Yahoo 2005 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2005 Yahoo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

83
The following tables show all investments in an unrealized loss position for which an other-than-temporary
impairment has not been recognized and the related gross unrealized losses and fair value, aggregated by
investment category and length of time that individual securities have been in a continuous unrealized loss
position (in thousands):
December 31, 2004
Less than 12 Months 12 Months or Greater Total
Fair Value
Unrealized
Loss Fair Value
Unrealized
Loss Fair Value
Unrealized
Loss
United States Government
and agency securities $ 668,465 $ (4,238) $ 159,590 $ (1,941) $ 828,055 $ (6,179)
Municipal bonds — — 2,899 (20) 2,899 (20)
Corporate bonds 689,859 (3,659) 209,439 (2,289) 899,298 (5,948)
Auction rate securities — — — — — —
Corporate equity securities 3,834 (219) — — 3,834 (219)
Total investments in
available-for-sale securities $ 1,362,158 $ (8,116) $ 371,928 $ (4,250) $ 1,734,086 $ (12,366)
December 31, 2005
Less than 12 Months 12 Months or Greater Total
Fair Value
Unrealized
Loss Fair Value
Unrealized
Loss Fair Value
Unrealized
Loss
United States Government
and agency securities $ 539,875 $ (4,790) $ 474,856 $ (8,420) $ 1,014,731 $ (13,210)
Municipal bonds 9,594 (166) — — 9,594 (166)
Corporate debt securities 1,072,961 (7,545) 356,842 (5,082) 1,429,803 (12,627)
Corporate equity securities — — 2,885 (1,168) 2,885 (1,168)
Total investments in
available-for-sale securities $ 1,622,430 $ (12,501) $ 834,583 $ (14,670) $ 2,457,013 $ (27,171)
The Company’s investment portfolio consists of government and high-quality corporate securities.
Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate
risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest
rates, while floating rate securities may produce less income than expected in interest rates fall. The longer
the term of the securities, the more susceptible they are to changes in market rates of interest and yields on
bonds. Investments are reviewed periodically to identify possible other-than-temporary impairment.
When evaluating the investments, the Company reviews factors such as the length of time and extent to
which fair value has been below cost basis, the financial condition of the issuer and the Company’s ability
and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in
market value. The Company has the intent and ability to hold these securities for a reasonable period of
time sufficient for a forecasted recovery of fair value up to (or beyond) the initial cost of the investment.
The Company expects to realize the full value of all of these investments upon maturity or sale.
Note 9 LONG-TERM DEBT
In April 2003, the Company issued $750 million of zero coupon senior convertible notes (the “Notes”) due
April 2008, which resulted in net proceeds to the Company of approximately $733 million after transaction
fees of $17 million, which have been deferred and are included on the consolidated balance sheets in long-
term other assets. As of December 31, 2005, $8 million of the transaction fees remained to be amortized.
The Notes were issued at par and bear no interest. The Notes are convertible into Yahoo! common stock
at a conversion price of $20.50 per share, which would result in the issuance of an aggregate of
approximately 37 million shares, subject to adjustment upon the occurrence of specified events. Each