be used to settle obligations of the VIEs. Other than the amounts due to subsidiaries of the Group (which are eliminated upon consolidation), all remaining liabilities of the VIEs are without recourse to the Company.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information using accounting policies that are consistent with those used in the preparation of the Company’s audited consolidated financial statements for the year ended December 31, 2021. Accordingly, these unaudited interim condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position, operating results and cash flows of the Company for each of the periods presented. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2022. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2021.

Principles of Consolidation

The consolidated financial statements of the Group include the financial statements of the Company, its subsidiaries, and the VIEs for which a wholly-owned subsidiary of the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated upon consolidation.

Convenience translation

Amounts in U.S. dollars are presented for the convenience of the reader and are translated at the noon buying rate of RMB7.1135 per US$1.00 on September 30, 2022 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair value measurements

Financial instruments of the Group primarily include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, derivatives, amounts due to related parties, accounts payable, certain other current assets and liabilities, short-term bank loans and long-term bank loans. The carrying amount of the long-term bank loans approximates its fair value due to the fact that the related interest rate approximates the interest rates currently offered by financial institutions for similar debt instruments of comparable maturities. The derivatives were recorded at fair value as determined on the respective issuance or origination date and subsequently adjusted to its fair value at each reporting date. The Group determined the fair values of the derivatives with the assistance of an independent appraiser. The Group applies ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement. The carrying values of the remaining financial instruments approximate their fair values due to their short-term maturities.

The Group’s derivatives represent target accrual forward transaction, the embedded call option, cross currency swap, and non-deliverable forward that did not qualify for hedge accounting in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). The derivatives are accounted for at fair value by recording the unrealized mark-to-market (fair value adjustment) in each period in the unaudited interim condensed consolidated statements of comprehensive income within “Changes in fair value of financial instruments”. As of September 30, 2022, the total notional amount of the derivative contracts were MYR396,654 and US$500. The gain of RMB1,582 and RMB35,226 (US$4,952) were recognized within “Changes in fair value of financial instruments” in the unaudited interim condensed consolidated statements of comprehensive income for the nine months ended September 30, 2021 and 2022, respectively. The estimated fair value of the derivatives is determined at discrete points in time with reference to the market rates using industry standard valuation techniques. The fair value of the Group’s derivatives was determined utilizing market observable forward exchange rates. During all periods presented, there were no changes in valuation technique; or transfers in and out of each level.

Concentration of credit risk

Assets that potentially subject the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, restricted cash, short-term investments and accounts receivable. The Group expects that there is no significant credit risk associated with cash and cash equivalents, restricted cash and short-term investments, which were held by reputable financial institutions in the jurisdictions where the Company, its subsidiaries, and the VIEs are located. The Group believes that it is not exposed to unusual risks as these financial institutions have high credit quality. Accounts receivable are typically unsecured and are derived from revenues earned from reputable customers. As of December 31, 2021 and September 30, 2022, the Group had one customer with a receivable balance exceeding 10% of the total accounts receivable balance. The risk with respect to accounts receivable is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring process of outstanding balances.

3. REVENUES

The following table presents the Group’s revenues from contracts with customers disaggregated by material revenue category:

For the nine months ended September 30,

2021

2022

RMB

US$

(unaudited)

Colocation services recognized over time

1,917,651

2,950,317

414,749

Colocation rental recognized over time

85,894

98,425

13,836

Others recognized over time

67,003

112,666

15,838

2,070,548

3,161,408

444,423

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

4. ACCOUNTS RECEIVABLE, NET

As of

December 31,
2021

September 30,
2022

RMB

US$

(unaudited)

Accounts receivable

661,951

1,722,359

242,125

Allowance for credit losses

(924

)

(2,379

)

(334

)

Accounts receivable, net

661,027

1,719,980

241,791

5. PROPERTY AND EQUIPMENT, NET


	As of
	December 31, 2021			September 30, 2022			September 30, 2022
	RMB			RMB			US$
				(unaudited)			(unaudited)
Buildings		2,721,086			3,336,445			469,030
Data center equipment		4,607,321			7,236,014			1,017,223
Furniture and office equipment		17,086			19,205			2,700
Computers and network equipment		14,858			25,170			3,538
Motor vehicles		10,001			13,379			1,881
Purchased software		12,763			14,164			1,991
Leasehold improvements		48,674			95,785			13,465
Construction in progress		3,218,617			2,785,589			391,592

		10,650,406			13,525,751			1,901,420
Less: accumulated depreciation		(1,222,815	)		(1,783,772	)		(250,759	)

Property and equipment, net		9,427,591			11,741,979			1,650,661

Depreciation expense for the nine months ended September 30, 2021 and 2022 was RMB401,835 and RMB550,179 (US$77,343), respectively.

6. INTANGIBLE ASSETS


	As of
	December 31, 2021			September 30, 2022			September 30, 2022
	RMB			RMB			US$
				(unaudited)			(unaudited)
Acquired customer relationships		396,499			396,996			55,809
Acquired license and others		30,834			52,830			7,427
Less: accumulated amortization		(121,533	)		(153,630	)		(21,597	)

Intangible assets, net		305,800			296,196			41,639

The Group recorded amortization expense of RMB31,685 and RMB31,997 (US$4,498) for the nine months ended September 30, 2021 and 2022, respectively.

As of September 30, 2022, estimated amortization expense of the existing intangible assets for the three months ended December 31, 2022 and for the years ending December 31, 2023, 2024, 2025 and 2026 is RMB10,634, RMB39,872, RMB55,207, RMB54,714 and RMB51,821, respectively.

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


	As of
	December 31, 2021		September 30, 2022		September 30, 2022
	RMB		RMB		US$
			(unaudited)		(unaudited)
Payroll payable		59,432		63,947		8,990
Interest payable*		239,853		13,438		1,889
Deferred government grants		8,629		9,815		1,380
Other tax and surcharges payable		90,011		78,187		10,991
Accrued expenses		42,693		49,751		6,994
Others		70,639		96,979		13,633

		511,257		312,117		43,877

*	Interest payable as of December 31, 2021 included the incremental interest payable of RMB223,084 due upon the maturity of one bank, which was settled when the related bank loan was repaid in September 2022.

8. BANK LOANS

The Group’s borrowings consisted of the following:

As of

December 31,
2021

September 30,
2022

RMB

US$

(unaudited)

Secured short-term bank loans

260,980

455,443

64,025

Secured long-term bank loans

5,216,005

7,960,651

1,119,091

5,476,985

8,416,094

1,183,116

The Group entered into loan agreements with various financial institutions for data center project development and working capital purpose with terms ranging from 1 to 7 years.

As of September 30, 2022, the Group had total financing credit facilities of RMB5,704,381, US$570,000 and MYR248,000 from various financial institutions, of which the unused amount was RMB1,014,968, US$ nil and MYR nil, respectively.

The Group entered into a new syndication loan agreement with US$500,000 facility in June 2022. The facility has a 3-year tenor with a 2-year extension option. The Group had drawn down the facility in full as of September 30, 2022.

The weighted average interest rate on bank loans as of December 31, 2021 and September 30, 2022 was 7.12% and 6.21%, respectively. Management assessed that there was no breach of loan covenants for all its bank borrowings as of December 31, 2021 and September 30, 2022.

9. TAXATION

The Company’s effective tax rates are 33.5% and 29.0% for the nine months ended September 30, 2021 and 2022, respectively. The change in the effective tax rate is mainly due to the increase in operating income in certain PRC subsidiaries and the increase in non-deductible expenses including share-based compensation.

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

9. TAXATION (Continued)

The Group evaluated its income tax uncertainty in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. The Group elects to classify interest and penalties related to an uncertain tax position, if and when required, as part of income tax expense in the unaudited interim condensed consolidated statements of comprehensive income. As of September 30, 2022, the recorded unrecognized tax benefits are presented on a net basis against the deferred tax assets related to tax loss carry forwards on the Group’s unaudited interim condensed consolidated financial statements. It is possible that the amount of unrecognized tax benefits will further change in the next 12 months; however, an estimate of the range of the possible change cannot be made at this moment.

In general, the tax authorities have five to seven years to conduct examinations of the tax filings of the Group’s subsidiaries. Accordingly, the subsidiaries’ tax years of 2016 through 2021 remain open to examination by the respective tax authorities.

10. RESTRICTED NET ASSETS

Under PRC laws and regulations, there are restrictions on the Company’s PRC subsidiaries and the VIEs with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. The amounts of restricted assets including registered share capital, capital reserve and surplus reserves of the Company’s PRC subsidiaries and the VIEs were approximately RMB4,224,510 (US$593,872) as of September 30, 2022.

11. RELATED PARTY TRANSACTIONS

a)	Related parties

Equity method investee of the Company (referred to as “Investee”)

Hebei Jizongneng Energy Development Co., Ltd. (“Jizongneng”)

Affiliate of certain shareholders of the Company (collectively hereinafter referred to as “Shareholder Affiliates”)

Bain Capital Private Equity Advisors (China) Ltd.

Bain Capital Private Equity, LP

Bain Capital Mauritius

BCPE Bridge Cayman L.P.

BCC Mauritius Holdings PCC

Abiding Joy HK Limited

b)	The Group had the following related party transactions:

For the nine months ended September 30,

2021

2022

RMB

US$

(unaudited)

Purchase of utility from Jizongneng*

—

258,128

36,287

*	Utility purchased from Jizongneng represented electricity and related costs for the Group’s colocation services which was recorded in cost of revenues.

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

11. RELATED PARTY TRANSACTIONS (Continued)

c)	The Group had the following related party balances at the end of the period:

As of

December 31,
2021

September 30,
2022

RMB

US$

(unaudited)

Amounts due to related parties:

Investee

6,754

40,843

5,742

Shareholder Affiliates

32,078

30,769

4,325

38,832

71,612

10,067

All the balances with related parties as of December 31, 2021 and September 30, 2022 were unsecured. All outstanding balances are also repayable on demand unless otherwise disclosed.

12. EARNINGS PER SHARE

Basic and diluted earnings per share for each of the periods presented are calculated as follows:


	For the nine months ended September 30,
	2021					2022
	Class A		Class B			Class A				Class B
	RMB		RMB			RMB		US$		RMB			US$
	(unaudited)		(unaudited)			(unaudited)		(unaudited)		(unaudited)			(unaudited)
Earnings per share-basic:
Numerator:
Allocation of net income available to ordinary shareholders		97,555		104,200			269,581		37,897		265,587			37,335
Denominator:
Weighted average number of ordinary shares outstanding		350,963,669		374,867,453			367,092,587		367,092,587		361,654,431			361,654,431

Denominator used for earnings per share		350,963,669		374,867,453			367,092,587		367,092,587		361,654,431			361,654,431
Earnings per share-basic		0.28		0.28			0.73		0.10		0.73			0.10

Earnings per share-diluted:
Numerator:
Allocation of net income available to ordinary shareholders		97,555		104,200			269,581		37,897		265,587			37,335
Reallocation of net income available to ordinary shares as a result of conversion of Class B to Class A ordinary shares		104,200		—			265,587		37,335		—			—
Reallocation of net income to Class B ordinary shares		—		(96	)		—		—		(1,051	)		(148	)

Net income available to ordinary shareholders		201,755		104,104			535,168		75,232		264,536			37,187
Denominator:
Weighted average number of ordinary shares outstanding		350,963,669		374,867,453			367,092,587		367,092,587		361,654,431			361,654,431
Share-based awards		1,947,865		1,364,379			2,895,966		2,895,966		—			—
Conversion of Class B including potential ordinary shares to Class A ordinary shares		376,231,832		—			361,654,431		361,654,431		—			—

Denominator used for earnings per share		729,143,366		376,231,832			731,642,984		731,642,984		361,654,431			361,654,431
Earnings per share-diluted		0.28		0.28			0.73		0.10		0.73			0.10

CHINDATA GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

except for number of shares and per share data)

13. ACCUMULATED OTHER COMPREHENSIVE LOSS


	RMB
Balance as of January 1, 2021		(172,586	)
Foreign currency translation adjustments, net of tax of nil		(64,090	)

Balance as of September 30, 2021 (unaudited)		(236,676	)
Balance as of January 1, 2022		(257,977	)
Foreign currency translation adjustments, net of tax of nil		(125,473	)

Balance as of September 30, 2022 (unaudited)		(383,450	)

Balance as of September 30, 2022, in US$ (unaudited)		(53,905	)

There have been no reclassifications out of accumulated other comprehensive loss to net income for the periods presented.

14. BUSINESS COMBINATION

In March 2022, the Group completed a business combination, which the Group expected to increase its operating capacity in Thailand. The total purchase consideration was RMB76,029 (US$10,688). The acquired business was considered insignificant. The results of the acquired business’s operations have been included in the Group’s consolidated financial statements.

15. COMMITMENTS AND CONTINGENCIES

Capital expenditure commitments

The Group has commitments of RMB2,273,538 (US$319,609) for the purchase of certain data center equipment and construction in progress as of September 30, 2022, which are scheduled to be paid within one to two years.

Contingencies

In August 2020 (“Termination Date”), Bridge Datacentres (Mumbai) LLP (“Bridge Mumbai”), the Company’s subsidiary in India, exercised its rights under the force majeure clause and terminated its construction contact with Sterling & Wilson Private Limited (“S&W”), the contractor of its data center in India. Pursuant to the termination, S&W made a claim against Bridge Mumbai towards amounts payable for work performed through Termination Date, other costs and losses. In turn, Bridge Mumbai also submitted a claim against S&W towards the refund of cash advance payments previously made, and losses caused by S&W including delay in work performed, defective work, and replacement of contractor. In March 2021, Bridge Mumbai submitted a statement of defense. As of September 30, 2022, both parties had completed the pre-trial formalities and the hearings were still on-going. Based on management’s estimation and legal counsel’s advice, RMB31,162 (US$4,890) was accrued and recorded in “Others, net” in the consolidated statement of comprehensive loss for the year ended December 31, 2020, and there were no significant changes to such accrual balance as of December 31, 2021 and September 30, 2022.