Yahoo 2013 Annual Report Download - page 59

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Other Income, Net
Other income, net was as follows (dollars in thousands):
Years Ended December 31, 2011-2012
Dollar Change
2012-2013
Dollar Change2011 2012 2013
Interest, dividend, and investment income .... $18,920 $ 41,673 $ 57,544 $ 22,753 $ 15,871
Gain related to the sale of Alibaba Group
Shares ............................... — 4,603,322 — 4,603,322 (4,603,322)
Interest expense ......................... (9,473) (9,297) (14,319) 176 (5,022)
Other ................................. 17,728 12,141 132 (5,587) (12,009)
Total other income, net ............... $27,175 $4,647,839 $ 43,357 $4,620,664 $(4,604,482)
Interest, dividend, and investment income consists of income earned from cash in bank accounts, investments
made in marketable securities and money market funds, and dividend income on the Alibaba Group Preference
Shares prior to the redemption of such shares in May 2013.
For the year ended December 31, 2012, we recorded a pre-tax gain of approximately $4.6 billion related to the
sale to Alibaba Group of the Shares. See Note 8—“Investments in Equity Interests” in the Notes to our
consolidated financial statements for additional information.
Interest expense is related to the Notes and capital lease obligations for buildings and data centers.
Other consists of gains and losses from sales or impairments of marketable securities and/or investments in
privately-held companies, foreign exchange gains and losses due to re-measurement of monetary assets and
liabilities denominated in non-functional currencies, and foreign exchange gains and losses on balance sheet
hedges.
Other income, net may fluctuate in future periods due to changes in our average investment balances, changes in
interest and foreign exchange rates, changes in the fair value of foreign currency forward contracts, realized gains
and losses on investments, and impairments of investments.
Income Taxes
The provision for income taxes for the year ended December 31, 2013 differs from the amount computed by
applying the federal statutory income tax rate to income before provision for income taxes and earnings in equity
interests as follows (dollars in thousands):
Years Ended December 31,
2011 (*) 2012 (*) 2013 (*)
Income tax at the U.S. federal statutory rate of
35 percent ................................ $289,630 35% $1,824,973 35% $221,648 35%
State income taxes, net of federal benefit .......... 4,627 1% 237,637 5% 23,000 4%
Stock-based compensation expense .............. 20,021 2% 19,946 — 16,015 3%
Research tax credits ........................... (10,499) (1)% — — (18,036) (3)%
Effect of non-U.S. operations ................... (49,781) (6)% (138,078) (3)% (47,968) (8)%
Settlement with tax authorities .................. (14,685) (2)% (4,711) — (46,943) (7)%
Remeasurement of prior year tax positions ......... — — — — (24,246) (4)%
Acquisition related non-deductible expenses ....... — — 1,894 — 9,296 1%
Goodwill impairment charge .................... — — — — 22,244 3%
Other ...................................... 2,454 — (1,618) — (1,618) —
Provision for income taxes ..................... $241,767 29% $1,940,043 37% $153,392 24%
(*) Percent of income before income taxes and earnings in equity interests.
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