阿里巴巴2019年财务报表Form20-F

UNITEDSTATES

SECURITIESANDEXCHANGECOMMISSION

Washington,D.C.20549

FORM20-F

(MarkOne)

អ

REGISTRATIONSTATEMENTPURSUANTTOSECTION12(B)OR12(G)OFTHESECURITIESEXCHANGEACTOF1934

OR

፤

ANNUALREPORTPURSUANTTOSECTION13OR15(D)OFTHESECURITIESEXCHANGEACTOF1934

ForthefiscalyearendedMarch31,2017

OR

អ

អ

TRANSITIONREPORTPURSUANTTOSECTION13OR15(D)OFTHESECURITIESEXCHANGEACTOF1934

OR

SHELLCOMPANYREPORTPURSUANTTOSECTION13OR15(D)OFTHESECURITIESEXCHANGEACTOF1934

Dateofeventrequiringthisshellcompanyreport

Forthetransitionperiodfrom

to

Commissionfilenumber001-36614

AlibabaGroupHoldingLimited

(ExactnameofRegistrantasspecifiedinitscharter)

CaymanIslands

(Jurisdictionofincorporationororganization)

c/oAlibabaGroupServicesLimited

26/FTowerOne,TimesSquare

1MathesonStreet,CausewayBay

HongKong

(Addressofprincipalexecutiveoffices)

TimothyA.Steinert,Esq.,GeneralCounselandSecretary

Telephone:+852-2215-5100

Facsimile:+852-2215-5200

AlibabaGroupHoldingLimited

c/oAlibabaGroupServicesLimited

26/FTowerOne,TimesSquare

1MathesonStreet,CausewayBay

HongKong

(Name,Telephone,E-mailand/orFacsimilenumberandAddressofCompanyContactPerson)

SecuritiesregisteredortoberegisteredpursuanttoSection12(b)oftheAct:

Titleofeachclass

Nameofeachexchangeonwhichregistered

OrdinaryShares,parvalueUS$0.000025pershare

AmericanDepositaryShares,eachrepresenting

oneOrdinaryShare

NewYorkStockExchange

SecuritiesregisteredortoberegisteredpursuanttoSection12(g)oftheAct:

None

SecuritiesforwhichthereisareportingobligationpursuanttoSection15(d)oftheAct:

None

Indicatethenumberofoutstandingsharesofeachoftheissuer’sclassesofcapitalorcommonstockasofthecloseoftheperiodcoveredbytheannual

report:2,529,364,189OrdinaryShares

Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.

፤YesអNo

Ifthisreportisanannualortransitionreport,indicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13or15(d)ofthe

SecuritiesExchangeActof1934.

អYes፤No

Indicatebycheckmarkwhethertheregistrant:(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934

duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfiling

requirementsforthepast90days.

፤YesអNo

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequired

tobesubmittedandpostedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiod

thattheregistrantwasrequiredtosubmitandpostsuchfiles).

፤YesអNo

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,oranemerginggrowthcompany.See

thedefinitionsof‘‘largeacceleratedfiler,’’‘‘acceleratedfiler,’’and‘‘emerginggrowthcompany’’inRule12b-2oftheExchangeAct.

Largeacceleratedfiler፤

Acceleratedfilerអ

Non-acceleratedfilerអ

Emerginggrowthcompanyអ

IfanemerginggrowthcompanythatpreparesitsfinancialstatementsinaccordancewithU.S.GAAP,indicatebycheckmarkiftheregistranthaselected

nottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)ofthe

ExchangeAct

Indicatebycheckmarkwhichbasisofaccountingtheregistranthasusedtopreparethefinancialstatementsincludedinthisfiling:

U.S.GAAP፤InternationalFinancialReportingStandardsasissued

bytheInternationalAccountingStandardsBoard

អ

Otherអ

អ

If‘‘Other’’hasbeencheckedinresponsetothepreviousquestion,indicatebycheckmarkwhichfinancialstatementitemtheregistranthaselected

tofollow.

អItem17អItem18

Ifthisisanannualreport,indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheSecuritiesExchangeAct

of1934).

អYes፤No

(APPLICABLEONLYTOISSUERSINVOLVEDINBANKRUPTCYPROCEEDINGSDURINGTHEPASTFIVEYEARS)

IndicatebycheckmarkwhethertheregistranthasfiledalldocumentsandreportsrequiredtobefiledbySections12,13or15(d)oftheSecurities

ExchangeActof1934subsequenttothedistributionofsecuritiesunderaplanconfirmedbyacourt.

អYesអNo

TABLEOFCONTENTS

Page

PARTI

ITEM1

ITEM2

ITEM3

ITEM4

IDENTITYOFDIRECTORS,SENIORMANAGEMENTANDADVISERS

..........

1

1

OFFERSTATISTICSANDEXPECTEDTIMETABLE..........................

KEYINFORMATION................................................

INFORMATIONONTHECOMPANY.....................................

1

56

ITEM4A.UNRESOLVEDSTAFFCOMMENTS.....................................

115

115

165

184

199

202

203

212

213

ITEM5

ITEM6

ITEM7

ITEM8

ITEM9

ITEM10

ITEM11

ITEM12

OPERATINGANDFINANCIALREVIEWANDPROSPECTS

DIRECTORS,SENIORMANAGEMENTANDEMPLOYEES....................

MAJORSHAREHOLDERSANDRELATEDPARTYTRANSACTIONS.............

...................

FINANCIALINFORMATION...........................................

THEOFFERANDLISTING...........................................

ADDITIONALINFORMATION.........................................

QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKET.RISK....

DESCRIPTIONOFSECURITIESOTHERTHANEQUITYSECURITIES...........

PARTII

DEFAULTS,DIVIDENDARREARAGESANDDELINQUENCIES

ITEM13

ITEM14

................

216

MATERIALMODIFICATIONSTOTHERIGHTSOFSECURITYHOLDERSANDUSE

OFPROCEEDS...................................................

216

216

217

217

217

217

ITEM15

CONTROLSANDPROCEDURES.......................................

ITEM16A.AUDITCOMMITTEEFINANCIALEXPERT.

ITEM16B.CODEOFETHICS..................................................

ITEM16C.PRINCIPALACCOUNTANTFEESANDSERVICES..........................

...............................

ITEM16D.EXEMPTIONSFROMTHELISTINGSTANDARDSFORAUDITCOMMITTEE......

ITEM16E.PURCHASESOFEQUITYSECURITIESBYTHEISSUERANDAFFILIATED

PURCHASERS....................................................

217

218

218

219

ITEM16F.CHANGEINREGISTRANT’SCERTIFYINGACCOUNTANT...................

ITEM16G.CORPORATEGOVERNANCE..........................................

ITEM16H.MINESAFETYDISCLOSURE..........................................

PARTIII

ITEM17

ITEM18

ITEM19

FINANCIALSTATEMENTS............................................

FINANCIALSTATEMENTS............................................

EXHIBITS........................................................

220

220

220

i

CONVENTIONSTHATAPPLYTOTHISANNUALREPORTONFORM20-F

Unlessthecontextotherwiserequires,referencesinthisannualreportonForm20-Fto:

•‘‘ADSs’’aretotheAmericandepositaryshares,eachofwhichrepresentsoneordinaryshare;

•‘‘Alipay’’aretoACo.,Ltd.,acompanywithwhichwehavealong-termcontractualrelationship

andwhichisawholly-ownedsubsidiaryofAntFinancialServicesor,wherethecontextrequires,its

predecessorentities.WedonothaveanyequityinterestinorcontrolovereitherAntFinancialServices

orAlipay;

•‘‘annualactivebuyers’’aretouseraccountsthathadoneormoreconfirmedordersontherelevant

platformduringtheprevioustwelvemonths,regardlessofwhetherornotthebuyerandsellersettlethe

transaction;

•‘‘annualactivesellers’’aretoselleraccounts(representingstorefronts)thathadoneormoreconfirmed

ordersontherelevantplatformduringtheprevioustwelvemonthsandthatwereactiveattheendofthe

period,regardlessofwhetherornotthebuyerandsellersettlethetransaction;

•‘‘annualactiveusers’’forAntFinancialServicesaretouseraccountsthatusedoneormoreservices

providedbyAntFinancialServicesanditsinvestees,suchaspayment,wealthmanagement,lending,

insuranceandcreditsystem,duringtheprevioustwelvemonths;

•‘‘AntFinancialServices’’aretoAntSmallandMicroFinancialServicesGroupCo.,Ltd.(formerlyknownas

ZhejiangAntSmallandMicroFinancialServicesGroupCo.,Ltd.),acompanyorganizedunderthelawsof

thePRC;

•‘‘CainiaoNetwork’’aretoCainiaoSmartLogisticsNetworkLimited,acompanyincorporatedunderthe

lawsoftheCaymanIslands,andanaffiliateinwhichweownanapproximately47%equityinterestasof

March31,2017,togetherwithitssubsidiaries,includingCainiaoNetworkechTnologyCo.,Ltd.;

•‘‘China’’andthe‘‘PRC’’aretothePeople’sRepublicofChina,excluding,forthepurposesofthisannual

reportonly,TaiwanandthespecialadministrativeregionsofHongKongandMacau;

•‘‘Chinaretailmarketplaces’’aretoaoTbaoMarketplaceandTmall(includingJuhuasuan),collectively.

PromotionalslotsonJuhuasuanmayonlybepurchasedbyaobTaoMarketplaceandTmallmerchants,and

transactionsfromtrafficoriginatingonJuhuasuanarecompletedonthemerchants’storefrontsaobonaoT

MarketplaceorTmall;

•‘‘GMV’’aretothevalueofconfirmedordersofproductsandservicesonourmarketplaces,regardlessof

how,orwhether,thebuyerandsellersettlethetransaction.Unlessotherwisestated,GMVinreferenceto

ourmarketplacesincludesonlyGMVtransactedonourChinaretailmarketplaces.GMVgeneratedfrom

trafficthroughJuhuasuanisrecordedaseitheraoTbaoMarketplaceGMVorTmallGMVdependingon

whichofthesetwomarketplacesthetransactioniscompleted.OurcalculationofGMVforourChinaretail

marketplacesincludesshippingchargespaidbybuyerstosellers.Asaprudentialmatteraimedat

eliminatinganyinfluenceonourGMVofpotentiallyfraudulenttransactions,weexcludefromour

calculationofGMVtransactionsincertainproductcategoriesovercertainamountsandtransactionsby

buyersincertainproductcategoriesoveracertainamountperday;

•‘‘HK$’’and‘‘HongKongdollars’’aretothelegalcurrencyoftheHongKongSpecialAdministrativeRegion

ofthePeople’sRepublicofChina;

•‘‘ISVs’’aretoindependentsoftwarevendors;

•‘‘mobileGMV’’aretothatportionofGMVgeneratedbyordersthatwereconfirmedusingamobileappor

mobilebrowser;

ii

•‘‘mobileMAUs’’inagivenmontharetothenumberofuniquemobiledevicesthatwereusedtovisitor

accesscertainofourmobileapplicationsatleastonceduringthatmonth;

•‘‘mobilemonetizationrate’’aretomobilerevenuefromChinacommerceretailexpressedasapercentageof

mobileGMVforagivenperiod;

•‘‘mobilerevenue’’aretothatportionofrevenuegeneratedbyonlinemarketingservicesdeliveredona

mobileappormobilebrowser,andcommissionsonmobileGMVsettledthroughAlipaywithmerchants,as

capturedbyouronlineauctionsystem,real-timebiddingsystemandothersettlementsystems;

•‘‘monetizationrate’’aretorevenuefromChinacommerceretailexpressedasapercentageofGMVfora

givenperiod;

•‘‘orders’’aretoeachconfirmedorderfromatransactionbetweenabuyerandasellerforproductsand

servicesontherelevantplatform,eveniftheseordersincludemultipleitems,duringthespecifiedperiod,

whetherornotthetransactionissettled;

•‘‘retailmarketplaces’’aretoaTobaoMarketplace,Tmall(includingJuhuasuan),andAliExpress,collectively;

•‘‘RMB’’and‘‘Renminbi’’aretothelegalcurrencyofChina;

•‘‘S$’’and‘‘Singaporedollars’’aretothelegalcurrencyoftheRepublicofSingapore;

•‘‘SMEs’’aretosmallandmedium-sizedenterprises;

•‘‘SoftBank’’aretoSoftBankGroupCorp.(formerlyknownasSoftBankCorp.beforeJuly2,2015),SBBM

CorporationandWestRaptorHoldings,LLC,collectively;

•‘‘variableinterestentities’’aretoourvariableinterestentitiesthatare100%ownedbyPRCcitizensorby

PRCentitiesownedbyPRCcitizens,whereapplicable,thatholdtheInternetcontentproviderlicenses,or

ICPlicenses,orotherbusinessoperationlicensesorapprovals,andgenerallyoperatethevariouswebsites

forourInternetbusinessesorotherbusinessesinwhichforeigninvestmentisrestrictedorprohibited,and

areconsolidatedintoourconsolidatedfinancialstatementsinaccordancewithU.S.GAAPasiftheywere

ourwholly-ownedsubsidiaries;

•‘‘we,’’‘‘us,’’‘‘ourcompany’’and‘‘our’’aretoAlibabaGroupHoldingLimitedanditsconsolidated

subsidiariesanditsaffiliatedconsolidatedentities,includingourvariableinterestentitiesandtheir

subsidiaries;

•‘‘wholesalemarketplaces’’andA,collectively;

•‘‘Yahoo’’aretoYahoo!Inc.andAltabaHoldingsHongKongLimited(formerlyknownasYahoo!Hong

KongHoldingsLimited),collectively;and

•‘‘US$,’’‘‘dollars’’and‘‘U.S.dollars’’aretothelegalcurrencyoftheUnitedStates.

OurreportingcurrencyistheRenminbi.ThisannualreportcontainstranslationsofRenminbi,HongKong

dollarandSingaporedollaramountsintoU.S.dollarsfortheconvenienceofthereader.Unlessotherwisestated,

alltranslationsofRenminbi,HongKongdollarsandSingaporedollarsintoU.S.dollarsweremadeatRMB6.8832

toUS$1.00,HK$7.7714toUS$1.00,andS$1.3967toUS$1.00,therespectiveexchangeratesonMarch31,2017set

forthintheH.10statisticalreleaseoftheFederalReserveBoard.WemakenorepresentationthattheRenminbi,

HongKongdollar,SingaporedollarorU.S.dollaramountsreferredtointhisannualreportcouldhavebeenor

couldbeconvertedintoU.S.dollars,Renminbi,HongKongdollarsorSingaporedollars,asthecasemaybe,at

anyparticularrateoratall.OnJune9,2017,thenoonbuyingrateforRenminbiwasRMB6.7970toUS$1.00.

iii

FORWARD-LOOKINGSTATEMENTS

ThisannualreportonForm20-Fcontainsforward-lookingstatementsthatinvolverisksanduncertainties,

includingstatementsbasedonourcurrentexpectations,assumptions,estimatesandprojectionsaboutus,our

industryandtheregulatoryenvironmentinwhichweandcompaniesintegraltoourecosystemoperate.All

statementsotherthanstatementsofhistoricalfactsareforward-lookingstatements.Theseforward-looking

statementsaremadeunderthe‘‘safeharbor’’provisionunderSection21EoftheSecuritiesExchangeActof1934,

asamended,andasdefinedinthePrivateSecuritiesLitigationReformActof1995.Thesestatementsinvolve

knownandunknownrisks,uncertaintiesandotherfactorsthatmaycauseouractualresults,performanceor

achievementstobemateriallydifferentfromthoseexpressedorimpliedbytheforward-lookingstatements.In

somecases,theseforward-lookingstatementscanbeidentifiedbywordsorphrasessuchas‘‘may,’’‘‘will,’’

‘‘expect,’’‘‘anticipate,’’‘‘aim,’’‘‘estimate,’’‘‘intend,’’‘‘plan,’’‘‘believe,’’‘‘potential,’’‘‘continue,’’‘‘is/arelikelyto’’or

othersimilarexpressions.Theforward-lookingstatementsincludedinthisannualreportrelateto,amongothers:

•ourgrowthstrategies;

•ourfuturebusinessdevelopment,resultsofoperationsandfinancialcondition;

•trendsinonlineandmobilecommerceandtheoverallInternetindustry,bothgloballyandinthePRC;

•competitioninourindustries;

•fluctuationsingeneraleconomicandbusinessconditionsinChinaandglobally;

•expectedchangesinourrevenuesandcertaincostandexpenseitemsandouroperatingmargins;

•theregulatoryenvironmentinwhichweandcompaniesintegraltoourecosystemoperate;and

•assumptionsunderlyingorrelatedtoanyoftheforegoing.

TheglobalandPRCInternet,retail,wholesale,onlineandmobilecommerce,cloudcomputing,digitalmedia

andentertainment,anddataindustriesmarketmaynotgrowattheratesprojectedbymarketdata,oratall.The

failureoftheseindustriesormarketstogrowattheprojectedratesmayhaveamaterialadverseeffectonour

business,financialconditionandresultsofoperationsandthemarketpriceofourADSs.Ifanyoneormoreof

theassumptionsunderlyingthemarketdataturnsouttobeincorrect,actualresultsmaydifferfromtheprojections

basedontheseassumptions.Youshouldnotplaceunduerelianceontheseforward-lookingstatements.

Theforward-lookingstatementsmadeinthisannualreportrelateonlytoeventsorinformationasofthedate

onwhichthestatementsaremadeinthisannualreport.Weundertakenoobligationtoupdateanyforward-

lookingstatementstoreflecteventsorcircumstancesafterthedateonwhichthestatementsaremadeortoreflect

theoccurrenceofunanticipatedevents.Youshouldreadthisannualreportandthedocumentsthatwehave

referredtointhisannualreportcompletelyandwiththeunderstandingthatouractualfutureresultsmaybe

materiallydifferentfromwhatweexpect.

iv

PARTI

ITEM1IDENTITYOFDIRECTORS,SENIORMANAGEMENTANDADVISERS

NotApplicable.

ITEM2OFFERSTATISTICSANDEXPECTEDTIMETABLE

NotApplicable.

ITEM3KEYINFORMATION

A.SelectedFinancialData

TheselectedconsolidatedstatementsofoperationsdatafortheyearsendedMarch31,2015,2016and2017,

andtheselectedconsolidatedbalancesheetdataasofMarch31,2016and2017havebeenderivedfromour

auditedconsolidatedfinancialstatementsincludedelsewhereinthisannualreport.Ourselectedconsolidated

statementsofoperationsdatafortheyearsendedMarch31,2013and2014andtheselectedconsolidatedbalance

sheetdataasofMarch31,2013,2014and2015havebeenderivedfromourauditedconsolidatedfinancial

statementsnotincludedinthisannualreport.Ourfinancialstatementshavebeenpreparedinaccordancewith

generallyacceptedaccountingprinciplesintheUnitedStates,orU.S..

GAAP

Thefollowingselectedconsolidatedfinancialdatafortheperiodsandasofthedatesindicatedarequalified

byreferencetoandshouldbereadinconjunctionwithourauditedconsolidatedfinancialstatementsandrelated

notesand‘‘Item5.OperatingandFinancialReviewandProspects,’’bothofwhichareincludedelsewhereinthis

annualreport.

Ourhistoricalresultsforanypriorperioddonotnecessarilyindicateourresultstobeexpectedforany

futureperiod.

1

ConsolidatedStatementsofOperationsData:

YearendedMarch31,

2013

2014

2015

2016

2017

RMB

RMB

RMB

RMB

RMB

US$

(inmillions,exceptpersharedata)

Revenue................................34,51752,50476,204101,143158,27322,994

Costofrevenue...........................(9,719)(13,369)(23,834)(34,355)(59,483)(8,642)

Productdevelopmentexpenses.................(3,753)(5,093)(10,658)(13,788)(17,060)(2,479)

Salesandmarketingexpenses..................(3,613)(4,545)(8,513)(11,307)(16,314)(2,370)

Generalandadministrativeexpenses(1)............(2,889)(4,218)(7,800)(9,205)(12,239)(1,778)

Amortizationofintangibleassets...............

Impairmentofgoodwillandintangibleassets.......

YahooTIPLAamendmentpayment............(3,487)

(2)

(130)

(175)

(315)(2,089)(2,931)(5,122)(744)

(44)

(175)

—

(455)

—

—

—

—

—

—

Incomefromoperations......................10,75124,92023,135

Interestandinvestmentincome,net.............

29,102

52,254

48,055

8,559

6,981

1,244

39

1,648

9,455

Interestexpense...........................(1,572)(2,195)(2,750)(1,946)(2,671)(388)

Otherincome,net.........................

894

2,429

2,486

2,058

6,086

884

Incomebeforeincometaxandshareofresultsof

equityinvestees..........................10,11226,80232,326

81,468

60,029

8,721

Incometaxexpenses........................(1,457)(3,196)(6,416)(8,449)(13,776)(2,002)

Shareofresultsofequityinvestees..............

(6)

(203)(1,590)(1,730)(5,027)(730)

Netincome..............................

Net(income)lossattributabletononcontrolling

interests...............................

8,64923,40324,320

71,289

41,226

5,989

(117)

(88)

(59)

171

2,449

356

NetincomeattributabletoAlibabaGroupHolding

Limited...............................

Accretionofconvertiblepreferenceshares(3)........

8,53223,31524,261

71,460

—

—

43,675

—

—

6,345

—

—

(17)

(31)

(15)

(97)

Dividendsaccruedonconvertiblepreferenceshares.

(3)

(111)

(208)

Netincomeattributabletoordinaryshareholders....

8,40423,07624,149

71,460

43,675

6,345

Earningspershare/ADSattributabletoordinary

shareholders:

Basic..................................

Diluted.................................

3.66

3.57

10.61

10.00

10.33

9.70

29.07

27.89

17.52

16.97

2.55

2.47

Weightedaveragenumberofsharesusedincomputing

earningspershare:

Basic..................................

Diluted.................................

2,294

2,389

2,175

2,332

2,337

2,500

2,458

2,562

2,493

2,573

Supplementalinformation:(4)

AdjustedEBITDA.........................16,60730,73140,753

52,340

74,45610,817

AdjustedEBITA...........................15,80229,39238,42748,57069,17210,049

Non-GAAPnetincome......................13,85328,26334,876

Non-GAAPdilutedEPS.....................

Freecashflow............................19,74532,26948,121

42,791

16.77

51,279

57,871

23.44

68,790

8,408

3.41

9,994

5.75

12.08

13.93

(1)Infiscalyear2014,theseexpensesincludedanequity-settleddonationexpenseofRMB1,269millionrelatingtothegrantofoptionsto

purchase50,000,000ofourordinarysharestoanon-profitorganizationdesignatedbyJackMaandJoeTsai.

(2)WeenteredintotheYahooTIPLAinOctober2005,pursuanttowhichwepaidroyaltyfeestoYahoo.WeandYahooamendedtheexisting

TIPLAinSeptember2012,pursuanttowhichwemadealumpsumpaymentintheamountofUS$550million.

(3)UponthecompletionofourinitialpublicofferinginSeptember2014,allofourthenoutstandingconvertiblepreferenceshareswere

convertedintoordinaryshares.

(4)See‘‘Non-GAAPMeasures’’below.

2

Non-GAAPMeasures

WeuseadjustedEBITDA(includingadjustedEBITDAmargin),adjustedEBITA(includingadjustedEBITA

margin),non-GAAPnetincome,non-GAAPdilutedEPSandfreecashflow,eachanon-GAAPfinancialmeasure,

inevaluatingouroperatingresultsandforfinancialandoperationaldecision-makingpurposes.

WebelievethatadjustedEBITDA,adjustedEBITA,non-GAAPnetincomeandnon-GAAPdilutedEPShelp

identifyunderlyingtrendsinourbusinessthatcouldotherwisebedistortedbytheeffectofcertainincomeor

expensesthatweincludeinincomefromoperations,netincomeanddilutedEPS.Webelievethatadjusted

EBITDA,adjustedEBITA,non-GAAPnetincomeandnon-GAAPdilutedEPSprovideusefulinformationabout

ourcoreoperatingresults,enhancetheoverallunderstandingofourpastperformanceandfutureprospectsand

allowforgreatervisibilitywithrespecttokeymetricsusedbyourmanagementinitsfinancialandoperational

decision-making.

Weconsiderfreecashflowtobealiquiditymeasurethatprovidesusefulinformationtomanagementand

investorsabouttheamountofcashgeneratedbyourbusinessthatcanbeusedforstrategiccorporatetransactions,

includinginvestinginournewbusinessinitiatives,makingstrategicinvestmentsandacquisitionsandstrengthening

ourbalancesheet.

AdjustedEBITDA,adjustedEBITA,non-GAAPnetincome,non-GAAPdilutedEPSandfreecashflow

shouldnotbeconsideredinisolationorconstruedasanalternativetoincomefromoperations,netincome,diluted

EPS,cashflowsoranyothermeasureofperformanceorasanindicatorofouroperatingperformance.These

non-GAAPfinancialmeasurespresentedheremaynotbecomparabletosimilarlytitledmeasurespresentedby

othercompanies.Othercompaniesmaycalculatesimilarlytitledmeasuresdifferently,limitingtheirusefulnessas

comparativemeasurestoourdata.

AdjustedEBITDArepresentsnetincomebefore(i)interestandinvestmentincome,net,interestexpense,

otherincome,net,incometaxexpensesandshareofresultsofequityinvestees,(ii)certainnon-cashexpenses,

consistingofshare-basedcompensationexpense,amortization,depreciation,impairmentofgoodwillandintangible

assetsand(iii)one-timeexpenseitemsconsistingoftheYahooTIPLAamendmentpaymentandanequity-settled

donationexpense,whichwedonotbelievearereflectiveofourcoreoperatin