Yahoo 2004 Annual Report Download - page 37

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Cash generated from our operations is a measure of the cash productivity of our business model and is an area of focus
for us. The growth of cash flow from operations demonstrates our commitment to creating value and is primarily a
function of our increasing net income, net of increases in our net working capital balances. As of December 31, 2004,
we had cash, cash equivalents and marketable debt securities totaling approximately $3.7 billion, an increase of $1.1 bil-
lion compared to $2.6 billion as of December 31, 2003. The principal components of the increase in cash, cash
equivalents and marketable debt securities were cash generated from operating activities of approximately $1.1 billion,
proceeds of $503 million from the sale of marketable equity securities and proceeds of $651 million from the exercise of
employee stock options, offset by cash used for business combinations of $756 million, capital expenditures of $246 mil-
lion and $70 million for structured stock repurchase activities.
During the year ended December 31, 2004, we disposed of approximately four million shares of an investment in a
publicly traded company and recorded a pre-tax gain of approximately $413 million, net of selling costs, which is
included in other income, net on the consolidated statements of operations.
We believe the search queries, page views, click-throughs and the related marketing services and fees revenues that we
generate are correlated to the number of users and the amount of time that these users are spending on our network. By
providing a platform for our users that brings together our search technology, content, and community while allowing for
personalization and integration across devices, we seek to become more essential to our users and increase our share of
users and deepen their engagement with our products and services. We believe this deeper engagement of new and
existing users, coupled with the expansion of the online advertising market as advertisers shift their spending from
traditional media to the Internet will increase our revenues in 2005.
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