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					Table of Contents

                                                                                                                                                           Page
Condensed Consolidated Financial Information
                                                                                                                                                                  1

Item I.     Balance Sheet (GAAP)                                                                                                                                  2

Item II.    Income Statement (GAAP) & Key Measures
            II-1)      Income Statement (GAAP)                                                                                                                    3
            II-2)      Key Financial and Operational Measures                                                                                                     4
            II-3)      Geographic Segment Data                                                                                                                    5
            II-4)      Reconciliations of GAAP Income from Operations and GAAP Net Earnings to Non-GAAP Income from Operations and Non-GAAP Net Earnings          6

Item III.   Cash Flow Statement (GAAP) & Free Cash Flow (Non-GAAP)                                                                                                7

Item IV.    Notes to Condensed Consolidated Financial Information                                                                                                 8




                                                                                           1
                                                                                                Yahoo! Inc.
                                                                        I) Condensed Consolidated Balance Sheet (GAAP)
                                                                                         (unaudited, in thousands)




                                                        Q1'12           Q2'12           Q3'12           Q4'12           Q1'13           Q2'13           Q3'13           Q4'13


ASSETS
Current assets:
   Cash and cash equivalents                        $   1,719,968   $   1,539,269   $   7,560,400   $   2,667,778   $   1,174,633   $   1,142,223   $     842,428   $   2,077,590
   Short-term marketable securities                       489,912         371,204         852,816       1,516,175       1,838,527       1,486,591         987,870       1,330,304
   Accounts receivable, net                               941,590       1,040,893         953,671       1,008,448         943,658         941,811         844,118         979,559
   Prepaid expenses and other current assets              331,327         318,932         318,892         460,312         644,204         887,677         891,807         638,404
      Total current assets                              3,482,797       3,270,298       9,685,779       5,652,713       4,601,022       4,458,302       3,566,223       5,025,857

Long-term marketable securities                          441,688         490,570       1,013,555       1,838,425       2,382,026       2,161,814       1,384,638       1,589,500
Alibaba Group Preference Shares                                -               -         802,609         816,261         830,925               -               -               -
Property and equipment, net                            1,726,858       1,663,665       1,671,234       1,685,845       1,612,690       1,579,822       1,536,362       1,488,518
Goodwill                                               3,910,932       3,887,360       3,910,245       3,826,749       3,803,433       4,582,588       4,704,859       4,679,648
Intangible assets, net                                   226,202         196,729         173,918         153,973         136,610         398,300         427,351         417,808
Other long-term assets                                   223,956         209,669         548,182         289,130         239,427         171,210         165,866         177,281
Investments in equity interests                        4,950,807       4,939,938       2,608,605       2,840,157       2,884,846       2,874,387       3,120,450       3,426,347
    Total assets                                    $ 14,963,240    $ 14,658,229    $ 20,414,127    $ 17,103,253    $ 16,490,979    $ 16,226,423    $ 14,905,749    $ 16,804,959


LIABILITIES AND EQUITY
Current liabilities:
   Accounts payable                                 $     129,042   $     132,105   $     147,943   $     184,831   $     110,162   $     120,028   $     123,042   $     138,031
   Accrued expenses and other current liabilities         762,391         768,080       3,049,074         808,475         720,463         763,117         776,466         907,782
   Deferred revenue                                       178,924         176,960         309,265         296,926         308,462         294,968         293,615         294,499
      Total current liabilities                         1,070,357       1,077,145       3,506,282       1,290,232       1,139,087       1,178,113       1,193,123       1,340,312

Convertible debt                                              -               -               -               -               -               -               -         1,110,585
Long-term deferred revenue                                 41,172          38,757         444,415         407,560         370,414         333,229         295,970         258,904
Capital lease and other long-term liabilities             132,551         130,149         127,531         124,587         121,475         125,639         121,169         116,605
Deferred and other long-term tax liabilities, net         859,167         895,941         730,378         675,271         674,077         730,708         749,168         847,956
Total liabilities                                       2,103,247       2,141,992       4,808,606       2,497,650       2,305,053       2,367,689       2,359,430       3,674,362

Total Yahoo! Inc. stockholders' equity                12,818,578      12,472,997      15,561,503      14,560,200      14,139,915      13,808,864      12,494,111      13,074,909
Noncontrolling interests                                  41,415          43,240          44,018          45,403          46,011          49,870          52,208          55,688
Total equity                                          12,859,993      12,516,237      15,605,521      14,605,603      14,185,926      13,858,734      12,546,319      13,130,597
   Total liabilities and equity                     $ 14,963,240    $ 14,658,229    $ 20,414,127    $ 17,103,253    $ 16,490,979    $ 16,226,423    $ 14,905,749    $ 16,804,959



                                                                                           2
                                                                                                                              Yahoo! Inc.
                                                                                         II-1) Condensed Consolidated Income Statement (GAAP)
                                                                                              (unaudited, in thousands, except per share amounts)

                                                                                                                                                       Quarterly Data                                                                                           Annual Data

                                                                                              Q1'12             Q2'12               Q3'12            Q4'12            Q1'13             Q2'13              Q3'13            Q4'13               FY'11                FY'12            FY'13

Revenue                                                                                   $   1,221,233     $   1,217,794      $   1,201,732     $   1,345,807    $   1,140,368     $   1,135,244      $   1,138,973    $   1,265,795       $   4,984,199       $   4,986,566     $   4,680,380

                            (1)
Operating expenses :
        Cost of revenue - traffic acquisition costs                                             144,091           137,025            112,829           124,961           66,068            64,316             58,464           65,594             603,371             518,906           254,442
        Cost of revenue - other                                                                 253,979           278,453            282,081           287,147          278,007           271,262            271,763          273,906             983,626           1,101,660         1,094,938
        Sales and marketing                                                                     285,268           272,910            269,272           274,122          257,019           279,738            282,562          311,501           1,122,193           1,101,572         1,130,820
        Product development                                                                     228,478           199,628            217,301           240,417          219,580           246,198            267,444          275,265             919,368             885,824         1,008,487
        General and administrative                                                              124,271           136,117            135,249           144,610          133,421           135,039            151,304          149,791             497,288             540,247           569,555
        Amortization of intangibles                                                              10,053             9,756              8,084             7,926            7,365             8,084             15,253           14,139              33,592              35,819            44,841
        Gain on sale of patents                                                                       -                 -                  -                 -                -            (9,950)                 -          (70,000)                  -                   -           (79,950)
        Goodwill impairment charge                                                                    -                 -                  -                 -                -                 -                  -           63,555                   -                   -            63,555
        Restructuring charges (reversals), net                                                    5,717           129,092             24,727            76,634           (7,062)            3,578               (576)           7,826              24,420             236,170             3,766
           Total operating expenses                                                           1,051,857         1,162,981          1,049,543         1,155,817          954,398           998,265          1,046,214        1,091,577           4,183,858           4,420,198         4,090,454
                                  (2)
Income from operations                                                                          169,376            54,813            152,189          189,990           185,970           136,979            92,759          174,218              800,341             566,368          589,926
Other income, net (3)                                                                              2,278           20,175          4,607,656           17,730            17,072            23,606              5,370           (2,691)             27,175           4,647,839           43,357



Income before income taxes and earnings in equity interests                                     171,654            74,988          4,759,845          207,720           203,042           160,585            98,129          171,527              827,516           5,214,207          633,283

Provision for income taxes                                                                      (56,419)          (26,523)         (1,774,094)        (83,007)          (29,736)          (50,267)          (31,891)         (41,498)            (241,767)          (1,940,043)        (153,392)
Earnings in equity interests                                                                    172,243           179,991             175,265         148,939           217,588           224,690           232,756          221,641              476,920              676,438          896,675
Net income                                                                                $     287,478     $     228,456      $   3,161,016     $    273,652     $     390,894     $     335,008      $    298,994     $    351,670        $   1,062,669       $   3,950,602     $   1,376,566
  Less: Net income attributable to noncontrolling
    interests                                                                             $       (1,135) $         (1,825) $           (778) $         (1,385) $           (609) $         (3,858) $         (2,338) $        (3,480)      $     (13,842) $            (5,123) $       (10,285)


Net income attributable to Yahoo! Inc. (4)                                                $     286,343     $     226,631      $   3,160,238     $    272,267     $     390,285     $     331,150      $    296,656     $    348,190        $   1,048,827       $   3,945,479     $   1,366,281


Net income attributable to Yahoo! Inc. common stockholders
per share - basic                                                                         $         0.24    $         0.19     $         2.66    $         0.24   $         0.36    $         0.31     $        0.29    $        0.34       $            0.82   $         3.31    $        1.30


Net income attributable to Yahoo! Inc. common stockholders
                          (5)
per share - diluted                                                                       $         0.23    $         0.18     $         2.64    $         0.23   $         0.35    $         0.30     $        0.28    $        0.33       $            0.82   $         3.28    $        1.26




Shares used in per share calculation - basic                                                  1,215,783         1,213,320          1,186,046         1,155,950        1,094,170         1,079,389          1,024,289        1,012,972           1,274,240           1,192,775         1,052,705
Shares used in per share calculation - diluted                                                1,226,486         1,221,719          1,195,085         1,168,336        1,108,095         1,094,694          1,041,698        1,038,754           1,282,282           1,202,906         1,070,811

             Stock-based compensation expense by function:
              Cost of revenue - other                                                     $       2,894     $       2,614      $       2,363     $      2,207     $       3,578     $       3,029      $      2,608     $      6,330        $       3,489       $      10,078     $     15,545
              Sales and marketing                                                         $      21,097     $      18,981      $      19,876     $     22,161     $      16,045     $      23,775      $     29,175     $     32,857        $      65,120       $      82,115     $    101,852
              Product development                                                         $      19,471     $      17,808      $      17,050     $     19,955     $       8,263     $      20,537      $     28,702     $     25,894        $      89,587       $      74,284     $     83,396
              General and administrative                                                  $      12,504     $      10,168      $      22,077     $     13,139     $      16,719     $      20,795      $     20,241     $     19,672        $      45,762       $      57,888     $     77,427
              Restructuring expense (reversals) accelerations, net                        $           -     $      (3,429)     $           -     $          -     $           -     $           -      $          -     $          -        $         214       $      (3,429)    $        -




(1)
      In Q2'12, the Company revised the allocation of certain reimbursements from Microsoft between product development and cost of revenue-other. Prior period amounts have been revised to conform to the current presentation.
(2)
      Income from operations for each period may include certain items that the Company does not consider indicative of its ongoing operating results, see non-GAAP income from operations in Item II-4.
(3)
      Q3'12 and FY'12 include a $4.6 billion gain on the sale of shares of Alibaba Group Holding Limited ("Alibaba Group").
(4)
      Net income attributable to Yahoo! Inc. for each period may include certain items that the Company does not consider indicative of its ongoing results, see non-GAAP net earnings in Item II-4.
(5)
      The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's diluted earnings per share by $0.01 for Q2'12 and Q4'13 and $0.02 for FY'13.




                                                                                                                                                       3
                                                                                                                                             Yahoo! Inc.
                                                                                                                       II-2) Key Financial and Operational Measures (6)
                                                                                                               (unaudited, in thousands, except headcount and percentages)

                                                                                                                                                                              Quarterly Data                                                                                                                  Annual Data

                                                                                                       Q1'12                 Q2'12                 Q3'12                 Q4'12                Q1'13                 Q2'13                 Q3'13                 Q4'13                     FY'11                 FY'12                 FY'13
Revenue for groups of similar services:
   Display                                                                                       $         511,217     $         534,972     $         506,002      $       590,627     $         455,071     $         471,742       $      469,932      $        553,085         $       2,160,309     $        2,142,818    $        1,949,830
   Search                                                                                                  470,397               460,969               472,537              481,957               424,687               418,202              435,192               463,710                 1,853,110              1,885,860             1,741,791
   Other                                                                                                   239,619               221,853               223,193              273,223               260,610               245,300              233,849               249,000                   970,780                957,888               988,759
     Total revenue                                                                               $       1,221,233     $       1,217,794     $       1,201,732      $     1,345,807     $       1,140,368     $       1,135,244       $    1,138,973      $      1,265,795         $       4,984,199     $        4,986,566    $        4,680,380

                      (7)
Revenue ex-TAC for groups of similar services:
   GAAP display revenue                                                                          $         511,217 $             534,972 $             506,002 $            590,627 $             455,071 $             471,742 $            469,932 $             553,085         $       2,160,309 $            2,142,818 $           1,949,830
   TAC associated with display revenue                                                                     (57,426)              (61,552)              (54,361)             (70,218)              (53,047)              (48,610)             (48,617)              (62,388)                 (227,822)              (243,557)             (212,662)
   Display revenue ex-TAC                                                                        $         453,791 $             473,420 $             451,641 $            520,409 $             402,024 $             423,132 $            421,315 $             490,697         $       1,932,487 $            1,899,261 $           1,737,168

        GAAP search revenue                                                                      $         470,397 $             460,969 $             472,537 $            481,957 $             424,687 $             418,202 $            435,192 $             463,710         $       1,853,110 $            1,885,860 $           1,741,791
        TAC associated with search revenue for non-transitioned markets                                    (86,665)              (75,473)              (58,468)             (54,743)              (16,057)              (14,931)              (9,100)               (2,345)                 (375,409)              (275,349)              (42,433)
        Search revenue ex-TAC                                                                    $         383,732 $             385,496 $             414,069 $            427,214 $             408,630 $             403,271 $            426,092 $             461,365         $       1,477,701 $            1,610,511 $           1,699,358

        Other GAAP revenue                                                                       $         239,619     $         221,853     $         223,193      $       273,223     $         260,610     $         245,300       $      233,849      $        249,000         $         970,780 $              957,888    $          988,759
        TAC associated with other GAAP revenue                                                                     -                     -                     -                    -                 3,036                 (775)                 (747)                 (861)                   (140)                   -                     653
        Other revenue ex-TAC                                                                     $         239,619     $         221,853     $         223,193      $       273,223     $         263,646     $         244,525       $      233,102      $        248,139         $         970,640 $              957,888    $          989,412

Revenue ex-TAC:
   GAAP revenue                                                                                  $       1,221,233 $           1,217,794 $           1,201,732 $          1,345,807 $           1,140,368 $           1,135,244 $          1,138,973 $           1,265,795         $       4,984,199 $            4,986,566 $           4,680,380
   TAC                                                                                                    (144,091)             (137,025)             (112,829)            (124,961)              (66,068)              (64,316)             (58,464)              (65,594)                 (603,371)              (518,906)             (254,442)
        Revenue ex-TAC                                                                           $       1,077,142     $       1,080,769     $       1,088,903      $     1,220,846     $       1,074,300     $       1,070,928       $    1,080,509      $      1,200,201         $       4,380,828     $        4,467,660    $        4,425,938

                       (8)
Adjusted EBITDA                                                                                  $         384,307     $         397,715     $         407,793      $       508,912     $         385,605     $         369,182       $      331,125      $        478,333         $       1,654,583     $        1,698,727    $        1,564,245


Free cash flow (9)                                                                               $         195,823     $          93,390     $         920,424      $     (2,044,502) $           149,908     $         131,400       $      249,037      $        256,120         $         725,801     $         (834,865) $            786,465


Operating metrics:
Worldwide headcount(10)                                                                                     14,200                12,800                12,300                11,700               11,500                11,700                12,400                12,200                    14,200                11,700                12,200

Reconciliation of net income attributable to Yahoo! Inc. to adjusted EBITDA:
   Net income attributable to Yahoo! Inc.                                                        $         286,343 $             226,631 $           3,160,238 $             272,267 $            390,285 $             331,150 $             296,656 $             348,190        $       1,048,827 $            3,945,479 $           1,366,281
   Depreciation and amortization                                                                           153,248               157,739               169,511               168,769              162,092               160,489               158,216               147,981                  625,864                649,267               628,778
   Stock-based compensation expense                                                                         55,966                49,571                61,366                57,462               44,605                68,136                80,726                84,753                  203,958                224,365               278,220
                              (11)
   Restructuring charges, net                                                                                5,717               129,092                24,727                (6,794)              (7,062)                3,578                  (576)                7,826                   24,420                152,742                 3,766
   Other income, net                                                                                        (2,278)              (20,175)           (4,607,656)              (17,730)             (17,072)              (23,606)               (5,370)                2,691                  (27,175)            (4,647,839)              (43,357)
   Provision for income taxes                                                                               56,419                26,523             1,774,094                83,007               29,736                50,267                31,891                41,498                  241,767              1,940,043               153,392
   Earnings in equity interests                                                                           (172,243)             (179,991)             (175,265)             (148,939)            (217,588)             (224,690)             (232,756)             (221,641)                (476,920)              (676,438)             (896,675)
   Net income attributable to noncontrolling interests                                                       1,135                 1,825                   778                 1,385                  609                 3,858                 2,338                 3,480                   13,842                  5,123                10,285
   Goodwill impairment charge                                                                                  -                     -                     -                     -                    -                     -                     -                  63,555                      -                      -                  63,555
   Deal costs related to the sale of Alibaba Group shares                                                      -                   6,500                   -                     -                    -                     -                     -                     -                        -                    6,500                   -
   Costs associated with the Korea business and its closure(11)                                                -                     -                     -                  99,485                  -                     -                     -                     -                        -                   99,485                   -
     Adjusted EBITDA                                                                             $         384,307 $             397,715 $             407,793 $             508,912 $            385,605 $             369,182 $             331,125 $             478,333        $       1,654,583 $            1,698,727 $           1,564,245



(6)
      This presentation is not prepared under a comprehensive set of accounting rules or principles such as GAAP. See Notes to Condensed Consolidated Financial Information for further explanation of non-GAAP financial measures.
(7)
      Revenue excluding traffic acquisition costs (or revenue ex-TAC) is a non-GAAP financial measure, see Notes to Condensed Consolidated Financial Information.
(8)
      Adjusted EBITDA is a non-GAAP financial measure, see Notes to Condensed Consolidated Financial Information.
(9)
    Free cash flow is a non-GAAP financial measure, see Notes to Condensed Consolidated Financial Information. Q3'12 and FY'12 include a payment of $550 million from Alibaba Group in satisfaction of certain future royalty payments under the existing technology and intellectual property license agreement with Alibaba Group. Q4'12 and FY'12
include a $2.3 billion cash tax payment related to the sale of Alibaba Group shares.
(10)
     Commencing in Q4'13, worldwide headcount includes fixed-term contractors on payroll. Prior periods amounts have been revised to conform to the current presentation.
(11)
     For Q4'12 and FY'12, costs associated with the Korea business and its closure include $83 million of restructuring charges.




                                                                                                                                                                              4
                                                                                                                                                         Yahoo! Inc.
                                                                                                                                         II-3) Geographic Segment Data (6)
                                                                                                                                   (unaudited, in thousands, except percentages)

                                                                                                                                                                                               Quarterly Data                                                                                                                      Annual Data

                                                                                                              Q1'12                   Q2'12                    Q3'12                     Q4'12                    Q1'13                    Q2'13                    Q3'13                    Q4'13               FY'11                FY'12             FY'13


Americas Segment
   GAAP revenue                                                                                       $           836,033 $                821,751 $                843,731 $                960,118 $                842,195 $                828,537 $                850,935 $                959,835     $    3,302,989 $          3,461,633 $       3,481,502
   TAC                                                                                                            (42,955)                 (45,910)                 (41,289)                 (52,357)                 (37,522)                 (37,120)                 (36,435)                 (47,897)          (160,110)            (182,511)         (158,974)
         Revenue ex-TAC                                                                                           793,078                  775,841                  802,442                  907,761                  804,673                  791,417                  814,500                  911,938          3,142,879            3,279,122         3,322,528
         Direct costs (12)                                                                                        179,225                  181,510                  189,345                  183,236                  170,124                  172,268                  171,285                  187,884           696,103              733,316           701,561
         Contribution by segment (13)                                                                 $           613,853      $           594,331      $           613,097      $           724,525      $           634,549      $           619,149      $           643,215      $           724,054     $    2,446,776    $       2,545,806    $    2,620,967
         Segment contribution margin (14)                                                                              77%                      77%                      76%                      80%                      79%                      78%                      79%                       79%               78%                  78%               79%


EMEA Segment
   GAAP revenue                                                                                       $           133,962 $                128,099 $                 96,473 $                113,527 $                  94,824 $                 97,387 $                 89,156 $               103,819     $      629,383 $            472,061 $        385,186
   TAC                                                                                                            (45,662)                 (34,187)                 (17,399)                 (16,982)                  (11,536)                 (11,372)                  (9,929)                (10,078)          (221,916)            (114,230)         (42,915)
         Revenue ex-TAC                                                                                            88,300                   93,912                   79,074                   96,545                   83,288                   86,015                    79,227                   93,741          407,467              357,831           342,271
         Direct costs                                                                                              40,221                   41,277                   39,167                   41,325                   38,428                   41,416                    39,922                   45,646          165,750              161,990           165,412
         Contribution by segment                                                                      $            48,079      $            52,635      $            39,907      $            55,220      $            44,860      $            44,599      $             39,305     $             48,095    $     241,717     $        195,841     $     176,859
         Segment contribution margin                                                                                   54%                      56%                      50%                      57%                      54%                      52%                      50%                       51%               59%                  55%               52%

Asia Pacific Segment
         GAAP revenue                                                                                 $           251,238 $                267,944 $                261,528 $                272,162 $                203,349 $                209,320 $                198,882 $                202,141     $    1,051,827 $          1,052,872 $        813,692
         TAC                                                                                                      (55,474)                 (56,928)                 (54,141)                 (55,622)                 (17,010)                 (15,824)                 (12,100)                  (7,619)          (221,345)            (222,165)         (52,553)
         Revenue ex-TAC                                                                                           195,764                  211,016                  207,387                  216,540                  186,339                  193,496                  186,782                  194,522           830,482              830,707           761,139
         Direct costs                                                                                              51,491                   56,248                   56,329                   60,046                   55,014                   49,667                    47,583                   45,921          225,417              224,114           198,185
         Contribution by segment                                                                      $           144,273      $           154,768      $           151,058      $           156,494      $           131,325      $           143,829      $           139,199      $           148,601     $     605,065     $        606,593     $     562,954

         Segment contribution margin                                                                                   74%                      73%                      73%                      72%                      70%                      74%                      75%                       76%               73%                  73%               74%

Total
    GAAP revenue                                                                                      $        1,221,233 $              1,217,794 $              1,201,732 $              1,345,807 $              1,140,368 $               1,135,244 $              1,138,973 $              1,265,795     $    4,984,199 $          4,986,566 $       4,680,380
    TAC                                                                                                         (144,091)                (137,025)                (112,829)                (124,961)                 (66,068)                  (64,316)                 (58,464)                 (65,594)          (603,371)            (518,906)         (254,442)
         Revenue ex-TAC                                                                                        1,077,142                1,080,769                1,088,903                1,220,846                 1,074,300                1,070,928                1,080,509                1,200,201          4,380,828            4,467,660         4,425,938
         Direct costs                                                                                             270,937                  279,035                  284,841                  284,607                  263,566                  263,351                  258,790                  279,451          1,087,270            1,119,420         1,065,158
         Contribution by combined segments                                                            $           806,205      $           801,734      $           804,062      $           936,239      $           810,734      $           807,577      $           821,719      $           920,750     $    3,293,558    $       3,348,240    $    3,360,780
         Combined segments contribution margin                                                                         75%                      74%                      74%                      77%                      75%                      75%                      76%                       77%               75%                  75%               76%


(6)
      This presentation is not prepared under a comprehensive set of accounting rules or principles such as GAAP. See Notes to Condensed Consolidated Financial Information for further explanation of non-GAAP financial measures.
(12)
       Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are directly attributable to the segment such as employee compensation expense (excluding stock-based compensation expense), local sales and marketing expenses, and facilities expenses.
(13)
       Segment contribution is calculated as segment revenue ex-TAC less segment direct costs.
(14)
       Segment contribution margin is calculated as segment contribution divided by segment revenue ex-TAC.




                                                                                                                                                                                                 5
                                                                                                                                                                                     Yahoo! Inc.
                                                                                                                             II-4) Reconciliations of GAAP Income from Operations and GAAP Net Earnings
                                                                                                                                   to Non-GAAP Income from Operations and Non-GAAP Net Earnings(6)
                                                                                                                                                    (unaudited, in thousands, except per share amounts)



                                                                                                                                                                                            Quarterly Data                                                                                       Annual Data

                                                                                                                                  Q1'12             Q2'12              Q3'12              Q4'12            Q1'13            Q2'13             Q3'13             Q4'13            FY'11                FY'12            FY'13

GAAP income from operations                                                                                                  $     169,376      $      54,813     $     152,189       $    189,990     $    185,970     $     136,979     $      92,759     $    174,218     $    800,341        $     566,368     $    589,926


(a)          Costs associated with the Korea business and its closure                                                                       -                 -                  -          99,485                  -                 -                 -               -                    -          99,485                 -
(b)                                        (15)                                                                                       5,717           129,092               24,727           (6,794)          (7,062)           3,578               (576)          7,826           24,420              152,742            3,766
             Restructuring charges, net
(c)          Deal costs related to the sale of Alibaba Group shares                                                                         -           6,500                    -                -                 -                 -                 -               -                -               6,500                 -
(d)          Stock-based compensation expense                                                                                        55,966            49,571               61,366          57,462           44,605            68,136            80,726           84,753          203,958              224,365          278,220
(e)          Goodwill impairment charge                                                                                                     -                 -                  -                -                 -                 -                 -         63,555                     -                -          63,555


Non-GAAP income from operations(16)                                                                                          $     231,059      $     239,976     $     238,282       $    340,143     $    223,513     $     208,693     $     172,909     $    330,352     $   1,028,719       $   1,049,460     $    935,467

GAAP net income attributable to Yahoo! Inc.                                                                                  $     286,343      $     226,631     $ 3,160,238         $    272,267     $    390,285     $     331,150     $     296,656     $    348,190     $   1,048,827       $   3,945,479     $   1,366,281


(a)          Costs associated with the Korea business and its closure                                                                       -                 -                  -          99,485                  -                 -                 -               -                    -          99,485                 -


(b)                                        (15)                                                                                       5,717           129,092               24,727           (6,794)          (7,062)           3,578               (576)          7,826           24,420              152,742            3,766
             Restructuring charges, net

(c)          Non-cash gain related to the dilution of the Company's ownership interest in                                                   -                 -                  -                -                 -                 -                 -               -          (25,083)                   -                -
             Alibaba Group, which is included in earnings in equity interests

(d)          Deal costs related to the sale of Alibaba Group shares                                                                         -           6,500                    -                -                 -                 -                 -               -                    -           6,500                 -

(e)          Gain related to sale of Alibaba Group shares                                                                                   -                 -       (4,603,322)                 -                 -                 -                 -               -                    -       (4,603,322)               -

(f)          Stock-based compensation expense                                                                                        55,966            49,571               61,366          57,462           44,605            68,136            80,726           84,753          203,958              224,365          278,220

(g)          Goodwill impairment charge                                                                                                     -                 -                  -                -                 -                 -                 -         63,555                     -                -          63,555

(h)          To adjust the provision for income taxes to reflect the tax impact of items (a) -                                      (14,444)          (49,212)        1,827,093              (9,100)          (7,646)         (16,995)          (18,354)          (22,389)         (54,674)          1,754,337           (65,384)
             (b) and (d) - (g).

Non-GAAP net earnings(17)                                                                                                    $     333,582      $     362,582     $     470,102       $    413,320     $    420,182     $     385,869     $     358,452     $    481,935     $   1,197,448       $   1,579,586     $   1,646,438


GAAP net earnings attributable to Yahoo! Inc. common stockholders per share -                                                $          0.24    $         0.19    $           2.66    $        0.24    $        0.36    $         0.31    $         0.29    $        0.34    $        0.82       $         3.31    $        1.30
basic


GAAP net earnings attributable to Yahoo! Inc. common stockholders per share -                                                $          0.23    $         0.18    $           2.64    $        0.23    $        0.35    $         0.30    $         0.28    $        0.33    $        0.82       $         3.28    $        1.26
diluted (5)


Non-GAAP net earnings per share - basic(17)                                                                                  $          0.27    $         0.30    $           0.40    $        0.36    $        0.38    $         0.36    $         0.35    $        0.48    $        0.94       $         1.32    $        1.56


Non-GAAP net earnings per share - diluted(17) (18)                                                                           $          0.27    $         0.30    $           0.39    $        0.35    $        0.38    $         0.35    $         0.34    $        0.46    $        0.93       $         1.31    $        1.52

Shares used in per share calculation - basic                                                                                     1,215,783          1,213,320         1,186,046           1,155,950        1,094,170        1,079,389         1,024,289         1,012,972        1,274,240           1,192,775         1,052,705
Shares used in per share calculation - diluted                                                                                   1,226,486          1,221,719         1,195,085           1,168,336        1,108,095        1,094,694         1,041,698         1,038,754        1,282,282           1,202,906         1,070,811



(5)
      The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's diluted earnings per share by $0.01 for Q2'12 and Q4'13 and $0.02 for the year ended December 31, 2013.

(6)
      This presentation is not prepared under a comprehensive set of accounting rules or principles such as GAAP. See Notes to Condensed Consolidated Financial Information for further explanation of non-GAAP financial measures.
(15)
       For Q4'12 and FY'12, this amount excludes the restructuring charges related to the closure of the Korea business of $83 million, which are included in item (a) above.
(16)
       Commencing in 2013, non-GAAP income from operations excludes stock-based compensation expense. Prior period amounts have been revised to conform to the current presentation.
(17)
       Commencing in 2013, non-GAAP net earnings and non-GAAP net earnings per share exclude stock-based compensation expense and its related tax effects. Prior period amounts have been revised to conform to the current presentation.
(18)
       The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's non-GAAP diluted earnings per share by $0.02 for the year ended December 31, 2013.




                                                                                                                                                                        6
                                                                                                                                                               Yahoo! Inc.
                                                                                                                          III) Condensed Consolidated Cash Flow Statement (GAAP)
                                                                                                                                                                                              (6)
                                                                                                                                                  Free Cash Flow (Non-GAAP)
                                                                                                                                                      (unaudited, in thousands)

                                                                                                                                                                                           Quarterly Data                                                                                       Annual Data

                                                                                                                                 Q1'12             Q2'12              Q3'12             Q4'12              Q1'13              Q2'13             Q3'13            Q4'13             FY'11             FY'12             FY'13
GAAP Cash Flow Statement

Cash flows from operating activities:
   Net income                                                                                                               $     287,478     $      228,456     $   3,161,016      $     273,652     $      390,894     $     335,008     $     298,994     $    351,670     $   1,062,669     $   3,950,602     $   1,376,566
   Adjustments to reconcile net income to net cash provided by (used in) operating activities:
    Depreciation                                                                                                                  122,750            131,789            146,483           148,213            143,864           141,426           127,356           119,839          530,516            549,235          532,485
    Amortization of intangible assets                                                                                              31,345             28,864             23,878            21,279             18,410            19,067            30,888            28,153          117,723            105,366           96,518
    Accretion of convertible debt discount                                                                                              -                  -                  -                 -                  -                 -                 -             4,846                -                  -            4,846
    Stock-based compensation expense, net                                                                                          55,966             46,142             61,366            57,462             44,605            68,136            80,726            84,753          204,172            220,936          278,220
    Non-cash goodwill impairment charge                                                                                                 -                  -                  -                 -                  -                 -                 -            63,555                -                  -           63,555
    Non-cash restructuring charges                                                                                                      -             38,638              1,824            69,434                547                 -                 -                 -              990            109,896              547
    Dividend income related to Alibaba Group Preference Shares                                                                          -                  -                  -           (20,000)           (20,251)          (15,475)                -                 -                -            (20,000)         (35,726)
    Tax benefits (detriments) from stock-based awards                                                                               1,014             (4,949)            (5,536)          (21,969)             9,537               188            24,169            15,167           33,497            (31,440)          49,061
    Excess tax benefits from stock-based awards                                                                                    (8,161)            (8,609)           (13,981)           (5,093)           (12,807)           (5,706)          (28,680)          (17,214)         (70,680)           (35,844)         (64,407)
    Deferred income taxes                                                                                                          (4,399)           (14,075)          (872,814)          121,968            (20,158)           (7,839)          (46,984)           (9,321)          70,392           (769,320)         (84,302)
    Earnings in equity interests                                                                                                 (172,243)          (179,991)          (175,265)         (148,939)          (217,588)         (224,690)         (232,756)         (221,641)        (476,920)          (676,438)        (896,675)
    Dividends received from equity investees                                                                                            -             83,648                  -                 -             12,000           123,058                 -                 -           75,391             83,648          135,058
    Gain related to sale of Alibaba shares                                                                                              -                  -         (4,603,322)                -                  -                 -                 -                 -                -         (4,603,322)               -
    Gain from the sale of patents                                                                                                       -                  -                  -                 -                  -                 -            (9,950)          (70,000)               -                  -          (79,950)
    (Gains) losses from sales of investments, assets, and other, net                                                               (3,857)           (15,105)               654             6,468             11,905             1,270             6,819             2,403            4,405            (11,840)          22,397
    Changes in assets and liabilities, net of effects of acquisitions:
      Accounts receivable, net                                                                                                    102,641           (112,549)           96,850             (52,190)           57,853               657           102,949          (135,260)          38,100            34,752            26,199
      Prepaid expenses and other                                                                                                   (9,430)            20,448            30,041              37,470            19,707           (58,381)           30,886            35,189           97,849            78,529            27,401
      Accounts payable                                                                                                            (42,442)             6,728            13,257              35,204           (71,135)           11,381             5,411            46,579             (316)           12,747            (7,764)
      Accrued expenses and other liabilities                                                                                      (43,988)            28,233         2,644,717          (2,373,163)         (123,472)           (7,183)          (53,051)           84,853         (290,070)          255,799           (98,853)
      Deferred revenue                                                                                                            (19,221)            (3,108)          537,140             (49,671)          (25,229)          (50,089)          (38,767)          (35,844)         (73,912)          465,140          (149,929)
    Net cash provided by (used in) operating activities (19) (20)                                                                 297,453            274,560         1,046,308          (1,899,875)          218,682           330,828           298,010           347,727        1,323,806          (281,554)        1,195,247

Cash flows from investing activities:
   Acquisition of property and equipment, net                                                                                    (109,791)          (106,131)          (139,865)          (149,720)          (69,581)           (82,076)         (77,653)         (108,821)         (593,294)         (505,507)         (338,131)
   Purchases of marketable securities                                                                                            (176,220)          (469,046)        (1,193,594)        (1,681,467)       (1,481,293)          (763,009)          (3,000)         (975,888)       (1,708,530)       (3,520,327)       (3,223,190)
   Proceeds from sales of marketable securities                                                                                   133,961            414,478            136,540             56,968           424,347          1,034,246        1,183,955           229,286         1,508,948           741,947         2,871,834
   Proceeds from maturities of marketable securities                                                                               77,700            120,798             52,155            130,750           183,100            279,306           95,159           191,350         1,316,197           381,403           748,915
   Proceeds related to the redemption of Alibaba Group Preference Shares                                                                -                  -                  -                  -                 -            800,000                -                 -                 -                 -           800,000
   Proceeds related to sale of Alibaba Group shares, net                                                                                -                  -          6,247,728                  -                 -                  -                -                 -                 -         6,247,728                 -
   Acquisitions, net of cash acquired                                                                                                   -                  -                  -             (5,716)          (10,147)        (1,014,010)        (163,072)          (60,315)         (323,830)           (5,716)       (1,247,544)
   Purchases of intangible assets                                                                                                  (1,802)            (1,286)                 -               (711)           (1,128)              (924)            (238)             (210)          (11,819)           (3,799)           (2,500)
   Proceeds from the sale of investments                                                                                                -             26,132                  -                  -                 -                  -                -               181            21,271            26,132               181
   Proceeds from the settlement of derivative hedge contracts                                                                           -                  -                  -             17,898             4,100              1,411              548           306,207                 -            17,898           312,266
   Payments for the settlement of derivative hedge contracts                                                                            -                  -                  -            (11,141)                -             (7,720)          (3,937)          (11,051)                -           (11,141)          (22,708)
   Proceeds from the sale of patents                                                                                                    -                  -                  -                  -                 -                  -                -            70,000                 -                 -            79,950
   Other investing activities, net                                                                                                 (7,280)            (2,141)                 -              2,847              (278)              (653)          (4,518)           13,103            (6,581)           (6,574)           (2,294)
    Net cash (used in) provided by investing activities                                                                           (83,432)           (17,196)         5,102,964         (1,640,292)         (950,880)           246,571        1,027,244          (346,158)          202,362         3,362,044           (23,221)

Cash flows from financing activities:
   Proceeds from issuance of common stock, net                                                                                      11,623            66,248            38,549             101,951            61,108            61,984             80,325          149,850           156,226           218,371           353,267
   Repurchases of common stock                                                                                                     (70,500)         (455,507)         (190,372)         (1,451,462)         (775,075)         (652,750)        (1,685,293)        (231,278)       (1,618,741)       (2,167,841)       (3,344,396)
   Proceeds from issuance of convertible debt                                                                                            -                 -                 -                   -                 -                 -                  -        1,412,344                 -                 -         1,412,344
   Payments for convertible note hedges                                                                                                  -                 -                 -                   -                 -                 -                  -         (205,706)                -                 -          (205,706)
   Proceeds from the issuance of warrants                                                                                                -                 -                 -                   -                 -                 -                  -          124,775                 -                 -           124,775
   Excess tax benefits from stock-based awards                                                                                       8,161             8,609            13,981               5,093            12,807             5,706             28,680           17,214            70,680            35,844            64,407
   Tax withholdings related to net share settlements of
      restricted stock awards and restricted stock units                                                                           (31,504)           (6,990)           (9,603)            (12,842)          (43,689)           (7,448)           (55,040)         (33,638)          (44,761)          (60,939)         (139,815)
   Proceeds from credit facility                                                                                                         -                 -                 -                   -                 -                 -            150,000                -                 -                 -           150,000
   Repayment of credit facility                                                                                                          -                 -                 -                   -                 -                 -           (150,150)             150                 -                 -          (150,000)
   Other financing activities, net                                                                                                  (1,013)           (1,209)           (1,297)             (1,373)           (1,405)           (1,373)            (2,935)          (3,047)          (19,362)           (4,892)           (8,760)
    Net cash (used in) provided by financing activities                                                                            (83,233)         (388,849)         (148,742)         (1,358,633)         (746,254)         (593,881)        (1,634,413)       1,230,664        (1,455,958)       (1,979,457)       (1,743,884)

Effect of exchange rate changes on cash and cash equivalents                                                                        26,790           (49,214)              20,601            6,178           (14,693)          (15,929)             9,363            2,929          (34,247)            4,355           (18,330)

Net change in cash and cash equivalents                                                                                           157,578           (180,699)        6,021,131          (4,892,622)       (1,493,145)          (32,410)         (299,795)        1,235,162           35,963         1,105,388          (590,188)
Cash and cash equivalents, beginning of period                                                                                  1,562,390          1,719,968         1,539,269           7,560,400         2,667,778         1,174,633         1,142,223           842,428        1,526,427         1,562,390         2,667,778

Cash and cash equivalents, end of period                                                                                    $   1,719,968     $    1,539,269     $   7,560,400      $   2,667,778     $    1,174,633     $   1,142,223     $     842,428     $   2,077,590    $   1,562,390     $   2,667,778     $   2,077,590


Free cash flow and Reconciliation to net cash provided by operating activities:

Net cash provided by (used in) operating activities                                                                         $     297,453 $          274,560 $       1,046,308 $        (1,899,875) $        218,682 $         330,828 $         298,010 $         347,727    $   1,323,806 $        (281,554)        1,195,247
Acquisition of property and equipment, net                                                                                       (109,791)          (106,131)         (139,865)           (149,720)          (69,581)          (82,076)          (77,653)         (108,821)        (593,294)         (505,507)         (338,131)
Dividends received from equity investees                                                                                                -            (83,648)                -                   -           (12,000)         (123,058)                -                 -          (75,391)          (83,648)         (135,058)
Excess tax benefits from stock-based awards                                                                                         8,161              8,609            13,981               5,093            12,807             5,706            28,680            17,214           70,680            35,844            64,407
Free cash flow (19) (20)                                                                                                    $     195,823     $       93,390     $     920,424      $   (2,044,502) $        149,908     $     131,400     $     249,037     $    256,120     $     725,801     $    (834,865) $        786,465


(6)
      This presentation is not prepared under a comprehensive set of accounting rules or principles such as GAAP. See Notes to Condensed Consolidated Financial Information for further explanation of key non-GAAP financial measures.
(19)
       Q3'12 and FY'12 include a payment of $550 million from Alibaba Group in satisfaction of certain future royalty payments under the existing technology and intellectual property license agreement with Alibaba Group. Q4'12 and FY'12 include a
$2.3 billion cash tax payment related to the sale of Alibaba Group shares.
(20)
       Q4'12 and FY'12 include a cash tax payment of $2.3 billion which is related to the sale of Alibaba Group shares.




                                                                                                                                                                       7
Yahoo! Inc.
Notes to Condensed Consolidated Financial Information

The condensed consolidated financial information accompanying these notes includes the non-GAAP financial measures of revenue excluding traffic acquisition costs ("revenue ex-TAC”);
adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per share; and free cash flow, which are reconciled to revenue; net income attributable
to Yahoo! Inc. (in the case of adjusted EBITDA and non-GAAP net earnings); income from operations; net income attributable to Yahoo! Inc. common stockholders per share; and net cash
provided by (used in) operating activities, which we believe are the most comparable GAAP measures. We use these non-GAAP financial measures for internal managerial purposes and to
facilitate period-to-period comparisons. We describe limitations specific to each non-GAAP financial measure below. Management generally compensates for limitations in the use of non-
GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable
GAAP financial measure or measures. Further, management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We
believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete
understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, revenue, net
income attributable to Yahoo! Inc., income from operations, net income attributable to Yahoo! Inc. common stockholders per share, and net cash provided by (used in) operating activities,
calculated in accordance with generally accepted accounting principles ("GAAP").

Revenue ex-TAC is a non-GAAP financial measure defined as GAAP revenue less traffic acquisition costs. Traffic acquisition costs (“TAC”) consist of payments made to third-party entities
that have integrated our advertising offerings into their Websites or other offerings (those Websites and other offerings, "Affiliate sites") and payments made to companies that direct consumer
and business traffic to Yahoo!’s online properties and services ("Yahoo! Properties"). Based on the terms of the Search Agreement with Microsoft, Microsoft retains a revenue share of 12
percent of the net (after TAC) search revenue generated on Yahoo! Properties and Affiliate sites in transitioned markets. Yahoo! reports the net revenue it receives under the Search
Agreement as revenue and no longer presents the associated TAC. Accordingly, for transitioned markets Yahoo! reports GAAP revenue associated with the Search Agreement on a net (after
TAC) basis rather than a gross basis. For markets that have not yet transitioned, revenue continues to be recorded on a gross basis, and TAC is recorded as a part of operating expenses. We
present revenue ex-TAC to provide investors a metric used by the Company for evaluation and decision-making purposes during the Microsoft transition and to provide investors with
comparable revenue numbers when comparing periods preceding, during and following the transition period. A limitation of revenue ex-TAC is that it is a measure which we have defined for
internal and investor purposes that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry who have similar
business arrangements but address the impact of TAC differently. Management compensates for these limitations by also relying on the comparable GAAP financial measures of revenue and
total operating expenses, which includes TAC in non-transitioned markets.

Adjusted EBITDA is defined as net income attributable to Yahoo! Inc. before taxes, depreciation, amortization of intangible assets, stock-based compensation expense, other income, net
(which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses and expenses that we do not believe are indicative of our
ongoing results. Yahoo! presents adjusted EBITDA because the exclusion of certain gains, losses, and expenses facilitates comparisons of the operating performance of the Company on a
period to period basis. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for results reported under GAAP. These limitations
include: adjusted EBITDA does not reflect tax payments and such payments reflect a reduction in cash available to us; adjusted EBITDA does not reflect the periodic costs of certain
capitalized tangible and intangible assets used in generating revenues in our businesses; adjusted EBITDA does not include stock-based compensation expense related to the Company’s
workforce; adjusted EBITDA also excludes other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests, and other gains, losses,
and expenses that we do not believe are indicative of our ongoing results, and these items may represent a reduction or increase in cash available to us; and adjusted EBITDA is a measure
that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry. Management compensates for these limitations by
also relying on the comparable GAAP financial measure of net income attributable to Yahoo! Inc., which includes taxes, depreciation, amortization, stock-based compensation expense, other
income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and the other gains, losses and expenses that are excluded from adjusted
EBITDA.

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
and further adjusted to exclude stock-based compensation expense. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based
compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation expense enhances the ability of management and
investors to understand the impact of stock-based compensation expense on income from operations. We consider non-GAAP income from operations to be a profitability measure which
facilitates the forecasting of our operating results for future periods and allows for the comparison of our results to historical periods. A limitation of non-GAAP income from operations is that it
does not include all items that impact our income from operations for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measure of
income from operations which includes the gains, losses, and expenses that are excluded from non-GAAP income from operations.

Non-GAAP net earnings 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 and further adjusted to exclude stock-based compensation expense and its related tax effects. Because of the variety of equity awards used by companies, the varying
methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation
expense enhances the ability of management and investors to understand the impact of stock-based compensation expense on net income and net income per share. We consider non-GAAP
net earnings and non-GAAP net earnings per share to be profitability measures which facilitate the forecasting of our results for future periods and allow for the comparison of our results to
historical periods. A limitation of non-GAAP net earnings and non-GAAP net earnings per share is that they do not include all items that impact our net income and net income per share for the
period. Management compensates for this limitation by also relying on the comparable GAAP financial measures of net income attributable to Yahoo! Inc. and net income attributable to
Yahoo! Inc. common stockholders per share, both of which include the gains, losses, expenses and related tax effects that are excluded from non-GAAP net earnings and non-GAAP net
earnings per share.

Free cash flow is a non-GAAP financial measure defined as net cash provided by (used in) 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. We consider free cash flow to be a liquidity measure which provides useful information to
management and investors about the amount of cash generated by the business after the acquisition of property and equipment, 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. Management compensates for this limitation by also relying on the net change in cash and cash equivalents as
presented in the Company’s unaudited condensed consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.




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