SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: October 8, 2003
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YAHOO! INC.
(Exact name of registrant as specified in its charter)
0-28018
(Commission File Number)
DELAWARE 77-0398689
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
701 FIRST AVE.
SUNNYVALE, CALIFORNIA 94089
(Address of principal executive offices, with zip code)
(408) 349-3300
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press release dated October 8, 2003 by Yahoo! Inc.
Item 12.Results of Operations and Financial Condition
This Report on Form 8-K is being filed under the Securities Exchange
Act of 1934, as amended.
On October 8, 2003, Yahoo! Inc., a Delaware corporation ("Yahoo!"),
announced its financial results for the fiscal quarter ended September 30, 2003
and certain other information. A copy of Yahoo!'s press release announcing these
financial results and certain other information is attached as Exhibit 99.1
hereto and incorporated by reference herein.
The press release filed as an exhibit to this report includes "safe
harbor" language pursuant to the Private Securities Litigation Reform Act of
1995, as amended, indicating that certain statements about the Company's
business and other matters contained in the press release are "forward-looking"
rather than "historic." The press release also states that a more thorough
discussion of certain factors which may affect the Company's operating results
is included, among other sections, under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2002 and the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2003, which are on file with the Securities and Exchange
Commission ("SEC") and available at the Securities and Exchange Commission's
website (http://www.sec.gov), and will also be included in the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2003 to
be filed with the Securities and Exchange Commission in the fourth quarter of
2003.
The press release also discloses certain financial measures, such as
revenues excluding traffic acquisition costs ("TAC"), operating income before
depreciation and amortization and free cash flow, that may be considered
non-GAAP financial measures in certain circumstances. Generally, a non-GAAP
financial measure is a numerical measure of a company's performance, financial
position, or cash flows that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable measure calculated
and presented in accordance with generally accepted accounting principles. We
believe these financial measures provide useful information to both management
and investors by excluding certain expenses, gains and losses that may not be
indicative of our core operating results. We believe these financial measures
are useful to investors in allowing for greater transparency to supplemental
information used by management in its financial and operational decision-making.
In addition, we have historically reported similar financial measures to our
investors and believe that the inclusion of comparative numbers provides
consistency in our financial reporting at this time.
The Company believes that financial measures that may be considered
non-GAAP in certain circumstances, including revenues excluding TAC, operating
income before depreciation and amortization and free cash flow are helpful, when
presented in conjunction with the comparable GAAP measures of gross profit,
income from operations, and cash flow from operating activities.
Revenues excluding TAC is defined as gross profit before other cost of
revenues. We believe this measure is useful to management and investors as it is
more comparable to our historical results, as traffic acquisition costs paid to
affiliates of Overture Services, Inc., the Company's recently acquired
wholly-owned subsidiary ("Overture"), are a significant percentage of revenues
generated from Overture's sponsored search services.
Operating income before depreciation and amortization is defined as income
(loss) from operations before depreciation and amortization. We consider
operating income before depreciation and amortization to be an important
indicator of the operational strength of the Company. This measure eliminates
the effects of depreciation and amortization from period to period, which we
believe is useful to management and investors in evaluating the operating
performance of the Company as depreciation and amortization costs are not
directly attributable to the underlying performance of the Company's business
operations. A limitation associated with this measure is that it does not
reflect the periodic costs of certain capitalized tangible and intangible assets
used in generating revenues in the Company's businesses. Management evaluates
the costs of such tangible and intangible assets through other financial
measures such as capital expenditures.
Free cash flow is defined as cash flow from operating activities less
capital expenditures and change in long-term deferred revenue. Change in
long-term deferred revenue represents cash payments received in advance of
revenue recognized related to the Company's agreement with its sponsored search
provider. Free cash flow is considered a liquidity measure and provides useful
information to management and investors about the amount of cash generated after
the acquisition of property and equipment and change in long-term deferred
revenue, which can then be used for strategic opportunities including, among
others, investing in the Company's business, making strategic acquisitions,
strengthening the balance sheet and repurchasing stock. A limitation of free
cash flow is that it does not represent the total increase or decrease in the
cash balance for the period.
In addition, management refers to these financial measures to facilitate
internal and external comparisons to the Company's historical operating results,
in making operating decisions, for budget planning purposes, and to form the
basis upon which management is compensated. These measures should be considered
in addition to, not as a substitute for, or superior to, gross profit, income
from operations, cash flow from operating activities, or other measures of
financial performance prepared in accordance with generally accepted accounting
principles. The non-GAAP measures included in our press release have been
reconciled to the most directly comparable GAAP measure as is now required under
new SEC rules regarding the use of non-GAAP financial measures.
As used herein, "GAAP" refers to accounting principles generally accepted
in the United States.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
YAHOO! INC.
Date: October 8, 2003 By: /s/ Susan Decker
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Susan Decker
Executive Vice President, Finance and
Administration, and Chief Financial Officer
YAHOO! INC.
INDEX TO EXHIBITS
Exhibit Number Description
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99.1 Press Release dated October 8, 2003.