Yahoo 2013 Annual Report Download - page 102

December 31, 2013
Gross Carrying
Amount
Accumulated
Amortization(*) Net
Customer, affiliate, and advertiser related relationships ........... $293,612 $ (87,794) $205,818
Developed technology and patents ............................ 261,435 (120,936) 140,499
Trade names, trademarks, and domain names ................... 107,381 (35,890) 71,491
Total intangible assets, net .............................. $662,428 $(244,620) $417,808
(*) Cumulative foreign currency translation adjustments, reflecting movement in the currencies of the underlying
entities, increased total intangible assets by approximately $19 million as of both December 31, 2012 and
2013.
The intangible assets have estimated useful lives as follows:
• Customer, affiliate, and advertiser related relationships—two to eight years;
• Developed technology and patents—one year to eight years; and
• Trade names, trademarks, and domain names—one year to an indefinite life.
The Company recognized amortization expense of intangible assets of approximately $118 million, $105 million,
and $97 million for 2011, 2012, and 2013, respectively, including $84 million, $70 million, and $52 million,
respectively, included in cost of revenue-other. Based on the current amount of intangibles subject to
amortization, the estimated amortization expense for each of the succeeding years is as follows: 2014: $107
million; 2015: $85 million; 2016: $60 million; 2017: $55 million; 2018: $43 million; and cumulatively thereafter:
$51 million.
Note 7 B ASIC A ND D ILUTED N ET I NCOME A TTRIBUTABLE T O Y AHOO !I NC .C OMMON S TOCKHOLDERS
P ER S HARE
Basic and diluted net income attributable to Yahoo common stockholders per share is computed using the
weighted average number of common shares outstanding during the period, excluding net income attributable to
participating securities (restricted stock awards granted under the Company’s 1995 Stock Plan and restricted
stock units granted under the Company’s 1996 Directors’ Stock Plan (the “Directors’ Plan”)). Diluted net income
per share is computed using the weighted average number of common shares and, if dilutive, potential common
shares outstanding during the period. Potential common shares are calculated using the treasury stock method
and consist of unvested restricted stock and shares underlying unvested restricted stock units, the incremental
common shares issuable upon the exercise of stock options, and shares to be purchased under the Company’s
1996 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”). The Company calculates potential
tax windfalls and shortfalls by including the impact of pro forma deferred tax assets.
The Company takes into account the effect on consolidated net income per share of dilutive securities of entities
in which the Company holds equity interests that are accounted for using the equity method.
For 2011, 2012, and 2013, potentially dilutive securities representing approximately 56 million, 39 million, and
10 million shares of common stock, respectively, were excluded from the computation of diluted earnings per
share for these periods because their effect would have been anti-dilutive.
The Company has the option to pay cash, issue shares of common stock or any combination thereof for the
aggregate amount due upon conversion of the Notes. The Company’s intent is to settle the principal amount of
the Notes in cash upon conversion. As a result, upon conversion of the Notes, only the amounts payable in excess
of the principal amounts of the Notes are considered in diluted earnings per share under the treasury stock
method.
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