Exhibit 99.2
Google Inc.
CONSOLIDATED BALANCE SHEETS
(In millions)
| As of December 31, 2011* | As of June 30, 2012 | |||||||
| (unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,983 | $ | 15,437 | ||||
Marketable securities | 34,643 | 27,685 | ||||||
Accounts receivable, net of allowance | 5,427 | 6,866 | ||||||
Inventories | 35 | 634 | ||||||
Receivable under reverse repurchase agreements | 745 | 475 | ||||||
Deferred income taxes, net | 215 | 146 | ||||||
Prepaid revenue share, expenses and other assets | 1,710 | 2,614 | ||||||
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Total current assets | 52,758 | 53,857 | ||||||
Prepaid revenue share, expenses and other assets, non-current | 499 | 2,263 | ||||||
Non-marketable equity securities | 790 | 1,040 | ||||||
Property and equipment, net | 9,603 | 10,909 | ||||||
Intangible assets, net | 1,578 | 7,862 | ||||||
Goodwill | 7,346 | 10,120 | ||||||
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Total assets | $ | 72,574 | $ | 86,051 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 588 | $ | 2,419 | ||||
Short-term debt | 1,218 | 3,218 | ||||||
Accrued compensation and benefits | 1,818 | 1,626 | ||||||
Accrued expenses and other current liabilities | 1,370 | 2,750 | ||||||
Accrued revenue share | 1,168 | 1,175 | ||||||
Securities lending payable | 2,007 | 1,916 | ||||||
Deferred revenue | 547 | 767 | ||||||
Income taxes payable, net | 197 | 157 | ||||||
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Total current liabilities | 8,913 | 14,028 | ||||||
Long-term debt | 2,986 | 2,987 | ||||||
Deferred revenue, non-current | 44 | 97 | ||||||
Income taxes payable, non-current | 1,693 | 1,898 | ||||||
Deferred income taxes, net, non-current | 287 | 1,509 | ||||||
Other long-term liabilities | 506 | 811 | ||||||
Stockholders’ equity: | ||||||||
Common stock and additional paid-in capital | 20,264 | 21,357 | ||||||
Accumulated other comprehensive income | 276 | 84 | ||||||
Retained earnings | 37,605 | 43,280 | ||||||
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Total stockholders’ equity | 58,145 | 64,721 | ||||||
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Total liabilities and stockholders’ equity | $ | 72,574 | $ | 86,051 | ||||
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| * | 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 | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||
| (unaudited) | ||||||||||||||||
Revenues: | ||||||||||||||||
Google (advertising and other) | $ | 9,026 | $ | 10,964 | $ | 17,602 | $ | 21,609 | ||||||||
Motorola (hardware and other) | — | 1,250 | — | 1,250 | ||||||||||||
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Total revenues | 9,026 | 12,214 | 17,602 | 22,859 | ||||||||||||
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Costs and expenses: | ||||||||||||||||
Cost of revenues - Google (advertising and other)(1) | 3,172 | 3,984 | 6,107 | 7,773 | ||||||||||||
Cost of revenues - Motorola (hardware and other)(1) | — | 1,029 | — | 1,029 | ||||||||||||
Research and development(1) | 1,234 | 1,585 | 2,456 | 3,026 | ||||||||||||
Sales and marketing(1) | 1,091 | 1,433 | 2,117 | 2,702 | ||||||||||||
General and administrative(1) | 648 | 980 | 1,244 | 1,737 | ||||||||||||
Charge related to the resolution of Department of Justice investigation | — | — | 500 | — | ||||||||||||
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Total costs and expenses | 6,145 | 9,011 | 12,424 | 16,267 | ||||||||||||
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Income from operations | 2,881 | 3,203 | 5,178 | 6,592 | ||||||||||||
Interest and other income, net | 204 | 254 | 300 | 410 | ||||||||||||
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Income before income taxes | 3,085 | 3,457 | 5,478 | 7,002 | ||||||||||||
Provision for income taxes | 580 | 672 | 1,174 | 1,327 | ||||||||||||
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Net income | $ | 2,505 | $ | 2,785 | $ | 4,304 | $ | 5,675 | ||||||||
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Net income per share - basic | $ | 7.77 | $ | 8.54 | $ | 13.37 | $ | 17.42 | ||||||||
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Net income per share - diluted | $ | 7.68 | $ | 8.42 | $ | 13.19 | $ | 17.17 | ||||||||
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Shares used in per share calculation - basic | 322,228 | 326,272 | 321,878 | 325,786 | ||||||||||||
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Shares used in per share calculation - diluted | 326,036 | 330,793 | 326,209 | 330,464 | ||||||||||||
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(1) Includes stock-based compensation expense as follows: |
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Cost of revenues - Google (advertising and other) | $ | 51 | $ | 82 | $ | 100 | $ | 156 | ||||||||
Cost of revenues - Motorola (hardware and other) | — | 5 | — | 5 | ||||||||||||
Research and development | 247 | 291 | 484 | 590 | ||||||||||||
Sales and marketing | 74 | 120 | 152 | 217 | ||||||||||||
General and administrative | 63 | 160 | 130 | 246 | ||||||||||||
Google Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||
| (unaudited) | ||||||||||||||||
Operating activities | ||||||||||||||||
Net income | $ | 2,505 | $ | 2,785 | $ | 4,304 | $ | 5,675 | ||||||||
Adjustments: | ||||||||||||||||
Depreciation and amortization of property and equipment | 347 | 473 | 648 | 851 | ||||||||||||
Amortization of intangible and other assets | 108 | 197 | 208 | 330 | ||||||||||||
Stock-based compensation expense | 435 | 658 | 866 | 1,214 | ||||||||||||
Excess tax benefits from stock-based award activities | (9 | ) | (27 | ) | (33 | ) | (55 | ) | ||||||||
Deferred income taxes | 175 | (163 | ) | 464 | 191 | |||||||||||
Gain on sale of marketable equity securities | — | — | — | (44 | ) | |||||||||||
Gain on divestiture of business | — | (188 | ) | — | (188 | ) | ||||||||||
Other | 19 | 12 | 55 | (12 | ) | |||||||||||
Changes in assets and liabilities, net of effects of acquisitions and divestiture: | ||||||||||||||||
Accounts receivable | (205 | ) | (222 | ) | (24 | ) | 79 | |||||||||
Income taxes, net | (171 | ) | 1,026 | (98 | ) | 1,169 | ||||||||||
Inventories | 2 | 202 | (1 | ) | 170 | |||||||||||
Prepaid revenue share, expenses and other assets | (72 | ) | (912 | ) | (147 | ) | (1,188 | ) | ||||||||
Accounts payable | 50 | (249 | ) | 77 | (80 | ) | ||||||||||
Accrued expenses and other liabilities | 260 | 612 | 297 | (243 | ) | |||||||||||
Accrued revenue share | 39 | 34 | 6 | 23 | ||||||||||||
Deferred revenue | 36 | 14 | 69 | 54 | ||||||||||||
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| Net cash provided by operating activities | 3,519 | 4,252 | 6,691 | 7,946 | ||||||||||||
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| Investing activities | ||||||||||||||||
Purchases of property and equipment | (917 | ) | (774 | ) | (1,807 | ) | (1,381 | ) | ||||||||
Purchases of marketable securities | (13,364 | ) | (6,854 | ) | (20,955 | ) | (15,542 | ) | ||||||||
Maturities and sales of marketable securities | 8,982 | 5,456 | 13,627 | 22,657 | ||||||||||||
Investments in non-marketable equity securities | (212 | ) | (99 | ) | (343 | ) | (202 | ) | ||||||||
Cash collateral related to securities lending | 57 | (336 | ) | (424 | ) | (91 | ) | |||||||||
Investments in reverse repurchase agreements | (445 | ) | 75 | (270 | ) | 270 | ||||||||||
Acquisitions, net of cash acquired and proceeds received from divestiture, and purchases of intangibles and other assets | (715 | ) | (9,854 | ) | (863 | ) | (9,946 | ) | ||||||||
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| Net cash used in investing activities | (6,614 | ) | (12,386 | ) | (11,035 | ) | (4,235 | ) | ||||||||
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| Financing activities | ||||||||||||||||
Net proceeds (payments) related to stock-based award activities | (28 | ) | (137 | ) | 88 | (184 | ) | |||||||||
Excess tax benefits from stock-based award activities | 9 | 27 | 33 | 55 | ||||||||||||
Proceeds from issuance of debt, net of costs | 5,846 | 4,602 | 8,030 | 7,751 | ||||||||||||
Repayments of debt | (4,869 | ) | (3,853 | ) | (7,304 | ) | (5,753 | ) | ||||||||
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| Net cash provided by financing activities | 958 | 639 | 847 | 1,869 | ||||||||||||
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Effect of exchange rate changes on cash and cash equivalents | 42 | (176 | ) | 187 | (126 | ) | ||||||||||
| Net increase (decrease) in cash and cash equivalents | (2,095 | ) | (7,671 | ) | (3,310 | ) | 5,454 | |||||||||
| Cash and cash equivalents at beginning of period | 12,415 | 23,108 | 13,630 | 9,983 | ||||||||||||
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| Cash and cash equivalents at end of period | $ | 10,320 | $ | 15,437 | $ | 10,320 | $ | 15,437 | ||||||||
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The following table presents our consolidated revenues by revenue source (in millions, unaudited):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||
Advertising revenues: | ||||||||||||||||
Google websites | $ | 6,232 | $ | 7,542 | $ | 12,111 | $ | 14,854 | ||||||||
Google Network Members’ websites | 2,484 | 2,983 | 4,911 | 5,896 | ||||||||||||
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Total advertising revenues | �� | 8,716 | 10,525 | 17,022 | 20,750 | |||||||||||
Other revenues | 310 | 439 | 580 | 859 | ||||||||||||
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Total Google revenues (advertising and other) | 9,026 | 10,964 | 17,602 | 21,609 | ||||||||||||
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Total Motorola revenues (hardware and other) | — | 1,250 | — | 1,250 | ||||||||||||
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Consolidated Revenues | $ | 9,026 | $ | 12,214 | $ | 17,602 | $ | 22,859 | ||||||||
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The following table presents our Google revenues, by revenue source, as a percentage of Google revenues (unaudited):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||
Advertising revenues: | ||||||||||||||||
Google websites | 69 | % | 69 | % | 69 | % | 69 | % | ||||||||
Google Network Members’ websites | 28 | % | 27 | % | 28 | % | 27 | % | ||||||||
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Total advertising revenues | 97 | % | 96 | % | 97 | % | 96 | % | ||||||||
Other revenues | 3 | % | 4 | % | 3 | % | 4 | % | ||||||||
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Google revenues | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
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