Yahoo 2004 Annual Report Download - page 45

United States. United States revenues in 2004 increased approximately $1,298 million, or 96 percent as compared to the
prior year. United States revenues in 2003 increased approximately $549 million, or 68 percent as compared to the prior
year. The successive year-over-year growth can be attributed to a combination of acquisitions and organic growth.
Incremental revenue from acquisitions contributed approximately $790 million and $226 million to the increases in 2004
and 2003, respectively. The remainder of the increases, $508 million in 2004 and $323 million in 2003 is primarily
from strong growth in advertising across the entire Yahoo! Network. United States segment operating income before
depreciation and amortization increased approximately $450 million, or 102 percent from 2003 to 2004 primarily as a
result of the increase in revenues, as well as continued efforts to control discretionary spending. United States segment
operating income before depreciation and amortization increased approximately $229 million, or 107 percent from 2002
to 2003 primarily as a result of the increase in revenues, as well as continued efforts to control discretionary spending.
International. International revenues in 2004 increased approximately $651 million, or 241 percent as compared to the
prior year. International revenues in 2003 increased approximately $123 million, or 84 percent as compared to the prior
year. The successive year-over-year growth can be attributed to a combination of acquisitions and organic growth.
Incremental revenue from acquisitions contributed approximately $449 million and $53 million to the increases in 2004
and 2003, respectively. The remainder of the increase, approximately $202 million in 2004 and $70 million in 2003 is
primarily from strong growth in advertising across the entire Yahoo! Network and the strengthening of the Asian and
European markets in which we primarily operate. International segment operating income (loss) before depreciation and
amortization increased approximately $105 million from 2003 to 2004, primarily due to the increase in revenues and
continued efforts to control discretionary spending. International segment operating income (loss) before depreciation and
amortization increased approximately $43 million from 2002 to 2003, primarily due to the increase in revenues and
continued efforts to control discretionary spending.
International revenues accounted for approximately 26 percent of total revenues during 2004 as compared to 17 percent
during 2003 and 15 percent during 2002. The growth in our international operations has increased our exposure to
foreign currency fluctuations. Revenues and related expenses generated from our international subsidiaries are generally
denominated in the functional currencies of the local countries. Primary currencies include Euros, British Pounds,
Japanese Yen, Korean Won and Australian Dollars. The income statements of our international operations are translated
into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar weakens against
foreign currencies, the translation of these foreign currency denominated transactions results in increased revenues,
operating expenses and net income for our International segment. Similarly, our revenues, operating expenses and net
income will decrease for our International segment when the U.S. dollar strengthens against foreign currencies.
During 2004, the U.S. dollar weakened against the Euro and other foreign currencies as compared to 2003. Using the
average foreign currency exchange rates from 2003, our international revenues for 2004 would have been lower than we
reported using the actual exchange rates for 2004, by approximately $59 million, and our international segment operating
income before depreciation and amortization would have been lower by approximately $10 million.
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