Yahoo 2011 Annual Report Download - page 41

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revenue when the services are performed. Transaction revenue is generated from facilitating commercial
transactions through Yahoo! Properties, principally from Yahoo! Small Business, Yahoo! Travel, and Yahoo!
Shopping. We recognize transaction revenue when there is evidence that qualifying transactions have occurred
(for example, when travel arrangements are booked through Yahoo! Travel). Fees revenue consists of revenue
generated from a variety of consumer and business fee-based services, including Internet broadband services,
royalties received from joint venture partners, and premium mail, as well as services for small businesses. We
recognize fees revenue when the services are performed.
2011 Highlights
Years Ended December 31, Dollar
ChangeOperating Highlights 2010 2011
(In thousands)
Revenue ................................................. $6,324,651 $ 4,984,199 $(1,340,452)
Income from operations .................................... $ 772,524 $ 800,341 $ 27,817
Years Ended December 31, Dollar
ChangeCash Flow Highlights 2010 2011
(In thousands)
Net cash provided by operating activities ....................... $1,240,190 $ 1,323,806 $ 83,616
Net cash provided by investing activities ....................... $ 509,915 $ 202,362 $ (307,553)
Net cash used in financing activities ........................... $(1,501,706) $(1,455,958) $ 45,748
Our revenue decrease of 21 percent for the year ended December 31, 2011 compared to 2010 can be attributed to
a decrease in our search revenue. The decrease in search revenue was primarily due to the required change in
revenue presentation which began in the fourth quarter of 2010, the associated revenue share with Microsoft for
the Americas region, and the loss of an Affiliate in the Asia Pacific region. The increase in income from
operations of $28 million for the year ended December 31, 2011 reflects a decrease in gross profit offset by a
decrease in operating expenses of $243 million for the year ended December 31, 2011 compared to 2010.
Cash provided by operating activities is a measure of the cash productivity of our business model. Our operating
activities in 2011 generated adequate cash to meet our operating needs. Cash provided by investing activities in
the year ended December 31, 2011 included net proceeds from sales, maturities, and purchases of marketable
debt securities of $1,117 million offset by $324 million used for acquisitions, net of cash acquired and net capital
expenditures of $593 million. Cash used in financing activities included $1,619 million used in the direct
repurchase of common stock and $45 million used for tax withholding payments related to the net share
settlements of restricted stock units, offset by $156 million in proceeds from employee option exercises and
employee stock purchases.
Summary
In the following Management’s Discussion and Analysis, we provide information regarding to the following
areas of our financial results:
• Results of Operations;
• Business Segment Results;
• Transactions;
• Liquidity and Capital Resources;
• Critical Accounting Policies and Estimates; and
• Recent Accounting Pronouncements.
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