Google 8-K Google Announces Fourth Quarter and Fiscal Year 2011 Results

Exhibit 99.2

Google Inc.

CONSOLIDATED BALANCE SHEETS

(In millions)

	As of December 31, 2010*		As of December 31, 2011
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	13,630	$	9,983
Marketable securities		21,345		34,643
Accounts receivable, net of allowance		4,252		5,427
Receivable under reverse repurchase agreements		750		745
Deferred income taxes, net		259		215
Prepaid revenue share, expenses and other assets		1,326		1,745
Total current assets		41,562		52,758
Prepaid revenue share, expenses and other assets, non-current		442		499
Deferred income taxes, net, non-current		265		—
Non-marketable equity securities		523		790
Property and equipment, net		7,759		9,603
Intangible assets, net		1,044		1,578
Goodwill		6,256		7,346
Total assets	$	57,851	$	72,574
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	483	$	588
Short-term debt		3,465		1,218
Accrued compensation and benefits		1,410		1,818
Accrued expenses and other current liabilities		961		1,370
Accrued revenue share		885		1,168
Securities lending payable		2,361		2,007
Deferred revenue		394		547
Income taxes payable, net		37		197
Total current liabilities		9,996		8,913
Long-term debt		—		2,986
Deferred revenue, non-current		35		44
Income taxes payable, non-current		1,200		1,693
Deferred income taxes, net, non-current		—		287
Other long-term liabilities		379		506
Stockholders' equity:
Common stock and additional paid-in capital		18,235		20,264
Accumulated other comprehensive income		138		276
Retained earnings		27,868		37,605
Total stockholders' equity		46,241		58,145
Total liabilities and stockholders' equity	$	57,851	$	72,574

* Derived from audited financial statements.

Google Inc.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except share amounts which are reflected in thousands and per share amounts)

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2010		2011			2010*		2011
	(unaudited)							(unaudited)
Revenues	$	8,440	$	10,584		$	29,321	$	37,905
Costs and expenses:
Cost of revenues (including stock-based compensation expense of $45, $77, $67, $249)		2,946		3,702			10,417		13,188
Research and development (including stock-based compensation expense of $224, $266, $861, $1,061)		1,051		1,298			3,762		5,162
Sales and marketing (including stock-based compensation expense of $76, $105, $261, $361)		902		1,268			2,799		4,589
General and administrative (including stock-based compensation expense of $51, $88, $187, $303)		559		809			1,962		2,724
Charge related to the resolution of Department of Justice investigation		—		—			—		500
Total costs and expenses		5,458		7,077			18,940		26,163
Income from operations		2,982		3,507			10,381		11,742
Interest and other income (expense), net		160		(18	)		415		584
Income before income taxes		3,142		3,489			10,796		12,326
Provision for income taxes		599		784			2,291		2,589
Net income	$	2,543	$	2,705		$	8,505	$	9,737
Net income per share - basic	$	7.95	$	8.34		$	26.69	$	30.17
Net income per share - diluted	$	7.81	$	8.22		$	26.31	$	29.76
Shares used in per share calculation - basic		319,946		324,204			318,702		322,778
Shares used in per share calculation - diluted		325,536		329,002			323,251		327,214

* Derived from audited financial statements.

Google Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2010			2011			2010*			2011
	(unaudited)									(unaudited)
Operating activities
Net income	$	2,543		$	2,705		$	8,505		$	9,737
Adjustments:
Depreciation and amortization of property and equipment		280			385			1,067			1,396
Amortization of intangible and other assets		101			118			329			455
Impairment of equity investments		—			110			—			110
Stock-based compensation expense		396			536			1,376			1,974
Excess tax benefits from stock-based award activities		(51	)		(25	)		(94	)		(86	)
Deferred income taxes		(14	)		(183	)		9			343
Other		(5	)		3			(12	)		6
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable		(673	)		(909	)		(1,129	)		(1,156	)
Income taxes, net		397			463			102			731
Prepaid revenue share, expenses and other assets		(59	)		(116	)		(414	)		(262	)
Accounts payable		(42	)		29			272			101
Accrued expenses and other liabilities		429			540			745			795
Accrued revenue share		145			189			214			259
Deferred revenue		79			79			111			162
Net cash provided by operating activities		3,526			3,924			11,081			14,565
Investing activities
Purchases of property and equipment		(2,545	)		(951	)		(4,018	)		(3,438	)
Purchases of marketable securities		(6,396	)		(17,979	)		(43,985	)		(61,672	)
Maturities and sales of marketable securities		6,730			15,639			37,099			48,746
Investments in non-marketable equity securities		(55	)		(70	)		(320	)		(428	)
Cash collateral received (returned) related to securities lending		(500	)		(1,048	)		2,361			(354	)
Investments in reverse repurchase agreements		125			400			(750	)		5
Acquisitions, net of cash acquired, and purchases of intangible and other assets		(208	)		(550	)		(1,067	)		(1,900	)
Net cash used in investing activities		(2,849	)		(4,559	)		(10,680	)		(19,041	)
Financing activities
Net proceeds (payments) related to stock-based award activities		359			15			294			(5	)
Excess tax benefits from stock-based award activities		51			25			94			86
Repurchase of common stock in connection with acquisitions		—			—			(801	)		—
Proceeds from issuance of debt, net of costs		2,702			2,125			5,246			10,905
Repayments of debt		(1,360	)		(2,125	)		(1,783	)		(10,179	)
Net cash provided by financing activities		1,752			40			3,050			807
Effect of exchange rate changes on cash and cash equivalents		(56	)		(52	)		(19	)		22
Net increase (decrease) in cash and cash equivalents		2,373			(647	)		3,432			(3,647	)
Cash and cash equivalents at beginning of period		11,257			10,630			10,198			13,630
Cash and cash equivalents at end of period	$	13,630		$	9,983		$	13,630		$	9,983

* Derived from audited financial statements.

The following table presents our revenues by revenue source (in millions, unaudited):

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2010		2011		2010		2011
Advertising revenues:
Google websites	$	5,672	$	7,294	$	19,444	$	26,145
Google Network Members' websites		2,495		2,880		8,792		10,386
Total advertising revenues		8,167		10,174		28,236		36,531
Other revenues		273		410		1,085		1,374
Revenues	$	8,440	$	10,584	$	29,321	$	37,905

The following table presents our revenues, by revenue source, as a percentage of total revenues (unaudited):

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2010			2011			2010			2011
Advertising revenues:
Google websites		67	%		69	%		66	%		69	%
Google Network Members' websites		30	%		27	%		30	%		27	%
Total advertising revenues		97	%		96	%		96	%		96	%
Other revenues		3	%		4	%		4	%		4	%
Revenues		100	%		100	%		100	%		100	%