Yahoo 2006 Annual Report Download - page 87

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share of the results of Yahoo! Japan one quarter in arrears within earnings in equity interests. The fair value of the
Company’s approximate 34 percent ownership in Yahoo! Japan, based on the quoted stock price, was approximately
$8 billion as of December 31, 2006.
Prior to and during 2001, Yahoo! Japan acquired the Company’s equity interests in certain entities in Japan for total
consideration of approximately $65 million, paid partially in shares of Yahoo! Japan common stock and partially in
cash. As a result of the acquisition, the Company increased its investment in Yahoo! Japan, which resulted in
approximately $41 million of goodwill to be amortized over seven years. The amortization ceased upon the
adoption of SFAS 142 on January 1, 2002. The carrying amount of the Company’s investment in Yahoo! Japan
differs from the amount of the underlying equity in net assets of Yahoo! Japan primarily as a result of this goodwill.
As of December 31, 2005 and 2006, the Company had $304 million and $451 million, respectively, included in
retained earnings relating to its investment in Yahoo! Japan.
The following table presents Yahoo! Japan’s financial information, as derived from the Yahoo! Japan financial
statements for the 12 months ended September 30, 2004, 2005, and 2006 and as of September 30, 2005 and 2006 (in
thousands):
2004 2005 2006
Twelve Months Ended September 30,
Operating data:
(*)
Revenues .................................... $868,281 $1,367,247 $1,671,154
Gross profit .................................. $810,114 $1,251,599 $1,584,433
Income from operations.......................... $470,681 $ 656,167 $ 806,718
Net income ................................... $290,576 $ 382,287 $ 451,377
2005 2006
September 30,
Balance sheet data:
Current assets ............................................ $900,149 $ 731,757
Long-term assets.......................................... $469,077 $1,691,508
Current liabilities ......................................... $306,441 $ 535,232
Long-term liabilities ....................................... $ 19,663 $ 509,187
(*)
The Company records its share of the results of Yahoo! Japan one quarter in arrears in earnings in equity interests.
The differences between United States and Japanese generally accepted accounting principles did not materially
impact the amounts reflected in the Company’s financial statements.
77
Yahoo! Inc.
Notes to Consolidated Financial Statements — (Continued)