Google 8-K Google Announces Second Quarter 2008 Results

Exhibit 99.2

Google Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2007*		June 30, 2008
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	6,081,593	$	7,363,536
Marketable securities		8,137,020		5,370,133
Accounts receivable, net of allowance		2,162,521		2,641,901
Deferred income taxes, net		68,538		94,402
Income taxes receivable		145,253		—
Prepaid revenue share, expenses and other assets		694,213		846,865
Total current assets		17,289,138		16,316,837
Prepaid revenue share, expenses and other assets, non-current		168,530		444,844
Deferred income taxes, net, non-current		33,219		220,079
Non-marketable equity securities		1,059,694		1,067,520
Property and equipment, net		4,039,261		5,137,710
Intangible assets, net		446,596		1,138,991
Goodwill		2,299,368		4,853,805
Total assets	$	25,335,806	$	29,179,786
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	282,106	$	439,281
Accrued compensation and benefits		588,390		493,284
Accrued expenses and other current liabilities		465,032		555,117
Accrued revenue share		522,001		517,287
Deferred revenue		178,073		197,433
Income taxes payable		—		143,113
Total current liabilities		2,035,602		2,345,515
Deferred revenue, non-current		30,249		30,933
Deferred income taxes, net, non-current		—		22,197
Income taxes payable, non-current		478,372		711,827
Other long-term liabilities		101,904		156,299
Stockholders' equity:
Common stock		313		314
Additional paid-in capital		13,241,221		13,904,271
Accumulated other comprehensive income		113,373		119,181
Retained earnings		9,334,772		11,889,249
Total stockholders’ equity		22,689,679		25,913,015
Total liabilities and stockholders’ equity	$	25,335,806	$	29,179,786

* Derived from audited financial statements.

Google Inc.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2008		2007		2008
	(unaudited)
Revenues	$	3,871,985	$	5,367,212	$	7,535,956	$	10,553,255
Costs and expenses:
Cost of revenues (including stock-based compensation expense of $7,659, $9,363, $12,048, $18,511)		1,560,255		2,147,575		3,030,682		4,258,111
Research and development (including stock-based compensation expense of $156,983, $187,281, $277,771, $381,081)		532,106		682,210		940,490		1,355,279
Sales and marketing (including stock-based compensation expense of $36,385, $42,593, $63,635, $85,169)		355,604		484,552		658,156		931,450
General and administrative (including stock-based compensation expense of $40,497, $33,539, $71,936, $68,794)		319,405		474,910		580,804		884,215
Total costs and expenses		2,767,370		3,789,247		5,210,132		7,429,055
Income from operations		1,104,615		1,577,965		2,325,824		3,124,200
Interest income and other, net		137,130		57,923		267,859		225,266
Income before income taxes		1,241,745		1,635,888		2,593,683		3,349,466
Provision for income taxes		316,625		388,497		666,401		794,989
Net income	$	925,120	$	1,247,391	$	1,927,282	$	2,554,477
Net income per share - basic	$	2.98	$	3.97	$	6.22	$	8.15
Net income per share - diluted	$	2.93	$	3.92	$	6.12	$	8.04
Shares used in per share calculation - basic		310,436		313,817		309,876		313,473
Shares used in per share calculation - diluted		315,469		318,023		315,170		317,708

Google Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2008			2007			2008
	(unaudited)
Operating activities
Net income	$	925,120		$	1,247,391		$	1,927,282		$	2,554,477
Adjustments:
Depreciation and amortization of property and equipment		188,137			308,716			358,426			589,280
Amortization of intangibles and other		35,218			82,891			69,921			138,851
Stock-based compensation		241,524			272,776			425,390			553,555
Excess tax benefits from stock-based award activity		(105,731	)		(43,878	)		(179,815	)		(94,979	)
Deferred income taxes		(121,039	)		(67,676	)		(182,441	)		(105,890	)
Other, net		6,351			20,245			(35	)		(24,658	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable		(171,472	)		(72,883	)		(325,034	)		(296,376	)
Income taxes, net		116,744			90,184			515,848			528,359
Prepaid revenue share, expenses and other assets		(22,046	)		(141,219	)		(207,524	)		(182,803	)
Accounts payable		(45,406	)		(14,547	)		(74,662	)		39,237
Accrued expenses and other liabilities		160,767			87,026			20,881			(147,251	)
Accrued revenue share		4,288			(6,326	)		82,152			(16,450	)
Deferred revenue		17,471			3,454			19,130			10,248
Net cash provided by operating activities		1,229,926			1,766,154			2,449,519			3,545,600
Investing activities
Purchases of property and equipment		(575,098	)		(697,517	)		(1,171,991	)		(1,539,114	)
Purchases of marketable securities		(2,118,710	)		(2,101,798	)		(7,343,870	)		(4,921,310	)
Maturities and sales of marketable securities		1,937,854			2,037,331			7,017,218			7,416,559
Investments in non-marketable equity securities		(10,288	)		(10,554	)		(10,288	)		(9,492	)
Acquisitions, net of cash acquired, and purchases of intangible and other assets		(173,099	)		(186,095	)		(207,540	)		(3,312,270	)
Net cash used in investing activities		(939,341	)		(958,633	)		(1,716,471	)		(2,365,627	)
Financing activities
Net proceeds (payments) related to stock-based award activity		14,398			(301	)		28,824			(22,746	)
Excess tax benefits from stock-based award activity		105,731			43,878			179,815			94,979
Net cash provided by financing activities		120,129			43,577			208,639			72,233
Effect of exchange rate changes on cash and cash equivalents		1,598			(7,311	)		7,294			29,737
Net increase in cash and cash equivalents		412,312			843,787			948,981			1,281,943
Cash and cash equivalents at beginning of period		4,081,340			6,519,749			3,544,671			6,081,593
Cash and cash equivalents at end of period	$	4,493,652		$	7,363,536		$	4,493,652		$	7,363,536

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,
	2007			2008			2007			2008
Advertising revenues:
Google web sites	$	2,486,290		$	3,530,145		$	4,768,411		$	6,930,550
Google Network web sites		1,352,051			1,655,280			2,697,381			3,341,421
Total advertising revenues		3,838,341			5,185,425			7,465,792			10,271,971
Licensing and other revenues		33,644			181,787			70,164			281,284
Revenues	$	3,871,985		$	5,367,212		$	7,535,956		$	10,553,255
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,
	2007			2008			2007			2008
Advertising revenues:
Google web sites		64	%		66	%		63	%		66	%
Google Network web sites		35	%		31	%		36	%		31	%
Total advertising revenues		99	%		97	%		99	%		97	%
Licensing and other revenues		1	%		3	%		1	%		3	%
Revenues		100	%		100	%		100	%		100	%