Page 497 -

CASE 9 • YAHOO! INC. — 2009 93

EXHIBIT 1 Consolidated Statements of Income

Years Ended December 31
2006 2007 2008
(in thousands, except per
share amounts)
Revenues $ 6,425,679 $ 6,969,274 $ 7,208,502
Cost of revenues 2,675,723 2,838,758 3,023,362
Gross profit 3,749,956 4,130,516 4,185,140
Operating expenses:
Sales and marketing 1,322,259 1,610,357 1,563,313
Product development 833,147 1,084,238 1,221,787
General and administrative 528,798 633,431 705,136
Amortization of intangibles 124,786 107,077 87,550
Restructuring charges, net — — 106,854
Goodwill impairment charge — — 487,537
Total operating expenses 2,808,990 3,435,103 4,172,177
Income from operations 940,966 695,413 12,963
Other income, net 157,034 154,011 82,838
Income before provision for income taxes,
earnings in equity interests, and minority
interests 1,098,000 849,424 95,801
Provision for income taxes (458,011) (337,263) (262,717)
Earnings in equity interests 112,114 150,689 596,979
Minority interests in operations of
consolidated subsidiaries (712) (2,850) (5,765)
Net income $ 751,391 $ 660,000 $ 424,298
Net income per share-basic $ 0.54 $ 0.49 $ 0.31
Net income per share-diluted $ 0.52 $ 0.47 $ 0.29
Shares used in per share calculation-basic 1,388,741 1,338,987 1,369,476
Shares used in per share calculation-diluted 1,457,686 1,405,486 1,400,101
Stock-based compensation expense by function:
Cost of revenues $ 6,621 $ 10,628 $ 13,813
Sales and marketing 155,084 246,472 182,826
Product development 144,807 218,207 178,091
General and administrative 118,418 97,120 63,113
Restructuring expense reversals — — (30,236)
Total stock-based compensation expense $ 424,930 $ 572,427 $ 407,607

Source: http://yhoo.client.shareholder.com/sec.cfm?DocType=Annual

EXHIBIT 2 Consolidated Balance Sheets

2006 2007 2008
ASSETS
Current assets:
Cash and cash equivalents $ 1,569,871 $ 1,513,930 $ 2,292,296
Short-term marketable debt securities 1,031,528 487,544 1,159,691

Accounts receivable, net of allowance of
$46,521 and $51,600, respectively 930,964 1,055,532 1,060,450

continued