-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HwqLPWewwFBtBsjfcrhhZu3iEdam8oz30YS7IxZs0YAAjwpInbJgDmV4Xps/VQip wcOu08ISSyUmZZ5gmHWzIA== 0001157523-05-006241.txt : 20050719 0001157523-05-006241.hdr.sgml : 20050719 20050719164452 ACCESSION NUMBER: 0001157523-05-006241 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050719 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050719 DATE AS OF CHANGE: 20050719 FILER: COMPANY DATA: COMPANY CONFORMED NAME: YAHOO INC CENTRAL INDEX KEY: 0001011006 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 770398689 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28018 FILM NUMBER: 05961967 BUSINESS ADDRESS: STREET 1: YAHOO! INC. STREET 2: 701 FIRST AVENUE CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4083493300 MAIL ADDRESS: STREET 1: 701 FIRST AVENUE CITY: SUNNYVALE STATE: CA ZIP: 94089 8-K 1 a4933131.txt YAHOO! 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 8-K --------------- Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 July 19, 2005 Date of Report (Date of Earliest Event Reported) --------------- Yahoo! Inc. (Exact name of Registrant as specified in its charter) --------------- Delaware 0-28018 77-0398689 (State or other Jurisdiction (Commission File No.) (IRS Employer of Incorporation) Identification No.) 701 First Ave. Sunnyvale, California 94089 (Address of principal executive offices, including zip code) (408) 349-3300 (Registrant's telephone number, including area code) ================================================================================ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ================================================================================ Item 2.02 Results of Operations and Financial Condition The information in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended. On July 19, 2005, Yahoo! Inc., a Delaware corporation ("Yahoo!") announced its financial results for the second quarter ended June 30, 2005 and certain other information. A copy of Yahoo!'s press release announcing these financial results and certain other information is attached hereto as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits (c) Exhibits. The following exhibit is furnished with this report on Form 8-K: 99.1 Yahoo! Inc. press release dated July 19, 2005. 2 ================================================================================ SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. YAHOO! INC. By:/s/ Susan Decker ---------------------------------------- Susan Decker Executive Vice President, Finance and Administration, and Chief Financial Officer (Principal Financial Officer) Date: July 19, 2005 3 YAHOO! INC. INDEX TO EXHIBITS Exhibit Number Description - -------------- ----------- 99.1 Press Release dated July 19, 2005 4 EX-99.1 2 a4933131ex991.txt YAHOO! PRESS RELEASE EXHIBIT 99.1 Exhibit 99.1 Yahoo! Reports Second Quarter 2005 Financial Results; Revenues - $1,253 Million, Operating Income - $261 Million, Operating Income Before Depreciation and Amortization - $368 Million SUNNYVALE, Calif.--(BUSINESS WIRE)--July 19, 2005--Yahoo! Inc. (Nasdaq:YHOO) today reported results for the second quarter ended June 30, 2005. "Yahoo! continued to see solid growth in the second quarter as a result of our strength in both search marketing and brand advertising, increased engagement from our large, global audience, and our ability to execute and perform according to plan," said Terry Semel, chairman and chief executive officer, Yahoo!. "We have a healthy business model that we believe will enable us to take advantage of future growth opportunities and we remain dedicated to providing our users with the very best services on the Internet." Consolidated Financial Results -- Revenues were $1,253 million for the second quarter of 2005, a 51 percent increase compared to $832 million for the same period of 2004. -- Marketing services revenue was $1,094 million for the second quarter of 2005, a 51 percent increase compared to $723 million for the same period of 2004. -- Fees revenue was $159 million for the second quarter of 2005, a 45 percent increase compared to $109 million for the same period of 2004. -- Revenues excluding traffic acquisition costs ("TAC") were $875 million for the second quarter of 2005, a 44 percent increase compared to $609 million for the same period of 2004. -- Gross profit for the second quarter of 2005 was $767 million, a 43 percent increase compared to $535 million for the same period of 2004. -- Operating income for the second quarter of 2005 was $261 million, a 75 percent increase compared to $149 million for the same period of 2004. -- Operating income before depreciation and amortization for the second quarter of 2005 was $368 million, a 57 percent increase compared to $234 million for the same period of 2004. -- Cash flow from operating activities for the second quarter of 2005 was $404 million, a 62 percent increase compared to $250 million for the same period of 2004. -- Free cash flow for the second quarter of 2005 was $300 million, a 55 percent increase compared to $194 million for the same period of 2004. -- Net income for the second quarter of 2005 was $755 million or $0.51 per diluted share (including net income of $563 million, or $0.38 per diluted share, related to the sale of an investment). This compares with net income of $113 million or $0.08 per diluted share for the same period of 2004. "We are very pleased with our second quarter results as they clearly underscore two fundamental business model strengths: excellent growth and great balance," said Susan Decker, chief financial officer, Yahoo!. "We see this as a terrific combination leading to the quarter's strong organic revenue growth, robust profitability, and substantial free cash flow." Segment Financial Results -- United States revenues for the second quarter of 2005 were $870 million, a 39 percent increase from the $624 million reported for the same period of 2004. -- International revenues for the second quarter of 2005 were $383 million, an 84 percent increase from the $208 million reported for the same period of 2004. -- United States segment operating income before depreciation and amortization for the second quarter of 2005 was $291 million, a 47 percent increase from the $198 million reported for the same period of 2004. -- International segment operating income before depreciation and amortization for the second quarter of 2005 was $77 million, a 116 percent increase from the $36 million reported for the same period of 2004. Cash Flow Information Free cash flow was $300 million in the second quarter of 2005 compared to $194 million for the same period of 2004. Cash, cash equivalents and investments in marketable debt securities grew by $1,073 million from $3,852 million at March 31, 2005 to $4,925 million at June 30, 2005. In addition to free cash flow of $300 million, Yahoo! generated $212 million from the issuance of common stock as a result of the exercise of employee stock options, and $959 million in proceeds from sales of marketable equity securities. These increases were offset by a net $264 million used in structured stock repurchase transactions, and $122 million used for acquisitions and investing activities. Please refer to the "Note to Unaudited Condensed Consolidated Statements of Operations" for definitions of certain key financial measures used here and in the "Business Outlook" attached to this press release. Quarterly Conference Call Yahoo! will host a conference call to discuss second quarter results at 5:00 p.m. Eastern Time today. A live webcast of the conference call, together with supplemental financial information can be accessed through the Company's Investor Relations website at http://yhoo.client.shareholder.com/earnings.cfm. In addition, an archive of the webcast can be accessed through the same link. An audio replay of the call will be available following the conference call by calling 877-213-9653 or 630-652-3041, reservation number: 11995938. About Yahoo! Yahoo! Inc. is a leading global internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! seeks to provide online products and services essential to users' lives, and offers a full range of tools and marketing solutions for businesses to connect with Internet users around the world. Yahoo! is headquartered in Sunnyvale, California. This press release includes the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission: revenues excluding traffic acquisition costs, operating income before depreciation and amortization, and free cash flow. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. See "Note to Unaudited Condensed Consolidated Statements of Operations" and "Reconciliations to Unaudited Condensed Consolidated Statements of Operations" included in this press release for further information regarding these non-GAAP financial measures. This press release and its attachments contain forward-looking statements that involve risks and uncertainties concerning Yahoo!'s expected financial performance (as described without limitation in the Business Outlook section and quotations from management in this press release), as well as Yahoo!'s strategic and operational plans. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company's ability to compete with new or existing competitors; reduction in spending by, or loss of, marketing services customers; the demand by customers for Yahoo!'s premium services; acceptance by users of new products and services; risks related to the integration of recent acquisitions; risks related to the Company's international operations; failure to manage growth and diversification; adverse results in litigation, including intellectual property infringement claims; the Company's ability to protect its intellectual property and the value of its brands; dependence on key personnel; dependence on third parties for technology, services, content and distribution; and general economic conditions. All information set forth in this release and its attachments is as of July 19, 2005. Yahoo! undertakes no duty to update this information. More information about potential factors that could affect the Company's business and financial results is included under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Company's Annual Report on Form 10-K for the year ended December 31, 2004 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 which are on file with the SEC and available at the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo!'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, which will be filed with the SEC in the third quarter of 2005. Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners. Yahoo! Inc. Unaudited Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, ----------------------- ----------------------- 2004 2005 2004 2005 ----------- ----------- ----------- ----------- Revenues $ 832,299 $ 1,252,997 $ 1,590,085 $ 2,426,739 Cost of revenues 297,383 485,898 579,088 939,195 ----------- ----------- ----------- ----------- Gross profit 534,916 767,099 1,010,997 1,487,544 ----------- ----------- ----------- ----------- Operating expenses: Sales and marketing 191,875 246,406 358,170 476,925 Product development 87,140 125,544 164,129 244,893 General and administrative 63,159 81,430 120,715 154,975 Stock compensation expense (1) 7,140 10,948 19,712 20,414 Amortization of intangibles 36,108 41,414 66,620 81,617 ----------- ----------- ----------- ----------- Total operating expenses 385,422 505,742 729,346 978,824 ----------- ----------- ----------- ----------- Income from operations 149,494 261,357 281,651 508,720 Other income, net 13,179 979,736 27,557 1,029,730 ----------- ----------- ----------- ----------- Income before income taxes, earnings in equity interests, minority interests 162,673 1,241,093 309,208 1,538,450 Provision for income taxes (72,517) (515,855) (137,226) (636,290) Earnings in equity interests 24,108 33,105 43,976 62,483 Minority interests in operations of consolidated subsidiaries (1,752) (3,654) (2,234) (5,394) ----------- ----------- ----------- ----------- Net income $ 112,512 $ 754,689 $ 213,724 $ 959,249 =========== =========== =========== =========== Net income per share - diluted $ 0.08 $ 0.51 $ 0.15 $ 0.65 =========== =========== =========== =========== Shares used in per share calculation - diluted 1,449,707 1,484,200 1,438,128 1,481,114 =========== =========== =========== =========== (1) Stock compensation expense is allocated as follows: Sales and marketing $ 2,376 $ 1,509 $ 5,981 $ 2,999 Product development 2,548 3,741 7,271 7,003 General and administrative 2,216 5,698 6,460 10,412 ----------- ----------- ----------- ----------- Total stock compensation expense $ 7,140 $ 10,948 $ 19,712 $ 20,414 =========== =========== =========== =========== - ---------------------------------------------------------------------- Supplemental Financial Data (See Note) - --------------------------- Revenues excluding traffic acquisition costs ("TAC") $ 609,141 $ 875,112 $ 1,159,291 $ 1,695,867 Operating income before depreciation and amortization $ 234,062 $ 368,440 $ 444,983 $ 713,502 Free cash flow $ 194,003 $ 299,874 $ 391,289 $ 617,440 - ---------------------------------------------------------------------- Yahoo! Inc. Note to Unaudited Condensed Consolidated Statements of Operations This press release includes the non-GAAP financial measures of revenues excluding traffic acquisition costs, operating income before depreciation and amortization, and free cash flow, which are reconciled to gross profit, income from operations, and cash flow from operating activities, respectively, which we believe are the most comparable GAAP measures. We use these non-GAAP financial measures for internal managerial purposes, when publicly providing business outlook, and as a means to evaluate period-to-period comparisons. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, gross profit, income from operations, and cash flow from operating activities calculated in accordance with generally accepted accounting principles. Revenues excluding traffic acquisition costs or TAC is defined as gross profit plus other cost of revenues. Under GAAP, both our revenues and cost of revenues include TAC. In defining revenues excluding TAC as our non-GAAP gross profit measure, we have removed TAC from both revenues and cost of revenues. TAC consists of payments made to affiliates that have integrated our sponsored search offerings into their websites and payments made to companies that direct consumer and business traffic to the Yahoo! website. We present revenues excluding TAC: (1) to provide a metric for our investors to analyze and value our Company and (2) to provide investors one of the primary metrics used by the Company for evaluation and decision-making purposes. We provide revenues excluding TAC because we believe it is useful to investors in valuing our Company. One of the ways investors value companies is to apply a multiple to revenues. Since a significant portion of the GAAP revenues associated with our sponsored search offerings is paid to our third party affiliates, we believe investors find it more meaningful to apply multiples to revenues excluding TAC to assess our value as this avoids "double counting" revenues that are paid to, and being reported by, our third party affiliates. Further, management uses revenues excluding TAC for evaluating the performance of our business, making operating decisions, for budgeting purposes, and as a factor in determining management compensation. A limitation of revenues excluding TAC is that it is a measure which we have defined for internal and investor purposes that may be unique to the Company and therefore it may not enhance the comparability of our results to other companies in our industry who have similar business arrangements but address the impact of TAC differently. Operating income before depreciation and amortization is defined as income from operations before depreciation, amortization of intangible assets and amortization of stock compensation expense. We consider operating income before depreciation and amortization to be an important indicator of the operational strength of the Company. This measure eliminates the effects of depreciation, amortization of intangible assets and amortization of stock compensation expense from period to period, which we believe is useful to management and investors in evaluating the operating performance of the Company, as depreciation and amortization costs are not directly attributable to the underlying performance of the Company's business operations. A limitation associated with this measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company's businesses. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. A further limitation associated with this measure is that it does not include stock compensation expenses related to our workforce. Management compensates for this limitation by providing supplemental information about stock compensation expense on the face of the consolidated statements of operations. Free cash flow is defined as cash flow from operating activities including the tax benefit from stock options, less net capital expenditures and dividends received. We consider free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by the business after the acquisition of property and equipment, which can then be used for strategic opportunities including, among others, investing in the Company's business, making strategic acquisitions, strengthening the balance sheet and repurchasing stock. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Yahoo! Inc. Reconciliations to Unaudited Condensed Consolidated Statements of Operations (in thousands) Three Months Ended Six Months Ended June 30, June 30, ----------------------------------------------- 2004 2005 2004 2005 ----------- ----------- ----------- ----------- Revenues for groups of similar services (2): Marketing services $ 722,705 $ 1,094,301 $ 1,387,751 $ 2,119,097 Fees 109,594 158,696 202,334 307,642 ----------- ----------- ----------- ----------- Total revenues $ 832,299 $ 1,252,997 $ 1,590,085 $ 2,426,739 =========== =========== =========== =========== Revenues by segment: United States $ 624,161 $ 869,517 $ 1,223,432 $ 1,688,243 International 208,138 383,480 366,653 738,496 ----------- ----------- ----------- ----------- Total revenues $ 832,299 $ 1,252,997 $ 1,590,085 $ 2,426,739 =========== =========== =========== =========== Cost of revenues: Traffic acquisition costs ("TAC") $ 223,158 $ 377,885 $ 430,794 $ 730,872 Other cost of revenues 74,225 108,013 148,294 208,323 ----------- ----------- ----------- ----------- Total cost of revenues $ 297,383 $ 485,898 $ 579,088 $ 939,195 =========== =========== =========== =========== Revenues excluding TAC: Gross profit $ 534,916 $ 767,099 $ 1,010,997 $ 1,487,544 Other cost of revenues 74,225 108,013 148,294 208,323 ----------- ----------- ----------- ----------- Revenues excluding TAC $ 609,141 $ 875,112 $ 1,159,291 $ 1,695,867 =========== =========== =========== =========== Revenues excluding TAC by segment: United States: Gross profit $ 413,788 $ 575,460 $ 802,896 $ 1,115,549 Other cost of revenues 60,304 84,585 122,921 163,388 ----------- ----------- ----------- ----------- Revenues excluding TAC $ 474,092 $ 660,045 $ 925,817 $ 1,278,937 =========== =========== =========== =========== International: Gross profit $ 121,128 $ 191,639 $ 208,101 $ 371,995 Other cost of revenues 13,921 23,428 25,373 44,935 ----------- ----------- ----------- ----------- Revenues excluding TAC $ 135,049 $ 215,067 $ 233,474 $ 416,930 =========== =========== =========== =========== Operating income before depreciation and amortization: Income from operations $ 149,494 $ 261,357 $ 281,651 $ 508,720 Depreciation and amortization 77,428 96,135 143,620 184,368 Stock compensation expense 7,140 10,948 19,712 20,414 ----------- ----------- ----------- ----------- Operating income before depreciation and amortization $ 234,062 $ 368,440 $ 444,983 $ 713,502 =========== =========== =========== =========== Operating income before depreciation and amortization by segment: Operating income before depreciation and amortization - United States $ 198,365 $ 291,244 $ 389,619 $ 561,659 Operating income before depreciation and amortization - International 35,697 77,196 55,364 151,843 ----------- ----------- ----------- ----------- Operating income before depreciation and amortization $ 234,062 $ 368,440 $ 444,983 $ 713,502 =========== =========== =========== =========== United States: Income from operations $ 128,556 $ 202,275 $ 249,845 $ 392,293 Depreciation and amortization 63,711 78,591 123,011 150,194 Stock compensation expense 6,098 10,378 16,763 19,172 ----------- ----------- ----------- ----------- Operating income before depreciation and amortization - United States $ 198,365 $ 291,244 $ 389,619 $ 561,659 =========== =========== =========== =========== International: Income from operations $ 20,938 $ 59,082 $ 31,806 $ 116,427 Depreciation and amortization 13,717 17,544 20,609 34,174 Stock compensation expense 1,042 570 2,949 1,242 ----------- ----------- ----------- ----------- Operating income before depreciation and amortization - International $ 35,697 $ 77,196 $ 55,364 $ 151,843 =========== =========== =========== =========== Free cash flow: Cash flow from operating activities $ 249,702 $ 404,195 $ 485,677 $ 789,910 Acquisition of property and equipment, net (55,699) (93,651) (94,388) (161,800) Dividends received - (10,670) - (10,670) ----------- ----------- ----------- ----------- Free cash flow $ 194,003 $ 299,874 $ 391,289 $ 617,440 =========== =========== =========== =========== (2) Yahoo! currently classifies its revenues as either Marketing Services or Fees. For the three and six months ended June 30, 2004, Yahoo! reclassified previously reported Marketing Services revenues of $6 million and $10 million, respectively, as Fees in order to refine its alignment of revenue sources with these classifications. Yahoo! Inc. Business Outlook Business Outlook The following business outlook is based on current information and expectations as of July 19, 2005. Yahoo!'s business outlook as of today is expected to be available on the Company's Investor Relations website throughout the current quarter. It is currently expected the outlook will not be updated until the release of Yahoo!'s next quarterly earnings announcement, notwithstanding subsequent developments; however, Yahoo! may update the outlook or any portion thereof at any time. Three months ending Year ending September 30, December 31, 2005 2005 --------------- ----------------- Revenues excluding traffic acquisition costs (3) ("TAC") outlook (in millions): Gross profit $768-$808 $3,150-$3,225 Other cost of revenues 112-122 450-475 --------------- ----------------- Revenues excluding TAC $880-$930 $3,600-$3,700 =============== ================= Operating income before depreciation and amortization (3) outlook (in millions): Income from operations $235-$252 $1,075-$1,105 Depreciation and amortization 105-115 400-420 Stock compensation expense 10-13 40-50 --------------- ----------------- Operating income before depreciation and amortization $350-$380 $1,515-$1,575 =============== ================= (3) Refer to Note to Unaudited Condensed Consolidated Statements of Operations. Yahoo! Inc. Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) Three Months Ended Six Months Ended June 30, June 30, ---------------------------------------------- 2004 2005 2004 2005 ---------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 112,512 $ 754,689 $ 213,724 $ 959,249 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 77,428 96,135 143,620 184,368 Tax benefits from stock options 60,371 495,041 121,121 602,568 Earnings in equity interests (24,108) (33,105) (43,976) (62,483) Dividends received - 10,670 - 10,670 Minority interests in operations of consolidated subsidiaries 1,752 3,654 2,234 5,394 Stock compensation expense 7,140 10,948 19,712 20,414 (Gain)/loss from sale of investments, assets and other, net 10,889 (937,998) 9,616 (952,266) Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net (37,011) (47,740) (35,822) (78,157) Prepaid expenses and other 4,992 (8,868) 582 10,240 Accounts payable 4,316 10,433 (13,593) (14,193) Accrued expenses and other liabilities 19,566 34,597 51,869 79,816 Deferred revenue 11,855 15,739 16,590 24,290 --------- ----------- ----------- ----------- Net cash provided by operating activities 249,702 404,195 485,677 789,910 --------- ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment, net (55,699) (93,651) (94,388) (161,800) Purchases of marketable debt securities (550,422) (3,838,067) (1,461,937) (5,474,827) Proceeds from sales and maturities of marketable debt securities 552,635 3,597,080 1,469,667 5,374,465 Acquisitions, net of cash acquired (530,110) (72,404) (573,877) (126,374) Proceeds from sales of marketable equity securities - 958,914 1,351 970,296 Other investing activities, net 5,577 (49,913) 15,137 (38,595) --------- ----------- ----------- ----------- Net cash provided by (used in) investing activities (578,019) 501,959 (644,047) 543,165 --------- ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock, net 225,383 212,420 317,678 302,724 Repurchases of common stock - - - (164,895) Structured stock repurchases, net - (263,729) (50,000) (359,931) Other financing activities, net - - - 800 --------- ----------- ----------- ----------- Net cash provided by (used in) financing activities 225,383 (51,309) 267,678 (221,302) --------- ----------- ----------- ----------- Effect of exchange rate changes on cash and cash equivalents 13 (25,332) 3,053 (15,073) Net change in cash and cash equivalents (102,921) 829,513 112,361 1,096,700 Cash and cash equivalents, beginning of period 631,174 1,090,910 415,892 823,723 --------- ----------- ----------- ----------- Cash and cash equivalents, end of period $ 528,253 $ 1,920,423 $ 528,253 $ 1,920,423 ========= =========== =========== =========== Supplemental schedule of acquisition-related activities: Cash paid for acquisitions $ 568,927 $ 73,455 619,611 $ 127,452 Cash acquired in acquisitions (38,817) (1,051) (45,734) (1,078) --------- ----------- ----------- ----------- $ 530,110 $ 72,404 $ 573,877 $ 126,374 ========= =========== =========== =========== Common stock, restricted stock and stock options issued in connection with acquisitions $ - $ 6,615 $ 2,209 $ 44,381 ========= =========== =========== =========== Yahoo! Inc. Unaudited Condensed Consolidated Balance Sheets (in thousands) December 31, June 30, 2004 2005 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 823,723 $ 1,920,423 Marketable debt securities 1,875,964 1,474,101 Marketable equity securities 812,288 - Accounts receivable, net 479,993 548,408 Prepaid expenses and other current assets 98,507 157,918 ----------- ----------- Total current assets 4,090,475 4,100,850 Long-term marketable debt securities 1,042,575 1,530,149 Property and equipment, net 531,696 589,373 Goodwill 2,550,957 2,563,597 Intangible assets, net 480,666 491,494 Other assets 481,832 396,904 ----------- ----------- Total assets $ 9,178,201 $ 9,672,367 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 48,205 $ 30,909 Accrued expenses and other current liabilities 853,115 709,394 Deferred revenue 279,387 304,287 ----------- ----------- Total current liabilities 1,180,707 1,044,590 Long-term deferred revenue 65,875 64,584 Long-term debt 750,000 750,000 Other long-term liabilities 35,907 81,237 Minority interests in consolidated subsidiaries 44,266 50,354 Stockholders' equity 7,101,446 7,681,602 ----------- ----------- Total liabilities and stockholders' equity $ 9,178,201 $ 9,672,367 =========== =========== CONTACT: Yahoo! Inc. Kelly Delaney, 408-349-2579 (Media Relations) kellyd@yahoo-inc.com Cathy La Rocca, 408-349-5188 (Investor Relations) cathy@yahoo-inc.com or OutCast Communications Kim Milosevich, 415-392-8282 (Media Relations) kim@outcastpr.com -----END PRIVACY-ENHANCED MESSAGE-----