Yahoo 2011 Annual Report Download - page 106

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complaint purports to assert claims for relief for violation of Section 10(b) and 20(a) of the Exchange Act and for
violation of Rule 10b-5 thereunder, and seeks unspecified damages, injunctive and equitable relief, fees and
costs.
On December 1, 2011 and December 7, 2011, purported class action complaints were filed in the Delaware
Chancery Court by M & C Partners, III and Louisiana Municipal Police Employees’ Retirement System,
respectively, against the Company and the members of the Company’s board of directors at that time. On
December 14, 2011, The Delaware Chancery Court consolidated the two actions under the caption In re Yahoo!
Shareholders Litig. and appointed lead plaintiffs. On December 29, 2011, lead plaintiffs filed a consolidated
amended class action complaint purportedly on behalf of all of the Company’s stockholders alleging that the
board of directors breached fiduciary duties by failing to maximize the Company’s value in connection with the
strategic review process. Plaintiffs seek injunctive relief, rescission, fees and costs.
With respect to the legal proceedings and claims described above, the Company has determined, based on current
knowledge, that the amount or range of reasonably possible losses, including reasonably possible losses in excess
of amounts already accrued, is not reasonably estimable with respect to certain matters and that the aggregate
amount or range of such losses that are estimable would not have a material adverse effect on the Company’s
consolidated financial position, results of operations or cash flows. Amounts accrued as of December 31, 2010
and December 31, 2011 were not material. The ultimate outcome of legal proceedings involves judgments,
estimates and inherent uncertainties, and cannot be predicted with certainty. In the event of a determination
adverse to Yahoo!, its subsidiaries, directors, or officers in these matters, however, the Company may incur
substantial monetary liability, and be required to change its business practices. Either of these events could have
a material adverse effect on the Company’s financial position, results of operations, or cash flows. The Company
may also incur substantial legal fees, which are expensed as incurred in defending against these claims.
Note 13 S
EGMENTS
The Company manages its business geographically. The primary areas of measurement and decision making are
the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific. Management relies on an internal
reporting process that provides revenue ex-TAC, which is defined as revenue less TAC, direct costs excluding
TAC by segment, and consolidated income from operations for making decisions related to the evaluation of the
financial performance of, and allocating resources to, our segments.
104