Yahoo 2012 Annual Report Download - page 55

Management Reporting
We continue to manage our business geographically. The primary areas of measurement and decision making are
currently the Americas, EMEA and Asia Pacific. Management relies on an internal reporting process that
provides revenue ex-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.
Years Ended December 31, 2010-2011
% Change
2011-2012
% Change2010 2011 2012
(dollars in thousands)
Revenue by segment:
Americas ........................... $4,425,457 $3,302,989 $3,461,633 (25)% 5%
EMEA ............................. 579,145 629,383 472,061 9% (25)%
Asia Pacific ......................... 1,320,049 1,051,827 1,052,872 (20)% 0%
Total revenue ................... $6,324,651 $4,984,199 $4,986,566 (21)% 0%
TAC by segment:
Americas ........................... $ 957,608 $ 160,110 $ 182,511 (83)% 14%
EMEA ............................. 210,261 221,916 114,230 6% (49)%
Asia Pacific ......................... 568,554 221,345 222,165 (61)% 0%
Total TAC ...................... $1,736,423 $ 603,371 $ 518,906 (65)% (14)%
Revenue ex-TAC by segment:
Americas ........................... $3,467,849 $3,142,879 $3,279,122 (9)% 4%
EMEA ............................. 368,884 407,467 357,831 10% (12)%
Asia Pacific ......................... 751,495 830,482 830,707 11% 0%
Total revenue ex-TAC ............ $4,588,228 $4,380,828 $4,467,660 (5)% 2%
Direct costs by segment(1):
Americas ........................... 704,858 696,103 733,316 (1)% 5%
EMEA ............................. 149,594 165,750 161,990 11% (2)%
Asia Pacific ......................... 175,589 225,417 224,114 28% (1)%
Global operating costs(2)(3) ................. 1,847,832 1,638,975 1,672,070 (11)% 2%
Depreciation and amortization .............. 656,396 625,864 649,267 (5)% 4%
Stock-based compensation expense .......... 223,478 203,958 224,365 (9)% 10%
Restructuring charges, net ................. 57,957 24,420 236,170 (58)% N/M
Income from operations ............... $ 772,524 $ 800,341 $ 566,368 4% (29)%
N/M = Not Meaningful
(1) Direct costs for each segment include cost of revenue—other, as well as other operating expenses that are
directly attributable to the segment such as employee compensation expense (excluding stock-based
compensation expense), local sales and marketing expenses, and facilities expenses. Beginning in 2012,
marketing and customer advocacy costs are managed locally and included as direct costs for each segment.
Prior period amounts have been revised to conform to the current presentation.
(2) Global operating costs include product development, service engineering and operations, general and
administrative, and other corporate expenses that are managed on a global basis and that are not directly
attributable to any particular segment. Prior to 2012, marketing and customer advocacy costs were managed
on a global basis and included as global operating costs. Prior period amounts have been revised to conform
to the current presentation.
(3) The net cost reimbursements from Microsoft pursuant to the Search Agreement are primarily included in
global operating costs. Operating costs and expenses consist of cost of revenue—TAC; cost of revenue—
other; sales and marketing, product development; general and administrative; amortization of intangible
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