Exhibit 99.2
Google Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, 2008* | June 30, 2009 | |||||
(unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 8,656,672 | $ | 11,911,351 | ||
Marketable securities | 7,189,099 | 7,432,655 | ||||
Accounts receivable, net of allowance | 2,642,192 | 2,701,912 | ||||
Deferred income taxes, net | 286,105 | 575,976 | ||||
Income taxes receivable, net | — | 145,843 | ||||
Prepaid revenue share, expenses and other assets | 1,404,114 | 1,067,116 | ||||
Total current assets | 20,178,182 | 23,834,853 | ||||
Prepaid revenue share, expenses and other assets, non-current | 433,846 | 406,136 | ||||
Deferred income taxes, net, non-current | — | 124,647 | ||||
Non-marketable equity securities | 85,160 | 93,925 | ||||
Property and equipment, net | 5,233,843 | 5,005,900 | ||||
Intangible assets, net | 996,690 | 856,386 | ||||
Goodwill | 4,839,854 | 4,836,913 | ||||
Total assets | $ | 31,767,575 | $ | 35,158,760 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 178,004 | $ | 221,914 | ||
Accrued compensation and benefits | 811,643 | 589,862 | ||||
Accrued expenses and other current liabilities | 480,263 | 411,226 | ||||
Accrued revenue share | 532,547 | 550,199 | ||||
Deferred revenue | 218,084 | 227,761 | ||||
Income taxes payable, net | 81,549 | — | ||||
Total current liabilities | 2,302,090 | 2,000,962 | ||||
Deferred revenue, non-current | 29,818 | 31,675 | ||||
Income taxes payable, net, non-current | 890,115 | 1,232,984 | ||||
Deferred income taxes, net, non-current | 12,515 | — | ||||
Other long-term liabilities | 294,175 | 298,283 | ||||
Stockholders’ equity: | ||||||
Common stock | 315 | 316 | ||||
Additional paid-in capital | 14,450,338 | 15,044,103 | ||||
Accumulated other comprehensive income | 226,579 | 81,434 | ||||
Retained earnings | 13,561,630 | 16,469,003 | ||||
Total stockholders’ equity | 28,238,862 | 31,594,856 | ||||
Total liabilities and stockholders’ equity | $ | 31,767,575 | $ | 35,158,760 | ||
* 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, | |||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||
(unaudited) | ||||||||||||||
Revenues | $ | 5,367,212 | $ | 5,522,897 | $ | 10,553,255 | $ | 11,031,887 | ||||||
Costs and expenses: | ||||||||||||||
Cost of revenues (including stock-based compensation expense of $9,363, $13,592, $18,511, $26,129) | 2,147,575 | 2,107,971 | 4,258,111 | 4,209,475 | ||||||||||
Research and development (including stock-based compensation expense of $187,281, $182,209, $381,081, $350,770) | 682,210 | 707,626 | 1,355,279 | 1,349,269 | ||||||||||
Sales and marketing (including stock-based compensation expense of $42,593, $57,294, $85,169, $116,320) | 484,552 | 469,039 | 931,450 | 902,980 | ||||||||||
General and administrative (including stock-based compensation expense of $33,539, $39,975, $68,794, $77,334) | 474,910 | 364,367 | 884,215 | 812,678 | ||||||||||
Total costs and expenses | 3,789,247 | 3,649,003 | 7,429,055 | 7,274,402 | ||||||||||
Income from operations | 1,577,965 | 1,873,894 | 3,124,200 | 3,757,485 | ||||||||||
Interest and other income (expense), net | 57,923 | (17,718 | ) | 225,266 | (11,508 | ) | ||||||||
Income before income taxes | 1,635,888 | 1,856,176 | 3,349,466 | 3,745,977 | ||||||||||
Provision for income taxes | 388,497 | 371,631 | 794,989 | 838,604 | ||||||||||
Net income | $ | 1,247,391 | $ | 1,484,545 | $ | 2,554,477 | $ | 2,907,373 | ||||||
Net income per share - basic | $ | 3.97 | $ | 4.70 | $ | 8.15 | $ | 9.21 | ||||||
Net income per share - diluted | $ | 3.92 | $ | 4.66 | $ | 8.04 | $ | 9.15 | ||||||
Shares used in per share calculation - basic | 313,817 | 315,901 | 313,473 | 315,576 | ||||||||||
Shares used in per share calculation - diluted | 318,023 | 318,536 | 317,708 | 317,878 | ||||||||||
Google Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Operating activities | ||||||||||||||||
Net income | $ | 1,247,391 | $ | 1,484,545 | $ | 2,554,477 | $ | 2,907,373 | ||||||||
Adjustments: | ||||||||||||||||
Depreciation and amortization of property and equipment | 308,716 | 310,982 | 589,280 | 632,111 | ||||||||||||
Amortization of intangibles and other | 82,891 | 65,975 | 138,851 | 148,068 | ||||||||||||
Stock-based compensation expense | 272,776 | 293,070 | 553,555 | 570,553 | ||||||||||||
Excess tax benefits from stock-based award activities | (43,878 | ) | (4,515 | ) | (94,979 | ) | (36,359 | ) | ||||||||
Deferred income taxes | (67,676 | ) | (101,584 | ) | (105,890 | ) | (114,431 | ) | ||||||||
Other, net | 20,245 | (1,678 | ) | (24,658 | ) | (23,087 | ) | |||||||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||||||||||||
Accounts receivable | (72,883 | ) | (139,118 | ) | (296,376 | ) | (41,728 | ) | ||||||||
Income taxes, net | 90,184 | (388,271 | ) | 528,359 | (63,518 | ) | ||||||||||
Prepaid revenue share, expenses and other assets | (141,219 | ) | 10,338 | (182,803 | ) | 87,795 | ||||||||||
Accounts payable | (14,547 | ) | 19,936 | 39,237 | 41,815 | |||||||||||
Accrued expenses and other liabilities | 87,026 | 41,172 | (147,251 | ) | (281,167 | ) | ||||||||||
Accrued revenue share | (6,326 | ) | 14,859 | (16,450 | ) | 19,123 | ||||||||||
Deferred revenue | 3,454 | 3,461 | 10,248 | 12,136 | ||||||||||||
Net cash provided by operating activities | 1,766,154 | 1,609,172 | 3,545,600 | 3,858,684 | ||||||||||||
Investing activities | ||||||||||||||||
Purchases of property and equipment | (697,517 | ) | (139,437 | ) | (1,539,114 | ) | (402,192 | ) | ||||||||
Purchases of marketable securities | (2,101,798 | ) | (5,390,722 | ) | (4,921,310 | ) | (10,635,567 | ) | ||||||||
Maturities and sales of marketable securities | 2,037,331 | 5,325,719 | 7,416,559 | 10,435,309 | ||||||||||||
Investments in non-marketable equity securities | (10,554 | ) | (9,681 | ) | (9,492 | ) | (28,431 | ) | ||||||||
Acquisitions, net of cash acquired, and purchases of intangible and other assets | (186,095 | ) | (3,021 | ) | (3,312,270 | ) | (5,093 | ) | ||||||||
Net cash used in investing activities | (958,633 | ) | (217,142 | ) | (2,365,627 | ) | (635,974 | ) | ||||||||
Financing activities | ||||||||||||||||
Net (payments) proceeds related to stock-based award activities | (301 | ) | 46,731 | (22,746 | ) | 9,995 | ||||||||||
Excess tax benefits from stock-based award activities | 43,878 | 4,515 | 94,979 | 36,359 | ||||||||||||
Net cash provided by financing activities | 43,577 | 51,246 | 72,233 | 46,354 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (7,311 | ) | 41,784 | 29,737 | (14,385 | ) | ||||||||||
Net increase in cash and cash equivalents | 843,787 | 1,485,060 | 1,281,943 | 3,254,679 | ||||||||||||
Cash and cash equivalents at beginning of period | 6,519,749 | 10,426,291 | 6,081,593 | 8,656,672 | ||||||||||||
Cash and cash equivalents at end of period | $ | 7,363,536 | $ | 11,911,351 | $ | 7,363,536 | $ | 11,911,351 | ||||||||
The following table presents our revenues by revenue source (in thousands, unaudited):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Advertising revenues: | ||||||||||||||||
Google web sites | $ | 3,530,145 | $ | 3,652,628 | $ | 6,930,550 | $ | 7,345,451 | ||||||||
Google Network web sites | 1,655,280 | 1,683,500 | 3,341,421 | 3,321,542 | ||||||||||||
Total advertising revenues | 5,185,425 | 5,336,128 | 10,271,971 | 10,666,993 | ||||||||||||
Licensing and other revenues | 181,787 | 186,769 | 281,284 | 364,894 | ||||||||||||
Revenues | $ | 5,367,212 | $ | 5,522,897 | $ | 10,553,255 | $ | 11,031,887 | ||||||||
The following table presents our revenues, by revenue source, as a percentage of total revenues (unaudited):
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| |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Advertising revenues: | ||||||||||||||||
Google web sites | 66 | % | 66 | % | 66 | % | 67 | % | ||||||||
Google Network web sites | 31 | % | 31 | % | 31 | % | 30 | % | ||||||||
Total advertising revenues | 97 | % | 97 | % | 97 | % | 97 | % | ||||||||
Licensing and other revenues | 3 | % | 3 | % | 3 | % | 3 | % | ||||||||
Revenues | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||