Yahoo 2013 Annual Report Download - page 106

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September 30,
2012
September 30,
2013
Balance sheet data:
Current assets .................................................... $4,062,823 $7,994,731
Long-term assets ................................................. $3,204,144 $5,959,835
Current liabilities ................................................. $2,624,656 $4,838,510
Long-term liabilities ............................................... $4,705,347 $5,319,113
Convertible preferred shares ........................................ $1,317,526 $1,688,889
Noncontrolling interests ............................................ $ 65,907 $ 92,127
Since acquiring its interest in Alibaba Group, the Company has recorded, in retained earnings, cumulative
earnings in equity interests, net of tax, of $661 million and $1,078 million as of December 31, 2012 and 2013,
respectively.
Equity Investment in Yahoo Japan. During April 1996, the Company signed a joint venture agreement with
Softbank, which was amended in September 1997, whereby Yahoo Japan Corporation (“Yahoo Japan”) was
formed. Yahoo Japan was formed to establish and manage a local version of Yahoo in Japan.
The investment in Yahoo Japan is being accounted for using the equity method and the total investment,
including net tangible assets, identifiable intangible assets, and goodwill, is classified as part of the investments
in equity interests balance on the Company’s consolidated balance sheets. The Company records its share of the
results of Yahoo Japan and any related amortization expense, one quarter in arrears, within earnings in equity
interests in the consolidated statements of income.
The Company makes adjustments to its earnings in equity interests line in the consolidated statements of income
for any differences between U.S. GAAP and accounting principles generally accepted in Japan (“Japanese
GAAP”), the standard by which Yahoo Japan’s financial statements are prepared.
During the year ended December 31, 2011, the Company recorded $33 million in U.S. GAAP adjustments to
Yahoo Japan’s net income to reflect the Company’s 35 percent share of non-cash losses related to impairments of
assets held by Yahoo Japan. The $33 million recorded during the year ended December 31, 2011 primarily
includes $7 million related to the Company’s share of a non-cash loss in connection with an impairment of assets
held by Yahoo Japan in the second quarter of 2011, and a $26 million U.S. GAAP adjustment to Yahoo Japan’s
net income in the first quarter of 2011 to reflect the Company’s share of an other-than-temporary impairment of a
cost-method investment of Yahoo Japan that resulted primarily from reductions in the projected operating results
of the Yahoo Japan investee.
The fair value of the Company’s ownership in the common stock of Yahoo Japan, based on the quoted stock
price, was approximately $11 billion as of December 31, 2013.
During the years ended December 31, 2011, 2012 and 2013, the Company received cash dividends from Yahoo
Japan in the amounts of $75 million, $84 million, and $77 million, net of tax, respectively, which were recorded
as reductions in the Company’s investment in Yahoo Japan.
The following tables present summarized financial information derived from Yahoo Japan’s consolidated
financial statements, which are prepared on the basis of Japanese GAAP. The Company has made adjustments to
the Yahoo Japan financial information to address differences between Japanese GAAP and U.S. GAAP that
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