Yahoo 2011 Annual Report Download - page 84

As of December 31, 2011 the difference between the Company’s carrying value of its investment in Alibaba
Group and its proportionate share of the net assets of Alibaba Group is summarized as follows (in thousands):
Carrying value of investment in Alibaba Group .......................................... $2,521,825
Proportionate share of Alibaba Group stockholders’ equity ................................. 1,843,970
Excess of carrying value of investment over proportionate share of Alibaba Group’s
stockholders’ equity(*) ....................................................... $ 677,855
(*) The excess carrying value has been primarily assigned to goodwill.
The amortizable intangible assets included in the excess carrying value have useful lives not exceeding seven
years and a weighted average useful life of approximately five years. Goodwill is not deductible for tax purposes.
The following table presents Alibaba Group’s U.S. GAAP financial information, as derived from the Alibaba
Group financial statements (in thousands):
Twelve Months Ended September 30,
2009 2010 2011
Operating data(*):
Revenue ................................................ $730,336 $1,298,229 $2,344,973
Gross profit .............................................. $534,974 $ 986,455 $1,563,979
(Loss) income from operations .............................. $(39,460) $ (14,355) $ 325,343
Net (loss) income ........................................ $(19,932) $ 42,463 $ 339,552
Net (loss) income attributable to Alibaba Group ................ $(57,346) $ (10,743) $ 268,004
September 30,
2010
September 30,
2011
Balance sheet data(*):
Current assets .................................................... $4,399,571 $3,491,753
Long-term assets ................................................. $2,436,976 $2,993,329
Current liabilities ................................................. $2,660,043 $1,562,840
Long-term liabilities ............................................... $ 58,679 $ 134,160
Non-voting participating redeemable securities ......................... $ 860 $ 1,415
Noncontrolling interests ............................................ $ 338,419 $ 406,805
(*) To expedite obtaining an essential regulatory license, the ownership of Alibaba Group’s online payment
business, Alipay, was restructured so that 100 percent of its outstanding shares are held by a Chinese
domestic company, which is majority owned by Alibaba Group’s chief executive officer, and certain control
agreements were terminated which resulted in the deconsolidation of Alipay in the first quarter of
2011. Accordingly, the Alibaba Group consolidated financial statements as of and for the nine months ended
September 30, 2011 do not include the results of Alipay, nor do they include the net assets of Alipay as of
and for the nine months ended September 30, 2011. As of September 30, 2010, the consolidated current
assets and current liabilities of Alibaba Group both include $1.6 billion of cash collected from purchasers and
to be remitted to sellers. These amounts are no longer included in the consolidated balance sheet as of
September 30, 2011. The impact of the deconsolidation of Alipay was not material to the Company’s
financial statements.
Since acquiring its interest in Alibaba Group, the Company has recorded, in retained earnings, cumulative
earnings in equity interests, net of tax, of $350 million and $440 million, respectively as of December 31, 2010
and 2011.
The Company also has commercial arrangements with Alibaba Group to provide technical, development, and
advertising services. For the years ended December 31, 2010 and 2011, these transactions were not material.
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