Yahoo 2012 Annual Report Download - page 117

Download and view the complete annual report

Please find page 117 of the 2012 Yahoo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

Restructuring Plans Prior to 2012. Prior to 2012, the Company implemented workforce reductions, a strategic
realignment, and consolidation of certain real estate facilities and data centers to reduce its cost structure, align
resources with its product strategy, and improve efficiency. During the year ended December 31, 2010, the
Company incurred total pre-tax cash charges of $59 million in severance, facility and other related costs, net of
reversal for adjustments to original estimates totaling $9 million. In addition to the pre-tax cash charges, the
Company recorded a non-cash charge of $3 million related to asset impairment and a $4 million credit related to
non-cash stock-based compensation expense reversals for unvested stock awards that were forfeited. Of the
$58 million in restructuring charges, net, recorded in the year ended December 31, 2010, $39 million related to
the Americas segment, $17 million related to the EMEA segment and $2 million related to the Asia Pacific
segment. During the year ended December 31, 2011, the Company incurred total pre-tax cash charges of
$23 million in severance, facility and other related costs, net of reversal for adjustments to original estimates
totaling $12 million. In addition to the pre-tax cash charges, the Company recorded a non-cash charge of
$1 million related to asset impairment. Of the $24 million in restructuring charges, net, recorded in the year
ended December 31, 2011, $22 million related to the Americas segment, $1 million related to the EMEA
segment, and $1 million related to the Asia Pacific segment. During the year ended December 31, 2012, the
Company recorded total pre-tax cash charges of $10 million in severance, facility, and other related costs, net of
reversal for adjustments to original estimates totaling $5 million. The majority of $10 million in restructuring
charges, net, recorded in the year ended December 31, 2012, related to the Americas segment.
Q2’12 Restructuring Plan. During the second quarter of 2012, the Company began implementing the Q2’12
Restructuring Plan to reduce its worldwide workforce by approximately 2,000 employees and to consolidate certain
real estate and data center facilities. During the year ended December 31 2012, the Company recorded total pre-tax
cash charges of $139 million in severance and facility related costs and $40 million in non-cash facility and other
asset impairment charges. The total pre-tax charges were offset by changes to original estimates of $33 million in
severance related costs recognized throughout 2012, primarily as a result of redeployments and voluntary
resignations of employees prior to their planned severance dates and a $3 million credit related to non-cash stock-
based compensation expense reversals for unvested stock awards that were forfeited. Of the $143 million in
restructuring charges, net, recorded in the year ended December 31, 2012, $93 million related to the Americas
segment, $46 million related to the EMEA segment, and $4 million related to the Asia Pacific segment.
Q4’12 Korea Business Closure. During the fourth quarter of 2012, the Company decided to close its Korea
business by the end of 2012 to streamline its operations and focus its resources. During the year ended
December 31, 2012, the Company incurred total pre-tax cash charges of $13 million in severance and contract
termination costs. In addition to the pre-tax cash charges, the Company recorded a non-cash charge of
$86 million related to goodwill and other asset impairment and a non-cash credit approximately of $16 million
related to the reversal of previously recorded cumulative foreign currency translation adjustment. As a result, the
Company recorded a net $83 million in restructuring charges all related to the Asia Pacific segment for the year
ended December 31, 2012.
Restructuring Accruals. The $73 million restructuring liability as of December 31, 2012 consists of $35 million
for employee severance pay expenses, which the Company expects to pay out by the end of the fourth quarter of
2013 and $38 million relates to non-cancelable lease and contract termination costs that the Company expects to
pay over the terms of the related obligations which extend to the fourth quarter of 2021.
103