Yahoo 2013 Annual Report Download - page 128

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It is difficult to predict when the examinations will be settled or their final outcomes. The Company believes that
it has adequately provided for any reasonably foreseeable adjustment and that any settlement will not have a
material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.
The Company may have additional tax liabilities in China related to the sale to Alibaba Group of 523 million
Alibaba Group Shares that took place during the year ended December 31, 2012. Any taxes assessed and paid in
China are expected to be ultimately offset and recovered in the U.S.
During the year ended December 31, 2012, tax authorities from the Brazilian State of Sao Paulo assessed certain
indirect taxes against the Company’s Brazilian subsidiary, Yahoo! do Brasil Internet Ltda., related to online
advertising services. The assessment totaling approximately $85 million is for calendar years 2008 and 2009. The
Company currently believes the assessment is without merit. The Company believes the risk of loss is remote and
has not recorded an accrual for the assessment.
Note 17 T
RANSACTIONS
W
ITH
R
ELATED
P
ARTIES
Revenue from related parties, excluding Yahoo Japan and Alibaba Group, represented approximately 1 percent
of total revenue for the years ended December 31, 2011, 2012, and 2013. Management believes that the terms of
the agreements with these related parties are comparable to the terms obtained in arm’s-length transactions with
unrelated similarly situated customers of the Company.
See Note 8—“Investments in Equity Interests” for additional information related to transactions involving Yahoo
Japan and Alibaba Group.
Note 18 S
EGMENTS
The Company continues to manage its business geographically. The primary areas of measurement and decision-
making are the Americas, EMEA (Europe, Middle East and Africa) and Asia Pacific. Management relies on an
internal reporting process that provides revenue ex-TAC, which is defined as revenue less 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, the Company’s segments.
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