Enom 2010 Annual Report Download - page 53

Table of Contents
investment decision is clearly distinguishable from other ongoing business activities, and its discretionary nature and long term impact differentiate it from
specific period transactions, decisions regarding day-to-day operations, and activities that would have immediate performance consequences if materially
changed, deferred or terminated.
We believe that Revenue ex-TAC is a meaningful measure of operating performance because it is frequently used for internal managerial purposes and
helps facilitate a more complete period to period understanding of factors and trends affecting our underlying revenue performance.
Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our
consolidated revenue and operating results in the same manner as our management and in comparing financial results across accounting periods and to those
of our peer companies.
The following table presents a reconciliation of Revenue ex-TAC and Adjusted OIBDA for each of the periods presented:
Year
ended
March 31,
2007
Nine Months
ended
December 31,
2007
Year ended December 31,
2008 2009 2010
(In thousands)
Non-GAAP Financial Measures:
Content & Media revenue $ 18,073 $ 49,342 $ 84,821 $ 107,717 $ 152,910
Registrar revenue 40,906 52,953 85,429 90,735 100,026
Less: traffic acquisition costs (TAC)(1) (5,087) (7,254) (7,655) (10,554) (12,213)
Total revenue ex-TAC $ 53,892 $ 95,041 $ 162,595 $ 187,898 $ 240,723
Income (loss) from operations $ (7,081)$ (18,770)$ (18,416)$ (479)
Add (deduct):
Depreciation 3,590 10,506 14,963 18,266
Amortization(2) 17,393 33,204 32,152 33,750
Stock-based compensation(3) 3,670 5,970 7,736 9,689
Non-cash purchase accounting adjustments(4) 1,282 1,533 960 779
Gain on sale of asset(5) — — (582) —
Adjusted OIBDA $ 18,854 $ 32,443 $ 36,813 $ 62,005
Represents revenue-sharing payments made to our network customers from advertising revenue generated from such customers'
websites.
Represents the amortization expense of our finite lived intangible assets, including that related to our investment in media content
assets, included in our GAAP results of operations.
Represents the fair value of stock-based awards and certain warrants to purchase our stock included in our GAAP results of operations.
Represents adjustments for certain deferred revenue and costs that we do not recognize under GAAP because of GAAP purchase
accounting.
Represents a gain recognized on the sale of certain assets included in our GAAP operating results.
(1)
(2)
(3)
(4)
(5)
The use of non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense that affect our operations.
We compensate for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP
financial measures should be considered in addition to, not as a substitute for, measures prepared in accordance with GAAP. Further, these non-GAAP
measures may differ from the
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