Exhibit 99.2
Google Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, 2007* | September 30, 2008 | |||||
(unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 6,081,593 | $ | 8,370,469 | ||
Marketable securities | 8,137,020 | 6,042,140 | ||||
Accounts receivable, net of allowance | 2,162,521 | 2,541,492 | ||||
Deferred income taxes, net | 68,538 | 111,401 | ||||
Income taxes receivable | 145,253 | — | ||||
Prepaid revenue share, expenses and other assets | 694,213 | 897,349 | ||||
Total current assets | 17,289,138 | 17,962,851 | ||||
Prepaid revenue share, expenses and other assets, non-current | 168,530 | 426,478 | ||||
Deferred income taxes, net, non-current | 33,219 | 165,448 | ||||
Non-marketable equity securities | 1,059,694 | 1,100,896 | ||||
Property and equipment, net | 4,039,261 | 5,213,167 | ||||
Intangible assets, net | 446,596 | 1,047,717 | ||||
Goodwill | 2,299,368 | 4,821,646 | ||||
Total assets | $ | 25,335,806 | $ | 30,738,203 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 282,106 | $ | 240,706 | ||
Accrued compensation and benefits | 588,390 | 622,658 | ||||
Accrued expenses and other current liabilities | 465,032 | 532,627 | ||||
Accrued revenue share | 522,001 | 515,949 | ||||
Deferred revenue | 178,073 | 200,378 | ||||
Income taxes payable | — | 99,959 | ||||
Total current liabilities | 2,035,602 | 2,212,277 | ||||
Deferred revenue, non-current | 30,249 | 29,992 | ||||
Deferred income taxes, net, non-current | — | 20,420 | ||||
Income taxes payable, non-current | 478,372 | 783,348 | ||||
Other long-term liabilities | 101,904 | 161,075 | ||||
Stockholders’ equity: | ||||||
Common stock | 313 | 315 | ||||
Additional paid-in capital | 13,241,221 | 14,194,197 | ||||
Accumulated other comprehensive income | 113,373 | 101,162 | ||||
Retained earnings | 9,334,772 | 13,235,417 | ||||
Total stockholders’ equity | 22,689,679 | 27,531,091 | ||||
Total liabilities and stockholders’ equity | $ | 25,335,806 | $ | 30,738,203 | ||
* | Derived from audited financial statements. |
Google Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts, unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2007 | 2008 | 2007 | 2008 | |||||||||
(unaudited) | ||||||||||||
Revenues | $ | 4,231,351 | $ | 5,541,391 | $ | 11,767,307 | $ | 16,094,646 | ||||
Costs and expenses: | ||||||||||||
Cost of revenues (including stock-based compensation expense of $4,031, $10,729, $16,080, $29,240) | 1,662,579 | 2,173,390 | 4,693,261 | 6,431,501 | ||||||||
Research and development (including stock-based compensation expense of $130,655, $169,263, $408,425, $550,343) | 548,712 | 704,571 | 1,489,202 | 2,059,851 | ||||||||
Sales and marketing (including stock-based compensation expense of $29,918, $64,497, $93,553, $149,666) | 380,820 | 508,801 | 1,038,976 | 1,440,252 | ||||||||
General and administrative (including stock-based compensation expense of $33,352, $35,550, $105,288, $104,345) | 321,398 | 411,964 | 902,202 | 1,296,178 | ||||||||
Total costs and expenses | 2,913,509 | 3,798,726 | 8,123,641 | 11,227,782 | ||||||||
Income from operations | 1,317,842 | 1,742,665 | 3,643,666 | 4,866,864 | ||||||||
Interest income and other, net | 154,428 | 21,217 | 422,287 | 246,485 | ||||||||
Income before income taxes | 1,472,270 | 1,763,882 | 4,065,953 | 5,113,349 | ||||||||
Provision for income taxes | 402,281 | 417,715 | 1,068,682 | 1,212,704 | ||||||||
Net income | $ | 1,069,989 | $ | 1,346,167 | $ | 2,997,271 | $ | 3,900,645 | ||||
Net income per share - basic | $ | 3.44 | $ | 4.28 | $ | 9.66 | $ | 12.43 | ||||
Net income per share - diluted | $ | 3.38 | $ | 4.24 | $ | 9.50 | $ | 12.28 | ||||
Shares used in per share calculation - basic | 311,221 | 314,241 | 310,324 | 313,729 | ||||||||
Shares used in per share calculation - diluted | 316,576 | 317,776 | 315,638 | 317,730 | ||||||||
Google Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2007 | 2008 | 2007 | 2008 | |||||||||||||
(unaudited) | ||||||||||||||||
Operating activities | ||||||||||||||||
Net income | $ | 1,069,989 | $ | 1,346,167 | $ | 2,997,271 | $ | 3,900,645 | ||||||||
Adjustments: | ||||||||||||||||
Depreciation and amortization of property and equipment | 207,415 | 309,482 | 565,841 | 898,762 | ||||||||||||
Amortization of intangibles and other | 41,960 | 76,764 | 111,881 | 215,615 | ||||||||||||
Stock-based compensation | 197,956 | 280,039 | 623,346 | 833,594 | ||||||||||||
Excess tax benefits from stock-based award activity | (58,762 | ) | (19,791 | ) | (238,577 | ) | (114,770 | ) | ||||||||
Deferred income taxes | (2,079 | ) | 20,164 | (184,520 | ) | (85,726 | ) | |||||||||
Other, net | (7,180 | ) | 10,169 | (7,215 | ) | (14,488 | ) | |||||||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||||||||||||
Accounts receivable | (234,391 | ) | 78,049 | (559,425 | ) | (218,326 | ) | |||||||||
Income taxes, net | 99,720 | 24,314 | 615,568 | 552,673 | ||||||||||||
Prepaid revenue share, expenses and other assets | (29,738 | ) | 42,744 | (237,262 | ) | (140,059 | ) | |||||||||
Accounts payable | 94,817 | (191,402 | ) | 20,155 | (152,165 | ) | ||||||||||
Accrued expenses and other liabilities | 185,641 | 185,133 | 206,522 | 37,882 | ||||||||||||
Accrued revenue share | 54,294 | 12,017 | 136,446 | (4,433 | ) | |||||||||||
Deferred revenue | 13,001 | 11,106 | 32,131 | 21,354 | ||||||||||||
Net cash provided by operating activities | 1,632,643 | 2,184,955 | 4,082,162 | 5,730,558 | ||||||||||||
Investing activities | ||||||||||||||||
Purchases of property and equipment | (552,640 | ) | (451,503 | ) | (1,724,631 | ) | (1,990,617 | ) | ||||||||
Purchases of marketable securities | (4,412,277 | ) | (2,892,983 | ) | (11,756,147 | ) | (7,814,293 | ) | ||||||||
Maturities and sales of marketable securities | 4,501,783 | 2,218,344 | 11,519,001 | 9,634,903 | ||||||||||||
Investments in non-marketable equity securities | (11,000 | ) | (35,377 | ) | (21,288 | ) | (44,869 | ) | ||||||||
Acquisitions, net of cash acquired, proceeds received from divestiture, and purchases of intangible and other assets | (615,552 | ) | 24,562 | (823,092 | ) | (3,287,708 | ) | |||||||||
Net cash used in investing activities | (1,089,686 | ) | (1,136,957 | ) | (2,806,157 | ) | (3,502,584 | ) | ||||||||
Financing activities | ||||||||||||||||
Net proceeds (payments) related to stock-based award activity | (9,751 | ) | (15,506 | ) | 19,073 | (38,252 | ) | |||||||||
Excess tax benefits from stock-based award activity | 58,762 | 19,791 | 238,577 | 114,770 | ||||||||||||
Net cash provided by financing activities | 49,011 | 4,285 | 257,650 | 76,518 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 20,784 | (45,350 | ) | 28,078 | (15,616 | ) | ||||||||||
Net increase in cash and cash equivalents | 612,752 | 1,006,933 | 1,561,733 | 2,288,876 | ||||||||||||
Cash and cash equivalents at beginning of period | 4,493,652 | 7,363,536 | 3,544,671 | 6,081,593 | ||||||||||||
Cash and cash equivalents at end of period | $ | 5,106,404 | $ | 8,370,469 | $ | 5,106,404 | $ | 8,370,469 | ||||||||
The following table presents our revenues, by revenue source, for the periods presented (in thousands, unaudited):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2007 | 2008 | 2007 | 2008 | |||||||||||||
Advertising revenues: | ||||||||||||||||
Google web sites | $ | 2,734,756 | $ | 3,672,111 | $ | 7,503,167 | $ | 10,602,660 | ||||||||
Google Network web sites | 1,454,721 | 1,679,861 | 4,152,102 | 5,021,283 | ||||||||||||
Total advertising revenues | 4,189,477 | 5,351,972 | 11,655,269 | 15,623,943 | ||||||||||||
Licensing and other revenues | 41,874 | 189,419 | 112,038 | 470,703 | ||||||||||||
Revenues | $ | 4,231,351 | $ | 5,541,391 | $ | 11,767,307 | $ | 16,094,646 | ||||||||
The following table presents our revenues, by revenue source, as a percentage of total revenues for the periods presented (unaudited):
|
| |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2007 | 2008 | 2007 | 2008 | |||||||||||||
Advertising revenues: | ||||||||||||||||
Google web sites | 65 | % | 67 | % | 64 | % | 66 | % | ||||||||
Google Network web sites | 34 | % | 30 | % | 35 | % | 31 | % | ||||||||
Total advertising revenues | 99 | % | 97 | % | 99 | % | 97 | % | ||||||||
Licensing and other revenues | 1 | % | 3 | % | 1 | % | 3 | % | ||||||||
Revenues | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||