Yahoo 2013 Annual Report Download - page 56

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experience, salaries of $13 million due to an increase in headcount in the function, and stock-based compensation
expense of $20 million due to an increase in the number of awards granted at a higher fair value, including
performance-based awards. This was partially offset by a decline of $20 million in legal costs.
General and administrative expenses for the year ended December 31, 2012 increased $43 million, or 9 percent,
as compared to 2011. The increase in the general and administrative function was due to increases of $16 million
in professional services expense, $19 million in legal costs associated with the closure of our Korea business, and
$12 million in stock-based compensation expense primarily due to vesting accelerations upon executive
terminations.
General and administrative expenses represented approximately 12 percent of GAAP revenue for the year ended
December 31, 2013, compared to 11 percent and 10 percent in 2012 and 2011, respectively.
Amortization of Intangibles
We have purchased, and expect to continue purchasing, assets and/or businesses, which may include the purchase
of intangible assets. Intangible assets includes customer, affiliate, and advertiser-related relationships and
tradenames, trademarks and domain names. Amortization of developed technology and patents is included in the
cost of revenue—other, and not in amortization of intangibles.
Amortization of intangibles for the year ended December 31, 2013 increased $9 million, or 25 percent, as
compared to 2012. The year-over-year increase in amortization of intangibles from 2012 to 2013 was primarily
driven by incremental amortization from acquisitions completed in 2013, partially offset by a decrease in
amortization of intangibles driven by fully amortized assets acquired in prior years.
Amortization of intangibles for the year ended December 31, 2012 increased $2 million, or 7 percent, as
compared to 2011. The year-over-year increase in amortization of intangibles from 2011 to 2012 was primarily
driven by the inclusion of intangibles related to an acquisition in the fourth quarter of 2011. This is offset by a
decrease in amortization expense for fully amortized assets acquired in prior years.
Amortization of intangibles represented approximately 1 percent of GAAP revenue for the years ended
December 31, 2013, 2012, and 2011.
Gains on Sales of Patents
For the year ended December 31, 2013, we sold certain patents and recorded gains on sales of patents of
approximately $80 million. The gains on sales of patents were primarily related to a patent sale agreement with a
wholly-owned affiliate of Alibaba Group entered into during the fourth quarter of 2013 for $70 million.
Goodwill Impairment Charge
We conducted our annual goodwill impairment test as of October 31, 2013 and determined that the fair values of
our reporting units, with the exception of the Middle East reporting unit, exceeded their carrying values and
therefore goodwill in those reporting units was not impaired. We concluded that the carrying value of the Middle
East reporting unit exceeded its fair value and recorded a goodwill impairment charge of approximately $64
million. See Note 5—“Goodwill” in the Notes to our consolidated financial statements for additional
information.
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