Yahoo 2006 Annual Report Download - page 67

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Yahoo! Inc.
Consolidated Statements of Income
2004 2005 2006
Years Ended December 31,
(In thousands, except per share amounts)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,574,517 $5,257,668 $6,425,679
Cost of revenues
(*)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,342,338 2,096,201 2,675,723
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,232,179 3,161,467 3,749,956
Operating expenses:
Sales and marketing
(*)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787,649 1,033,947 1,322,259
Product development
(*)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380,770 569,527 833,147
General and administrative
(*)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273,262 341,073 528,798
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,917 109,195 124,786
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,543,598 2,053,742 2,808,990
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688,581 1,107,725 940,966
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496,443 1,435,857 157,034
Income before income taxes, earnings in equity interests and minority
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,185,024 2,543,582 1,098,000
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (437,966) (767,816) (458,011)
Earnings in equity interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,991 128,244 112,114
Minority interests in operations of consolidated subsidiaries . . . . . . . . . . . . . . . (2,496) (7,780) (712)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 839,553 $1,896,230 $ 751,391
Net income per share — basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.62 $ 1.35 $ 0.54
Net income per share — diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.58 $ 1.28 $ 0.52
Shares used in per share calculation — basic. . . . . . . . . . . . . . . . . . . . . . . . . . 1,353,439 1,400,421 1,388,741
Shares used in per share calculation — diluted . . . . . . . . . . . . . . . . . . . . . . . . 1,452,499 1,485,591 1,457,686
Stock-based compensation expense by function
(*)
:
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 6,621
Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,620 8,698 155,084
Product development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,010 22,390 144,807
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,660 21,383 118,418
Total stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,290 $ 52,471 $ 424,930
(*) Cost of revenues and operating expenses for the year ended December 31, 2006 include stock-based compensation expense in accordance
with Statement of Financial Accounting Standards (“SFAS”) No. 123R (revised 2004), “Share-Based Payment” (“SFAS 123R”), which the
Company adopted on January 1, 2006. See Note 1 — “The Company and Summary of Significant Accounting Policies” and Note 12 —
“Employee Benefits” for additional information.
The accompanying notes are an integral part of these consolidated financial statements.
57