Exhibit 99.2
Google Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, 2006* | June 30, 2007 | |||||
| (unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 3,544,671 | $ | 4,493,652 | ||
Marketable securities | 7,699,243 | 8,009,883 | ||||
Accounts receivable, net of allowance | 1,322,340 | 1,648,680 | ||||
Deferred income taxes, net | 29,713 | 78,068 | ||||
Prepaid revenue share, expenses and other assets | 443,880 | 627,240 | ||||
Total current assets | 13,039,847 | 14,857,523 | ||||
Prepaid revenue share, expenses and other assets, non-current | 114,455 | 147,154 | ||||
Deferred income taxes, net, non-current | — | 98,421 | ||||
Non-marketable equity securities | 1,031,850 | 1,038,804 | ||||
Property and equipment, net | 2,395,239 | 3,219,280 | ||||
Intangible assets, net | 346,841 | 339,579 | ||||
Goodwill | 1,545,119 | 1,723,124 | ||||
Total assets | $ | 18,473,351 | $ | 21,423,885 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 211,169 | $ | 136,483 | ||
Accrued compensation and benefits | 351,671 | 330,951 | ||||
Accrued expenses and other current liabilities | 265,872 | 276,723 | ||||
Accrued revenue share | 370,364 | 452,472 | ||||
Deferred revenue | 105,136 | 122,566 | ||||
Income taxes payable | 375 | — | ||||
Total current liabilities | 1,304,587 | 1,319,195 | ||||
Deferred revenue, long-term | 20,006 | 21,673 | ||||
Deferred income taxes, net | 40,421 | — | ||||
Income taxes payable, long-term | — | 340,762 | ||||
Other long-term liabilities | 68,497 | 82,647 | ||||
Stockholders’ equity: | ||||||
Common stock | 309 | 311 | ||||
Additional paid-in capital | 11,882,906 | 12,576,560 | ||||
Accumulated other comprehensive income | 23,311 | 29,248 | ||||
Retained earnings | 5,133,314 | 7,053,489 | ||||
Total stockholders’ equity | 17,039,840 | 19,659,608 | ||||
Total liabilities and stockholders’ equity | $ | 18,473,351 | $ | 21,423,885 | ||
| * | Derived from audited financial statements. |
Google Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2006 | 2007 | 2006 | 2007 | |||||||||
| (Unaudited) | ||||||||||||
Revenues | $ | 2,455,991 | $ | 3,871,985 | $ | 4,709,746 | $ | 7,535,956 | ||||
Costs and expenses: | ||||||||||||
Cost of revenues (including stock-based compensation expense of $2,322, $7,659, $4,606, $12,048) | 989,032 | 1,560,255 | 1,893,151 | 3,030,682 | ||||||||
Research and development (including stock-based compensation expense of $70,564, $156,983, $143,650, $277,771) | 282,552 | 532,106 | 529,151 | 940,490 | ||||||||
Sales and marketing (including stock-based compensation expense of $14,285, $36,385, $30,214, $63,635) | 196,397 | 355,604 | 387,340 | 658,156 | ||||||||
General and administrative (including stock-based compensation expense of $21,978, $40,497, $45,343, $71,936) | 172,638 | 319,405 | 342,033 | 580,804 | ||||||||
Total costs and expenses | 1,640,619 | 2,767,370 | 3,151,675 | 5,210,132 | ||||||||
Income from operations | 815,372 | 1,104,615 | 1,558,071 | 2,325,824 | ||||||||
Interest income and other, net | 160,805 | 137,130 | 228,724 | 267,859 | ||||||||
Income before income taxes | 976,177 | 1,241,745 | 1,786,795 | 2,593,683 | ||||||||
Provision for income taxes | 255,100 | 316,625 | 473,427 | 666,401 | ||||||||
Net income | $ | 721,077 | $ | 925,120 | $ | 1,313,368 | $ | 1,927,282 | ||||
Net income per share—basic | $ | 2.39 | $ | 2.98 | $ | 4.41 | $ | 6.22 | ||||
Net income per share—diluted | $ | 2.33 | $ | 2.93 | $ | 4.28 | $ | 6.12 | ||||
Shares used in per share calculation—basic | 301,410 | 310,436 | 297,653 | 309,876 | ||||||||
Shares used in per share calculation—diluted | 310,038 | 315,469 | 307,080 | 315,170 | ||||||||
Google Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended June 30, | ||||||||
| 2006 | 2007 | |||||||
| (Unaudited) | ||||||||
Operating activities | ||||||||
Net income | $ | 1,313,368 | $ | 1,927,282 | ||||
Adjustments: | ||||||||
Depreciation of property and equipment | 206,079 | 358,426 | ||||||
Amortization of intangibles and warrants | 31,300 | 69,921 | ||||||
In-process research and development | 4,000 | 3,660 | ||||||
Stock-based compensation | 223,813 | 425,390 | ||||||
Excess tax benefits from stock-based award activity | (258,087 | ) | (179,815 | ) | ||||
Other | — | (3,695 | ) | |||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||||
Accounts receivable | (193,211 | ) | (325,034 | ) | ||||
Income taxes, net | 265,384 | 333,407 | ||||||
Prepaid revenue share, expenses and other assets | (67,974 | ) | (207,524 | ) | ||||
Accounts payable | 63,879 | (74,662 | ) | |||||
Accrued expenses and other liabilities | 14,782 | 20,881 | ||||||
Accrued revenue share | 56,984 | 82,152 | ||||||
Deferred revenue | 5,073 | 19,130 | ||||||
Net cash provided by operating activities | 1,665,390 | 2,449,519 | ||||||
Investing activities | ||||||||
Purchases of property and equipment | (1,043,938 | ) | (1,171,991 | ) | ||||
Purchases of marketable securities | (17,576,067 | ) | (7,343,870 | ) | ||||
Maturities and sales of marketable securities | 15,856,478 | 7,017,218 | ||||||
Investments in non-marketable equity securities | (1,004,222 | ) | (10,288 | ) | ||||
Acquisitions, net of cash acquired, and purchases of intangible and other assets | (188,506 | ) | (207,540 | ) | ||||
Net cash used in investing activities | (3,956,255 | ) | (1,716,471 | ) | ||||
Financing activities | ||||||||
Net proceeds from stock-based award activity | 97,088 | 28,824 | ||||||
Net proceeds from a public stock offering | 2,063,777 | — | ||||||
Excess tax benefits from stock-based award activity | 258,087 | 179,815 | ||||||
Net cash provided by financing activities | 2,418,952 | 208,639 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 10,661 | 7,294 | ||||||
Net increase in cash and cash equivalents | 138,748 | 948,981 | ||||||
Cash and cash equivalents at beginning of year | 3,877,174 | 3,544,671 | ||||||
Cash and cash equivalents at end of period | $ | 4,015,922 | $ | 4,493,652 | ||||
The following table presents our revenues, by revenue source, for the periods presented (in thousands, unaudited):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2006 | 2007 | 2006 | 2007 | |||||||||
Advertising revenues: | ||||||||||||
Google web sites | $ | 1,432,461 | $ | 2,486,290 | $ | 2,729,778 | $ | 4,768,411 | ||||
Google Network web sites | 996,567 | 1,352,051 | 1,924,942 | 2,697,381 | ||||||||
Total advertising revenues | 2,429,028 | 3,838,341 | 4,654,720 | 7,465,792 | ||||||||
Licensing and other revenues | 26,963 | 33,644 | 55,026 | 70,164 | ||||||||
Revenues | $ | 2,455,991 | $ | 3,871,985 | $ | 4,709,746 | $ | 7,535,956 | ||||
The following table presents our revenues, by revenue source, as a percentage of total revenues for the periods presented (unaudited):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2006 | 2007 | 2006 | 2007 | |||||||||
Advertising revenues: | ||||||||||||
Google web sites | 58 | % | 64 | % | 58 | % | 63 | % | ||||
Google Network web sites | 41 | % | 35 | % | 41 | % | 36 | % | ||||
Total advertising revenues | 99 | % | 99 | % | 99 | % | 99 | % | ||||
Licensing and other revenues | 1 | % | 1 | % | 1 | % | 1 | % | ||||
Revenues | 100 | % | 100 | % | 100 | % | 100 | % | ||||
