YHOO_Q112EarningsPresentation | Yahoo! | Risk

Yahoo! Inc.

Q1 12 Q1’12 Financial Highlights 4.17.2012

This presentation contains forward-looking statements concerning Yahoo!’s expected financial performance, long-term financial objectives and strategic and operational plans. Risks and uncertainties may cause actual results to 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, the costs and management distraction attendant to a proxy contest; the impact of management and organizational changes; the implementation and results of Yahoo!'s ongoing strategic and cost initiatives; Yahoo!'s ability to compete with new or existing competitors; reduction in spending by, or loss of, advertising customers; risks related to Yahoo!’s regulatory environment; interruptions or delays in the provision of Yahoo!’s services; security breaches; acceptance by users of new products and services; risks related to joint ventures and the integration of acquisitions; risks related to Yahoo!'s international operations; failure to manage growth and diversification; adverse results in litigation, including intellectual property infringement claims and derivative and class actions; Yahoo!'s ability to protect its intellectual property and the value of its brands; dependence on key personnel; dependence on third parties for technology, services, content, and distribution; general economic conditions and changes in economic conditions; transition and implementation risks associated with the Search and Advertising Services and Sales Agreement (the “Search Agreement ) Agreement”) between Yahoo! and Microsoft Corporation (“Microsoft”); and risks that the benefits of the Framework Agreement Yahoo! entered into with Alibaba Group Softbank ( Microsoft ); Group, Corporation and certain other parties regarding Alipay may not be realized. Yahoo!’s long-term financial objectives are necessarily based upon a variety of estimates and assumptions which may not be realized and, in addition to the risks identified above, are inherently subject to business, economic, competitive, industry, regulatory, market, and financial uncertainties, many of which are beyond Yahoo!’s control. There can be no assurance that the estimates and assumptions made in preparing the long-term financial objectives will prove accurate, and Yahoo!’s long-term financial objectives may not be achieved. All information in this presentation is as of April 17, 2012. Yahoo! does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances; however, Yahoo! may update its business outlook, or any portion thereof, at any time in its discretion. More information about potential risk factors that could affect Yahoo!’s business and financial results is included in Yahoo!’s filings with the Securities and Exchange Commission (“SEC”) including its Annual Report on Form 10-K for the year ended December 31, 2011, which is available on the SEC’s web site at www.sec.gov.

Throughout this presentation, we have rounded numbers as appropriate. In this presentation, “year-over-year” (or YOY) refers to the change from the corresponding period in the prior fiscal year to the specified period in the specified year; and “quarter-over-quarter” (or QOQ) refers to the change from the immediately preceding fiscal quarter to the specified quarter.

We periodically review and refine our methodology for monitoring, gathering, and counting Page views to more accurately reflect the total number of Web pages viewed by users on Yahoo! Properties. Based on this process, from time to time we update our methodology to exclude from the count of Page views interactions with our servers that we determine or believe are not the result of user visits to Yahoo! Properties.

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.

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Definitions and Non-GAAP Financial Measures This presentation includes the following non-GAAP financial measures: -R Revenue ex-TAC i d fi d as GAAP R TAC is defined Revenue l less T ffi acquisition costs (TAC) TAC consists of payments t Affili t and payments made t companies th t di t consumer and b i Traffic i iti t (TAC). i t f t to Affiliates d t d to i that direct d business t ffi t traffic to Yahoo! Properties. - Display revenue ex-TAC is defined as GAAP Display revenue less Display TAC. Search revenue ex-TAC is defined as GAAP Search revenue less Search TAC. Other revenue ex-TAC is defined as GAAP Other revenue less Other TAC. -Total operating expenses less TAC is defined as GAAP Total operating expenses excluding TAC. -Free cash flow is defined as Cash flow from operating activities (adjusted to include Excess tax benefits from stock-based awards), less Acquisition of property and equipment, net and Dividends received from equity investees. - Non-GAAP income from operations is defined as Income from operations excluding certain gains, losses, and expenses that we do not believe are indicative of our ongoing operating results. - Non-GAAP net income is defined as Net income attributable to Yahoo! Inc. excluding certain gains, losses, expenses, and their related tax effects that we do not believe are indicative of our ongoing results. Please refer to the Appendix for reconciliations of these non-GAAP financial measures to the GAAP financial measures the Company considers most comparable.

In addition, certain margin information is presented on a non-GAAP basis: - Operating margin ex-TAC is calculated as Operating income divided by Revenue ex-TAC; and - Net margin ex-TAC is calculated as Net income attributable to Yahoo! Inc. divided by Revenue ex-TAC. Please refer to the Appendix for presentations of the most comparable margins calculated on a GAAP basis.

Return on invested capital (ROIC) is calculated as: (Operating income x (1- Effective tax rate))/(average Stockholder’s equity + average Net debt – average Investments in equity interests), where the average of such items is calculated as the average of the amounts at the beginning and ending of the 12-month period. Effective tax rate for the period is calculated as (Provision for income taxes)/(Income before income taxes and earnings in equity interests). Net debt is calculated as (Total debt) – ((Cash & cash equivalents) + (Short term and Long term marketable debt securities)).

Please refer to the Company’s earnings release for definitions of other terms appearing in this presentation, and for more information regarding the Company’s non-GAAP financial measures.

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Key Takeaways From Q1’12
 R Revenue ex-TAC of $1,077 million was i th t h lf of our guidance TAC f $1 077 illi in the top half f id range, and more importantly, grew on a YOY basis for the first time since Q3’08.  Operating income of $169 million exceeded the top end of our guidance range due to a combination of both revenue and cost favorability.  Earnings-per-diluted-share increased by 38% YOY from Q1’11 on improvements in equity interests.  Cash flow from operations g p grew 45% YOY from Q Q1’11.  We grew our unique visitors by 7% on a YOY basis.

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Progress Highlights After 90 Days
 A Appointed fi new i d i t d five independent di t d t directors.  Pursuing active discussions with Alibaba regarding monetization of a portion of our ownership stake.  Reorganized the company into three operating groups (Consumer, Regions, and Technology) to better focus on serving our customers.  Announced initiatives to streamline our organization and cost structure that will save the company $375 million annually when fully implemented.  Made key hires to round out the senior leadership of the company company.

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Financials and Key Metrics at a Glance
$ in millions, except per share amounts GAAP Revenue Revenue ex-TAC Operating income Operating margin ex-TAC Net income attributable to Yahoo! Inc. Net margin ex TAC ex-TAC EPS attributable to Yahoo! Inc. – diluted ROIC – last 12 months Ending employees Q1’11 $1,214 $1,064 $190 18% $223 21% $0.17 12.4% 13,300 13 300 Q1’12 $1,221 $1,077 $169 16% $286 27% $0.23 10.4% 14,000 14 000 YOY 1% 1% (11%) (210bps) 28% 563bps 38% (198bps) 5%

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Engagement Metrics
YOY Growth Unique visitors Worldwide visitors to Yahoo!-branded sites (1) Worldwide visitors to Yahoo! Properties (2) Page views (3) Communications & communities Media properties Search Minutes (2) (4) Communications & communities Media properties Search queries (5) US Core search 26% 17% 1% (4%) (5%) (10%) 17% (1%) 19% 31% 5% 32% 8% 14% 8% (6%) 7% 3% (10%) 8% 1% (14%) 9% (3%) (19%) 7% (4%) (17%) 10% (8%) 13% 15% 11% 14% 9% 11% 12% 12% 7% 6% Q1’11 Q2’11 Q3’11 Q4’11 Q1’12

Source: (1) Source: comScore. (2) Derived from comScore data, excludes visitors from China and Japan where Yahoo!-branded sites are operated by third-party licensees. (3) Source: internal data from Yahoo! Properties. “Communications & communities” primarily includes Mail, Login/Registration, Wretch, Flickr and Groups. “Media properties” primarily includes Homepage, Mobile Web and apps (excluding IMAP mail and SMS), News, Sports, Finance, and Entertainment, as well as Local, Marketplaces and other properties. Media properties “Search” Page views are Web pages viewed by users on Yahoo! Properties resulting from search queries. (4) Reflects Yahoo!’s minutes in standard comScore categories (other than Search) grouped into Communications & communities and Media properties. (5) Source: comScore Core Search (US only). “Core Search” includes both explicit and contextual searches. Note: For Unique visitors, year-over-year growth represents change in average monthly comScore amounts during the period. Worldwide comScore data for March 2012 is not available as of April 16, 2012; Unique visitors and Minutes growth for Q1’12 is based on January-February 2011 and January-February 2012 only. Commencing in May 2010, Yahoo! Properties began transitioning from comScore’s panel-only methodology to comScore’s unified methodology; YOY comparisons of Unique visitors and Minutes spanning such transitions include growth attributable to the change in methodology.

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Revenue ex-TAC Trends
Revenue ex-TAC
$1,169 $1,064 $1,076 $1,072 $1,077

$ in millions n

Q1'11
GAAP Revenue : $1,214

Q2'11
$1,229

Q3'11
$1,217

Q4'11
$1,324

Q1'12
$1,221

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Revenue ex-TAC by Source
$ in millions Display revenue ex-TAC YOY Growth Q1’11 $471 10% (1) Q2’11 $467 5% Q3’11 $449 0% Q4’11 $546 (4%) Q1’12 $454 (4%)

Search revenue ex-TAC YOY Growth

$357 (19%)
(2)

$371 (15%)
(2)

$374 (13%)
(2)

$376 (3%)
(2)

$384 8%

Other revenue ex-TAC O C YOY Growth

$237 $ (10%)

$239 $ (3%)

$248 $ 0%

$248 $ (1%)

$240 $ 1%

Total revenue ex-TAC YOY Growth
(1) (2)

$1,064 ( ) (6%) (1)(2)

$1,076 ( ) (5%) (2)

$1,072 ( ) (5%) (2)

$1,169 ( ) (3%) (2)

$1,077 1%

YOY Growth in Display revenue ex-TAC and Total revenue ex-TAC were negatively impacted by a one-time benefit in Q1’10 from transitioning some large customers from cash-basis accounting to accrual accounting. YOY Growth in Search revenue ex-TAC and Total revenue ex-TAC were negatively impacted by headwinds in Q4’11 of $6M and $18M, in Q3’11 of $37M and $58M, in Q2’11 of $37M and $61M, and in Q1’11 of $36M and $63M, respectively.

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Geographic Segment Data
$ in millions Americas Revenue ex-TAC
( ) Direct costs(1)

Q1’11

Q1’12

YOY

$781 (136) $645 83%

$793 (179) $614 77%

2% 32% (5%) (517bps)

Contribution Americas contribution margin(2) EMEA Revenue ex TAC ex-TAC Direct costs(1) Contribution EMEA contribution margin(2) Asia P ifi A i Pacific Revenue ex-TAC Direct costs(1) Contribution Asia Pacific contribution margin(2)
(1) (2)

$97 (31) $66 68%

$88 (40) $48 54%

(9%) 31% (27%) (1,387bps)

$187 (45) $142 76%

$196 (51) $144 74%

5% 15% 1% (246bps)

Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are directly attributable to the segment. Beginning in 2012, marketing and consumer advocacy costs are managed locally and included as direct costs for each segment (they are not included in direct costs for each segment in 2011 shown above). Contribution margin is calculated as Contribution divided by Revenue ex-TAC for each segment. 10

Total Operating Expenses less TAC
Depreciation, A D i ti Amortization, and St k b ti ti d Stock-based compensation d ti
$926 $908 $875 $885 $894

$ in millions n

Q1'11

Q2'11

Q3'11

Q4'11

Q1'12

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Operating Income
$242

$190

$191 $177 $169

$ in millions

Q1'11
Op. margin ex-TAC : 18%

Q2'11
18%

Q3'11
17%

Q4'11
21%

Q1'12
16%

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Key Balance Sheet Metrics
$ in millions Cash & marketable debt securities(1) Q1’11 $3,528 Q2’11 $3,255 Q3’11 $2,870 Q4’11 $2,530 Q1’12 $2,652

Accounts receivable, net

$933

$957

$873

$1,037

$942

Current deferred revenue Market value of 35% ownership in Yahoo Japan (at 3/31/12) (2) Market value of 29% ownership in Alibaba.com (at 3/31/12) (2)(3)(4)

$247

$240

$206

$195

$179

$6,547

$2,362

(1) (2) (3) (4)

Cash & marketable debt securities is comprised of Cash and cash equivalents, Short-term marketable debt securities, and Long-term marketable debt securities. These pre-tax market values are based on public market share prices for Yahoo Japan and Alibaba.com on March 31, 2012. Yahoo!’s 29% stake in Alibaba.com is held indirectly through its equity interest in Alibaba Group, and the market value presented above does not include estimates for the values of Alibaba Group’s privately held businesses. Using the September 2011 third-party tender offer for Alibaba Group employee-owned shares as a value guide, based on the number of shares Yahoo! owns and the offering price, our investment in Alibaba Group would have been valued at just over $14 billion on a pre-tax basis as of that date.

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Key Cash Flow Highlights
$ in millions Share repurchases Q1’11 $137 Q2’11 $472 Q3’11 $593 Q4’11 $416 Q1’12 $71

Net cash provided by operating activities

$206

$331

$356

$431

$297

Acquisition of property and equipment, net

$168

$172

$124

$130

$110

Free cash flow

$56

$96

$247

$327

$196

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Example – Impact of change in GAAP revenue presentation and revenue share related to Search Alliance (1)
Pre-Search Alliance Transition GAAP Revenue Presentation – “Gross” basis
Yahoo! Properties Affiliate (70% TAC)

Post-Search Alliance Transition GAAP Revenue Presentation – “Net” basis Yahoo! Properties
Search transactions in AdCenter(2) Less: TAC $100 ($5)

Total

Affiliate (70% TAC)
$100 ($70)

Total

GAAP Revenue Less: TAC

$100 ($5)

$100 ($70)

$200 ($75)

$200 ($75)

Less: 12% MSFT L revenue share(3)

($11)

($4)

($15)

Revenue ex-TAC

$95

$30

$125

GAAP Revenue

$84

$26

$110

(1) (2) (3)

The numbers presented in this slide are for illustration purposes only and do not reflect actual amounts or actual average TAC rates. Represents dollar value of search transactions in Microsoft’s AdCenter platform attributed to Yahoo! Properties and Affiliate sites. Under the Search Agreement, Yahoo! is entitled to an 88% post-TAC revenue share and Microsoft is entitled to a 12% post-TAC revenue share in transitioned markets.

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Business Outlook
$ in millions Q2’12 Current Outlook $1,030 – 1,140 $875 – 895 $40 – 50 $915 – 945 $155 – 245 $40 – 50 $115 – 195 Revenue ex-TAC Ongoing operating expenses less TAC Transition-related expenses Total operating expenses less TAC Ongoing operating income Less: Transition-related expenses Operating Income

Note: The above business outlook is based on information and expectations as of April 17, 2012. Yahoo! does not intend, and undertakes no duty, to update this business outlook to reflect subsequent events or circumstances; however, Yahoo! may update this business outlook or any portion thereof at any time at its discretion. This business outlook for the three months ending June 30, 2012 excludes any restructuring charges arising from our plan to reshape the Company for the future as these amounts are not currently estimable. These costs could have a significant impact on the business outlook amounts.

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Appendix

Table 1 – Revenue ex-TAC Calculation by Segment
Reconciliations of GAAP Revenue to Revenue ex-TAC
$ in millions Americas GAAP Revenue TAC Revenue ex-TAC EMEA GAAP Revenue TAC Revenue ex-TAC Asia Pacific GAAP Revenue TAC Revenue ex-TAC Worldwide GAAP Revenue TAC Revenue ex-TAC $1,214 (150) $1,064 $1,229 (153) $1,076 $1,217 (145) $1,072 $1,324 (155) $1,169 $1,221 (144) $1,077 $241 (54) $187 $258 (56) $203 $277 (55) $222 $275 (56) $219 $251 (55) $196 $154 (58) $97 $163 (58) $105 $148 (52) $96 $164 (55) $110 $134 (46) $88 $819 ( ) (38) $781 $808 ( ) (39) $769 $791 ( ) (37) $754 $885 ( ) (45) $840 $836 ( ) (43) $793 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12

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Table 2 – Revenue Details
Reconciliations of GAAP Revenue to Revenue ex-TAC by Source
$ in millions
Display GAAP Display revenue YOY Growth Display TAC Display revenue ex-TAC Search GAAP Search revenue YOY Growth Search TAC Search revenue ex-TAC Other GAAP Other revenue YOY Growth Other TAC Other revenue ex-TAC Total GAAP Revenue YOY Growth TAC Revenue ex-TAC R TAC $1,214 (24%) (150) $1,064 $1 064 $1,229 (23%) (153) $1,076 $1 076 $1,217 (24%) (145) $1,072 $1 072 $1,324 (13%) (155) $1,169 $1 169 $1,221 1% (144) $1,077 $1 077 $237 (11%) (0) $237 $239 (3%) (0) $239 $248 0% (0) $248 $248 (1%) (0) $248 $240 1% (0) $240 $455 (46%) (98) $357 $467 (45%) (96) $371 $467 (44%) (92) $374 $465 (27%) (89) $376 $470 3% (87) $384 $523 6% (52) $471 $524 2% (57) $467 $502 (2%) (53) $449 $612 (4%) (66) $546 $511 (2%) (57) $454

Q1’11

Q2’11

Q3’11

Q4’11

Q1’12

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Table 3 – Revenue and Direct Costs by Segment
$ i millions in illi Revenue by segment: Americas EMEA Asia Pacific Total revenue TAC Total revenue ex-TAC Direct costs by segment: Americas EMEA Asia Pacific Global operating costs(1) Restructuring charges, net Depreciation and amortization Stock-based compensation Income from operations
(1)

Q1’11

Q1’12

$819 154 241 1,214 (150) $1,064

$836 134 251 1,221 (144) $1,077

$136 31 45 457 11 160 35 $190

$179 40 51 422 6 153 56 $169

Global operating costs include product development, service engineering and operations, general and administrative, and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment. Prior to 2012, marketing and customer advocacy costs were managed on a global basis and included as global operating costs (they are not included in global operating costs in 2012 shown above). 20

Table 4 – Total Operating Expenses
Reconciliations of Total Operating Expenses to Total Operating Expenses less TAC
$ in millions Total operating expenses less TAC: Q1’11 Q2’11 Q3’11 Q4’11 Q1’12

Total operating expenses

$1,025

$1,038

$1,039

$1,082

$1,052

Less: Traffic acquisition costs

(150)

(153)

(145)

(155)

(144)

Total operating expenses less TAC

$875

$885

$894

$926

$908

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Table 5 – Non-GAAP Operating Income Calculation
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income, with Details on Adjustments I i h D il Adj
Quarterly Data
$ in thousands
GAAP Operating income (a) Reimbursements from Microsoft for transition costs incurred in prior periods(1) (b) Restructuring charges, net charges Non-GAAP Operating income GAAP Operating margin Non-GAAP Operating margin(2)

Year Ended
Q4 11 Q4’11
$242,447 – 16,329 16 329 $258,776 18% 20%

Q1 11 Q1’11
$189,745 – 10,575 10 575 $200,320 16% 16%

Q2 11 Q2’11
$190,895 – 237 $191,132 16% 16%

Q3 11 Q3’11
$177,254 – (2,721) (2 721) $174,533 15% 14%

Q1 12 Q1’12
$169,376 – 5,717 5 717 $175,093 14% 14%

12/31/10
$772,524 (43,300) 57,957 57 957 $787,181 12% 12%

12/31/11
$800,341 – 24,420 24 420 $824,761 16% 17%

(1) (2)

Non-GAAP Operating income excludes reimbursements for costs incurred in prior periods. The net reimbursement adjustment of $43 million in Q1'10 is equal to the transition costs of $11 million and $32 million incurred in Q3’09 and Q4’09, respectively, in connection with the Search Agreement. Non-GAAP Operating margin is calculated as Non-GAAP Operating income divided by GAAP Revenue.

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Table 6 – Free Cash Flow Calculation
Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow
$ in millions Free cash flow: Q1’11 Q2’11 Q3’11 Q4’11 Q1’12

Cash flow from operating activities Excess tax benefits from stock-based awards Acquisition of property & equipment, net

$206

$331

$356

$431

$297

18

12

14

26

8

(168)

(172)

(124)

(130)

(110)

q y Dividends received from equity investees

( ) (75)

Free cash flow

$56

$96

$247

$327

$196

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Table 7 – Non-GAAP Net Income Per Share Calculation
Reconciliation of GAAP Net Income Attributable to Yahoo! Inc. and GAAP Net Income Attributable to Yahoo! Inc. Common Stockholders Per Share – Diluted Inc to Non-GAAP Net Income and Non-GAAP Net Income Per Share – Diluted
$ in millions, except per share amounts GAAP Net income attributable to Yahoo! Inc Inc. Adjustments Non-GAAP Net income GAAP Revenue GAAP Net margin Non-GAAP Net margin(1) GAAP Net income attributable to Yahoo! Inc. common Stockholders per share – diluted Non-GAAP Net income per share – diluted Diluted shares outstanding Q1’11 $223 7 $230 $1,214 18% 19% $0.17 $0.17 1,320 Q2’11 $237 7 $244 $1,229 19% 20% $0.18 $0.19 1,308 Q3’11 $293 (27) $266 $1,217 24% 22% $0.23 $0.21 1,260 Q4’11 $296 12 $307 $1,324 22% 23% $0.24 $0.25 1,241 Q1’12 $286 4 $290 $1,221 23% 24% $0.23 $0.24 1,226

(1)

Non-GAAP Net margin is calculated as Non-GAAP Net income divided by GAAP Revenue.

Note: All per share amounts are based on fully diluted share counts. Please refer to Appendix Table 8 for details on Adjustments.

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Table 8 - Non-GAAP Net Income Calculation
Reconciliation of GAAP Net Income Attributable to Yahoo! Inc. to Non-GAAP Net Income, with Details on Adjustments
$ in thousands GAAP Net income attributable to Yahoo! Inc. (a) Restructuring charges, net (b) Non-cash gain related to the dilution of the Company's ownership interest in Alibaba Group, which is included in earnings in equity interests (c) To adjust the provision for income taxes to exclude the tax impact of item (a) Non-GAAP Net income Q1’11 $222,992 10,575 – Q2’11 $236,972 237 – Q3’11 $293,291 (2,721) (25,083) Q4’11 $295,572 16,329 – Q1’12 $286,343 5,717 –

(3,362) (3 362) $230,205

(350) $236,859

365 $265,852

(4,540) (4 540) $307,361

(2,047) (2 047) $290,013

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Table 9 – Business Outlook Reconciliations
Reconciliations of Outlook for GAAP Revenue to Revenue ex-TAC and Total operating expenses to Total operating expenses less TAC
$ in millions Revenue ex-TAC: R TAC GAAP Revenue Less: TAC Revenue ex-TAC R TAC Total operating expenses less TAC: Total operating expenses Less: TAC Total operating expenses less TAC $1,055 – 1,095 140 – 150 $915 – 945 $1,170 – 1,290 140 – 150 $1,030 1,140 $1 030 – 1 140 Q2’12 Current Outlook

Note: The above business outlook is based on information and expectations as of April 17, 2012. Yahoo! does not intend, and undertakes no duty, to update the business outlook to reflect subsequent events or circumstances; however, Yahoo! may update the business outlook or any portion thereof at any time at its discretion. This business outlook for the three months ending June 30 2012 excludes any restructuring charges arising from our plan to reshape the Company for the future as these amounts are not currently estimable. These costs could have a 30, estimable significant impact on the business outlook amounts.

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Table 10 – Additional Reconciliations
 Note: The business outlook below is based on information and expectations as of April 17, 2012. Yahoo! does not intend, and undertakes no duty, to update the business outlook to reflect subsequent events or circumstances; however, Yahoo! may update the business outlook or any portion thereof at any time at its discretion. Outlook Range Midpoint for the Q2’12 (in millions) Ongoing operating income Operating income Plus: Transition-related expenses Ongoing operating income  $155 45 $200

Outlook for pro forma operating margin ex-TAC – Ongoing operating income outlook range midpoint of $200 million implies pro forma operating margin ex-TAC of 18.4% in Q2’12 (calculated as $200 million divided by revenue ex-TAC outlook range midpoint of $1,085 million). Outlook for operating margin is 12.6% (calculated as operating income outlook range midpoint of $155 million divided by GAAP revenue outlook range midpoint of $1,230 million). g , y g g g plan to reshape the Company for the future as p p y Note: Our business outlook for the three months ending June 30, 2012 excludes any restructuring charges arising from our p these amounts are not currently estimable. These costs could have a significant impact on the business outlook amounts.

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