EXHIBIT 99.1
Yahoo! Reports Fourth Quarter and Full Year 2003 Financial Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 14, 2004--
Company Posts Full Year 2003 Revenues of $1,625 Million,
Operating Income of $296 Million,
Operating Income Before Depreciation and Amortization of $455 Million
Yahoo! Inc. (Nasdaq:YHOO) today reported results for the fourth
quarter and full year ended December 31, 2003.
"Yahoo!'s fourth quarter performance completes a year of
phenomenal growth for our company, and represents the most successful
quarter in the history of Yahoo!. As we made across-the-board
improvements in our business, we were rewarded with deeper and more
profitable relationships with our customers," said Terry Semel,
chairman and chief executive officer, Yahoo!. "We believe the key to
Yahoo!'s long-term growth continues to be building and improving
products and services essential to our customers' lives. Our focus on
expanding the world's largest and most diverse online marketing
platform and improving the best user experience on the web is expected
to be the catalyst for the future success of Yahoo!."
-- Revenues of $663.9 million in the fourth quarter of 2003
compared to $285.8 million in the same period of 2002.
-- Revenues excluding traffic acquisition costs ("TAC") of $511.3
million in the fourth quarter of 2003, compared to $285.8
million for the same period of 2002.
-- Gross profit for the fourth quarter of 2003 was $443.1
million, compared to $243.5 million for the same period of
2002.
-- Operating income for the fourth quarter of 2003 was $94.4
million, compared to $55.4 million for the same period of
2002.
-- Operating income before depreciation and amortization for the
fourth quarter of 2003 was $157.5 million, compared to $84.6
million for the same period of 2002. Operating income and
operating income before depreciation and amortization include
stock compensation expense of $20.1 million for the quarter
ended December 31, 2003, primarily as a result of the
acquisition of Overture Services, Inc. ("Overture"), compared
to $0.7 million for the same period of 2002.
-- Cash flow from operating activities for the fourth quarter of
2003 was $101.9 million, compared to $79.4 million for the
same period of 2002.
-- Free cash flow for the fourth quarter of 2003 was $92.3
million, compared to $62.7 million for the same period of
2002. Free cash flow for the quarter ended December 31, 2003
included approximately $28.7 million of costs related to the
acquisition of Overture.
"We are very pleased with the strength of our fourth quarter and
year-end results, and believe that they are a reflection of the
strength of our current fundamentals and also represent progress on
our key longer-term initiatives. As we exit our second consecutive
year of strong free cash flow generation, we continue to re-invest in
our customers, users and infrastructure," said Susan Decker, chief
financial officer, Yahoo!. "We achieved tremendous growth this year
balanced throughout the businesses of our company, and we remain
focused on delivering long-term growth across our key financial
metrics."
-- Revenues for the year ended December 31, 2003 totaled $1,625.1
million compared to the $953.1 million reported for the same
period in 2002.
-- Revenues excluding TAC for 2003 were $1,472.5 million,
compared to $953.1 million for the same period of 2002.
-- Gross profit for 2003 was $1,267.0 million, compared to $790.2
million for the same period of 2002.
-- Operating income for 2003 was $295.7 million, compared to
$88.2 million for the same period of 2002.
-- Operating income before depreciation and amortization for 2003
was $455.4 million, compared to $197.6 million for the same
period of 2002. Operating income and operating income before
depreciation and amortization include stock compensation
expense of $22.0 million for the year ended December 31, 2003
primarily as a result of the acquisition of Overture, compared
to $8.4 million for the same period of 2002.
-- Cash flow from operating activities for the year ended
December 31, 2003 was $428.1 million, compared to $302.4
million for the same period of 2002.
-- Free cash flow for the year ended December 31, 2003 was $338.9
million, compared to $220.9 million for the same period of
2002. Free cash flow for the year ended December 31, 2003
included approximately $43.2 million of costs primarily
related to the acquisitions of Overture and Inktomi
Corporation ("Inktomi"), which closed during 2003.
Fourth Quarter and Year Ended 2003 Financial Highlights
Cash flow from operating activities and Free cash flow: Cash flow
from operating activities for the fourth quarter of 2003 totaled
$101.9 million, compared to $79.4 million for the same period of 2002.
Free cash flow for the fourth quarter of 2003 totaled $92.3 million, a
47 percent increase over the $62.7 million reported for the same
period of 2002. Free cash flow for the quarter ended December 31, 2003
included approximately $28.7 million of costs related to the
acquisition of Overture, which closed in the fourth quarter of 2003.
Cash flow from operating activities for the year ended December
31, 2003 totaled $428.1 million, compared to $302.4 million for the
same period of 2002. Free cash flow for the year ended December 31,
2003 totaled $338.9 million, a 53 percent increase compared to the
$220.9 million reported for the same period of 2002. Free cash flow
for the year ended December 31, 2003 included approximately $43.2
million of costs primarily related to the acquisitions of Overture and
Inktomi, which closed during 2003.
Cash, cash equivalents and investments in marketable debt and
equity securities increased to $2,571.2 million at December 31, 2003,
compared to $1,537.6 million at December 31, 2002. In addition to the
free cash flow of $338.9 million generated for the year ended December
31, 2003, the company increased its cash, cash equivalents and
investments in marketable debt and equity securities balances by
$733.1 million related to issuance of convertible debt, and $353.2
million related to issuance of common stock from exercise of employee
stock options, offset by approximately $370.4 million used for
acquisitions completed in 2003, net of cash acquired.
Revenues: In the fourth quarter of 2003, Yahoo! reported revenues
of $663.9 million, a 132 percent increase from the same period in
2002. For the year ended December 31, 2003, revenues were $1,625.1
million, a 71 percent increase from the $953.1 million reported in the
same period in 2002.
Marketing services revenue for the fourth quarter of 2003 totaled
$545.5 million, a 178 percent increase from the $196.4 million
reported in the same period in 2002. Marketing services revenue for
the year ended December 31, 2003 totaled $1,199.7 million, an 84
percent increase from the $651.6 million reported in the same period
in 2002. These increases resulted primarily from the strong increase
in revenues from Yahoo!'s search and marketplace properties and growth
in the balance of Yahoo!'s global marketing services revenues, as well
as the incremental revenue associated with the acquisition of Overture
in the fourth quarter of 2003.
Fees revenue for the fourth quarter of 2003 totaled $85.2 million,
a 37 percent increase compared to the $62.0 million reported in the
same period in 2002. Fees revenue for the year ended December 31, 2003
totaled $298.2 million, a 43 percent increase compared to the $207.9
million reported in the same period in 2002. These increases were
primarily driven by the growth in paying relationships for Yahoo!'s
premium services, including SBC Yahoo! DSL and Dial, small business
and communications suites of premium services, and Yahoo! Personals,
partially offset by a decrease in our event webcasting business.
Listings revenue for the fourth quarter of 2003 totaled $33.2
million, a 21 percent increase compared to the $27.4 million reported
in the same period in 2002. Listings revenue for the year ended
December 31, 2003 totaled $127.2 million, a 36 percent increase
compared to the $93.6 million reported in the same period in 2002.
These increases were driven by the increases in our search and
marketplace services revenues as well as increased revenue from
HotJobs, which was acquired in February 2002.
Revenues excluding TAC and Gross profit: Revenues excluding TAC
for the fourth quarter of 2003 totaled $511.3 million, a 79 percent
increase compared to the $285.8 million in the same period of 2002.
Gross profit for the fourth quarter of 2003 totaled $443.1 million,
compared to $243.5 million in the same period of 2002.
Revenues excluding TAC for the year ended December 31, 2003
totaled $1,472.5 million, a 55 percent increase compared to the $953.1
million in the same period of 2002. Gross profit for the year ended
December 31, 2003 totaled $1,267.0 million, compared to $790.2 million
in the same period of 2002.
The increases in revenues excluding TAC for both the quarter and
year ended December 31, 2003, when compared to the same periods in
2002, resulted from the combination of a strong increase in revenues
from Yahoo!'s search and marketplace properties and growth in the
balance of Yahoo!'s global revenues. In addition, revenues excluding
TAC for the quarter ended December 31, 2003 increased as a result of
the incremental revenue associated with the acquisition of Overture.
Operating income and Operating income before depreciation and
amortization: Operating income for the fourth quarter of 2003 totaled
$94.4 million, compared to $55.4 million in the same period of 2002.
Operating income before depreciation and amortization for the fourth
quarter of 2003 totaled $157.5 million, an 86 percent increase
compared to the $84.6 million reported in the same period of 2002.
Operating income and operating income before depreciation and
amortization include stock compensation expense of $20.1 million for
the fourth quarter of 2003, primarily as a result of the acquisition
of Overture, compared to $0.7 million for the same period in 2002.
Operating income for the year ended December 31, 2003 totaled
$295.7 million, compared to $88.2 million in the same period of 2002.
Operating income before depreciation and amortization for the year
ended December 31, 2003 totaled $455.4 million, a 130 percent increase
compared to the $197.6 million reported in the same period of 2002.
Operating income and operating income before depreciation and
amortization include stock compensation expense of $22.0 million for
the year ended December 31, 2003, primarily as a result of the
acquisition of Overture, compared to $8.4 million for the same period
in 2002.
The substantial increase in operating income and operating income
before depreciation and amortization both for the quarter and year
ended December 31, 2003, when compared to the same periods in 2002,
reflects strong growth in revenues excluding TAC while maintaining
ongoing cost discipline.
Net Income: Net income for the fourth quarter of 2003 was $75.0
million or $0.11 per diluted share, compared with $46.2 million or
$0.08 per diluted share for the same period of 2002.
Net income for the year ended December 31, 2003 was $237.9 million
or $0.37 per diluted share, compared with income before the cumulative
effect of accounting change of $106.9 million or $0.18 per diluted
share for the same period of 2002. Net income was $42.8 million or
$0.07 per diluted share for the year ended December 31, 2002,
including the charge of $64.1 million for the cumulative effect of the
accounting change for the implementation of Statement of Financial
Accounting Standard No. 142 ("SFAS 142"). SFAS 142, which the Company
adopted January 1, 2002, requires companies to assess the goodwill
recorded from previous acquisitions, and as necessary, record an
impairment charge that does not affect cash or the Company's
operations.
Please refer to the "Note to Unaudited Condensed Consolidated
Statements of Operations" and "Business Outlook" attached to this
press release.
Quarterly Conference Call
Yahoo! will host a conference call to discuss fourth quarter
results at 5:00 p.m. Eastern Time today. A live Webcast of the
conference call, together with supplemental financial information can
be accessed through the Company's Investor Relations Web site at
http://yhoo.client.shareholder.com/earnings.cfm. In addition, an
archive of the Webcast can be accessed through the same link. An audio
replay of the call will be available following the conference call by
calling 877-213-9653 or 630-652-3041, reservation number: 8226589.
About Yahoo!
Yahoo! Inc. is a leading provider of comprehensive online products
and services to consumers and businesses worldwide. Yahoo! is the No.
1 Internet brand globally and the most trafficked Internet destination
worldwide. Headquartered in Sunnyvale, Calif., Yahoo!'s global network
includes 25 World properties and is available in 13 languages.
This press release includes the financial measures revenues
excluding traffic acquisition costs, operating income before
depreciation and amortization and free cash flow. These measures are
defined as non-GAAP financial measures by the Securities and Exchange
Commission and may be different from non-GAAP financial measures used
by other companies. The presentation of this financial information is
not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
generally accepted accounting principles. See Note to Unaudited
Condensed Consolidated Statements of Operations and Reconciliations to
Unaudited Consolidated Condensed Statements of Operations included in
this press release for further information regarding these non-GAAP
financial measures.
This press release and its attachments contain forward-looking
statements that involve risks and uncertainties concerning Yahoo!'s
expected financial performance (as described without limitation in the
Business Outlook section and quotations from management in this press
release), as well as Yahoo!'s strategic and operational plans. Actual
results may differ materially from the results predicted and reported
results should not be considered as an indication of future
performance. The potential risks and uncertainties include, among
others, decreases or delays in marketing services spending, including
performance of the Company's newly acquired Overture business; the
actual increases in demand by customers for Yahoo!'s premium services;
acceptance of new products and services; general economic conditions;
risks related to the integration of recent acquisitions; the ability
to adjust to changes in personnel, including management changes; and
the dependence on third parties for technology, services, content and
distribution. All information set forth in this release and its
attachments is as of January 14, 2004. Yahoo! undertakes no duty to
update this information. More information about potential factors that
could affect the Company's business and financial results is included
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 and Quarterly Report on Form 10-Q for the quarter
ended September 30, 2003, including (without limitation) under the
captions, "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," which are on file with
the SEC and available at the SEC's website at www.sec.gov. Additional
information will also be set forth in those sections in Yahoo!'s
Annual Report on Form 10-K for the year ended December 31, 2003, which
will be filed with the SEC in the first quarter of 2004.
Yahoo! and the Yahoo! logos are trademarks and/or registered
trademarks of Yahoo! Inc. All other names are trademarks and/or
registered trademarks of their respective owners.
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
-------------------------------------------
2002 2003 2002 2003
-------------------------------------------
Revenues $ 285,787 $ 663,922 $ 953,067 $1,625,097
Cost of revenues 42,319 220,842 162,881 358,103
---------- --------- ---------- ----------
Gross profit 243,468 443,080 790,186 1,266,994
---------- --------- ---------- ----------
Operating expenses:
Sales and marketing 115,933 166,280 429,968 530,613
Product development 37,858 78,105 141,766 207,285
General and administrative 27,701 54,844 100,676 157,027
Stock compensation expense(a) 710 20,078 8,402 22,029
Amortization of intangibles 5,898 29,354 21,186 54,374
---------- --------- ---------- ----------
Total operating expenses 188,100 348,661 701,998 971,328
---------- --------- ---------- ----------
Income from operations 55,368 94,419 88,188 295,666
Other income, net 13,182 13,202 69,287 47,506
Earnings in equity interests 6,974 15,427 22,301 47,652
Minority interests in
operations of consolidated
subsidiaries (986) (824) (1,551) (5,921)
---------- --------- ---------- ----------
Income before income taxes
and cumulative effect of
accounting change 74,538 122,224 178,225 384,903
Provision for income taxes 28,329 47,205 71,290 147,024
---------- --------- ---------- ----------
Income before cumulative
effect of accounting change 46,209 75,019 106,935 237,879
Cumulative effect of
accounting change - - (64,120) -
---------- --------- ---------- ----------
Net income $ 46,209 $ 75,019 $ 42,815 $ 237,879
========== ========= ========== ==========
Net income per share - diluted:
Income before cumulative
effect of accounting
change $ 0.08 $ 0.11 $ 0.18 $ 0.37
Cumulative effect of
accounting change - - (0.11) -
---------- --------- ---------- ----------
Net income per share -
diluted $ 0.08 $ 0.11 $ 0.07 $ 0.37
========== ========= ========== ==========
Shares used in per share
calculation - diluted 607,544 686,514 610,060 642,081
========== ========= ========== ==========
(a) Stock compensation expense is allocated as follows:
Sales & marketing $ 212 $ 5,366 $ 1,424 $ 5,785
Product development 315 9,309 1,702 10,526
General and administrative 183 5,403 5,276 5,718
---------- --------- ---------- ----------
Total stock compensation
expense $ 710 $ 20,078 $ 8,402 $ 22,029
========== ========= ========== ==========
- ----------------------------------------------------------------------
Supplemental Financial Data (See Note)
Revenues excluding traffic
acquisition costs ("TAC") $ 285,787 $ 511,339 $ 953,067 $1,472,514
Operating income before
depreciation and
amortization $ 84,575 $ 157,518 $ 197,577 $ 455,354
Free cash flow $ 62,686 $ 92,320 $ 220,895 $ 338,886
Yahoo! Inc.
Note to Unaudited Condensed Consolidated Statements of Operations
The Company believes that the non-GAAP financial measures revenues
excluding traffic acquisition costs ("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 performance measure is useful to management
and investors as it is more comparable to our historical
profitability, as traffic acquisition costs paid to affiliates of
Overture Services, Inc., ("Overture"), which the Company acquired on
October 7, 2003, are a significant percentage of revenues generated
from Overture's sponsored search services. A limitation of revenues
excluding TAC is that other cost of revenues are excluded and
therefore does not represent the actual gross profit for the period.
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.
Operating income before depreciation and amortization includes stock
compensation expense of $20.1 million and $0.7 million for the three
months ended December 31, 2003 and 2002, respectively. Operating
income before depreciation and amortization includes stock
compensation expense of $22.0 million and $8.4 million for the year
ended December 31, 2003 and 2002, respectively.
In our business outlook, we define operating income before
depreciation and amortization as income (loss) from operations before
depreciation, amortization of intangible assets and amortization of
stock compensation expense. In our business outlook, this measure now
also eliminates the effect of amortization of stock compensation
expense from period to period as this expense is also not directly
attributable to the underlying performance of the Company's business
operations. As a result, a further limitation associated with this
measure is that it does not include all expenses related to our
workforce. Management compensates for this limitation by providing
supplemental information about stock compensation expense on the face
of our consolidated statements of operations.
Free cash flow is defined as cash flow from operating activities less
capital expenditures and change in long-term deferred revenue and
includes Overture receivable settled through acquisition. Change in
long-term deferred revenue represents cash payments received in
advance of revenue recognized. Overture receivable settled through
acquisition represents a Yahoo! accounts receivable balance owed from
Overture that was settled as part of the acquisition. 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, change in long-term deferred
revenue and Overture receivable settled through acquisition, 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.
Yahoo! Inc.
Reconciliations to Unaudited Condensed Consolidated
Statements of Operations
(in thousands, except percentages)
Three Months Ended Year Ended
December 31, December 31,
--------------------------------------
2002 2003 2002 2003
--------------------------------------
Revenues for groups of similar services:
Marketing services $196,422 $545,498 $651,568 $1,199,733
Fees 62,001 85,179 207,941 298,192
Listings 27,364 33,245 93,558 127,172
-------- -------- -------- ----------
Total revenues $285,787 $663,922 $953,067 $1,625,097
======== ======== ======== ==========
Revenues by segment:
United States $242,386 $545,503 $806,598 $1,355,153
International 43,401 118,419 146,469 269,944
-------- -------- -------- ----------
Total revenues $285,787 $663,922 $953,067 $1,625,097
======== ======== ======== ==========
Cost of revenues
Traffic acquisition
costs ("TAC") $ - $152,583 $ - $ 152,583
Other cost of revenues 42,319 68,259 162,881 205,520
-------- -------- -------- ----------
Total cost of revenues $ 42,319 $220,842 $162,881 $ 358,103
======== ======== ======== ==========
Revenues excluding TAC
Gross profit $243,468 $443,080 $790,186 $1,266,994
Other cost of revenues 42,319 68,259 162,881 205,520
-------- -------- -------- ----------
Revenues excluding TAC $285,787 $511,339 $953,067 $1,472,514
======== ======== ======== ==========
Revenues excluding TAC by segment:
United States:
Gross profit $208,384 $371,557 $676,694 $1,068,965
Other cost of revenues 34,002 58,446 129,904 170,688
-------- -------- -------- ----------
Revenues excluding TAC $242,386 $430,003 $806,598 $1,239,653
======== ======== ======== ==========
International:
Gross profit $ 35,084 $ 71,523 $113,492 $ 198,029
Other cost of revenues 8,317 9,813 32,977 34,832
-------- -------- -------- ----------
Revenues excluding TAC $ 43,401 $ 81,336 $146,469 $ 232,861
======== ======== ======== ==========
Operating income before depreciation and amortization reconciliation:
Income from operations $ 55,368 $ 94,419 $ 88,188 $ 295,666
Depreciation and amortization 29,207 63,099 109,389 159,688
-------- -------- -------- ----------
Operating income before
depreciation and
amortization $ 84,575 $157,518 $197,577 $ 455,354
======== ======== ======== ==========
Operating income (loss) before depreciation and amortization
by segment:
Operating income before
depreciation and amortization -
United States $ 81,315 $147,669 $204,319 $ 421,294
Operating income (loss) before
depreciation and amortization -
International 3,260 9,849 (6,742) 34,060
-------- -------- -------- ----------
Operating income before
depreciation and
amortization $ 84,575 $157,518 $197,577 $ 455,354
======== ======== ======== ==========
Operating income (loss) before depreciation and amortization by
segment reconciliation:
United States
Income from operations $ 55,021 $ 90,246 $106,375 $ 279,402
Depreciation and amortization 26,294 57,423 97,944 141,892
-------- -------- -------- ----------
Operating income before
depreciation and amortization -
United States $ 81,315 $147,669 $204,319 $ 421,294
======== ======== ======== ==========
International
Income (loss) from operations $ 347 $ 4,173 $(18,187) $ 16,264
Depreciation and amortization 2,913 5,676 11,445 17,796
-------- -------- -------- ----------
Operating income (loss) before
depreciation and amortization -
International $ 3,260 $ 9,849 $ (6,742) $ 34,060
======== ======== ======== ==========
Free cash flow reconciliation:
Cash flow from operating
activities $ 79,358 $101,860 $302,448 $ 428,144
Acquisition of property and
equipment, net (16,672) (37,611) (51,553) (117,329)
Change in long-term deferred
revenue - - (30,000) -
Overture receivable settled
through acquisition - 28,071 - 28,071
-------- -------- -------- ----------
Free cash flow $ 62,686 $ 92,320 $220,895 $ 338,886
======== ======== ======== ==========
Yahoo! Inc.
Business Outlook
Business Outlook
The following business outlook is based on current information
(including the effect of our acquisition of 3721 Network Software
Company Limited) and expectations as of January 14, 2004. Yahoo!'s
business outlook as of today is expected to be available on the
Company's Investor Relations Web site throughout the current quarter.
It is currently expected the full business outlook will not be updated
until the release of Yahoo!'s next quarterly earnings announcement,
notwithstanding subsequent developments; however, Yahoo! may update
the full business outlook or any portion thereof at any time.
Three months ending Year ending
March 31, 2004 December 31, 2004
------------------------------------
Revenues excluding traffic acquisition costs(b) ("TAC") outlook
(in millions):
Gross Profit $407 - $432 $1,815 - $1,920
Other cost of revenues $68 - $73 $305 - $330
------------------------------------
Revenues excluding TAC $475 - $505 $2,120 - $2,250
====================================
Operating income before depreciation and amortization(b) outlook
(in millions):
Income from operations $75 - $88 $420 - $480
Depreciation and amortization $62 - $66 $250 - $270
Stock compensation expense $13 - $16 $40 - $50
------------------------------------
Operating income before
depreciation and amortization $150 - $170 $710 - $800
====================================
(b) Refer to Note to Unaudited Condensed Consolidated Statements of
Operations.
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
--------------------------------------------
2002 2003 2002 2003
--------- --------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 46,209 $ 75,019 $ 42,815 $ 237,879
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 29,207 63,099 109,389 159,688
Tax benefits from
stock options 21,963 39,009 60,406 124,852
Cumulative effect of
accounting change - - 64,120 -
Earnings in equity
interests (6,974) (15,427) (22,301) (47,652)
Minority interests in
operations of
consolidated
subsidiaries 986 824 1,551 5,921
Stock compensation
expense 710 20,078 8,402 22,029
Other noncash charges 1,285 1,716 (109) 11,047
Changes in assets and
liabilities, net of
effects of
acquisitions:
Accounts receivable,
net (10,039) (90,405) (30,798) (122,220)
Prepaid expenses and
other assets 4,583 17,591 29,555 16,835
Accounts payable 5,587 (13,169) 4,507 (12,889)
Accrued expenses and
other liabilities (5,309) (18,787) (9,904) (640)
Deferred revenue (8,850) 22,312 14,815 33,294
Long-term deferred
revenue - - 30,000 -
--------- --------- ----------- -----------
Net cash provided by
operating activities 79,358 101,860 302,448 428,144
--------- --------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property
and equipment, net (16,672) (37,611) (51,553) (117,329)
Purchases of marketable
securities (368,480) (284,502) (1,165,711) (1,916,800)
Proceeds from sales and
maturities of
marketable securities 258,800 241,894 1,067,540 1,283,323
Acquisitions, net of
cash acquired - (142,039) (189,168) (370,357)
Purchases of other
investments - (3,929) (7,649) (3,747)
Proceeds from sales of
other investments - 740 687 3,321
--------- --------- ----------- -----------
Net cash used in investing
activities (126,352) (225,447) (345,854) (1,121,589)
--------- --------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance
of debt - - - 733,125
Proceeds from issuance
of common stock, net 39,575 150,174 78,190 353,201
Repurchase of common
stock - - (100,000) -
--------- --------- ----------- -----------
Net cash provided by (used
in) financing activities 39,575 150,174 (21,810) 1,086,326
--------- --------- ----------- -----------
Effect of exchange rate
changes on cash and cash
equivalents (928) 5,434 3,556 9,686
Net change in cash and
cash equivalents (8,347) 32,021 (61,660) 402,567
Cash and cash equivalents,
beginning of period 319,319 681,518 372,632 310,972
--------- --------- ----------- -----------
Cash and cash equivalents,
end of period $ 310,972 $ 713,539 $ 310,972 $ 713,539
========= ========= =========== ===========
Yahoo! Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2002 2003
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 310,972 $ 713,539
Short-term investments in marketable
securities 463,204 595,978
Accounts receivable, net 113,612 282,415
Prepaid expenses and other current assets 82,216 129,777
----------- -----------
Total current assets 970,004 1,721,709
Long-term investments in marketable
securities 763,408 1,261,693
Property and equipment, net 371,272 449,512
Goodwill 415,225 1,805,561
Intangible assets, net 96,252 445,640
Other assets 174,020 247,539
----------- -----------
Total assets $ 2,790,181 $ 5,931,654
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,738 $ 31,890
Accrued and other current liabilities 257,575 483,628
Deferred revenue 135,501 192,278
----------- -----------
Total current liabilities 411,814 707,796
Long term debt - 750,000
Other liabilities 84,540 72,890
Minority interests in consolidated
subsidiaries 31,557 37,478
Stockholders' equity 2,262,270 4,363,490
----------- -----------
Total liabilities and
stockholders' equity $ 2,790,181 $ 5,931,654
=========== ===========
Yahoo! Inc.
Unaudited Supplemental Financial Information and Business Metrics
(in thousands, except percentages)
Q1 Q2 Q3 Q4
2002 2002 2002 2002
----------- ---------- ---------- ----------
Revenues for groups of similar services:
Marketing services $ 137,675 $ 151,710 $ 165,761 $ 196,422
Fees 39,546 49,063 57,331 62,001
Listings 15,444 25,019 25,731 27,364
---------- ---------- ---------- ----------
Total revenues $ 192,665 $ 225,792 $ 248,823 $ 285,787
========== ========== ========== ==========
Revenues for groups of similar services (Trailing Twelve Months):
Marketing services $ 561,673 $ 566,728 $ 603,358 $ 651,568
Fees 130,138 150,865 178,426 207,941
Listings 38,061 55,906 74,407 93,558
---------- ---------- ---------- ----------
Total revenues $ 729,872 $ 773,499 $ 856,191 $ 953,067
========== ========== ========== ==========
Revenues by segment:
United States $ 166,612 $ 187,465 $ 210,135 $ 242,386
International 26,053 38,327 38,688 43,401
---------- ---------- ---------- ----------
Total revenues $ 192,665 $ 225,792 $ 248,823 $ 285,787
========== ========== ========== ==========
Revenues by segment (Trailing Twelve Months):
United States $ 613,970 $ 652,324 $ 723,094 $ 806,598
International 115,902 121,175 133,097 146,469
---------- ---------- ---------- ----------
Total revenues $ 729,872 $ 773,499 $ 856,191 $ 953,067
========== ========== ========== ==========
Cost of revenues:
Traffic acquisition
costs ("TAC") $ - $ - $ - $ -
Other cost of revenues 37,821 41,708 41,033 42,319
---------- ---------- ---------- ----------
Total cost of revenues $ 37,821 $ 41,708 $ 41,033 $ 42,319
========== ========== ========== ==========
Cost of revenues (Trailing Twelve Months):
Traffic acquisition
costs $ - $ - $ - $ -
Other cost of revenues 156,279 157,428 157,863 162,881
---------- ---------- ---------- ----------
Total cost of revenues $ 156,279 $ 157,428 $ 157,863 $ 162,881
========== ========== ========== ==========
Revenues excluding TAC:
Gross profit $ 154,844 $ 184,084 $ 207,790 $ 243,468
Other cost of revenues 37,821 41,708 41,033 42,319
---------- ---------- ---------- ----------
Revenues excluding TAC $ 192,665 $ 225,792 $ 248,823 $ 285,787
========== ========== ========== ==========
Revenues excluding TAC (Trailing twelve months):
Gross profit $ 573,593 $ 616,071 $ 698,328 $ 790,186
Other cost of revenues 156,279 157,428 157,863 162,881
---------- ---------- ---------- ----------
Revenues excluding TAC $ 729,872 $ 773,499 $ 856,191 $ 953,067
========== ========== ========== ==========
Revenues excluding TAC by segment:
United States:
Gross profit $ 135,656 $ 155,068 $ 177,586 $ 208,384
Other cost of revenues 30,956 32,397 32,549 34,002
---------- ---------- ---------- ----------
Revenues excluding TAC $ 166,612 $ 187,465 $ 210,135 $ 242,386
========== ========== ========== ==========
International:
Gross profit $ 19,188 $ 29,016 $ 30,204 $ 35,084
Other cost of revenues 6,865 9,311 8,484 8,317
---------- ---------- ---------- ----------
Revenues excluding TAC $ 26,053 $ 38,327 $ 38,688 $ 43,401
========== ========== ========== ==========
Revenues excluding TAC by segment (Trailing Twelve Months):
United States:
Gross profit $ 483,442 $ 523,282 $ 594,645 $ 676,694
Other cost of revenues 130,528 129,042 128,449 129,904
---------- ---------- ---------- ----------
Revenues excluding TAC $ 613,970 $ 652,324 $ 723,094 $ 806,598
========== ========== ========== ==========
International:
Gross profit $ 90,151 $ 92,789 $ 103,983 $ 113,492
Other cost of revenues 25,751 28,386 29,414 32,977
---------- ---------- ---------- ----------
Revenues excluding TAC $ 115,902 $ 121,175 $ 133,397 $ 146,469
========== ========== ========== ==========
Operating income before depreciation and amortization:
Income (loss) from
operations $ (4,175) $ 7,518 $ 29,477 $ 55,368
Depreciation and
amortization 22,955 27,476 29,751 29,207
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization $ 18,780 $ 34,994 $ 59,228 $ 84,575
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization (Trailing
Twelve Months):
Income (loss) from
operations $ (129,677) $ (48,325) $ 7,514 $ 88,188
Depreciation and
amortization 123,319 118,553 116,223 109,389
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization $ (6,358) $ 70,228 $ 123,737 $ 197,577
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment:
Operating income before
depreciation and
amortization - United
States $ 26,829 $ 38,554 $ 57,621 $ 81,315
Operating income (loss)
before depreciation and
amortization -
International (8,049) (3,560) 1,607 3,260
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization $ 18,780 $ 34,994 $ 59,228 $ 84,575
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment (Trailing Twelve Months):
Operating income before
depreciation and
amortization - United
States $ 29,551 $ 97,631 $ 140,036 $ 204,319
Operating income (loss)
before depreciation and
amortization -
International (35,909) (27,403) (16,299) (6,742)
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization $ (6,358) $ 70,228 $ 123,737 $ 197,577
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment reconciliation:
United States
Income from operations $ 6,729 $ 13,874 $ 30,751 $ 55,021
Depreciation and
amortization 20,100 24,680 26,870 26,294
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization - United
States $ 26,829 $ 38,554 $ 57,621 $ 81,315
========== ========== ========== ==========
International
Income (loss) from
operations $ (10,904) $ (6,356) $ (1,274) $ 347
Depreciation and
amortization 2,855 2,796 2,881 2,913
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization -
International $ (8,049) $ (3,560) $ 1,607 $ 3,260
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment reconciliation (Trailing Twelve Months):
United States
Income (loss) from
operations $ (80,217) $ (7,949) $ 35,540 $ 106,375
Depreciation and
amortization 109,768 105,580 104,496 97,944
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization - United
States $ 29,551 $ 97,631 $ 140,036 $ 204,319
========== ========== ========== ==========
International
Income (loss) from
operations $ (49,460) $ (40,376) $ (28,026) $ (18,187)
Depreciation and
amortization 13,551 12,973 11,727 11,445
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization -
International $ (35,909) $ (27,403) $ (16,299) $ (6,742)
========== ========== ========== ==========
Free cash flow reconciliation:
Cash flow from operating
activities $ 47,443 $ 103,382 $ 72,265 $ 79,358
Acquisition of property
and equipment, net (7,287) (14,301) (13,293) (16,672)
Change in long-term
deferred revenue - (30,000) - -
Overture receivable
settled through
acquisition - - - -
---------- ---------- ---------- ----------
Free cash flow $ 40,156 $ 59,081 $ 58,972 $ 62,686
========== ========== ========== ==========
Free cash flow reconciliation (Trailing Twelve Months):
Cash flow from operating
activities $ 83,240 $ 192,226 $ 236,073 $ 302,448
Acquisition of property
and equipment, net (52,043) (52,743) (49,223) (51,553)
Change in long-term
deferred revenue - (30,000) (30,000) (30,000)
Overture receivable
settled through
acquisition - - - -
---------- ---------- ---------- ----------
Free cash flow $ 31,197 $ 109,483 $ 156,850 $ 220,895
========== ========== ========== ==========
Q1 Q2 Q3 Q4
2003 2003 2003 2003
---------- ---------- ---------- ----------
Revenues for groups of similar services:
Marketing services $ 189,965 $ 219,198 $ 245,072 $ 545,498
Fees 63,729 69,926 79,358 85,179
Listings 29,254 32,282 32,391 33,245
---------- ---------- ---------- ----------
Total revenues $ 282,948 $ 321,406 $ 356,821 $ 663,922
========== ========== ========== ==========
Revenues for groups of similar services (Trailing Twelve Months):
Marketing services $ 703,858 $ 771,346 $ 850,657 $1,199,733
Fees 232,124 252,987 275,014 298,192
Listings 107,368 114,631 121,291 127,172
---------- ---------- ---------- ----------
Total revenues $1,043,350 $1,138,964 $1,246,962 $1,625,097
========== ========== ========== ==========
Revenues by segment:
United States $ 238,546 $ 271,345 $ 299,759 $ 545,503
International 44,402 50,061 57,062 118,419
---------- ---------- ---------- ----------
Total revenues $ 282,948 $ 321,406 $ 356,821 $ 663,922
========== ========== ========== ==========
Revenues by segment (Trailing Twelve Months):
United States $ 878,532 $ 962,412 $1,052,036 $1,355,153
International 164,818 176,552 194,926 269,944
---------- ---------- ---------- ----------
Total revenues $1,043,350 $1,138,964 $1,246,962 $1,625,097
========== ========== ========== ==========
Cost of revenues:
Traffic acquisition
costs ("TAC") $ - $ - $ - $ 152,583
Other cost of revenues 43,132 46,842 47,287 68,259
---------- ---------- ---------- ----------
Total cost of revenues $ 43,132 $ 46,842 $ 47,287 $ 220,842
========== ========== ========== ==========
Cost of revenues (Trailing Twelve Months):
Traffic acquisition
costs $ - $ - $ - $ 152,583
Other cost of revenues 168,192 173,326 179,580 205,520
---------- ---------- ---------- ----------
Total cost of revenues $ 168,192 $ 173,326 $ 179,580 $ 358,103
========== ========== ========== ==========
Revenues excluding TAC:
Gross profit $ 239,816 $ 274,564 $ 309,534 $ 443,080
Other cost of revenues 43,132 46,842 47,287 68,259
---------- ---------- ---------- ----------
Revenues excluding TAC $ 282,948 $ 321,406 $ 356,821 $ 511,339
========== ========== ========== ==========
Revenues excluding TAC (Trailing twelve months):
Gross profit $ 875,158 $ 965,638 $1,067,382 $1,266,994
Other cost of revenues 168,192 173,326 179,580 205,520
---------- ---------- ---------- ----------
Revenues excluding TAC $1,043,350 $1,138,964 $1,246,962 $1,472,514
========== ========== ========== ==========
Revenues excluding TAC by segment:
United States:
Gross profit $ 203,228 $ 232,890 $ 261,290 $ 371,557
Other cost of revenues 35,318 38,455 38,469 58,446
---------- ---------- ---------- ----------
Revenues excluding TAC $ 238,546 $ 271,345 $ 299,759 $ 430,003
========== ========== ========== ==========
International:
Gross profit $ 36,588 $ 41,674 $ 48,244 $ 71,523
Other cost of revenues 7,814 8,387 8,818 9,813
---------- ---------- ---------- ----------
Revenues excluding TAC $ 44,402 $ 50,061 $ 57,062 $ 81,336
========== ========== ========== ==========
Revenues excluding TAC by segment (Trailing Twelve Months):
United States:
Gross profit $ 744,266 $ 822,088 $ 905,792 $1,068,965
Other cost of revenues 134,266 140,324 146,244 170,688
---------- ---------- ---------- ----------
Revenues excluding TAC $ 878,532 $ 962,412 $1,052,036 $1,239,653
========== ========== ========== ==========
International:
Gross profit $ 130,892 $ 143,550 $ 161,590 $ 198,029
Other cost of revenues 33,926 33,002 33,336 34,832
---------- ---------- ---------- ----------
Revenues excluding TAC $ 164,818 $ 176,552 $ 194,926 $ 232,861
========== ========== ========== ==========
Operating income before depreciation and amortization:
Income (loss) from
operations $ 54,977 $ 62,772 $ 83,498 $ 94,419
Depreciation and
amortization 29,073 34,503 33,013 63,099
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization $ 84,050 $ 97,275 $ 116,511 $ 157,518
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization
(Trailing Twelve Months):
Income (loss) from
operations $ 147,340 $ 202,594 $ 256,615 $ 295,666
Depreciation and
amortization 115,507 122,534 125,796 159,688
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization $ 262,847 $ 325,128 $ 382,411 $ 455,354
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment:
Operating income before
depreciation and
amortization - United
States $ 76,948 $ 90,555 $ 106,122 $ 147,669
Operating income
(loss) before
depreciation and
amortization -
International 7,102 6,720 10,389 9,849
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization $ 84,050 $ 97,275 $ 116,511 $ 157,518
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment (Trailing Twelve Months):
Operating income before
depreciation and
amortization - United
States $ 254,438 $ 306,439 $ 354,940 $ 421,294
Operating income
(loss) before
depreciation and
amortization -
International 8,409 18,689 27,471 34,060
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization $ 262,847 $ 325,128 $ 382,411 $ 455,354
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment reconciliation:
United States
Income from operations $ 51,000 $ 60,472 $ 77,684 $ 90,246
Depreciation and
amortization 25,948 30,083 28,438 57,423
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization - United
States $ 76,948 $ 90,555 $ 106,122 $ 147,669
========== ========== ========== ==========
International
Income (loss) from
operations $ 3,977 $ 2,300 $ 5,814 $ 4,173
Depreciation and
amortization 3,125 4,420 4,575 5,676
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization -
International $ 7,102 $ 6,720 $ 10,389 $ 9,849
========== ========== ========== ==========
Operating income (loss) before depreciation and amortization by
segment reconciliation (Trailing Twelve Months):
United States
Income (loss) from
operations $ 150,646 $ 197,244 $ 244,177 $ 279,402
Depreciation and
amortization 103,792 109,195 110,763 141,892
---------- ---------- ---------- ----------
Operating income before
depreciation and
amortization - United
States $ 254,438 $ 306,439 $ 354,940 $ 421,294
========== ========== ========== ==========
International
Income (loss) from
operations $ (3,306) $ 5,350 $ 12,438 $ 16,264
Depreciation and
amortization 11,715 13,339 15,033 17,796
---------- ---------- ---------- ----------
Operating income (loss)
before depreciation and
amortization -
International $ 8,409 $ 18,689 $ 27,471 $ 34,060
========== ========== ========== ==========
Free cash flow reconciliation:
Cash flow from operating
activities $ 98,628 $ 92,123 $ 135,533 $ 101,860
Acquisition of
property and
equipment, net (20,503) (20,770) (38,445) (37,611)
Change in long-term
deferred revenue - - - -
Overture receivable
settled through
acquisition - - - 28,071
---------- ---------- ---------- ----------
Free cash flow $ 78,125 $ 71,353 $ 97,088 $ 92,320
========== ========== ========== ==========
Free cash flow reconciliation (Trailing Twelve Months):
Cash flow from operating
activities $ 353,633 $ 342,374 $ 405,642 $ 428,144
Acquisition of
property and
equipment, net (64,769) (71,238) (96,390) (117,329)
Change in long-term
deferred revenue (30,000) - - -
Overture receivable
settled through
acquisition - - - 28,071
---------- ---------- ---------- ----------
Free cash flow $ 258,864 $ 271,136 $ 309,252 $ 338,886
========== ========== ========== ==========
CONTACT: Yahoo! Inc.
Brian Nelson, 408-349-7329 (Media Relations)
bnelson@yahoo-inc.com
Cathy La Rocca, 408-349-5188 (Investor Relations)
cathy@yahoo-inc.com
or
Fleishman-Hillard
Ruben Osorio, 415-318-4108 (Media Relations)
osorior@fleishman.com