Yahoo 2003 Annual Report Download - page 39

Amortization of Intangibles. From time to time we have pur- estimate is approximately $2 million. Property and equip-
chased, and expect to continue purchasing, assets or busi- ment that was disposed of or removed from operations
nesses, which may result in the creation of intangible resulted in a net charge of approximately $9 million and
assets. consisted primarily of furniture and fixtures, servers, lease-
hold improvements, and computer equipment. We also
Amortization of intangibles was approximately $54 mil- recorded other restructuring costs of approximately
lion, or three percent of revenues for the year ended $2 million relating primarily to payments for professional
December 31, 2003, an increase of approximately fees incurred with the restructuring program.
$33 million compared to $21 million or two percent of
revenues for 2002. The year-over-year increase in amorti- A summary of the restructuring costs is as follows (in
zation of intangibles was the result of completed acquisi- thousands):
tions. Amortization of intangibles was $21 million, or two Consolidation of
percent of revenues for the year ended December 31, Workforce excess facilities and
2002, a decrease of approximately $43 million compared reduction other charges Total
to $64 million or nine percent of revenues for 2001 as a Total charge $15,137 $ 42,334 $ 57,471
result of the cessation of goodwill amortization in connec- Noncash charges (5,411) (9,380) (14,791)
tion with the adoption of Statement of Financial Account- Cash payments (5,901) (7,279) (13,180)
ing Standards No. 142 (‘‘SFAS 142’’), ‘‘Goodwill and
Restructuring accrual at
Other Intangible Assets.’’
December 31, 2001 3,825 25,675 29,500
Cash payments (3,825) (13,930) (17,755)
Restructuring Costs. During 2001, we announced restructur-
ing programs to balance our investment in growth areas Restructuring accrual at
with the desire to modify our near-term business plan to December 31, 2002 – 11,745 11,745
reflect the current economic and capital market slowdown. Cash payments – (4,286) (4,286)
These restructuring programs included worldwide Restructuring accrual at
workforce reductions, consolidation of excess facilities and December 31, 2003 $ – $ 7,459 $ 7,459
other charges. As a result of these restructuring programs,
we recorded restructuring costs of approximately $57 mil- The restructuring accrual is included on the balance sheet
lion classified as operating expenses in 2001. in accrued expenses and other current liabilities. Amounts
related to the net lease expense due to the consolidation
Worldwide Workforce Reduction. The restructuring programs of facilities will be paid over the respective lease terms
resulted in a workforce reduction of approximately 660 through December 2012.
employees across certain business functions, operating
units, and geographic regions. The worldwide workforce Other Income, Net. Other income, net was as follows (in
reductions were substantially completed within 2001. We thousands):
recorded a workforce reduction charge of approximately
$15 million in 2001 relating primarily to severance and Years Ended December 31,
fringe benefits. 2001 2002 2003
Consolidation of Excess Facilities and Other Charges. We recorded Interest and investment income $ 91,931 $63,200 $47,202
a restructuring charge of approximately $42 million in Investment gains (losses), net (26,623) 2,189 (1,223)
2001 relating to the consolidation of excess facilities and Contract termination fees 9,000 1,661 750
other charges. Of this charge, approximately $31 million Other (1,526) 2,237 777
was primarily for excess facilities relating to lease termina- Total other income, net $ 72,782 $69,287 $47,506
tions and non-cancelable lease costs. This charge included
estimated sub-lease income based on current comparable Other income, net decreased approximately $22 million in
rates for leases in the respective markets. If facilities rental 2003 compared to 2002, primarily as a result of decreased
rates continue to decrease in these markets or if it takes interest and investment income, as a result of reduced
longer than expected to sublease these facilities, the maxi- interest rates on investments. Interest rates decreased from
mum amount the actual loss could exceed the original
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