Yahoo 2012 Annual Report Download - page 48

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(“Yahoo! Properties”), or through our distribution network of third party entities (“Affiliates”) who integrate our
advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”).
Our offerings to users on Yahoo! Properties currently fall into four categories: Yahoo.com; Communications;
User-Generated Content; and Mobile & Emerging Products. The majority of our offerings are available in more
than 45 languages and in 60 countries, regions, and territories. We manage and measure our business
geographically, principally in the Americas, EMEA (Europe, Middle East, and Africa) and Asia Pacific.
In the following Management’s Discussion and Analysis, we provide information regarding the following areas:
• Key Financial Metrics;
• Non-GAAP Financial Measures;
• Significant Transactions;
• Results of Operations;
• Liquidity and Capital Resources;
• Critical Accounting Policies and Estimates; and
• Recent Accounting Pronouncements.
Key Financial Metrics
The key financial metrics we use are as follows: revenue; revenue less traffic acquisition costs (“TAC”), or
revenue ex-TAC; income from operations; adjusted EBITDA; net income attributable to Yahoo! Inc.; net cash
provided by (used in) operating activities; and free cash flow. Revenue ex-TAC, adjusted EBITDA and free cash
flow are financial measures that are not defined in accordance with U.S. generally accepted accounting principles
(“GAAP”). We use these non-GAAP financial measures for internal managerial purposes and to facilitate period-
to-period comparisons. See “Non-GAAP Financial Measures” below for a description of, and limitations specific
to, each of these non-GAAP financial measures.
Years Ended December 31,
2010 2011 2012
(dollars in thousands)
Revenue ................................................... $6,324,651 $4,984,199 $4,986,566
Revenue ex-TAC ............................................ $4,588,228 $4,380,828 $4,467,660
Income from operations(1) ..................................... $ 772,524 $ 800,341 $ 566,368
Adjusted EBITDA ........................................... $1,710,355 $1,654,583 $1,698,839
Net income attributable to Yahoo! Inc ........................... $1,231,663 $1,048,827 $3,945,479
Net cash provided by (used in) operating activities ................. $1,240,190 $1,323,806 $ (281,554)
Free cash flow(2) ............................................ $ 596,255 $ 725,801 $ (834,865)
(1) Includes:
Stock-based compensation expense ......................... $ 223,478 $ 203,958 $ 224,365
Restructuring charges, net ................................. $ 57,957 $ 24,420 $ 236,170
(2) Excluding the impact of the cash taxes paid of $2.3 billion related to the Initial Repurchase described under
“Significant Transactions” below, free cash flow for the year ended December 31, 2012 would have been
$1.4 billion.
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