Google 8-K Google Announces Fourth Quarter and Fiscal Year 2008 Results

Exhibit 99.2

Google Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2007*		December 31, 2008
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	6,081,593	$	8,656,672
Marketable securities		8,137,020		7,189,099
Accounts receivable, net of allowance		2,162,521		2,642,192
Deferred income taxes, net		68,538		286,105
Income taxes receivable, net		145,253		—
Prepaid revenue share, expenses and other assets		694,213		1,404,114
Total current assets		17,289,138		20,178,182
Prepaid revenue share, expenses and other assets, non-current		168,530		433,846
Deferred income taxes, net, non-current		33,219		—
Non-marketable equity securities		1,059,694		85,160
Property and equipment, net		4,039,261		5,233,843
Intangible assets, net		446,596		996,690
Goodwill		2,299,368		4,839,854
Total assets	$	25,335,806	$	31,767,575
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	282,106	$	178,004
Accrued compensation and benefits		588,390		811,643
Accrued expenses and other current liabilities		465,032		480,263
Accrued revenue share		522,001		532,547
Deferred revenue		178,073		218,084
Income taxes payable, net		—		81,549
Total current liabilities		2,035,602		2,302,090
Deferred revenue, non-current		30,249		29,818
Income taxes payable, net, non-current		478,372		890,115
Deferred income taxes, net, non-current		—		12,515
Other long-term liabilities		101,904		294,175
Stockholders' equity:
Common stock		313		315
Additional paid-in capital		13,241,221		14,450,338
Accumulated other comprehensive income		113,373		226,579
Retained earnings		9,334,772		13,561,630
Total stockholders' equity		22,689,679		28,238,862
Total liabilities and stockholders' equity	$	25,335,806	$	31,767,575

* Derived from audited financial statements.

Google Inc.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2007		2008			2007*		2008
	(unaudited)							(unaudited)
Revenues	$	4,826,679	$	5,700,904		$	16,593,986	$	21,795,550
Costs and expenses:
Cost of revenues (including stock-based compensation expense of $6,255, $12,099, $22,335, $41,340)		1,955,825		2,190,005			6,649,085		8,621,506
Research and development (including stock-based compensation expense of $161,372, $182,075, $569,797, $732,418)		630,783		733,342			2,119,985		2,793,192
Sales and marketing (including stock-based compensation expense of $38,085, $56,354, $131,638, $206,020)		422,291		505,993			1,461,266		1,946,244
General and administrative (including stock-based compensation expense of $39,588, $35,644, $144,876, $139,988)		377,046		411,360			1,279,250		1,802,639
Total costs and expenses		3,385,945		3,840,700			11,509,586		15,163,581
Income from operations		1,440,734		1,860,204			5,084,400		6,631,969
Impairment on equity investments		—		(1,094,757	)		—		(1,094,757	)
Interest income and other, net		167,294		69,899			589,580		316,384
Income before income taxes		1,608,028		835,346			5,673,980		5,853,596
Provision for income taxes		401,579		452,904			1,470,260		1,626,738
Net income	$	1,206,449	$	382,442		$	4,203,720	$	4,226,858
Net income per share - basic	$	3.86	$	1.22		$	13.53	$	13.46
Net income per share - diluted	$	3.79	$	1.21		$	13.29	$	13.31
Shares used in per share calculation - basic		312,251		314,651			310,806		313,959
Shares used in per share calculation - diluted		317,925		316,864			316,210		317,514

* Derived from audited financial statements.

Google Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2007			2008			2007*			2008
	(unaudited)									(unaudited)
Operating activities
Net income	$	1,206,449		$	382,442		$	4,203,720		$	4,226,858
Adjustments:
Depreciation and amortization of property and equipment		241,902			313,475			807,743			1,212,237
Impairment charges on equity investments		—			1,094,757			—			1,094,757
Amortization of intangibles and other		48,034			72,035			159,915			287,650
Stock-based compensation		245,300			286,172			868,646			1,119,766
Excess tax benefits from stock-based award activity		(140,629	)		(44,318	)		(379,206	)		(159,088	)
Deferred income taxes		20,308			(100,048	)		(164,212	)		(224,645	)
Other, net		(32,526	)		(17,422	)		(39,741	)		(31,910	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable		(277,822	)		(116,138	)		(837,247	)		(334,464	)
Income taxes, net		129,234			73,354			744,802			626,027
Prepaid revenue share, expenses and other assets		(61,427	)		22,827			(298,689	)		(147,132	)
Accounts payable		49,980			(59,374	)		70,135			(211,539	)
Accrued expenses and other liabilities		212,383			176,025			418,905			338,907
Accrued revenue share		13,864			18,433			150,310			14,000
Deferred revenue		38,198			20,079			70,329			41,433
Net cash provided by operating activities		1,693,248			2,122,299			5,775,410			7,852,857
Investing activities
Purchases of property and equipment		(678,209	)		(367,844	)		(2,402,840	)		(2,358,461	)
Purchases of marketable securities		(4,240,913	)		(7,542,011	)		(15,997,060	)		(15,356,304	)
Maturities and sales of marketable securities		4,140,472			6,127,893			15,659,473			15,762,796
Investments in non-marketable equity securities		(13,223	)		(2,285	)		(34,511	)		(47,154	)
Acquisitions, net of cash acquired and proceeds received from divestiture, and purchases of intangible and other assets		(83,559	)		(32,591	)		(906,651	)		(3,320,299	)
Net cash used in investing activities		(875,432	)		(1,816,838	)		(3,681,589	)		(5,319,422	)
Financing activities
Net proceeds (payments) related to stock-based award activity		4,788			(33,269	)		23,861			(71,521	)
Excess tax benefits from stock-based award activity		140,629			44,318			379,206			159,088
Net cash provided by financing activities		145,417			11,049			403,067			87,567
Effect of exchange rate changes on cash and cash equivalents		11,956			(30,307	)		40,034			(45,923	)
Net increase in cash and cash equivalents		975,189			286,203			2,536,922			2,575,079
Cash and cash equivalents at beginning of period		5,106,404			8,370,469			3,544,671			6,081,593
Cash and cash equivalents at end of period	$	6,081,593		$	8,656,672		$	6,081,593		$	8,656,672

* Derived from audited financial statements.

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

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2007			2008			2007			2008
Advertising revenues:
Google web sites	$	3,121,539		$	3,811,166		$	10,624,705		$	14,413,826
Google Network web sites		1,635,836			1,693,405			5,787,938			6,714,688
Total advertising revenues		4,757,375			5,504,571			16,412,643			21,128,514
Licensing and other revenues		69,304			196,333			181,343			667,036
Revenues	$	4,826,679		$	5,700,904		$	16,593,986		$	21,795,550
The following table presents our revenues, by revenue source, as a percentage of total revenues for the periods presented (unaudited):
	Three Months Ended December 31,						Twelve Months Ended December 31,
	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	%