Google 8-K Google Announces First Quarter 2007 Results

Exhibit 99.2

Google Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2006*		March 31, 2007
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	3,544,671	$	4,081,340
Marketable securities		7,699,243		7,854,579
Accounts receivable, net of allowance		1,322,340		1,477,090
Deferred income taxes, net		29,713		51,259
Prepaid revenue share, expenses and other assets		443,880		616,506
Total current assets		13,039,847		14,080,774
Prepaid revenue share, expenses and other assets, non-current		114,455		129,903
Non-marketable equity securities		1,031,850		1,030,952
Property and equipment, net		2,395,239		2,826,717
Intangible assets, net		346,841		326,526
Goodwill		1,545,119		1,620,566
Total assets	$	18,473,351	$	20,015,438
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	211,169	$	181,828
Accrued compensation and benefits		351,671		180,708
Accrued expenses and other current liabilities		265,872		300,068
Accrued revenue share		370,364		448,121
Deferred revenue		105,136		105,771
Income taxes payable		375		37,857
Total current liabilities		1,304,587		1,254,353
Deferred revenue, long-term		20,006		20,979
Deferred income taxes, net		40,421		18,821
Income taxes payable, long-term		—		267,209
Other long-term liabilities		68,497		76,866
Stockholders’ equity:
Common stock		309		310
Additional paid-in capital		11,882,906		12,211,590
Accumulated other comprehensive income		23,311		36,942
Retained earnings		5,133,314		6,128,368
Total stockholders’ equity		17,039,840		18,377,210
Total liabilities and stockholders’ equity	$	18,473,351	$	20,015,438

* Derived from audited financial statements.

Google Inc.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

	Three Months Ended March 31,
	2006		2007
	(Unaudited)
Revenues	$	2,253,755	$	3,663,971
Costs and expenses:
Cost of revenues (including stock-based compensation expense of $2,283, $4,389)		904,119		1,470,426
Research and development (including stock-based compensation expense of $73,086, $120,787)		246,599		408,384
Sales and marketing (including stock-based compensation expense of $15,929, $27,250)		190,943		302,552
General and administrative (including stock-based compensation expense of $23,366, $31,440)		169,395		261,400
Total costs and expenses		1,511,056		2,442,762
Income from operations		742,699		1,221,209
Interest income and other, net		67,919		130,728
Income before income taxes		810,618		1,351,937
Provision for income taxes		218,327		349,775
Net income	$	592,291	$	1,002,162
Net income per share—basic	$	2.02	$	3.24
Net income per share—diluted	$	1.95	$	3.18
Shares used in per share calculation—basic		293,896		309,315
Shares used in per share calculation—diluted		304,123		314,870

Google Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended March 31,
	2006			2007
	(Unaudited)
Operating activities
Net income	$	592,291		$	1,002,162
Adjustments:
Depreciation of property and equipment		95,868			170,289
Amortization of intangibles and warrants		15,290			34,703
In-process research and development		4,000			—
Stock-based compensation		114,664			183,866
Excess tax benefits from stock-based award activity		(77,285	)		(74,084	)
Other		—			(6,386	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable		(155,221	)		(153,562	)
Income taxes, net		216,527			337,702
Prepaid revenue share, expenses and other assets		(26,525	)		(185,478	)
Accounts payable		30,232			(29,256	)
Accrued expenses and other liabilities		(39,295	)		(139,886	)
Accrued revenue share		51,216			77,864
Deferred revenue		3,042			1,659
Net cash provided by operating activities		824,804			1,219,593
Investing activities
Purchases of property and equipment		(344,938	)		(596,893	)
Purchases of marketable securities		(13,111,471	)		(5,225,160	)
Maturities and sales of marketable securities		11,755,756			5,079,364
Acquisitions, net of cash acquired, and purchases of intangible and other assets		(187,964	)		(34,441	)
Net cash used in investing activities		(1,888,617	)		(777,130	)
Financing activities
Net proceeds from stock-based award activity		42,611			14,426
Excess tax benefits from stock-based award activity		77,285			74,084
Net cash provided by financing activities		119,896			88,510
Effect of exchange rate changes on cash and cash equivalents		1,922			5,696
Net increase (decrease) in cash and cash equivalents		(941,995	)		536,669
Cash and cash equivalents at beginning of year		3,877,174			3,544,671
Cash and cash equivalents at end of period	$	2,935,179		$	4,081,340

The following table presents our revenues, by revenue source, for the periods presented (in thousands, unaudited):

	Three Months Ended March 31,
	2006		2007
Advertising revenues:
Google web sites	$	1,297,317	$	2,282,121
Google Network web sites		928,376		1,345,329
Total advertising revenues		2,225,693		3,627,450
Licensing and other revenues		28,062		36,521
Revenues	$	2,253,755	$	3,663,971

The following table presents our revenues, by revenue source, as a percentage of total revenues for the periods presented (unaudited):

	Three Months Ended March 31,
	2006		2007
Advertising revenues:
Google web sites	58	%	62	%
Google Network web sites	41	%	37	%
Total advertising revenues	99	%	99	%
Licensing and other revenues	1	%	1	%
Revenues	100	%	100	%