Yahoo 2013 Annual Report Download - page 30

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We earn a material amount of our operating income from outside the U.S. As of December 31, 2013, we had
undistributed foreign earnings of approximately $2.6 billion, principally related to Yahoo Japan. While we do not
currently anticipate repatriating these earnings, any repatriation of funds in foreign jurisdictions to the U.S. could
result in higher effective tax rates for us and subject us to significant additional U.S. income tax liabilities.
We are subject to regular review and audit by both domestic and foreign tax authorities as well as subject to the
prospective and retrospective effects of changing tax regulations and legislation. Although we believe our tax
estimates are reasonable, the ultimate tax outcome may materially differ from the tax amounts recorded in our
consolidated financial statements and may materially affect our income tax provision, net income, or cash flows
in the period or periods for which such determination and settlement is made.
Adverse macroeconomic conditions could cause decreases or delays in spending by our advertisers and could
harm our ability to generate revenue and our results of operations.
Advertising expenditures tend to be cyclical, reflecting overall economic conditions and budgeting and buying
patterns. Since we derive most of our revenue from advertising, adverse macroeconomic conditions have caused,
and future adverse macroeconomic conditions could cause, decreases or delays in advertising spending and
negatively impact our advertising revenue and short-term ability to grow our revenue. Further, any decreased
collectability of accounts receivable or early termination of agreements, whether resulting from customer
bankruptcies or otherwise due to adverse macroeconomic conditions, could negatively impact our results of
operations.
Our stock price has been volatile historically and may continue to be volatile regardless of our operating
performance.
The trading price of our common stock has been and may continue to be subject to broad fluctuations. During the
twelve months ended December 31 2013, the closing sale price of our common stock on the NASDAQ Global
Select Market ranged from $18.99 to $40.85 per share and the closing sale price on February 14, 2014 was
$38.23 per share. Our stock price may fluctuate in response to a number of events and factors, such as variations
in quarterly operating results or announcements of technological innovations, significant transactions, or new
features, products or services by us or our competitors; changes in financial estimates and recommendations by
securities analysts; the operating and stock price performance of, or other developments involving, other
companies that investors may deem comparable to us; trends in our industry; general economic conditions; and
the current and anticipated future operating performance and market equity valuation of Alibaba Group
(including speculation regarding its potential initial public offering) and Yahoo Japan Corporation in which we
have equity investments, including changes in equity valuation due to fluctuations in foreign currency exchange
rates.
In addition, the stock market in general, and the market prices for companies in our industry, have experienced
volatility that often has been unrelated to operating performance. These broad market and industry fluctuations
may adversely affect the price of our stock, regardless of our operating performance. A decrease in the market
price of our common stock would likely adversely impact the trading price of the 0.00% Convertible Senior
Notes due 2018 that we issued in November 2013 (the “Notes”). Volatility or a lack of positive performance in
our stock price may also adversely affect our ability to retain key employees who have been granted stock
options or other stock-based awards. A sustained decline in our stock price and market capitalization could lead
to an impairment charge to our long-lived assets.
Delaware statutes and certain provisions in our charter documents could make it more difficult for a third-
party to acquire us.
Our Board has the authority to issue up to 10 million shares of preferred stock and to determine the price, rights,
preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action
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