Exhibit 99.2
Google Inc.
CONSOLIDATED BALANCE SHEETS
(In millions)
As of December 31, 2011 | As of December 31, 2012 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 9,983 | $ | 14,778 | |||
Marketable securities | 34,643 | 33,310 | |||||
Accounts receivable, net of allowance | 5,427 | 7,885 | |||||
Inventories | 35 | 505 | |||||
Receivable under reverse repurchase agreements | 745 | 700 | |||||
Deferred income taxes, net | 215 | 1,144 | |||||
Prepaid revenue share, expenses and other assets | 1,710 | 2,132 | |||||
Total current assets | 52,758 | 60,454 | |||||
Prepaid revenue share, expenses and other assets, non-current | 499 | 2,011 | |||||
Non-marketable equity securities | 790 | 1,469 | |||||
Property and equipment, net | 9,603 | 11,854 | |||||
Intangible assets, net | 1,578 | 7,473 | |||||
Goodwill | 7,346 | 10,537 | |||||
Total assets | $ | 72,574 | $ | 93,798 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 588 | $ | 2,012 | |||
Short-term debt | 1,218 | 2,549 | |||||
Accrued compensation and benefits | 1,818 | 2,239 | |||||
Accrued expenses and other current liabilities | 1,370 | 3,258 | |||||
Accrued revenue share | 1,168 | 1,471 | |||||
Securities lending payable | 2,007 | 1,673 | |||||
Deferred revenue | 547 | 895 | |||||
Income taxes payable, net | 197 | 240 | |||||
Total current liabilities | 8,913 | 14,337 | |||||
Long-term debt | 2,986 | 2,988 | |||||
Deferred revenue, non-current | 44 | 100 | |||||
Income taxes payable, non-current | 1,693 | 2,046 | |||||
Deferred income taxes, net, non-current | 287 | 1,872 | |||||
Other long-term liabilities | 506 | 740 | |||||
Stockholders’ equity: | |||||||
Common stock and additional paid-in capital | 20,264 | 22,835 | |||||
Accumulated other comprehensive income | 276 | 538 | |||||
Retained earnings | 37,605 | 48,342 | |||||
Total stockholders’ equity | 58,145 | 71,715 | |||||
Total liabilities and stockholders’ equity | $ | 72,574 | $ | 93,798 |
Google Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except share amounts which are reflected in thousands and per share amounts)
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2011 | 2012 | 2011 | 2012 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Revenues: | |||||||||||||||
Google (advertising and other) | $ | 10,584 | $ | 12,905 | $ | 37,905 | $ | 46,039 | |||||||
Motorola Mobile (hardware and other) | — | 1,514 | — | 4,136 | |||||||||||
Total revenues | 10,584 | 14,419 | 37,905 | 50,175 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues - Google (advertising and other) (1) | 3,702 | 4,963 | 13,188 | 17,176 | |||||||||||
Cost of revenues - Motorola Mobile (hardware and other) (1) | — | 1,250 | — | 3,458 | |||||||||||
Research and development (1) | 1,298 | 1,935 | 5,162 | 6,793 | |||||||||||
Sales and marketing (1) | 1,268 | 1,751 | 4,589 | 6,143 | |||||||||||
General and administrative (1) | 809 | 1,126 | 2,724 | 3,845 | |||||||||||
Charge related to the resolution of Department of Justice investigation | — | — | 500 | — | |||||||||||
Total costs and expenses | 7,077 | 11,025 | 26,163 | 37,415 | |||||||||||
Income from operations | 3,507 | 3,394 | 11,742 | 12,760 | |||||||||||
Interest and other income, net | (18 | ) | 152 | 584 | 626 | ||||||||||
Income from continuing operations before income taxes | 3,489 | 3,546 | 12,326 | 13,386 | |||||||||||
Provision for income taxes | 784 | 639 | 2,589 | 2,598 | |||||||||||
Net income from continuing operations | 2,705 | 2,907 | 9,737 | 10,788 | |||||||||||
Net loss from discontinued operations | — | (21 | ) | — | (51 | ) | |||||||||
Net Income | $ | 2,705 | $ | 2,886 | $ | 9,737 | $ | 10,737 | |||||||
Net income (loss) per share - basic: | |||||||||||||||
Continuing operations | $ | 8.34 | $ | 8.83 | $ | 30.17 | $ | 32.97 | |||||||
Discontinued operations | — | (0.06 | ) | — | (0.16 | ) | |||||||||
Net income per share - basic | $ | 8.34 | $ | 8.77 | $ | 30.17 | $ | 32.81 | |||||||
Net income (loss) per share - diluted | |||||||||||||||
Continuing operations | $ | 8.22 | $ | 8.68 | $ | 29.76 | $ | 32.46 | |||||||
Discontinued operations | — | (0.06 | ) | — | (0.15 | ) | |||||||||
Net income per share - diluted | $ | 8.22 | $ | 8.62 | $ | 29.76 | $ | 32.31 | |||||||
Shares used in per share calculation - basic | 324,204 | 329,363 | 322,778 | 327,213 | |||||||||||
Shares used in per share calculation - diluted | 329,002 | 334,977 | 327,214 | 332,305 | |||||||||||
(1) Includes stock-based compensation expense as follows: | |||||||||||||||
Cost of revenues - Google (advertising and other) | $ | 77 | $ | 101 | $ | 249 | $ | 359 | |||||||
Cost of revenues - Motorola Mobile (hardware and other) | — | 4 | — | 14 | |||||||||||
Research and development | 266 | 364 | 1,061 | 1,325 | |||||||||||
Sales and marketing | 105 | 130 | 361 | 498 | |||||||||||
General and administrative | 88 | 109 | 303 | 453 | |||||||||||
$ | 536 | $ | 708 | $ | 1,974 | $ | 2,649 |
Google Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2011 | 2012 | 2011 | 2012 | ||||||||||||
Operating activities | (unaudited) | (unaudited) | |||||||||||||
Net income | $ | 2,705 | $ | 2,886 | $ | 9,737 | $ | 10,737 | |||||||
Adjustments: | |||||||||||||||
Depreciation and amortization of property and equipment | 385 | 630 | 1,396 | 1,988 | |||||||||||
Amortization of intangible and other assets | 118 | 323 | 455 | 974 | |||||||||||
Stock-based compensation expense | 536 | 716 | 1,974 | 2,692 | |||||||||||
Excess tax benefits from stock-based award activities | (25 | ) | (75 | ) | (86 | ) | (188 | ) | |||||||
Deferred income taxes | (183 | ) | (289 | ) | 343 | (266 | ) | ||||||||
Impairment of equity investments | 110 | — | 110 | — | |||||||||||
Gain on divestiture of business | — | — | — | (188 | ) | ||||||||||
Other | 3 | (4 | ) | 6 | (28 | ) | |||||||||
Changes in assets and liabilities, net of effects of acquisitions and divestiture: | |||||||||||||||
Accounts receivable | (909 | ) | (559 | ) | (1,156 | ) | (787 | ) | |||||||
Income taxes, net | 463 | 156 | 731 | 1,492 | |||||||||||
Inventories | (12 | ) | 113 | (30 | ) | 301 | |||||||||
Prepaid revenue share, expenses and other assets | (104 | ) | 382 | (232 | ) | (833 | ) | ||||||||
Accounts payable | 29 | (225 | ) | 101 | (499 | ) | |||||||||
Accrued expenses and other liabilities | 540 | 278 | 795 | 762 | |||||||||||
Accrued revenue share | 189 | 356 | 259 | 299 | |||||||||||
Deferred revenue | 79 | (19 | ) | 162 | 163 | ||||||||||
Net cash provided by operating activities | 3,924 | 4,669 | 14,565 | 16,619 | |||||||||||
Investing activities | |||||||||||||||
Purchases of property and equipment | (951 | ) | (1,020 | ) | (3,438 | ) | (3,273 | ) | |||||||
Purchases of marketable securities | (17,979 | ) | (9,164 | ) | (61,672 | ) | (33,410 | ) | |||||||
Maturities and sales of marketable securities | 15,639 | 5,380 | 48,746 | 35,180 | |||||||||||
Investments in non-marketable equity securities | (70 | ) | (450 | ) | (428 | ) | (696 | ) | |||||||
Cash collateral related to securities lending | (1,048 | ) | (13 | ) | (354 | ) | (334 | ) | |||||||
Investments in reverse repurchase agreements | 400 | (150 | ) | 5 | 45 | ||||||||||
Acquisitions, net of cash acquired and proceeds received from divestiture, and purchases of intangibles and other assets | (550 | ) | (97 | ) | (1,900 | ) | (10,568 | ) | |||||||
Net cash used in investing activities | (4,559 | ) | (5,514 | ) | (19,041 | ) | (13,056 | ) | |||||||
Financing activities | |||||||||||||||
Net proceeds (payments) related to stock-based award activities | 15 | (98 | ) | (5 | ) | (287 | ) | ||||||||
Excess tax benefits from stock-based award activities | 25 | 75 | 86 | 188 | |||||||||||
Proceeds from issuance of debt, net of costs | 2,125 | 3,984 | 10,905 | 16,109 | |||||||||||
Repayments of debt | (2,125 | ) | (4,653 | ) | (10,179 | ) | (14,781 | ) | |||||||
Net cash provided by (used in) financing activities | 40 | (692 | ) | 807 | 1,229 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (52 | ) | 55 | 22 | 3 | ||||||||||
Net increase (decrease) in cash and cash equivalents | (647 | ) | (1,482 | ) | (3,647 | ) | 4,795 | ||||||||
Cash and cash equivalents at beginning of period | 10,630 | 16,260 | 13,630 | 9,983 | |||||||||||
Cash and cash equivalents at end of period | $ | 9,983 | $ | 14,778 | $ | 9,983 | $ | 14,778 |
The following table presents our consolidated revenues by revenue source (in millions):
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2011 | 2012 | 2011 | 2012 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Advertising revenues: | |||||||||||||||
Google websites | $ | 7,294 | $ | 8,640 | $ | 26,145 | $ | 31,221 | |||||||
Google Network Members’ websites | 2,880 | 3,436 | 10,386 | 12,465 | |||||||||||
Total advertising revenues | 10,174 | 12,076 | 36,531 | 43,686 | |||||||||||
Other revenues | 410 | 829 | 1,374 | 2,353 | |||||||||||
Total Google revenues (advertising and other) | 10,584 | 12,905 | 37,905 | 46,039 | |||||||||||
Total Motorola Mobile revenues (hardware and other) | — | 1,514 | — | 4,136 | |||||||||||
Consolidated revenues | $ | 10,584 | $ | 14,419 | $ | 37,905 | $ | 50,175 |
The following table presents our Google revenues, by revenue source, as a percentage of Google revenues:
Three Months Ended | Twelve Months Ended | ||||||||||
December 31, | December 31, | ||||||||||
2011 | 2012 | 2011 | 2012 | ||||||||
(unaudited) | (unaudited) | ||||||||||
Advertising revenues: | |||||||||||
Google websites | 69 | % | 67 | % | 69 | % | 68 | % | |||
Google Network Members’ websites | 27 | % | 27 | % | 27 | % | 27 | % | |||
Total advertising revenues | 96 | % | 94 | % | 96 | % | 95 | % | |||
Other revenues | 4 | % | 6 | % | 4 | % | 5 | % | |||
Google revenues | 100 | % | 100 | % | 100 | % | 100 | % |