Altaba (AABA) 8-K Yahoo! Completes First Stage of Alibaba Share Repurchase Agreement Valued at $7.6 Billion

Exhibit 99.2

Unaudited Pro Forma Condensed Consolidated Financial Information

The following unaudited pro forma condensed consolidated financial information has been derived from the historical financial statements of Yahoo! Inc., adjusted to give effect to the Initial Repurchase under the Share Repurchase and Preference Share Sale Agreement between Yahoo! Inc., Alibaba Group Holding Limited, a company organized under the laws of the Cayman Islands (“Alibaba”) and Yahoo! Hong Kong Holdings Limited, a Hong Kong corporation and wholly-owned subsidiary of Yahoo! Inc. (“YHK” and collectively with Yahoo! Inc., “Yahoo!”), consummated on September 18, 2012. This unaudited pro forma condensed consolidated financial information should be read in conjunction with the accompanying notes and tax rate assumption as well as the historical consolidated financial statements and related notes of Yahoo! Inc.

The unaudited pro forma condensed consolidated financial statements as of and for the six months ended June 30, 2012 are based on our historical unaudited consolidated financial statements. The unaudited pro forma consolidated statement of income for the year ended December 31, 2011 is based on our historical audited consolidated financial statements. Our historical audited consolidated financial statements were filed on February 2, 2012 with our Annual Report on Form 10-K for the year ended December 31, 2011, and our historical unaudited financial statements as of and for the six months ended June 30, 2012 were filed on August 9, 2012 with our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012.

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2011 and the six months ended June 30, 2012 assumes that the Initial Repurchase occurred on January 1, 2011. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2012 assumes that the Initial Repurchase occurred on June 30, 2012. The unaudited pro forma condensed consolidated financial information and pro forma adjustments are preliminary and have been made solely for informational purposes and are not necessarily indicative of the condensed consolidated financial position or results of operations that would have been realized had the Initial Repurchase occurred as of the dates indicated, nor is it meant to be indicative of any anticipated condensed consolidated financial position or future results of operations that the company will experience. The historical consolidated financial information has been adjusted in the accompanying unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the Initial Repurchase, (2) factually supportable and (3) with respect to the unaudited pro forma condensed consolidated statements of income, are expected to have a continuing impact on the combined results. Accordingly, the accompanying unaudited pro forma condensed consolidated statements of income do not include the gain on disposition of Alibaba shares by Yahoo! Inc. The adjustments presented are based on currently available information and certain estimates and assumptions. Therefore, actual results may differ from the pro-forma adjustments.

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Yahoo! Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Income

(In thousands, except per share amounts)

				Year Ended December 31, 2011
	As Reported			Pro Forma Adjustments			Pro Forma
Revenue	$	4,984,199					$	4,984,199
Operating expenses:
Cost of revenue		1,502,650						1,502,650
Sales and marketing		1,122,302						1,122,302
Product development		1,005,090						1,005,090
General and administrative		495,804						495,804
Amortization of intangibles		33,592						33,592
Restructuring charges, net		24,420						24,420
Total operating expenses		4,183,858						4,183,858
Income from operations		800,341						800,341
Other income, net		27,175			80,000	(1)		107,175
Income before income taxes and earnings in equity interests		827,516			80,000			907,516
Provision for income taxes		(241,767	)		(30,400	)(3)		(272,167	)
Earnings in equity interests		476,920			(47,529	)(4)		429,391
Net income		1,062,669			2,071			1,064,740
Less: Net income attributable to noncontrolling interests		(13,842	)					(13,842	)
Net income attributable to Yahoo! Inc.	$	1,048,827			2,071		$	1,050,898
Net income attributable to Yahoo! Inc. common stockholders per share—basic	$	0.82		$	0.00		$	0.82
Net income attributable to Yahoo! Inc. common stockholders per share—diluted	$	0.82		$	0.00		$	0.82
Shares used in per share calculation—basic		1,274,240						1,274,240
Shares used in per share calculation—diluted		1,282,282						1,282,282

See accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

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Yahoo! Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Income

(In thousands, except per share amounts)

				Six Months Ended June 30, 2012
	As Reported			Pro Forma Adjustments			Pro Forma
Revenue	$	2,439,027					$	2,439,027
Operating expenses:
Cost of revenue		813,548						813,548
Sales and marketing		558,178						558,178
Product development		428,106						428,106
General and administrative		260,388			(8,945	)(2)		251,443
Amortization of intangibles		19,809						19,809
Restructuring charges, net		134,809						134,809
Total operating expenses		2,214,838			(8,945	)		2,205,893
Income from operations		224,189			8,945			233,134
Other income, net		22,453			40,000	(1)		62,453
Income before income taxes and earnings in equity interests		246,642			48,945			295,587
Provision for income taxes		(82,942	)		(18,599	)(3)		(101,541	)
Earnings in equity interests		352,234			(59,693	)(4)		292,541
Net income		515,934			(29,347	)		486,587
Less: Net income attributable to noncontrolling interests		(2,960	)					(2,960	)
Net income attributable to Yahoo! Inc.		512,974			(29,347	)		483,627
Net income attributable to Yahoo! Inc. common stockholders per share—basic	$	0.42		$	(0.02	)	$	0.40
Net income attributable to Yahoo! Inc. common stockholders per share—diluted	$	0.42		$	(0.02	)	$	0.40
Shares used in per share calculation—basic		1,214,551						1,214,551
Shares used in per share calculation—diluted		1,224,102						1,224,102

See accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

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Yahoo! Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

(In thousands)

	As of June 30, 2012
	As Reported			Pro Forma Adjustments			Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	1,539,269		$	6,282,152	(5)	$	7,821,421
Short-term marketable debt securities		371,204						371,204
Accounts receivable, net		1,040,893						1,040,893
Prepaid expenses and other current assets		318,932						318,932
Total current assets		3,270,298			6,282,152			9,552,450
Mandatorily redeemable preference shares		—			800,000	(9)		800,000
Long-term marketable debt securities		490,570						490,570
Property and equipment, net		1,663,665						1,663,665
Goodwill		3,887,360						3,887,360
Intangible assets, net		196,729						196,729
Other long-term assets		209,669						209,669
Investments in equity interests		4,939,938			(2,643,538	)(6)		2,296,400
Total assets	$	14,658,229		$	4,438,614		$	19,096,843
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	132,105					$	132,105
Accrued expenses and other current liabilities		768,080			2,494,665	(7)		3,262,745
Deferred revenue		176,960						176,960
Total current liabilities		1,077,145			2,494,665			3,571,810
Long-term deferred revenue		38,757						38,757
Capital lease and other long-term liabilities		130,149						130,149
Deferred and other long-term tax liabilities, net		895,941			(505,960	)(7)		389,981
Total liabilities		2,141,992			1,988,705			4,130,697
Commitments and contingencies		—						—
Yahoo! Inc. stockholders’ equity:
Preferred stock		—						—
Common stock		1,253						1,253
Additional paid-in capital		9,976,949						9,976,949
Treasury stock at cost		(942,244	)					(942,244	)
Retained earnings		2,945,269			2,571,287	(8)		5,516,556
Accumulated other comprehensive income		491,770			(121,377	)		370,393
Total Yahoo! Inc. stockholders’ equity		12,472,997			2,449,909			14,922,906
Noncontrolling interests		43,240						43,240
Total equity		12,516,237			2,449,909			14,966,146
Total liabilities and equity	$	14,658,229		$	4,438,614		$	19,096,843

See accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

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Notes to the unaudited pro forma condensed consolidated statements of income

(1) Reflects the inclusion of dividends related to the new Alibaba preference shares issued to Yahoo! Inc. in connection with the repurchase transaction. The Alibaba preference shares will yield semi-annual dividends at a rate per annum of up to 10 percent. For the purposes of the pro forma financial statements, we have assumed a 10% dividend rate as this is the rate expected for the foreseeable future.

(2) Reflects the elimination of third party advisory, legal and regulatory costs that were directly attributable to the repurchase transaction but that are not expected to have a continuing impact on Yahoo!’s results.

(3) For purposes of determining the estimated income tax expense for pro forma adjustments reflected in the unaudited pro forma condensed consolidated statement of income, an estimated assumed effective tax rate of 38% was applied.

(4) Represents the reduction in equity earnings due to reduced income available for common holders due to the preferred stock issued by Alibaba and reduced ownership interest in Alibaba.

Notes to unaudited pro forma condensed consolidated balance sheet

(5) Represents cash received from Alibaba on our sale of ordinary shares under the repurchase agreement.

(6) Reflects an adjustment to give effect to the reduction in Yahoo!’s ownership of Alibaba from 42% to approximately 23% on a fully diluted basis resulting from our sale of Alibaba ordinary shares.

(7) Represents $1.9 billion in taxes on the gain on disposition of Alibaba’s shares by Yahoo! based on the estimated tax rate of 40% and the reversal of deferred tax liabilities of $595 million related to Yahoo!’s ownership of Alibaba.

(8) Reflects the impact of the gain on disposition of Alibaba’s shares by Yahoo!. The pro forma consolidated statements of income do not reflect the non-recurring after-tax gain on disposition of $2.6 billion.

(9) Reflects the mandatorily redeemable preference shares received as part of the consideration paid by Alibaba to Yahoo! as part of the repurchase transaction.

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