Exhibit 99.2
Google Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except share and par value amounts which are reflected in thousands,
and par value per share amounts)
As of December 31, 2012 | As of December 31, 2013 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 14,778 | $ | 18,898 | |||
Marketable securities | 33,310 | 39,819 | |||||
Total cash, cash equivalents, and marketable securities (including securities loaned of $3,160 and $5,059) | 48,088 | 58,717 | |||||
Accounts receivable, net of allowance of $581 and $631 | 7,885 | 8,882 | |||||
Inventories | 505 | 426 | |||||
Receivable under reverse repurchase agreements | 700 | 100 | |||||
Deferred income taxes, net | 1,144 | 1,526 | |||||
Income taxes receivable, net | 0 | 408 | |||||
Prepaid revenue share, expenses and other assets | 2,132 | 2,827 | |||||
Total current assets | 60,454 | 72,886 | |||||
Prepaid revenue share, expenses and other assets, non-current | 2,011 | 1,976 | |||||
Non-marketable equity investments | 1,469 | 1,976 | |||||
Property and equipment, net | 11,854 | 16,524 | |||||
Intangible assets, net | 7,473 | 6,066 | |||||
Goodwill | 10,537 | 11,492 | |||||
Total assets | $ | 93,798 | $ | 110,920 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,012 | $ | 2,453 | |||
Short-term debt | 2,549 | 3,009 | |||||
Accrued compensation and benefits | 2,239 | 2,502 | |||||
Accrued expenses and other current liabilities | 3,258 | 3,755 | |||||
Accrued revenue share | 1,471 | 1,729 | |||||
Securities lending payable | 1,673 | 1,374 | |||||
Deferred revenue | 895 | 1,062 | |||||
Income taxes payable, net | 240 | 24 | |||||
Total current liabilities | 14,337 | 15,908 | |||||
Long-term debt | 2,988 | 2,236 | |||||
Deferred revenue, non-current | 100 | 139 | |||||
Income taxes payable, non-current | 2,046 | 2,638 | |||||
Deferred income taxes, net, non-current | 1,872 | 1,947 | |||||
Other long-term liabilities | 740 | 743 | |||||
Stockholders’ equity: | |||||||
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding | 0 | 0 | |||||
Class A and Class B common stock and additional paid-in capital, $0.001 par value per share: 12,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000); 329,979 (Class A 267,448, Class B 62,531) and par value of $330 (Class A $267, Class B $63) and 335,832 (Class A 279,325, Class B 56,507) and par value of $336 (Class A $279, Class B $57) shares issued and outstanding | 22,835 | 25,922 |
Class C capital stock, $0.001 par value per share: 3,000,000 shares authorized; no shares issued and outstanding | 0 | 0 | |||||
Accumulated other comprehensive income | 538 | 125 | |||||
Retained earnings | 48,342 | 61,262 | |||||
Total stockholders’ equity | 71,715 | 87,309 | |||||
Total liabilities and stockholders’ equity | $ | 93,798 | $ | 110,920 |
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, | ||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Revenues: | |||||||||||||||
Google (advertising and other) | $ | 12,905 | $ | 15,707 | $ | 46,039 | $ | 55,519 | |||||||
Motorola Mobile (hardware and other) | 1,514 | 1,151 | 4,136 | 4,306 | |||||||||||
Total revenues | 14,419 | 16,858 | 50,175 | 59,825 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues - Google (advertising and other) (1) | 4,963 | 6,253 | 17,176 | 21,993 | |||||||||||
Cost of revenues - Motorola Mobile (hardware and other) (1) | 1,250 | 1,185 | 3,458 | 3,865 | |||||||||||
Research and development (1) | 1,935 | 2,111 | 6,793 | 7,952 | |||||||||||
Sales and marketing (1) | 1,751 | 2,126 | 6,143 | 7,253 | |||||||||||
General and administrative (1) | 1,126 | 1,261 | 3,845 | 4,796 | |||||||||||
Total costs and expenses | 11,025 | 12,936 | 37,415 | 45,859 | |||||||||||
Income from operations | 3,394 | 3,922 | 12,760 | 13,966 | |||||||||||
Interest and other income, net | 152 | 125 | 626 | 530 | |||||||||||
Income from continuing operations before income taxes | 3,546 | 4,047 | 13,386 | 14,496 | |||||||||||
Provision for income taxes | 639 | 666 | 2,598 | 2,282 | |||||||||||
Net income from continuing operations | 2,907 | 3,381 | 10,788 | 12,214 | |||||||||||
Net income (loss) from discontinued operations | (21 | ) | (5 | ) | (51 | ) | 706 | ||||||||
Net income | $ | 2,886 | $ | 3,376 | $ | 10,737 | $ | 12,920 | |||||||
Net income (loss) per share - basic: | |||||||||||||||
Continuing operations | $ | 8.83 | $ | 10.10 | $ | 32.97 | $ | 36.70 | |||||||
Discontinued operations | (0.06 | ) | (0.02 | ) | (0.16 | ) | 2.12 | ||||||||
Net income (loss) per share - basic | $ | 8.77 | $ | 10.08 | $ | 32.81 | $ | 38.82 | |||||||
Net income (loss) per share - diluted: | |||||||||||||||
Continuing operations | $ | 8.68 | $ | 9.91 | $ | 32.46 | $ | 36.05 | |||||||
Discontinued operations | (0.06 | ) | (0.01 | ) | (0.15 | ) | 2.08 | ||||||||
Net income (loss) per share - diluted | $ | 8.62 | $ | 9.90 | $ | 32.31 | $ | 38.13 | |||||||
Shares used in per share calculation - basic | 329,363 | 334,836 | 327,213 | 332,846 | |||||||||||
Shares used in per share calculation - diluted | 334,977 | 341,003 | 332,305 | 338,809 | |||||||||||
(1) Includes stock-based compensation expense as follows: | |||||||||||||||
Cost of revenues - Google (advertising and other) | $ | 101 | $ | 127 | $ | 359 | $ | 469 | |||||||
Cost of revenues - Motorola Mobile (hardware and other) | 4 | 4 | 14 | 18 | |||||||||||
Research and development | 364 | 482 | 1,325 | 1,717 | |||||||||||
Sales and marketing | 130 | 159 | 498 | 578 | |||||||||||
General and administrative | 109 | 130 | 453 | 486 | |||||||||||
$ | 708 | $ | 902 | $ | 2,649 | $ | 3,268 |
Google Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Operating activities | |||||||||||||||
Net income | $ | 2,886 | $ | 3,376 | $ | 10,737 | $ | 12,920 | |||||||
Adjustments: | |||||||||||||||
Depreciation and amortization of property and equipment | 630 | 757 | 1,988 | 2,781 | |||||||||||
Amortization of intangible and other assets | 323 | 279 | 974 | 1,158 | |||||||||||
Stock-based compensation expense | 716 | 902 | 2,692 | 3,343 | |||||||||||
Excess tax benefits from stock-based award activities | (75 | ) | (179 | ) | (188 | ) | (481 | ) | |||||||
Deferred income taxes | (289 | ) | (562 | ) | (266 | ) | (437 | ) | |||||||
Loss (gain) on divestiture of businesses | 0 | 5 | (188 | ) | (700 | ) | |||||||||
Other | (4 | ) | 62 | (28 | ) | 106 | |||||||||
Changes in assets and liabilities, net of effects of acquisitions: | |||||||||||||||
Accounts receivable | (559 | ) | (853 | ) | (787 | ) | (1,307 | ) | |||||||
Income taxes, net | 156 | 480 | 1,492 | 401 | |||||||||||
Inventories | 113 | (188 | ) | 301 | (234 | ) | |||||||||
Prepaid revenue share, expenses and other assets | 382 | (547 | ) | (833 | ) | (696 | ) | ||||||||
Accounts payable | (225 | ) | 320 | (499 | ) | 605 | |||||||||
Accrued expenses and other liabilities | 278 | 983 | 762 | 713 | |||||||||||
Accrued revenue share | 356 | 246 | 299 | 254 | |||||||||||
Deferred revenue | (19 | ) | 157 | 163 | 233 | ||||||||||
Net cash provided by operating activities | 4,669 | 5,238 | 16,619 | 18,659 | |||||||||||
Investing activities | |||||||||||||||
Purchases of property and equipment | (1,020 | ) | (2,255 | ) | (3,273 | ) | (7,358 | ) | |||||||
Purchases of marketable securities | (9,164 | ) | (13,698 | ) | (33,410 | ) | (45,444 | ) | |||||||
Maturities and sales of marketable securities | 5,380 | 15,073 | 35,180 | 38,314 | |||||||||||
Investments in non-marketable equity investments | (450 | ) | (98 | ) | (696 | ) | (569 | ) | |||||||
Cash collateral related to securities lending | (13 | ) | (519 | ) | (334 | ) | (299 | ) | |||||||
Investments in reverse repurchase agreements | (150 | ) | 0 | 45 | 600 | ||||||||||
Proceeds from divestiture of businesses | 0 | 0 | 0 | 2,525 | |||||||||||
Acquisitions, net of cash acquired, and purchases of intangibles and other assets | (97 | ) | (120 | ) | (10,568 | ) | (1,448 | ) | |||||||
Net cash used in investing activities | (5,514 | ) | (1,617 | ) | (13,056 | ) | (13,679 | ) | |||||||
Financing activities | |||||||||||||||
Net payments related to stock-based award activities | (98 | ) | (144 | ) | (287 | ) | (781 | ) | |||||||
Excess tax benefits from stock-based award activities | 75 | 179 | 188 | 481 | |||||||||||
Proceeds from issuance of debt, net of costs | 3,984 | 2,418 | 16,109 | 10,768 | |||||||||||
Repayments of debt | (4,653 | ) | (2,421 | ) | (14,781 | ) | (11,325 | ) |
Net cash provided by (used in) financing activities | (692 | ) | 32 | 1,229 | (857 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 55 | 3 | 3 | (3 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | (1,482 | ) | 3,656 | 4,795 | 4,120 | ||||||||||
Cash and cash equivalents at beginning of period | 16,260 | 15,242 | 9,983 | 14,778 | |||||||||||
Cash and cash equivalents at end of period | $ | 14,778 | $ | 18,898 | $ | 14,778 | $ | 18,898 |
The following table presents our Google segment revenues by revenue source(a) (in millions):
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Advertising revenues: | |||||||||||||||
Google websites | $ | 8,640 | $ | 10,551 | $ | 31,221 | $ | 37,453 | |||||||
Google Network Members' websites | 3,436 | 3,522 | 12,465 | 13,125 | |||||||||||
Total advertising revenues | 12,076 | 14,073 | 43,686 | 50,578 | |||||||||||
Other revenues | 829 | 1,647 | 2,353 | 4,972 | |||||||||||
Google segment revenues | $ | 12,905 | $ | 15,720 | $ | 46,039 | $ | 55,550 |
(a) In accordance with GAAP, Google segment revenues (and related percentages) are presented consistent with what is provided to the chief operating decision maker for purposes of making decisions about allocating resources to that segment and assessing its performance, and include $13 million and $31 million of revenues resulting from intersegment transactions that are eliminated in our consolidated results for the three months and twelve months ended December 31, 2013, respectively.
The following table presents our Google segment revenues, by revenue source, as a percentage of Google segment revenues(a):
Three Months Ended | Twelve Months Ended | ||||||||||
December 31, | December 31, | ||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||
(unaudited) | (unaudited) | ||||||||||
Advertising revenues: | |||||||||||
Google websites | 67 | % | 67 | % | 68 | % | 67 | % | |||
Google Network Members' websites | 27 | % | 23 | % | 27 | % | 24 | % | |||
Total advertising revenues | 94 | % | 90 | % | 95 | % | 91 | % | |||
Other revenues | 6 | % | 10 | % | 5 | % | 9 | % | |||
Google segment revenues | 100 | % | 100 | % | 100 | % | 100 | % |
(a) In accordance with GAAP, Google segment revenues (and related percentages) are presented consistent with what is provided to the chief operating decision maker for purposes of making decisions about allocating resources to that segment and assessing its performance, and include $13 million and $31 million of revenues resulting from intersegment transactions that are eliminated in our consolidated results for the three months and twelve months ended December 31, 2013, respectively.