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10-K 1 goog2013123110-k.htm FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
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(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2013
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number: 000-50726
Google Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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77-0493581
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1600 Amphitheatre Parkway
Mountain View, CA 94043
(Address of principal executive offices) (Zip Code)
(650) 253-0000
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Class A Common Stock, $0.001 par value
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Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
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Securities registered pursuant to Section 12(g) of the Act:
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Title of each class
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Class B Common Stock, $0.001 par value
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Options to purchase Class A Common Stock
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
As of June 30, 2013 , the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing sale price of such shares on the Nasdaq Global Select Market on June 28, 2013) was $214,573,249,181.
As of January 30, 2014 , there were 279,883,488 shares of the registrant’s Class A common stock outstanding and 56,167,343 shares of the registrant’s Class B common stock outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the 2014 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2013 .
Google Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2013
TABLE OF CONTENTS
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding:
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the growth of our business and revenues and our expectations about the factors that influence our success and trends in our business;
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our plans to continue to invest in new businesses, products and technologies, systems, facilities, and infrastructure, to continue to hire aggressively and provide competitive compensation programs, as well as to continue to invest in acquisitions;
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seasonal fluctuations in internet usage and advertiser expenditures, traditional retail seasonality and macroeconomic conditions, which are likely to cause fluctuations in our quarterly results;
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the potential for declines in our revenue growth rate;
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our expectation that growth in advertising revenues from our websites will continue to exceed that from our Google Network Members’ websites, which will have a positive impact on our operating margins;
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our expectation that we will continue to pay most of the fees we receive from advertisers to our Google Network Members;
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our expectation that we will continue to take steps to improve the relevance of the ads we deliver and to reduce the number of accidental clicks;
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fluctuations in aggregate paid clicks and average cost-per-click;
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our belief that our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currency exchange rates;
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the expected increase of costs related to hedging activities under our foreign exchange risk management program;
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our expectation that our cost of revenues, research and development expenses, sales and marketing expenses, and general and administrative expenses will increase in dollars and may increase as a percentage of revenues;
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our potential exposure in connection with pending investigations, proceedings, and other contingencies;
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our expectation that our traffic acquisition costs will fluctuate in the future;
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our continued investments in international markets;
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estimates of our future compensation expenses;
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fluctuations in our effective tax rate;
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the sufficiency of our sources of funding;
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our payment terms to certain advertisers, which may increase our working capital requirements;
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fluctuations in our capital expenditures;
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our expectations regarding the issuance and trading of our Class C stock; and
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our expectations about the disposition of the Motorola Mobile business;
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as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements may appear throughout this report, including without limitation, the following sections: Item 1 “ Business, ” Item 1A “ Risk Factors, ” and Item 7 “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. ” Forward-looking statements generally can be identified by words such as “ anticipates, ” “ believes, ” “ estimates, ” “ expects, ” “ intends, ” “ plans, ” “ predicts, ” “ projects, ” “ will be, ” “ will continue, ” “ will likely result, ” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form 10-K, and in particular, the risks discussed under the caption “ Risk Factors ” in Item 1A of this report and those discussed in other documents we file with the Securities and Exchange Commission (SEC). We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
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As used herein, “ Google, ” “ we, ” “ our, ” and similar terms include Google Inc. and its subsidiaries, unless the context indicates otherwise.
“Google ” and other trademarks of ours appearing in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies ’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.
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PART I
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ITEM 1.
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BUSINESS
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Overview
Google is a global technology leader focused on improving the ways people connect with information. We aspire to build products and provide services that improve the lives of billions of people globally. Our mission is to organize the world’s information and make it universally accessible and useful. Our innovations in web search and advertising have made our website a top internet property and our brand one of the most recognized in the world. Our Google segment generates revenues primarily by delivering relevant, cost-effective online advertising. Businesses use our AdWords program and AdSense program to promote their products and services with advertising on both Google-owned properties and publishers' sites across the web.
Our Motorola Mobile segment is focused on mobile wireless devices and related products and services. In January 2014, we entered into an agreement with Lenovo Group Limited (Lenovo), a Hong Kong corporation, providing for the disposition of our Motorola Mobile segment. The transaction is expected to close in 2014.
Our business is primarily focused around the following key areas: search and display advertising, the Android operating system platform, consumer content through Google Play, enterprise, commerce and hardware products.
We were incorporated in California in September 1998 and reincorporated in Delaware in August 2003. Our headquarters are located at 1600 Amphitheatre Parkway, Mountain View, California 94043, and our telephone number is (650) 253-0000. We completed our initial public offering in August 2004 and our Class A common stock is currently listed on the Nasdaq Global Select Market under the symbol “GOOG.”
On January 30, 2014, we announced that our board of directors had approved a distribution of shares of our Class C capital stock as a dividend to our stockholders with a dividend record date of March 27, 2014 and a dividend payment date of April 2, 2014. On the first trading day expected to be April 3, 2014, Class C will be listed on the Nasdaq Global Select Market under the symbol "GOOG" and Class A will be listed on the Nasdaq Global Select Market under the symbol "GOOGL."
2013 Corporate Highlights
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Android - Our Android operating system continues to grow with more than a billion Android devices activated globally as of September 2013.
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Google Play - Google Play is an entirely cloud-based, digital entertainment store with more than a million apps and games plus millions of songs and books and thousands of movies that our users can find, enjoy and share on their computer, phone or tablet. Our new music subscription service, All Access, lets people listen to more than 20 million songs for $9.99 a month on any device.
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Chromebooks and Chrome - Chromebooks are computers that are built for the way people work and live today. Chromebooks, like the Chrome browser, are built around the core tenets of speed, simplicity, and security. Today, eight of the top computer manufacturers are making Chromebooks, and Chromebooks are used in more than 5,000 schools. Chrome has made browsing the web simpler, speedier and safer for more than 750 million users around the world.
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Chromecast - To help make it easy to bring users’ favorite online entertainment to the biggest screen in their house - the TV - we introduced Chromecast. Chromecast is a small and affordable device that users simply plug into their high-definition (HD) TV and it allows users to use their phone, tablet or laptop to "cast" online content to their TV screen. It works with Netflix, YouTube, Google Play Movies & TV, Google Play Music, HBO Go, Hulu Plus and Pandora. With Chromecast, we wanted to create an easy solution that works for everyone, for every TV in the house .
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Nexus - We launched Nexus 5, our newest smartphone, in October 2013, that features an intelligently simple design that is precision-built from strong materials. It comes in black, white and red and has a 5” HD display, Snapdragon 800 processor, 4G/LTE and built-in wireless charging. In July 2013, we also launched a refreshed Nexus 7 tablet. The thinner, lighter and faster Nexus 7 delivers the perfect mix of power and portability. It features the world’s sharpest 7" tablet screen - putting over 2.3M pixels in the palm of each user’s hand.
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Google Now - We continue to improve Google Now, which brings users information they want, when they need it. In 2013, we added a number of new cards for car rentals, concert tickets, commute sharing, NCAA football
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and new reminders, as well as improved public transit and updated TV cards, all appearing automatically throughout the day on any device at the moment users need them.
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Ads - We introduced Enhanced Campaigns in February 2013 as a new way for advertisers to more easily create campaigns that run across multiple devices in AdWords. In addition, we launched Estimated Total Conversions, which helps our advertisers measure the full influence of their online campaigns as users move across multiple screens.
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On January 29, 2014, we entered into an acquisition agreement with Lenovo to sell our Motorola Mobile segment. Google will retain the vast majority of Motorola Mobile's patent portfolio, which will be licensed back to Motorola Mobile for its continued operations. Under the terms of the acquisition agreement, Lenovo will acquire Motorola Mobile for total consideration of (i) $660 million in cash, subject to adjustments for working capital, deferred revenue and net debt, (ii) $750 million in Lenovo ordinary shares, based on the Lenovo share price at closing and (iii) a $1.5 billion interest free, three-year prepayable promissory note. We expect the transaction to close in 2014.
Search
Google Search continues to evolve and improve as more information comes online, and as people increasingly look to their mobile devices for answers throughout the day. While on the go, users can now ask questions of the Google Search app on Android and iOS in natural language and get answers - "Where’s my package? Do I need a jacket this weekend? Who built the Eiffel Tower? What year was it constructed?"
To enable this, we've expanded and improved our Knowledge Graph, which allows users to search for things, people or places that Google knows about, and built systems that recognize speech accurately and understand natural language. As described above, we are also making Google Now more useful, adding more kinds of cards that help with everything from car rentals, to concert tickets, to commute sharing, to reminders users can set for a specific place - so, for example, users can say "Remind me to pick up milk when I get to Shop Rite," and they will get a reminder when they get to the store.
In addition, we are constantly improving and adding to our products and services, to provide users with more relevant results so that users find what they are looking for faster. We also offer Product Listing Ads, which include richer product information, such as product image, price, and merchant information, without requiring additional keywords or ad text.
Advertising
The goal of AdWords, our primary auction-based advertising program, is to deliver ads that are so useful and relevant to search queries or web content that they are a form of information in their own right. With AdWords, advertisers create simple text-based ads that appear beside related search results or web content on our websites and on thousands of partner websites in our Google Network, which is the network of third parties that use our advertising programs to deliver relevant ads with their search results and content. Most of our AdWords customers pay us on a cost-per-click basis, which means that an advertiser pays us only when a user clicks on one of its ads. We also offer AdWords on a cost-per-impression basis that enables advertisers to pay us based on the number of times their ads appear on our websites and our Google Network Members’ websites as specified by the advertiser.
Our AdSense program enables websites that are part of the Google Network to deliver ads from our AdWords advertisers that are relevant to the search results or content on their websites. We share the majority of the revenues generated from these ads with the Google Network Members that display the ads. The AdSense program enables advertisers to extend the reach of their ad campaigns, improves our partners’ ability to generate revenue from their content, and delivers relevant ads for their users.
As consumers increasingly live their lives across multiple screens, we introduced enhanced campaigns in AdWords to help advertisers big and small create relevant campaigns across all devices more easily. All of the more than one million AdWords advertisers are now using this new system, and the feedback we have gotten from marketers has been very positive.
Display advertising comprises the videos, text, images, and other interactive ads that run across the web on computers and mobile devices, including smart phones and handheld computers such as netbooks and tablets. The Google Display Network provides advertisers services related to the delivery of display advertising across publishers participating in our AdSense program, publishers participating in the DoubleClick Ad Exchange, and Google-owned sites such as YouTube and Google Finance.
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Through our DoubleClick advertising technology, we provide to publishers, agencies, and advertisers the ad serving technology, which is the infrastructure that enables billions of ads to be served each day across the web. Our DoubleClick Ad Exchange creates a real-time auction marketplace for the trading of display ad space. We aim to simplify display advertising so it is easier for advertisers and publishers to manage campaigns across different screens and formats.
In addition, YouTube provides a range of video, interactive, and other ad formats for advertisers to reach their intended audience. YouTube’s video advertising solutions give advertisers a way to promote their content to the YouTube community, as well as to associate with content being watched by their target audience. YouTube also offers analytic tools to help advertisers understand their audience and derive general business intelligence. In the past year, YouTube has experienced strong growth in mobile viewers and has established key partnerships with content companies to help monetize mobile video.
Consumer Content and Platforms
Android . Working closely with the Open Handset Alliance, a business alliance of more than 75 technology and mobile companies, we developed Android, a free, fully open source mobile software platform that any developer can use to create applications for mobile devices and any handset manufacturer can install on a device. We believe Android will drive greater innovation and choice in the mobile device ecosystem, and provide consumers with a more powerful mobile experience.
Chromebook, Chrome, and Chromecast. As mentioned above, we launched several new hardware products this year including multiple Chromebooks, Nexus 5 (smartphone), Nexus 7 (7" tablet), and Chromecast (device allowing the consumer to "cast" online content to their TV screen), all of which received extremely positive user feedback.
Google+ . Google+ allows users to share online just like users do in the real world, sharing different things with different people. As of October 2013, we had 540 million 30-day active users across our Google properties.
Google Play. Google Play is our digital entertainment store for apps, music, books and movies. We also launched our All Access music service this year which allows users to listen to our vast music library. This year we brought Google Play to more platforms so Play Music, Play Movies and Play Books can now be enjoyed on the iPhone and iPad, in addition to Android devices.
Google Drive . Google Drive is a place where users can create, share, collaborate, and keep all of their stuff. Google Docs is built right into Google Drive so users can work with others in real time on documents, spreadsheets and presentations and users’ files go everywhere they do. When users change a file on the web, on their computer, or on their mobile device, the file updates on every device where users have installed Google Drive.
Google Wallet . Google Wallet is a virtual wallet that securely stores users’ credit and debit cards, offers, and rewards cards. Users can tap their phone to pay in-store using Google Wallet anywhere contactless payments are accepted. Users can also easily pay online and on their mobile devices at participating merchant sites and apps using Google Wallet. People can also easily send money to their friends through Gmail or through the Google Wallet app.
Enterprise
With Google's Enterprise products, we help users work the way they live by enhancing our consumer products used by billions with the features and controls their business needs to be productive, innovative and successful. These tools such as Google Apps (which includes Gmail, Google Drive, Calendar, Google Sites, and more) are built to let people work anywhere, anytime, on any device, without loss of security or control. We also provide versions of our Google Maps Application Programming Interface (API) for businesses (including fully interactive Google Maps for public and internal websites), as well as Google Earth Enterprise (a behind-the-company-firewall software solution for imagery and data visualization).
We now also offer infrastructure and cloud services to developers and businesses with Google Cloud Platform. This suite of services includes a Platform as a Service (PAAS) offering called Google App Engine, storage through Google Cloud Storage, real time analytics through Google BigQuery, Structured Query Language (SQL) through Google Cloud SQL, and Infrastructure as a Service (IAAS) via Google Compute Engine.
Motorola
The Motorola Mobile segment is focused on mobile wireless devices and related products and services and generates revenues primarily by selling hardware products. In January 2014, we entered into an agreement with
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Lenovo providing for the disposition of our Motorola Mobile segment.
Research
We continue to develop new products and services and to enhance our existing ones through research and product development and the licensing and acquisition of third-party businesses and technology. Our product development philosophy is to launch innovative products early and often, and then iterate rapidly to make those products even better. We often post early-stage products at test locations online or directly on Google.com. We then use data and user feedback to decide if and how to invest further in those products.
Our research and development expenses were $5.2 billion, $6.8 billion, and $8.0 billion in 2011, 2012, and 2013, respectively, which included stock-based compensation expense of $1.1 billion, $1.3 billion, and $1.7 billion, respectively. We expect to continue to invest in building the employee and systems infrastructure needed to support the development of new products and services and to improve existing ones.
Intellectual Property
We rely on a combination of intellectual property laws, as well as confidentiality procedures and contractual provisions, to protect our proprietary technology and our brand. We have registered, and applied for the registration of, U.S. and international trademarks, service marks, domain names, and copyrights. Additionally, we have filed U.S. and international patent applications covering certain of our proprietary technology. Over time, we have assembled a portfolio of patents, trademarks, service marks, copyrights, domain names, and trade secrets covering our products and services. Our proprietary technology is not dependent on any single patent or copyright or groups of related patents or copyrights. We believe the duration of our patents is adequate relative to the expected lives of our products. Although we rigorously protect our proprietary technology, any significant impairment of, or third-party claim against, our intellectual property rights could harm our business or our ability to compete.
Sales and Support
We continue to develop and grow our sales and support infrastructure. We have over 85 offices in over 50 countries, the large majority of which include sales people. Our global sales and support infrastructure has specialized teams across vertical markets. We bring businesses into our advertising network through direct, remote, and online sales channels, using technology and automation wherever possible to improve our customers’ experience and to grow our business cost-effectively. Our direct advertising and sales teams focus on building relationships with the largest advertisers and leading internet companies. We have built a multi-product sales force, with teams selling campaigns that include search and display (including video) that appear on multiple devices used by consumers.
We provide customer service to our advertiser base through our global support organization. Our global support organization concentrates on helping our advertisers and Google Network Members get the most out of their relationship with us.
No individual customer or groups of affiliated customers represented more than 10% of our revenues in 2011, 2012, or 2013.
Government Contracts
No material portion of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the U.S. government.
Marketing
Google’s global brand is well known. We believe that building a trusted, highly recognized brand begins with providing high-quality products and services that make a notable difference in people’s lives. Our marketing, promotional, and public relations activities are designed to promote Google’s brand image and differentiate it from competitors.
Competition
Our business is characterized by rapid change and converging, as well as new and disruptive, technologies. We face formidable competition in every aspect of our business, particularly from companies that seek to connect people with information on the web and provide them with relevant advertising. We face competition from:
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General purpose search engines, such as Yahoo and Microsoft’s Bing.
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Vertical search engines and e-commerce websites, such as Kayak (travel queries), Monster.com (job queries), WebMD (health queries), and Amazon.com and eBay (e-commerce). Some users will navigate directly to such websites rather than go through Google.
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Social networks, such as Facebook and Twitter. Some users are relying more on social networks for product or service referrals, rather than seeking information through general purpose search engines.
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Other forms of advertising, such as television, radio, newspapers, magazines, billboards, and yellow pages, for ad dollars. Our advertisers typically advertise in multiple media, both online and offline.
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Mobile applications on iPhone and Android devices, which allow users to access information directly from a publisher without using search engines.
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Providers of online products and services. A number of our online products and services, including Gmail, YouTube, and Google Docs, compete directly with new and established companies, which offer communication, information, and entertainment services integrated into their products or media properties.
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We compete to attract and retain users, for whom other products and services are literally one click away, primarily on the basis of the relevance and usefulness of our search results and the features, availability, and ease of use of our products and services.
We also compete to attract and retain content providers (Google Network Members, as well as other content providers for whom we distribute or license content), primarily based on the size and quality of our advertiser base, our ability to help these partners generate revenues from advertising, and the terms of our agreements with them.
Government Regulation
We are subject to numerous domestic and foreign laws and regulations covering a wide variety of subject matter. New laws and regulations (or new interpretations of existing laws and regulations) may also impact our business. The costs of compliance with these laws and regulations are high and are likely to increase in the future and any failure on our part to comply with these laws may subject us to significant liabilities and other penalties.
Culture and Employees
We take great pride in our culture. We embrace collaboration and creativity, and encourage the iteration of ideas to address complex technical challenges. Transparency and open dialog are central to us, and we like to ensure that company news reaches our employees first through internal channels.
Despite our rapid growth, we still cherish our roots as a startup and give employees the freedom to act on their ideas regardless of role or function within the company. We strive to hire the best employees, with backgrounds and perspectives as diverse as our global users. We provide an environment where these talented people can have fulfilling careers working on some of the biggest challenges in technology, and have a huge, positive impact on the world.
At December 31, 2013, we had 47,756 full-time employees, consisting of 18,593 in research and development, 15,348 in sales and marketing, 6,563 in general and administrative, and 7,252 in operations. All of Google’s full-time employees are also equity holders, with significant collective employee ownership. Although we have works councils and statutory employee representation obligations in certain countries, our U.S. employees are not represented by a labor union and we consider our employee relations to be good. Competition for qualified personnel in our industry is intense, particularly for software engineers, computer scientists, and other technical staff.
Global Operations and Geographic Data
We provide our products and services in more than 100 languages and in more than 50 countries, regions, and territories. On www.google.com or one of our other Google domains, users can find information in many different languages and in many different formats. The United States accounted for approximately 45% of our revenues in 2013. Information regarding financial data by geographic areas is set forth in Item 7 and Note 15 of Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K.
Seasonality
Our business is affected by both seasonal fluctuations in internet usage and traditional retail seasonality. Internet usage generally slows during the summer months, and commercial queries typically increase significantly in the fourth quarter of each year. These seasonal trends have caused and will likely continue to cause, fluctuations in our quarterly
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results, including fluctuations in sequential revenue growth rates.
Available Information
Our website is located at www.google.com, and our investor relations website is located at https://investor.google.com. The following filings are available through our investor relations website after we file them with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and our Proxy Statements for our annual meetings of stockholders, for the last three years. These filings are also available for download free of charge on our investor relations website. We also provide a link to the section of the SEC’s website at www.sec.gov that has all of our public filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, our Proxy Statements, and other ownership related filings. Further, a copy of this Annual Report on Form 10-K is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.
We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website as well as on our investor relations Google+ page (https://plus.google.com/+GoogleInvestorRelations/posts). Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts and RSS feeds. Further corporate governance information, including our certificate of incorporation, bylaws, governance guidelines, board committee charters, and code of conduct, is also available on our investor relations website under the heading “Corporate Governance.” The content of our websites are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
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ITEM 1A.
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RISK FACTORS
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Our operations and financial results are subject to various risks and uncertainties, including those described below, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock.
Risks Related to Our Business and Industry
We face intense competition. If we do not continue to innovate and provide products and services that are useful to users, we may not remain competitive, and our revenues and operating results could be adversely affected.
Our business is rapidly evolving and intensely competitive, and is subject to changing technologies, shifting user needs, and frequent introductions of new products and services. Our ability to compete successfully depends heavily on providing products and services that make using the internet a more useful and enjoyable experience for our users and delivering innovative products and technologies to the marketplace. As our business has evolved, the competitive pressure to innovate will now encompass a wider range of products and services, including products and services that may be outside of our historical core business.
We have many competitors in different industries, including general purpose search engines, vertical search engines and e-commerce sites, social networking sites, traditional media companies, wireless mobile device companies, and providers of online products and services. Our current and potential competitors range from large and established companies to emerging start-ups. Established companies have longer operating histories and more established relationships with customers and users, and they can use their experience and resources in ways that could affect our competitive position, including by making acquisitions, investing aggressively in research and development, aggressively initiating intellectual property claims (whether or not meritorious) and competing aggressively for advertisers and websites. Emerging start-ups may be able to innovate and provide products and services faster than we can.
Our competitors are constantly developing innovations in web search, online advertising, wireless mobile devices, and web-based products and services. The research and development of new, technologically advanced products is
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also a complex and uncertain process requiring high levels of innovation and investment, as well as the accurate anticipation of technology, market trends and consumer needs. As a result, we must continue to invest significant resources in research and development, including through acquisitions, in order to enhance our web search technology and our existing products and services, and introduce new products and services that people can easily and effectively use. If we are unable to provide quality products and services, then acceptance rates for our products and services could decline and affect consumer and advertiser perceptions of our brand. In addition, these new products and services may present new and difficult technological and legal challenges, and we may be subject to claims if users of these offerings experience service disruptions or failures or other issues. Our operating results would also suffer if our innovations are not responsive to the needs of our users, advertisers, and Google Network Members, are not appropriately timed with market opportunities, or are not effectively brought to market. As technology continues to develop, our competitors may be able to offer user experiences that are, or that are seen to be, substantially similar to or better than ours. This may force us to compete in different ways and expend significant resources in order to remain competitive. If our competitors are more successful than we are in developing compelling products or in attracting and retaining users, advertisers, and content providers, our revenues and operating results could be adversely affected.
Our ongoing investment in new businesses and new products, services, and technologies is inherently risky, and could disrupt our ongoing businesses.
We have invested and expect to continue to invest in new businesses, products, services, and technologies. Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, insufficient revenues to offset liabilities assumed and expenses associated with these new investments, inadequate return of capital on our investments, and unidentified issues not discovered in our due diligence of such strategies and offerings. Because these new ventures are inherently risky, no assurance can be given that such strategies and offerings will be successful and will not adversely affect our reputation, financial condition, and operating results.
More people are using devices other than personal computers to access the internet and accessing new platforms to make search queries. If manufacturers and users do not widely adopt versions of our web search technology, products, or operating systems developed for these devices, our business could be adversely affected.
The number of people who access the internet through devices other than personal computers, including mobile phones, smartphones, handheld computers such as netbooks and tablets, video game consoles, and television set-top devices, is increasing dramatically. The lower resolution, functionality, and memory associated with some alternative devices make the use of our products and services through such devices more difficult and the versions of our products and services developed for these devices may not be compelling to users, manufacturers, or distributors of alternative devices. Each manufacturer or distributor may establish unique technical standards for its devices, and our products and services may not work or be viewable on these devices as a result. Some manufacturers may also elect not to include our products on their devices. In addition, search queries are increasingly being undertaken via “apps” tailored to particular devices or social media platforms, which could affect our share of the search market over time. As new devices and platforms are continually being released, it is difficult to predict the problems we may encounter in adapting our products and services and developing competitive new products and services. We expect to continue to devote significant resources to the creation, support, and maintenance of products and services across multiple platforms. If we are unable to attract and retain a substantial number of alternative device manufacturers, distributors, and users to our products and services, or if we are slow to develop products and technologies that are more compatible with alternative devices and platforms, we will fail to capture the opportunities available as consumers and advertisers transition to a dynamic, multi-screen environment.
We generate a significant portion of our revenues from advertising, and a reduction in spending by or loss of advertisers could seriously harm our business.
We generated 91% of Google revenues from our advertisers in 2013. Our advertisers can generally terminate their contracts with us at any time. Advertisers will not continue to do business with us if their investment in advertising with us does not generate sales leads, and ultimately customers, or if we do not deliver their advertisements in an appropriate and effective manner. If we are unable to remain competitive and provide value to our advertisers, they may stop placing ads with us, which would adversely affect our revenues and business.
In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Adverse macroeconomic conditions can also have a material negative impact on the demand for
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advertising and cause our advertisers to reduce the amounts they spend on advertising, which could adversely affect our revenues and business.
Our revenue growth rate could decline over time, and we anticipate downward pressure on our operating margin in the future.
Our revenue growth rate could decline over time as a result of a number of factors, including as a result of:
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increasing competition,
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changes in property mix, platform mix and geographical mix,
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the challenges in maintaining our growth rate as our revenues increase to higher levels,
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the evolution of the online advertising market, including the increasing variety of online platforms for advertising, and the other markets in which we participate and
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the success of our investments in new businesses, products, services, and technologies.
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The revenue growth rate of our Motorola Mobile segment will also depend on a number of factors, including the success of our new products, our reliance on several large customers, the absence of long-term exclusivity arrangements with such customers, our ability to gain significant market share in the mobile devices space, our reliance on third-party distributors, representatives and retailers to sell certain of our products and the successful implementation of our product and operating system strategies. Furthermore, consolidation in the telecommunications industry could negatively impact our business because there would be fewer network operators and it could be more difficult to replace any lost customers. Any of these factors could have a negative impact on our Motorola Mobile segment and have an adverse effect on our consolidated financial results.
We believe our operating margin will experience downward pressure as a result of increasing competition and increased expenditures for many aspects of our business, including Motorola, and new lines of business. For instance, our operating margin will experience downward pressure if a greater percentage of our revenues comes from ads placed on our Google Network Members' websites compared to revenues generated through ads placed on our own websites or if we spend a proportionately larger amount to promote the distribution of certain products, including Google Chrome. Both the margin on revenues we generate from our Google Network Members and the margin on revenues from our Motorola business are significantly less than the margin on revenues we generate from advertising on our websites. Also, the margins on advertising revenues from mobile devices and newer advertising formats are generally less than the margin on revenues we generate from advertising on our websites. Additionally, the margin we earn on revenues generated from our Google Network Members could decrease in the future if we pay an even larger percentage of advertising fees to our Google Network Members.
We are subject to increased regulatory scrutiny that may negatively impact our business.
The growth of our company and our expansion into a variety of new fields implicate a variety of new regulatory issues, and we have experienced increased regulatory scrutiny as we have grown. We continue to cooperate with the European Commission (EC), other international regulatory authorities, and several state attorneys general in investigations they are conducting with respect to our business and its impact on competition. Legislators and regulators, including those conducting investigations in the U.S. and Europe, may make legal and regulatory changes, or interpret and apply existing laws, in ways that make our products and services less useful to our users, require us to incur substantial costs, expose us to unanticipated civil or criminal liability, or cause us to change our business practices. These changes or increased costs could negatively impact our business and results of operations in material ways.
We are regularly subject to claims, suits, government investigations, and other proceedings that may result in adverse outcomes.
We are regularly subject to claims, suits, government investigations, and other proceedings involving competition and antitrust (such as the pending investigations by the EC), intellectual property, privacy, consumer protection, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, and other matters. The sale of hardware products also exposes us to the risk of product liability and other litigation involving assertions about product defects, as well as health and safety, hazardous materials usage, and other environmental concerns. In addition, our businesses face intellectual property litigation, as further discussed later, that exposes us to the risk of exclusion and cease and desist orders, which could limit our ability to sell products and services.
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Such claims, suits, government investigations, and proceedings are inherently uncertain and their results cannot be predicted with certainty. Regardless of the outcome, such legal proceedings can have an adverse impact on us because of legal costs, diversion of management resources, and other factors. Determining reserves for our pending litigation is a complex, fact-intensive process that requires significant judgment. It is possible that a resolution of one or more such proceedings could result in substantial fines and penalties that could adversely affect our business, consolidated financial position, results of operations, or cash flows in a particular period. These proceedings could also result in reputational harm, criminal sanctions, consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, requiring a change in our business practices or product recalls or other field action, or requiring development of non-infringing or otherwise altered products or technologies. Any of these consequences could adversely affect our business and results of operations.
Acquisitions and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business and results of operations.
Acquisitions are an important element of our overall corporate strategy and use of capital, and these transactions could be material to our financial condition and results of operations. We expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The process of integrating an acquired company, business, or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The areas where we face risks include:
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Diversion of management time and focus from operating our business to acquisition integration challenges.
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Failure to successfully further develop the acquired business or technology.
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Implementation or remediation of controls, procedures, and policies at the acquired company.
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Integration of the acquired company's accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing functions.
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Transition of operations, users, and customers onto our existing platforms.
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Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval, under competition and antitrust laws which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition.
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In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries.
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Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employees from the businesses we acquire.
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Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities.
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Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders, or other third parties.
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Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and harm our business generally.
Our acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill and purchased long-lived assets, and restructuring charges, any of which could harm our financial condition or results. Also, the anticipated benefit of many of our acquisitions may not materialize.
Our business depends on a strong brand, and failing to maintain and enhance our brand would hurt our ability to expand our base of users, advertisers, Google Network Members, and other partners.
The brand identity that we have developed has significantly contributed to the success of our business.
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Maintaining and enhancing the “Google” brand is critical to expanding our base of users, advertisers, Google Network Members, and other partners. We believe that the importance of brand recognition will increase due to the relatively low barriers to entry in the internet market. Our brand may be negatively impacted by a number of factors, including data protection and security issues, service outages, and product malfunctions. If we fail to maintain and enhance the “Google” brand, or if we incur excessive expenses in this effort, our business, operating results, and financial condition will be materially and adversely affected. Maintaining and enhancing our brand will depend largely on our ability to be a technology leader and continue to provide high-quality innovative products and services, which we may not do successfully.
A variety of new and existing U.S. and foreign laws could subject us to claims or otherwise harm our business.
We are subject to numerous U.S. and foreign laws and regulations covering a wide variety of subject matters. New laws and regulations (or new interpretations of existing laws and regulations) may also impact our business. The costs of compliance with these laws and regulations are high and are likely to increase in the future. Any failure on our part to comply with these laws and regulations can result in negative publicity and diversion of management time and effort and may subject us to significant liabilities and other penalties.
Furthermore, many of these laws were adopted prior to the advent of the internet and related technologies and, as a result, do not contemplate or address the unique issues of the internet and related technologies. The laws that do reference the internet are being interpreted by the courts, but their applicability and scope remain uncertain. For example, the laws relating to the liability of providers of online services are currently unsettled both within the U.S. and abroad. Claims have also been, or may be, threatened and filed against us under both U.S. and foreign laws for defamation, invasion of privacy and other tort claims, unlawful activity, patent, copyright and trademark infringement, or other theories based on the nature and content of the materials searched and the ads posted by our users, our products and services, or content generated by our users. Moreover, current and new patent laws such as U.S. patent laws and European patent laws may affect the ability of companies, including us, to protect their innovations and defend against claims of patent infringement.
In addition, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for caching or hosting, or for listing or linking to, third-party websites that include materials that infringe copyrights or other rights, so long as we comply with the statutory requirements of this act. Any future legislation impacting these safe harbors may adversely impact us. Various U.S. and international laws restrict the distribution of materials considered harmful to children and impose additional restrictions on the ability of online services to collect information from minors. In the area of data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, such as California's Information Practices Act. We face similar risks and costs as our products and services are offered in international markets and may be subject to additional regulations.
We are, and may in the future be, subject to intellectual property or other claims, which are costly to defend, could result in significant damage awards, and could limit our ability to use certain technologies in the future.
Internet, technology, media, and other companies own large numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. In addition, patent holding companies may continue to seek to monetize patents they have purchased or otherwise obtained. As we have grown, the intellectual property rights claims against us have increased and may continue to increase as we develop new products, services, and technologies.
We have had patent, copyright, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies, including Android, Google Search, Google AdWords, Google AdSense, Motorola products, Google Maps, Google Books, Google News, Google Image Search, Google Chrome, Google Talk, Google Voice, and YouTube, among others, infringe the intellectual property rights of others. Third parties have also sought broad injunctive relief against us by filing claims in U.S. and international courts and the U.S. International Trade Commission (ITC) for exclusion and cease and desist orders, which could limit our ability to sell our products or services in the U.S. or elsewhere if our products or services or those of our customers or suppliers are found to infringe the intellectual property subject to the claims. Adverse results in any of these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements (if licenses are available at all), or orders preventing us from offering certain features, functionalities, products, or services, and may also cause us to change our business practices, and require development of non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business.
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In addition, many of our agreements with our customers and partners, including certain suppliers, require us to indemnify them for certain intellectual property infringement claims against them, which could increase our costs as a result of defending such claims, and may require that we pay significant damages if there were an adverse ruling in any such claims. Such customers and partners may also discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely impact our business. Moreover, supplier provided intellectual property indemnities to us, when obtainable, may not cover all damages and losses suffered by us and our customers from covered products.
Regardless of the merits of the claims, intellectual property claims are often time consuming, expensive to litigate or settle, and cause significant diversion of management attention. To the extent such intellectual property infringement claims are successful, they may have an adverse effect on our business, consolidated financial position, results of operations, or cash flows.
Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brand.
Our patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for us. Various events outside of our control pose a threat to our intellectual property rights, as well as to our products, services and technologies. For example, effective intellectual property protection may not be available in every country in which our products and services are distributed or made available through the internet. Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective.
Although we seek to obtain patent protection for our innovations, it is possible we may not be able to protect some of these innovations. Moreover, because of our long-term interests in open source, we may not have adequate patent protection for certain innovations that later turn out to be important. Furthermore, there is always the possibility, despite our efforts, that the scope of the protection gained will be insufficient or that an issued patent may be deemed invalid or unenforceable.
We also seek to maintain certain intellectual property as trade secrets. The secrecy could be compromised by outside parties, or by our employees, which could cause us to lose the competitive advantage resulting from these trade secrets.
We also face risks associated with our trademarks. For example, there is a risk that the word “Google” could become so commonly used that it becomes synonymous with the word “search.” If this happens, we could lose protection for this trademark, which could result in other people using the word “Google” to refer to their own products, thus diminishing our brand.
Any significant impairment of our intellectual property rights could harm our business and our ability to compete. Also, protecting our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results.
We may be subject to legal liability associated with providing online services or content.
We host and provide a wide variety of services and products that enable users to exchange information, advertise products and services, conduct business, and engage in various online activities both domestically and internationally. The law relating to the liability of providers of these online services and products for activities of their users is still somewhat unsettled both within the U.S. and internationally. Claims have been threatened and have been brought against us for defamation, negligence, breaches of contract, copyright or trademark infringement, unfair competition, unlawful activity, tort, including personal injury, fraud, or other theories based on the nature and content of information that we publish or to which we provide links or that may be posted online or generated by us or by third parties, including our users. In addition, we are and have been and may again in the future be subject to domestic or international actions alleging that certain content we have generated or third-party content that we have made available within our services violates U.S. and non-U.S. law.
We also arrange for the distribution of third-party advertisements to third-party publishers and advertising networks, and we offer third-party products, services, or content. We may be subject to claims concerning these products, services, or content by virtue of our involvement in marketing, branding, broadcasting, or providing access to them, even if we do not ourselves host, operate, provide, or provide access to these products, services, or content. Defense of any such actions could be costly and involve significant time and attention of our management and other
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resources, may result in monetary liabilities or penalties, and may require us to change our business in an adverse manner.
Privacy concerns relating to our technology could damage our reputation and deter current and potential users from using our products and services.
From time to time, concerns have been expressed about whether our products, services, or processes compromise the privacy of users and others. Concerns about our practices with regard to the collection, use, disclosure, or security of personal information or other privacy related matters, even if unfounded, could damage our reputation and adversely affect our operating results.
In addition, as nearly all of our products and services are web-based, the amount of data we store for our users on our servers (including personal information) has been increasing. Any systems failure or compromise of our security that results in the release of our users' data could seriously limit the adoption of our products and services, as well as harm our reputation and brand and, therefore, our business. We expect to continue to expend significant resources to protect against security breaches. The risk that these types of events could seriously harm our business is likely to increase as we expand the number of web-based products and services we offer, and operate in more countries.
Regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning data protection. In addition, the interpretation and application of consumer and data protection laws in the U.S., Europe and elsewhere are often uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have an adverse effect on our business and results of operations. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.
We face a number of manufacturing and supply chain risks that, if not properly managed, could adversely impact our financial results and prospects.
We face a number of risks related to manufacturing and supply chain management. For instance, the products we sell may have quality issues resulting from the design or manufacture of the product, or from the software used in the product. Sometimes, these issues may be caused by components we purchase from other manufacturers or suppliers. If the quality of our products does not meet our customers' expectations or our products are found to be defective, then our sales and operating earnings, and ultimately our reputation, could be negatively impacted.
We rely on third parties to manufacture many of our assemblies and finished products, and we have third-party arrangements for the design of some components and parts. Our business could be negatively affected if we are not able to engage third parties with the necessary capabilities or capacity on reasonable terms, or if those we engage fail to meet their obligations (whether due to financial difficulties or other reasons), or make adverse changes in the pricing or other material terms of our arrangements with them.
In the past, Motorola, like many electronics manufacturers, has experienced supply shortages and price increases driven by raw material availability, manufacturing capacity, labor shortages, industry allocations, natural disasters and significant changes in the financial or business condition of its suppliers. Workaround plans to address shortages have entailed in the past, and could entail in the future, increased freight costs for expedited shipments. We cannot assure you that we will not experience shortages or other supply chain disruptions in the future or that they will not negatively impact our operations. In addition, some of the components we use in our products are available only from a single source or limited sources, and we cannot assure you that we would be able to find replacement vendors on favorable terms or at all in the event of a supply chain disruption.
Additionally, because many of our supply contracts have volume-based pricing or minimum purchase requirements, if the volume of our hardware sales decreases or does not reach projected targets, we could face increased materials and manufacturing costs or other financial liabilities that could make our hardware products more costly per unit to manufacture and therefore less competitive and negatively impact our financial results. Further, certain of our competitors may negotiate more favorable contractual terms based on volume and other commitments that may provide them with competitive advantages and may impact our supply.
We also require our suppliers and business partners to comply with law and company policies regarding workplace and employment practices, environmental compliance and intellectual property licensing, but we do not control them
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or their practices. If any of them violates laws or implements practices regarded as unethical, we could experience supply chain disruptions, canceled orders, terminations of or damage to key relationships, and damage to our reputation. If any of them fails to procure necessary license rights to third-party intellectual property, legal action could ensue that could impact the salability of our products and expose us to financial obligations to third parties.
The Dodd-Frank Wall Street Reform and Consumer Protection Act includes disclosure requirements regarding the use of “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries (DRC) and procedures regarding a manufacturer's efforts to prevent the sourcing of such “conflict” minerals. SEC rules implementing these requirements may have the effect of reducing the pool of suppliers who can supply DRC “conflict free” components and parts, and we may not be able to obtain DRC conflict free products or supplies in sufficient quantities for our operations. Since our supply chain is complex, we may face reputational challenges with our customers, stockholders and other stakeholders if we are unable to sufficiently verify the origins for the "conflict" minerals used in our products.
If our security measures are breached, or if our services are subject to attacks that degrade or deny the ability of users to access our products and services, our products and services may be perceived as not being secure, users and customers may curtail or stop using our products and services, and we may incur significant legal and financial exposure.
Our products and services involve the storage and transmission of users' and customers' proprietary information, and security breaches expose us to a risk of loss of this information, litigation, and potential liability. We experience cyber attacks of varying degrees on a regular basis, and as a result, unauthorized parties have obtained, and may in the future obtain, access to our data or our users' or customers' data. Our security measures may also be breached due to employee error, malfeasance, or otherwise. Additionally, outside parties may attempt to fraudulently induce employees, users, or customers to disclose sensitive information in order to gain access to our data or our users' or customers' data. Any such breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation, and a loss of confidence in the security of our products and services that could potentially have an adverse effect on our business. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and we could lose users and customers.
Web spam and content farms could decrease our search quality, which could damage our reputation and deter our current and potential users from using our products and services.
“Web spam” refers to websites that attempt to violate a search engine's quality guidelines or that otherwise seek to rank higher in search results than a search engine's assessment of their relevance and utility would rank them. Although English-language web spam in our search results has been significantly reduced, and web spam in most other languages is limited, we expect web spammers will continue to seek ways to improve their rankings inappropriately. We continuously combat web spam, including through indexing technology that makes it harder for spam-like, less useful web content to rank highly. We face challenges from low-quality and irrelevant content websites, including “content farms”, which are websites that generate large quantities of low-quality content to help them improve their search rankings. We are continually launching algorithmic changes focused on low-quality websites. If web spam and content farms continue to increase on Google, this could hurt our reputation for delivering relevant information or reduce user traffic to our websites. In addition, as we continue to take actions to improve our search quality and reduce low-quality content, this may in the short run reduce our AdSense revenues, since some of these websites are AdSense partners.
Interruption or failure of our information technology and communications systems could hurt our ability to effectively provide our products and services, which could damage our reputation and harm our operating results.
The availability of our products and services depends on the continuing operation of our information technology and communications systems. Our systems are vulnerable to damage or interruption from earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, computer denial of service attacks, or other attempts to harm our systems. Some of our data centers are located in areas with a high risk of major earthquakes. Our data centers are also subject to break-ins, sabotage, and intentional acts of vandalism, and to potential disruptions if the operators of certain of these facilities have financial difficulties. Some of our systems are not fully redundant, and
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our disaster recovery planning cannot account for all eventualities. The occurrence of a natural disaster, a decision to close a facility we are using without adequate notice for financial reasons, or other unanticipated problems at our data centers could result in lengthy interruptions in our service. In addition, our products and services are highly technical and complex and may contain errors or vulnerabilities. Any errors or vulnerabilities in our products and services, or damage to or failure of our systems, could result in interruptions in our services, which could reduce our revenues and profits, and damage our brand.
Our international operations expose us to additional risks that could harm our business, operating results, and financial condition.
Our international operations are significant to our revenues and net income, and we plan to further expand internationally. International revenues accounted for approximately 55% of our consolidated revenues in 2013, and more than half of our user traffic has been coming from outside the U.S. In certain international markets, we have limited operating experience and may not benefit from any first-to-market advantages or otherwise succeed.
Most of our Motorola products are manufactured outside the U.S., primarily in China, Taiwan and Brazil. If our manufacturing in these countries is disrupted, our overall capacity could be reduced and sales or profitability could be negatively impacted. We require suppliers and business partners to comply with the law and company policies regarding workplace and employment practices, environmental compliance and intellectual property licensing, but we do not control them or their practices. If any of them violates laws or implements practices regarded as unethical, we could experience supply chain disruptions, canceled orders, terminations of or damage to key relationships, and damage to our reputation. If any of them fails to procure necessary license rights to third-party intellectual property, legal action could ensue that could impact the salability of our products and expose us to financial obligations to third parties.
Moreover, in connection with Motorola Mobile's operations in Brazil, we have had and continue to have legal disputes and controversies, including tax, labor and trade compliance controversies and other legal matters that take many years to resolve. We incur legal and other costs in managing and defending these matters and expect to continue to incur such costs. Based on our assessment of these matters, we have recorded reserves on only a small portion of the total potential exposure. It is, however, very difficult to predict the outcome of legal disputes and controversies, including litigation, in Brazil and our ultimate exposure may be greater than our current assessments and related reserves.
In addition to risks described elsewhere in this section, our international operations expose us to other risks, including the following:
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Changes in local political, economic, social, and labor conditions, which may adversely harm our business.
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Restrictions on foreign ownership and investments, and stringent foreign exchange controls that might prevent us from repatriating cash earned in countries outside the U.S.
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Import and export requirements, tariffs, trade disputes and barriers, and customs classifications that may prevent us from offering products or providing services to a particular market and may increase our operating costs.
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Potential injunctions from importation into the U.S. of our Motorola products manufactured outside the U.S. in an ITC matter.
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Longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud.
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Still developing foreign laws and legal systems.
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Uncertainty regarding liability for services and content, including uncertainty as a result of local laws and lack of legal precedent.
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Different employee/employer relationships, existence of workers' councils and labor unions, and other challenges caused by distance, language, and cultural differences, making it harder to do business in certain jurisdictions.
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In addition, compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business. These numerous and sometimes conflicting laws and regulations include internal control and disclosure rules, data privacy and filtering requirements, anti-corruption laws, such as the Foreign Corrupt Practices Act, and other local laws prohibiting corrupt payments to governmental officials, and antitrust and competition regulations, among others. Violations of these laws and regulations could result in fines and penalties,
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criminal sanctions against us, our officers, or our employees, prohibitions on the conduct of our business and on our ability to offer our products and services in one or more countries, and could also materially affect our brand, our international expansion efforts, our ability to attract and retain employees, our business, and our operating results. Although we have implemented policies and procedures designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies.
Finally, since we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars, we face exposure to fluctuations in currency exchange rates. Although we hedge a portion of our international currency exposure, significant fluctuations in exchange rates between the U.S. dollar and foreign currencies may adversely affect our net income. Additionally, hedging programs are inherently risky and could expose us to additional risks that could adversely affect our financial condition and results of operations.
Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations.
Our operating results may fluctuate as a result of a number of factors, many outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our quarterly, year-to-date, and annual expenses as a percentage of our revenues may differ significantly from our historical or projected rates. Our operating results in future quarters may fall below expectations. Any of these events could cause our stock price to fall. Each of the risk factors listed in this section in addition to the following factors may affect our operating results:
|
•
|
Our ability to continue to attract users to our websites and satisfy existing users on our websites.
|
|
•
|
Our ability to monetize (or generate revenues from) traffic on our websites and our Google Network Members' websites.
|
|
•
|
Revenue fluctuations caused by changes in property mix, platform mix and geographical mix.
|
|
•
|
The amount of revenues and expenses generated and incurred in currencies other than U.S. dollars, and our ability to manage the resulting risk through our foreign exchange risk management program.
|
|
•
|
The amount and timing of operating costs and expenses and capital expenditures related to the maintenance and expansion of our businesses, operations, and infrastructure.
|
|
•
|
Our focus on long-term goals over short-term results.
|
|
•
|
The results of our investments in risky projects, including new businesses, products, services, technologies and acquisitions.
|
|
•
|
Our ability to keep our websites operational at a reasonable cost and without service interruptions.
|
|
•
|
Our ability to generate significant revenues from services in which we have invested considerable time and resources.
|
Because our business is changing and evolving, our historical operating results may not be useful to you in predicting our future operating results. In addition, advertising spending has historically been cyclical in nature, reflecting overall economic conditions, as well as budgeting and buying patterns. Also, user traffic tends to be seasonal. Our rapid growth has tended to mask the cyclicality and seasonality of our business. As our growth rate has slowed, the cyclicality and seasonality in our business has become more pronounced and caused our operating results to fluctuate.
If we were to lose the services of Larry, Sergey, Eric, or other key personnel, we may not be able to execute our business strategy.
Our future success depends in a large part upon the continued service of key members of our senior management team. In particular, Larry Page and Sergey Brin are critical to the overall management of Google and the development of our technology. Along with our Executive Chairman Eric E. Schmidt, they also play a key role in maintaining our culture and setting our strategic direction. All of our executive officers and key employees are at-will employees, and we do not maintain any key-person life insurance policies. The loss of key personnel could seriously harm our business.
We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hire qualified personnel, or maintain our corporate culture, we may not be able to grow effectively.
Our performance largely depends on the talents and efforts of highly skilled individuals. Our future success
17
depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees is intense, and certain of our competitors have directly targeted our employees. In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees.
In addition, we believe that our corporate culture fosters innovation, creativity, and teamwork. As our organization grows, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture. This could negatively impact our future success.
Our business depends on continued and unimpeded access to the internet by us and our users. Internet access providers may be able to block, degrade, or charge for access to certain of our products and services, which could lead to additional expenses and the loss of users and advertisers.
Our products and services depend on the ability of our users to access the internet, and certain of our products require significant bandwidth to work effectively. Currently, this access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, and government-owned service providers. Some of these providers have taken, or have stated that they may take measures, including legal actions, that could degrade, disrupt, or increase the cost of user access to certain of our products by restricting or prohibiting the use of their infrastructure to support or facilitate our offerings, or by charging increased fees to us or our users to provide our offerings. Such interference could result in a loss of existing users and advertisers, and increased costs, and could impair our ability to attract new users and advertisers, thereby harming our revenues and growth.
New technologies could block our ads, which would harm our business.
Technologies have been developed that can block the display of our ads and that provide tools to users to opt out of our advertising products. Most of our revenues are derived from fees paid to us by advertisers in connection with the display of ads on web pages for our users. As a result, such technologies and tools could adversely affect our operating results.
We are exposed to fluctuations in the market values of our investment portfolio.
Given the global nature of our business, we have investments both domestically and internationally. Credit ratings and pricing of these investments can be negatively impacted by liquidity, credit deterioration or losses, financial results, or other factors. As a result, the value or liquidity of our cash equivalents and marketable securities could decline and result in a material impairment, which could materially adversely affect our financial condition and operating results.
We may have exposure to greater than anticipated tax liabilities.
Our future income taxes could be adversely affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, as a result of gains on our foreign exchange risk management program, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items. We are subject to regular review and audit by both domestic and foreign tax authorities. Any adverse outcome of such a review or audit could have a negative effect on our operating results and financial condition. In addition, the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment, and there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made.
Risks Related to Ownership of Our Stock
The trading price for our Class A common stock may continue to be volatile, and if the shares of the new class of non-voting Class C capital stock are distributed as expected, the trading price of that class may also be volatile and may affect the trading price for the Class A common stock.
18
The trading price of our Class A common stock has at times experienced substantial price volatility and may continue to be volatile. For example, from January 1, 2013 through December 31, 2013, the closing price of our Class A common stock ranged from $702.87 per share to $1,120.71 per share. The trading price of our Class A common stock may fluctuate widely in response to various factors, some of which are beyond our control. These factors include, among others:
|
•
|
Quarterly variations in our results of operations or those of our competitors.
|
|
•
|
Announcements by us or our competitors of acquisitions, new products, significant contracts, commercial relationships, or capital commitments.
|
|
•
|
Recommendations by securities analysts or changes in earnings estimates.
|
|
•
|
Announcements about our earnings that are not in line with analyst expectations, the risk of which is enhanced because it is our policy not to give guidance on earnings.
|
|
•
|
Announcements by our competitors of their earnings that are not in line with analyst expectations.
|
|
•
|
Commentary by industry and market professionals about our products, strategies, and other matters affecting our business and results, regardless of its accuracy.
|
|
•
|
The volume of shares of Class A common stock available for public sale.
|
|
•
|
Sales of Class A common stock by us or by our stockholders (including sales by our directors, executive officers, and other employees).
|
|
•
|
Short sales, hedging, and other derivative transactions on shares of our Class A common stock.
|
In addition, following the settlement of litigation involving the authorization to distribute our non-voting Class C capital stock, our board of directors has approved a distribution of shares of Class C capital stock as a dividend to our holders of Class A and Class B common stock. We expect that the market price for the shares of Class A common stock will generally reflect the effect of a two-for-one stock split once the dividend is distributed. Although we plan to list the Class C capital stock on The Nasdaq Stock Market, we cannot predict whether, or to what extent, a liquid trading market will develop for the Class C capital stock. If it does not or if the Class C capital stock is not attractive to targets as an acquisition currency or to our employees as an incentive, we may not achieve our objectives in creating this new class. As in the case of the Class A common stock, the trading price for the Class C capital stock may also be volatile and affected by the factors noted above, as well as by the difference in voting rights as between the Class A common stock and the Class C capital stock, the volume of Class C capital stock available for public sale and sales by us and our stockholders of Class C capital stock, including by institutional investors that may be unwilling, unable or choose not to hold non-voting shares they receive as part of the stock dividend. Whether or not the Class C capital stock is included in stock indices in the future may also affect the trading prices of the Class A common stock and the Class C capital stock.
In addition, the stock market in general, and the market for technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may harm the market price of our Class A common stock and our Class C capital Stock regardless of our actual operating performance.
The concentration of our stock ownership limits our stockholders' ability to influence corporate matters.
Our Class B common stock has 10 votes per share and our Class A common stock has one vote per share. As of December 31, 2013, Larry, Sergey, and Eric beneficially owned approximately 92.2% of our outstanding Class B common stock, representing approximately 61.7% of the voting power of our outstanding capital stock. Larry, Sergey, and Eric therefore have significant influence over management and affairs and over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets, for the foreseeable future. In addition, because our Class C capital stock carries no voting rights (except as required by applicable law), the issuance of the Class C capital stock, including in future stock-based acquisition transactions and to fund employee equity incentive programs, could prolong the duration of Larry and Sergey's current relative ownership of our voting power and their ability to elect all of our directors and to determine the outcome of most matters submitted to a vote of our stockholders. Together with Eric, they would also continue to be able to control any required stockholder vote with respect to certain change in control transactions involving Google (including an acquisition of Google by another company).
19
This concentrated control limits or severely restricts our stockholders' ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial. As a result, the market price of our Class A common stock and our Class C capital stock could be adversely affected.
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.
Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:
|
•
|
Our certificate of incorporation provides for a tri-class capital stock structure. As a result of this structure, Larry, Sergey, and Eric have significant influence over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets. This concentrated control could discourage others from initiating any potential merger, takeover, or other change of control transaction that other stockholders may view as beneficial. As noted above, the issuance of the Class C capital stock could have the effect of prolonging the influence of Larry, Sergey, and Eric.
|
|
•
|
Our board of directors has the right to elect directors to fill a vacancy created by the expansion of the Board of Directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors.
|
|
•
|
Our stockholders may not act by written consent. As a result, a holder, or holders, controlling a majority of our capital stock would not be able to take certain actions without holding a stockholders' meeting.
|
|
•
|
Our certificate of incorporation prohibits cumulative voting in the election of directors. This limits the ability of minority stockholders to elect director candidates.
|
|
•
|
Stockholders must provide advance notice to nominate individuals for election to the Board of Directors or to propose matters that can be acted upon at a stockholders' meeting. These provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company.
|
|
•
|
Our board of directors may issue, without stockholder approval, shares of undesignated preferred stock. The ability to issue undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.
|
As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware law, a corporation may not engage in a business combination with any holder of 15% or more of its outstanding voting stock unless the holder has held the stock for three years or, among other things, the Board of Directors has approved the transaction. Our board of directors could rely on Delaware law to prevent or delay an acquisition of us.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
On April 11, 2013, we received a comment letter from the Securities and Exchange Commission (SEC) related to various issues with respect to our public filings, including discussions of advertising and Motorola revenues in Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2012 Annual Report on Form 10-K. We responded to the SEC on May 10, 2013. On June 27, 2013, November 13, 2013 and January 16, 2014, we received additional comment letters from the SEC on these and other matters. We responded to the first two comment letters on August 9, 2013 and December 20, 2013, respectively, and provided the SEC with supplemental analysis and information as requested by the SEC.
As of the date of the filing of this Annual Report on Form 10-K, we are working on responding to the latest comment letter received on January 16, 2014, and have not resolved the comments described above. We believe that we have properly disclosed information related to advertising and Motorola revenues and will continue to cooperate with the SEC to resolve the comments.
20
|
ITEM 2.
|
PROPERTIES
|
Our headquarters are located in Mountain View, California, where we own approximately 3.8 million square feet of office and building space and approximately fifteen acres of developable land to accommodate anticipated future growth. We also own sizable office and building space in New York, New York; Paris, France; and Dublin, Ireland. We operate and own data centers in the U.S., Europe, and Asia pursuant to various lease agreements and co-location arrangements.
In addition, we lease significant office space and undeveloped land in and near our headquarters in Mountain View, California. We also lease additional research and development, and sales and support offices throughout the United States and maintain leased facilities internationally in countries around the world.
Motorola also operates manufacturing facilities, research and development, administrative and sales offices in various U.S. locations and in many foreign countries. Motorola generally considers the productive capacity of its facilities to be adequate and sufficient for the requirements of its business. The extent of utilization of such manufacturing facilities varies from plant to plant and from time to time during the year.
We believe our existing facilities, both owned and leased, are in good condition and suitable for the conduct of our business.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
For a description of our material pending legal proceedings, please see Note 11 “Commitments and Contingencies - Legal Matters” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
Not applicable.
PART II
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Our Class A common stock has been listed on the Nasdaq Global Select Market under the symbol “GOOG” since August 19, 2004. Prior to that time, there was no public market for our stock. The following table sets forth for the indicated periods the high and low sales prices per share for our Class A common stock on the Nasdaq Global Select Market.
|
Fiscal Year 2013 Quarters Ended:
|
High
|
|
Low
|
||||
|
March 31, 2013
|
$
|
844.00
|
|
|
$
|
695.52
|
|
|
June 30, 2013
|
920.60
|
|
|
761.26
|
|
||
|
September 30, 2013
|
928.00
|
|
|
845.56
|
|
||
|
December 31, 2013
|
1,121.00
|
|
|
842.98
|
|
|
Fiscal Year 2012 Quarters Ended:
|
High
|
|
Low
|
||||
|
March 31, 2012
|
$
|
670.25
|
|
|
$
|
564.55
|
|
|
June 30, 2012
|
653.14
|
|
|
556.52
|
|
||
|
September 30, 2012
|
764.89
|
|
|
562.09
|
|
||
|
December 31, 2012
|
774.38
|
|
|
636.00
|
|
Our Class B common stock is neither listed nor traded.
Holders of Record
21
As of December 31, 2013 , there were approximately, 2,536 stockholders of record of our Class A common stock, and the closing price of our Class A common stock was $1,120.71 per share as reported by the Nasdaq Global Select Market. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. As of December 31, 2013 , there were approximately 74 stockholders of record of our Class B common stock.
Dividend Policy
We have never declared or paid any cash dividend on our common stock. We intend to retain any future earnings and do not expect to pay any cash dividends in the foreseeable future.
Stock Performance Graph
This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference into any filing of Google under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The following graph compares the 5-year cumulative total return to shareholders on Google Inc.’s common stock relative to the cumulative total returns of the S&P 500 index, the RDG Internet Composite index, and the NASDAQ Composite index. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in the company’s common stock and in each index on December 31, 2008 and its relative performance is tracked through December 31, 2013 . The returns shown are based on historical results and are not intended to suggest future performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Google Inc., the S&P 500 Index, the
NASDAQ Composite Index, and the RDG Internet Composite Index
*$100 invested on December 31, 2008 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
22
Copyright © 2014 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.
Results of Google’s Transferable Stock Option (TSO) Program
Under our TSO program, eligible employees were able to sell vested stock options to participating financial institutions in an online auction as an alternative to exercising options in the traditional method and then selling the underlying shares. The TSO program was discontinued as of November 29, 2013 .
The following table provides information with respect to sales by our employees of TSOs for the period from October 1, 2013 to November 29, 2013, which is the date the TSO program was discontinued.
|
|
Aggregate Amounts
|
|
Weighted-Average Per Share
Amounts
|
|||||||||||||||||||
|
Period (1)
|
Number of Shares
Underlying
TSOs Sold
|
|
Sale
Price of
TSOs Sold
|
|
TSO
Premium (2)
|
|
Exercise
Price of
TSOs Sold
|
|
Sale
Price of
TSOs Sold
|
|
TSO
Premium (2)
|
|||||||||||
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
|
October 1 – 31
|
79,104
|
|
|
$
|
47,600
|
|
|
$
|
36
|
|
|
$
|
415.67
|
|
|
$
|
601.73
|
|
|
$
|
0.46
|
|
|
November 1 – 29
|
50,621
|
|
|
32,957
|
|
|
22
|
|
|
390.62
|
|
|
651.06
|
|
|
0.44
|
|
|||||
|
Total (except weighted-average per share amounts)
|
129,725
|
|
|
$
|
80,557
|
|
|
$
|
58
|
|
|
$
|
405.90
|
|
|
$
|
620.98
|
|
|
$
|
0.45
|
|
|
(1)
|
The TSO program was generally active during regular trading hours for the Nasdaq Global Select Market when our trading window was open. However, we had the right to suspend the TSO program at any time for any reason, including for maintenance and other technical reasons.
|
|
(2)
|
TSO premium was calculated as the difference between (a) the sale price of the TSO and (b) the intrinsic value of the TSO, which we define as the excess, if any, of the price of our Class A common stock at the time of the sale over the exercise price of the TSO.
|
Our TSO program allowed participation by executive officers (other than Larry Page, Sergey Brin, and Eric E. Schmidt). The following table provides information with respect to sales by our executive officers of TSOs for the period from October 1, 2013 to November 29, 2013, which is the date the TSO program was discontinued:
|
|
Aggregate Amounts
|
|||||||||
|
Executive Officer
|
Number of Shares
Underlying
TSOs Sold
|
|
Sale
Price of
TSOs Sold
|
|
TSO
Premium
|
|||||
|
|
|
|
(in thousands)
|
|||||||
|
Patrick Pichette
|
4,330
|
|
|
$
|
1,943
|
|
|
$
|
0
|
|
|
Total
|
4,330
|
|
|
$
|
1,943
|
|
|
$
|
0
|
|
23
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
The following selected consolidated financial data should be read in conjunction with Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing in Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
The consolidated statements of income data for the years ended December 31, 2011 , 2012 , and 2013 and the consolidated balance sheet data at December 31, 2012 , and 2013 are derived from our audited consolidated financial statements appearing in Item 8 of this Annual Report on Form 10-K. The consolidated statements of income data for the years ended December 31, 2009 and 2010, and the consolidated balance sheet data at December 31, 2009, 2010, and 2011 , are derived from our audited consolidated financial statements that are not included in this Annual Report on Form 10-K. The historical results are not necessarily indicative of the results to be expected in any future period.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
||||||||||
|
|
(in millions, except per share amounts)
|
||||||||||||||||||
|
Consolidated Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Revenues
|
$
|
23,651
|
|
|
$
|
29,321
|
|
|
$
|
37,905
|
|
|
$
|
50,175
|
|
|
$
|
59,825
|
|
|
Income from operations
|
8,312
|
|
|
10,381
|
|
|
11,742
|
|
|
12,760
|
|
|
13,966
|
|
|||||
|
Net income from continuing operations
|
6,520
|
|
|
8,505
|
|
|
9,737
|
|
|
10,788
|
|
|
12,214
|
|
|||||
|
Net income (loss) from discontinued operations
|
0
|
|
|
0
|
|
|
0
|
|
|
(51
|
)
|
|
706
|
|
|||||
|
Net income
|
6,520
|
|
|
8,505
|
|
|
9,737
|
|
|
10,737
|
|
|
12,920
|
|
|||||
|
Net income (loss) per share of Class A and Class B common stock - basic
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Continuing operations
|
$
|
20.62
|
|
|
$
|
26.69
|
|
|
$
|
30.17
|
|
|
$
|
32.97
|
|
|
$
|
36.70
|
|
|
Discontinued operations
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
$
|
(0.16
|
)
|
|
$
|
2.12
|
|
|||
|
Net income per share of Class A and Class B common stock - basic
|
$
|
20.62
|
|
|
$
|
26.69
|
|
|
$
|
30.17
|
|
|
$
|
32.81
|
|
|
$
|
38.82
|
|
|
Net income (loss) per share of Class A and Class B common stock - diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Continuing operations
|
$
|
20.41
|
|
|
$
|
26.31
|
|
|
$
|
29.76
|
|
|
$
|
32.46
|
|
|
$
|
36.05
|
|
|
Discontinued operations
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
$
|
(0.15
|
)
|
|
$
|
2.08
|
|
|||
|
Net income per share of Class A and Class B common stock - diluted
|
$
|
20.41
|
|
|
$
|
26.31
|
|
|
$
|
29.76
|
|
|
$
|
32.31
|
|
|
$
|
38.13
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash, cash equivalents, and marketable securities
|
$
|
24,485
|
|
|
$
|
34,975
|
|
|
$
|
44,626
|
|
|
$
|
48,088
|
|
|
$
|
58,717
|
|
|
Total assets
|
40,497
|
|
|
57,851
|
|
|
72,574
|
|
|
93,798
|
|
|
110,920
|
|
|||||
|
Total long-term liabilities
|
1,746
|
|
|
1,614
|
|
|
5,516
|
|
|
7,746
|
|
|
7,703
|
|
|||||
|
Total stockholders’ equity
|
36,004
|
|
|
46,241
|
|
|
58,145
|
|
|
71,715
|
|
|
87,309
|
|
24
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.
Overview
Google is a global technology leader focused on improving the ways people connect with information. We aspire to build products and provide services that improve the lives of billions of people globally. Our mission is to organize the world’s information and make it universally accessible and useful. Our innovations in web search and advertising have made our website a top internet property and our brand one of the most recognized in the world. Our Google segment generates revenues primarily by delivering relevant, cost-effective online advertising. Businesses use our AdWords program and AdSense program to promote their products and services with advertising on both Google-owned properties and publishers' sites across the web.
Our Motorola Mobile segment is focused on mobile wireless devices and related products and services and generates revenues primarily by selling hardware products. In January 2014, we entered into an agreement with Lenovo providing for the disposition of the Motorola Mobile segment. The transaction is expected to close in 2014.
The Motorola Home segment was focused on technologies and devices that provide video entertainment services to consumers by enabling subscribers to access a variety of interactive digital television services. In December 2012, we entered into an agreement for the disposition of the Motorola Home segment. The transaction closed on April 17, 2013. All financial results related to Motorola Home were presented as net income (loss) from discontinued operations on the Consolidated Statements of Income.
Trends in Our Businesses
Advertising transactions continue to shift from offline to online as the digital economy evolves. This has contributed to the rapid growth of our business since inception, resulting in substantially increased revenues, and we expect that our business will continue to grow. However, our revenue growth rate has generally declined over time, and it could do so in the future as a result of a number of factors, including increasing competition, our investments in new business strategies, products, services, and technologies, changes in our product mix, shifts in the geographic mix of our revenues, query growth rates and how users make queries, challenges in maintaining our growth rate as our revenues increase to higher levels, and the evolution of the online advertising market, including the increasing variety of online platforms for advertising, and other markets in which we participate.
Our users are increasingly connected to the internet and using multiple devices to access our products and services, a trend that has increased our global search queries and changed our platform mix. We expect that our revenue growth rate will continue to be affected by evolving consumer preferences, as well as by advertising trends, the acceptance by users of our products and services as they are delivered on diverse devices, and our ability to create a seamless experience for both users and advertisers in this multi-screen environment.
The main focus of our advertising programs is to help businesses reach people in the moments that matter across all devices with smarter ads that are relevant to their intent and context, reflecting our commitment to constantly improve their overall web experience. As a result, we expect to continue to take steps to improve the relevance of the ads displayed on our websites and our Google Network Members’ websites. These steps include not displaying ads that generate low click-through rates or that send users to irrelevant or otherwise low-quality websites, updating our advertising policies and ensuring their compliance, and terminating our relationships with those Google Network Members whose websites do not meet our quality requirements. We may also continue to take steps to reduce the number of accidental clicks by our users. These steps could negatively affect the growth rate of our revenues.
Both seasonal fluctuations in internet usage and traditional retail seasonality have affected, and are likely to continue to affect, our business. Internet usage generally slows during the summer months, and commercial queries typically increase significantly in the fourth quarter of each year. These seasonal trends have caused, and will likely continue to cause, fluctuations in our quarterly results, including fluctuations in sequential revenues, as well as aggregate paid clicks and average cost-per-click growth rates.
The operating margin we realize on revenues generated from ads placed on our Google Network Members’ websites through our AdSense program is significantly lower than the operating margin we realize from revenues generated from ads placed on our websites because most of the advertiser fees from ads served on Google Network Members’ websites are shared with our Google Network Members. For the past five years, growth in advertising
25
revenues from our websites has generally exceeded that from our Google Network Members’ websites. This trend has had a positive impact on our operating margins, and we expect that this will continue for the foreseeable future, although the relative rate of growth in revenues from our websites compared to the rate of growth in revenues from our Google Network Members’ websites may vary over time. Also, the margins on advertising revenues from mobile phones and other newer advertising formats are generally lower than those from desktop computers and tablets. We expect this trend to continue to pressure our margins, particularly if we fail to realize the opportunities we anticipate with the transition to a dynamic multi-screen environment.
We conduct our Motorola Mobile business in highly competitive markets, facing both new and established competitors. The markets for many of our products are characterized by rapidly changing technologies, frequent new product introductions, changing consumer trends, short product life cycles, consumer loyalty and evolving industry standards. Market disruptions caused by new technologies, the entry of new competitors, consolidations among our customers and competitors, changes in regulatory requirements, changes in economic conditions, supply chain interruptions or other factors, can introduce volatility into our businesses. Meeting all of these challenges requires consistent operational planning and execution and investment in technology, resulting in innovative products that meet the needs of our customers around the world.
From an overall business perspective, we continue to invest aggressively in areas of strategic focus, our systems, data centers, corporate facilities, information technology infrastructure, and employees. We expect to continue to hire aggressively for 2014 and provide competitive compensation programs to our employees. Our full-time employee headcount was 53,861 (including 11,113 headcount from Motorola Mobile and 5,204 from Motorola Home) at December 31, 2012, and 47,756 (including 3,894 headcount from Motorola Mobile) at December 31, 2013. Acquisitions will also remain an important component of our strategy and use of capital. We expect our cost of revenues will increase in dollars and may increase as a percentage of revenues in future periods, primarily as a result of forecasted increases in traffic acquisition costs, manufacturing and inventory-related costs, data center costs, content acquisition costs, credit card and other transaction fees, and other costs. In particular, traffic acquisition costs as a percentage of advertising revenues may increase in the future if we are unable to continue to improve the monetization or generation of revenues from traffic on our websites and our Google Network Members’ websites.
As we expand our advertising programs and other products to international markets, we continue to increase our exposure to fluctuations in foreign currency to U.S. dollar exchange rates. We have a foreign exchange risk management program that is designed to reduce our exposure to fluctuations in foreign currency exchange rates. However, this program will not fully offset the effect of fluctuations on our revenues and earnings.
Other revenues consist of non-advertising revenues including licensing, hardware and digital content. We expect other revenues to continue to grow. However, operating margin on other revenues is generally lower than that on advertising revenues.
Results of Operations
We completed our acquisition of Motorola on May 22, 2012 (the acquisition date). In December 2012, we entered into an agreement for the disposition of the Motorola Home segment, and consequently, financial results related to Motorola Home were presented as net income (loss) from discontinued operations in the Consolidated Statements of Income in all periods presented. In April 2013, we completed the disposition of the Motorola Home segment.
In January 2014, we entered into an agreement with Lenovo providing for the disposition of the Motorola Mobile segment. The transaction is expected to close in 2014. As we evaluate the impact of this agreement, we expect financial results of Motorola Mobile will be presented as net income (loss) from discontinued operations on the Consolidated Statements of Income and assets and liabilities of Motorola Mobile to be disposed of will be presented as held for sale on the Consolidated Balance Sheets beginning in the first quarter of 2014.
Subsequent to the acquisition of Motorola, we initiated a restructuring plan of our Motorola business. See Note 9 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further discussion of this restructuring plan and the associated restructuring charges.
The following table presents our historical operating results as a percentage of revenues for the periods indicated:
26
|
|
Year Ended December 31,
|
|||||||
|
2011
|
|
2012
|
|
2013
|
||||
|
Consolidated Statements of Income Data:
|
|
|
|
|
|
|||
|
Revenues:
|
|
|
|
|
|
|||
|
Google (advertising and other)
|
100.0
|
%
|
|
91.8
|
%
|
|
92.8
|
%
|
|
Motorola Mobile (hardware and other)
|
0.0
|
|
|
8.2
|
|
|
7.2
|
|
|
Total revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|||
|
Cost of revenues - Google (advertising and other)
|
34.8
|
|
|
34.2
|
|
|
36.8
|
|
|
Cost of revenues - Motorola Mobile (hardware and other)
|
0.0
|
|
|
6.9
|
|
|
6.5
|
|
|
Research and development
|
13.6
|
|
|
13.5
|
|
|
13.3
|
|
|
Sales and marketing
|
12.1
|
|
|
12.2
|
|
|
12.1
|
|
|
General and administrative
|
7.2
|
|
|
7.8
|
|
|
8.0
|
|
|
Charge related to the resolution of Department of Justice investigation
|
1.3
|
|
|
0
|
|
|
0
|
|
|
Total costs and expenses
|
69.0
|
%
|
|
74.6
|
%
|
|
76.7
|
%
|
|
Income from operations
|
31.0
|
|
|
25.4
|
|
|
23.3
|
|
|
Interest and other income, net
|
1.5
|
|
|
1.3
|
|
|
0.9
|
|
|
Income from continuing operations before income taxes
|
32.5
|
|
|
26.7
|
|
|
24.2
|
|
|
Provision for income taxes
|
6.8
|
|
|
5.2
|
|
|
3.8
|
|
|
Net income from continuing operations
|
25.7
|
|
|
21.5
|
|
|
20.4
|
|
|
Net income (loss) from discontinued operations
|
0.0
|
|
|
(0.1
|
)
|
|
1.2
|
|
|
Net income
|
25.7
|
%
|
|
21.4
|
%
|
|
21.6
|
%
|
Revenues by Segment
The following table presents our segment revenues, by revenue source, for the periods presented (in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
|
Advertising revenues:
|
|
|
|
|
|
||||||
|
Google websites
|
$
|
26,145
|
|
|
$
|
31,221
|
|
|
$
|
37,453
|
|
|
Google Network Members' websites
|
10,386
|
|
|
12,465
|
|
|
13,125
|
|
|||
|
Total advertising revenues
|
36,531
|
|
|
43,686
|
|
|
50,578
|
|
|||
|
Other revenues
|
1,374
|
|
|
2,353
|
|
|
4,972
|
|
|||
|
Google segment revenues
|
$
|
37,905
|
|
|
$
|
46,039
|
|
|
$
|
55,550
|
|
|
|
|
|
|
|
|
||||||
|
Motorola Mobile segment revenues
|
0
|
|
|
4,136
|
|
|
4,443
|
|
|||
|
|
|
|
|
|
|
||||||
|
Elimination and other
|
0
|
|
|
0
|
|
|
(168
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
Total revenues
|
$
|
37,905
|
|
|
$
|
50,175
|
|
|
$
|
59,825
|
|
Google segment
The following table presents our Google segment revenues, by revenue source, as a percentage of total Google segment revenues for the periods presented:
27
|
|
Year Ended December 31,
|
|||||||
|
|
2011
|
|
2012
|
|
2013
|
|||
|
Advertising revenues:
|
|
|
|
|
|
|||
|
Google websites
|
69.0
|
%
|
|
67.8
|
%
|
|
67.4
|
%
|
|
Google Network Members' websites
|
27.4
|
|
|
27.1
|
|
|
23.6
|
|
|
Total advertising revenues
|
96.4
|
%
|
|
94.9
|
%
|
|
91.0
|
%
|
|
Other revenues
|
3.6
|
|
|
5.1
|
|
|
9.0
|
|
|
Total revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|||
|
Google websites as % of advertising revenues
|
71.6
|
%
|
|
71.5
|
%
|
|
74.0
|
%
|
|
Google Network Members’ websites as % of advertising revenues
|
28.4
|
%
|
|
28.5
|
%
|
|
26.0
|
%
|
Our Google segment revenues increased $9,511 million from 2012 to 2013. This increase resulted primarily from an increase in advertising revenues generated by Google websites and an increase in other revenues, and to a lesser extent, an increase in advertising revenues generated by Google Network Members' websites. The increase in other revenues was mainly driven by higher sales related to digital content and hardware products. The increase in advertising revenues for Google websites and Google Network Members' websites resulted primarily from an increase in the number of paid clicks through our advertising programs, as paid clicks on Google websites and Google Network Members' websites increased approximately 25% from 2012 to 2013. The increase in the number of paid clicks generated through our advertising programs was due to certain monetization improvements including new and richer ad formats, an increase in aggregate traffic across all platforms, the continued global expansion of our products, advertisers, and user base, as well as an increase in the number of Google Network Members, partially offset by certain advertising policy changes. The impact from the increase in paid clicks on our revenue growth was partially offset by a decrease in the average cost-per-click paid by our advertisers. Average cost-per-click on Google websites and Google Network Members' websites decreased approximately 8% from 2012 to 2013. The decrease in the average cost-per-click paid by our advertisers was driven by various factors, such as the introduction of new products as well as changes in property mix, platform mix and geographical mix, and the general strengthening of the U.S. dollar compared to certain foreign currencies.
Our Google segment revenues increased $8,134 million from 2011 to 2012. This increase resulted primarily from an increase in advertising revenues generated by Google websites and Google Network Members’ websites and, to a lesser extent, an increase in other revenues driven by hardware product sales. The increase in advertising revenues for Google websites and Google Network Members’ websites resulted primarily from an increase in the number of paid clicks through our advertising programs, as aggregate paid clicks on Google websites and Google Network Members’ websites increased approximately 34% from 2011 to 2012. The increase in the number of paid clicks generated through our advertising programs was due to an increase in aggregate traffic across all platforms, certain monetization improvements including new ad formats, the continued global expansion of our products, advertisers, and user base, as well as an increase in the number of Google Network Members. The impact of this increase was partially offset by a decrease in the average cost-per-click paid by our advertisers. Average cost-per-click on Google websites and Google Network Members’ websites decreased approximately 12% from 2011 to 2012. The decrease in the average cost-per-click paid by our advertisers was driven by various factors, such as introduction of new products as well as changes in property mix, platform mix and geographical mix, and the general strengthening of the U.S. dollar compared to certain foreign currencies.
The rate of change in aggregate paid clicks and average cost-per-click, and their correlation with the rate of change in revenues, has fluctuated and may fluctuate in the future because of various factors, including the revenue growth rates on our websites compared to those of our Google Network Members, advertiser competition for keywords, changes in foreign currency exchange rates, seasonality, the fees advertisers are willing to pay based on how they manage their advertising costs, changes in advertising quality or formats, and general economic conditions. In addition, traffic growth in emerging markets compared to more mature markets and across various advertising verticals and channels also contributes to these fluctuations. Changes in aggregate paid clicks and average cost-per-click may not be indicative of our performance or advertiser experiences in any specific geographic market, vertical, or industry.
Improvements in our ability to monetize increased traffic primarily relate to enhancing the end user experience, including providing end users with ads that are more relevant to their search queries or to the content on the Google Network Members’ websites they visit. For instance, these improvements include displaying advertiser-nominated images that are relevant to the user query and creating a more engaging user shopping experience by enhancing
28
search ads to include richer product information, such as product image, price, and merchant name. We believe that the increase in the number of paid clicks on Google websites and Google Network Members’ websites is substantially the result of our commitment to improving the relevance and quality of both our search results and the advertisements displayed, which we believe results in a better user experience, which in turn results in more searches, advertisers, Google Network Members and other partners.
Other revenues in our Google segment increased $2,619 million from 2012 to 2013 and also increased as a percentage of the segment revenues. The increase was primarily due to growth of our digital content products, such as apps, music and movies. Additionally, we experienced an increase in our hardware revenues due to Chromecast, directly-sold Nexus products and Chrome OS devices. In 2011, other revenue was not a significant driver of overall Google segment revenues.
Motorola Mobile segment
Our Motorola Mobile segment revenues increased $307 million from 2012 to 2013. The increase was due to approximately seven months of results being included in 2012 while twelve months of results were included in 2013 and a 14% increase in average selling price (“ASP”) related to new product launches and changes in product mix during the year, partially offset by a 6% decrease in units shipped during 2013. We note that results between 2012 and 2013 are not comparable due to the significant restructuring efforts to simplify the product portfolio completed over the nineteen-month period.
The increase in the Motorola Mobile segment revenues from 2011 to 2012 resulted from the inclusion of revenues from the Motorola Mobile segment of $4,136 million subsequent to the acquisition in May 2012.
Elimination and other
Beginning in the third quarter of 2013, Google and Motorola Mobile segment revenues have been impacted by intersegment transactions that are eliminated in consolidation. Additionally, segment revenues associated with certain products were recognized during the year in our segment results, but deferred to future periods in our consolidated financial statements. This presentation is consistent with what is provided to the chief operating decision maker for purposes of making decisions about allocating resources to each segment and assessing their performance.
Revenues by Geography
The following table presents our Google segment domestic and international revenues as a percentage of Google segment revenues, determined based on the billing addresses of our customers for our Google segment:
|
|
Year Ended December 31,
|
|||||||
|
|
2011
|
|
2012
|
|
2013
|
|||
|
United States
|
46
|
%
|
|
46
|
%
|
|
45
|
%
|
|
United Kingdom
|
11
|
%
|
|
11
|
%
|
|
10
|
%
|
|
Rest of the world
|
43
|
%
|
|
43
|
%
|
|
45
|
%
|
The following table presents our consolidated domestic and international revenues as a percentage of consolidated revenues, determined based on the billing addresses of our customers for our Google segment, and ship-to addresses of our customers for our Motorola Mobile segment:
|
|
Year Ended December 31,
|
|||||||
|
|
2011
|
|
2012
|
|
2013
|
|||
|
United States
|
46
|
%
|
|
47
|
%
|
|
45
|
%
|
|
United Kingdom
|
11
|
%
|
|
10
|
%
|
|
9
|
%
|
|
Rest of the world
|
43
|
%
|
|
43
|
%
|
|
46
|
%
|
The growth in revenues from the rest of the world as a percentage of the Google segment and consolidated revenues from 2012 to 2013 resulted largely from increased acceptance of our advertising programs, and our continued progress in developing localized versions of our products for the international markets as well as increased revenues from the rest of the world in our Motorola Mobile segment in 2013 as compared to 2012.
29
Foreign Exchange Impact on Revenues
The general strengthening of the U.S. dollar relative to certain foreign currencies (primarily the Japanese yen and Brazilian real) from 2012 to 2013 had an unfavorable impact on our international revenues, which was partially offset by the general weakening of the U.S. dollar relative to other foreign currencies (primarily the Euro). Had foreign exchange rates remained constant in these periods, our revenues from the United Kingdom would have been $67 million or 1.2% higher and our revenues from the rest of the world would have been approximately $613 million or 2.2% higher in 2013. This is before consideration of hedging gains of $63 million and $32 million recognized to revenues from the United Kingdom and the rest of the world in 2013.
The general strengthening of the U.S. dollar relative to certain foreign currencies (primarily the Euro) from 2011 to 2012 had an unfavorable impact on our international revenues. Had foreign exchange rates remained constant in these periods, our revenues from the United Kingdom would have been $68 million or 1.4% higher and our revenues from the rest of the world would have been approximately $1,211 million or 5.6% higher in 2012. This is before consideration of hedging gains of $18 million and $199 million recognized to revenues from the United Kingdom and the rest of the world in 2012.
Although we expect to continue to make investments in international markets, these investments may not result in an increase in our international revenues as a percentage of total revenues in 2014 or thereafter. See Note 15 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information about geographic areas.
Costs and Expenses
Cost of Revenues
Cost of revenues consists primarily of traffic acquisition costs. Traffic acquisition costs consist of amounts paid to our Google Network Members under AdSense arrangements and to certain other partners (our distribution partners) who distribute our toolbar and other products (collectively referred to as access points) or otherwise direct search queries to our website (collectively referred to as distribution arrangements). These amounts are primarily based on the revenue share and fixed fee arrangements with our Google Network Members and distribution partners.
Certain distribution arrangements require us to pay our partners based on a fee per access point delivered and not exclusively - or at all - based on revenue share. These fees are non-refundable. Further, these arrangements are terminable at will, although under the terms of certain contracts we or our distribution partners may be subject to penalties in the event of early termination. We recognize fees under these arrangements over the estimated useful lives of the access points to the extent we can reasonably estimate those lives and they are one year or longer, or based on any contractual revenue share, if greater. Otherwise, the fees are charged to expense as incurred. The estimated useful life of the access points is based on the historical average period of time they generate traffic and revenues.
Cost of revenues also includes the expenses associated with the operation of our data centers, including depreciation, labor, energy, and bandwidth costs; hardware inventory costs; credit card and other transaction fees related to processing customer transactions; amortization of acquisition-related intangible assets; and content acquisition costs. We have entered into arrangements with certain content providers under which we distribute or license their video and other content. In a number of these arrangements, we display ads on the pages of our websites from which the content is viewed and share most of the fees these ads generate with the content providers. We also license content on the pages of our websites from which the content is sold and share most of the fees these sales generate with content providers. To the extent we are obligated to make guaranteed minimum revenue share payments to our content providers, we recognize as content acquisition costs the contractual revenue share amount or the amount determined on a straight-line basis, whichever is greater, over the term of the agreements.
In addition, cost of revenues includes manufacturing and inventory-related costs primarily from our Motorola Mobile segment.
The following tables present our cost of revenues by operating segment, our traffic acquisition costs, and traffic acquisition costs as a percentage of advertising revenues in the Google segment, for the periods presented (dollars in millions):
30
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Google
|
$
|
12,939
|
|
|
$
|
16,816
|
|
|
$
|
21,524
|
|
|
Motorola Mobile
|
0
|
|
|
3,294
|
|
|
3,773
|
|
|||
|
Unallocated items
|
249
|
|
|
524
|
|
|
561
|
|
|||
|
Total
|
$
|
13,188
|
|
|
$
|
20,634
|
|
|
$
|
25,858
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Traffic acquisition costs related to AdSense arrangements
|
$
|
7,294
|
|
|
$
|
8,791
|
|
|
$
|
9,293
|
|
|
Traffic acquisition costs related to distribution arrangements
|
1,517
|
|
|
2,165
|
|
|
2,965
|
|
|||
|
Traffic acquisition costs
|
$
|
8,811
|
|
|
$
|
10,956
|
|
|
$
|
12,258
|
|
|
Traffic acquisition costs as a percentage of Google segment advertising revenues
|
24.1
|
%
|
|
25.1
|
%
|
|
24.2
|
%
|
Google segment
Cost of revenues for the Google segment increased $4,708 million from 2012 to 2013 . The increase was due to increases in traffic acquisition costs of $1,302 million resulting from more distribution fees paid, more fees paid for additional traffic directed to our websites, as well as more advertiser fees generated through our AdSense program. The remaining increase was primarily driven by an increase in data center costs, hardware inventory costs as a result of increased hardware sales, content acquisition costs as a result of increased activities related to YouTube and digital content, and revenue share payments to mobile carriers and original equipment manufacturers (OEMs). The decrease in traffic acquisition costs as a percentage of advertising revenues was primarily as a result of a shift of mix between Google website revenue and Google Network Members' websites.
Cost of revenues for the Google segment increased $3,877 million from 2011 to 2012 . The increase was primarily related to an increase in traffic acquisition costs of $2,145 million resulting from more advertiser fees generated through our AdSense program, more traffic directed to our websites, as well as more distribution fees paid. The remaining increase was primarily driven by increases in data center costs, hardware inventory costs and content acquisition costs. The increase in traffic acquisition costs as a percentage of advertising revenues was primarily the result of a greater increase in traffic acquisition costs related to distribution arrangements compared to the increase in advertising revenues generated by Google websites.
Motorola Mobile segment
Cost of revenues for the Motorola Mobile segment were not comparable between 2012 and 2013 because approximately seven months of results were included in 2012 while twelve months of results were included in 2013. Additionally, we conducted various restructuring activities to simplify the Motorola Mobile product portfolio subsequent to the acquisition in May 2012.
Unallocated Items
Unallocated items, including stock-based compensation expense, as well as restructuring and related charges, are not allocated to each segment because we do not include this information in our measurement of the performance of our operating segments.
We expect cost of revenues will increase in dollar amount and may increase as a percentage of total revenues in 2014 and in future periods, primarily as a result of increases in traffic acquisition costs, data center costs, hardware and inventory costs, manufacturing and inventory-related costs, content acquisition costs, credit card and other transaction fees, and other costs. Traffic acquisition costs as a percentage of advertising revenues may fluctuate in the future based on a number of factors, including the following:
|
•
|
The relative growth rates of revenues from our websites and from our Google Network Members’ websites.
|
|
•
|
Whether we are able to enter into more AdSense arrangements that provide for lower revenue share obligations or whether increased competition for arrangements with existing and potential Google Network Members results in less favorable revenue share arrangements.
|
31
|
•
|
Whether we are able to continue to improve the monetization of traffic on our websites and our Google Network Members’ websites.
|
|
•
|
The relative growth rates of expenses associated with distribution arrangements and the related revenues generated, including whether we share with certain existing and new distribution partners proportionately more of the aggregate advertising fees that we earn from paid clicks derived from search queries these partners direct to our websites.
|
Research and Development
The following table presents our research and development expenses by operating segment for the periods presented (dollars in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Google
|
$
|
4,101
|
|
|
$
|
4,809
|
|
|
$
|
5,496
|
|
|
Motorola Mobile
|
0
|
|
474
|
|
|
702
|
|
||||
|
Unallocated items
|
1,061
|
|
|
1,510
|
|
|
1,754
|
|
|||
|
Total
|
$
|
5,162
|
|
|
$
|
6,793
|
|
|
$
|
7,952
|
|
Research and development expenses consist primarily of compensation and related costs for personnel responsible for the research and development activities relating to new and existing products and services, as well as depreciation and equipment-related costs. We expense research and development costs as incurred.
Google segment
Research and development expenses for the Google segment increased $687 million from 2012 to 2013 and as a percentage of Google segment revenues remained relatively flat from 2012 to 2013. The increase in expenses was primarily due to an increase in labor and facilities-related costs of $596 million, largely as a result of an 18% increase in research and development headcount.
Research and development expenses for the Google segment increased $708 million from 2011 to 2012 and as a percentage of Google segment revenues remained relatively flat from 2011 to 2012. The increase in expenses was primarily due to an increase in labor and facilities-related costs of $359 million, largely as a result of a 15% increase in research and development headcount, an increase in depreciation and equipment-related expenses of $147 million, and an increase in professional services expense of $66 million.
Motorola Mobile segment
Research and development expenses for the Motorola Mobile segment were not comparable between 2012 and 2013 because approximately seven months of results were included in 2012 while twelve months of results were included in 2013. Additionally, we conducted various restructuring activities to simplify the Motorola Mobile product portfolio subsequent to the acquisition in May 2012.
Unallocated Items
Unallocated items, including stock-based compensation expense, as well as restructuring and related charges, are not allocated to each segment because we do not include this information in our measurement of the performance of our operating segments.
We expect that research and development expenses will increase in dollar amount in 2014 and future periods because we expect to continue to invest in building the necessary employee and system infrastructure required to support the development of new, and to improve existing, products and services.
Sales and Marketing
The following table presents our sales and marketing expenses by operating segment for the periods presented (dollars in millions):
32
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Google
|
$
|
4,228
|
|
|
$
|
5,017
|
|
|
$
|
6,002
|
|
|
Motorola Mobile
|
0
|
|
|
524
|
|
|
678
|
|
|||
|
Elimination and unallocated items
|
361
|
|
|
602
|
|
|
573
|
|
|||
|
Total
|
$
|
4,589
|
|
|
$
|
6,143
|
|
|
$
|
7,253
|
|
Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service, sales, and sales support functions, as well as advertising and promotional expenditures.
Google segment
Sales and marketing expenses for the Google segment increased $985 million from 2012 to 2013 and as a percentage of Google segment revenues remained flat from 2012 to 2013. The increase in expenses was primarily due to an increase in advertising and promotional expenses of $674 million, as well as an increase in labor and facilities-related costs of $233 million, largely as a result of a 13% increase in sales and marketing headcount.
Sales and marketing expenses for the Google segment increased $789 million from 2011 to 2012 and as a percentage of Google segment revenues remained flat from 2011 to 2012. The increase in expenses was primarily due to an increase in labor and facilities-related costs of $390 million, largely as a result of a 14% increase in sales and marketing headcount, as well as an increase in advertising and promotional expenses of $288 million.
Motorola Mobile segment
Sales and marketing expenses for the Motorola Mobile segment were not comparable between 2012 and 2013 because approximately seven months of results were included in 2012 while twelve months of results were included in 2013. Additionally, we conducted various restructuring activities to simplify the Motorola Mobile product portfolio subsequent to the acquisition in May 2012.
Elimination and Unallocated Items
Elimination items represent intersegment transactions that are eliminated in consolidation. Unallocated items, including stock-based compensation expense, as well as restructuring and related charges, are not allocated to each segment because we do not include this information in our measurement of the performance of our operating segments.
We expect that sales and marketing expenses will increase in dollar amount and may increase as a percentage of total revenues in 2014 and future periods, as we expand our business globally, increase advertising and promotional expenditures in connection with new and existing products, and increase the level of service we provide to our advertisers, Google Network Members, and other partners.
General and Administrative
The following table presents our general and administrative expenses by operating segment for the periods presented (dollars in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Google
|
$
|
2,421
|
|
|
$
|
3,090
|
|
|
$
|
3,967
|
|
|
Motorola Mobile
|
0
|
|
|
236
|
|
|
319
|
|
|||
|
Unallocated items
|
303
|
|
|
519
|
|
|
510
|
|
|||
|
Total
|
$
|
2,724
|
|
|
$
|
3,845
|
|
|
$
|
4,796
|
|
General and administrative expenses consist primarily of compensation and related costs for personnel and facilities, and include costs related to our facilities, finance, human resources, information technology and legal organizations, as well as fees for professional services. Professional services are principally comprised of outside legal, audit, information technology consulting, and outsourcing services. General and administrative expenses also include amortization of certain acquisition-related intangible assets.
Google segment
33
General and administrative expenses for the Google segment increased $877 million from 2012 to 2013 and as a percentage of Google segment revenues remained relatively flat from 2012 to 2013. The increase in expenses was primarily due to an increase in labor and facilities-related costs of $396 million, largely as a result of a 15% increase in general and administrative headcount, an increase in depreciation and equipment-related expense of $222 million, as well as an increase in amortization of acquired intangible assets of $157 million.
General and administrative expenses for the Google segment increased $669 million from 2011 to 2012 and as a percentage of Google segment revenues remained relatively flat from 2011 to 2012. This increase in expenses was primarily due to an increase in amortization of acquired intangible assets of $274 million, an increase in professional services expense of $147 million, the majority of which was related to legal costs, and an increase in labor and facilities-related costs of $122 million, primarily as a result of an 11% increase in general and administrative headcount.
Motorola Mobile segment
General and administrative expenses for the Motorola Mobile segment were not comparable between 2012 and 2013 because approximately seven months of results were included in 2012 while twelve months of results were included in 2013. Additionally, we conducted various restructuring activities to simplify the Motorola Mobile product portfolio subsequent to the acquisition in May 2012.
Unallocated Items
Unallocated items, including stock-based compensation expense, as well as restructuring and related charges, are not allocated to each segment because we do not include this information in our measurement of the performance of our operating segments.
As we expand our business and incur additional expenses, we expect general and administrative expenses will increase in dollar amount and may increase as a percentage of total revenues in 2014 and in future periods.
Charge Related to the Resolution of Department of Justice Investigation
In connection with a resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $500 million during the first quarter of 2011, which was paid in August 2011 upon final resolution of that matter.
Restructuring and related charges
The following table presents our restructuring and related charges for the periods presented (dollars in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Restructuring and related charges (1)
|
$
|
0
|
|
|
$
|
632
|
|
|
$
|
182
|
|
(1) These amounts are included in the previously discussed sections above, as unallocated items related to cost of revenues, research and development, sales and marketing, and general and administrative expenses.
Restructuring and related charges decreased $450 million from 2012 to 2013 because we completed the majority of our restructuring and related activities related to Motorola in 2012.
Stock-Based Compensation
The following table presents our stock-based compensation for the periods presented (dollars in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Stock-based compensation (1) (2)
|
$
|
1,974
|
|
|
$
|
2,523
|
|
|
$
|
3,247
|
|
(1) These amounts are included in the previously discussed sections above, as unallocated items related to cost of revenues, research and development, sales and marketing, and general and administrative expenses.
(2) Stock-based compensation expenses of $126 million and $21 million are included in "restructuring and related charges" above for the years ended December 31, 2012 and 2013.
34
Stock-based compensation increased $724 million from 2012 to 2013 and as a percentage of consolidated revenues remained flat from 2012 to 2013. This increase in expenses was primarily due to an increase in headcount to support our growing business.
Stock-based compensation increased $549 million from 2011 to 2012 and as a percentage of consolidated revenues remained flat from 2011 to 2012. This increase in expenses was primarily due to additional stock awards issued to existing and new employees, as well as awards issued in connection with the acquisition of Motorola.
Stock-based compensation expense for the Motorola Home segment was included in net income (loss) from discontinued operations.
We estimate stock-based compensation related to awards granted through December 31, 2013 to be approximately $3.1 billion in 2014 and $3.2 billion thereafter. This estimate does not include expenses to be recognized related to employee stock awards that are granted after December 31, 2013 or non-employee stock awards that have been or may be granted. In addition, to the extent forfeiture rates are different from what we have anticipated, stock-based compensation related to these awards will be different from our expectations.
Interest and Other Income, Net
Interest and other income, net, decreased $96 million from 2012 to 2013 . This decrease was primarily driven by a decrease in the gain on divestiture of businesses (other than Motorola Home) of $245 million and a decrease in the realized gain on investments of $81 million, partially offset by a decrease in foreign currency exchange loss of $152 million and an increase in interest income of $72 million.
Interest and other income, net, increased $42 million from 2011 to 2012 . This increase was primarily driven by a gain on divestiture of business of $188 million in 2012, an impairment charge related to equity investments of $110 million in 2011, partially offset by an increase in foreign currency exchange loss of $152 million and a decrease in interest income of $99 million.
The costs of our foreign exchange hedging activities that we recognized to interest and other income, net, are primarily a function of the notional amount of the option and forward contracts and their related duration, the movement of the foreign exchange rates relative to the strike prices of the contracts, as well as the volatility of the foreign exchange rates.
As we expand our international business, we believe costs related to hedging activities under our foreign exchange risk management program may increase in dollar amount in 2014 and future periods.
Provision for Income Taxes
The following table presents our provision for income taxes, and effective tax rate for the periods presented (dollars in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Provision for income taxes
|
$
|
2,589
|
|
|
$
|
2,598
|
|
|
$
|
2,282
|
|
|
Effective tax rate
|
21.0
|
%
|
|
19.4
|
%
|
|
15.7
|
%
|
The federal research and development credit expired on December 31, 2011. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law. Under this act, the federal research and development credit was retroactively extended for amounts paid or incurred after December 31, 2011 and before January 1, 2014. The effects of these changes in the tax law have resulted in a tax benefit which was recognized in the first quarter of 2013, the quarter in which the law was enacted.
Our provision for income taxes and our effective tax rate decreased from 2012 to 2013 , primarily as a result of proportionately more earnings realized in countries that have lower statutory tax rates as well as the federal research and development credit related to the American Taxpayer Relief Act of 2012.
Our provision for income taxes increased from 2011 to 2012 , primarily as a result of increases in federal income taxes, driven by higher taxable income year over year and expiration of the federal research and development credit, partially offset by proportionately more earnings realized in countries that have lower statutory tax rates. Our effective tax rate decreased from 2011 to 2012, primarily as a result of proportionately more earnings realized in countries that
35
have lower statutory tax rates as well as a discrete item related to an investigation by the Department of Justice recognized in 2011, which was not deductible for income tax purposes.
Our effective tax rate could fluctuate significantly on a quarterly basis and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates. Our effective tax rate could also fluctuate due to the net gains and losses recognized by legal entities on certain hedges and related hedged intercompany and other transactions under our foreign exchange risk management program, by changes in the valuation of our deferred tax assets or liabilities, or by changes in tax laws, regulations, or accounting principles, as well as certain discrete items. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service (IRS) and other tax authorities, including European governments. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.
See Critical Accounting Policies and Estimates below for additional information about our provision for income taxes.
A reconciliation of the federal statutory income tax rate to our effective tax rate is set forth in Note 14 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Net Income (Loss) from Discontinued Operations
On April 17, 2013, we completed the disposition of the Motorola Home segment to Arris and certain other persons for consideration of approximately $2,412 million in cash, including cash of $2,238 million received on the closing date and certain post-closing adjustments of $174 million received in the third quarter of 2013, and approximately $175 million in Arris' common stock (10.6 million shares). Subsequent to the transaction, we own approximately 7.8% of the outstanding shares of Arris. Additionally, in connection with the disposition, we agreed to indemnify Arris for potential liability from certain intellectual property infringement litigation, for which we recorded an indemnification liability of $175 million, the majority of which was settled during 2013.
The disposition resulted in a net gain of $757 million, which was presented as part of net income from discontinued operations in the Consolidated Statements of Income for the year ended December 31, 2013.
The Motorola Home segment results have been presented as a discontinued operation for the years ended December 31, 2012 and 2013. The following table provides the financial results included in net income (loss) from discontinued operations during the periods presented (in millions):
|
|
Year ended December 31,
|
||||||
|
|
2012
|
|
2013
|
||||
|
Revenues
|
$
|
2,028
|
|
|
$
|
804
|
|
|
|
|
|
|
||||
|
Loss from discontinued operations before income taxes
|
(22
|
)
|
|
(67
|
)
|
||
|
(Provision for)/Benefits from income taxes
|
(29
|
)
|
|
16
|
|
||
|
Gain on disposal
|
0
|
|
|
757
|
|
||
|
Net (loss) income from discontinued operations
|
$
|
(51
|
)
|
|
$
|
706
|
|
Quarterly Results of Operations
The following tables presenting our quarterly results of operations should be read in conjunction with the consolidated financial statements and related notes included in Item 8 of this Annual Report on Form 10-K. We have prepared the unaudited information on the same basis as our audited consolidated financial statements. Our operating results for any quarter are not necessarily indicative of results for any future quarters or for a full year. Please note that previously reported quarters have been adjusted to show discontinued operations for the disposition of the Motorola Home business.
The following table presents our unaudited quarterly results of operations for the eight quarters ended December 31, 2013 . This table includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for fair presentation of our consolidated financial position and operating results for the quarters presented. Both seasonal fluctuations in internet usage and traditional retail seasonality have affected, and are likely to continue to affect, our business. Internet usage generally slows during the summer months, and commercial queries typically
36
increase significantly in the fourth quarter of each year. These seasonal trends have caused and will likely continue to cause, fluctuations in our quarterly results, including fluctuations in sequential revenue growth rates.
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
|
|
Mar 31,
2012
|
|
Jun 30,
2012
|
|
Sep 30,
2012
|
|
Dec 31,
2012
|
|
Mar 31,
2013
|
|
Jun 30,
2013
|
|
Sep 30,
2013
|
|
Dec 31,
2013
|
||||||||||||||||
|
|
(In millions, except per share amounts)
(unaudited)
|
||||||||||||||||||||||||||||||
|
Consolidated Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Google (advertising and other)
|
$
|
10,645
|
|
|
$
|
10,964
|
|
|
$
|
11,526
|
|
|
$
|
12,905
|
|
|
$
|
12,951
|
|
|
$
|
13,107
|
|
|
$
|
13,754
|
|
|
$
|
15,707
|
|
|
Motorola Mobile (hardware and other)
|
0
|
|
|
843
|
|
|
1,778
|
|
|
1,514
|
|
|
1,018
|
|
|
998
|
|
|
1,139
|
|
|
1,151
|
|
||||||||
|
Total revenues
|
10,645
|
|
|
11,807
|
|
|
13,304
|
|
|
14,419
|
|
|
13,969
|
|
|
14,105
|
|
|
14,893
|
|
|
16,858
|
|
||||||||
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Cost of revenues - Google (advertising and other)
|
3,789
|
|
|
3,984
|
|
|
4,440
|
|
|
4,963
|
|
|
5,136
|
|
|
5,195
|
|
|
5,409
|
|
|
6,253
|
|
||||||||
|
Cost of revenues - Motorola Mobile (hardware and other)
|
0
|
|
|
693
|
|
|
1,515
|
|
|
1,250
|
|
|
808
|
|
|
868
|
|
|
1,004
|
|
|
1,185
|
|
||||||||
|
Research and development
|
1,441
|
|
|
1,538
|
|
|
1,879
|
|
|
1,935
|
|
|
1,837
|
|
|
1,987
|
|
|
2,017
|
|
|
2,111
|
|
||||||||
|
Sales and marketing
|
1,269
|
|
|
1,413
|
|
|
1,710
|
|
|
1,751
|
|
|
1,586
|
|
|
1,735
|
|
|
1,806
|
|
|
2,126
|
|
||||||||
|
General and administrative
|
757
|
|
|
942
|
|
|
1,020
|
|
|
1,126
|
|
|
1,125
|
|
|
1,197
|
|
|
1,213
|
|
|
1,261
|
|
||||||||
|
Total costs and expenses
|
7,256
|
|
|
8,570
|
|
|
10,564
|
|
|
11,025
|
|
|
10,492
|
|
|
10,982
|
|
|
11,449
|
|
|
12,936
|
|
||||||||
|
Income from operations
|
3,389
|
|
|
3,237
|
|
|
2,740
|
|
|
3,394
|
|
|
3,477
|
|
|
3,123
|
|
|
3,444
|
|
|
3,922
|
|
||||||||
|
Interest and other income, net
|
156
|
|
|
253
|
|
|
65
|
|
|
152
|
|
|
134
|
|
|
247
|
|
|
24
|
|
|
125
|
|
||||||||
|
Income from continuing operations before income taxes
|
3,545
|
|
|
3,490
|
|
|
2,805
|
|
|
3,546
|
|
|
3,611
|
|
|
3,370
|
|
|
3,468
|
|
|
4,047
|
|
||||||||
|
Provision for income taxes
|
655
|
|
|
657
|
|
|
647
|
|
|
639
|
|
|
287
|
|
|
816
|
|
|
513
|
|
|
666
|
|
||||||||
|
Net income from continuing operations
|
$
|
2,890
|
|
|
$
|
2,833
|
|
|
$
|
2,158
|
|
|
$
|
2,907
|
|
|
$
|
3,324
|
|
|
$
|
2,554
|
|
|
$
|
2,955
|
|
|
$
|
3,381
|
|
|
Net income (loss) from discontinued operations
|
0
|
|
|
(48
|
)
|
|
18
|
|
|
(21
|
)
|
|
22
|
|
|
674
|
|
|
15
|
|
|
(5
|
)
|
||||||||
|
Net income
|
$
|
2,890
|
|
|
$
|
2,785
|
|
|
$
|
2,176
|
|
|
$
|
2,886
|
|
|
$
|
3,346
|
|
|
$
|
3,228
|
|
|
$
|
2,970
|
|
|
$
|
3,376
|
|
|
Net income (loss) per share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Continuing operations
|
$
|
8.88
|
|
|
$
|
8.68
|
|
|
$
|
6.59
|
|
|
$
|
8.83
|
|
|
$
|
10.06
|
|
|
$
|
7.68
|
|
|
$
|
8.86
|
|
|
$
|
10.10
|
|
|
Discontinued operations
|
0
|
|
|
(0.14
|
)
|
|
0.05
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.07
|
|
|
$
|
2.03
|
|
|
$
|
0.04
|
|
|
$
|
(0.02
|
)
|
|||
|
Net income per share - basic
|
$
|
8.88
|
|
|
$
|
8.54
|
|
|
$
|
6.64
|
|
|
$
|
8.77
|
|
|
$
|
10.13
|
|
|
$
|
9.71
|
|
|
$
|
8.90
|
|
|
$
|
10.08
|
|
|
Net income (loss) per share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Continuing operations
|
$
|
8.75
|
|
|
$
|
8.56
|
|
|
$
|
6.48
|
|
|
$
|
8.68
|
|
|
$
|
9.87
|
|
|
$
|
7.55
|
|
|
$
|
8.71
|
|
|
$
|
9.91
|
|
|
Discontinued operations
|
0
|
|
|
(0.14
|
)
|
|
0.05
|
|
|
(0.06
|
)
|
|
0.07
|
|
|
1.99
|
|
|
0.04
|
|
|
(0.01
|
)
|
||||||||
|
Net income per share - diluted
|
$
|
8.75
|
|
|
$
|
8.42
|
|
|
$
|
6.53
|
|
|
$
|
8.62
|
|
|
$
|
9.94
|
|
|
$
|
9.54
|
|
|
$
|
8.75
|
|
|
$
|
9.90
|
|
The following table presents our unaudited quarterly results of operations as a percentage of revenues for the eight quarters ended December 31, 2013 :
37
|
|
Quarter Ended
|
||||||||||||||||||||||
|
|
Mar 31,
2012
|
|
Jun 30,
2012
|
|
Sep 30,
2012
|
|
Dec 31,
2012
|
|
Mar 31,
2013
|
|
Jun 30,
2013
|
|
Sep 30,
2013
|
|
Dec 31,
2013
|
||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Google (advertising and other)
|
100.0
|
%
|
|
92.9
|
%
|
|
86.6
|
%
|
|
89.5
|
%
|
|
92.7
|
%
|
|
92.9
|
%
|
|
92.4
|
%
|
|
93.2
|
%
|
|
Motorola Mobile (hardware and other)
|
0
|
|
|
7.1
|
|
|
13.4
|
|
|
10.5
|
|
|
7.3
|
|
|
7.1
|
|
|
7.6
|
|
|
6.8
|
|
|
Total revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cost of revenues - Google (advertising and other)
|
35.6
|
|
|
33.7
|
|
|
33.4
|
|
|
34.4
|
|
|
36.8
|
|
|
36.8
|
|
|
36.3
|
|
|
37.1
|
|
|
Cost of revenues - Motorola Mobile (hardware and other)
|
0
|
|
|
5.9
|
|
|
11.3
|
|
|
8.7
|
|
|
5.7
|
|
|
6.2
|
|
|
6.7
|
|
|
7.0
|
|
|
Research and development
|
13.5
|
|
|
13.0
|
|
|
14.1
|
|
|
13.4
|
|
|
13.2
|
|
|
14.1
|
|
|
13.5
|
|
|
12.5
|
|
|
Sales and marketing
|
11.9
|
|
|
12.0
|
|
|
12.9
|
|
|
12.2
|
|
|
11.4
|
|
|
12.3
|
|
|
12.1
|
|
|
12.6
|
|
|
General and administrative
|
7.2
|
|
|
8.0
|
|
|
7.7
|
|
|
7.8
|
|
|
8.0
|
|
|
8.5
|
|
|
8.3
|
|
|
7.5
|
|
|
Total costs and expenses
|
68.2
|
|
|
72.6
|
|
|
79.4
|
|
|
76.5
|
|
|
75.1
|
|
|
77.9
|
|
|
76.9
|
|
|
76.7
|
|
|
Income from operations
|
31.8
|
|
|
27.4
|
|
|
20.6
|
|
|
23.5
|
|
|
24.9
|
|
|
22.1
|
|
|
23.1
|
|
|
23.3
|
|
|
Interest and other income, net
|
1.5
|
|
|
2.1
|
|
|
0.5
|
|
|
1.1
|
|
|
1.0
|
|
|
1.8
|
|
|
0.2
|
|
|
0.7
|
|
|
Income from continuing operations before income taxes
|
33.3
|
|
|
29.5
|
|
|
21.1
|
|
|
24.6
|
|
|
25.9
|
|
|
23.9
|
|
|
23.3
|
|
|
24.0
|
|
|
Provision for income taxes
|
6.2
|
|
|
5.5
|
|
|
4.9
|
|
|
4.4
|
|
|
2.1
|
|
|
5.8
|
|
|
3.4
|
|
|
4.0
|
|
|
Net income from continuing operations
|
27.1
|
%
|
|
24.0
|
%
|
|
16.2
|
%
|
|
20.2
|
%
|
|
23.8
|
%
|
|
18.1
|
%
|
|
19.9
|
%
|
|
20.0
|
%
|
|
Net income (loss) from discontinued operations
|
0
|
%
|
|
(0.4
|
)%
|
|
0.1
|
%
|
|
(0.2
|
)%
|
|
0.2
|
%
|
|
4.8
|
%
|
|
0.1
|
%
|
|
0
|
%
|
|
Net income
|
27.1
|
%
|
|
23.6
|
%
|
|
16.3
|
%
|
|
20.0
|
%
|
|
24.0
|
%
|
|
22.9
|
%
|
|
20.0
|
%
|
|
20.0
|
%
|
Liquidity and Capital Resources
As of December 31, 2013 , we had $58.7 billion of cash, cash equivalents, and marketable securities. Cash equivalents and marketable securities are comprised of time deposits, money market and other funds, including cash collateral received related to our securities lending program, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments, debt instruments issued by municipalities in the U.S., corporate securities, mortgage-backed securities and asset-backed securities.
As of December 31, 2013 , $33.6 billion of the $58.7 billion of cash, cash equivalents, and marketable securities was held by our foreign subsidiaries. If these funds are needed for our operations in the U.S., we would be required to accrue and pay U.S. taxes to repatriate these funds. However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to repatriate them to fund our U.S. operations.
Our principal sources of liquidity are our cash, cash equivalents, and marketable securities, as well as the cash flow that we generate from our operations. At December 31, 2013 , we had unused letters of credit for approximately $173 million. We believe that our sources of funding will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months. Our liquidity could be negatively affected by a decrease in demand for our products and services. In addition, we may make acquisitions or license products and technologies complementary to our business and may need to raise additional capital through future debt or equity financing to provide for greater flexibility to fund any such acquisitions and licensing activities. Additional financing may not be available at all or on terms favorable to us.
38
We have a debt financing program of up to $3.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. As of December 31, 2013 , we had $2.0 billion of commercial paper outstanding recorded as short-term debt, with a weighted-average interest rate of 0.1% that mature at various dates through June 2014. Average commercial paper borrowings during the year were $2.1 billion and the maximum amount outstanding during the year was $2.5 billion. In conjunction with this program, we have a $3.0 billion revolving credit facility expiring in July 2016. The interest rate for the credit facility is determined based on a formula using certain market rates. As of December 31, 2013 , we were in compliance with the financial covenant in the credit facility and no amounts were outstanding.
In May 2011, we issued $3.0 billion of unsecured senior notes in three equal tranches, due in 2014, 2016, and 2021, with stated interest rates of 1.25%, 2.125%, and 3.625%. The net proceeds from the sale of the notes were used to repay a portion of our outstanding commercial paper and for general corporate purposes. In May 2013, we reclassified the first tranche of $1.0 billion unsecured senior notes due in May 2014 as short-term debt. We plan to issue $1.0 billion of long-term debt when this note matures in 2014. As of December 31, 2013 , the total carrying value and estimated fair value of these notes were $3.0 billion and $3.1 billion. The estimated fair value was based on quoted prices for our publicly-traded debt as of December 31, 2013 . We are not subject to any financial covenants under the notes.
In August 2013, we entered into a $258 million capital lease obligation on certain property expiring in 2028 with an option to purchase in 2016. The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value at December 31, 2013.
In summary, our cash flows are as follows (in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Net cash provided by operating activities
|
$
|
14,565
|
|
|
$
|
16,619
|
|
|
$
|
18,659
|
|
|
Net cash used in investing activities
|
(19,041
|
)
|
|
(13,056
|
)
|
|
(13,679
|
)
|
|||
|
Net cash provided by (used in) financing activities
|
807
|
|
|
1,229
|
|
|
(857
|
)
|
Cash Provided by Operating Activities
Our largest source of cash provided by operating cash flows is advertising revenues generated by Google websites and Google Network Members' websites. We also generate cash from the sale of our hardware products, primarily in the Motorola Mobile segment. Our primary uses of cash from operating activities include payments to our Google Network Members and distribution partners, which are based on the revenue share or fixed fee arrangements, as well as payments for manufacturing and inventory-related costs primarily for the Motorola Mobile segment. In addition, uses of cash from operating activities include compensation and related costs, other general corporate expenditures and income taxes.
Cash provided by operating activities consist of net income adjusted for certain non-cash items, including stock-based compensation expense, depreciation, amortization, deferred income taxes, excess tax benefits from stock-based award activities, as well as the effect of changes in working capital and other activities.
Net cash provided by operating activities increased from 2012 to 2013, primarily due to increased net income adjusted for gain on divestiture of businesses, depreciation and amortization expense on property and equipment, stock-based compensation expense, and amortization of intangible assets. These increases were partially offset by the net decrease in cash from changes in working capital primarily as a result of a decrease in income taxes, an increase in accounts receivable and inventories, offset by an increase in accounts payable.
Net cash provided by operating activities increased from 2011 to 2012, primarily due to increased net income adjusted for gain on divestiture of businesses, stock-based compensation expense, depreciation and amortization expense on property and equipment and amortization of intangible assets. In addition, there was a net increase in cash from changes in working capital primarily driven by an increase in income taxes and a decrease in accounts receivable and inventories. These increases were partially offset by the net increase in prepaid and other assets and a decrease in accounts payable.
39
As we expand our business internationally, we have offered payment terms to certain advertisers that are standard in their locales but longer than terms we would generally offer to our domestic advertisers. This may increase our working capital requirements and may have a negative effect on cash provided by our operating activities.
Cash Used In Investing Activities
Cash provided by or used in investing activities primarily consist of purchases, maturities, and sales of marketable securities, acquisitions of businesses and intangible assets, divestiture of businesses, and purchases of property and equipment. In addition, cash provided by or used in investing activities include our investments in reverse repurchase agreements and the cash collateral received or returned from our securities lending program.
Cash used in investing activities increased from 2012 to 2013, primarily attributable to a net increase in purchases of marketable securities and an increase in capital expenditures primarily related to our production equipment, data centers, and real estate purchases. This increase was partially offset by lower spend related to acquisitions and an increase in proceeds received from divestiture of businesses.
Cash used in investing activities decreased from 2011 to 2012, primarily attributable to a decrease in purchases of marketable securities, partially offset by a decrease in maturities and sales of marketable securities and an increase in spend related to acquisitions due to the purchase of Motorola in 2012.
In order to manage expected increases in internet traffic, advertising transactions, and new products and services, and to support our overall global business expansion, we expect to make significant investments in production equipment, our systems, data centers, corporate facilities, and information technology infrastructure in 2014 and thereafter. However, the amount of our capital expenditures has fluctuated and may continue to fluctuate on a quarterly basis.
In addition, we expect to continue to spend cash on acquisitions and other investments. These acquisitions generally enhance the breadth and depth of our expertise in engineering and other functional areas, our technologies, and our product and service offerings.
Cash Provided by (Used in) Financing Activities
Cash provided by or used in financing activities consists primarily of net proceeds or payments from issuance or repayments of short-term debt under our commercial paper program and net proceeds or payments and excess tax benefits from stock-based award activities.
Cash used in financing activities increased from 2012 to 2013, primarily driven by an increase in net cash payments related to debt and, to a lesser extent, an increase in net payments for stock-based award activities.
Cash provided by financing activities increased from 2011 to 2012, primarily driven by an increase in net cash proceeds received related to debt, partially offset by an increase in net payments for stock-based award activities.
Contractual Obligations as of December 31, 2013
|
|
Payments due by period
|
||||||||||||||||||
|
|
Total
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Operating lease obligations, net of sublease income amounts
|
$
|
4,038
|
|
|
$
|
499
|
|
|
$
|
915
|
|
|
$
|
788
|
|
|
$
|
1,836
|
|
|
Purchase obligations and other
|
3,293
|
|
|
2,407
|
|
|
680
|
|
|
80
|
|
|
126
|
|
|||||
|
Long-term debt obligations, including capital lease obligations
|
3,601
|
|
|
1,079
|
|
|
1,358
|
|
|
73
|
|
|
1,091
|
|
|||||
|
Other long-term liabilities reflected on our balance sheet
|
251
|
|
|
114
|
|
|
48
|
|
|
55
|
|
|
34
|
|
|||||
|
Total contractual obligations
|
$
|
11,183
|
|
|
$
|
4,099
|
|
|
$
|
3,001
|
|
|
$
|
996
|
|
|
$
|
3,087
|
|
40
Operating Leases
We have entered into various non-cancelable operating lease agreements for certain of our offices, land, and data centers throughout the world with original lease periods expiring primarily between 2014 and 2063. We are committed to pay a portion of the related operating expenses under certain of these lease agreements. These operating expenses are not included in the above table. Certain of these leases have free or escalating rent payment provisions. We recognize rent expense under such leases on a straight-line basis over the term of the lease. Certain leases have adjustments for market provisions.
Purchase Obligations
Purchase obligations represent non-cancelable contractual obligations at December 31, 2013 . These contracts are primarily related to certain of our distribution arrangements, video and other content licensing revenue sharing arrangements, data center operations and facility build-outs, as well as purchase of inventory.
Long-term Debt Obligations
Long-term debt obligations represent principal and interest payments to be made over the life of our unsecured senior notes issued in May 2011 and our capital lease obligation incurred in August 2013. Please see Note 4 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further details.
Other Long-Term Liabilities
Other long-term liabilities represent cash obligations recorded on our consolidated balance sheets, including the short-term portion of these long-term liabilities and consist primarily of payments owed in connection with certain investments and asset retirement obligations.
In addition to the amounts above, we had long-term taxes payable of $2.7 billion as of December 31, 2013 related to tax positions for which the timing of the ultimate resolution is uncertain. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes. As a result, this amount is not included in the above table.
Off-Balance Sheet Entities
As of December 31, 2013 , we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP.) In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. We have reviewed our critical accounting policies and estimates with the audit committee of our board of directors.
Income Taxes
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes.
Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income
41
taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest and penalties.
Our effective tax rates have differed from the statutory rate primarily due to the tax impact of foreign operations, state taxes, certain benefits realized related to stock-based award activities, and research and development tax credits. The effective tax rates were 21.0%, 19.4%, and 15.7% for 2011 , 2012 , and 2013 . Our future effective tax rates could be adversely affected by earnings being lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates, the net gains and losses recognized by legal entities on certain hedges and related hedged intercompany and other transactions under our foreign exchange risk management program, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items. In addition, we are subject to the continuous examination of our income tax returns by the IRS and other tax authorities which may assert assessments against us. We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes.
Loss Contingencies
We are regularly subject to claims, suits, government investigations, and other proceedings involving competition and antitrust, intellectual property, privacy, indirect taxes, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, and other matters. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both probable that a loss has been incurred, and the amount can be reasonably estimated. If we determine that a loss is possible and a range of the loss can be reasonably estimated, we disclose the range of the possible loss in the Notes to the Consolidated Financial Statements. We evaluate, on a monthly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related ranges of possible losses disclosed, and make adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material. Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material impact on our business, consolidated financial position, results of operations, or cash flows. See Note 11 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding contingencies.
Business Combinations
We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.
Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and acquired patents and developed technology; and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed, as more fully discussed in Note 6 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Goodwill
Goodwill is allocated to reporting units expected to benefit from the business combination. We test goodwill for impairment at the reporting unit level at least annually, or more frequently if events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill impairment tests require judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. As of December 31, 2013, no impairment of goodwill has been identified.
42
Impairment of Marketable and Non-Marketable Securities
We periodically review our marketable and non-marketable securities for impairment. If we conclude that any of these investments are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. For marketable debt securities, we also consider whether (1) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as interest and other income, net.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
We are exposed to financial market risks, including changes in currency exchange rates and interest rates.
Foreign Currency Exchange Risk
We transact business globally in multiple currencies. Our international revenues, as well as costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the US dollar. Our most significant currency exposures are the Euro, the British pound, and Japanese Yen. We are a net receiver of foreign currencies and therefore benefit from a weakening of the U.S. dollar and are adversely affected by a strengthening of the U.S. dollar relative to the foreign currency.
We use foreign exchange option contracts to protect our forecasted U.S. dollar-equivalent earnings from adverse changes in foreign currency exchange rates. These hedging contracts reduce, but do not entirely eliminate the impact of adverse currency exchange rate movements. We designate these option contracts as cash flow hedges for accounting purposes. The fair value of the option contract is separated into its intrinsic and time values. Changes in the time value are recorded in interest and other income, net. Changes in the intrinsic value are recorded as a component of accumulated other comprehensive income (AOCI) and subsequently reclassified into revenues to offset the hedged exposures as they occur.
We considered the historical trends in currency exchange rates and determined that it was reasonably possible that changes in exchange rates of 20% could be experienced in the near term. If the U.S. dollar weakened by 20%, the amount recorded in AOCI related to our foreign exchange options before tax effect would have been approximately $9 million and $4 million lower at December 31, 2012 and December 31, 2013 , and the total amount of expense recorded as interest and other income, net, would have been approximately $140 million and $123 million higher in the years ended December 31, 2012 and December 31, 2013 . If the U.S. dollar strengthened by 20%, the amount recorded in accumulated AOCI related to our foreign exchange options before tax effect would have been approximately $1.7 billion higher both at December 31, 2012 and December 31, 2013 , and the total amount of expense recorded as interest and other income, net, would have been approximately $159 million and $120 million higher in the years ended December 31, 2012 and December 31, 2013 .
In addition, we use foreign exchange forward contracts to offset the foreign exchange risk on our assets and liabilities denominated in currencies other than the local currency of the subsidiary. These forward contracts reduce, but do not entirely eliminate the impact of currency exchange rate movements on our assets and liabilities. The foreign currency gains and losses on the assets and liabilities are recorded in interest and other income, net, which are offset by the gains and losses on the forward contracts.
We considered the historical trends in currency exchange rates and determined that it was reasonably possible that adverse changes in exchange rates of 20% for all currencies could be experienced in the near term. These changes would have resulted in an adverse impact on income before income taxes of approximately $9 million and $52 million at December 31, 2012 and December 31, 2013 . The adverse impact at December 31, 2012 and December 31, 2013 is after consideration of the offsetting effect of approximately $731 million and $853 million from foreign exchange contracts in place for the months of December 31, 2012 and December 31, 2013 . These reasonably possible adverse changes in exchange rates of 20% were applied to total monetary assets and liabilities denominated in currencies other than the local currencies at the balance sheet dates to compute the adverse impact these changes would have had on our income before income taxes in the near term.
43
Interest Rate Risk
Our investment strategy is to achieve a return that will allow us to preserve capital and maintain liquidity requirements. We invest primarily in U.S. government and its agency securities, money market and other funds, corporate debt securities, mortgage-backed securities, debt instruments issued by foreign governments, municipal securities, time deposits, and asset backed securities. By policy, we limit the amount of credit exposure to any one issuer. Our investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. As of December 31, 2012 and December 31, 2013, unrealized losses on our marketable debt securities were primarily due to temporary interest rate fluctuations as a result of higher market interest rates compared to the fixed interest rates on our debt securities. We account for both fixed and variable rate securities at fair value with changes on gains and losses recorded in AOCI until the securities are sold. We use interest rate derivative contracts to hedge realized gains and losses on our securities. These derivative contracts are accounted for at fair value with changes in fair value recorded in Interest and other income, net.
We considered the historical volatility of short-term interest rates and determined that it was reasonably possible that an adverse change of 100 basis points could be experienced in the near term. A hypothetical 1.00% (100 basis points) increase in interest rates would have resulted in a decrease in the fair values of our marketable securities of approximately $1.1 billion and $1.0 billion at December 31, 2012 and December 31, 2013 , after taking into consideration the offsetting effect from interest rate derivative contracts outstanding as of December 31, 2012 and December 31, 2013 . A hypothetical 1.00% (100 basis points) decrease in interest rates would have resulted in a decrease in the fair values of our forward-starting interest swaps of approximately $107 million and $92 million at December 31, 2012 and December 31, 2013 .
44
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Google Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
Page
|
|
Financial Statements:
|
|
The supplementary financial information required by this Item 8 is included in Item 7 under the caption “Quarterly Results of Operations.”
45
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of Google Inc.
We have audited the accompanying consolidated balance sheets of Google Inc. as of December 31, 2012 and 2013, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15(a)2. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Google Inc. as of December 31, 2012 and 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Google Inc.’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated February 11, 2014 expressed an unqualified opinion thereon.
|
/s/ Ernst & Young LLP
|
|
|
|
|
|
San Jose, California
|
|
|
February 11, 2014
|
|
46
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of Google Inc.
We have audited Google Inc.’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). Google Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Google Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Google Inc. as of December 31, 2012 and 2013, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013 of Google Inc. and our report dated February 11, 2014 expressed an unqualified opinion thereon.
|
/s/ Ernst & Young LLP
|
|
|
|
|
|
San Jose, California
|
|
|
February 11, 2014
|
|
47
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 |
||||
|
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
|
|
||
|
Commitments and contingencies
|
|
|
|
|
|||
|
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
|
|
See accompanying notes.
48
Google Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Revenues:
|
|
|
|
|
|
||||||
|
Google (advertising and other)
|
$
|
37,905
|
|
|
$
|
46,039
|
|
|
$
|
55,519
|
|
|
Motorola Mobile (hardware and other)
|
0
|
|
|
4,136
|
|
|
4,306
|
|
|||
|
Total revenues
|
$
|
37,905
|
|
|
$
|
50,175
|
|
|
$
|
59,825
|
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
|
Cost of revenues - Google (advertising and other) (1)
|
13,188
|
|
|
17,176
|
|
|
21,993
|
|
|||
|
Cost of revenues - Motorola Mobile (hardware and other) (1)
|
0
|
|
|
3,458
|
|
|
3,865
|
|
|||
|
Research and development (1)
|
5,162
|
|
|
6,793
|
|
|
7,952
|
|
|||
|
Sales and marketing (1)
|
4,589
|
|
|
6,143
|
|
|
7,253
|
|
|||
|
General and administrative (1)
|
2,724
|
|
|
3,845
|
|
|
4,796
|
|
|||
|
Charge related to the resolution of Department of Justice investigation
|
500
|
|
|
0
|
|
|
0
|
|
|||
|
Total costs and expenses
|
26,163
|
|
|
37,415
|
|
|
45,859
|
|
|||
|
Income from operations
|
11,742
|
|
|
12,760
|
|
|
13,966
|
|
|||
|
Interest and other income, net
|
584
|
|
|
626
|
|
|
530
|
|
|||
|
Income from continuing operations before income taxes
|
12,326
|
|
|
13,386
|
|
|
14,496
|
|
|||
|
Provision for income taxes
|
2,589
|
|
|
2,598
|
|
|
2,282
|
|
|||
|
Net income from continuing operations
|
$
|
9,737
|
|
|
$
|
10,788
|
|
|
$
|
12,214
|
|
|
Net income (loss) from discontinued operations
|
0
|
|
|
(51
|
)
|
|
706
|
|
|||
|
Net income
|
$
|
9,737
|
|
|
$
|
10,737
|
|
|
$
|
12,920
|
|
|
Net income (loss) per share of Class A and Class B common stock - basic:
|
|
|
|
|
|
||||||
|
Continuing operations
|
$
|
30.17
|
|
|
$
|
32.97
|
|
|
$
|
36.70
|
|
|
Discontinued operations
|
0.00
|
|
|
(0.16
|
)
|
|
2.12
|
|
|||
|
Net income (loss) per share of Class A and Class B common stock - basic
|
$
|
30.17
|
|
|
$
|
32.81
|
|
|
$
|
38.82
|
|
|
Net income (loss) per share of Class A and Class B common stock - diluted:
|
|
|
|
|
|
||||||
|
Continuing operations
|
$
|
29.76
|
|
|
$
|
32.46
|
|
|
$
|
36.05
|
|
|
Discontinued operations
|
0.00
|
|
|
(0.15
|
)
|
|
2.08
|
|
|||
|
Net income (loss) per share of Class A and Class B common stock - diluted
|
$
|
29.76
|
|
|
$
|
32.31
|
|
|
$
|
38.13
|
|
|
|
|
|
|
|
|
||||||
|
(1) Includes stock-based compensation expense as follows:
|
|
|
|
|
|
||||||
|
Cost of revenues - Google (advertising and other)
|
$
|
249
|
|
|
$
|
359
|
|
|
$
|
469
|
|
|
Cost of revenues - Motorola Mobile (hardware and other)
|
0
|
|
|
14
|
|
|
18
|
|
|||
|
Research and development
|
1,061
|
|
|
1,325
|
|
|
1,717
|
|
|||
|
Sales and marketing
|
361
|
|
|
498
|
|
|
578
|
|
|||
|
General and administrative
|
303
|
|
|
453
|
|
|
486
|
|
|||
|
|
$
|
1,974
|
|
|
$
|
2,649
|
|
|
$
|
3,268
|
|
49
Google Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Net income
|
$
|
9,737
|
|
|
$
|
10,737
|
|
|
$
|
12,920
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
|
Change in foreign currency translation adjustment
|
(107
|
)
|
|
75
|
|
|
89
|
|
|||
|
Available-for-sale investments:
|
|
|
|
|
|
||||||
|
Change in net unrealized gains
|
348
|
|
|
493
|
|
|
(392
|
)
|
|||
|
Less: reclassification adjustment for net gains included in net income
|
(115
|
)
|
|
(216
|
)
|
|
(162
|
)
|
|||
|
Net change (net of tax effect of $54, $68, $212)
|
233
|
|
|
277
|
|
|
(554
|
)
|
|||
|
Cash flow hedges:
|
|
|
|
|
|
||||||
|
Change in unrealized gains
|
39
|
|
|
47
|
|
|
112
|
|
|||
|
Less: reclassification adjustment for gains included in net income
|
(27
|
)
|
|
(137
|
)
|
|
(60
|
)
|
|||
|
Net change (net of tax effect of $2, $53, $30)
|
12
|
|
|
(90
|
)
|
|
52
|
|
|||
|
Other comprehensive income (loss)
|
138
|
|
|
262
|
|
|
(413
|
)
|
|||
|
Comprehensive income
|
$
|
9,875
|
|
|
$
|
10,999
|
|
|
$
|
12,507
|
|
See accompanying notes.
50
Google Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except for share amounts which are reflected in thousands)
|
|
Class A and Class B
Common Stock and
Additional Paid-In Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||
|
Balance at January 1, 2011
|
321,301
|
|
|
$
|
18,235
|
|
|
$
|
138
|
|
|
$
|
27,868
|
|
|
$
|
46,241
|
|
|
Common stock issued
|
3,594
|
|
|
621
|
|
|
0
|
|
|
0
|
|
|
621
|
|
||||
|
Stock-based compensation expense
|
|
|
1,974
|
|
|
0
|
|
|
0
|
|
|
1,974
|
|
|||||
|
Stock-based compensation tax benefits
|
|
|
60
|
|
|
0
|
|
|
0
|
|
|
60
|
|
|||||
|
Tax withholding related to vesting of restricted stock units
|
|
|
(626
|
)
|
|
0
|
|
|
0
|
|
|
(626
|
)
|
|||||
|
Net income
|
|
|
0
|
|
|
0
|
|
|
9,737
|
|
|
9,737
|
|
|||||
|
Other comprehensive income
|
|
|
0
|
|
|
138
|
|
|
0
|
|
|
138
|
|
|||||
|
Balance at December 31, 2011
|
324,895
|
|
|
20,264
|
|
|
276
|
|
|
37,605
|
|
|
58,145
|
|
||||
|
Common stock issued
|
5,084
|
|
|
736
|
|
|
0
|
|
|
0
|
|
|
736
|
|
||||
|
Stock-based compensation expense
|
|
|
2,692
|
|
|
0
|
|
|
0
|
|
|
2,692
|
|
|||||
|
Stock-based compensation tax benefits
|
|
|
166
|
|
|
0
|
|
|
0
|
|
|
166
|
|
|||||
|
Tax withholding related to vesting of restricted stock units
|
|
|
(1,023
|
)
|
|
0
|
|
|
0
|
|
|
(1,023
|
)
|
|||||
|
Net income
|
|
|
0
|
|
|
0
|
|
|
10,737
|
|
|
10,737
|
|
|||||
|
Other comprehensive income
|
|
|
0
|
|
|
262
|
|
|
0
|
|
|
262
|
|
|||||
|
Balance at December 31, 2012
|
329,979
|
|
|
22,835
|
|
|
538
|
|
|
48,342
|
|
|
71,715
|
|
||||
|
Common stock issued
|
5,853
|
|
|
1,174
|
|
|
0
|
|
|
0
|
|
|
1,174
|
|
||||
|
Stock-based compensation expense
|
|
|
3,343
|
|
|
0
|
|
|
0
|
|
|
3,343
|
|
|||||
|
Stock-based compensation tax benefits
|
|
|
449
|
|
|
0
|
|
|
0
|
|
|
449
|
|
|||||
|
Tax withholding related to vesting of restricted stock units
|
|
|
(1,879
|
)
|
|
0
|
|
|
0
|
|
|
(1,879
|
)
|
|||||
|
Net income
|
|
|
0
|
|
|
0
|
|
|
12,920
|
|
|
12,920
|
|
|||||
|
Other comprehensive income
|
|
|
0
|
|
|
(413
|
)
|
|
0
|
|
|
(413
|
)
|
|||||
|
Balance at December 31, 2013
|
335,832
|
|
|
$
|
25,922
|
|
|
$
|
125
|
|
|
$
|
61,262
|
|
|
$
|
87,309
|
|
See accompanying notes.
51
Google Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Operating activities
|
|
|
|
|
|
||||||
|
Net income
|
$
|
9,737
|
|
|
$
|
10,737
|
|
|
$
|
12,920
|
|
|
Adjustments:
|
|
|
|
|
|
||||||
|
Depreciation and amortization of property and equipment
|
1,396
|
|
|
1,988
|
|
|
2,781
|
|
|||
|
Amortization of intangible and other assets
|
455
|
|
|
974
|
|
|
1,158
|
|
|||
|
Stock-based compensation expense
|
1,974
|
|
|
2,692
|
|
|
3,343
|
|
|||
|
Excess tax benefits from stock-based award activities
|
(86
|
)
|
|
(188
|
)
|
|
(481
|
)
|
|||
|
Deferred income taxes
|
343
|
|
|
(266
|
)
|
|
(437
|
)
|
|||
|
Impairment of equity investments
|
110
|
|
|
0
|
|
|
0
|
|
|||
|
Gain on divestiture of businesses
|
0
|
|
|
(188
|
)
|
|
(700
|
)
|
|||
|
Other
|
6
|
|
|
(28
|
)
|
|
106
|
|
|||
|
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
|
Accounts receivable
|
(1,156
|
)
|
|
(787
|
)
|
|
(1,307
|
)
|
|||
|
Income taxes, net
|
731
|
|
|
1,492
|
|
|
401
|
|
|||
|
Inventories
|
(30
|
)
|
|
301
|
|
|
(234
|
)
|
|||
|
Prepaid revenue share, expenses and other assets
|
(232
|
)
|
|
(833
|
)
|
|
(696
|
)
|
|||
|
Accounts payable
|
101
|
|
|
(499
|
)
|
|
605
|
|
|||
|
Accrued expenses and other liabilities
|
795
|
|
|
762
|
|
|
713
|
|
|||
|
Accrued revenue share
|
259
|
|
|
299
|
|
|
254
|
|
|||
|
Deferred revenue
|
162
|
|
|
163
|
|
|
233
|
|
|||
|
Net cash provided by operating activities
|
14,565
|
|
|
16,619
|
|
|
18,659
|
|
|||
|
Investing activities
|
|
|
|
|
|
||||||
|
Purchases of property and equipment
|
(3,438
|
)
|
|
(3,273
|
)
|
|
(7,358
|
)
|
|||
|
Purchases of marketable securities
|
(61,672
|
)
|
|
(33,410
|
)
|
|
(45,444
|
)
|
|||
|
Maturities and sales of marketable securities
|
48,746
|
|
|
35,180
|
|
|
38,314
|
|
|||
|
Investments in non-marketable equity investments
|
(428
|
)
|
|
(696
|
)
|
|
(569
|
)
|
|||
|
Cash collateral related to securities lending
|
(354
|
)
|
|
(334
|
)
|
|
(299
|
)
|
|||
|
Investments in reverse repurchase agreements
|
5
|
|
|
45
|
|
|
600
|
|
|||
|
Proceeds from divestiture of businesses
|
0
|
|
|
0
|
|
|
2,525
|
|
|||
|
Acquisitions, net of cash acquired, and purchases of intangibles and other assets
|
(1,900
|
)
|
|
(10,568
|
)
|
|
(1,448
|
)
|
|||
|
Net cash used in investing activities
|
(19,041
|
)
|
|
(13,056
|
)
|
|
(13,679
|
)
|
|||
|
Financing activities
|
|
|
|
|
|
||||||
|
Net payments related to stock-based award activities
|
(5
|
)
|
|
(287
|
)
|
|
(781
|
)
|
|||
|
Excess tax benefits from stock-based award activities
|
86
|
|
|
188
|
|
|
481
|
|
|||
|
Proceeds from issuance of debt, net of costs
|
10,905
|
|
|
16,109
|
|
|
10,768
|
|
|||
|
Repayments of debt
|
(10,179
|
)
|
|
(14,781
|
)
|
|
(11,325
|
)
|
|||
|
Net cash provided by (used in) financing activities
|
807
|
|
|
1,229
|
|
|
(857
|
)
|
|||
|
Effect of exchange rate changes on cash and cash equivalents
|
22
|
|
|
3
|
|
|
(3
|
)
|
|||
|
Net increase (decrease) in cash and cash equivalents
|
(3,647
|
)
|
|
4,795
|
|
|
4,120
|
|
|||
|
Cash and cash equivalents at beginning of period
|
13,630
|
|
|
9,983
|
|
|
14,778
|
|
|||
|
Cash and cash equivalents at end of period
|
$
|
9,983
|
|
|
$
|
14,778
|
|
|
$
|
18,898
|
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
||||||
|
Cash paid for taxes
|
$
|
1,471
|
|
|
$
|
2,034
|
|
|
$
|
1,932
|
|
|
Cash paid for interest
|
$
|
40
|
|
|
$
|
74
|
|
|
$
|
72
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
|
Receipt of Arris shares in connection with divestiture of Motorola Home
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
175
|
|
|
Fair value of stock-based awards assumed in connection with acquisition of Motorola
|
$
|
0
|
|
|
$
|
41
|
|
|
$
|
0
|
|
|
Property under capital lease
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
258
|
|
52
Google Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Google Inc. and Summary of Significant Accounting Policies
Nature of Operations
We were incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. We generate revenues primarily by delivering relevant, cost-effective online advertising in our Google segment. To a lesser extent, we generate revenues primarily from sales of mobile devices in our Motorola Mobile segment.
In April 2013, we completed the disposition of the Motorola Home segment to Arris Group, Inc. (Arris) and certain other persons. See Note 8 for further discussion of the disposition of the Motorola Home segment.
Basis of Consolidation
The consolidated financial statements include the accounts of Google Inc. and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the accounts receivable and sales allowances, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of stock-based awards, inventory valuations, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
In the second quarter of 2013, we revised the estimated useful lives of certain types of property and equipment which resulted in an additional depreciation expense of $207 million during the year ended December 31, 2013.
Revenue Recognition
The following table presents our revenues by revenue source (in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Google:
|
|
|
|
|
|
||||||
|
Advertising revenues:
|
|
|
|
|
|
||||||
|
Google websites
|
$
|
26,145
|
|
|
$
|
31,221
|
|
|
$
|
37,422
|
|
|
Google Network Members' websites
|
10,386
|
|
|
12,465
|
|
|
13,125
|
|
|||
|
Total advertising revenues
|
36,531
|
|
|
43,686
|
|
|
50,547
|
|
|||
|
Other revenues
|
1,374
|
|
|
2,353
|
|
|
4,972
|
|
|||
|
Total Google revenues (advertising and other)
|
$
|
37,905
|
|
|
$
|
46,039
|
|
|
$
|
55,519
|
|
|
Motorola Mobile:
|
|
|
|
|
|
||||||
|
Total Motorola Mobile revenues (hardware and other)
|
0
|
|
|
4,136
|
|
|
4,306
|
|
|||
|
Total revenues
|
$
|
37,905
|
|
|
$
|
50,175
|
|
|
$
|
59,825
|
|
We recognize revenues when the services or products have been provided or delivered, the fees we charge are fixed or determinable, we and our advertisers or other customers understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured.
Google AdWords is our auction-based advertising program that enables advertisers to place text-based and display ads on our websites and our Google Network Members’ websites. Display advertising comprises the videos, text, images, and other interactive ads that run across the web on computers and mobile devices, including smart phones and handheld computers such as netbooks and tablets. Most of our customers pay us on a cost-per-click basis, which means that an advertiser pays us only when a user clicks on one of its ads. We also offer advertising on a cost-per-impression basis that enables advertisers to pay us based on the number of times their ads display on our websites and our Google Network Members’ websites as specified by the advertisers.
53
Google AdSense refers to the online programs through which we distribute our advertisers’ AdWords ads for display on our Google Network Members’ websites.
We recognize as revenues the fees charged to advertisers each time a user clicks on one of the ads that appears next to the search results or content on our websites or our Google Network Members’ websites. For those advertisers using our cost-per-impression pricing, we recognize as revenues the fees charged to advertisers each time their ads are displayed on our websites or our Google Network Members’ websites. We report our Google AdSense revenues on a gross basis principally because we are the primary obligor to our advertisers.
For hardware product sales, where we sell directly to end customers or through distribution channels, revenue recognition generally occurs when products have been shipped, risk of loss has transferred to the customer, objective evidence exists that customer acceptance provisions have been met, no significant obligations remain and allowances for discounts, price protection, returns and customer incentives can be reasonably and reliably estimated. Recorded revenues are reduced by these allowances. Where these allowances cannot be reasonably and reliably estimated, we recognize revenue at the time the product sells through the distribution channel to the end customer.
For the sale of certain third-party products and services, we evaluate whether it is appropriate to recognize revenue based on the gross amount billed to the customers or the net amount earned as revenue share. Generally, when we are primarily obligated in a transaction, are subject to inventory risk or have latitude in establishing prices, or have several but not all of these indicators, revenue is recorded on a gross basis. We generally record the net amounts as revenue share earned if we are not primarily obligated and do not have inventory risk or latitude in establishing prices. Such amounts earned are typically determined using a fixed percentage, a fixed fee, or a combination of the two.
For arrangements that include multiple deliverables, primarily for products that contain software essential to the hardware products’ functionality and services, we allocate revenue to each unit of accounting based on their relative selling prices. In such circumstances, we use a hierarchy to determine the selling prices to be used for allocating revenue: (i) vendor-specific objective evidence of fair value (VSOE), (ii) third-party evidence of selling price, and (iii) best estimate of the selling price (ESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. ESPs reflect our best estimates of what the selling prices of elements would be if they were sold regularly on a stand-alone basis.
We record deferred revenues upon invoicing or when cash payments are received in advance of our performance in the underlying agreement on the accompanying Consolidated Balance Sheets.
Cost of Revenues
Cost of revenues consists primarily of traffic acquisition costs. Traffic acquisition costs consist of amounts ultimately paid to our Google Network Members under AdSense arrangements and to certain other partners (our distribution partners) who distribute our toolbar and other products (collectively referred to as access points) or otherwise direct search queries to our website (collectively referred to as distribution arrangements). These amounts are primarily based on the revenue share and fixed fee arrangements with our Google Network Members and distribution partners.
Certain distribution arrangements require us to pay our partners based on a fee per access point delivered and not exclusively - or at all - based on revenue share. These fees are non-refundable. Further, these arrangements are terminable at will, although under the terms of certain contracts we or our distribution partners may be subject to penalties in the event of early termination. We recognize fees under these arrangements over the estimated useful lives of the access points (approximately two years) to the extent we can reasonably estimate those lives and they are longer than one year, or based on any contractual revenue share, if greater. Otherwise, the fees are charged to expense as incurred. The estimated useful life of the access points is based on the historical average period of time they generate traffic and revenues.
Cost of revenues also includes the expenses associated with the operation of our data centers, including depreciation, labor, energy, and bandwidth costs, hardware inventory costs, credit card and other transaction fees related to processing customer transactions, amortization of acquisition-related intangible assets, as well as content acquisition costs. We have entered into arrangements with certain content providers under which we distribute or license their video and other content. In a number of these arrangements, we display ads on the pages of our websites from which the content is viewed and share most of the fees these ads generate with the content providers. We also license content on the pages of our websites from which the content is sold and share most of the fees these sales generate with content providers. To the extent we are obligated to make guaranteed minimum revenue share payments
54
to our content providers, we recognize as content acquisition costs the contractual revenue share amount or the amount determined on a straight-line basis, whichever is greater, over the terms of the agreements.
In addition, cost of revenues includes manufacturing and inventory-related costs primarily from our Motorola Mobile segment.
Stock-based Compensation
We have elected to use the Black-Scholes-Merton (BSM) option pricing model to determine the fair value of stock options on the dates of grant . Restricted stock units (RSUs) are measured based on the fair market values of the underlying stock on the dates of grant. Shares are issued on the vesting dates net of the minimum statutory tax withholding requirements to be paid by us on behalf of our employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding. Furthermore, we record the liability for withholding amounts to be paid by us as a reduction to additional paid-in capital when paid. Also, we recognize stock-based compensation using the straight-line method.
We include as part of cash flows from financing activities the benefits of tax deductions in excess of the tax-effected compensation of the related stock-based awards for options exercised and RSUs vested during the period. During the years ended December 31, 2011 , December 31, 2012 , and December 31, 2013 , the amount of cash received from the exercise of stock options was $621 million , $736 million , and $1,174 million , and the total direct tax benefit realized, including the excess tax benefit, from stock-based award activities was $451 million , $747 million , and $1,195 million . We have elected to account for the indirect effects of stock-based awards - primarily the research and development tax credit - through the Consolidated Statements of Income.
For the years ended December 31, 2011 , December 31, 2012 , and December 31, 2013 , we recognized stock-based compensation expense and related tax benefits of $ 1,974 million and $413 million , $ 2,649 million and $591 million , and $ 3,268 million and $720 million . Additionally, net income (loss) from discontinued operations for the year ended December 31, 2012 and December 31, 2013 includes stock-based compensation expense and related tax benefits of $43 million and $11 million , and $75 million and $24 million , respectively.
Certain Risks and Concentrations
Our revenues are primarily derived from online advertising, the market for which is highly competitive and rapidly changing. In addition, our revenues are generated from a multitude of vertical market segments in countries around the world. Significant changes in this industry or changes in customer buying or advertiser spending behavior could adversely affect our operating results. In addition, for our Motorola Mobile segment, the vast majority of our Motorola products (other than some prototypes) are manufactured outside the U.S., primarily in China and Brazil.
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, foreign exchange contracts, and accounts receivable. Cash equivalents and marketable securities consist primarily of time deposits, money market and other funds, including cash collateral received related to our securities lending program, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments and municipalities in the U.S., corporate securities, mortgage-backed securities, and asset-backed securities. Foreign exchange contracts are transacted with various financial institutions with high credit standing. Accounts receivable are typically unsecured and are derived from revenues earned from customers located around the world. In 2011 , 2012 , and 2013 , we generated approximately 46% , 47% , and 45% of our revenues from customers based in the U.S., with the majority of customers outside of the U.S. located in Europe and Japan. Many of our Google Network Members are in the internet industry. We perform ongoing evaluations to determine customer credit and we limit the amount of credit we extend, but generally we do not require collateral from our customers. We maintain reserves for estimated credit losses and these losses have generally been within our expectations.
No individual customer or groups of affiliated customers represented more than 10% of our revenues in 2011 , 2012 , and 2013 .
Fair Value of Financial Instruments
Our financial assets and financial liabilities that include cash equivalents, marketable securities, and foreign currency and interest rate derivative contracts are measured and recorded at fair value on a recurring basis. We measure certain other assets including our non-marketable equity securities at fair value on a nonrecurring basis when
55
they are deemed to be other-than-temporarily impaired. Our other current financial assets and our other current financial liabilities have fair values that approximate their carrying value and are therefore not recorded at fair value.
Cash, Cash Equivalents, and Marketable Securities
We invest our excess cash primarily in time deposits, money market and other funds, including cash collateral received related to our securities lending program, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments and municipalities in the U.S., corporate securities, mortgage-backed securities, and asset-backed securities.
We classify all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as marketable securities.
We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date. We have classified and accounted for our marketable securities as available-for-sale. We may or may not hold securities with stated maturities greater than 12 months until maturity. After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell these securities prior to their stated maturities. As we view these securities as available to support current operations, we classify securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying Consolidated Balance Sheets. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which we record as interest and other income, net. We determine any realized gains or losses on the sale of marketable securities on a specific identification method, and we record such gains and losses as a component of interest and other income, net.
Non-Marketable Equity Securities
We have accounted for non-marketable equity securities either under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method.
Impairment of Marketable and Non-Marketable Securities
We periodically review our marketable and non-marketable securities for impairment. If we conclude that any of these investments are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. For marketable debt securities, we also consider whether (1) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as interest and other income, net.
Accounts Receivable
We record accounts receivable at the invoiced amount and we do not charge interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review the accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We also maintain a sales allowance to reserve for potential credits issued to customers. We determine the amount of the reserve based on historical credits issued.
Inventories
Inventories are stated at the lower of cost or market, computed using the first-in, first-out method.
Property and Equipment
We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally two to five years. We depreciate buildings over periods up to 25 years. We amortize leasehold improvements over the shorter of the
56
remaining lease term or the estimated useful lives of the assets. Construction in progress is related to the construction or development of property (including land) and equipment that have not yet been placed in service for our intended use. Depreciation for equipment commences once it is placed in service and depreciation for buildings and leasehold improvements commences once they are ready for our intended use. Land is not depreciated.
Software Development Costs
We expense software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological feasibility of such products is reached. We have determined that technological feasibility was reached shortly before the release of those products and as a result, the development costs incurred after the establishment of technological feasibility and before the release of those products were not material, and accordingly, were expensed as incurred. Software development costs also include costs to develop software programs to be used solely to meet our internal needs and cloud based applications used to deliver our services.
Business Combinations
We include the results of operations of the businesses that we acquire as of the respective dates of acquisition. We allocate the fair value of the purchase price of our acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets
We review property and equipment, long-term prepayments and intangible assets, excluding goodwill, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We have made no material adjustments to our long-lived assets in any of the years presented. In addition, we test our goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that this asset may be impaired. No goodwill impairment has been identified in any of the years presented.
Intangible assets with definite lives are amortized over their estimated useful lives. We amortize our acquired intangible assets on a straight-line basis with definite lives over periods ranging from one to twelve years.
Income Taxes
We recognize income taxes under the liability method. We recognize deferred income taxes for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which differences are expected to reverse. We recognize the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date.
Foreign Currency
Generally, the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs, and expenses. We record translation gains and losses in accumulated other comprehensive income as a component of stockholders’ equity. We recorded $107 million of net translation losses in 2011 , $75 million of net translation gains in 2012 , and $89 million of net translation gains in 2013 . We record net gains and losses resulting from foreign exchange transactions as a component of foreign currency exchange losses in interest and other income, net. These gains and losses are net of those recognized on foreign exchange contracts. We recorded $38 million of net losses in 2011 , $78 million of net losses in 2012 , and $120 million of net losses in 2013 .
Advertising and Promotional Expenses
We expense advertising and promotional costs in the period in which they are incurred. For the years ended December 31, 2011 , 2012 and 2013 , advertising and promotional expenses totaled approximately $1,544 million , $2,332 million , and $2,848 million .
57
Note 2. Net Income Per Share of Class A and Class B Common Stock
We compute net income per share of Class A and Class B common stock using the two-class method. Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options, warrants issued under the TSO program, and restricted stock units. The TSO program was discontinued as of November 29, 2013. The dilutive effect of outstanding stock options, warrants, and restricted stock units is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.
The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock are identical, except with respect to voting. Further, there are a number of safeguards built into our certificate of incorporation, as well as Delaware law, which preclude our board of directors from declaring or paying unequal per share dividends on our Class A and Class B common stock. Specifically, Delaware law provides that amendments to our certificate of incorporation which would have the effect of adversely altering the rights, powers, or preferences of a given class of stock (in this case the right of our Class A common stock to receive an equal dividend to any declared on our Class B common stock) must be approved by the class of stock adversely affected by the proposed amendment. In addition, our certificate of incorporation provides that before any such amendment may be put to a stockholder vote, it must be approved by the unanimous consent of our board of directors. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, as we assume the conversion of Class B common stock in the computation of the diluted net income per share of Class A common stock, the undistributed earnings are equal to net income for that computation.
The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock (in millions, except share amounts which are reflected in thousands and per share amounts):
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||||||||||||||
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||
|
Basic net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Allocation of undistributed earnings - continuing operations
|
$
|
7,658
|
|
|
$
|
2,079
|
|
|
$
|
8,641
|
|
|
$
|
2,147
|
|
|
$
|
10,037
|
|
|
$
|
2,177
|
|
|
Allocation of undistributed earnings - discontinued operations
|
0
|
|
|
0
|
|
|
(41
|
)
|
|
(10
|
)
|
|
580
|
|
|
126
|
|
||||||
|
Total
|
$
|
7,658
|
|
|
$
|
2,079
|
|
|
$
|
8,600
|
|
|
$
|
2,137
|
|
|
$
|
10,617
|
|
|
$
|
2,303
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Number of shares used in per share computation
|
253,862
|
|
|
68,916
|
|
|
262,078
|
|
|
65,135
|
|
|
273,518
|
|
|
59,328
|
|
||||||
|
Basic net income (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Continuing operations
|
$
|
30.17
|
|
|
$
|
30.17
|
|
|
$
|
32.97
|
|
|
$
|
32.97
|
|
|
$
|
36.70
|
|
|
$
|
36.70
|
|
|
Discontinued operations
|
0
|
|
|
0
|
|
|
(0.16
|
)
|
|
(0.16
|
)
|
|
2.12
|
|
|
2.12
|
|
||||||
|
Basic net income per share
|
$
|
30.17
|
|
|
$
|
30.17
|
|
|
32.81
|
|
|
$
|
32.81
|
|
|
$
|
38.82
|
|
|
$
|
38.82
|
|
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Allocation of undistributed earnings for basic computation - continuing operations
|
$
|
7,658
|
|
|
$
|
2,079
|
|
|
$
|
8,641
|
|
|
$
|
2,147
|
|
|
$
|
10,037
|
|
|
$
|
2,177
|
|
|
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares
|
2,079
|
|
|
0
|
|
|
2,147
|
|
|
0
|
|
|
2,177
|
|
|
0
|
|
||||||
|
Reallocation of undistributed earnings to Class B shares
|
0
|
|
|
(27
|
)
|
|
0
|
|
|
(31
|
)
|
|
0
|
|
|
(38
|
)
|
58
|
Allocation of undistributed earnings - continuing operations
|
$
|
9,737
|
|
|
$
|
2,052
|
|
|
$
|
10,788
|
|
|
$
|
2,116
|
|
|
$
|
12,214
|
|
|
$
|
2,139
|
|
|
Allocation of undistributed earnings for basic computation - discontinued operations
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(41
|
)
|
|
$
|
(10
|
)
|
|
$
|
580
|
|
|
$
|
126
|
|
|
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares
|
0
|
|
|
0
|
|
|
(10
|
)
|
|
0
|
|
|
126
|
|
|
0
|
|
||||||
|
Reallocation of undistributed earnings to Class B shares
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
||||||
|
Allocation of undistributed earnings - discontinued operations
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(51
|
)
|
|
$
|
(10
|
)
|
|
$
|
706
|
|
|
$
|
124
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Number of shares used in basic computation
|
253,862
|
|
|
68,916
|
|
|
262,078
|
|
|
65,135
|
|
|
273,518
|
|
|
59,328
|
|
||||||
|
Weighted-average effect of dilutive securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Conversion of Class B to Class A common shares outstanding
|
68,916
|
|
|
0
|
|
|
65,135
|
|
|
0
|
|
|
59,328
|
|
|
0
|
|
||||||
|
Employee stock options, including warrants issued under Transferable Stock Option program
|
2,958
|
|
|
46
|
|
|
2,944
|
|
|
34
|
|
|
2,748
|
|
|
4
|
|
||||||
|
Restricted stock units
|
1,478
|
|
|
0
|
|
|
2,148
|
|
|
0
|
|
|
3,215
|
|
|
0
|
|
||||||
|
Number of shares used in per share computation
|
327,214
|
|
|
68,962
|
|
|
332,305
|
|
|
65,169
|
|
|
338,809
|
|
|
59,332
|
|
||||||
|
Diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Continuing operations
|
$
|
29.76
|
|
|
$
|
29.76
|
|
|
$
|
32.46
|
|
|
$
|
32.46
|
|
|
$
|
36.05
|
|
|
$
|
36.05
|
|
|
Discontinued operations
|
0
|
|
|
0
|
|
|
(0.15
|
)
|
|
(0.15
|
)
|
|
2.08
|
|
|
2.08
|
|
||||||
|
Diluted net income per share
|
$
|
29.76
|
|
|
$
|
29.76
|
|
|
$
|
32.31
|
|
|
$
|
32.31
|
|
|
$
|
38.13
|
|
|
$
|
38.13
|
|
The net income per share amounts are the same for Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.
Note 3. Financial Instruments
Fair Value Measurements
We measure our cash equivalents, marketable securities, and foreign currency and interest rate derivative contracts at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.
Level 3 - Unobservable inputs that are supported by little or no market activities.
The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
59
We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. We classify our foreign currency and interest rate derivative contracts primarily within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.
Cash, Cash Equivalents and Marketable Securities
The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 31, 2012 and December 31, 2013 (in millions):
|
|
|
As of December 31, 2012
|
||||||||||||||||||||||
|
|
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross Unrealized Losses |
|
Fair Value |
|
Cash and Cash Equivalents |
|
Marketable Securities |
||||||||||||
|
Cash
|
|
$
|
8,066
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
8,066
|
|
|
$
|
8,066
|
|
|
$
|
0
|
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Money market and other funds
|
|
5,221
|
|
|
0
|
|
|
0
|
|
|
5,221
|
|
|
5,221
|
|
|
0
|
|
||||||
|
U.S. government notes
|
|
10,853
|
|
|
77
|
|
|
(1
|
)
|
|
10,929
|
|
|
0
|
|
|
10,929
|
|
||||||
|
Marketable equity securities
|
|
12
|
|
|
88
|
|
|
0
|
|
|
100
|
|
|
0
|
|
|
100
|
|
||||||
|
|
|
16,086
|
|
|
165
|
|
|
(1
|
)
|
|
16,250
|
|
|
5,221
|
|
|
11,029
|
|
||||||
|
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Time deposits (1)
|
|
984
|
|
|
0
|
|
|
0
|
|
|
984
|
|
|
562
|
|
|
422
|
|
||||||
|
Money market and other funds (2)
|
|
929
|
|
|
0
|
|
|
0
|
|
|
929
|
|
|
929
|
|
|
0
|
|
||||||
|
U.S. government agencies
|
|
1,882
|
|
|
20
|
|
|
0
|
|
|
1,902
|
|
|
0
|
|
|
1,902
|
|
||||||
|
Foreign government bonds
|
|
1,996
|
|
|
81
|
|
|
(3
|
)
|
|
2,074
|
|
|
0
|
|
|
2,074
|
|
||||||
|
Municipal securities
|
|
2,249
|
|
|
23
|
|
|
(6
|
)
|
|
2,266
|
|
|
0
|
|
|
2,266
|
|
||||||
|
Corporate debt securities
|
|
7,200
|
|
|
414
|
|
|
(14
|
)
|
|
7,600
|
|
|
0
|
|
|
7,600
|
|
||||||
|
Agency residential mortgage-backed securities
|
|
7,039
|
|
|
136
|
|
|
(6
|
)
|
|
7,169
|
|
|
0
|
|
|
7,169
|
|
||||||
|
Asset-backed securities
|
|
847
|
|
|
1
|
|
|
0
|
|
|
848
|
|
|
0
|
|
|
848
|
|
||||||
|
|
|
23,126
|
|
|
675
|
|
|
(29
|
)
|
|
23,772
|
|
|
1,491
|
|
|
22,281
|
|
||||||
|
Total
|
|
$
|
47,278
|
|
|
$
|
840
|
|
|
$
|
(30
|
)
|
|
$
|
48,088
|
|
|
$
|
14,778
|
|
|
$
|
33,310
|
|
60
|
|
|
As of December 31, 2013
|
||||||||||||||||||||||
|
|
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross Unrealized Losses |
|
Fair Value |
|
Cash and
Cash
Equivalents
|
|
Marketable Securities |
||||||||||||
|
Cash
|
|
$
|
9,909
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
9,909
|
|
|
$
|
9,909
|
|
|
$
|
0
|
|
|
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Money market and other funds
|
|
4,428
|
|
|
0
|
|
|
0
|
|
|
4,428
|
|
|
4,428
|
|
|
0
|
|
||||||
|
U.S. government notes
|
|
18,276
|
|
|
23
|
|
|
(37
|
)
|
|
18,262
|
|
|
2,501
|
|
|
15,761
|
|
||||||
|
Marketable equity securities
|
|
197
|
|
|
167
|
|
|
0
|
|
|
364
|
|
|
0
|
|
|
364
|
|
||||||
|
|
|
22,901
|
|
|
190
|
|
|
(37
|
)
|
|
23,054
|
|
|
6,929
|
|
|
16,125
|
|
||||||
|
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Time deposits (1)
|
|
1,207
|
|
|
0
|
|
|
0
|
|
|
1,207
|
|
|
790
|
|
|
417
|
|
||||||
|
Money market and other funds (2)
|
|
1,270
|
|
|
0
|
|
|
0
|
|
|
1,270
|
|
|
1,270
|
|
|
0
|
|
||||||
|
U.S. government agencies
|
|
4,575
|
|
|
3
|
|
|
(3
|
)
|
|
4,575
|
|
|
0
|
|
|
4,575
|
|
||||||
|
Foreign government bonds
|
|
1,502
|
|
|
5
|
|
|
(26
|
)
|
|
1,481
|
|
|
0
|
|
|
1,481
|
|
||||||
|
Municipal securities
|
|
2,904
|
|
|
9
|
|
|
(36
|
)
|
|
2,877
|
|
|
0
|
|
|
2,877
|
|
||||||
|
Corporate debt securities
|
|
7,300
|
|
|
162
|
|
|
(67
|
)
|
|
7,395
|
|
|
0
|
|
|
7,395
|
|
||||||
|
Agency residential mortgage-backed securities
|
|
5,969
|
|
|
27
|
|
|
(187
|
)
|
|
5,809
|
|
|
0
|
|
|
5,809
|
|
||||||
|
Asset-backed securities
|
|
1,142
|
|
|
0
|
|
|
(2
|
)
|
|
1,140
|
|
|
0
|
|
|
1,140
|
|
||||||
|
|
|
25,869
|
|
|
206
|
|
|
(321
|
)
|
|
25,754
|
|
|
2,060
|
|
|
23,694
|
|
||||||
|
Total
|
|
$
|
58,679
|
|
|
$
|
396
|
|
|
$
|
(358
|
)
|
|
$
|
58,717
|
|
|
$
|
18,898
|
|
|
$
|
39,819
|
|
|
(1)
|
Majority of our time deposits are foreign deposits.
|
|
(2)
|
The balances at December 31, 2012 and December 31, 2013 were related to cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See below for further discussion of this program.
|
During the second quarter of 2013, we received approximately $175 million in Arris' common stock ( 10.6 million shares) in connection with the disposition of the Motorola Home segment (see details in Note 8). These shares are accounted for as available-for-sale marketable equity securities.
We determine realized gains or losses on the sale of marketable securities on a specific identification method. We recognized gross realized gains of $383 million and $460 million for the years ended December 31, 2012 and December 31, 2013 . We recognized gross realized losses of $101 million and $259 million for the years ended December 31, 2012 and December 31, 2013 . We reflect these gains and losses as a component of interest and other income, net, in the accompanying Consolidated Statements of Income.
The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions):
|
|
As of December 31, 2013 |
||
|
Due in 1 year
|
$
|
11,583
|
|
|
Due in 1 year through 5 years
|
15,601
|
|
|
|
Due in 5 years through 10 years
|
6,405
|
|
|
|
Due after 10 years
|
5,866
|
|
|
|
Total
|
$
|
39,455
|
|
The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2012 and December 31, 2013 , aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):
61
|
|
|
As of December 31, 2012
|
||||||||||||||||||||||
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
|
|
Fair Value
|
|
Unrealized Loss |
|
Fair Value
|
|
Unrealized Loss |
|
Fair Value
|
|
Unrealized Loss |
||||||||||||
|
U.S. government notes
|
|
$
|
842
|
|
|
$
|
(1
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
842
|
|
|
$
|
(1
|
)
|
|
Foreign government bonds
|
|
509
|
|
|
(2
|
)
|
|
12
|
|
|
(1
|
)
|
|
521
|
|
|
(3
|
)
|
||||||
|
Municipal securities
|
|
686
|
|
|
(6
|
)
|
|
9
|
|
|
0
|
|
|
695
|
|
|
(6
|
)
|
||||||
|
Corporate debt securities
|
|
820
|
|
|
(10
|
)
|
|
81
|
|
|
(4
|
)
|
|
901
|
|
|
(14
|
)
|
||||||
|
Agency residential mortgage-backed securities
|
|
1,300
|
|
|
(6
|
)
|
|
0
|
|
|
0
|
|
|
1,300
|
|
|
(6
|
)
|
||||||
|
Total
|
|
$
|
4,157
|
|
|
$
|
(25
|
)
|
|
$
|
102
|
|
|
$
|
(5
|
)
|
|
$
|
4,259
|
|
|
$
|
(30
|
)
|
|
|
|
As of December 31, 2013
|
||||||||||||||||||||||
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
|
|
Fair Value
|
|
Unrealized
Loss
|
|
Fair Value
|
|
Unrealized
Loss
|
|
Fair Value
|
|
Unrealized Loss |
||||||||||||
|
U.S. government notes
|
|
$
|
4,404
|
|
|
$
|
(37
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
4,404
|
|
|
$
|
(37
|
)
|
|
U.S. government agencies
|
|
496
|
|
|
(3
|
)
|
|
0
|
|
|
0
|
|
|
496
|
|
|
(3
|
)
|
||||||
|
Foreign government bonds
|
|
899
|
|
|
(23
|
)
|
|
83
|
|
|
(3
|
)
|
|
982
|
|
|
(26
|
)
|
||||||
|
Municipal securities
|
|
1,210
|
|
|
(32
|
)
|
|
99
|
|
|
(4
|
)
|
|
1,309
|
|
|
(36
|
)
|
||||||
|
Corporate debt securities
|
|
2,583
|
|
|
(62
|
)
|
|
69
|
|
|
(5
|
)
|
|
2,652
|
|
|
(67
|
)
|
||||||
|
Agency residential mortgage-backed securities
|
|
4,065
|
|
|
(167
|
)
|
|
468
|
|
|
(20
|
)
|
|
4,533
|
|
|
(187
|
)
|
||||||
|
Asset-backed securities
|
|
643
|
|
|
(2
|
)
|
|
0
|
|
|
0
|
|
|
643
|
|
|
(2
|
)
|
||||||
|
Total
|
|
$
|
14,300
|
|
|
$
|
(326
|
)
|
|
$
|
719
|
|
|
$
|
(32
|
)
|
|
$
|
15,019
|
|
|
$
|
(358
|
)
|
We periodically review our marketable debt and equity securities for other-than-temporary impairment. We consider factors such as the duration, severity and the reason for the decline in value, the potential recovery period and our intent to sell. For marketable debt securities, we also consider whether (i) it is more likely than not that we will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses. During the years ended December 31, 2012 and 2013, we did not recognize any other-than-temporary impairment loss.
Non-Marketable Equity Investments
Our non-marketable equity investments are investments we have made in privately held companies accounted for under the equity or cost method. As of December 31, 2012 and December 31, 2013 , these investments accounted for under the equity method had a carrying value of approximately $921 million and $975 million , respectively, and these investments accounted for under the cost method had a carrying value of $548 million and $1.0 billion , respectively. For investments accounted for under the cost method, we concluded that their fair values approximated their carrying values as of December 31, 2012 and exceeded their carrying values as of December 31, 2013 . We periodically review our non-marketable equity investments for impairment. No material impairments or realized gains and losses were recognized on our non-marketable equity investments for the years ended December 31, 2011 , 2012 , and 2013 .
Securities Lending Program
From time to time, we enter into securities lending agreements with financial institutions to enhance investment income. We loan selected securities which are collateralized in the form of cash or securities. Cash collateral is invested in reverse repurchase agreements which are collateralized in the form of securities.
We classify loaned securities as cash equivalents or marketable securities and record the cash collateral as an asset with a corresponding liability in the accompanying Consolidated Balance Sheets. We classify reverse repurchase agreements maturing within three months as cash equivalents and those longer than three months as receivable under reverse repurchase agreements in the accompanying Consolidated Balance Sheets. For security collateral received, we do not record an asset or liability except in the event of counterparty default.
62
Derivative Financial Instruments
We recognize derivative instruments as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives in the accompanying Consolidated Statements of Income as interest and other income, net, as part of revenues, or as a component of accumulated other comprehensive income (AOCI) in the accompanying Consolidated Balance Sheets, as discussed below.
We enter into foreign currency contracts with financial institutions to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. We use certain interest rate derivative contracts to hedge interest rate exposures on our fixed income securities and our anticipated debt issuance. Our program is not used for trading or speculative purposes.
We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. To further reduce credit risk, we enter into collateral security arrangements under which the counterparty is required to provide collateral when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We can take possession of the collateral in the event of counterparty default. As of December 31, 2012 and December 31, 2013 , we received cash collateral related to the derivative instruments under our collateral security arrangements of $43 million and $35 million .
Cash Flow Hedges
We use options designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar. The notional principal of these contracts was approximately $9.5 billion and $10.0 billion as of December 31, 2012 and December 31, 2013 . These foreign exchange contracts have maturities of 36 months or less.
In 2012, we entered into forward-starting interest rate swaps that effectively locked in an interest rate on our anticipated debt issuance of $1.0 billion in 2014. The total notional amount of these forward-starting interest swaps was $1.0 billion as of December 31, 2012 and December 31, 2013 with terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate.
We initially report any gain or loss on the effective portion of a cash flow hedge as a component of AOCI and subsequently reclassify cumulative gains and losses to revenues or interest expense when the hedged transactions are recorded. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI would be immediately reclassified to interest and other income, net. Further, we exclude the change in the time value of the options from our assessment of hedge effectiveness. We record the premium paid or time value of an option on the date of purchase as an asset. Thereafter, we recognize changes to this time value in interest and other income, net.
As of December 31, 2013 , the effective portion of our cash flow hedges before tax effect was $93 million , of which $11 million is expected to be reclassified from AOCI into earnings within the next 12 months.
Fair Value Hedges
We use forward contracts designated as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. Gains and losses on these contracts are recognized in interest and other income, net, along with the offsetting losses and gains of the related hedged items. We exclude changes in the time value for forward contracts from the assessment of hedge effectiveness. The notional principal of these contracts was $1.1 billion and $1.2 billion as of December 31, 2012 and December 31, 2013 .
Other Derivatives
Other derivatives not designated as hedging instruments consist of forward and option contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts, as well as the related costs in interest and other income, net, along with the foreign currency gains and losses on monetary assets and liabilities. The notional principal of foreign exchange contracts outstanding was $6.6 billion and $9.4 billion at December 31, 2012 and December 31, 2013 .
We also use exchange-traded interest rate futures contracts and “To Be Announced” (TBA) forward purchase commitments of mortgage-backed assets to hedge interest rate risks on certain fixed income securities. The TBA
63
contracts meet the definition of derivative instruments in cases where physical delivery of the assets is not taken at the earliest available delivery date. Our interest rate futures and TBA contracts (together interest rate contracts) are not designated as hedging instruments. We recognize gains and losses on these contracts, as well as the related costs in interest and other income, net. The gains and losses are generally economically offset by unrealized gains and losses in the underlying available-for-sale securities, which are recorded as a component of AOCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are moved from AOCI into interest and other income, net. The total notional amounts of interest rate contracts outstanding were $25 million and $13 million at December 31, 2012 and December 31, 2013 .
The fair values of our outstanding derivative instruments were as follows (in millions):
|
|
|
|
|
As of December 31, 2012
|
||||||||||
|
|
|
Balance Sheet Location
|
|
Fair Value of
Derivatives
Designated as
Hedging Instruments
|
|
Fair Value of
Derivatives Not
Designated as
Hedging Instruments
|
|
Total Fair
Value
|
||||||
|
Derivative Assets:
|
|
|
|
|
|
|
|
|
||||||
|
Level 2:
|
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange contracts
|
|
Prepaid revenue share, expenses and other assets, current and non-current
|
|
$
|
164
|
|
|
$
|
13
|
|
|
$
|
177
|
|
|
Interest rate contracts
|
|
Prepaid revenue share, expenses and other assets, current and non-current
|
|
1
|
|
|
0
|
|
|
1
|
|
|||
|
Total
|
|
|
|
$
|
165
|
|
|
$
|
13
|
|
|
$
|
178
|
|
|
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
||||||
|
Level 2:
|
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange contracts
|
|
Accrued expenses and other current liabilities
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
7
|
|
|
|
|
|
|
As of December 31, 2013
|
||||||||||
|
|
|
Balance Sheet Location
|
|
Fair Value of
Derivatives
Designated as
Hedging Instruments
|
|
Fair Value of
Derivatives Not
Designated as
Hedging Instruments
|
|
Total Fair
Value
|
||||||
|
Derivative Assets:
|
|
|
|
|
|
|
|
|
||||||
|
Level 2:
|
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange contracts
|
|
Prepaid revenue share, expenses and other assets, current and non-current
|
|
$
|
133
|
|
|
$
|
12
|
|
|
$
|
145
|
|
|
Interest rate contracts
|
|
Prepaid revenue share, expenses and other assets, current and non-current
|
|
87
|
|
|
0
|
|
|
87
|
|
|||
|
Total
|
|
|
|
$
|
220
|
|
|
$
|
12
|
|
|
$
|
232
|
|
|
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
||||||
|
Level 2:
|
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange contracts
|
|
Accrued expenses and other current liabilities
|
|
$
|
0
|
|
|
$
|
4
|
|
|
$
|
4
|
|
64
The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below (in millions):
|
|
|
Gains (Losses) Recognized in OCI
on Derivatives Before Tax Effect (Effective Portion)
|
||||||||||
|
|
|
Year Ended December 31,
|
||||||||||
|
Derivatives in Cash Flow Hedging Relationship
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Foreign exchange contracts
|
|
$
|
54
|
|
|
$
|
73
|
|
|
$
|
92
|
|
|
Interest rate contracts
|
|
0
|
|
|
1
|
|
|
86
|
|
|||
|
Total
|
|
$
|
54
|
|
|
$
|
74
|
|
|
$
|
178
|
|
|
|
|
Gains Reclassified from AOCI into Income (Effective Portion)
|
||||||||||||
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
Derivatives in Cash Flow Hedging Relationship
|
|
Location
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Foreign exchange contracts
|
|
Revenues
|
|
$
|
43
|
|
|
$
|
217
|
|
|
$
|
95
|
|
|
|
|
Gains (Losses) Recognized in Income on Derivatives (Amount
Excluded from Effectiveness Testing and Ineffective Portion) (1)
|
||||||||||||
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
Derivatives in Cash Flow Hedging Relationship
|
|
Location
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Foreign exchange contracts
|
|
Interest and
other income, net
|
|
$
|
(323
|
)
|
|
$
|
(447
|
)
|
|
$
|
(280
|
)
|
|
(1)
|
Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.
|
The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions):
|
|
|
Gains (Losses) Recognized in Income on Derivatives (2)
|
||||||||||||
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
Derivatives in Fair Value Hedging Relationship
|
|
Location
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Foreign exchange contracts
|
|
Interest and
other income, net
|
|
$
|
(2
|
)
|
|
$
|
(31
|
)
|
|
$
|
16
|
|
|
Hedged item
|
|
Interest and
other income, net
|
|
(12
|
)
|
|
23
|
|
|
(25
|
)
|
|||
|
Total
|
|
|
|
$
|
(14
|
)
|
|
$
|
(8
|
)
|
|
$
|
(9
|
)
|
|
(2)
|
Losses related to the amount excluded from effectiveness testing of the hedges were $14 million , $8 million , and $9 million for the years ended December 31, 2011 , 2012 , and 2013 .
|
The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions):
65
|
|
|
Gains (Losses) Recognized in Income on Derivatives
|
||||||||||||
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
Derivatives Not Designated As Hedging Instruments
|
|
Location
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Foreign exchange contracts
|
|
Interest and
other income, net
|
|
$
|
29
|
|
|
$
|
(67
|
)
|
|
$
|
118
|
|
|
Interest rate contracts
|
|
Interest and
other income, net
|
|
(19
|
)
|
|
(6
|
)
|
|
4
|
|
|||
|
Total
|
|
|
|
$
|
10
|
|
|
$
|
(73
|
)
|
|
$
|
122
|
|
Offsetting of Derivatives, Securities Lending and Reverse Repurchase Agreements
We present our derivatives, securities lending and reverse repurchase agreements at gross fair values in the Consolidated Balance Sheets. However, our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2012 and December 31, 2013 , information related to these offsetting arrangements was as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Offsetting of Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Balance as of December 31, 2012
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
|
|
|
||||||||||||||||||
|
Description
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Non-Cash Collateral Received
|
|
Net Assets Exposed
|
||||||||||||||
|
Derivatives
|
|
$
|
178
|
|
|
$
|
0
|
|
|
$
|
178
|
|
|
$
|
(4
|
)
|
(1)
|
$
|
(40
|
)
|
|
$
|
(12
|
)
|
|
$
|
122
|
|
|
Reverse repurchase agreements
|
|
1,629
|
|
|
0
|
|
|
1,629
|
|
(2)
|
0
|
|
|
0
|
|
|
(1,629
|
)
|
|
0
|
|
|||||||
|
Total
|
|
$
|
1,807
|
|
|
$
|
0
|
|
|
$
|
1,807
|
|
|
$
|
(4
|
)
|
|
$
|
(40
|
)
|
|
$
|
(1,641
|
)
|
|
$
|
122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Balance as of December 31, 2013
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
|
|
|
||||||||||||||||||
|
Description
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Non-Cash Collateral Received
|
|
Net Assets Exposed
|
||||||||||||||
|
Derivatives
|
|
$
|
232
|
|
|
$
|
0
|
|
|
$
|
232
|
|
|
$
|
(2
|
)
|
(1)
|
$
|
(35
|
)
|
|
$
|
(52
|
)
|
|
$
|
143
|
|
|
Reverse repurchase agreements
|
|
1,370
|
|
|
0
|
|
|
1,370
|
|
(2)
|
0
|
|
|
0
|
|
|
(1,370
|
)
|
|
0
|
|
|||||||
|
Total
|
|
$
|
1,602
|
|
|
$
|
0
|
|
|
$
|
1,602
|
|
|
$
|
(2
|
)
|
|
$
|
(35
|
)
|
|
$
|
(1,422
|
)
|
|
$
|
143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The balances at December 31, 2012 and December 31, 2013 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.
(2) The balances at December 31, 2012 and December 31, 2013 included $929 million and $1,270 million recorded in cash and cash equivalents, respectively, and $700 million and $100 million recorded in receivable under reverse repurchase agreements, respectively.
66
|
Offsetting of Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Balance as of December 31, 2012
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
|
|
|
||||||||||||||||||
|
Description
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Non-Cash Collateral Pledged
|
|
Net Liabilities
|
||||||||||||||
|
Derivatives
|
|
$
|
7
|
|
|
$
|
0
|
|
|
$
|
7
|
|
|
$
|
(4
|
)
|
(3)
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3
|
|
|
Securities lending agreements
|
|
1,673
|
|
|
0
|
|
|
1,673
|
|
|
0
|
|
|
0
|
|
|
(1,673
|
)
|
|
0
|
|
|||||||
|
Total
|
|
$
|
1,680
|
|
|
$
|
0
|
|
|
$
|
1,680
|
|
|
$
|
(4
|
)
|
|
$
|
0
|
|
|
$
|
(1,673
|
)
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Balance as of December 31, 2013
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
|
|
|||||||||||||||||||
|
Description
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Non-Cash Collateral Pledged
|
|
Net Liabilities
|
||||||||||||||
|
Derivatives
|
|
$
|
4
|
|
|
$
|
0
|
|
|
$
|
4
|
|
|
$
|
(2
|
)
|
(3)
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
Securities lending agreements
|
|
1,374
|
|
|
0
|
|
|
1,374
|
|
|
0
|
|
|
0
|
|
|
(1,357
|
)
|
|
17
|
|
|||||||
|
Total
|
|
$
|
1,378
|
|
|
$
|
0
|
|
|
$
|
1,378
|
|
|
$
|
(2
|
)
|
|
$
|
0
|
|
|
$
|
(1,357
|
)
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The balances at December 31, 2012 and December 31, 2013 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.
Note 4. Debt
Short-Term Debt
We have a debt financing program of up to $3.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. At December 31, 2012 and December 31, 2013 , we had $2.5 billion and $2.0 billion of outstanding commercial paper recorded as short-term debt with weighted-average interest rates of 0.2% and 0.1% . In conjunction with this program, we have a $3.0 billion revolving credit facility expiring in July 2016. The interest rate for the credit facility is determined based on a formula using certain market rates. At December 31, 2012 and December 31, 2013 , we were in compliance with the financial covenant in the credit facility, and no amounts were outstanding under the credit facility at December 31, 2012 and December 31, 2013 . The estimated fair value of the short-term debt approximated its carrying value at December 31, 2012 and December 31, 2013 .
Our short-term debt balance also includes the short-term portion of certain long-term debt, as described in the section below.
Long-Term Debt
In May 2011, we issued $3.0 billion of unsecured senior notes in three tranches (collectively, the Notes) and in August 2013, we entered into a capital lease obligation. The details of these financing arrangements are described in the table below (in millions):
67
|
|
Outstanding Balance As of December 31, 2012
|
|
Outstanding Balance As of December 31, 2013
|
||||
|
Short-Term Portion of Long-Term Debt
|
|
|
|
|
|
||
|
1.25% Notes due on May 19, 2014
|
$
|
0
|
|
|
$
|
1,000
|
|
|
Capital Lease Obligation
|
0
|
|
|
9
|
|
||
|
Total
|
$
|
0
|
|
|
$
|
1,009
|
|
|
|
|
|
|
||||
|
Long-Term Debt
|
|
|
|
||||
|
1.25% Notes due on May 19, 2014
|
$
|
1,000
|
|
|
$
|
0
|
|
|
2.125% Notes due on May 19, 2016
|
1,000
|
|
|
1,000
|
|
||
|
3.625% Notes due on May 19, 2021
|
1,000
|
|
|
1,000
|
|
||
|
Unamortized discount for the Notes above
|
(12
|
)
|
|
(10
|
)
|
||
|
Subtotal
|
2,988
|
|
|
1,990
|
|
||
|
Capital Lease Obligation
|
0
|
|
|
246
|
|
||
|
Total
|
$
|
2,988
|
|
|
$
|
2,236
|
|
The effective interest yields of the 2014, 2016, and 2021 Notes were 1.258% , 2.241% , and 3.734% , respectively. Interest on the Notes is payable semi-annually in arrears on May 19 and November 19 of each year. We may redeem the Notes at any time in whole or from time to time in part at specified redemption prices. We are not subject to any financial covenants under the Notes. We used the net proceeds from the issuance of the Notes for general corporate purposes. The total estimated fair value of the Notes was approximately $3.2 billion and $3.1 billion at December 31, 2012 and December 31, 2013 . The fair value of the Notes was determined based on observable market prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.
In August 2013, we entered into a capital lease obligation on certain property expiring in 2028 with an option to purchase the property in 2016. The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value at December 31, 2013 .
At December 31, 2013 , aggregate future principal payments for long-term debt (including short-term portion of long-term debt) and capital lease obligation were as follows (in millions):
|
Years ending
|
|
|
||
|
2014
|
|
$
|
1,009
|
|
|
2015
|
|
10
|
|
|
|
2016
|
|
1,236
|
|
|
|
2017
|
|
0
|
|
|
|
Thereafter
|
|
1,000
|
|
|
|
Total
|
|
$
|
3,255
|
|
Note 5. Balance Sheet Components
Inventories
Inventories consisted of the following (in millions):
|
|
As of December 31, 2012
|
|
As of December 31, 2013
|
||||
|
Raw materials and work in process
|
$
|
77
|
|
|
$
|
115
|
|
|
Finished goods
|
428
|
|
|
311
|
|
||
|
Inventories
|
$
|
505
|
|
|
$
|
426
|
|
68
Property and Equipment
Property and equipment consisted of the following (in millions):
|
|
As of December 31, 2012
|
|
As of December 31, 2013
|
||||
|
Information technology assets
|
$
|
7,717
|
|
|
$
|
9,094
|
|
|
Land and buildings
|
6,257
|
|
|
7,488
|
|
||
|
Construction in progress
|
2,240
|
|
|
5,602
|
|
||
|
Leasehold improvements
|
1,409
|
|
|
1,576
|
|
||
|
Furniture and fixtures
|
74
|
|
|
77
|
|
||
|
Total
|
17,697
|
|
|
23,837
|
|
||
|
Less: accumulated depreciation and amortization
|
5,843
|
|
|
7,313
|
|
||
|
Property and equipment, net
|
$
|
11,854
|
|
|
$
|
16,524
|
|
Property under capital lease with a cost basis of $258 million was included in construction in progress as of December 31, 2013.
Accumulated Other Comprehensive Income
The components of AOCI, net of tax, were as follows (in millions):
|
|
Foreign Currency Translation Adjustments
|
|
Unrealized Gains (Losses) on Available-for-Sale Investments
|
|
Unrealized Gains on Cash Flow Hedges
|
|
Total
|
||||||||
|
Balance as of December 31, 2012
|
$
|
(73
|
)
|
|
$
|
604
|
|
|
$
|
7
|
|
|
$
|
538
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other comprehensive income (loss) before reclassifications
|
89
|
|
|
(392
|
)
|
|
112
|
|
|
(191
|
)
|
||||
|
Amounts reclassified from AOCI
|
0
|
|
|
(162
|
)
|
|
(60
|
)
|
|
(222
|
)
|
||||
|
Other comprehensive income (loss)
|
89
|
|
|
(554
|
)
|
|
52
|
|
|
(413
|
)
|
||||
|
Balance as of December 31, 2013
|
$
|
16
|
|
|
$
|
50
|
|
|
$
|
59
|
|
|
$
|
125
|
|
The effects on net income of amounts reclassified from AOCI for the year ended December 31, 2013 were as follows (in millions):
|
AOCI Components
|
|
Location
|
|
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
|
||
|
Unrealized gains on available-for-sale investments
|
|
Interest and other income, net
|
|
$
|
201
|
|
|
|
|
Provision for income taxes
|
|
(39
|
)
|
|
|
|
|
Net of tax
|
|
$
|
162
|
|
|
|
|
|
|
|
||
|
Unrealized gains on cash flow hedges for foreign exchange contracts
|
|
Revenue
|
|
$
|
95
|
|
|
|
|
Provision for income taxes
|
|
(35
|
)
|
|
|
|
|
Net of tax
|
|
$
|
60
|
|
|
|
|
|
|
|
||
|
Total amount reclassified, net of tax
|
|
|
|
$
|
222
|
|
69
Note 6. Acquisitions
2013 Acquisitions
In June 2013, we completed our acquisition of Waze Limited (Waze), a provider of a mobile map application which provides turn-by-turn navigation and real-time traffic updates powered by incidents and route information submitted by a community of users, for a total cash consideration of $969 million . The acquisition is expected to enhance our customers' user experience by offering real time traffic information to meet users' daily navigation needs. Of the total purchase price, $841 million was attributed to goodwill and $193 million was attributed to intangible assets, offset by $65 million of other net liabilities assumed. The goodwill of $841 million is primarily attributable to the synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.
During the year ended December 31, 2013, we completed other acquisitions and purchases of intangible assets for a total cash consideration of approximately $489 million , of which $268 million was attributed to intangible assets, $238 million to goodwill, and $17 million to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our expertise in engineering and other functional areas, our technologies, and our product offerings. The amount of goodwill expected to be deductible for tax purposes is approximately $38 million .
Pro forma results of operations for these acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in aggregate.
For all acquisitions completed during the year ended December 31, 2013, patents and developed technology have a weighted-average useful life of 4.8 years, customer relationships have a weighted-average useful life of 5.5 years, and trade names and other have a weighted-average useful life of 3.5 years.
2012 Acquisitions
On May 22, 2012, we completed our acquisition of Motorola, a provider of innovative technologies, products and services that enable a range of mobile and wireline digital communication, information and entertainment experiences. The acquisition is expected to protect and advance our Android ecosystem and enhance competition in mobile computing. Under the transaction, we acquired all outstanding common shares of Motorola for $40 per share and all vested Motorola stock options and restricted stock units, for a total purchase price of approximately $12.4 billion in cash. In addition, we assumed $401 million of unvested Motorola stock options and restricted stock units, which will be recorded as stock-based compensation expense over the remaining service periods. Transaction costs were approximately $50 million , which have been recorded as general and administrative expense as incurred.
Of the $12.4 billion total purchase price, $2.9 billion was cash acquired, $5.5 billion was attributed to patents and developed technology, $2.5 billion to goodwill, $0.7 billion to customer relationships, and $0.8 billion to other net assets acquired.
The goodwill of $2.5 billion is primarily attributed to the synergies expected to arise after the acquisition. Goodwill is not deductible for tax purposes.
During the year ended December 31, 2012, we completed other acquisitions and purchases of intangible assets for a total cash consideration of approximately $1,171 million , of which $733 million was attributed to goodwill, $462 million to acquired intangible assets, and $24 million to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our expertise in engineering and other functional areas, our technologies, and our product offerings. The amount of goodwill expected to be deductible for tax purposes is approximately $29 million .
2011 Acquisitions
In April 2011, we completed the acquisition of ITA Software, Inc., a privately-held flight information software company, for $676 million in cash, of which $394 million was attributed to acquired intangible assets, $323 million to goodwill, and $41 million to net liabilities assumed.
During the year ended December 31, 2011, we completed other acquisitions and purchases of intangible assets for a total cash consideration of approximately $1.3 billion , of which $795 million was attributed to goodwill, $593 million to acquired intangible assets, and $86 million to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our expertise in engineering and other functional areas, our technologies, and our product offerings.
70
Note 7. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the year ended December 31, 2013 were as follows (in millions):
|
Balance as of December 31, 2012
|
$
|
10,537
|
|
|
Goodwill acquired
|
1,079
|
|
|
|
Goodwill disposed
|
(64
|
)
|
|
|
Goodwill adjustment
|
(60
|
)
|
|
|
Balance as of December 31, 2013
|
$
|
11,492
|
|
As of December 31, 2013 , the amount of goodwill related to the Motorola Mobile segment was not material.
Information regarding our acquisition-related intangible assets is as follows (in millions):
|
|
As of December 31, 2012
|
||||||||||
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
|
Patents and developed technology
|
$
|
7,310
|
|
|
$
|
1,323
|
|
|
$
|
5,987
|
|
|
Customer relationships
|
2,061
|
|
|
847
|
|
|
1,214
|
|
|||
|
Trade names and other
|
576
|
|
|
304
|
|
|
272
|
|
|||
|
Total
|
$
|
9,947
|
|
|
$
|
2,474
|
|
|
$
|
7,473
|
|
|
|
As of December 31, 2013
|
||||||||||
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
||||||
|
Patents and developed technology
|
$
|
7,282
|
|
|
$
|
2,102
|
|
|
$
|
5,180
|
|
|
Customer relationships
|
1,770
|
|
|
1,067
|
|
|
703
|
|
|||
|
Trade names and other
|
534
|
|
|
351
|
|
|
183
|
|
|||
|
Total
|
$
|
9,586
|
|
|
$
|
3,520
|
|
|
$
|
6,066
|
|
Patents and developed technology, customer relationships, and trade names and other have weighted-average useful lives from the date of purchase of 8.1 years, 6.5 years, and 5.3 years. Amortization expense of acquisition-related intangible assets for the years ended December 31, 2011 , 2012 , and 2013 was $441 million , $884 million , and $1,158 million .
As of December 31, 2013 , expected amortization expense for acquisition-related intangible assets for each of the next five years and thereafter was as follows (in millions):
|
2014
|
$
|
1,093
|
|
|
2015
|
934
|
|
|
|
2016
|
844
|
|
|
|
2017
|
781
|
|
|
|
2018
|
734
|
|
|
|
Thereafter
|
1,680
|
|
|
|
|
$
|
6,066
|
|
Note 8. Discontinued Operations
71
On April 17, 2013, we completed the disposition of the Motorola Home segment to Arris and certain other persons for consideration of approximately $2,412 million in cash, including cash of $2,238 million received at the date of close and certain post-close adjustments of $174 million received in the third quarter of 2013, and approximately $175 million in Arris' common stock ( 10.6 million shares). Subsequent to the transaction, we own approximately 7.8% of the outstanding shares of Arris. Additionally, in connection with the disposition, we agreed to indemnify Arris for potential liability from certain intellectual property infringement litigation, for which we recorded an indemnification liability of $175 million , the majority of which was settled subsequent to the disposition.
The disposition resulted in a net gain of $757 million , which was presented as part of net income from discontinued operations in the Consolidated Statements of Income for the year ended December 31, 2013.
The Motorola Home segment results have been presented as a discontinued operation for the years ended December 31, 2012 and 2013. The following table provides the financial results included in net income (loss) from discontinued operations during the periods presented (in millions):
|
|
Year Ended December 31,
|
||||||
|
|
2012
|
|
2013
|
||||
|
Revenues
|
$
|
2,028
|
|
|
$
|
804
|
|
|
|
|
|
|
||||
|
Loss from discontinued operations before income taxes
|
(22
|
)
|
|
(67
|
)
|
||
|
(Provision for)/Benefits from income taxes
|
(29
|
)
|
|
16
|
|
||
|
Gain on disposal
|
0
|
|
|
757
|
|
||
|
Net (loss) income from discontinued operations
|
$
|
(51
|
)
|
|
$
|
706
|
|
The following table presents the aggregate carrying amounts of the major classes of assets and liabilities divested (in millions):
|
Assets:
|
|
||
|
Accounts receivable
|
$
|
424
|
|
|
Inventories
|
228
|
|
|
|
Deferred income taxes, net
|
144
|
|
|
|
Prepaid and other current assets
|
152
|
|
|
|
Property and equipment, net
|
282
|
|
|
|
Intangible assets, net
|
701
|
|
|
|
Other assets, non-current
|
182
|
|
|
|
Total assets
|
$
|
2,113
|
|
|
Liabilities:
|
|
||
|
Accounts payable
|
169
|
|
|
|
Accrued expenses and other liabilities
|
289
|
|
|
|
Total liabilities
|
$
|
458
|
|
Note 9. Restructuring charges
Subsequent to our acquisition of Motorola in May 2012, we initiated a restructuring plan for Motorola, primarily in our Motorola Mobile segment, to reduce workforce, reorganize management structure, close or consolidate certain facilities, as well as simplify our mobile product portfolio. These changes were designed to return the Motorola Mobile segment to profitability. Pursuant to this restructuring plan, we have incurred cumulative charges of approximately $821 million .
For the year ended December 31, 2013, changes to restructuring accruals were as follows (in millions):
72
|
|
Severance and
Related
|
|
Other
Charges
|
|
Total
|
||||||
|
Balance as of December 31, 2012
|
$
|
238
|
|
|
$
|
15
|
|
|
$
|
253
|
|
|
Charges
|
145
|
|
|
45
|
|
|
$
|
190
|
|
||
|
Cash payments
|
(254
|
)
|
|
(34
|
)
|
|
(288
|
)
|
|||
|
Non-cash items (1)
|
(84
|
)
|
|
(14
|
)
|
|
(98
|
)
|
|||
|
Balance as of December 31, 2013
|
$
|
45
|
|
|
$
|
12
|
|
|
$
|
57
|
|
(1) Non-cash items were primarily related to restricted stock units (RSUs) and stock options.
For the year ended December 31, 2012 and 2013 , restructuring charges were included in costs and expenses as follows (in millions):
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2012
|
|
2013
|
||||||||||||||||||||
|
|
Severance and
Related
|
|
Other
Charges
|
|
Total
|
|
Severance and Related |
|
Other Charges |
|
Total
|
||||||||||||
|
Cost of revenues - Motorola Mobile
|
$
|
88
|
|
|
$
|
41
|
|
|
$
|
129
|
|
|
$
|
20
|
|
|
$
|
14
|
|
|
$
|
34
|
|
|
Research and development
|
195
|
|
|
5
|
|
|
200
|
|
|
23
|
|
|
19
|
|
|
42
|
|
||||||
|
Sales and marketing
|
123
|
|
|
8
|
|
|
131
|
|
|
13
|
|
|
13
|
|
|
26
|
|
||||||
|
General and administrative
|
114
|
|
|
2
|
|
|
116
|
|
|
26
|
|
|
(5
|
)
|
|
21
|
|
||||||
|
Net income (loss) from discontinued operations
|
55
|
|
|
0
|
|
|
55
|
|
|
63
|
|
|
4
|
|
|
67
|
|
||||||
|
Total charges
|
$
|
575
|
|
|
$
|
56
|
|
|
$
|
631
|
|
|
$
|
145
|
|
|
$
|
45
|
|
|
$
|
190
|
|
Note 10. Interest and Other Income, Net
The components of interest and other income, net, were as follows (in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Interest income
|
$
|
812
|
|
|
$
|
713
|
|
|
$
|
785
|
|
|
Interest expense
|
(58
|
)
|
|
(84
|
)
|
|
(83
|
)
|
|||
|
Realized gains on available-for-sale investments, net
|
254
|
|
|
282
|
|
|
201
|
|
|||
|
Impairment of equity investments
|
(110
|
)
|
|
0
|
|
|
0
|
|
|||
|
Foreign currency exchange losses
|
(379
|
)
|
|
(531
|
)
|
|
(379
|
)
|
|||
|
Gain (loss) on divestiture of business (1)
|
0
|
|
|
188
|
|
|
(57
|
)
|
|||
|
Other
|
65
|
|
|
58
|
|
|
63
|
|
|||
|
Interest and other income, net
|
$
|
584
|
|
|
$
|
626
|
|
|
$
|
530
|
|
(1) Gain on divestiture of Home business was included in net income (loss) from discontinued operations for the year ended December 31, 2013.
Note 11. Commitments and Contingencies
Operating Leases
We have entered into various non-cancelable operating lease agreements for certain of our offices, land, and data centers throughout the world with original lease periods expiring primarily between 2014 and 2063 . We are committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below. Certain of these arrangements have free or escalating rent payment provisions. We recognize rent expense under such arrangements on a straight-line basis.
73
As of December 31, 2013 , future minimum payments under non-cancelable operating leases, net of sublease income amounts, were as follows over each of the next five years and thereafter (in millions):
|
|
Operating
Leases
|
|
Sub-lease
Income
|
|
Net
Operating
Leases
|
||||||
|
2014
|
527
|
|
|
28
|
|
|
499
|
|
|||
|
2015
|
501
|
|
|
24
|
|
|
477
|
|
|||
|
2016
|
454
|
|
|
16
|
|
|
438
|
|
|||
|
2017
|
427
|
|
|
9
|
|
|
418
|
|
|||
|
2018
|
373
|
|
|
3
|
|
|
370
|
|
|||
|
Thereafter
|
1,845
|
|
|
9
|
|
|
1,836
|
|
|||
|
Total minimum payments
|
$
|
4,127
|
|
|
$
|
89
|
|
|
$
|
4,038
|
|
Certain leases have adjustments for market provisions. Amounts in the above table represent our best estimates of future payments to be made under these leases. Rent expense under operating leases, including co-location arrangements, was $380 million , $448 million , and $525 million in 2011 , 2012 , and 2013 .
Purchase Obligations
At December 31, 2013 , we had $3.3 billion of other non-cancelable contractual obligations, primarily related to certain of our distribution arrangements, video and other content licensing revenue sharing arrangements, data center operations and facility build-outs, as well as purchase of inventory.
Letters of Credit
At December 31, 2013 , we had unused letters of credit for $173 million , of which $69 million related to our Motorola Mobile segment.
Indemnifications
In the normal course of business to facilitate transactions in our services and products, we indemnify certain parties, including advertisers, Google Network Members, and lessors with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.
It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows, or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period. As of December 31, 2013 , we did not have any material indemnification claims that were probable or reasonably possible.
Legal Matters
Antitrust Investigations
On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an investigation into various antitrust-related complaints against us. We believe we have adequately responded to all of the allegations made against us. We continue to cooperate with the EC and are pursuing a potential resolution that would avoid a finding of infringement and a fine. The EC has also opened an investigation into Motorola's licensing practices for standards essential patents and use of standards-essential patents in litigation on the basis of complaints brought by Microsoft and Apple. The EC has issued a Statement of Objections against Motorola alleging abuse of a dominant position with respect to these standards-essential patents. We have responded to the Statement of Objections and are defending the case.
74
The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India, the Taiwan Fair Trade Commission, Brazil's Council for Economic Defense and the Canadian Competition Bureau have also opened investigations into certain of our business practices.
State attorneys general from the states of Texas, Ohio, and Mississippi have also issued Civil Investigative Demands relating to our business practices. We are cooperating with the state attorneys general and are responding to their information requests on an ongoing basis.
EPA Investigation
In February 2009, we learned of a U.S. Environmental Protection Agency (EPA) investigation into an alleged release of refrigerant at one of our smaller data center facilities, which we acquired from DoubleClick, and the accuracy of related statements and records. We are cooperating with the EPA and have provided documents and other materials.
Patent and Intellectual Property Claims
We have had patent, copyright, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies, including Android, Google Search, Google AdWords, Google AdSense, Google Books, Google News, Google Image Search, Google Chrome, Google Talk, Google Voice, Motorola devices and YouTube, infringe the intellectual property rights of others. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services, and may also cause us to change our business practices, and require development of non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business. In addition, the U.S. International Trade Commission (ITC) has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss for a company or its suppliers in an ITC action could result in a prohibition on importing infringing products into the U.S. Since the U.S. is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the U.S. or necessitating workarounds that may limit certain features of our products.
Furthermore, many of our agreements with our customers and partners require us to indemnify them for certain intellectual property infringement claims against them, which would increase our costs as a result of defending such claims, and may require that we pay significant damages if there were an adverse ruling in any such claims. Our customers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely impact our business.
Other
We are also regularly subject to claims, suits, government investigations, and other proceedings involving competition and antitrust (such as the pending investigation by the EC described above), intellectual property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Such claims, suits, government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences.
Certain of our outstanding legal matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. We evaluate, on a monthly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters.
With respect to our outstanding legal matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.
We expense legal fees in the period in which they are incurred.
Taxes
We are under audit by the Internal Revenue Service (IRS) and various other tax authorities, including European governments, with regards to income tax and indirect tax matters. We have reserved for potential adjustments to our
75
provision for income taxes and accrual of indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities, and we believe that the final outcome of these examinations or agreements will not have a material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state, and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, a further charge to expense would result.
Note 12. Stockholders’ Equity
Convertible Preferred Stock
Our board of directors has authorized 100,000,000 shares of convertible preferred stock, $0.001 par value, issuable in series. As of December 31, 2012 and 2013, there were no shares issued or outstanding.
Class A and Class B Common Stock
Our board of directors has authorized two classes of common stock, Class A and Class B. At December 31, 2013 , there were 9,000,000,000 and 3,000,000,000 shares authorized and there were 279,325,564 and 56,506,728 shares outstanding of Class A and Class B common stock, $0.001 par value. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share. Shares of Class B common stock may be converted at any time at the option of the stockholder and automatically convert upon sale or transfer to Class A common stock. We refer to Class A and Class B common stock as common stock throughout the notes to these financial statements, unless otherwise noted.
Stock Split Effected In Form of Stock Dividend
In April 2012, our board of directors approved amendments to our certificate of incorporation that would, among other things, create a new class of non-voting capital stock (Class C capital stock). The amendments authorized 3 billion shares of Class C capital stock and also increased the authorized shares of Class A common stock from 6 billion to 9 billion . The amendments are reflected in our Fourth Amended and Restated Certificate of Incorporation (New Charter), the adoption of which was approved by stockholders at our 2012 Annual Meeting of Stockholders held on June 21, 2012. In January 2014, our board of directors considered and approved a distribution of shares of the Class C capital stock as a dividend to our holders of Class A and Class B common stock (Dividend). The Dividend will have a record date of March 27, 2014 and a payment date of April 2, 2014. The Class C capital stock will have no voting rights, except as required by applicable law. Except as expressly provided in the New Charter, shares of Class C capital stock will have the same rights and privileges and rank equally, share ratably and be identical in all other respects to the shares of Class A common stock and Class B common stock as to all matters.
In accordance with the settlement of litigation involving the authorization to distribute the Class C capital stock, we may be obligated to make a payment to holders of the Class C stock if, on average, Class C trades below Class A in the first year following the Class C issuance, payable in cash, Class A stock, Class C stock, or a combination thereof, at the discretion of the Board of Directors. Because the Class C shares have not yet been issued or commenced trading, we cannot reliably predict what, if any, patterns will emerge over time with respect to the relative trading prices of Class A and Class C shares.
The par value per share of our shares of Class A common stock and Class B common stock will remain unchanged at $0.001 per share after the Dividend. On the effective date of the Dividend, there will be a transfer between retained earnings and common stock and the amount transferred will be equal to the $0.001 par value of the Class C capital stock that is issued. We will give retroactive effect to prior period share and per share amounts in our consolidated financial statements for the effect of the Dividend, such that prior periods are comparable to current period presentation.
Stock Plans
We maintain the 1998 Stock Plan, the 2000 Stock Plan, the 2003 Stock Plan, the 2003 Stock Plan (No. 2), the 2003 Stock Plan (No. 3), the 2004 Stock Plan, the 2012 Stock Plan, and plans assumed through acquisitions, all of which are collectively referred to as the “Stock Plans.” Under our Stock Plans, incentive and non-qualified stock options or rights to purchase common stock may be granted to eligible participants. Options are generally granted for a term of 10 years. Under the Stock Plans, we have also issued RSUs. An RSU award is an agreement to issue shares of our stock at the time the award vests. Except for options granted pursuant to our stock option exchange program completed in March 2009 (the Exchange), options granted and RSUs issued to participants under the Stock Plans generally vest over four years contingent upon employment or service with us on the vesting date.
76
As of December 31, 2012 and December 31, 2013 , there were 15,833,050 and 9,455,085 shares of common stock reserved for future issuance under our Stock Plans.
We estimated the fair value of each option award on the date of grant using the BSM option pricing model. Our assumptions about stock-price volatility have been based exclusively on the implied volatilities of publicly traded options to buy our stock with contractual terms closest to the expected life of options granted to our employees. We estimate the expected term based upon the historical exercise behavior of our employees. The risk-free interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.
The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted in the periods presented:
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Risk-free interest rate
|
2.3
|
%
|
|
1.0
|
%
|
|
0.9
|
%
|
|||
|
Expected volatility
|
33
|
%
|
|
29
|
%
|
|
29
|
%
|
|||
|
Expected life (in years)
|
5.9
|
|
|
5.2
|
|
|
5.8
|
|
|||
|
Dividend yield
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Weighted-average estimated fair value of options granted during the year
|
$
|
210.07
|
|
|
$
|
194.27
|
|
|
$
|
214.39
|
|
The following table summarizes the activities for our options for the year ended December 31, 2013 :
|
|
Options Outstanding
|
|||||||||||
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(in millions) (1)
|
|||||
|
Balance at December 31, 2012
|
8,551,395
|
|
|
$
|
405.98
|
|
|
|
|
|
||
|
Granted
|
1,571
|
|
|
$
|
723.25
|
|
|
|
|
|
||
|
Exercised
|
(3,299,276
|
)
|
|
$
|
355.56
|
|
|
|
|
|
||
|
Forfeited/canceled
|
(220,827
|
)
|
|
$
|
595.92
|
|
|
|
|
|
||
|
Balance at December 31, 2013
|
5,032,863
|
|
|
$
|
431.00
|
|
|
5.0
|
|
$
|
3,470
|
|
|
Exercisable as of December 31, 2013
|
3,795,911
|
|
|
$
|
379.60
|
|
|
4.1
|
|
$
|
2,813
|
|
|
Exercisable as of December 31, 2013 and expected to vest thereafter (2)
|
4,880,718
|
|
|
$
|
426.33
|
|
|
5.0
|
|
$
|
3,390
|
|
(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $1,120.71 of our Class A common stock on December 31, 2013 .
(2) Options expected to vest reflect an estimated forfeiture rate.
The following table summarizes additional information regarding outstanding, and vested and exercisable stock options as of December 31, 2013 :
77
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
|
Range of Exercise Prices
|
|
Number of
Shares
|
|
Weighted-
Average
Remaining
Life
(in years)
|
|
Weighted-
Average
Exercise
Price
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
||||||
|
$3.75–$92.23
|
|
22,905
|
|
|
2.2
|
|
$
|
68.89
|
|
|
22,905
|
|
|
$
|
68.89
|
|
|
$117.84–$198.41
|
|
117,075
|
|
|
1.1
|
|
$
|
181.44
|
|
|
117,075
|
|
|
$
|
181.44
|
|
|
$205.96–$298.86
|
|
141,731
|
|
|
1.6
|
|
$
|
276.29
|
|
|
141,731
|
|
|
$
|
276.29
|
|
|
$300.97–$399.00
|
|
2,098,774
|
|
|
3.5
|
|
$
|
309.82
|
|
|
2,066,572
|
|
|
$
|
309.83
|
|
|
$401.78–$499.07
|
|
547,762
|
|
|
5.1
|
|
$
|
442.23
|
|
|
516,010
|
|
|
$
|
440.83
|
|
|
$501.27–$595.35
|
|
1,235,007
|
|
|
6.2
|
|
$
|
538.95
|
|
|
755,917
|
|
|
$
|
532.34
|
|
|
$601.17–$675.82
|
|
852,625
|
|
|
7.9
|
|
$
|
628.88
|
|
|
172,006
|
|
|
$
|
616.14
|
|
|
$723.25–$762.5
|
|
16,984
|
|
|
8.8
|
|
$
|
758.87
|
|
|
3,695
|
|
|
$
|
758.34
|
|
|
$3.75–$762.5
|
|
5,032,863
|
|
|
5.0
|
|
$
|
431.00
|
|
|
3,795,911
|
|
|
$
|
379.60
|
|
The above tables include 388,324 warrants held by selected financial institutions that were options purchased from employees under our TSO program, with a weighted-average exercise price of $431.76 and a weighted-average remaining life of 0.6 years.
During 2013, the number of shares underlying TSOs sold to selected financial institutions under the TSO program was 671,190 at a total value of $322 million , or an average of $479.06 per share, including an average premium of $2.35 per share. The premium is calculated as the difference between (a) the sale price of the TSO and (b) the intrinsic value of the TSO, which we define as the excess, if any, of the price of our Class A common stock at the time of the sale over the exercise price of the TSO. The TSO program was discontinued as of November 29, 2013. This did not have a material impact on our consolidated financial statements.
The total grant date fair value of stock options vested during 2011 , 2012 , and 2013 was $561 million , $489 million , and $223 million . The aggregate intrinsic value of all options and warrants exercised during 2011 , 2012 , and 2013 was $674 million , $827 million , and $1,793 million . These amounts do not include the aggregate sales price of options sold under our TSO program.
As of December 31, 2013 , there was $188 million of unrecognized compensation cost related to outstanding employee stock options. This amount is expected to be recognized over a weighted-average period of 1.9 years. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation related to these awards will be different from our expectations.
The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2013 :
|
|
Unvested Restricted Stock Units
|
|||||
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
|
Unvested at December 31, 2012
|
10,994,927
|
|
|
$
|
566.32
|
|
|
Granted
|
5,713,847
|
|
|
$
|
888.05
|
|
|
Vested
|
(5,104,216
|
)
|
|
$
|
593.19
|
|
|
Forfeited/canceled
|
(627,578
|
)
|
|
$
|
623.62
|
|
|
Unvested at December 31, 2013
|
10,976,980
|
|
|
$
|
718.39
|
|
|
Expected to vest after December 31, 2013 (1)
|
9,626,811
|
|
|
$
|
718.39
|
|
|
(1)
|
RSUs expected to vest reflect an estimated forfeiture rate.
|
As of December 31, 2013 , there was $6.2 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.7 years. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation related to these awards will be different from our expectations.
78
Note 13. 401(k) Plans
We have two 401(k) Savings Plans (401(k) Plans) that qualify as deferred salary arrangements under Section 401(k) of the Internal Revenue Code. Under these 401(k) Plans, matching contributions are based upon the amount of the employees’ contributions subject to certain limitations. We contributed approximately $136 million , $180 million , and $216 million for the years ended December 31, 2011, 2012, and 2013.
Note 14. Income Taxes
Income from continuing operations before income taxes included income from domestic operations of $4,693 million , $5,311 million , and $5,828 million for the years ended December 31, 2011, 2012, and 2013, and income from foreign operations of $7,633 million , $8,075 million , and $8,668 million for the years ended December 31, 2011, 2012, and 2013.
The provision for income taxes consists of the following (in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Current:
|
|
|
|
|
|
||||||
|
Federal
|
$
|
1,724
|
|
|
$
|
2,342
|
|
|
$
|
1,853
|
|
|
State
|
274
|
|
|
171
|
|
|
111
|
|
|||
|
Foreign
|
248
|
|
|
358
|
|
|
771
|
|
|||
|
Total
|
2,246
|
|
|
2,871
|
|
|
2,735
|
|
|||
|
Deferred:
|
|
|
|
|
|
||||||
|
Federal
|
452
|
|
|
(328
|
)
|
|
(439
|
)
|
|||
|
State
|
(109
|
)
|
|
(19
|
)
|
|
14
|
|
|||
|
Foreign
|
0
|
|
74
|
|
|
(28
|
)
|
||||
|
Total
|
343
|
|
|
(273
|
)
|
|
(453
|
)
|
|||
|
Provision for income taxes
|
$
|
2,589
|
|
|
$
|
2,598
|
|
|
$
|
2,282
|
|
The reconciliation of federal statutory income tax rate to our effective income tax rate is as follows (in millions):
|
|
Year ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Expected provision at federal statutory tax rate (35%)
|
$
|
4,314
|
|
|
$
|
4,685
|
|
|
$
|
5,076
|
|
|
State taxes, net of federal benefit
|
122
|
|
|
99
|
|
|
89
|
|
|||
|
Change in valuation allowance
|
27
|
|
|
1,921
|
|
|
(598
|
)
|
|||
|
Foreign rate differential
|
(2,001
|
)
|
|
(2,200
|
)
|
|
(2,494
|
)
|
|||
|
Federal research credit
|
(140
|
)
|
|
0
|
|
(453
|
)
|
||||
|
Basis difference in investment of Arris
|
0
|
|
(1,960
|
)
|
|
644
|
|
||||
|
Other adjustments
|
267
|
|
|
53
|
|
|
18
|
|
|||
|
Provision for income taxes
|
$
|
2,589
|
|
|
$
|
2,598
|
|
|
$
|
2,282
|
|
A retroactive extension of the 2012 federal research and development credit was signed into law on January 2, 2013 in accordance with The American Taxpayer Act of 2012. The benefit of $189 million related to the 2012 federal research and development credit is included in the year ended December 31, 2013.
We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2013 because we intend to permanently reinvest such earnings outside the U.S. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability may be reduced by any foreign income taxes previously paid on these earnings. As of December 31, 2013 , the cumulative amount of earnings upon
79
which U.S. income taxes have not been provided is approximately $38.9 billion . Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.
Deferred Tax Assets
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows (in millions):
|
|
As of December 31,
|
||||||
|
|
2012
|
|
2013
|
||||
|
Deferred tax assets:
|
|
|
|
||||
|
Stock-based compensation expense
|
$
|
311
|
|
|
$
|
283
|
|
|
State taxes
|
184
|
|
|
204
|
|
||
|
Capital loss carryforward
|
236
|
|
|
215
|
|
||
|
Settlement with the Authors Guild and AAP
|
28
|
|
|
45
|
|
||
|
Vacation accruals
|
67
|
|
|
94
|
|
||
|
Deferred rent
|
50
|
|
|
59
|
|
||
|
Accrued employee benefits
|
323
|
|
383
|
|
|||
|
Accruals and reserves not currently deductible
|
365
|
|
|
390
|
|
||
|
Unrealized gain/loss on investments and others
|
0
|
|
57
|
|
|||
|
Net operating losses
|
505
|
|
|
279
|
|
||
|
Tax credit
|
274
|
|
|
394
|
|
||
|
Basis difference in investment of Arris
|
2,043
|
|
|
1,372
|
|
||
|
Inventory write down
|
0
|
|
63
|
|
|||
|
Other
|
128
|
|
|
128
|
|
||
|
Total deferred tax assets
|
4,514
|
|
|
3,966
|
|
||
|
Valuation allowance
|
(2,629
|
)
|
|
(1,899
|
)
|
||
|
Total deferred tax assets net of valuation allowance
|
1,885
|
|
|
2,067
|
|
||
|
Deferred tax liabilities:
|
|
|
|
||||
|
Depreciation and amortization
|
(761
|
)
|
|
(537
|
)
|
||
|
Identified intangibles
|
(1,496
|
)
|
|
(1,479
|
)
|
||
|
Unrealized gains on investments and other
|
(105
|
)
|
|
0
|
|||
|
Other prepaids
|
(118
|
)
|
|
(125
|
)
|
||
|
Other
|
(133
|
)
|
|
(283
|
)
|
||
|
Total deferred tax liabilities
|
(2,613
|
)
|
|
(2,424
|
)
|
||
|
Net deferred tax liabilities
|
$
|
(728
|
)
|
|
$
|
(357
|
)
|
As of December 31, 2013 , our federal, state and foreign net operating loss carryforwards for income tax purposes were approximately $440 million , $1,247 million and $824 million . If not utilized, the federal net operating loss carryforwards will begin to expire in 2019 and the state net operating loss carryforwards will begin to expire in 2014. The foreign net operating loss can be carried forward indefinitely, however it is more likely than not that it will not be realized, therefore we have recorded a valuation allowance against all material foreign net operation losses. The net operating loss carryforwards are subject to various annual limitations under the tax laws of the different jurisdictions.
As of December 31, 2013 , our California research and development credit carryforwards for income tax purposes were approximately $450 million that can be carried over indefinitely. We believe it is more likely than not that a portion of the state tax credit will not be realized. Therefore, we have recorded a full valuation allowance on the state tax credit carryforward. We will reassess the valuation allowance quarterly and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.
80
As of December 31, 2013 , our foreign tax credit carryforwards for income tax purposes were approximately $228 million that will start to expire in 2023. We believe it is more likely than not that all of the foreign tax credit will be realized. We will reassess the need for a valuation allowance on a quarterly basis and if future evidence supports a need to establish a valuation allowance, then a tax expense will be recorded accordingly.
As of December 31, 2013 , our federal and state capital loss carryforwards for income tax purposes were approximately $349 million and $560 million . We also have deferred tax assets for impairment losses that, if recognized, will be capital in nature. We believe that it is more likely than not that our deferred tax assets for capital losses and impairment losses will not be realized. Therefore, we have recorded a valuation allowance on both our
federal and state deferred tax assets for these items. We will reassess the valuation allowance quarterly and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.
In December 2012, we entered into an agreement with Arris Group Inc. (Arris) for the disposition of the Motorola Home segment. A deferred tax asset was established for the book to tax basis difference in our investment in the Motorola Home segment upon signing the agreement because the basis difference was going to be recognized in the foreseeable future. In April 2013, upon the disposition of the Home segment to Arris, our basis difference in the Home segment became a basis difference in Google’s investment in Arris shares received in the disposition and was adjusted by the amount of cash received as part of the transaction. Since any future losses to be recognized upon the disposition of Arris shares will be capital losses and we already have an excess capital loss carryforward, a full valuation allowance was recorded against this deferred tax asset. We will reassess the valuation allowance quarterly and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.
Uncertain Tax Positions
The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2011 to December 31, 2013 (in millions):
|
Balance as of January 1, 2011
|
$
|
1,140
|
|
|
Increases related to prior year tax positions
|
77
|
|
|
|
Decreases related to prior year tax positions
|
(9
|
)
|
|
|
Decreases related to settlement with tax authorities
|
(5
|
)
|
|
|
Increases related to current year tax positions
|
361
|
|
|
|
Balance as of December 31, 2011
|
1,564
|
|
|
|
Increases related to prior year tax positions
|
43
|
|
|
|
Decreases related to prior year tax positions
|
(40
|
)
|
|
|
Decreases related to settlement with tax authorities
|
(62
|
)
|
|
|
Increases related to acquisition
|
17
|
|
|
|
Increases related to current year tax positions
|
411
|
|
|
|
Balance as of December 31, 2012
|
1,933
|
|
|
|
Increases related to prior year tax positions
|
158
|
|
|
|
Decreases related to prior year tax positions
|
(37
|
)
|
|
|
Decreases related to settlement with tax authorities
|
(78
|
)
|
|
|
Increases related to current year tax positions
|
595
|
|
|
|
Balance as of December 31, 2013
|
$
|
2,571
|
|
Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $1,350 million , $1,749 million , and $2,378 million as of December 31, 2011, 2012, and 2013.
As of December 31, 2012 and 2013, we had accrued $139 million and $181 million for payment of interest and penalties. Interest and penalties included in our provision for income taxes were not material in all the periods presented.
We and our subsidiaries are routinely examined by various taxing authorities. Although we file U.S. federal, U.S. state, and foreign tax returns, our two major tax jurisdictions are the U.S. and Ireland. During the quarter ended December 31, 2007, the IRS completed its examination of our 2003 and 2004 tax years. We have filed an appeal with the IRS for certain issues related to this audit and settlements were reached in 2012 on all but one issue which we plan to litigate in court. As a result we released the related reserves in the quarter ended December 31, 2012. The IRS is currently in examination of our 2007, 2008, and 2009 tax years. We expect the examination to be completed
81
within the next 12 months, but we do not anticipate any significant impact to our unrecognized tax benefit balance as of December 31, 2013, related to our 2007, 2008, and 2009 tax years.
Our 2010, 2011, 2012 and 2013 tax years remain subject to examination by the IRS for U.S. federal tax purposes, and our 2006 through 2013 tax years remain subject to examination by the appropriate governmental agencies for Irish tax purposes. There are various other ongoing audits in various other jurisdictions that are not material to our financial statements.
Note 15. Information about Segments and Geographic Areas
Subsequent to the completion of our disposition of the Motorola Home segment on April 17, 2013, we operate in the following two operating segments:
|
•
|
Google - includes our advertising and other non-advertising businesses
|
|
•
|
Motorola Mobile - includes our mobile devices business acquired from Motorola
|
Our chief operating decision maker does not evaluate operating segments using asset information.
The following table sets forth revenues and operating income (loss) by operating segment (in millions):
|
|
Google
|
|
Motorola Mobile
|
|
Elimination
and unallocated items (1)(2)
|
|
Total
|
||||||
|
Year Ended December 31, 2011
|
|
|
|
|
|
|
|
||||||
|
Revenues
|
$
|
37,905
|
|
|
0
|
|
|
0
|
|
|
$
|
37,905
|
|
|
Income (loss) from operations
|
$
|
14,216
|
|
|
0
|
|
|
(2,474
|
)
|
|
$
|
11,742
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
||||||
|
Revenues
|
$
|
46,039
|
|
|
4,136
|
|
|
0
|
|
|
$
|
50,175
|
|
|
Income (loss) from operations
|
$
|
16,308
|
|
|
(393
|
)
|
|
(3,155
|
)
|
|
$
|
12,760
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
||||||
|
Revenues
|
$
|
55,550
|
|
|
4,443
|
|
|
(168
|
)
|
|
$
|
59,825
|
|
|
Income (loss) from operations
|
$
|
18,561
|
|
|
(1,029
|
)
|
|
(3,566
|
)
|
|
$
|
13,966
|
|
(1) Beginning in the third quarter of 2013, Google and Motorola Mobile segment revenues have been impacted by intersegment transactions that are eliminated in consolidation. Additionally, segment revenues associated with certain products are recognized in the segment results, but deferred to future periods in our consolidated financial statements.
(2) Unallocated items, including stock-based compensation expense, as well as restructuring and other charges are not allocated to each segment because we do not include this information in our measurement of the performance of our operating segments.
Revenues by geography are based on the billing addresses of our customers for the Google segment and the ship-to-addresses of our customers for the Motorola Mobile segment. The following tables set forth revenues and long-lived assets by geographic area (in millions):
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2012
|
|
2013
|
||||||
|
Revenues:
|
|
|
|
|
|
||||||
|
United States
|
$
|
17,560
|
|
|
$
|
23,502
|
|
|
$
|
26,768
|
|
|
United Kingdom
|
4,057
|
|
|
4,872
|
|
|
5,638
|
|
|||
|
Rest of the world
|
16,288
|
|
|
21,801
|
|
|
27,419
|
|
|||
|
Total revenues
|
$
|
37,905
|
|
|
$
|
50,175
|
|
|
$
|
59,825
|
|
82
|
|
As of December 31,
|
||||||
|
|
2012
|
|
2013
|
||||
|
Long-lived assets (1) :
|
|
|
|
||||
|
United States
|
$
|
20,985
|
|
|
$
|
24,004
|
|
|
International
|
12,359
|
|
|
14,030
|
|
||
|
Total long-lived assets
|
$
|
33,344
|
|
|
$
|
38,034
|
|
|
(1)
|
Includes the Motorola Home segment as of December 31, 2012
|
Note 16. Subsequent Events
Acquisition of Nest
In January 2014, we entered into an agreement to acquire 100% of Nest Labs, Inc. (Nest), a company whose mission is to reinvent devices in the home such as thermostats and smoke alarms, for a total purchase price of $3.2 billion in cash, subject to adjustments. Prior to this transaction, we had an approximately 12% ownership interest in Nest, which was net against the total consideration. We expect that the acquisition will enhance Google's suite of products and services and allow Nest to continue to innovate upon devices in the home, making them more useful, intuitive, and thoughtful, and to reach more users in more countries. The transaction closed on February 7, 2014.
This transaction is considered a “step acquisition” under GAAP whereby our ownership interest in Nest held before the acquisition is required to be remeasured to fair value at the date of the acquisition. The gain as a result of remeasurement will be included in “interest and other income, net” on our Consolidated Statement of Income in the first quarter of 2014.
We are currently in the process of valuing the assets acquired and liabilities assumed in the transaction, and determining the fair value of our previously held ownership interest at the acquisition date. We will provide all required disclosures upon the completion of the valuation in the first quarter of 2014.
Divestiture of Motorola Mobile
On January 29, 2014, we entered into an agreement with Lenovo Group Limited (Lenovo) providing for the disposition of the Motorola Mobile segment for a total purchase price of approximately $2.9 billion (subject to certain adjustments), including $1.4 billion to be paid at close, comprised of $660 million in cash and $750 million in Lenovo ordinary shares (subject to a share cap and floor). The remaining $1.5 billion will be paid in the form of an interest-free, three -year prepayable promissory note.
We will maintain ownership of the vast majority of the Motorola Mobile patent portfolio, including current patent applications and invention disclosures, which will be licensed back to Motorola Mobile for its continued operations. Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio. Additionally, in connection with the sale, we will indemnify Lenovo for certain potential liabilities of the Motorola Mobile business. The transaction is subject to the satisfaction of regulatory requirements, customary closing conditions and any other needed approvals and is expected to close in 2014.
As we evaluate the impact of this agreement, we expect financial results of Motorola Mobile will be presented as net income (loss) from discontinued operations on the Consolidated Statement of Income and assets and liabilities of Motorola Mobile to be disposed of will be presented as held for sale on the Consolidated Balance Sheets beginning in the first quarter of 2014.
We are in the process of evaluating the transaction and its impact on our financial statements, including evaluating the resulting gain or loss that will be recognized, based on all the terms of the agreement. The following table presents our best estimate of the aggregate carrying amounts of the major classes of assets and liabilities related to the Motorola Mobile segment to be disposed of as of December 31, 2013 (in millions):
83
|
Assets:
|
|
|
||
|
Cash and cash equivalents
|
|
$
|
160
|
|
|
Accounts receivable
|
|
783
|
|
|
|
Inventories
|
|
178
|
|
|
|
Deferred income taxes, net
|
|
241
|
|
|
|
Prepaid and other current assets
|
|
919
|
|
|
|
Property and equipment, net
|
|
425
|
|
|
|
Intangible assets, net
|
|
959
|
|
|
|
Other assets, non-current
|
|
325
|
|
|
|
Total assets
|
|
$
|
3,990
|
|
|
Liabilities:
|
|
|
||
|
Accounts payable
|
|
$
|
1,132
|
|
|
Accrued expenses and other liabilities
|
|
1,531
|
|
|
|
Total liabilities
|
|
$
|
2,663
|
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
None.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K.
Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2013 , our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2013 . Management reviewed the results of its assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 2013 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report which is included in Item 8 of this Annual Report on Form 10-K.
84
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
|
ITEM 9B.
|
OTHER INFORMATION
|
None.
PART III
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
The information required by this item will be included under the caption “Directors, Executive Officers and Corporate Governance” in our Proxy Statement for the 2014 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2013 (2014 Proxy Statement) and is incorporated herein by reference. The information required by this item regarding delinquent filers pursuant to Item 405 of Regulation S-K will be included under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2014 Proxy Statement and is incorporated herein by reference.
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
The information required by this item will be included under the captions “Director Compensation,” “Executive Compensation” and “Directors, Executive Officers and Corporate Governance—Corporate Governance and Board Matters—Compensation Committee Interlocks and Insider Participation” in the 2014 Proxy Statement and is incorporated herein by reference.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
The information required by this item will be included under the captions “Common Stock Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the 2014 Proxy Statement and is incorporated herein by reference.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
The information required by this item will be included under the captions “Certain Relationships and Related Transactions” and “Directors, Executive Officers and Corporate Governance—Corporate Governance and Board Matters—Director Independence” in the 2014 Proxy Statement and is incorporated herein by reference.
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
The information required by this item will be included under the caption “Independent Registered Public Accounting Firm” in the 2014 Proxy Statement and is incorporated herein by reference.
85
PART IV
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
(a)
|
We have filed the following documents as part of this Annual Report on Form 10-K:
|
1. Consolidated Financial Statements
|
Financial Statements:
|
|
2. Financial Statement Schedules
Schedule II: Valuation and Qualifying Accounts
|
|
Balance at
Beginning of
Year
|
|
Additions
|
|
Usage
|
|
Balance at
End of Year
|
||||||||
|
|
(In millions)
|
||||||||||||||
|
Year ended December 31, 2011
|
$
|
101
|
|
|
$
|
214
|
|
|
$
|
(182
|
)
|
|
$
|
133
|
|
|
Year ended December 31, 2012
|
$
|
133
|
|
|
$
|
1,263
|
|
|
$
|
(815
|
)
|
|
$
|
581
|
|
|
Year ended December 31, 2013
|
$
|
581
|
|
|
$
|
1,128
|
|
|
$
|
(1,078
|
)
|
|
$
|
631
|
|
|
Note:
|
Additions to the allowance for doubtful accounts are charged to expense. Additions to the allowance for sales credits are charged against revenues. For the year ended December 31, 2012 and 2013, additions included the impact from the Motorola acquisition.
|
All other schedules have been omitted because they are not required, not applicable, or the required information is otherwise included.
3. Exhibits
See the Exhibit Index immediately following the signature page of this Annual Report on Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 11, 2014
|
GOOGLE INC.
|
|
|
By:
|
/ S / L ARRY P AGE
|
|
|
Larry Page
|
|
|
Chief Executive Officer
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Larry Page and Patrick Pichette, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Signature
|
Title
|
Date
|
|
/ S / L ARRY P AGE
|
Chief Executive Officer, Co-Founder and Director (Principal Executive Officer)
|
February 11, 2014
|
|
Larry Page
|
|
|
|
/ S / P ATRICK P ICHETTE
|
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
February 11, 2014
|
|
Patrick Pichette
|
|
|
|
/ S / E RIC E. S CHMIDT
|
Executive Chairman
|
February 11, 2014
|
|
Eric E. Schmidt
|
|
|
|
/ S / S ERGEY B RIN
|
Co-Founder and Director
|
February 11, 2014
|
|
Sergey Brin
|
|
|
|
/ S / L. J OHN D OERR
|
Director
|
February 11, 2014
|
|
L. John Doerr
|
|
|
|
/ S / D IANE B. G REENE
|
Director
|
February 11, 2014
|
|
Diane B. Greene
|
|
|
|
/ S / J OHN L. H ENNESSY
|
Director
|
February 11, 2014
|
|
John L. Hennessy
|
|
|
|
/s/ A NN M ATHER
|
Director
|
February 11, 2014
|
|
Ann Mather
|
|
|
|
|
Director
|
|
|
Paul S. Otellini
|
|
|
|
/ S / K. R AM S HRIRAM
|
Director
|
February 11, 2014
|
|
K. Ram Shriram
|
|
|
|
/ S / S HIRLEY M. T ILGHMAN
|
Director
|
February 11, 2014
|
|
Shirley M. Tilghman
|
|
|
EXHIBIT INDEX
|
Exhibit
Number
|
|
Description
|
|
Incorporated by reference herein
|
||
|
|
Form
|
|
Date
|
|||
|
2.01
|
|
Agreement and Plan of Merger, by and among Google Inc., RB98 Inc., and Motorola Mobility Holdings, Inc., dated as of August 15, 2011
|
|
Current Report on Form 8-K
(File No. 000-50726)
|
|
August 18, 2011
|
|
3.01
|
|
Fourth Amended and Restated Certificate of Incorporation of Registrant
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
July 24, 2012
|
|
3.02
|
|
Amended and Restated Bylaws of Registrant
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
July 24, 2012
|
|
4.01
|
|
Specimen Class A Common Stock certificate
|
|
Registration Statement on Form S-1, as amended (File No. 333-114984)
|
|
August 18, 2004
|
|
4.02
|
|
Form of Warrant Agreement, dated April 20, 2007, among Google Inc., Citigroup Global Markets Inc. as Warrant Agent, and Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., Credit Suisse Management LLC, and UBS AG, London Branch, as Warrantholders (Warrant Agreement)
|
|
Current Report on Form 8-K (File No. 000-50726)
|
|
April 23, 2007
|
|
4.02.1
|
|
Amendment No. 1 to the Warrant Agreement among Google Inc. and J.P. Morgan Securities Inc., as Warrantholder entered into as of July 20, 2007
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
August 9, 2007
|
|
4.02.2
|
|
Amendment Agreement, dated as of July 12, 2011, among Google Inc., Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Credit Suisse Management LLC, Credit Suisse Securities (USA) LLC, UBS AG, London Branch, and UBS Securities LLC
|
|
Current Report on Form 8-K (File No. 000-50726) |
|
July 12, 2011
|
|
4.03
|
|
Indenture, dated as of May 19, 2011 between Google Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee
|
|
Current Report on Form 8-K (File No. 000-50726) |
|
May 19, 2011
|
|
4.04
|
|
Form of 1.250% Note due 2014
|
|
Current Report on Form 8-K (File No. 000-50726) |
|
May 19, 2011
|
|
4.05
|
|
Form of 2.125% Note due 2016
|
|
Current Report on Form 8-K (File No. 000-50726) |
|
May 19, 2011
|
|
4.06
|
|
Form of 3.625% Note due 2021
|
|
Current Report on Form 8-K (File No. 000-50726) |
|
May 19, 2011
|
|
4.07
|
|
Deferred Compensation Plan
|
|
Registration Statement on Form S-8 (File No. 333-175180)
|
|
June 28, 2011
|
|
4.07.1
|
|
Amendment No. 1 to the Deferred Compensation Plan
|
|
Annual Report on Form 10-K (File No. 000-50726) |
|
January 26, 2012
|
|
4.08
|
|
Terms of Settlement of In Re: Google Inc. Class C Shareholder Litigation (Consol. C.A. No. 7469-CS)
|
|
Current Report on Form 8-K (File No. 000-50726) |
|
October 28, 2013
|
|
10.01
|
|
Form of Indemnification Agreement entered into between Registrant, its affiliates and its directors and officers
|
|
Registration Statement on Form S-1, as amended (File No. 333-114984)
|
|
July 12, 2004
|
|
10.02
|
|
Letter Agreement, dated August 16, 2005, between Shirley M. Tilghman and Google Inc.
|
|
Current Report on Form 8-K (File No. 000-50726)
|
|
October 6, 2005
|
|
10.03
|
|
Offer Letter, dated June 6, 2008, between Patrick Pichette and Google Inc.
|
|
Current Report on Form 8-K (File No. 00050726)
|
|
June 25, 2008
|
|
Exhibit
Number
|
|
Description
|
|
Incorporated by reference herein
|
||
|
|
Form
|
|
Date
|
|||
|
10.04
|
|
Letter Agreement dated January 11, 2012, between Diane B. Greene and Google Inc.
|
|
Current Report on Form 8-K (File No. 00050726)
|
|
January 12, 2012
|
|
10.05
|
|
Agreement dated April 27, 2012, between Nikesh Arora and Google Inc.
|
|
Current Report on Form 8-K (File No. 00050726)
|
|
April 30, 2012
|
|
10.06
|
|
1998 Stock Plan, as amended
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
August 9, 2006
|
|
10.06.01
|
u
|
1998 Stock Plan—Form of stock option agreement
|
|
Registration Statement on Form S-1, as amended (File No. 333-114984)
|
|
April 29, 2004
|
|
10.07
|
u
|
2000 Stock Plan, as amended
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
August 9, 2006
|
|
10.07.1
|
u
|
2000 Stock Plan—Form of stock option agreement
|
|
Registration Statement on Form S-1, as amended (File No. 333-114984)
|
|
April 29, 2004
|
|
10.08
|
u
|
2003 Stock Plan, as amended
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
May 10, 2007
|
|
10.08.1
|
u
|
2003 Stock Plan—Form of stock option agreement
|
|
Registration Statement on Form S-1, as amended (File No. 333-114984)
|
|
April 29, 2004
|
|
10.09
|
u
|
2003 Stock Plan (No. 2), as amended
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
May 10, 2007
|
|
10.09.1
|
u
|
2003 Stock Plan (No. 2)—Form of stock option agreement
|
|
Registration Statement on Form S-1, as amended (File No. 333-114984)
|
|
April 29, 2004
|
|
10.10
|
u
|
2003 Stock Plan (No. 3), as amended
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
May 10, 2007
|
|
10.10.1
|
u
|
2003 Stock Plan (No. 3)—Form of stock option agreement
|
|
Registration Statement on Form S-1, as amended (File No. 333-114984)
|
|
April 29, 2004
|
|
10.11
|
u
|
2004 Stock Plan, as amended
|
|
Current Report on Form 8-K (File No. 000-50726)
|
|
June 7, 2011
|
|
10.11.1
|
u
|
2004 Stock Plan—Form of stock option agreement
|
|
Annual Report on Form 10-K (File No. 000-50726)
|
|
March 30, 2005
|
|
10.11.2
|
u
|
2004 Stock Plan—Form of restricted stock unit agreement
|
|
Annual Report on Form 10-K (File No. 000-50726)
|
|
March 30, 2005
|
|
10.11.3
|
u
|
2004 Stock Plan—Amendment to stock option agreements
|
|
Registration Statement on Form S-3 (File No. 333-142243)
|
|
April 20, 2007
|
|
10.11.4
|
u
|
2004 Stock Plan—Form of stock option agreement (TSO Program)
|
|
Registration Statement on Form S-3 (File No. 333-142243)
|
|
April 20, 2007
|
|
10.12
|
u
|
Google Inc. 2012 Stock Plan
|
|
Current Report on Form 8-K (File No. 333-00050726) |
|
June 26, 2012
|
|
10.13
|
u
|
Google Inc. 2012 Incentive Compensation Plan for Employees and Consultants of Motorola Mobility
|
|
Current Report on Form 8-K (File No. 333-00050726) |
|
June 26, 2012
|
|
10.14
|
u
|
Motorola Mobility Holdings, Inc. 2011 Incentive Compensation Plan
|
|
Registration Statement on Form S-8 (File No. 333-181661)
|
|
May 24, 2012
|
|
10.15
|
u
|
AdMob, Inc. 2006 Stock Plan and UK Sub-Plan of the AdMob, Inc. 2006 Stock Plan
|
|
Registration Statement on Form S-8 filed (File No. 333-167411)
|
|
June 9, 2010
|
|
10.16
|
u
|
Applied Semantics, Inc. 1999 Stock Option/Stock Issuance Plan, as amended
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
August 9, 2006
|
|
10.17
|
u
|
Click Holding Corp. 2005 Stock Incentive Plan
|
|
Registration Statement on Form S-8 (File No. 333-149956)
|
|
March 28, 2008
|
|
Exhibit
Number
|
|
Description
|
|
Incorporated by reference herein
|
||
|
|
Form
|
|
Date
|
|||
|
10.18
|
u
|
Keyhole, Inc. 2000 Equity Incentive Plan, as amended
|
|
Quarterly Report on Form 10-Q (File No. 000-50726)
|
|
August 9, 2006
|
|
10.19
|
|
Letter from Google Inc. to U.S. FTC
|
|
Current Report on Form 8-K (File No. 000-50726)
|
|
January 3, 2013
|
|
10.20
|
|
Agreement containing consent order regarding Motorola Mobility LLC and Google Inc.
|
|
Current Report on Form 8-K (File No. 000-50726)
|
|
January 3, 2013
|
|
10.21
|
*
|
Google 2012 Stock Plan – Form of Google Restricted Stock Unit Agreement
|
|
|
|
|
|
10.22
|
*
|
Google 2012 Stock Plan – Form of Google Stock Options Agreement
|
|
|
|
|
|
12
|
*
|
Computation of Earnings to Fixed Charge Ratios
|
|
|
|
|
|
21.01
|
*
|
Subsidiaries of the Registrant
|
|
|
|
|
|
23.01
|
*
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
|
|
24.01
|
*
|
Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)
|
|
|
|
|
|
31.01
|
*
|
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
31.02
|
*
|
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
32.01
|
‡
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
_________________
|
u
|
Indicates management compensatory plan, contract, or arrangement.
|
|
*
|
Filed herewith.
|
|
‡
|
Furnished herewith.
|
整体翻译：
10 - k1goog2013123110-k.htm形成10 - k
美国
证券交易委员会
20549年华盛顿特区。
|
|
形成10 - k |
(马克)
|
|
|
|
Y |
年度报告按照13到15节(d)的1934年证券交易法 |
的财政年度结束2013年12月31日
或
|
|
|
|
¨ |
交接报告按照13到15节(d)的1934年证券交易法 |
委员会文件数量:000 - 50726
谷歌(goog . o:行情)。
(具体名称的注册人在其宪章中指定)
|
|
|
|
|
|
特拉华州 |
77 - 0493581 |
(国家或其他管辖 公司或组织) |
(国税局雇主 识别号) |
1600剧场百汇
山景城,CA 94043
首席执行官办公室(地址)(邮政编码)
(650)253 - 0000
(注册人的电话号码(包括区号)
___________________________________________
证券登记依照Section12(b)的行为:
|
|
|
|
|
|
每个类的称号 |
注册的名字每个交换 |
ClassA普通股,0.001美元的票面价值 |
纳斯达克股票市场公司 (纳斯达克全球精选市场) |
证券登记依照Section12(g)的行为:
|
|
每个类的称号 |
B类普通股,0.001美元的票面价值 |
选择购买ClassA普通股 |
表明通过复选标记如果注册人是一个著名的经验丰富的发行人,证券Act.Yes 405规则中定义Y没有¨
表明通过复选标记如果注册人不需要文件报告依照Section13或Section15 Act.Yes(d)¨没有Y
表明通过复选标记注册人(1)是否已经提交所有提交的报告需要Section13或15(d)1934年证券交易法的前12个月期间(或短期内,注册人所需文件这样的报道),和(2)一直受到这些过去的90 days.Yes申请要求Y没有¨
表明通过复选标记注册人是否提交电子和发布于公司网站,如果有的话,每个交互数据文件需要提交和发布根据405规则监管S-T(§232.405本章)在前12个月(或短期内,注册人必须提交和发布这些文件)是的Y没有¨
显示复选标记如果披露拖欠申报人根据监管Item405 S-K(§229.405本章)不包含在此,将不包含,注册人的最好的知识,明确代理或信息报表合并的第三部分通过引用此表格10 - k或任何修改这张表10 - k。¨
表明通过复选标记注册人是否大加速编档人员,加速编档人员,非加速编档人员或小公司报告。看到的定义“大加速编档人员”,“加速编档人员”和“小报告公司”在规则12 b - 2交换的行为。(检查):
大加速编档人员Y加速编档人员¨非加速编档人员¨较小的报告公司¨
表明通过复选标记注册人是否一个壳公司(中定义的规则交易法的12 b - 2)是的¨没有Y
的June30 2013,持有的股份的总市场价值的non-affiliates注册人(基于关闭销售价格的股票在纳斯达克全球精选市场June28,2013)是214573249181美元。
的January30 2014注册人的ClassA,有279883488股普通股,56167343股的注册人ClassB普通股突出。
____________________________________________________________________
合并的文件参考
注册人的一部分2014年年度股东大会的委托书中所引用在本年度报告的PartIII形成10 - k在某种程度上规定外。这样代理声明将在120天内提交给美国证券交易委员会(sec)注册人的财政年度结束2013年12月31日.
表的内容
谷歌(goog . o:行情)。
形成10 - k
的财政年度结束2013年12月31日
表的内容
|
||
|
|
|
|
|
页面 |
注意前瞻性陈述 |
1 |
|
|
|
|
合适的婚姻对象 |
|
|
Item1。 |
业务 |
3 |
Item1A。 |
风险因素 |
8 |
Item1B。 |
解决员工的评论 |
20 |
第二条。 |
属性 |
20 |
项目3。 |
法律诉讼 |
21 |
第四项。 |
矿山安全信息披露 |
21 |
|
|
|
第二部分 |
|
|
Item5。 |
注册人的普通股本市场,相关股东事务和发行人股票的购买 |
21 |
Item6。 |
选定的财务数据 |
24 |
Item7。 |
管理的讨论和分析财务状况和操作的结果 |
25 |
Item7A。 |
定量和定性披露关于市场风险 |
43 |
Item8。 |
财务报表和补充数据 |
45 |
Item9。 |
的变化与会计师对会计和财务披露和分歧 |
84年 |
Item9A。 |
控制和程序 |
84年 |
Item9B。 |
其他信息 |
85年 |
|
|
|
PARTIII |
|
|
Item10。 |
董事、高管和公司治理 |
85年 |
Item11。 |
高管薪酬 |
85年 |
Item12。 |
安全某些有益的所有者的所有权和管理及相关股东至关重要 |
85年 |
Item13。 |
某些关系和关联交易,独立董事 |
85年 |
Item14。 |
主要会计费用和服务 |
85年 |
|
|
|
PARTIV |
|
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Item15。 |
展览,财务报表时间表 |
86年 |
我
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注意前瞻性陈述
本年度报告表格内10 - k包含前瞻性陈述的意义的私人证券诉讼改革法案1995。这些语句包括,除其他事项外,语句有关:
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我们的业务和收入的增长和我们预期的因素影响我们的成功在我们的业务和趋势; |
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我们的计划继续投资新企业,产品和技术,系统,设备,和基础设施,继续积极招聘,提供有竞争力的薪酬项目,以及继续投资于收购; |
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季节性的波动在互联网使用和广告支出,传统的零售季节性和宏观经济条件,这可能会导致我们的季度业绩的波动; |
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潜在的收入增长速度下降; |
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我们的期望,从我们的网站广告收入的增长将继续超过从我们谷歌网络成员的网站,这将产生积极的影响我们的营运利润率; |
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我们的期望,我们将继续支付大部分的费用我们收到广告商谷歌网络成员; |
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我们的期望,我们将继续采取措施改善我们提供广告的相关性和减少意外点击的数量; |
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波动总付费点击量和平均按点击付费广告; |
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我们的信念,我们的外汇风险管理计划不会完全抵消我们的净暴露在外汇汇率波动; |
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预期的成本增加对冲活动在我们的外汇风险管理程序; |
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我们的期望,我们的收入成本,研发费用、销售和营销费用,和一般及行政费用将增加以美元和可能增加收入的比例; |
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潜在风险与等待调查、程序,和其他突发事件; |
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我们期望我们的流量获得成本将在未来波动; |
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我们持续投资在国际市场; |
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估计未来的补偿费用; |
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波动的有效税率; |
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我们的资���来源的充分性; |
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我们的付款条件对某些广告,可能会增加我们的营运资本需求; |
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我们的资本支出的波动; |
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我们期望我们的C类股票的发行和交易,和 |
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我们的期望对摩托罗拉移动业务的处理; |
以及其他语句关于我们未来的业务,财务状况和前景和业务策略。前瞻性陈述可能出现在这个报告,包括但不限于以下部分:第一项 “业务,”项1 “风险因素,”和项目7 “管理’年代的讨论和分析财务状况和经营结果。”前瞻性陈述通常可以确定单词等 “预计,” “相信,” “的估计,” “预计,” “计划,” “计划,” “预测,” “项目,” “会,” “将会继续,” “可能的结果,”和类似的表达式。这些前瞻性声明是基于当前的预期和假设受风险和不确定性,这可能导致实际结果不同物质的反映在前瞻性陈述。因素,可能造成或导致这些差异包括,但不限于,那些本年度报告中讨论形成10 - k,特别是标题下讨论的风险 “风险因素”项1中讨论这个报告和其他文件我们文件向美国证券交易委员会(SEC)。我们没有义务进行修改���公布任何修订这些前瞻性声明的结果,法律要求的除外。考虑到这些风险和不确定性,提醒读者不要过分信赖这样的前瞻性陈述。
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表的内容
使用, “谷歌,” “我们,” “我们的,”和类似的条款包括谷歌(Google inc .)和它的子公司,除非上下文表示。
“谷歌”和其他我们的商标出现在这个报告是我们的财产。这个报告包含额外的贸易名称和商标的其他公司。我们不打算使用或显示其他公司’贸易名称或商标意味着背书或赞助我们这样的公司,或任何与这些公司的关系。
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第一部分
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业务 |
概述
谷歌是全球技术领导者致力于改善人们联系信息的方式。我们渴望建立产品和提供服务,改善全球数十亿人的生活。我们的使命是组织全世界的信息,使人人皆可访问并从中受益。我们的创新在网络搜索和广告把我们的网站作为互联网财产和我们世界上最受认可的品牌。我们谷歌段产生的收入主要由交付相关的,具有成本效益的在线广告。企业使用我们的AdWords和AdSense计划,促进他们的产品和服务与广告两国有属性和出版商的网站在网络上。
我们的摩托罗拉移动段是专注于移动无线设备和相关产品和服务。2014年1月,我们进入一个协议,联想集团有限公司(联想),一个香港公司,提供处理我们的摩托罗拉移动部分。该交易预计将在2014年关闭。
我们的业务主要集中在以下关键领域:搜索和显示广告,Android操作系统平台,消费者通过谷歌播放内容,企业、商业和硬件产品。
我们在加利福尼亚州在1998年9月和2003年8月重新注册在特拉华州。我们的总部位于1600阶梯教室百汇,山景城,加州94043年,我们的电话号码是(650)253 - 650。我们完成了首次公开发行(ipo)在2004年8月,我们班一个普通股目前在纳斯达克全球精选市场上市在象征“google”。
2014年1月30日,我们宣布,董事会已经批准了一项股票分配我们的C类资本存量作为我们的股东股息分红记录日期3月27日,2014年和股息付款日期4月2日2014年。第一个交易日将于4月3日,2014年,C类将在纳斯达克全球精选市场上市在象征“google”和类将在纳斯达克全球精选市场上市在象征“GOOGL。”
2013年公司强调
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安卓——我们的Android操作系统的持续增长与全球超过十亿的Android设备被激活的2013年9月。 |
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谷歌玩——谷歌玩是一个完全基于云计算的数字娱乐商店有超过一百万个应用程序和游戏以及数以百万计的歌曲和书籍和我们的用户可以找到成千上万的电影,享受和分享他们的电脑、手机或平板电脑。我们的新音乐订阅服务,所有访问,让人们听超过2000万首歌曲在任何设备上每月9.99美元。 |
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Chrome笔记本和铬——chrome笔记本电脑今天为人们的工作和生活方式。像Chrome浏览器Chrome笔记本,围绕的核心原则速度、简单性和安全性。今天,8个最大的电脑制造商正在chrome笔记本,在5000多所学校和chrome笔记本。铬使上网更简单、更快、更安全的世界各地的超过7.5亿用户。 |
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chromecast- - - - - -帮助使它容易让用户最喜欢的在线娱乐最大的屏幕在他们的房子——电视,我们介绍了Chromecast。Chromecast是一个小的和负担得起的设备,用户只需插入他们的高清晰度(HD)电视,它允许用户使用他们的手机,平板电脑或笔记本电脑,“演员”在线内容的电视屏幕上。它与Netflix,YouTube,谷歌玩电影和电视,谷歌播放音乐,HBO Go,Hulu Plus和潘多拉。使用Chromecast,我们想创建一个简单的解决方案,适用于每个人,每一个电视在家里. |
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联系我们最新的智能手机——我们推出Nexus 5日,2013年10月,功能的智能简单的设计precision-built强劲的材料。它有黑色,白色和红色,5”高清显示屏,Snapdragon处理器,800 4 g / LTE和内置无线充电。2013年7月,我们还推出了一个刷新Nexus 7的平板电脑。更薄,更轻,更快的联系7提供的完美混合电力和可移植性。具有世界上最大的7英寸平板电脑屏幕,将超过2.3像素在每个用户的的手掌。 |
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谷歌现在——我们现在继续改善谷歌,这让用户他们想要的信息,当他们需要它。在2013年,我们添加了许多新卡租车,演唱会门票,通勤共享、足球联赛 |
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和新提醒,以及改善公共交通和更新电视卡,所有每天自动出现在任何设备目前用户需要他们。
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广告——我们介绍了增强运动在2013年2月作为广告主的新方法更容易地创建跨多个设备运行AdWords的活动。此外,我们推出了估计总转换,这有助于我们的广告商衡量他们的在线活动的全部影响用户跨越多个屏幕。 |
2014年1月29日,我们与联想签订了收购协议,出售我们的摩托罗拉移动部分。谷歌将保留绝大多数的摩托罗拉移动的专利组合,将授权摩托罗拉移动继续操作。根据收购协议的条款,联想将收购摩托罗拉移动总考虑(我)6.6亿美元的现金,主题为营运资金调整,递延收入和净债务,联想(ii)7.5亿美元普通股,基于联想股价在关闭和(iii)15亿美元的无息的,三年prepayable本票。我们预计交易将在2014年关闭。
搜索
谷歌搜索继续发展和提高更多的信息来在线,,随着人们越来越多地依靠他们的移动设备来寻求答案。同时,用户现在可以提问的谷歌搜索应用程序,Android和iOS在自然语言和得到答案——“我的包在哪里?这个周末我需要一件夹克吗?谁建造埃菲尔铁塔?这一年是什么构造的?”
启用这个,我们扩大和改善我们的知识图,它允许用户搜索,谷歌知道的人或地点,建立系统,认识语言准确和理解自然语言。如上所述,我们也让谷歌现在更有用,增加更多种类的卡片帮助从租车、演唱会门票、往返分享,提醒用户可以设置为一个特定的地方,所以,例如,用户可以说“提醒我拿牛奶当我购物仪式,“他们会��醒人们当他们到达商店。
此外,我们不断改善和增加我们的产品和服务,为用户提供更相关的结果,以便用户找到他们正在寻找更快。广告我们也提供产品清单,其中包括更丰富的产品信息,如产品图片,价格,和商业信息,而不需要额外的关键字或广告文本。
广告
AdWords的目标,我们的主要基于拍卖的广告计划,是将广告是如此有用的和相关的搜索查询或web内容,它们本身信息的一种形式。AdWords,广告商创建简单的基于文本的广告出现在相关搜索结果或web内容在我们的网站和网络上成千上万的合作伙伴网站在谷歌,这是使用我们的第三方网络广告项目交付相关的搜索结果出现的广告和内容。我们大部分的AdWords客户支付我们在按点击付费广告的基础上,这就意味着广告客户只支付我们当用户点击其广告之一。我们还提供AdWords cost-per-impression基础上,使广告商支付我们基于他们的广告出现在我们的网站的次数和谷歌网络成员的网站按照广告商。
我们的AdSense计划使网站谷歌网络的一部分从我们的AdWords广告提供广告相关的搜索结果或他们的网站上的内容。我们分享的大部分收入来自这些广告与谷歌网络成员显示广告。广告程序使广告主能够扩展他们的广告宣传,提高我们的合作伙伴的能力产生收入的内容,为他们的用户提供相关广告。
随着消费者越来越生活在多个屏幕,我们介绍了在AdWords增强运动帮助广告商大大小小的创建相关活动在所有设备更容易。所有超过一百万的AdWords广告客户现在使用这个新系统,和我们得到的反馈营销人员一直非常积极。
展示广告包括视频、文本、图片、和其他互动广告在网络上运行的电脑和移动设备,包括智能手机和掌上电脑等上网本和平板电脑。谷歌显示网络提供广告服务交付相关的展示广告出版商参与我们的AdSense计划,出版商参与DoubleClick广告交换和谷歌网站,如YouTube和Google财经。
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通过我们DoubleClick广告技术,我们提供给出版商,机构和广告商广告服务技术,这是基础设施,使数以亿计的广告每天都在网络上。我们DoubleClick广告交换创建一个实时拍卖市场交易的广告空间。我们的目标是简化展示广告是广告商和出版商更容易管理活动在不同的屏幕和格式。
此外,YouTube提供了一系列的视频、互动和其他广告形式为广告客户达到他们的目标受众。YouTube的视频广告解决方案给广告商的方式促进其内容YouTube社区,以及与之关联的内容被他们的目标受众关注。YouTube还提供了分析工具,帮助广告主理解他们的观众,获得一般商业智能。在过去的一年中,YouTube移动观众经历了强劲增长和建立了关键伙伴关系帮助从移动视频内容公司。
消费内容和平台
安卓。密切合作与开放手机联盟的商业联盟超过75技术和移动公司,我们开发了Android,免费,完全开源的移动软件平台,任何开发人员都可以使用为移动设备创建应用程序和手机制造商可以安装在一个设备上。我们认为Android将推动更大的创新和选择移动设备的生态系统,并为消费者提供一个更强大的移动体验。
Chromebook,Chrome,Chromecast。正如上面提到的,我们今年推出了数款新硬件产品包括多个chrome笔记本,Nexus 5(智能手机),联系7(7”平板电脑),Chromecast(设备允许消费者“演员”在线内容的电视屏幕上),所有这些用户收到了非常积极的反馈。
Google +。Google +允许用户分享在线就像用户做在现实世界中,与不同的人分享不同的东西。截至2013年10月,我们有5.4亿个30天活跃用户在谷歌属性。
谷歌玩。谷歌玩是我们数字娱乐应用程序商店,音乐、书籍和电影。我们还推出了今年所有访问音乐服务,允许用户听我们巨大的音乐库。今年我们把谷歌发挥更多的平台播放音乐,播放电影和书籍现在可以玩喜欢iPhone和iPad上,除了Android设备。
Google Drive。Google Drive是一个用户可以创建、共享、协作,保持所有的东西。Google Docs内建Google Drive,用户可以实时地与他人合作在文档、电子表格和演示文稿和用户的文件去无处不在。当用户更改文件在网络上,在他们的电脑,或者他们的移动设备上,每个设备上的文件更新,用户已经安装了谷歌。
谷歌钱包。谷歌钱包是一个虚拟的钱包,安全地存储用户的信用卡和借记卡,提供奖励卡片。用户可以利用手机支付店内使用谷歌钱包的非接触式支付任何地方接受。用户也可以轻松在线支付和移动设备上使用谷歌钱包参与商业网站和应用程序。人们也可以很容易地通过Gmail发送钱给他们的朋友或通过谷歌钱包的应用。
企业
与谷歌的企业产品,我们帮助用户工作的生活方式提高我们的消费产品所使用的数十亿的特性和控制他们的业务需要生产,创新和成功。这些工具如Google Apps(包括Gmail、Google Drive,日历,谷歌网站,等等)是让人们在任何地方工作,在任何时间,在任何设备,没有安全或控制的损失。我们也提供版本的谷歌地图应用程序编程接口(API)为企业(包括公共和内部完全交互式谷歌地图网站),以及谷歌地球企业(behind-the-company-firewall图像和数据可视化软件解决方案)。
我们现在也提供基础设施和云服务的开发人员和企业与谷歌的云平台。此套件的服务包括一个平台即服务(PAAS)提供名为Google App Engine,存储通过谷歌云存储,实时分析通过谷歌BigQuery,结构化查询语言(SQL)通过谷歌云SQL,和基础设施即服务(IAAS)通过谷歌计算引擎。
摩托罗拉
摩托罗拉移动段是专注于移动无线设备和相关产品和服务并生成收入主要是靠卖硬件产品。2014年1月,我们达成协议
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联想提供处置我们的摩托罗拉移动部分。
研究
我们继续开发新的产品和服务,并通过研究和产品开发和加强我们现有的第三方的许可和收购企业和技术。我们的产品开发理念是尽早并且经常推出创新产品,然后迭代迅速使这些产品更好。我们经常发布早期产品在测试地点网上或直接在Google.com上。然后我们使用数据和用户反馈,决定是否以及如何进一步投资于这些产品。
我们的研发费用为52亿美元,68亿美元,和80亿年的2011美元,2012年和2013年,分别包括股票补偿费用为11亿美元,13亿美元和17亿美元,分别。我们希望继续投资于建立员工和系统基础设施需要支持新产品和新服务的发展和改善现有的。
知识产权
我们依靠知识产权法律,以及保密程序和合同条款,以保护我们的专有技术和品牌。我们已经注册,申请登记,美国和国际商标、服务商标、域名,和版权。此外,我们已经申请美国和国际专利申请涉及某些我们的专有技术。随着时间的推移,我们已经组建了一个投资组合的专利,商标、服务商标、版权、域名,和贸易秘密覆盖我们的产品和服务。我们的专有技术不是依赖任何单一的专利或版权或组相关的专利或版权。我们相信我们专利的时间是足够的我们的产品相对于预期的生活。虽然我们严格保护我们的专有技术,任何重大障碍,或第三方索赔,我们的知识产权可能损害我们的业务或我们的竞争能力。
销售和支持
我们继续发展和增长我们的销售和支持基础设施。我们有超过85个办事处在50多个国家,包括销售人员的绝大多数。我们的全球销售和支持基础设施专业团队在垂直市场。通过直接将企业带入我们的广告网络,远程,和在线销售渠道,尽可能使用技术和自动化来提高我们客户的经验和成本效益的业务发展。我们直接的广告和销售团队专注于建立关系最大的广告商和领先的互联网公司。我们已经建立了一个多产品销售团队,团队销售活动,包括搜索和显示(包括视频)出现在多个设备上使用的消费者。
我们提供客户服务广告客户通过我们的全球支持基地组织。我们的全球支持组织致力于帮助我们的广告商和谷歌网络成员和我们好好利用他们之间的关系。
任何个人客户或附属组客户代表超过10%的收入在2011年,2012年或2013年。
政府合同
没有材料的部分我们的业务利润或终止合同的重新谈判或者分包在美国政府的选举。
市场营销
谷歌的全球品牌是众所周知的。我们认为,建立一个可信、高品牌开始提供高质量的产品和服务,使人们生活的一个显著的不同。我们的营销、促销和公共关系活动,旨在促进从竞争对手谷歌的品牌形象和区分它。
竞争
我们的业务的特点是快速变化和融合,以及新的和破坏性的技术。我们面临强大的竞争在我们业务的方方面面,尤其是来自公司寻求信息网络与人们���系,并为他们提供相关的广告。我们面临的竞争:
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通用搜索引擎,雅虎和微软的必应等。 |
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垂直搜索引擎和电子商务网站,如Kayak(旅游查询),Monster.com(工作查询),WebMD(健康查询),Amazon.com和eBay(电子商务)。一些用户将直接导航到这些网站而不是通过谷歌。 |
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Facebook和Twitter等社交网络。一些用户越来越依赖社交网络产品或服务推荐,通过通用搜索引擎而不是寻求信息。 |
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其他形式的广告,如电视、广播、报纸、杂志、广告牌、和黄页广告收入。我们的广告商通常在多个媒体做广告,在线和离线。 |
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iPhone和Android设备上的移动应用程序,允许用户访问信息直接从出版商不使用搜索引擎。 |
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在线产品和服务的提供商。许多我们的网上产品和服务,包括Gmail、YouTube和Google Docs,与新成立公司直接竞争,提供通信、信息和娱乐服务整合到他们的产品或媒体属性。 |
我们竞争来吸引和留住用户,因为其他产品和服务简直是一个点击之外,主要的基础上我们的搜索结果的相关性和有用性的特性,可用性和易用性的产品和服务。
我们也竞相吸引和留住内容提供商(谷歌网络成员,以及其他内容提供商来说,我们分发或许可内容),主要基于我们的广告商基地的规模和质量,我们帮助这些合作伙伴的能力产生广告收入,和我们的协议的条款。
政府监管
我们都受到众多国内外法律法规涵盖了各种各样的主题。新法律法规(或新解释现有法律、法规)也可能影响我们的业务。遵守这些法律法规的成本高,可能会增加在未来,任何失败我们遵守这些法律可能一部分主题重大负债和其他处罚。
文化和员工
我们在我们的文化感到自豪。我们拥抱协作和创造力,鼓励迭代的思想来解决复杂的技术挑战。透明度和开放的对话是我们的核心,我们希望确保公司新闻达到员工首先通过内部渠道。
尽管我们快速增长,但我们仍然珍惜我们的根作为启动和给员工自由地按照自己的想法不管角色或功能在公司内部。我们努力雇佣最好的员工,与背景和视角等我们的全球用户。我们提供一个环境,让这些人才可以有充实的职业生涯致力于一些最大的技术挑战,并有一个巨大的对世界产生积极影响。
在2013年12月31日,我们有47756个全职员工,由18593年的研究和发展,15348年的销售和市场营销,一般和行政,6563和7252在操作。谷歌所有的全职员工股权持有人,集体员工所有权占有较大比重。虽然我们在某些国家议会和法定义务的员工表示,我们的美国员工不是由工会代表,我们认为我们的员工关系好。在我们的行业人才竞争是激烈的,特别是对于软件工程师,计算机科学家,和其他技术人员。
全球业务和地理数据
我们提供我们的产品和服务在超过100种语言在50多个国家,地区和地区。在www.google.com或我们的一个谷歌的其他领域,用户可以找到信息在许多不同的语言,在许多不同的格式。美国在2013年约占我们收入的45%。有关财务数据信息的地理区域提出7项,注意15项下的合并财务报表附注8 10 - k年度报告的形式。
季节性
我们的业务是受季节性波动影响互联网使用和传统零售的季节性。互联网的使用在夏季普遍放缓,和商业查询通常在每年的第四季度显著增加。这些季节趋势和可能会继续引起引起的,在我们的季度波动
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结果,包括顺序收入增长率的波动。
可用的信息
我们的网站位于www.google.com和投资者关系网站位于https://investor.google.com。以下文件可以通过我们的网站投资者关系与美国证券交易委员会(SEC):我们文件后形成10 - k年度报告,季度报告形式的10,和我们的代理语句对于我们的股东年会,在过去的三年。这些文件也可以下载免费网站投资者关系。我们还提供一个链接的部分美国证券交易委员会的网站www.sec.gov,我们所有的公共文件,包括年度报告形成10 - k,10 -季度报告形式,目前的8 - k报告形式,所有修改这些报道,我们的代理声明,和其他相关文件所有权。此外,本年度报告表格的副本10 - k位于美国证交会的公共资料室在F街100号,东北,20549年华盛顿特区。公共的操作信息资料室可以通过调用秒1 - 800秒- 0330。
我们网上收益电话和某些事件参与或主机与投资界在我们网站投资者关系。此外,我们提供消息的通知或公告关于我们的财务状况,包括提交给SEC的备案文件中,投资者的事件,媒体和收益发布,和博客作为我们的网站投资者关系以及投资者关系Google +页面(https://plus.google.com/ + GoogleInvestorRelations /职位)。投资者和其他人可以接收通知的新实时信息发布在我们的网站投资者关系通过注册电子邮件警报和RSS提要。公司治理进一步信息,包括我们的公司注册证,章程,治理方针,董事会委员会章程,和行为准则,也可以在我们的网站投资者关系在“公司治理。“我们的网站的内容不是通过引用并入到本年度报告表格10 - k或在其他任何报告或文档我们与美国证券交易委员会的文件,和对我们的网站的任何引用是不活跃的文本引用。
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风险因素 |
我们的业务和财务业绩受到各种风险和不确定性,包括下面描述,这可能会影响我们的业务,财务状况,结果操作,现金流,和我们共同的股票的交易价格。
我们的业务和行业相关风险
我们面临着激烈的竞争。如果我们不继续创新,为用户提供有用的产品和服务,我们不可能保持竞争力,我们的收入和经营成果可能会受到不利影响。
我们的业务正在迅速发展和竞争激烈,变化的技术,将用户的需求,和频繁的介绍新产品和服务。我们的成功在很大程度上依赖于竞争能力提供产品和服务,使使用互联网一个更有用的和愉快的经历为我们的用户和向市场提供创新的产品和技术。作为我们的业务发展,创新竞争压力将包括更广泛的产品和服务,包括产品和服务,我们的历史核心业务之外的可能。
我们有很多竞争对手在不同行业,包括通用搜索引擎,垂直搜索引擎和电子商务网站,社交网站,传统的媒体公司,无线移动设备的公司,网上产品和服务的提供者。我们当前的和潜在的竞争者的范围从大型新兴创业公司,建立了公司。老牌公司操作历史更长和更成熟的关系与客户和用户,他们可以用他们的经验和资源的方式会影响我们的竞争地位,包括通过收购,积极投资于研究和发展,积极发起知识产权索赔(是否有价值的),在积极吸引广告商和网站。新兴创业公司可以创新和速度比我们可以提供产品和服务。
我们的竞争对手不断开发创新web搜索、在线广告、无线移动设备,基于网络的产品和服务。研究和开发新的、技术先进的产品
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也是一个复杂的和不确定的过程需要高水平的创新和投资,以及技术的准确的预期,市场趋势和消费者的需求。因此,我们必须继续投入大量资源的研究和开发,包括通过收购,以提高我们的网络搜索技术和我们现有的产品和服务,并介绍新产品和服务,人们可以很容易地和有效地使用。如果我们不能提供高质量的产品和服务,然后录取率为我们的产品和服务可能会下降,影响消费者和广告客户对我们的品牌的看法。此外,这些新产品和服务可能会提供新的技术和法律上的挑战和困难,我们可能会声称如果这些产品的用户体验服务中断或故障或其他问题。我们的操作结果也会受损,如果我们的创新不响应用户的需求,广告商,和谷歌网络成员,与市场机会的时间不恰当的,或者不是有效市场。随着技术的不断发展,我们的竞争对手可以提供用户体验,或者是看到,实质上类似或优于我们。这可能迫使我们以不同的方式和竞争消耗大量资源以保持竞争力。如果我们的竞争对手比我们更成功的发展中引人注目的产品或吸引和留住用户,广告商,和内容提供商,我们的收入和经营成果可能会受到不利影响。
我们正在进行的投资新业务和新产品,服务,和技术本质上是有风险的,可能会扰乱我们的正在进行的业务。
我们投资并期待继续投资新企业、产品、服务和技术。这样的努力可能涉及重大的风险和不确定性,包括分散的管理从当前业务,收入不足以抵消承担负债和费用与这些新投资,我们的投资回报的资本不足,身份不明的问题不是我们的尽职调查中发现的策略和产品。因为这些新企业本质上是有风险的,我们不能做出保证,这些策略和产品会成功,不会影响我们的信誉,财务状况和经营成果。
越来越多的人使用个人电脑以外的设备访问互联网搜索查询和访问新的平台。如果制造商和用户不广泛采用版本的web搜索技术,产品,或操作系统为这些设备开发的,我们的业务会受到不利影响。
的人数通过个人电脑以外的设备访问互联网,包括手机、智能手机、上网本和平板电脑等掌上电脑,视频游戏机和电视置顶设备,大幅增加。分辨率越低,功能,和记忆与其他相关设备的使用我们的产品和服务通过这些设备的版本更加困难,我们的产品和服务为这些设备开发可能不引人注目的用户、制造商或分销商的替代设备���每个制造商或分销商可以建立独特的技术标准的设备,和我们的产品和服务可能不工作或可以在这些设备上。一些制造商也可能选择不包括我们的产品在他们的设备上。此外,越来越多的搜索查询通过“应用程序”进行针对特定设备或社会媒体平台,这可能会影响我们的搜索市场份额。新设备和平台不断被释放,很难预测我们可能会遇到的问题在调整我们的产品和服务,开发有竞争力的新产品和服务。我们希望继续投入大量资源创建、支持和维护跨多个平台的产品和服务。如果我们不能吸引并留住大量的替代设备制造商,经销商,和用户对我们的产品和服务,或如果我们发展缓慢的产品和技术,更兼容替代设备和平台,我们将无法捕捉机会,消费者和广告商过渡到一个动态的、实时的环境。
我们产生的很大一部分收入来自广告,广告商和减少支出或损失的可能严重损害我们的业务。
我们从广告商生成谷歌收入的91%在2013年。我们的广告商通常可以在任何时间与我们终止合同。广告商不会继续与我们做生意,如果他们投资在广告与我们没有产生销售线索,并最终客户,或者如果我们不提供他们的广告在一个适当的和有效的方式。如果我们不能保持竞争力和提供价值我们的广告商,他们可能与我们停止做广告,这将影响我们的收入和业务。
此外,支出由广告商往往是周期性的,反映整体经济条件和预算和购买模式。不利的宏观经济环境也可以对需求产生实质性的负面影响
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广告,导致我们的广告商减少他们花在广告,这将影响我们的收入和业务。
我们的收入增长率可能下降随着时间的推移,我们预期下行压力在未来的营运利润率。
收入增长率可能下降随着时间的推移,由于许多因素,包括由于:
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日益激烈的竞争, |
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属性组合的变化,平台结构和地理结构, |
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挑战在维护我们作为我们的收入增长率提高到更高的水平, |
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在线广告市场的发展,包括增加各种各样的在线广告平台,和我们参加的其他市场 |
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我们投资新企业的成功,产品,服务和技术。 |
摩托罗拉移动部门的收入增长速度还将取决于许多因素,包括我们的新产品的成功,我们几个大客户的依赖,缺乏长期的排他性与这样的客户安排的情况下,我们能够获得巨大的市场份额在移动设备领域,我们依赖第三方分销商和零售商销售代表某些我们的产品和我们产品的成功实现和操作系统的策略。此外,电信行业的整合可能对我们的业务产生负面影响,因为会有更少的网络运营商,它可能更难以取代任何失去客户。这些因素中的任何一个都可能有负面影响对我们的摩托罗拉移动部分和对我们有不利影响合并财务结果。
我们相信我们的营运利润率将经验下行压力的日益激烈的竞争和增加支出业务的许多方面,包括摩托罗拉,和新的业务线。例如,我们的营运利润率将经验下行压力如果更大比例的收入来自广告放在我们的谷歌网络成员的网站通过广告收入相比放置在自己的网站或如果我们花比例较大促进某些产品的分销,包括Google Chrome。的利润率收入我们从谷歌网络成员和产生收入来自我们的摩托罗拉业务的利润率显著低于保证金在我们网站生成来自广告收入。同时,广告收入的利润率从移动设备和新的广告格式通常低于保证金在我们网站生成来自广告收入。此外,我们赚的利润收入来自我们的谷歌网络成员可以减少将来如果我们支付更大比例的广告费用我们谷歌网络成员。
我们面临更多的监管审查,可能对我们的业务产生负面影响。
我们公司的发展和扩张成各种新领域涉及各种各样的新的监管问题,我们经历了我们已经增加了监管审查。我们继续与欧盟委员会(EC)合作,其他国际监管机构,和几个州检察长调查,他们正在对我们的业务及其对竞争的影响。立法者和监管者,包括那些在美国和欧洲进行调查,可能会使法律和监管变化,或解释和应用现有的法律,使我们的产品和服务不那么有用的方式对我们的用户来说,要求我们需要可观的成本,让我们意外的民事或刑事责任,或使我们改变我们的商业行为。这些变化或增加成本可能对我们的业务产生负面影响和结果在材料方面的操作。
我们经常受到索赔,诉讼、政府调查,和其他诉讼,可能会导致不良结果。
我们经常受到索赔,诉讼、政府调查,以及其他涉及竞争和反垄断诉讼(如等待调查的EC)、知识产权、隐私、消费者保护、税收、劳动和就业,商业纠纷,我们的用户生成的内容,广告商或出版商使用我们所提供的商品和服务平台,和其他事项。硬件产品的销售也将产品责任风险的暴露给��我们和其他诉讼涉及关于产品缺陷,以及健康和安全、危险物质的使用和其他环境问题。此外,我们的企业面临知识产权诉讼,作为进一步讨论后,暴露我们排斥和停止订单的风险,这可能会限制我们出售产品和服务的能力。
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这样的索赔,诉讼、政府调查和诉讼本质上是不确定的,他们无法预测的结果。不管结果如何,这样的法律程序对我们产生不利的影响,因为法律成本,管理资源的转移,和其他因素。确定储备未决诉讼是一个复杂的,fact-intensive过程需要大量的判断。有可能是一个解决一个或多个这样的诉讼可能导致巨大的罚款和处罚,可能影响我们的业务,巩固财务状况,现金流操作的结果,或在一个特定的时期。这些程序也可能导致声誉损害、刑事制裁,同意法令或命令阻止我们提供某些特性,功能,产品或服务,需要改变我们的商业行为或产品召回或其他领域的行动,或要求非侵权或改变产品或技术的发展。这些后果可能影响我们的业务和操作的结果。
收购和投资可能导致操作困难,稀释和其他有害的后果,可能造成负面影响我们的业务和操作的结果。
收购整个公司战略的一个重要元素和使用的资金,而这些交易可能的材料对我们的财务状况和经营结果。我们希望继续评估,进入讨论关于一系列广泛的潜在战略事务。收购公司的整合过程,商业,或技术创造了,并将继续创建、不可预见的操作困难和支出。我们面临风险的领域包括:
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转移的管理时间和重点从操作我们的业务收购整合的挑战。 |
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未能成功收购的业务或技术得到进一步的发展。 |
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实现或补救的控制、过程和被收购公司的政策。 |
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整合收购公司的会计,人力资源,和其他行政系统,协调产品、工程、销售和营销功能。 |
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过渡的操作、用户和客户到我们现有的平台。 |
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未能及时获得所需的批准,如果有的话,从政府部门、或条件的批准,在竞争和反垄断法,除此之外,延缓或阻止我们完成一个事务,或者限制我们的能力来实现预期的财务或战略收购的目标。 |
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在海外收购的情况下,需要集成操作在不同的文化和语言和解决特定的经济、货币、政治和监管风险与特定的国家。 |
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文化的挑战与整合收购公司的员工到我们的组织,我们获得和保留员工的企业。 |
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活动获得公司的责任在收购之前,包括专利和商标侵权索赔,违反法律,商业纠纷,税收负债,负债和其他已知和未知。 |
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诉讼或其他索赔与收购公司,包括声称终止雇员,客户,前股东或其他第三方。 |
我们未能解决这些风险或遇到其他问题与我们过去或未来的收购和投资可能导致我们没有意识到这样的收购或投资的预期收益,招致意外的负债,并损害我们的业务一般。
我们的并购也可能导致稀释我们的股票发行,招致的债务,或有负债,或摊销费用,或善意和购买长期资产减值准备,和重组费用,任何可能损害我们的财务状况或结果。此外,我们的许多并购的预期利益可能不会实现。
我们的业务依赖于一个强大的品牌,未能维护和加强我们的品牌会损害我们扩大我们的能力基础的用户,广告商,谷歌网络成员和其他合作伙伴。
品牌标识,我们开发了大大促成了我们业务的成功。
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维护和加强“谷歌”品牌是至关重要的扩大我们的用户基础,广告商,谷歌网络成员和其他合作伙伴。我们认为,品牌认知度的重要性将会增加由于在互联网市场进入壁垒相对较低。我们的品牌可能受到许多因素的负面影响,包括数据保护和安全问题,服务中断,和产品故障。如果我们不能保持和增强“谷歌”品牌,或者如果我们在这一努力承担过多的费用,我们的业务,经营成果和财务状况将物质和负面影响。维护和加强我们的品牌很大程度上取决于我们的能力,成为一个技术领先和继续提供高质量的创新产品和服务,我们不可能成功。
各种各样的新的和现有的美国和外国法律可能会令我们索赔或损害我们的业务。
我们受到许多美国和外国法律法规覆盖广泛的题材。新法律法规(或新解释现有法律、法规)也可能影响我们的业务。遵守这些法律法规的成本高,在未来可能会增加。任何我们一部分未能遵守这些法律法规可能导致负面宣传和娱乐管理的时间和精力,可能会受到我们的重大责任和其他处罚。
此外,这些法律通过之前互联网和相关技术的出现,因此,不考虑或解决独特的互联网和相关技术问题。法律,做参考互联网被法院解释,但他们的适用性和范围仍然不确定。例如,有关法律责任的在线服务提供商目前在美国国内外的不安。索赔也已经或可能威胁,提起我们在美国和外国法律诽谤,侵犯隐私和其他侵权索赔,非法活动,专利,版权和商标侵权,或其他理论基于材料的性质和内容搜索和发布的广告我们的用户,我们的产品和服务,或由用户生成的内容。此外,当前和新专利法美国专利法和欧洲专利法等可能影响公司的能力,包括我们,来保护他们的创新和抵御专利侵权的说法。
此外,《数字千禧年著作权法规定,限制,但不一定消除,我们的缓存或托管责任,或清单或链接到第三方网站,包括材料,侵犯版权或其他权利,只要我们遵守的法定要求。这些安全港口未来的立法影响可能造成负面影响。各种美国和国际法律限制材料被认为是对孩子有害的分布和施加额外限制未成年人在线服务来收集信息的能力。领域的数据保护,许多州已经通过法律要求时通知用户个人数据的安全漏洞,如加州的信息法》。我们也面临着类似的风险和成本,提供我们的产品和服务在国际市场和可能受到额外的规定。
我们,在未来可能受到知识产权或其他索赔,这是昂贵的保护,可能导致重大的损害赔偿金,可能会限制我们使用某些技术在未来的能力。
网络、技术、媒体和其他公司拥有大量的专利,版权,商标,商业秘密,经常进入诉讼基于指控侵权或其他侵犯知识产权。此外,专利控股公司可能会继续寻求从他们购买或获得专利。我们成长,知识产权索赔我们增加了,可��继续增加我们开发新产品,服务和技术。
我们有专利、版权和商标侵权诉讼反对我们声称某些我们的产品,服务和技术,包括Android、谷歌搜索、谷歌AdWords,Google AdSense,摩托罗拉产品,谷歌地图,谷歌图书,谷歌新闻,谷歌图片搜索,Google Chrome,Google Talk,谷歌语音,和YouTube,其中,侵犯他人的知识产权。第三方已经向我们也寻求广泛的禁令性救济提起索赔在美国和国际法庭和美国国际贸易委员会(ITC)排斥和停止订单,这可能会限制我们的能力来销售我们的产品或服务在美国或其他地方,如果我们的产品或服务或我们的客户或供应商发现侵犯知识产权的指控。不良导致这些诉讼可能包括奖项的实质性的金钱损失,代价高昂的版权或许可协议(如果可用许可证),或阻止我们订单提供某些特性,功能,产品或服务,也可以使我们改变我们的商业行为,并要求非侵权产品或技术的发展,导致损失的收入,否则伤害我们的业务��
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此外,我们的许多协议与我们的客户和合作伙伴,包括特定的供应商,要求我们赔偿他们对某些知识产权侵权赔偿他们,这将增加我们的成本由于防守这样的索赔,并可能要求我们支付大笔赔偿金如果有任何此类索赔的不利判决。这样的客户和合作伙伴也可能停止使用我们的产品,服务,和技术,由于禁令或否则,导致收入损失和负面影响我们的业务。此外,供应商为我们提供知识产权赔偿时,获得时,可能无法涵盖所有损失和损失由我们和我们的客户介绍产品。
不管索赔的优点,知识产权索赔往往费时,昂贵的提出诉讼或解决,造成重大的管理的关注。在某种程度上这些知识产权侵权索赔成功,他们可能对我们的业务有���利影响,巩固财政状况,操作的结果,或者现金流。
我们的知识产权是有价值的,任何无法保护他们可以降低我们产品的价值,服务和品牌。
我们的专利,商标,商业秘密,版权和其他知识产权资产对我们来说很重要。我们控制之外的各种事件威胁到我们的知识产权,以及我们的产品、服务和技术。例如,有效的知识产权保护可能不是在每一个国家,我们的产品和服务分配或通过互联网提供。同时,我们努力保护我们的专有权利可能是不够的或有效的。
虽然我们寻求获得专利保护创新,有可能我们可能无法保护其中的一些创新。此外,由于我们在开源的长远利益,我们可能没有足够的某些创新专利保护后是很重要的。此外,总有这种可能性,尽管我们的努力,将保护的范围得到了不足,或者一个发布的专利可能被视为无效或不能强制执行。
我们也寻求维持某些知识产权的商业机密。保密可以由外部团体妥协,或者由我们的员工,这可能会导致我们失去这些商业秘密所带来的竞争优势。
我们与我们的商标也面临风险。例如,有风险,“谷歌”一词可能成为常用,就“搜索这个词的同义词。“如果发生这种情况,我们可能会失去对这个商标的保护,导致别人使用“谷歌”指的是自己的产品,从而减少我们的品牌。
任何重大损害我们的知识产权可能损害我们的业务和竞争能力。同时,保护我们的知识产权是昂贵和费时的。任何未经授权使用的增加我们的知识产权可以使它更昂贵的做生意和伤害我们的操作结果。
我们可能会受到相关法律责任提供在线服务或内容。
我们的主机和提供各种各样的服务和产品,让用户交换信息,宣传产品和服务,开展业务,从事国内外各种在线活动。有关的法律责任这些在线服务的供应商和产品的活动用户仍在美国和国际上有些不安。声称已经威胁,已经对我们的诽谤,玩忽职守,违反合同,版权或商标侵权,不公平竞争,非法活动,侵权行为,包括人身伤害、欺诈、或其他理论基于信息的性质和内容,我们的发布或提供链接,或者可能是网上发布或由美国或由第三方,包括我们的用户。此外,我们已经和将来可能再次受到国内或国际行为声称某些内容我们已经生成的或第三方的内容,我们可以在我们违反美国和其他服务。法律。
我们也安排的第三方广告第三方出版商和广告网络,和我们提供第三方产品,服务,或内容。我们可能会声称,关于这些产品,服务,或内容由于我们参与营销、品牌、广播、或提供访问他们,即使我们不自己主机,操作,提供,或提供这些产品,服务,或内容。防御的行动可能是昂贵的,需要大量的时间和我们的管理和其他的注意
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资源,会导致货币负债或处罚,并要求我们改变我们的业务以一种负面的方式。
隐私问题有关我们的技术可能会损害我们的声誉和阻止当前和潜在用户使用我们的产品和服务。
不时的担忧已经表达了关于我们的产品,服务或流程妥协用户和他人的隐私。担忧我们的实践对于收集、使用、披露、或安全或其他个人信息隐私的相关事项,即使毫无根据的,可能会损害我们的声誉和影响我们的操作结果。
此外,由于几乎所有我们的产品和服务是基于网络的,我们为用户存储的数据量在我们的服务器上(包括个人信息)一直在增加。任何系统故障或妥协的安全,结果我们用户的发布的数据可能严重限制采用我们的产品和服务,以及损害我们的声誉和品牌,因此,我们的业务。我们希望继续耗费大量资源防止安全漏洞。这些类型的事件的风险可能严重损害我们的业务可能会增加我们扩大我们提供基于web的产品和服务的数量,并能在更多的国家。
世界各地的监管机构正在考虑一系列有关数据保护立法和监管的建议。此外,消费者和数据保护法律的解释和应用在美国,欧洲和其他地区往往不确定性和变化。有可能是这些法律可能解释和应用的方式与我们的数据不一致的实践。如果是这样,除了罚款的可能性,这可能导致订单要求我们改变数据的做法,这可能对我们的业务有不利影响和结果的操作。遵守各种法律可以使我们蒙受重大损失或要求我们改变我们的商业行为的方式不利于我们的业务。
我们面临许多制造和供应链的风险,如果不加以妥善管理,可能会严重影响我们的财务业绩以及前景。
我们面临许多风险相关的制造和供应链管理。例如,我们出售的产品可能质量问题造成产品的设计或制造,或从使用的软件产品。有时候,这些问题可能是由于组件我们从其他制造商或供应商购买。如果我们的产品质量没有达到客户的期望和我们的产品是有缺陷的,然后我们的销售和营业利润,并最终我们的声誉,可能的负面影响。
我们依靠第三方制造我们的许多组件和成品,和我们有第三方安排一些零部件的设计。我们的业务可能是��面影响,如果我们不能第三方参与必要的能力以合理的条件或能力,或如果我们接触的人未能履行义务(无论是由于财务困难或其他原因),或使不良定价或其他材料条款的变化我们的安排。
在过去,摩托罗拉,像许多电子产品制造商一样,经历了供应短缺和价格上涨受原材料的可用性、制造能力,劳动力短缺,行业配置、自然灾害和重大财务或业务条件的变化其供应商。解决方案计划,解决短缺已导致在过去,并可能导致在未来,增加了加速发货运费。我们不能向你保证,我们不会经历短缺或其他未来的供应链中断,或者他们不受到消极的影响我们的业务。此外,一些我们在我们的产品中使用的组件只能从单一来源或来源有限,我们不能向你保证,我们将能够找到替代供应商以优惠的条件或在供应链中断的事件。
此外,由于我们的许多供应合同基于卷的价格或最低购买要求,如果我们的硬件销售的数量减少或没有达到预期目标,我们可能会面临增加材料和制造成本或其他金融负债可能使我们的硬件产品单位生产成本更高,因此竞争力和负面影响我们的财务业绩。此外,某些竞争对手可能更有利的合同条款谈判基于体积和其他承诺,可能为他们提供竞争优势,可能会影响我们的供应。
我们也要求我们的供应商和业务伙伴遵守关于工作场所的法律和公司政策和就业实践、环保合规和知识产权许可,但我们无法控制他们
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或他们的行为。如果其中任何违反法律或实现实践被认为是不道德的,我们可以体验供应链中断,取消订单,终端或者损坏的重要关系,并损害我们的声誉。如果其中任何一个未能获得必要的许可权利的第三方知识产权,法律行动可能接踵而来,会影响我们的产品畅销,暴露我们金融义务给第三方。
多德-弗兰克华尔街改革和消费者保护法案包括披露要求关于“冲突”的使用矿物开采从刚果民主共和国(DRC)及邻近的国家和程序有关制造商的努力防止这样的“冲突”的采购矿物质。秒规则实现这些需求可能的影响减少供应商能供应的池刚果民主共和国“冲突钻石”组件和零件,我们可能无法获得刚果民主共和国��冲突免费产品或供应充足的对于我们的操作。因为我们的供应链是复杂的,我们可能面临声誉挑战与我们的客户、股东和其他利益相关者,如果我们不能充分验证“冲突”的起源矿物中使用我们的产品。
如果违反了我们的安全措施,或者我们的服务受到攻击,降低或拒绝用户访问我们的产品和服务的能力,我们的产品和服务可能被视为不安全、用户和客户可能减少或停止使用我们的产品和服务,和我们可能招致重大的法���和金融风险。
我们的产品和服务涉及的存储和传输用户和客户的专有信息,和安全漏洞暴露我们的损失风险信息,诉讼,和潜在的责任。我们经历不同程度的网络袭击定期,结果,未经授权的政党获得,并可能在未来获取,用户对我们的数据或访问”或客户的数据。我们的安全措施也可能违反了由于员工错误,渎职或否则。此外,外部团体可能试图欺诈手段诱使员工,用户,或客户披露敏感信息以获得我们的数据或用户或者客户的数据。任何此类违反或未经授权的访问可能导致重大的法律和金融风险,损害我们的声誉,在安全的信心丧失我们的产品和服务,有可能对我们的业务有不利影响。因为技术用于获得未授权访问,禁用或降低服务,或破坏系统经常变化,经常不承认,直到推出了针对一个目标,我们可能无法预测这些技术或实现充分的预防措施。如果发生实际或被认为违反我们的安全、我们的安全措施的有效性的市场感知可能会受到伤害,我们可能会失去用户和客户。
Web垃圾信息和内容农场可以减少我们的搜索质量,这可能损害我们的声誉和阻止我们当前和潜在用户使用我们的产品和服务。
“Web垃圾信息”是指网站试图违反搜索引擎质量指南或,否则寻求比搜索引擎在搜索结果中排名较高的评估他们的相关性和实用性排名。虽然英文web垃圾信息在我们的搜索结果中已经明显减少,在大多数其他语言和web垃圾信息是有限的,我们希望web垃圾信息散布者将继续寻求方法来改善他们的排名不当。我们不断战斗web垃圾信息,包括通过索引技术,使到更难,web内容等级高的那么有用。我们面临的挑战从劣质和不相关的内容的网站,包括“内容农场”,生成大量的低质量内容的网站,帮助他们改善他们的搜索排名。我们不断推出算法变化集中在低质量的网站。如果web垃圾信息和内容农场在谷歌上继续增加时,这可能会损害我���的声誉提供相关信息或减少对我们的网站用户流量。此外,当我们继续采取行动改善搜索质量和减少低质量的内容,这可能在短期内减少我们的广告收入,因为这些网站的广告合作伙伴。
中断或失败的信息技术和通信系统可能会损害我们有效地提供我们的产品和服务的能力,这可能会损害我们的声誉和伤害我们的操作结果。
我们的产品和服务的可用性取决于我们持续运作的信息技术和通信系统。我们的系统很容易受到损害或中断从地震,恐怖袭击,洪水、火灾、断电、通讯故障、计算机病毒、计算机拒绝服务攻击或其他试图伤害我们的系统。我们的一些数据中心位于高的地区大地震的风险。我们的数据中心也受到入侵,破坏,和故意破坏公物的,如果这些设施的运营商的某些潜在的中断有财务困难。我们的系统还没有完全冗余和
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我们的灾难恢复计划不能解释所有的结果。自然灾害的发生,决定关闭设施金融原因,我们使用的是没有足够的注意到在我们的数据中心或其他意料之外的问题可能导致长时间的中断我们的服务。此外,我们的产品和服务是高度技术和复杂,可能包含错误或漏洞。任何错误或漏洞在我们的产品和服务,或者损坏或失败的系统,可能会导致服务中断,这将减少我们的收入和利润,损害我们的品牌。
我们的国际业务让我们额外的风险,可能会损害我们的业务,经营成果和财务状况。
我们的国际业务是重要的收入和净利润,在国际上,我们计划进一步扩大。国际收入占大约55%的2013年综合收入,和我们的用户流量的一半以上来自美国以外的国际市场,我们有有限的运营经验和不得受益率先面市优势或成功。
我们大部分的摩托罗拉产品制造在美国以外,主要在中国大陆、台湾和巴西。如果打乱了我们在这些国家的制造业,我们的整体能力可以减少和销售或盈利能力可能的负面影响。我们要求供应商和业务伙伴遵守关于工作场所的法律和公司政策和就业实践、环保合规和知识产权许可,但我们无法控制他们或者他们的实践。如果其中任何违反法律或实现实践被认为是不道德的,我们可以体验供应链中断,取消订单,终端或者损坏的重要关系,并损害我们的声誉。如果其中任何一个未能获得必要的许可权���的第三方知识产权,法律行动可能接踵而来,会影响我们的产品畅销,暴露我们金融义务给第三方。
此外,在连接与摩托罗拉移动的业务在巴西,我们有,继续有法律纠纷和争议,包括税收、劳工和贸易合规争议和其他需要许多年才能解决的法律问题。我们承担法律和其他成本管理和维护这些问题并期望继续承担这些费用。根据我们的评估这些问题,我们已经记录储备只有一小部分的潜在风险。然而,很难预测法律纠纷和争议的结果,包括诉讼,在巴西和我们的最终暴露可能比我们目前的评估和相关的储备。
除了风险描述在本节中,我们的国际业务暴露我们其他风险,包括以下几点:
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变化在当地的政治、经济、社会和劳动条件,这可能会严重损害我们的业务。 |
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限制外国所有权和投资,以及严格的外汇管制,可能阻止我们遣返现金收入在美国以外的国家 |
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进出口需求,关税,贸易纠纷和障碍,和海关分类可能阻止我们提供产品或提供服务到一个特定的市场,可能会增加我们的运营成本。 |
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潜在的禁令从进口到美国的摩托罗拉产品在美国以外的国际转会证明的事。 |
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付款周期较长,在一些国家,信用风险增加,和更高水平的支付欺诈。 |
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还是开发外国法律和法律系统。 |
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不确定性关于服务和责任内容,包括不确定性的当地法律和缺乏法律的先例。 |
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不同的员工/雇主关系,存在工人委员会和工会和其他挑战造成的距离,语言,文化差异,使其难以在某些司法管辖区做生意。 |
此外,符合复杂的外国和美国法律和法规适用于我们国际业务增加我们的业务成本。这些众多,有时相互矛盾的法律法规包括内部控制和信息披露规则,数据隐私和过滤需求,反腐败的法律,如《反海外腐败法》,和其他当地法律禁止贿赂政府官员,和反垄断和竞争法规等等。违反这些法律法规可能导致罚款和处罚,
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刑事制裁我们,我们的官员,或员工,禁止的行为我们的业务,我们提供我们的产品和服务的能力在一个或多个国家,也会严重影响我们的品牌,我们的国际扩张的努力,我们的能力来吸引和留住员工,我们的业务,我们的操作结果。虽然我们已经实现的政策和程序设计,以确保遵守这些法律法规,不能保证我们的员工、承包商或代理人不会违反我们的政策。
最后,因为我们做生意在美元以外的货币,但报告我们的财务业绩在美元,我们面临暴露在汇率波动。虽然我们对冲的一部分我们的国际汇率风险,美元之间的汇率大幅波动和外国货币可能影响我们的净利润。此外,对冲项目本身就有风险,可能使我们额外的风险,可能影响我们的财务状况和操作的结果。
我们的经营成果可能波动,这使得我们的结果难以预测,可能导致我们的结果达不到预期。
我们的操作结果可能会有由于许多因素,我们控制之外的很多。结果,比较各期间的基础上我们的操作结果可能不是有意义的,你不应该依赖于我们过去的结果作为我们未来的性能的一个指标。我们的季度,今年迄今,和年度费用的比例我们的收入可能从我们的历史或预计利率差别很大。我们的操作结果在未来几个季度可能低于预期。所有这些事件都可能导致我们的股票价格下跌。每个人在这一节中列出的风险因素除了以下因素可能影响我们的操作结果:
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我们继续吸引用户的能力对我们的网站和满足现有用户在我们的网站。 |
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我们赚钱的能力(或产生收入)交通对我们的网站和我们的谷歌网络成员的网站。 |
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收入波动的变化引起的财产混合,混合平台和地理。 |
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产生的收入和费用发生在美元以外的货币,和我们的能力来管理产生的风险通过我们的外汇风险管理计划。 |
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运营成本和费用的金额和时间和资本支出相关的维护和扩大我们的业务,操作,和基础设施。 |
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我们专注于长期目标在短期业绩。 |
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在风险投资项目的结果,包括新企业、产品、服务、技术和收购。 |
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我们能够保持我们的网站操作在一个合理的成本,也没有服务中断。 |
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从服务能力带来显著的收益,我们投入了大量的时间和资源。 |
因为我们的业务变化和发展,我们的历史经营成果可能不是对你有用在预测我们未来的经营成果。此外,广告支出历来是周期性的性质,反映整体经济条件,以及预算和购买模式。另外,用户流量往往是季节性的。我们的快速增长已经倾向于掩盖我们的业务的周期性和季节性。我们的增长速度已经放缓,我们的业务变得更加明显的周期性和季节性波动,导致我们的操作结果。
如果我们失去了拉里的服务,谢尔盖,埃里克,或其他关键人员,我们可能无法执行业务战略。
我们未来的成功在很大程度上取决于继续服务我们的高级管理团队的关键成员。特别是,Larry Page和Sergey Brin至关重要的整体管理谷歌和我们的技术的发展。连同我们的执行主席Eric e . Schmidt,他们还扮演着一个关键角色在维持我们的文化,我们的战略方向。我们所有的执行官和关键员工雇佣员工,和我们不维护任何key-person人寿保险政策。关键人员的损失可能严重损害我们的业务。
我们依靠高技术人员,如果我们不能保留或激励的关键人员,雇佣人才,或维持我们的企业文化,我们可能无法有效地成长。
我们的性能很大程度上取决于人才和高技能的个人的努力。我们未来的成功
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取决于我们的持续能力识别、招聘、开发、激励和留住高技能人员为我们组织的所有领域。合格的员工在我们的行业竞争激烈,和某些竞争对手直接有针对性的员工。此外,我们的薪酬安排,比如我们的股权奖励计划,可能并不总是成功地吸引新员工和留住和激励我们现有的员工。我们的有效持续竞争能力取决于我们的能力来吸引新员工和留住和激励我们现有的员工。
此外,我们相信,我们的企业文化鼓励创新、创造力和团队精神。随着我们的组织,我们需要实现更复杂的组织管理结构,我们会发现越来越难以保持有益的方面,我们的企业文化。这可能会产生负面影响我们的未来的成功。
我们的业务依赖于持续和畅通由我们和我们的用户访问互联网。互联网接入提供商可能能够阻止,降解,或收费访问某些我们的产品和服务,这可能导致额外的费用和损失的用户和广告商。
我们的产品和服务依赖于我们的用户能够访问互联网,和某些我们的产品需要大量带宽有效地工作。目前,这种访问是由公司提供的宽带和互联网接入市场的重要市场力量,包括现任电话公司、有线电视公司、移动通信公司和国有服务提供者。其中的一些供应商已经,或表示,他们可能会采取措施,包括法律行动,这可能降低,破坏,或增加我们产品的用户访问某些成本通过限制或禁止使用的基础设施,以支持或促进我们的产品,或者收取的学费增加了我们和我们的用户提供我们的产品。这种干扰可能导致丧失现有的用户和广告商,和增加成本,并可能损害我们的能力来吸引新用户和广告商,损害我们的收入和增长。
新技术可能会阻止我们的广告,这将损害我们的业务。
技术已经被开发出来,它可以阻止我们广告的显示,为用户提供工具来选择我们的广告产品。我们的大部分收入来自广告商支付给我们的费用与web页面上的显示广告为我们的用户。因此,这些技术和工具可能影响我们的经营成果。
我们暴露在市场价值的波动我们的投资组合。
鉴于我们的业务的全球性质,我们有国内和国际的投资。信用评级和定价可以影响这些投资的流动性、信用恶化或损失,财务业绩或其他因素。结果,我们的价值或流动性现金等价物和有价证券可以下降,导致材料损伤,这可能会严重影响我们的财务状况和经营成果。
我们可能暴露在大于预期的税务责任。
可能不利影响我们的未来所得税收益低于预期的司法管辖区,法定税率较低,在辖区高于预期,有较高的法定税率,通过估值的变化我们的递延所得税资产和负债,由于收益外汇风险管理程序,或改变的税收法律、法规,或会计原则,以及某些离散的项目。我们都要接受定期审查和审计国内外税务机关。任何不利结果的审查或审计可能影响经营成果和财务状况。此外,我们全球的决心准备所得税和其他纳税义务需要大量的判断,和有很多交易和计算,最终确定税收是不确定的。虽然我们相信我们估计合理,最终的税收结果可能不同于数量记录在我们的财务报表,可能会严重影响我们的财务业绩在时间或时期,这样的决心。
相关风险我们的股票的所有权
A级普通股的交易价格可能继续波动,如果没有投票权的类C的新类的股票资本存量分布与预期的一样,这个类的交易价格也可能不稳定,可能会影响交易的A级普通股的价格。
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我们班一个普通股票的交易价格在经历了巨大的价格波动,并��能继续波动。例如,从2013年1月1日至12月31日,2013年,我们班的收盘价每股普通股702.87美元不等.71每股1120美元。我们班一个普通股票的交易价格可能会有广泛的针对各种因素,其中一些超出我们控制的事。这些因素包括:
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季度变化结果的操作或我们的竞争对手。 |
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公告由我们或我们的竞争对手的收购,新产品、重大合同、商业关系,或资本承诺。 |
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建议通过证券分析师或收益预期的变化。 |
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公告对我们的收益不符合分析师预期,这是增强的风险,因为这是我们的政策不给指导收益。 |
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声明,我们的竞争对手的收入并不符合分析师预期。 |
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由行业和市场专业人士对我们的产品评论,策略,及其他事情影响我们的业务和结果,无论其准确性。 |
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A级普通股股票的数量用于公开出售。 |
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销售由我们或我们的A级普通股股东(包括销售我们的董事、高管和其他员工)。 |
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卖空对冲,我们班和其他衍生品交易的股票普通股。 |
此外,结算后的诉讼涉及授权分发我们的投票权的类C的资本存量,我们的董事会已经批��了一个C类资本的股票分配股息,我们的a类和B类普通股的持有者。我们预计市场价格的股票类普通股通常会反映买一送一的影响股票分割一旦红利分配。虽然我们计划列表类C资本股票在纳斯达克市场,我们不能预测,或在多大程度上,液体交易市场将开发的类C的资本存量。如果它不或者C类资本存量不是有吸引力的收购目标作为货币或作为一个激励我们的���工,我们可能不会实现我们的目标在创建这个新类。作为普通股的类,类C资本股票的交易价格也可能波动和影响因素上面所提到的,以及类之间的区别在投票权普通股和C类资本存量,C类资本存量的数量供我们和我们的拍卖和销售类C股本的股东,包括机构投资者可能不愿,不能或选择不接收持有投票权的股份作为股票股利的一部分。C类资本存量是否包含在股票指数在未来也可能影响交易价格的A级普通股和C类资本存量。
此外,股市一般,尤其是科技公司的市场,经历了极端的价格和交易量的波动往往是不相关或不成比例的这些公司的经营业绩。这些广阔的市场和行业的市场价格因素可能伤害我们的A级普通股和C类资本存量不管我们的实际经营业绩。
集中我们的股票���有权限制股东对企业的影响力很重要。
我们的B类普通股每股10票和我们班一个普通股每股一票。截至2013年12月31日,拉里、谢尔盖,和埃里克•实益拥有大约92.2%的我们出色的B类普通股,代表大约61.7%的发行在外股份的投票权。拉里、谢尔盖和埃里克。因此在管理和事务的重大影响,在所有问题上要求股东批准,包括选举董事的和重要的企业交易,如合并或其他销售我们公司或者我们的资产,在可预见的未来。此外,因为我们的C类资本存量并没有投票权(根据适用的法律除外),C类资本证券的发行,其中包括在未来的股权收购交易和基金员工股权激励计划,可能延长期间Larry和Sergey目前的相对拥有投票权,选出我们所有的董事和能力来决定最重要的结果提交给我们的股东投票。和艾瑞克一起,他们还将继续能够控制所需的股东投票对某些变化控制涉及谷歌交易(包括谷歌的收购另一家公司)。
19
表的内容
这种集中控制限制或严格限制我们的股东对公司的影响力很重要,因此,我们可以采取行动,我们的股东并不认为是有益的。因此,我们的市场价格和我们班C a级普通股资本存量可能受到不利影响。
在我们的宪章规定按照美国特拉华州的法律文件和可能阻碍收购,股东可以考虑优惠。
在我们公司注册证和章程规定可能延缓或阻止的效果改变控制或改变我们的管理。这些规定包括以下几点:
|
|
• |
我们公司注册证提供tri-class资本存量结构。由于这种结构,拉里、谢尔盖,和埃里克对所有需要股东批准的事项有重大影响,包括选举董事的和重要的企业交易,如合并或其他销售我们公司或者我们的资产。这种集中控制可以阻止他人发起任何潜在的合并、收购或其他改变公司控制权的交易,其他股东可能认为有益的。如上所述,类C的发行股本可能延长拉里的影响的影响,谢尔盖和埃里克。 |
|
|
• |
我们董事会有权选举董事填补一个空缺由董事会的扩张或辞职、死亡,或删除一个导演,这可以防止股东对我们的董事会能够填补职位空缺。 |
|
|
• |
我们的股东书面同意不得。因此,持有人,或持有者,控制大多数我们的资本存量将无法采取某些行动没有控股股东会议。 |
|
|
• |
我们公司注册证禁止在选举董事的累积投票。这限制了少数股东选举董事候选人的能力。 |
|
|
• |
股东必须提供预先通知提名个人选举董事会或者提出问题,可以在一次股东会议。这些条款可能会阻碍或阻止潜在收购者进行征集代理选出收购者的提名的董事会或试图获得我们公司的控制。 |
|
|
• |
我们的董事会可能问题,没有股东批准,向优先股股票。问题向优先股的能力使我们的董事会发行优先股与投票或其他权利或偏好,可以阻止任何试图收购美国的成功。 |
特拉华州的公司,我们也受到某些特拉华州反收购条款。根据特拉华州法律规定,公司不得从事业务结合15%或更多的优秀的有投票权的股票持有人,除非权利人对三年或持有股票,除此之外,董事会已批准交易。我们的董事会可以依靠美国特拉华州的法律来防止或推迟我们的收购。
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|
Item1B。 |
解决员工的评论 |
2013年4月11日,我们收到的评论美国证券交易委员会(SEC)的来信有关各种问题关于我们的公共文件,包括讨论广告和摩托罗拉收入管理的讨论和分析的财务状况和经营结果的10 - k 2012年度报告形式。我们对美国证券交易委员会在5月10日,2013年。2013年6月27日,2013年11月13日和1月16日,2014年,我们收到额外的评论美国证交会的来信有关这些主题和其他事项。我们对前两个字母8月9日发表评论,2013年12月20日,2013年,分别向美国证券交易委员会(SEC)提供了补充分析和信息,美国证券交易委员会的要求。
截至本年度报告的提交日期10 - k,我们正在应对最新评论信收到1月16日,2014年,还没有解决上述评论。我们相信我们有适当的披露信息相关的广告和摩托罗拉收入并将继续与美国证券交易委员会合作,解决意见。
20
表的内容
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第二条。 |
属性 |
我们的总部位于山景城,加州,我们拥有大约380万平方英尺的办公室和建筑空间可开发土地,大约15英亩的适应预期未来的增长。我们还拥有相当大的办公室和建筑空间在纽约,纽约,巴黎,法国,和都柏林,爱尔兰。我们和自己的数据中心在美国、欧洲和亚洲依照各种租赁协议和主机代管安排。
此外,我们租赁重要的办公空间和未开发的土地和我们总部位于山景城附近,加利福尼亚。我们还租赁额外的研发,销售和支持办公室在美国和维护国际租赁设施在世界各国。
摩托罗拉还设有生产设施、研发、管理和销售办事处在美国各种位置和在许多外国国家。摩托罗拉通常认为其设备的生产能力充足,满足业务的需求。生产设备的利用程度不同植物种植和不时。
我们相信我们现有的设施,拥有和出租,都是在良好的条件和适合我们的业务的开展。
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ITEM3。 |
法律诉讼 |
的描述我们的未决诉讼材料,请注意11“承诺和突发事件-法律事务”的合并财务报表附注中Item8 10 - k年度报告的形式,把这里的参考。
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|
|
ITEM4。 |
矿山安全信息披露 |
不适用。
第二部分
|
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|
|
Item5。 |
注册人的普通股本市场,相关股东事务和发行人股票的购买 |
我们ClassA普通股已经在纳斯达克全球精选市场上市August19以来象征“google”,2004年。之前这段时间里,对我们的股票没有公开市场。下面的表提出的表示时间的高和低的销售价格为每股ClassA普通股在纳斯达克全球精选市场。
|
|||||||
|
|
|
|
|
|
|
|
2013财政年度季度结束: |
高 |
|
低 |
||||
2013年期间离校, |
$ |
844.00 |
|
|
$ |
695.52 |
|
June30 2013 |
920.60 |
|
|
761.26 |
|
||
September30 2013 |
928.00 |
|
|
845.56 |
|
||
December31 2013 |
1121 .00 |
|
|
842.98 |
|
|
|||||||
|
|
|
|
|
|
|
|
2012财政年度季度结束: |
高 |
|
低 |
||||
2012年期间离校, |
$ |
670.25 |
|
|
$ |
564.55 |
|
June30 2012 |
653.14 |
|
|
556.52 |
|
||
September30 2012 |
764.89 |
|
|
562.09 |
|
||
December31 2012 |
774.38 |
|
|
636.00 |
|
我们的B类普通股上市和交易。
记录持有者
21
表的内容
的2013年12月31日,大约有2536年记录我们的ClassA普通股股东,我们ClassA普通股票的收盘价1120 .71元每股据纳斯达克全球精选市场。因为我们的许多ClassA普通股股票经纪人和其他机构代表举行的股东,我们无法估计的股东总数由这些纪录保持者。的2013年12月31日,有大约74年我们的B类普通股股东的记录。
股利政策
我们从来没有宣布或支付任何现金股利在我们的普通股。我们打算保留任何预计未来收益,不支付任何现金股利在可预见的未��。
股市表现图
这种性能图不得被视为“提起”为目的的证券交易法的Section18 1934年修订的(交易法),或者通过引用并入到谷歌的任何文件在1933年的证券法案,修订,或交易法,除应当明确规定具体的引用这些文件中。
以下图表比较��5年累计向股东总回报谷歌(Google Inc .)的年代普通股相对于累积标准普尔500指数的总回报率,读数的互联网综合指数和纳斯达克综合指数(NASDAQ Composite index)。一个投资100美元(股息再投资的)被认为是在该公司的普通股和在December31每个索引,2008和它的相对性能是通过跟踪2013年12月31日。所示的回报是基于历史的结果,不是为了显示未来的表现。
比较5年累积总回报*
在谷歌(Google Inc .)、标准普尔500指数
纳斯达克综合指数,读数互联网综合指数
December31 * 100美元投资,2008年股票或指数,包括股息再投资。财政年度结束December31。
22
表的内容
版权©2014标准普尔,麦格劳-希尔公司公司的一个部门。保留所有权利。
结果谷歌的可转让的股票期权(TSO)计划
在我们TSO项目,符合条件的员工能够参与金融机构出售其所持股票期权在一个在线拍卖作为替代选项在传统的锻炼方法,然后出售底层股票。TSO程序中断是11月29日,2013年.
下表提供信息对销售员工的TSOs从10月1日2013年11月29日,2013年,是TSO项目之日起中断。
|
||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
总金额 |
|
加权平均每股 量 |
|||||||||||||||||||
期(1) |
NumberofShares 底层 TSOs出售 |
|
出售 作为数 TSOsSold |
|
TSO 溢价(2) |
|
锻炼 的价格 TSOsSold |
|
出售 作为数 TSOsSold |
|
TSO 溢价(2) |
|||||||||||
|
|
|
(inthousands) |
|
|
|
|
|
|
|||||||||||||
10 - 31 |
79104年 |
|
|
$ |
47600年 |
|
|
$ |
36 |
|
|
$ |
415.67 |
|
|
$ |
601.73 |
|
|
$ |
0.46 |
|
November1 - 29 |
50621年 |
|
|
32957年 |
|
|
22 |
|
|
390.62 |
|
|
651.06 |
|
|
0.44 |
|
|||||
总(加权平均每股金额除外) |
129725年 |
|
|
$ |
80557年 |
|
|
$ |
58 |
|
|
$ |
405.90 |
|
|
$ |
620.98 |
|
|
$ |
0.45 |
|
|
|
(1) |
TSO程序通常活跃在正常交易时段在纳斯达克全球精选市场当我们交易窗口是开着的。然而,我们有权暂停TSO程序在任何时间以任何理由,包括维护和其他技术原因。 |
|
|
(2) |
TSO保费计算之间的区别(a)的销售价格TSO和(b)TSO的内在价值,我们定义为多余的,如果有的话,我们的价格是ClassA普通股的时候锻炼TSO的价格出售。 |
我们TSO程序允许参与执行官(除了拉里•佩奇、布林(Sergey Brin)Eric e . Schmidt)。下表提供信息对销售我们的执行官TSOs从10月1日,2013年11月29日,2013年,这是TSO项目之日起停止:
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
总金额 |
|||||||||
执行官 |
NumberofShares 底层 TSOs出售 |
|
出售 作为数 TSOsSold |
|
TSO 溢价 |
|||||
|
|
|
(inthousands) |
|||||||
Patrick Pichette |
4330年 |
|
|
$ |
1943年 |
|
|
$ |
0 |
|
总 |
4330年 |
|
|
$ |
1943年 |
|
|
$ |
0 |
|
23
表的内容
|
|
|
|
Item6。 |
选定的财务数据 |
以下选择合并财务数据应该读结合Item7“管理财务状况和结果的讨论和分析作业”和我们合并财务报表和相关的记录出现在Item8“财务报表和补充数据”的10 - k年度报告形式。
合并报表的收入数据年December31结束,2011年,2012年,2013年和合并资产负债表数据2012年12月31日,2013年来自我们的经审计的合并财务报表中出现Item8 10 - k年度报告的形式。合并报表的收入数据年December31结束,2009年和2010年,在December31和合并资产负债表数据,2009年,2010年,2011年源于我们的经审计的合并财务报表,不包括在本年度报告Form10-K。历史的结果并不一定表明结果是预期在未来的任何时期。
|
|||||||||||||||||||
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|
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|
|
|
|
|
|
年December31结束, |
||||||||||||||||||
|
2009年 |
|
2010年 |
|
2011年 |
|
2012年 |
|
2013年 |
||||||||||
|
(在数百万,每股金额除外) |
||||||||||||||||||
IncomeData合并报表: |
|
|
|
|
|
|
|
|
|
||||||||||
收入 |
$ |
23651年 |
|
|
$ |
29321年 |
|
|
$ |
37905年 |
|
|
$ |
50175年 |
|
|
$ |
59825年 |
|
业务收入 |
8312年 |
|
|
10381年 |
|
|
11742年 |
|
|
12760年 |
|
|
13966年 |
|
|||||
来自持续经营业务的净收入 |
6520年 |
|
|
8505年 |
|
|
9737年 |
|
|
10788年 |
|
|
12214年 |
|
|||||
净利润(亏损)停止操作 |
0 |
|
|
0 |
|
|
0 |
|
|
(51 |
) |
|
706年 |
|
|||||
净收益 |
6520年 |
|
|
8505年 |
|
|
9737年 |
|
|
10737年 |
|
|
12920年 |
|
|||||
每股净收益(损失)的ClassA和ClassB普通股——基本 |
|
|
|
|
|
|
|
|
|
||||||||||
持续经营 |
$ |
20.62 |
|
|
$ |
26.69 |
|
|
$ |
30.17 |
|
|
$ |
32.97 |
|
|
$ |
36.70 |
|
已停止经营 |
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
$ |
(0.16 |
) |
|
$ |
2.12 |
|
|||
普通股每股净收益的ClassA和ClassB——基本 |
$ |
20.62 |
|
|
$ |
26.69 |
|
|
$ |
30.17 |
|
|
$ |
32.81 |
|
|
$ |
38.82 |
|
净利润(损失)ClassA和ClassB普通股的每股稀释 |
|
|
|
|
|
|
|
|
|
||||||||||
持续经营 |
$ |
20.41 |
|
|
$ |
26.31 |
|
|
$ |
29.76 |
|
|
$ |
32.46 |
|
|
$ |
36.05 |
|
已停止经营 |
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
$ |
(0.15 |
) |
|
$ |
2.08 |
|
|||
是ClassA和ClassB普通股每股净收益的稀释 |
$ |
20.41 |
|
|
$ |
26.31 |
|
|
$ |
29.76 |
|
|
$ |
32.31 |
|
|
$ |
38.13 |
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December31, |
||||||||||||||||||
|
2009年 |
|
2010年 |
|
2011年 |
|
2012年 |
|
2013年 |
||||||||||
|
(百万) |
||||||||||||||||||
合并资产负债表数据: |
|
|
|
|
|
|
|
|
|
||||||||||
现金、现金等价物和有价证券 |
$ |
24485年 |
|
|
$ |
34975年 |
|
|
$ |
44626年 |
|
|
$ |
48088年 |
|
|
$ |
58717年 |
|
总资产 |
40497年 |
|
|
57851年 |
|
|
72574年 |
|
|
93798年 |
|
|
110920年 |
|
|||||
长期负债总额 |
1746年 |
|
|
1614年 |
|
|
5516年 |
|
|
7746年 |
|
|
7703年 |
|
|||||
股东权益总额 |
36004年 |
|
|
46241年 |
|
|
58145年 |
|
|
71715年 |
|
|
87309年 |
|
24
表的内容
|
|
|
|
Item7。 |
管理的讨论和分析财务状况和操作的结果 |
下面的讨论和分析,我们的财务状况和经营结果应该与我们一起读合并财务报表和相关笔记包含在Item8 10 - k年度报告的形式。
概述
谷歌是全球技术领导者致力于改善人们联系信息的方式。我们渴望建立产品和提供服务,改善全球数十亿人的生活。我们的使命是组织全世界的信息,使人人皆可访问并从中受益。我们的创新在网络搜索和广告把我们的网站作为互联网财产和我们世界上最受认可的品牌。我们谷歌段产生的收入主要由交付相关的,具有成本效益的在线广告。企业使用我们的AdWords和AdSense计划,促进他们的产品和服务与广告两国有属性和出版商的网站在网络上。
我们的摩托罗拉移动段是专注于移动无线设备和相关产品和服务并生成收入主要是靠卖硬件产品。2014年1月,我们进入一个协议与联想提供摩托罗拉移动部门的性格。该交易预计将在2014年关闭。
摩托罗拉家庭段是专注于技术和设备,提供视频娱乐服务消费者通过允许用户访问各种交互式数字电视服务。2012年12月,我们进入一个协议处理摩托罗拉的段。2013年4月17日,交易关闭。与摩托罗拉家提出了相关的所有财务业绩净利润(亏损)对合并报表的收入中断操作。
我们的企业的趋势
广告交易继续从线下转移到线上数字经济的发展。这导致我们业务的快速增长,导致收入大幅增加,我们希望我们的业务将会持续增长。然而,我们的收入增长速度普遍下降随着时间的推移,它可能会在未来的许多因素,包括日益激烈的竞争,我们投资新业务战略、产品、服务和技术,我们的产品组合的变化,变化的地理结构收入增长率和查询用户如何查询,挑战保持我们作为我们的收入增长率提高到更高的水平,和在线广告市场的发展,包括增加各种各样的在线广告平台,和其他市场的参与。
越来越多的用户连接到互联网和使用多种设备访问我们的产品和服务,这种趋势增加了我们的全球搜索查询和改变了我们的平台。我们期待,我们的收入增长速度将继续受到进化的消费者偏好的影响,以及广告的趋势,由用户接受我们的产品和服务,因为他们是在不同的设备上,和我们创建一个无缝体验的能力都在这多屏幕环境中用户和广告商。
我们的广告计划的重点是帮助企业达到人的时刻,所有设备与智能广告他们的意图和上下文相关,反映了我们的承诺,不断提高他们的整体网络体验。因此,我们期望继续采取措施改善广告的相关性显示在我们的网站和谷歌网络成员的网站。这些步骤包括不显示广告,产生低点击率或发送用户无关紧要或低质量的网站,更新我们的广告政策,确保合规,终止我们的关系与谷歌网络成员的网站没有达到我们的质量要求。我们也会继续采取措施减少意外点击的用户数量。这些步骤可能会影响我们的收入的增长速度。
季节性波动在互联网使用和传统零售的季节性影响,并可能继续影响我们的业务。互联网的使用在夏季普遍放缓,和商业查询通常在每年的第四季度显著增加。这些造成季节性趋势,可能会继续原因,波动在我们的季度业绩,包括连续收入波动,以及总付费点击按点击��费广告的平均增长率。
的营运利润率我们实现营业收入来自广告放在谷歌网络成员的网站通过AdSense计划比营业利润率大大降低我们意识到从营业收入来自广告放置在我们的网站,因为大部分的广告费用从广告上谷歌网络成员的网站与我们共享谷歌网络成员。在过去的五年里,广告的增长
25
表的内容
从我们的网站通常超过收入,从我们的谷歌网络成员的网站。这种趋势对我们的营运利润率已经产生了积极的影响,我们认为这将继续在可预见的未来,尽管收入的相对增长率相比我们的网站从谷歌的收入增长率网络成员的网站可能会有所不同。同时,广告收入的利润率从手机和其他新广告格式通常低于从桌面电脑和平板电脑。我们预计这一趋势将继续我们的利润率的压力,特别是如果我们没有意识到的机会我们预计过渡到一个动态的、实时的环境。
我们开展摩托罗拉移动业务在高度竞争的市场,面对新的和建立竞争对手。我们的许多产品的市场特点是快速变化的技术,频繁的新产品介绍,消费趋势变化,产品生命周期短、消费者忠诚度和不断发展的行业标准。造成市场混乱新技术、新的竞争对手的进入,整合我们的客户和竞争对手,监管要求的变化,经济环境的变化,供应链中断或其他因素,可以在我们的企业中引入波动。应对这些挑战需要一致的操作计划和执行和投资技术,导致创新的产品,以满足全球客户的需求。
从整体业务的角度来看,我们继续大举投资战略重点领域,我们的系统,数据中心,企业设施、信息技术基础设施和员工。我们希望继续大举招募2014年和我们的员工提供有竞争力的薪酬项目。我们的全职员工人数为53861(其中包括11113名员工从5204年摩���罗拉移动和摩托罗拉)在12月31日,2012年和47756年(包括3894年摩托罗拉移动的员工)在12月31日,2013年。收购还将保持我们的战略的重要组成部分,使用的资本。我们期望美元的收入将会增加成本,可能会增加收入的比例在未来时期,主要是由于预测流量获取成本,增加生产和库存相关成本,数据中心成本,收购成本内容,信用卡和其他交易费用和其他费用。特别是,流量获得成本广告收入的比例可能会增加在未来如果我们无法继续提高收入的盈利或代交通在我们的网站和谷歌网络成员的网站。
当我们扩大我们的广告项目和其他产品的国际市场,我们将继续提高我们暴露在外汇美元汇率的波动。我们有一个外汇风险管理程序,旨在减少我们接触外国货币汇率的波动。然而,这个项目不会完全抵消收入和收益波动的影响。
其他收入包括根本不用广告就能收入包括许可、硬件和数字内容。我们希望其他收入继续增长。然而,营业利润率在其他收入普遍低于,广告收入。
结果的操作
我们完成收购摩托罗拉在2012年May22(收购日期)。2012年12月,我们进入一个协议处理摩托罗拉的段,因此,财务业绩与摩托罗拉家提出了净收益(损失)的合并报表已停止经营收入在所有时间。2013年4月,我们完成了摩托罗拉的性格。
2014年1月,我们进入一个协议与联想提供摩托罗拉移动部门的性格。该交易预计将在2014年关闭。我们评估本协议的影响,我们预计财务业绩的摩托罗拉移动将净收益(损失)已停止经营收入和合并报表的资产和负债的摩托罗拉移动处理将作为销售在合并资���负债表上举行在2014年第一季度开始。
随后收购摩托罗拉,摩托罗拉业务我们发起了一项重组计划。见注9 8项合并财务报表附注包括本年度报告表格10 - k的进一步讨论这一重组计划和相关的重组费用。
下表给出了我们的历史经营成果占收入的比例的时间表示:
26
表的内容
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YearEndedDecember31, |
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2011年 |
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2012年 |
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2013年 |
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合并报表的收入数据: |
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收入: |
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谷歌(广告和其他) |
100.0 |
% |
|
91.8 |
% |
|
92.8 |
% |
摩托罗拉移动(硬件和其他) |
0.0 |
|
|
8.2 |
|
|
7.2 |
|
总收入 |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
成本和费用: |
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收入成本——谷歌(广告和其他) |
34.8 |
|
|
34.2 |
|
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36.8 |
|
收入成本——摩托罗拉移动(硬件和其他) |
0.0 |
|
|
6.9 |
|
|
6.5 |
|
���究和开发 |
13.6 |
|
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13.5 |
|
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13.3 |
|
销售和营销 |
12.1 |
|
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12.2 |
|
|
12.1 |
|
一般和行政 |
7.2 |
|
|
7.8 |
|
|
8.0 |
|
负责相关决议司法部的调查 |
1.3 |
|
|
0 |
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|
0 |
|
总成本和费用 |
69.0 |
% |
|
74.6 |
% |
|
76.7 |
% |
业务收入 |
31.0 |
|
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25.4 |
|
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23.3 |
|
利息及其他收入,净 |
1.5 |
|
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1.3 |
|
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0.9 |
|
持续经营收入所得税 |
32.5 |
|
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26.7 |
|
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24.2 |
|
所得税准备 |
6.8 |
|
|
5.2 |
|
|
3.8 |
|
来自持续经营业务的净收入 |
25.7 |
|
|
21.5 |
|
|
20.4 |
|
净利润(亏损)停止操作 |
0.0 |
|
|
(0.1 |
) |
|
1.2 |
|
净收益 |
25.7 |
% |
|
21.4 |
% |
|
21.6 |
% |
收入的部分
下表展示了我们部分收入,收入来源,(百万)给出的时间:
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年December31结束, |
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2011年 |
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2012年 |
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2013年 |
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广告收入: |
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谷歌网站 |
$ |
26145年 |
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|
$ |
31221年 |
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|
$ |
37453年 |
|
谷歌网络成员的网站 |
10386年 |
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12465年 |
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13125年 |
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广告收入总额 |
36531年 |
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43686年 |
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50578年 |
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其他收入 |
1374年 |
|
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2353年 |
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4972年 |
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谷歌部分收入 |
$ |
37905年 |
|
|
$ |
46039年 |
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|
$ |
55550年 |
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摩托罗拉移动部门收入 |
0 |
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4136年 |
|
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4443年 |
|
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消除和其他 |
0 |
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0 |
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(168 |
) |
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总收入 |
$ |
37905年 |
|
|
$ |
50175年 |
|
|
$ |
59825年 |
|
谷歌市场
下表展示了我们谷歌部分收入,收入来源,谷歌市场总收入的比例的时期:
27日
表的内容
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YearEndedDecember31, |
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2011年 |
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2012年 |
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2013年 |
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广告收入: |
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谷歌网站 |
69.0 |
% |
|
67.8 |
% |
|
67.4 |
% |
谷歌网络成员的网站 |
27.4 |
|
|
27.1 |
|
|
23.6 |
|
广告收入总额 |
96.4 |
% |
|
94.9 |
% |
|
91.0 |
% |
其他收入 |
3.6 |
|
|
5.1 |
|
|
9.0 |
|
总收入 |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
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谷歌网站广告收入的% |
71.6 |
% |
|
71.5 |
% |
|
74.0 |
% |
谷歌网络成员的网站广告收入的% |
28.4 |
% |
|
28.5 |
% |
|
26.0 |
% |
我们谷歌部分收入从2012年到2013年增加95.11亿美元。这一增长主要是由于广告收入的增加导致谷歌网站和其他的增加所产生的收入,以及较小程度上,广告收入的增加由谷歌网络成员的网站。其他收入的增加主要是由于更高的销售数字内容和硬件相关的产品。广告收入的增加对谷歌网站和谷歌网络成员的网站主要是由于数量的增加导致的付费点击通过我们的广告项目,在谷歌网站和谷歌付费点击网络成员的网站从2012年到2013年增加了约25%。数增加的付费点击生成通过我们的广告项目是由于某些货币化的改进包括新的和更丰富的广告形式,增加总交通跨所有平台,持续的全球扩张我们的产品,广告商,和用户群,以及谷歌网络成员的数量的增加,部分抵消了某些广告的政策变化。付费点击量的增加的影响我们的收入增长是部分抵消了减少平均支付的按点击付费广告的广告商。平均按点击付费广告的谷歌网站和谷歌网络成员的网站从2012年到2013年下降约8%。减少平均支付的按点击付费广告的广告商是由各种因素,如新产品的引入以及属性组合的变化,平台结构和地理结构,和普通加强美元相比,某些外国货币。
我们谷歌部分收入从2011年到2012年增加81.34亿美元。这一增长主要是由于广告收入的增加导致生成的谷歌网站和谷歌网络成员的网站,并在较小程度上的增加其他收入由硬件产品的销售。广告收入的增加对谷歌网站和谷歌网络成员的网站主要是由于数量的增加导致的付费点击通过我们的广告项目,总在谷歌网站和谷歌付费点击网络成员的网站从2011年到2012年增加了约34%。数增加的付费点击生成通过我们的广告项目是由于跨所有平台总体流量的增加,某些货币化的改进包括新的广告形式,持续的全球扩张我们的产品,广告商,和用户群,以及谷歌网络成员的数量的增加。的影响增加部分抵消了减少平均支付的按点击付费广告的广告商。平均按点击付费广告的谷歌网站和谷歌网络成员的网站从2011年到2012年下降约12%。减少平均支付的按点击付费广告的广告商是由各种因素,如引进新产品以及属性组合的变化,平台结构和地理结构,和普通加强美元相比,某些外国货币。
变化的速度总付费点击量和平均按点击付费广告,和他们的相关收入的变动率,波动,将来可能会有因为各种因素,包括收入增长利率相比我们的网站我们的谷歌网络成员,广告商的竞争关键字,外汇汇率的变化,季节性,广告商愿意支付的费用根据他们如何管理他们的广告成本,广告质量的变化或格式,一般经济条件。此外,交通更为成熟的市场相比,新兴市场的增长和在各种广告垂直和渠道也促成了这些波动。总付费点击量和平均变化更可能并不表明我们的性能或广告经验在任何特定的地理市场,垂直,或行业。
增加交通的改善我们的盈利能力主要与提高终端用户体验,包括为终端用户提供更相关的广告搜索查询或到谷歌内容网络成员的网站访问。例如,这些改进包括显示advertiser-nominated图片相关的用户查询和创建一个更吸引人的用户购物体验,增强
28日
表的内容
搜索广告包括更丰富的产品信息,如产品图片,价格,商人的名字。我们相信越来越多的付费点击谷歌网站和谷歌网络成员的网站是我们致力于改善显著的结果的相关性和质量我们的搜索结果和广告显示,我们相信,结果在一个更好的用户体验,从而导致更多的搜索,广告,谷歌网络成员和其他合作伙伴。
其他收入在我们谷歌段从2012年到2013年增加26.19亿美元,也增加了部分收入的比例。的增加主要是由于经济增长数字内容产品,如应用程序、音乐和电影。此外,我们有经验的增加硬件收入由于Chromecast,directly-sold Nexus手机和Chrome OS设备。2011年,其他收入不是一个整体谷歌部分收入的重要推动力。
摩托罗拉移动部分
我们的摩托罗拉移动部分收入从2012年到2013年增加3.07亿美元。增长是因为大约七个月的结果被包括在2012年12个月的结果包括,2013年平均销售价格增加14%(ASP)相关新产品发布和产品结构的变化,部分抵消了在2013年降低6%台。我们注意,结果在2012年和2013年之间没有可比性由于重大重组努力简化产品组合在nineteen-month期间完成。
摩托罗拉移动的增加部分收入2011年来2012年产生的收入从摩托罗拉移动的41.36亿美元之后2012年5月收购。
消除和其他
2013年第三季度开始,谷歌和摩托罗拉移动部分收入冲击的段间的事务整合淘汰。此外,部分收入与某些产品被认可在今年我们的部分结果,递延到以后各期合并财务报表。这个显示是符合提供给首席运营决策者决策为目的的对每个段分��资源和评估他们的表现。
收入由地理
下表展示了我们谷歌段国内外收入谷歌部分收入的比例,根据客户的账单地址确定为我们的谷歌段:
|
||||||||
|
|
|
|
|
|
|
|
|
|
YearEndedDecember31, |
|||||||
|
2011年 |
|
2012年 |
|
2013年 |
|||
美国 |
46 |
% |
|
46 |
% |
|
45 |
% |
联合王国 |
11 |
% |
|
11 |
% |
|
10 |
% |
世界其他地方 |
43 |
% |
|
43 |
% |
|
45 |
% |
下表展示了我们整合国内外收入占总收入的比例,确定基于谷歌的客户的账单地址段,和送货地址的客户为我们的摩托罗拉移动段:
|
||||||||
|
|
|
|
|
|
|
|
|
|
YearEndedDecember31, |
|||||||
|
2011年 |
|
2012年 |
|
2013年 |
|||
美国 |
46 |
% |
|
47 |
% |
|
45 |
% |
联合王国 |
11 |
% |
|
10 |
% |
|
9 |
% |
世界其他地方 |
43 |
% |
|
43 |
% |
|
46 |
% |
收入的增长从世界其他国家的谷歌段和合并收入的比例从2012年到2013年,其主要原因与接受我们的广告项目,和我们继续开发我们的产品的本地化版本的进展为国际市场以及增加收入从世界其他国家在我们的摩托罗拉移动段2013年相比,2012年。
29日
表的内容
外汇对收入的影响
一般加强美元相对于某些外国货币(主要是日元和巴西雷亚尔)从2012年到2013年有不利影响我们的国���收入,由一般的部分抵消疲软的美元相对于其他外国货币(欧元)。在这段时期外汇汇率保持不变,我们的收入来自英国是6700万美元或更高的和我们的收入1.2%来自世界其他地区的约6.13亿美元或2013年高出2.2%。这是之前考虑套期保值收益6300万美元和3200万美元的收入来自英国和世界其他地区的2013年。
的一般加强美元相对于某些外国货币(欧元)从2011年到2012年有一个不利影响我们的国际收入。在这段时期外汇汇率保持不变,我们的收入来自英国是6800万美元或更高的和我们的收入1.4%来自世界其他地区的约12.11亿美元或2012年高出5.6%。这是之前考虑套期保值收益1800万美元和1.99亿美元的收入来自英国和世界其他地区的2012年。
尽管我们希望继续在国际市场上进行投资,这些投资可能不会导致增加我们的国际收入占总收入的比例在2014年或之后。看到Note15合并财务报表附注中Item8本年度报告表格10 - k的关于地理区域的额外信息。
成本和费用
成本收入
成本收入主要是流量获取成本。流量获得成本包括金额支付给我们的Google AdSense的安排下网络成员和某些其他合作伙伴(我们的分销伙伴)分发我们的工具栏和其他产品(统称为接入点)或直接搜索查询我们的网站(统称为分布安排)。这些金额主要是基于收入共享和固定费���安排与我们的谷歌网络成员和分销合作伙伴。
某些分布安排要求我们支付我们的合作伙伴基于每个访问点交付费用,不是专门——或者——基于收入共享。这些费用是不能退还。此外,这些安排都是有期限的,虽然在某些合同条款我们或我们的分销伙伴可能受到处罚的事件提前终止。在这些安排我们认识到费用的估计寿命接入点在某种程度上我们可以合理地估计这些生活和他们是一年或更长时间,或根据任何合同收入份额,如果更大。否则,费用收取费用的发生。访问点的估计寿命是基于历史平均水平的时间产生流量和收入。
收入还包括费用成本与操作相关的数据中心,包括折旧、劳动力、能源、和带宽成本;硬件库存成本,信用卡和其他交易费用与处理客户交易,与收购相关的无形资产的摊销;内容和收购成本。我们已经进入了与某些内容提供商的安排,我们分发或许可他们的视频和其他内容。的这些安排,我们的页面上展示广告的网站内容浏览和分享的大部分费用这些广告产生与内容提供商。我们也许可内容页的网站的内容和分享大部分的销售费用这些销售生成内容提供商。在某种程度上我们有义务保证最低收入支付给我们的内容提供商,我们认识到内容采购成本合同收入金额或数量直线的基础上决定,哪个更大,超过期限的协议。
此外,收入成本包括生产和库存相关成本主要来自我们的摩托罗拉移动部分。
下表呈现我们的成本收入的操作环节,我们的流量获取成本,广告收入和流量获取成本的比例在谷歌,对给出的时间(百万美元):
30
表的内容
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
谷歌 |
$ |
12939年 |
|
|
$ |
16816年 |
|
|
$ |
21524年 |
|
摩托罗拉移动 |
0 |
|
|
3294年 |
|
|
3773年 |
|
|||
未分配的项目 |
249年 |
|
|
524年 |
|
|
561年 |
|
|||
总 |
$ |
13188年 |
|
|
$ |
20634年 |
|
|
$ |
25858年 |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
流量获得成本与AdSense安排 |
$ |
7294年 |
|
|
$ |
8791年 |
|
|
$ |
9293年 |
|
相关流量获取成本分配安排 |
1517年 |
|
|
2165年 |
|
|
2965年 |
|
|||
流量获取成本 |
$ |
8811年 |
|
|
$ |
10956年 |
|
|
$ |
12258年 |
|
谷歌流量获取成本的比例部分广告收入 |
24.1 |
% |
|
25.1 |
% |
|
24.2 |
% |
谷歌市场
谷歌的收入成本增加47.08亿美元2012年来2013年。增长是因为流量获取成本,增加13.02亿美元带来更多分销费用,更多的费用支付额外的流量引导到我们的网站,以及通过我们的AdSense计划生成更多的广告费用。剩余的增加主要是由数据中心成本,增加硬件库存成本的增加硬件销售、内容采购成本的增加与YouTube和数字内容有关的活动,和收入支付移动运营商和原始设备制造商(oem)。流量获取成本的比例的减少主要是由于广告收入转变谷歌网站收入和谷歌之间的混合网络成员的网站。
谷歌的收入成本增加38.77亿美元2011年来2012年。增加主要是相关的流量获取成本,增加更多的广告商带来的21.45亿美元费用通过AdSense计划,生成更多的流量引导到我们的网站,以及更多的分销费用。剩余的增加主要是由数据中心成本增加,硬件库存成本和内容采购成本。流量获得成本的比例的增加广告收入增加主要是由于更大的流量获得成本相关的分配安排相比,广告收入的增加所产生的谷歌网站。
摩托罗拉移动部分
摩托罗拉移动的收入成本段之间没有可比性2012年和2013年因为大约七个月的结果包括2012年,2013年包括12个月的结果。此外,我们进行各种重组活动简化摩托罗拉移动产品组合随后在2012年5月收购。
未分配的项目
未分配的项目,包括股票补偿费用,以及重组及相关费用,不分配给每一段因为我们不包括这些信息在我们的测量性能的操作部分。
我们预计金额的收入将会增加成本,可能会增加总收入的比例在2014年和在未来时期,主要是由于流量获取成本,提高数据中心成本,硬件和库存成本,生产和库存相关成本,内容收购成本,信用卡和其他交易费用和其他费用。流量获得成本广告收入的比例可能会有在未来基于很多因素,包括以下几点:
|
|
• |
收入的相对增长率从我们的网站和我们的谷歌网络成员的网站。 |
|
|
• |
我们是否可以进入更多的AdSense安排,提供较低的收入份额义务是否增加了安排与现有的和潜在的竞争谷歌网络成员的结果不利于收入分享安排。 |
31日
表的内容
|
|
• |
我们是否能够继续改善交通在我们的网站和谷歌的货币化网络成员的网站。 |
|
|
• |
费用的相对增长率与分配相关安排和相关收入,包括我们是否与某些现有的和新的分销伙伴分享比例的总广告费用,我们从付费点击收入来源于搜索查询这些合作伙伴直接到我们的网站。 |
研究和开发
下面的表操作环节入手,介绍我们的研究和开发费用的时期(百万美元):
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
谷歌 |
$ |
4101年 |
|
|
$ |
4809年 |
|
|
$ |
5496年 |
|
摩托罗拉移动 |
0 |
|
474年 |
|
|
702年 |
|
||||
未分配的项目 |
1061年 |
|
|
1510年 |
|
|
1754年 |
|
|||
总 |
$ |
5162年 |
|
|
$ |
6793年 |
|
|
$ |
7952年 |
|
研究和开发费用主要由补偿及相关人员负责研究和开发活动的成本与新的和现有的产品和服务,以及折旧和equipment-related成本。我们研究和开发成本费用发生。
谷歌市场
谷歌部分研发费用增加了6.87亿美元2012年来2013年 和 谷歌市场收入的比例仍然相对平坦的从2012年到2013年。费用的增加主要是由于劳动力和facilities-related成本增加5.96亿美元,主要是由于增加了18%的研发人员。
谷歌部分研发费用增加了7.08亿美元2011年来2012年 和 谷歌市场收入的比例仍然相对平坦的从2011年到2012年。费用的增加主要是由于劳动力和facilities-related成本增加3.59亿美元,主要是由于研发员工人数增加了15%,折旧和equipment-related费用增加1.47亿美元,和专业服务费用增加6600万美元。
摩托罗拉移动部分
研究和开发费用为摩托罗拉移动段之间没有可比性2012年和2013年因为大约七个月的结果包括2012年,2013年包括12个月的结果。此外,我们进行各种重组活动简化摩托罗拉移动产品组合随后在2012年5月收购。
未分配的项目
未分配的项目,包括股票补偿费用,以及重组及相关费用,不分配给每一段因为我们不包括这些信息在我们的测量性能的操作部分。
我们希望研发费用将增加金额在2014年和以后各期,因为我们希望继续投资建设必要的员工和开发新系统所需的基础设施支持,并改善现有的产品和服务。
销售和营销
下表给出了我们的销售和营销费用通过操作段时期(百万美元):
32
表的内容
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
谷歌 |
$ |
4228年 |
|
|
$ |
5017年 |
|
|
$ |
6002年 |
|
摩托罗拉移动 |
0 |
|
|
524年 |
|
|
678年 |
|
|||
消除和未分配的项目 |
361年 |
|
|
602年 |
|
|
573年 |
|
|||
总 |
$ |
4589年 |
|
|
$ |
6143年 |
|
|
$ |
7253年 |
|
销售和营销费用主要由补偿和相关成本人员从事客户服务、销售、销售支持功能,以及广告和促销支出。
谷歌市场
谷歌市场销售和营销费用增加了9.85亿美元2012年来2013年和谷歌部分收入的比例从2012年到2013年持平。费用的增加主要是由于增加的广告和促销费用6.74亿美元,以及劳动力和facilities-related成本增加2.33亿美元,主要是由于增加了13%的销售和营销人员。
谷歌市场销售和营销费用增加了7.89亿美元2011年来2012年和谷歌部分收入的比例从2011年到2012年持平。费用的增加主要是由于劳动力和facilities-related成本增加3.9亿美元,主要是由于增加了14%的销售和营销人员,以及2.88亿美元的广告和促销费用的增加。
摩托罗拉移动部分
销售和市场费用为摩托罗拉移动段之间没有可比性2012年和2013年因为大约七个月的结果包括2012年,2013年包括12个月的结果。此外,我们进行各种重组活动简化摩托罗拉移动产品组合随后在2012年5月收购。
消除和未分配的项目
消除项目代表段间的事务整合淘汰。未分配的项目,包括股票补偿费用,以及重组及相关费用,不分配给每一段因为我们不包括这些信息在我们的测量性能的操作部分。
我们预计销售和营销费用金额的增加,可能会增加总收入的比例在2014年和以后各期,我们扩大我们的业务在全球范围内,增加广告和促销支出与新的和现有的产品,并提高服务水平的我们提供给广告商,谷歌网络成员和其他合作伙伴。
一般和行政
下表展示了我们一般及行政费用的操作部分给出的时间(百万美元):
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
谷歌 |
$ |
2421年 |
|
|
$ |
3090年 |
|
|
$ |
3967年 |
|
摩托罗拉移动 |
0 |
|
|
236年 |
|
|
319年 |
|
|||
未分配的项目 |
303年 |
|
|
519年 |
|
|
510年 |
|
|||
总 |
$ |
2724年 |
|
|
$ |
3845年 |
|
|
$ |
4796年 |
|
一般和行政费用主要由补偿及相关人员和设施的成本,有关我们的设施,包括成本,财务、人力资源、信息技术和法律组织,以及专业服务费用。专业服务主要是由外部法律、审计、信息技术咨询、外包服务。一般和行政费用还包括某些与收购相关的无形资产的摊销。
谷歌市场
33
表的内容
一般和行政费用的谷歌部分增加了8.77亿美元2012年来2013年和谷歌部分收入的比例仍然相对平坦的从2012年到2013年。费用的增加主要是由于劳动力和facilities-related成本增加3.96亿美元,很大程度上是由于增加了15%,管理员工,增加折旧和equipment-related费用2.22亿美元,以及获得的无形资产的摊销增加1.57亿美元。
一般和行政费用的谷歌部分增加了6.69亿美元2011年来2012年和谷歌部分收入的比例仍然相对平坦的从2011年到2012年。这种费用的增加主要是由于获得的无形资产摊销增加2.74亿美元,增加专业服务费用1.47亿美元,大部分的相关诉讼费用,和劳动力和facilities-related成本增加1.22亿美元,主要是由于增加了11%,管理员工。
摩托罗拉移动部分
一般和行政费用为摩托罗拉移动段之间没有可比性2012年和2013年因为大约七个月的结果包括2012年,2013年包括12个月的结果。此外,我们进行各种重组活动简化摩托罗拉移动产品组合随后在2012年5月收购。
未分配的项目
未分配的项目,包括股票补偿费用,以及重组及相关费用,不分配给每一段因为我们不包括这些信息在我们的测量性能的操作部分。
我们扩大我们的业务,产生额外的费用,我们期望一般及行政费用金额的增加,可能会增加总收入的比例在2014年和以后各期。
负责相关决议司法部的调查
与的决议由美国司法部调查的使用谷歌广告由特定的广告主,我们应计5亿美元在2011年第一季度,这是支付2011年8月在最终解决。
重组及相关费用
下表展示了我们重组及相关费用的时期(百万美元):
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
重组及相关费用(1) |
$ |
0 |
|
|
$ |
632年 |
|
|
$ |
182年 |
|
(1)以上金额包含在前面讨论的部分,作为未分配的项目相关的成本收入,研发、销售和营销、一般和管理费用。
重组和相关费用减少4.5亿美元2012年来2013年因为我们完成了大部分的重组和相关活动与摩托罗拉在2012年。
reuters estimates调查
下表给出我们的股票补偿的时期(百万美元):
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
reuters estimates调查(1)(2) |
$ |
1974年 |
|
|
$ |
2523年 |
|
|
$ |
3247年 |
|
(1)以上金额包含在前面讨论的部分,作为未分配的项目相关的成本收入,研发、销售和营销、一般和管理费用。
(2)1.26亿美元和2100万美元的股票补偿费用都包含在上面的“重组及相关费用”的年截至12月31日,2012年和2013年。
34
表的内容
reuters estimates调查增加了7.24亿美元2012年来2013年和合并营收的比例从2012年到2013年持平。这费用的增加主要是由于员工人数的增加,支持我们的业务增长。
reuters estimates调查增加了5.49亿美元2011年来2012年和合并营收的比例从2011年到2012年持平。这费用的增加主要是由于额外的股票奖励发给现有的和新的员工,以及颁奖与收购摩托罗拉发布。
reuters estimates调查摩托罗拉国内段费用是包括在净收益(损失)停止操作。
我们估计股票补偿相关奖项授予通过December31,2013将在31亿年约31亿美元和32亿美元。这个估计不包括费用识别相关员工股票奖励,授予December31之后,2013年或non-employeestock奖项已经或可能被授予。此外,没收率不同于我们所预期,reuters estimates调查有关这些奖项将不同于我们的预期。
利息及其他收入,净
利息及其他收入,净减少9600万美元2012年来2013年。这种减少主要是由于减少剥离的获得企业(除了摩托罗拉家)2.45亿美元,实现投资收益的下降8100万美元,部分抵消了减少外汇交易亏损1.52亿美元和7200万美元的利息收入的增加。
利息及其他收入,净增加4200万美元2011年来2012年。这一增长主要是由于对剥离业务获得1.88亿美元的2012年,减损支出与1.1亿年1.1亿美元的股权投资,部分抵消了增加外币汇兑损失为1.52亿美元,减少利息收入为9900万美元。
外汇对冲的成本活动,我们认识到利益和其他收入,净,主要是一个函数的名义金额选项和远期合约及其相关的持续时间,外汇汇率的运动相对于罢工的价格合同,以及汇率的波动。
我们扩大我们的国际业务,我们认为成本对冲活动在我们的外汇风险管理程序可能会增加金额在2014年和以后各期。
所得税准备
下面的表提出了我们对所得税的规定,并有效税率的时期(百万美元):
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
所得税准备 |
$ |
2589年 |
|
|
$ |
2598年 |
|
|
$ |
2282年 |
|
有效税率 |
21.0 |
% |
|
19.4 |
% |
|
15.7 |
% |
联邦研发December31信贷到期,2011年。在预览版,2013年,2012年的美国纳税人救助法案签署成为法律。在这个法案,联邦研发信贷追溯延长December31金额支付或发生后,2011年1月之前,2014年。这些变化在税法的影响导致了税收优惠是公认的2013年第一季度,第二季度的法律颁布。
所得税准备和有效税率下降2012年来2013年收益,主要是由于相对较高的国家意识到法定税率较低,以及联邦研发信贷与2012年的美国纳税人救助法案有关。
我们准备增加所得税2011年来2012年,主要是由于增加的联邦所得税,由去年同期更高的应纳税所得额和联邦研发信贷到期,部分抵消了相对更多的收益实现法定税率较低的国家。我们的有效税率从2011年到2012年,减少主要是由于比例更多收益的国家意识到
35
表的内容
法定税率较低以及离散项相关的调查2011年司法部认可,并没有扣除所得税的目的。
我们的有效税率大幅波动在季度和可能造成不利影响的程度收益低于预期在法定税率较低的国家,高于预期的国家法定利率上升。我们的有效税率也由于净损益波动被法律实体在某些对冲及相关对冲公司间的和其他事务在我们的外汇风险管理计划,通过估值的变化我们的递延所得税资产或负债,或通过改变税收法律、法规,或会计原则,以及某些离散的项目。此外,我们连续检查的所得税申报表由国税局(IRS)和其他税务机关,包括欧洲各国政府。我们定期评估可能造成的不良结果从这些考试决定我们准备充足的所得税。
请参见下面的关键会计政策和估计为所得税关于我们提供的额外信息。
和解的联邦法定所得税率在注意我们的有效税率规定14的笔记合并财务报表包括在本年度报告的Item8形成10 - k。
净利润(亏损)停止操作
2013年4月17日,我们完成了摩托罗拉的性格家段棱和某些其他的人考虑到大约24.12亿美元的现金,包括22.38亿美元的现金收到关闭后的截止日期和某些调整的1.74亿美元在2013年第三季度,棱和大约1.75亿美元的普通股(1060万股)。后续的事务,我们棱的大约7.8%的流通股。此外,与性格,我们同意赔偿棱潜在的责任确定知识产权侵权诉讼,我们记录了1.75亿美元的赔偿责任,绝大多数是在2013年定居。
性格导致了7.57亿美元的净收益,这是作为合并报表净利润已停止经营的收入截至今年12月31日,2013年。
回家的摩托罗拉部分结果已经停止经营的年截至12月31日,2012年和2013年。下表提供了财务结果包括在净收益(损失)已停止经营的时期(百万):
|
|||||||
|
|
|
|
|
|
|
|
|
截至12月31日 |
||||||
|
2012年 |
|
2013年 |
||||
收入 |
$ |
2028年 |
|
|
$ |
804年 |
|
|
|
|
|
||||
损失所得税前已停止经营 |
(22 |
) |
|
(67 |
) |
||
(预备)/受益于所得税 |
(29 |
) |
|
16 |
|
||
获得在处理 |
0 |
|
|
757年 |
|
||
净(损失)已停止经营收入 |
$ |
(51 |
) |
|
$ |
706年 |
|
季度业绩的操作
下表展示我们的季度业绩的操作应该读结合合并财务报表和相关笔记包括在本年度报告的Item8形成10 - k。我们准备了未经审计的信息在同一基础上经审计的合并财务报表。任何季度我们的操作结果并不一定表明结果任何未来几个季度或整整一年。请注意,之前报道季度调整显示已停止经营了摩托罗拉的家庭企业的性格。
下表展示了我们操作的未经审计的季度业绩8个季度结束2013年12月31日。这个表包含了所有的调整,包括只有正常的反复调整,我们认为必要的公允表达的我们的季度合并财务状况和经营成果。季节性波动在互联网使用和传统零售的季节性影响,并可能继续影响我们的业务。互联网的使用在夏季普遍放缓,通常和商业查询
36
表的内容
在每年第四季度增加显著。这些季节趋势和可能会继续引起引起,波动在我们的季度业绩,包括顺序收入增长率的波动。
|
|||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
季度结束 |
||||||||||||||||||||||||||||||
|
Mar31, 2012年 |
|
Jun30, 2012年 |
|
Sep30, 2012年 |
|
Dec31, 2012年 |
|
Mar31, 2013年 |
|
Jun30, 2013年 |
|
Sep30, 2013年 |
|
Dec31, 2013年 |
||||||||||||||||
|
(在数百万,每股金额除外) (未经审计) |
||||||||||||||||||||||||||||||
合并报表的收入数据: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
收入: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
谷歌(广告和其他) |
$ |
10645年 |
|
|
$ |
10964年 |
|
|
$ |
11526年 |
|
|
$ |
12905年 |
|
|
$ |
12951年 |
|
|
$ |
13107年 |
|
|
$ |
13754年 |
|
|
$ |
15707年 |
|
摩托罗拉移动(硬件和其他) |
0 |
|
|
843年 |
|
|
1778年 |
|
|
1514年 |
|
|
1018年 |
|
|
998年 |
|
|
1139年 |
|
|
1151年 |
|
||||||||
总收入 |
10645年 |
|
|
11807年 |
|
|
13304年 |
|
|
14419年 |
|
|
13969年 |
|
|
14105年 |
|
|
14893年 |
|
|
16858年 |
|
||||||||
成本和费用: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
收入成本——谷歌(广告和其他) |
3789年 |
|
|
3984年 |
|
|
4440年 |
|
|
4963年 |
|
|
5136年 |
|
|
5195年 |
|
|
5409年 |
|
|
6253年 |
|
||||||||
收入成本——摩托罗拉移动(硬件和其他) |
0 |
|
|
693年 |
|
|
1515年 |
|
|
1250年 |
|
|
808年 |
|
|
868年 |
|
|
1004年 |
|
|
1185年 |
|
||||||||
���究和开发 |
1441年 |
|
|
1538年 |
|
|
1879年 |
|
|
1935年 |
|
|
1837年 |
|
|
1987年 |
|
|
2017年 |
|
|
2111年 |
|
||||||||
销售和营销 |
1269年 |
|
|
1413年 |
|
|
1710年 |
|
|
1751年 |
|
|
1586年 |
|
|
1735年 |
|
|
1806年 |
|
|
2126年 |
|
||||||||
一般和行政 |
757年 |
|
|
942年 |
|
|
1020年 |
|
|
1126年 |
|
|
1125年 |
|
|
1197年 |
|
|
1213年 |
|
|
1261年 |
|
||||||||
总成本和费用 |
7256年 |
|
|
8570年 |
|
|
10564年 |
|
|
11025年 |
|
|
10492年 |
|
|
10982年 |
|
|
11449年 |
|
|
12936年 |
|
||||||||
业务收入 |
3389年 |
|
|
3237年 |
|
|
2740年 |
|
|
3394年 |
|
|
3477年 |
|
|
3123年 |
|
|
3444年 |
|
|
3922年 |
|
||||||||
利息及其他收入,净 |
156年 |
|
|
253年 |
|
|
65年 |
|
|
152年 |
|
|
134年 |
|
|
247年 |
|
|
24 |
|
|
125年 |
|
||||||||
持续经营收入所得税 |
3545年 |
|
|
3490年 |
|
|
2805年 |
|
|
3546年 |
|
|
3611年 |
|
|
3370年 |
|
|
3468年 |
|
|
4047年 |
|
||||||||
所得税准备 |
655年 |
|
|
657年 |
|
|
647年 |
|
|
639年 |
|
|
287年 |
|
|
816年 |
|
|
513年 |
|
|
666年 |
|
||||||||
来自持续经营业务的净收入 |
$ |
2890年 |
|
|
$ |
2833年 |
|
|
$ |
2158年 |
|
|
$ |
2907年 |
|
|
$ |
3324年 |
|
|
$ |
2554年 |
|
|
$ |
2955年 |
|
|
$ |
3381年 |
|
净利润(亏损)停止操作 |
0 |
|
|
(48 |
) |
|
18 |
|
|
(21 |
) |
|
22 |
|
|
674年 |
|
|
15 |
|
|
(5 |
) |
||||||||
净收益 |
$ |
2890年 |
|
|
$ |
2785年 |
|
|
$ |
2176年 |
|
|
$ |
2886年 |
|
|
$ |
3346年 |
|
|
$ |
3228年 |
|
|
$ |
2970年 |
|
|
$ |
3376年 |
|
每股净收益(损失)——基本: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
持续经营 |
$ |
8.88 |
|
|
$ |
8.68 |
|
|
$ |
6.59 |
|
|
$ |
8.83 |
|
|
$ |
10.06 |
|
|
$ |
7.68 |
|
|
$ |
8.86 |
|
|
$ |
10.10 |
|
已停止经营 |
0 |
|
|
(0.14 |
) |
|
0.05 |
|
|
$ |
(0.06 |
) |
|
$ |
0.07 |
|
|
$ |
2.03 |
|
|
$ |
0.04 |
|
|
$ |
(0.02 |
) |
|||
基本每股净收益 |
$ |
8.88 |
|
|
$ |
8.54 |
|
|
$ |
6.64 |
|
|
$ |
8.77 |
|
|
$ |
10.13 |
|
|
$ |
9.71 |
|
|
$ |
8.90 |
|
|
$ |
10.08 |
|
每股净收益(损失)-稀释: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
持续经营 |
$ |
8.75 |
|
|
$ |
8.56 |
|
|
$ |
6.48 |
|
|
$ |
8.68 |
|
|
$ |
9.87 |
|
|
$ |
7.55 |
|
|
$ |
8.71 |
|
|
$ |
9.91 |
|
已停止经营 |
0 |
|
|
(0.14 |
) |
|
0.05 |
|
|
(0.06 |
) |
|
0.07 |
|
|
1.99 |
|
|
0.04 |
|
|
(0.01 |
) |
||||||||
每股净收益-稀释 |
$ |
8.75 |
|
|
$ |
8.42 |
|
|
$ |
6.53 |
|
|
$ |
8.62 |
|
|
$ |
9.94 |
|
|
$ |
9.54 |
|
|
$ |
8.75 |
|
|
$ |
9.90 |
|
下表展示了我们未经审计的季度业绩的业务收入的比例8个季度结束2013年12月31日:
37
表的内容
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
季度结束 |
||||||||||||||||||||||
|
Mar31, 2012年 |
|
Jun30, 2012年 |
|
Sep30, 2012年 |
|
Dec31, 2012年 |
|
Mar31, 2013年 |
|
Jun30, 2013年 |
|
Sep30, 2013年 |
|
Dec31, 2013年 |
||||||||
收入: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
谷歌(广告和其他) |
100.0 |
% |
|
92.9 |
% |
|
86.6 |
% |
|
89.5 |
% |
|
92.7 |
% |
|
92.9 |
% |
|
92.4 |
% |
|
93.2 |
% |
摩托罗拉移动(硬件和其他) |
0 |
|
|
7.1 |
|
|
13.4 |
|
|
10.5 |
|
|
7.3 |
|
|
7.1 |
|
|
7.6 |
|
|
6.8 |
|
总收入 |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
成本和费用: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
收入成本——谷歌(广告和其他) |
35.6 |
|
|
33.7 |
|
|
33.4 |
|
|
34.4 |
|
|
36.8 |
|
|
36.8 |
|
|
36.3 |
|
|
37.1 |
|
收入成本——摩托罗拉移动(硬件和其他) |
0 |
|
|
5.9 |
|
|
11.3 |
|
|
8.7 |
|
|
5.7 |
|
|
6.2 |
|
|
6.7 |
|
|
7.0 |
|
���究和开发 |
13.5 |
|
|
13.0 |
|
|
14.1 |
|
|
13.4 |
|
|
13.2 |
|
|
14.1 |
|
|
13.5 |
|
|
12.5 |
|
销售和营销 |
11.9 |
|
|
12.0 |
|
|
12.9 |
|
|
12.2 |
|
|
11.4 |
|
|
12.3 |
|
|
12.1 |
|
|
12.6 |
|
一般和行政 |
7.2 |
|
|
8.0 |
|
|
7.7 |
|
|
7.8 |
|
|
8.0 |
|
|
8.5 |
|
|
8.3 |
|
|
7.5 |
|
总成本和费用 |
68.2 |
|
|
72.6 |
|
|
79.4 |
|
|
76.5 |
|
|
75.1 |
|
|
77.9 |
|
|
76.9 |
|
|
76.7 |
|
业务收入 |
31.8 |
|
|
27.4 |
|
|
20.6 |
|
|
23.5 |
|
|
24.9 |
|
|
22.1 |
|
|
23.1 |
|
|
23.3 |
|
利息及其他收入,净 |
1.5 |
|
|
2.1 |
|
|
0.5 |
|
|
1.1 |
|
|
1.0 |
|
|
1.8 |
|
|
0.2 |
|
|
0.7 |
|
持续经营收入所得税 |
33.3 |
|
|
29.5 |
|
|
21.1 |
|
|
24.6 |
|
|
25.9 |
|
|
23.9 |
|
|
23.3 |
|
|
24.0 |
|
所得税准备 |
6.2 |
|
|
5.5 |
|
|
4.9 |
|
|
4.4 |
|
|
2.1 |
|
|
5.8 |
|
|
3.4 |
|
|
4.0 |
|
来自持续经营业务的净收入 |
27.1 |
% |
|
24.0 |
% |
|
16.2 |
% |
|
20.2 |
% |
|
23.8 |
% |
|
18.1 |
% |
|
19.9 |
% |
|
20.0 |
% |
净利润(亏损)停止操作 |
0 |
% |
|
(0.4 |
)% |
|
0.1 |
% |
|
(0.2 |
)% |
|
0.2 |
% |
|
4.8 |
% |
|
0.1 |
% |
|
0 |
% |
净收益 |
27.1 |
% |
|
23.6 |
% |
|
16.3 |
% |
|
20.0 |
% |
|
24.0 |
% |
|
22.9 |
% |
|
20.0 |
% |
|
20.0 |
% |
流动性和资本资源
的2013年12月31日,我们有587亿美元的现金、现金等价物和有价证券。现金等价物和有价证券是由定期存款、货币市场和其他资金,包括现金抵押品收到有关我们的证券借贷项目,具有高度流动性的美国政府及其机构的债务工具,债务工具发行的外国政府、市政当局在美国发行的债务工具、公司证券、抵押贷款支持证券和资产支持证券。
的2013年12月31日,336亿美元587亿美元的现金、现金等价物和有价证券是由我们的外国子公司。如果这些资金需要我们的业务在美国,我们需要积累和美国纳税遣返这些基金。不过,我们的意图是永久投资这些基金以外的美国和我们目前的计划不演示需要遣返他们资助我们的美国业务。
我们的流动性的主要来源是我们的现金、现金等价物,和有价证券,以及我们从操作产生的现金流。在2013年12月31日,我们有大约1.73亿美元的未使用的信用证。我们相信,我们的资金来源将足以满足我们目前预期的现金需求至少未来12个月。我们的流动性可能负面影响对我们的产品和服务的需求减少。此外,我们可以收购或许可产品和技术互补的业务,可能需要筹集额外资本通过未来的债务或股权融资提供更大的灵活性来资助任何此类收购和许可的活动。额外的融资可能不可用或条件对我们有利。
38
表的内容
我们有一个高达30亿美元的债务融资计划通过发行商业票据。净收益这个程序用于一般企业用途。的2013年12月31日,我们有20亿美元的商业票据优秀记录为短期债务,加权平均利率为0.1%,成熟在不同的日期2014年6月通过。平均商业票据贷款在今年年内余额21亿美元,最大是25亿美元。结合这个程序中,我们有一个30亿美元的循环信贷额度在2016年7月到期。的利率信贷安排是根据公式确定使用特定的市场利率。的2013年12月31日,我们是按照信贷设施和金融契约没有杰出的数量。
2011年5月,我们发行了30亿美元无担保高级笔记三个相等的部分,因为在2014年,2016年,and2021,规定的利率为1.25%,2.125%,3.625%。notes的净出售所得用于偿还部分我们出色的商业票据及一般企业用途。2013年5月,我们重新分类的第一笔10亿美元无担保优先债券于2014年5月到期的短期债务。我们计划发行10亿美元的长期债务时注意将于2014年到期。的2013年12月31日的账面价值和公允价值估计这些笔记是30亿美元和31亿美元。估计公允价值是基于引用我们的上市公债价格2013年12月31日。我们不受任何金融契约下笔记。
2013年8月,我们签订了一份2.58亿美元资本租赁义务在某些属性将在2028年与2016年购买的一个选择。资本租赁义务的有效利率接近市场利率。资本租赁义务近似的估计公允价值其账面价值在12月31日,2013年。
总之,我们的现金流如下(百万):
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
经营活动提供的净现金 |
$ |
14565年 |
|
|
$ |
16619年 |
|
|
$ |
18659年 |
|
用于投资活动净现金 |
(19041 |
) |
|
(13056 |
) |
|
(13679 |
) |
|||
净现金(用于)提供的融资活动 |
807年 |
|
|
1229年 |
|
|
(857 |
) |
经营活动提供的现金
我们的最大来源提供的现金营运现金流所产生的广告收入谷歌网站和谷歌网络成员的网站。我们也从我们的硬件产品的销售产生现金流,主要在摩托罗拉移动部分。我们主要使用的现金支付经营活动包括谷歌网络成员和分销合作伙伴,这是基于收入共享或固定费用安排,以及支付生产和库存相关成本主要为摩托罗拉移动部分。此外,从经营活动现金的用途包括补偿及相关成本,其他一般公司支出和所得税。
经营活动所提供的现金包括净利润调整为某些非现金项目,包括股票补偿费用、折旧、摊销、递延所得税、股权奖励活动中多余的税收优惠,以及营运资本变化和其他活动的影响。
经营活动所提供的现金净额从2012增加到2013,主要是由于增加了获得净收益调整业务剥离,折旧和摊销费用在财产和设备上,股票补偿费用,无形资产摊销。这些增加的净减少所部分抵消现金营运资本的变化主要是由于ofadecrease在所得税,应收账款和存货的增加,应付账款的增加所抵消。
经营活动所提供的现金净额从2011增加到2012,主要是由于增加了获得净收益调整业务剥离,股票补偿费用、折旧及摊销费用在财产和设备和无形资产的摊销。此外,营运资本净增加现金变化主要受收入的增加税收和减少应收账款和库存。这些增加的净增长所部分抵消预付和其他资产和减少应付账款。
39
表的内容
作为在国际上我们扩大我们的业务,我们提供了标准的付款条件对某些广告商地区但超过条款我们通常提供给国内的广告商。这可能会增加我们的营运资本需求和可能有负面影响我们的经营活动提供的现金。
现金用于投资活动
提供的现金或用于投资活动主要包括购买,期限,和销售有价证券,收购企业和无形资产,剥离的业务,和购买房产和设备。此外,所提供的现金或用于投资活动包括在反向回购协议和投资收到的现金抵押品或从我们的证券借贷项目回来。
现金用于投资活动从2012年到2013年,增加主要归因于净增加购买有价证券和资本支出的增加主要与我们的生产设备、数据中心,购买房地产。增加部分抵消了低花相关并购和收到剥离的企业收益的增加。
现金用于投资活动从2011年到2012年,下降主要归因于减少购买有价证券,部分抵消了减少期限和销售相关的有价证券,增加花因购买摩托罗拉在2012年收购。
为了管理预期的互联网流量增长,广告交易,和新产品和服务,并支持我们的全球商业扩张,我们希望进行大规模的投资生产设备,我们的系统,数据中心,企业设施和信息技术基础设施之后,2014年。然而,我们的资本支出的数量波动,并可能继续波动一个季度。
此外,我们希望继续花现金收购和其他投资。这些收购通常会提高我们专业知识的广度和深度在工程和其他功能区域,我们的技术,我们的产品和服务。
(用于)融资活动提供的现金
现金或使用提供的融资活动主要是净收益或支付或偿还短期债务在我们的商业票据的发行程序和净收益或支付和超额税收优惠从股权奖励活动。
现金用于融资活动增加了从2012年到2013年,主要由现金支付与净债务增加,一定程度上,增加净支付股权奖励活动。
提供的现金融资活动增加了从2011年到2012年,主要由增加的净现金收益收到相关债务,部分抵消了净支付股权奖励活动的增加。
合同义务的2013年12月31日
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
支付到期的时间 |
||||||||||||||||||
|
总 |
|
不超过 1年 |
|
1 - 3 年 |
|
3 - 5 年 |
|
超过 5年 |
||||||||||
|
(百万) |
||||||||||||||||||
经营租赁义务,净转租收入的金额 |
$ |
4038年 |
|
|
$ |
499年 |
|
|
$ |
915年 |
|
|
$ |
788年 |
|
|
$ |
1836年 |
|
购买义务和其他 |
3293年 |
|
|
2407年 |
|
|
680年 |
|
|
80年 |
|
|
126年 |
|
|||||
长期债务,包括资本租赁义务 |
3601年 |
|
|
1079年 |
|
|
1358年 |
|
|
73年 |
|
|
1091年 |
|
|||||
其他长期负债反映在我们的资产负债表 |
251年 |
|
|
114年 |
|
|
48 |
|
|
55 |
|
|
34 |
|
|||||
总合同义务 |
$ |
11183年 |
|
|
$ |
4099年 |
|
|
$ |
3001年 |
|
|
$ |
996年 |
|
|
$ |
3087年 |
|
40
表的内容
经营租赁
我们已经进入了各种non-cancelable操作某些我们的办公室租赁协议,土地,和世界各地的数据中心与原租赁到期时间主要是在2014年和2063年之间。我们承诺支付部分的相关运营费用在一定的租赁协议。这些营业费用不包括在上面的表中。确定这些租赁免费或升级的租金支付条款。我们认识到在这种租赁租金费用直线的基础上在租赁期内。租赁期为市场调整条款。
购买的义务
购买义务代表non-cancelable合同义务2013年12月31日。这些合同主要是与特定的分配安排,视频和其他内容许可收入共享安排,数据中心运营和设施扩建项目,以及购买库存。
长期债务
长期债务本金和利息,代表生活的2011年5月发行的无担保高级笔记和资本租赁2013年8月承付款项。请见注4的合并财务报表附注中Item8本年度报告表格的10 - k为进一步的细节。
其他长期负债
其他长期负债代表现金义务记录在我们的合并资产负债表,包括这些长期负债和短期部分主要由支付欠与某些投资和资产退休义务。
除了上面的金额,我们有27亿美元的长期应付税款2013年12月31日相关的税收状况的时间最终决议是不确定的。在这个时候,我们不能支付一个合理可靠的估计的时间在个别年份出现超出12个月由于时间的不确定性,税务审计的结果。结果,这个数字不包括在上面的表中。
资产负债表外实体
的2013年12月31日,我们没有任何资产负债表外安排,定义在Item303(a)(4)(2)监管S-K颁布SEC已经或可能有一个合理当前或未来对我们的财务状况,影响我们的财务状况的变化,收入或费用,结果操作、流动性、资本支出、资本资源材料的投资者。
重要的会计政策和估计
我们准备合并财务报表依照美国公认会计原则(GAAP)。在这样做,我们必须做出估计和假设影响我们报道大量的资产,负债,收入,费用,以及相关信息披露的或有资产和负债。在某些情况下,我们可以合理地使用不同的会计政策和估计。在某些情况下,改变会计估计以后各期相当可能发生。因此,实际结果可能有所不同物质从我们的估计。在某种程度上,有材料这些估计和实际结果之间的差异,我们的财务状况或结果的操作将受到影响。我们估计在过去的经验和其他假设,我们认为是合理的在这种情况下,我们评估这些估计在一个正在进行的基础上。我们称这种类型的会计估计为重要的会计政策和估计,下面,我们进一步讨论。我们回顾了我们的关键会计政策和估计我们董事会的审计委员会。
所得税
我们受所得税在美国和许多外国司法管辖区。重要的判断是需要在我们不确定的税收状况评估和确定我们对所得税的规定。
尽管我们相信我们已经充分留给我们的不确定的税收状况,不能做出保证,最终税这些事情的结果不会是不同的。我们调整这些储备在事实和环境的变化,如税务审计的关闭或估计的改进。以至于最后税的结果比数量记录这些问题是不同的,这种差异将影响收入的规定
41
表的内容
税收的时期,这样的决心。所得税的规定包括储备储备条款和变更的影响,被认为是适当的,以及相关的净利息和罚金。
我们的有效税率与法定税率的不同主要是由于外国的税收影响操作、国家税收、股权奖励活动,某些利益实现和研发税收抵免。有效税率是21.0%,19.4%,15.7%2011年,2012年,2013年。可能不利影响我们未来的有效税率低于预期收益在法定税率较低的国家,高于预期在法定利率较高的国家,法律实体的净损益确认某些对冲及相关对冲公司间的和其他事务在我们的外汇风险管理程序,改变我们的递延所得税资产或负债的估值,或改变的税收法律、法规,或会计原则,以及某些离散的项目。此外,我们连续检查的所得税申报表由国税局和其他税务机关可能断言对我们评估。我们定期评估造成不良结果的可能性这些检查和评估来确定我们准备充足的所得税。
损失的突发事件
我们经常受到索赔,诉讼、政府调查,和其他诉讼涉及竞争和反垄断、知识产权、隐私、间接税收,劳动和就业,商业纠纷,我们的用户生成的内容,广告商或出版商使用我们所提供的商品和服务平台,和其他事项。确定这些问题包括投机申领实质性或不定数量的损失。我们相信它时记录责任既可能损失已经发生,和可以合理估计。如果我们确定是可能的损失和损失的范围可以合理估计,我们披露的范围可能损失在合并财务报表附注。我们每月评估,发展我们的法律问题,可能影响以前积累的责任,和事项和相关披露范围可能的损失,并做出适当的调整和改变我们的披露。重要的判断需要确定存在的可能性和相关的损失的估计量。直到最终解决这样的问题,可能会有一个风险损失超过数量记录,和这样的数量可以材料。应该我们的估计和假设变化或证明是不正确的,它可能对我们的业务产生实质性影响,巩固财政状况,操作的结果,或者现金流。看到Note11合并财务报表附注中Item8本年度报告表格的10 - k更多有关突发事件的信息。
业务组合
我们分配的公平价值购买考虑有形资产收购、债务承担和无形资产收购基于他们估计公允价值。多余的购买公允价值的考虑在这些可辨认资产和负债的公允价值是记录为商誉。在确定资产和负债的公允价值,管理是重要的��计和假设,尤其是对无形资产。
关键估计评估某些无形资产包括但不限于未来预期现金流从客户关系和获得专利和开发技术,和折扣利率。管理的估计公允价值是基于假设认为是合理的,但本质上是不确定和不可预测的,因此,实际结果可能不同于预期。
其他与会计估计相关的收购可能会发生变化,因为额外的信息关于收购的资产和负债认为可用,更充分地讨论了在合并财务报表附注的Note6包括在本年度报告的Item8形成10 - k。
善意
商誉是分配给报告单位将受益于企业合并。我们在报告单元级测试商誉减值至少每年一次,或者更频繁的事件或情况发生变化,较有可能减少报告单位的公允价值低于其账面价值。每年我们评估报告的单位,如果有必要,重新分配善意使用相对公允价值分配的方法。商誉减值测试需要判断,包括报告的鉴定单位,分配报告单位的资产和负债,转让商誉报告单位,每个报告单位的公允价值的确定。截至2013年12月31日,没有商誉减值确认。
42
表的内容
减值准备的和非盈利性的证券
定期审查我们的障碍和非盈利性的证券。如果我们认为这些投资受损,我们确定是否非临时这样的障碍。我们考虑的因素作出这样的决心包括损害的持续时间和严重程度,价值下降的原因和潜在的复苏时期,我们的目的。债务有价证券外,我们还考虑(1)较有可能,我们需要出售安全,才能恢复其摊余成本的基础上,和(2)的摊余成本基础不能恢复信贷损失的结果。如果任何障碍被认为非临时,我们将写下资产的公允价值,并记录相应的收取利息及其他收入,净。
|
|
|
|
Item7A。 |
关于MARKETRISK定性和定量的信息披露 |
我们接触到金融市场风险,包括货币汇率和利率的变化。
外币兑换风险
我们办理的业务在全球范围内以多种货币。我们的国际收入以及成本和费用以外国货币计价,暴露我们的风险外币兑美元汇率的波动。我们最重要的货币风险敞口欧元,英镑,日元。我们净接收外汇,因此受益于美元走软,正负面影响的加强美元相对于外币。
我们使用外汇期权合约来保护我们的预测美国不利美元计价的资本收益外汇汇率的变化。这些对冲合约减少,但不要完全消除不利的货币汇率变动的影响。我们指定这些期权合约现金流对冲会计目的。期权合约的公允价���分为内在和时间值。时间价值的变化记录在利息及其他收入,净。内在价值的变化记录作为一个组件的其他综合收益(AOCI)和随后重新分类为收入来抵消对冲风险敞口。
我们考虑汇率的历史趋势和决定,这是合理的,20%的汇率的变化可能会在短期内经历了。如果美国美元贬值20%,数量记录在AOCI相关外汇期权税前效果将减少约900万美元和400万美元2012年12月31日和2013年12月31日,费用记录为利益的总量和其他收入,净,会高出约1.4亿美元和1.23亿美元的年结束2012年12月31日和2013年12月31日。如果美元升值了20%,数量记录在积累AOCI相关外汇期权税前效应是大约17亿美元在更高2012年12月31日和2013年12月31日,费用记录为利益的总量和其他收入,净,会高出约1.59亿美元和1.2亿美元的年结束2012年12月31日和2013年12月31日.
此外,我们使用外汇远期合约来抵消外汇风险对我们的货币计价的资产和负债以外的其他子公司的当地货币。这些远期合约减少,但不能完全消除货币汇率变动的影响在我们的资产和负债。外汇损益的资产和负债记录在利益和其他收入,净,抵消了远期合约的收益和损失。
我们考虑汇率的历史趋势和确定合理的可能不良20%,所有货币汇率的变化可能会在短期内经历了。这些变化会导致不利影响收入所得税前大约900万美元和5200万美元2012年12月31日和2013年12月31日。的不利影响2012年12月31日和2013年12月31日考虑后的抵消效果大约7.31亿美元和8.53亿美元外汇合约的几个月2012年12月31日和2013年12月31日。这些合理可能的不利变化汇率的20%被应用于货币资产和负债以当地货币以外的货币计价的资产负债表日期计算不利影响这些变化将在我们的收入所得税在短期内。
43
表的内容
利率风险
我们的投资策略是实现一个返回,将使我们保持资本和维护流动性的需求。我们主要投资在美国政府及其机构证券、货币市场及其他基金、企业债券、抵押贷款支持证券,外国政府发行的债务工具,市政债券、定期存款和资产支持证券(abs)。根据政策,我们限制信贷暴露在任何一个发行人。我们的投资在固定利率和浮动利率利息收入证券利率风险的程度。固定利率证券可能公平市场价值的不利影响由于利率的上升,而浮动利率证券可能产生更少的收入比预测如果利率下降。截至2012年12月31日和12月31日,2013年,未实现损失我们的有价债券主要是由于临时利率波动导致更高的市场利率与固定利率债务证券。我们占固定和可变利率证券公允价值变化对收益和损失记录在AOCI直到证券出售。我们使用利率衍生品合约来对冲的已实现收益和损失我们的证券。这些衍生品合约占以公允价值与公允价值的变化记录在利益和其他收入,净。
我们认为短期利率的历史波动率,确定合理可能的不利变化可能会在短期内经历了100个基点。一个假设的1.00%(100个基点)提高利率会导致我们有价证券的公允价值下降约11亿美元和10亿美元2012年12月31日和2013年12月31日后,考虑到利率衍生品合约杰出的抵消效应2012年12月31日和2013年12月31日。一个假设的1.00%(100个基点)利率下降会导致公允价值的下降我们的forward-starting利益互换的大约1.07亿美元和9200万美元2012年12月31日和2013年12月31日.
44
表的内容
|
|
|
|
Item8。 |
财务报表和补充数据 |
谷歌(goog . o:行情)。
索引合并财务报表
|
|
|
|
|
|
|
页面 |
独立的注册会计师事务所的报告 |
46 |
财务报表: |
|
合并资产负债表 |
48 |
合并报表的收入 |
49 |
合并报表的综合收入 |
50 |
合并报表的股东权益 |
51 |
合并报表的现金流 |
52 |
合并财务报表附注 |
53 |
这个Item8补充所需的财务信息是包含在Item7标题下的“季度结果的操作。”
45
表的内容
独立注册会计师事务所的报告
谷歌(goog . o:行情)的董事会和股东。
我们审计的合并资产负债表的谷歌(Google inc .)12月31日,2012年和2013年,合并报表和相关的收入、综合收益,股东的股权,并为每一个三年的现金流期限截至12月31日,2013年。我们的审计也包括财务报表中列出时间表在Item15指数(a)2。这些财务报表和计划是公司管理层的责任。我们的责任是对这些财务报表发表意见和计划基于我们的审计。
我们进行审计按照标准的上市公司会计监管委员���(美国)。这些准则要求我们计划和执行审计获得合理保证是否重大错报的财务报表都是免费的。审计包括检查、测试的基础上,支持财务报表金额和披露的证据。审计还包括评估使用的会计原则和重大估计由管理、以及评估整体财务报表演示。我们相信,我们的审计���供一个合理的依据我们的意见。
在我们看来,上述财务报表被称为相当,在所有材料方面,谷歌(Google inc .)的综合财务状况的12月31日,2012年和2013年,并合并结果的操作和现金流的每个时期结束三年12月31日,2013年,符合美国公认会计原则。同样,在我们看来,有关财务报表进度,当考虑的基本财务报表作为一个整体,在一切重要方面提出了相当的信息提出。
我们也有审计,按照标准的公众公司会计监督委员会(美国)、谷歌(Google Inc .)的内部控制财务报表截至12月31日,2013年,成立于基于标准内部Control-Integrated框架委员会颁发的赞助Treadway委员会的组织框架(1992)和我们的报告日期为February11,2014表示无保留意见。
|
|
|
|
/ s /安永(Ernst & Young) |
|
|
|
加州圣何塞 |
|
February11 2014 |
|
46
表的内容
独立注册会计师事务所的报告
谷歌(goog . o:行情)的董事会和股东。
我们审计谷歌(goog . o:行情)的内部控制财务报表截至12月31日,2013年,成立于基于标准内部Control-Integrated框架委员会颁发的赞助Treadway委员会的组织框架(1992)(COSO标准)。谷歌(Google Inc .)管理负责维护有效的内部控制财务报表,并对其财务报告内部控制的有效性的评估包含在相应的管理对财务报告的内部控制报告。我们的责任是表达一个意见基于公司对财务报告的内部控制的审计。
我们进行审计按照标准的上市公司会计监管委员会(美国)。这些准则要求我们计划和执行审计获得合理保证财务报告是否有效的内部控制是保持在所有材料方面。我们的审计包括获得的理解内部控制财务报告,评估风险,存在一个重大缺陷,测试和评价内部控制的设计和操作有效性基于风险评估,和执行等其他程序在这种情况下,我们认为是必要的。我们相信,我们的审计我们的意见提供了合理的依据。
公司对财务报告的内部控制是一个过程设计提供合理保证财务报告的可靠性和外部财务报表的准备按照公认���计原则。公司对财务报告的内部控制包括那些(1)的政策和程序与记录的维护,在合理的细节,准确和公正反映交易和部署公司的资产;(2)提供合理的保证,交易记录在必要时允许编制的财务报表符合公认会计原则,和公司的收支只依照授权管理和公司董事;和(3)提供合理的保证有关预防或及时发现非法采集、使用或处置公司资产,可能对财务报表产生实质性影响。
由于其固有的局限性,财务报告内部控制可能无法防止或发现舞弊行为。同时,任何评价有效性的预测未来时期受到的风险控制不足可能会因为环境的变化,或符合政策或程序的程度可能恶化。
在我们看来,谷歌(Google inc .),在所有���料方面,有效的内部控制财务报表截至12月31日,2013年,根据COSO标准。
我们也有审计,按照标准的公众公司会计监督委员会(美国)、谷歌(Google inc .)的合并资产负债表截至12月31日,2012年和2013年,合并报表和相关的收入、综合收益,股东的股权,并为每一个三年的现金流在截至12月31日期间,2013年的谷歌(Google inc .)和我们的报告日期February11,2014表示无保留意见。
|
|
|
|
/ s /安永(Ernst & Young) |
|
|
|
加州圣何塞 |
|
February11 2014 |
|
47
表的内容
谷歌(goog . o:行情)。
合并资产负债表
(在数百万,除了分享和面值金额反映在成千上万,
和每股面值金额)
|
|||||||
|
|
|
|
|
|
|
|
|
的 |
|
的 |
||||
资产 |
|
|
|
||||
流动资产: |
|
|
|
||||
现金和���金等价物 |
$ |
14778年 |
|
|
$ |
18898年 |
|
有价证券 |
33310年 |
|
|
39819年 |
|
||
总现金、现金等价物和有价证券出借有价证券(包括3160美元和5059美元) |
48088年 |
|
|
58717年 |
|
||
应收账款,净581美元和631美元的津贴 |
7885年 |
|
|
8882年 |
|
||
库存 |
505年 |
|
|
426年 |
|
||
反向回购协议下应收 |
700年 |
|
|
100年 |
|
||
递延所得税,净 |
1144年 |
|
|
1526年 |
|
||
净应收所得税 |
0 |
|
|
408年 |
|
||
预付收入、费用和其他资产 |
2132年 |
|
|
2827年 |
|
||
流动资产总额 |
60454年 |
|
|
72886年 |
|
||
预付收入份额,费用和其他资产,非流动 |
2011年 |
|
|
1976年 |
|
||
非盈利性的股权投资 |
1469年 |
|
|
1976年 |
|
||
财产和设备、净 |
11854年 |
|
|
16524年 |
|
||
无形资产,净 |
7473年 |
|
|
6066年 |
|
||
善意 |
10537年 |
|
|
11492年 |
|
||
总资产 |
$ |
93798年 |
|
|
$ |
110920年 |
|
负债和股东权益 |
|
|
|
||||
流动负债: |
|
|
|
||||
应付账款 |
$ |
2012年 |
|
|
$ |
2453年 |
|
短期债务 |
2549年 |
|
|
3009年 |
|
||
应计薪酬和福利 |
2239年 |
|
|
2502年 |
|
||
应计费用和其他流动负债 |
3258年 |
|
|
3755年 |
|
||
应计收入份额 |
1471年 |
|
|
1729年 |
|
||
证券借贷支付 |
1673年 |
|
|
1374年 |
|
||
递延收入 |
895年 |
|
|
1062年 |
|
||
应交所得税,净 |
240年 |
|
|
24 |
|
||
流动负债总额 |
14337年 |
|
|
15908年 |
|
||
长期债务 |
2988年 |
|
|
2236年 |
|
||
递延收入,非流动 |
100年 |
|
|
139年 |
|
||
应交所得税,非流动 |
2046年 |
|
|
2638年 |
|
||
净递延所得税,非流动 |
1872年 |
|
|
1947年 |
|
||
其他长期负债 |
740年 |
|
|
743年 |
|
||
承诺和突发事件 |
|
|
|
|
|||
股东权益: |
|
|
|
||||
可转换优先股,每股面值0.001美元,100000股授权,没有股票发行��突出 |
0 |
|
|
0 |
|
||
ClassA和B类普通股和额外的实收资本,0.001美元每股票面价值:12000000股授权(ClassA 9000000,B类3000000);329979年(ClassA 267448,B类62531)和票面价值330美元(B类267美元,267美元)和335832年(279325年279325年ClassA,B类),面值为336美元(类279美元,B类57美元)股票发行和突出 |
22835年 |
|
|
25922年 |
|
||
C类资本股票,每股面值0.001美元:3000000股授权,没有股票发行和突出 |
0 |
|
|
0 |
|
||
其他综合收入积累 |
538年 |
|
|
125年 |
|
||
留存收益 |
48342年 |
|
|
61262年 |
|
||
股东权益总额 |
71715年 |
|
|
87309年 |
|
||
总负债和股东权益 |
$ |
93798年 |
|
|
$ |
110920年 |
|
看到随行笔记。
48
表的内容
谷歌(goog . o:行情)。
合并报表的收入
(在数百万,每股金额除外)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
收入: |
|
|
|
|
|
||||||
谷歌(广告和其他) |
$ |
37905年 |
|
|
$ |
46039年 |
|
|
$ |
55519年 |
|
摩托罗拉移动(硬件和其他) |
0 |
|
|
4136年 |
|
|
4306年 |
|
|||
总收入 |
$ |
37905年 |
|
|
$ |
50175年 |
|
|
$ |
59825年 |
|
成本和费用: |
|
|
|
|
|
||||||
收入成本——谷歌(广告和其他)(1) |
13188年 |
|
|
17176年 |
|
|
21993年 |
|
|||
收入成本——摩托罗拉移动(硬件和其他)(1) |
0 |
|
|
3458年 |
|
|
3865年 |
|
|||
���究和开发(1) |
5162年 |
|
|
6793年 |
|
|
7952年 |
|
|||
销售和营销(1) |
4589年 |
|
|
6143年 |
|
|
7253年 |
|
|||
一般和行政(1) |
2724年 |
|
|
3845年 |
|
|
4796年 |
|
|||
负责相关决议司法部的调查 |
500年 |
|
|
0 |
|
|
0 |
|
|||
总成本和费用 |
26163年 |
|
|
37415年 |
|
|
45859年 |
|
|||
业务收入 |
11742年 |
|
|
12760年 |
|
|
13966年 |
|
|||
利息及其他收入,净 |
584年 |
|
|
626年 |
|
|
530年 |
|
|||
持续经营收入所得税 |
12326年 |
|
|
13386年 |
|
|
14496年 |
|
|||
所得税准备 |
2589年 |
|
|
2598年 |
|
|
2282年 |
|
|||
来自持续经营业务的净收入 |
$ |
9737年 |
|
|
$ |
10788年 |
|
|
$ |
12214年 |
|
净利润(亏损)停止操作 |
0 |
|
|
(51 |
) |
|
706年 |
|
|||
净收益 |
$ |
9737年 |
|
|
$ |
10737年 |
|
|
$ |
12920年 |
|
每股净收益(损失)的ClassA和B类普通股——基本: |
|
|
|
|
|
||||||
持续经营 |
$ |
30.17 |
|
|
$ |
32.97 |
|
|
$ |
36.70 |
|
已停止经营 |
0.00 |
|
|
(0.16 |
) |
|
2.12 |
|
|||
每股净收益(损失)的ClassA和B类普通股——基本 |
$ |
30.17 |
|
|
$ |
32.81 |
|
|
$ |
38.82 |
|
净利润(亏损)ClassA和B类普通股每股稀释: |
|
|
|
|
|
||||||
持续经营 |
$ |
29.76 |
|
|
$ |
32.46 |
|
|
$ |
36.05 |
|
已停止经营 |
0.00 |
|
|
(0.15 |
) |
|
2.08 |
|
|||
净利润(损失)ClassA和B类普通股的每股稀释 |
$ |
29.76 |
|
|
$ |
32.31 |
|
|
$ |
38.13 |
|
|
|
|
|
|
|
||||||
(1)包括股票补偿费用如下: |
|
|
|
|
|
||||||
收入成本——谷歌(广告和其他) |
$ |
249年 |
|
|
$ |
359年 |
|
|
$ |
469年 |
|
收入成本——摩托罗拉移动(硬件和其他) |
0 |
|
|
14 |
|
|
18 |
|
|||
���究和开发 |
1061年 |
|
|
1325年 |
|
|
1717年 |
|
|||
销售和营销 |
361年 |
|
|
498年 |
|
|
578年 |
|
|||
一般和行政 |
303年 |
|
|
453年 |
|
|
486年 |
|
|||
|
$ |
1974年 |
|
|
$ |
2649年 |
|
|
$ |
3268年 |
|
看到随行笔记。
49
表的内容
谷歌(goog . o:行情)。
合��报表的综合收入
(百万)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
年December31结束, |
||||||||||
|
2011年 |
|
2012年 |
|
2013年 |
||||||
净收益 |
$ |
9737年 |
|
|
$ |
10737年 |
|
|
$ |
12920年 |
|
其他综合收益(损失): |
|
|
|
|
|
||||||
外币翻译的变化调整 |
(107 |
) |
|
75年 |
|
|
89年 |
|
|||
可供出售投资: |
|
|
|
|
|
||||||
净未实现收益的变化 |
348年 |
|
|
493年 |
|
|
(392 |
) |
|||
少:重新分类调整净收益包括在净收益 |
(115 |
) |
|
(216 |
) |
|
(162 |
) |
|||
净改变(54美元的净税收效应,68美元,212美元) |
233年 |
|
|
277年 |
|
|
(554 |
) |
|||
现金流对冲: |
|
|
|
|
|
||||||
未实现收益的变化 |
39 |
|
|
47 |
|
|
112年 |
|
|||
少:重新分类调整收益包括在净收益 |
(27 |
) |
|
(137 |
) |
|
(60 |
) |
|||
净改变(2美元的净税收效应,53美元,30美元) |
12 |
|
|
(90 |
) |
|
52 |
|
|||
其他综合收益(损失) |
138年 |
|
|
262年 |
|
|
(413 |
) |
|||
综合收益 |
$ |
9875年 |
|
|
$ |
10999年 |
|
|
$ |
12507年 |
|
看到随行笔记。
50
表的内容
谷歌(goog . o:行情)。
合并报表的股东权益
(在数百万,分享数量反映在数以千计的除外)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClassAandClassB 普通股和 AdditionalPaid-InCapital |
|
积累 其他 全面的 收入 |
|
保留 收益 |
|
总 股东 股本 |
|||||||||||
|
股票 |
|
量 |
|
||||||||||||||
平衡在1月,2011年 |
321301年 |
|
|
$ |
18235年 |
|
|
$ |
138年 |
|
|
$ |
27868年 |
|
|
$ |
46241年 |
|
发行的普通股 |
3594年 |
|
|
621年 |
|
|
0 |
|
|
0 |
|
|
621年 |
|
||||
股票补偿费用 |
|
|
1974年 |
|
|
0 |
|
|
0 |
|
|
1974年 |
|
|||||
reuters estimates调查税收优惠 |
|
|
60 |
|
|
0 |
|
|
0 |
|
|
60 |
|
|||||
税收扣缴相关限制性股票的期权 |
|
|
(626 |
) |
|
0 |
|
|
0 |
|
|
(626 |
) |
|||||
净收益 |
|
|
0 |
|
|
0 |
|
|
9737年 |
|
|
9737年 |
|
|||||
其他综合收益 |
|
|
0 |
|
|
138年 |
|
|
0 |
|
|
138年 |
|
|||||
在December31结余2011 |
324895年 |
|
|
20264年 |
|
|
276年 |
|
|
37605年 |
|
|
58145年 |
|
||||
发行的普通股 |
5084年 |
|
|
736年 |
|
|
0 |
|
|
0 |
|
|
736年 |
|
||||
股票补偿费用 |
|
|
2692年 |
|
|
0 |
|
|
0 |
|
|
2692年 |
|
|||||
reuters estimates调查税收优惠 |
|
|
166年 |
|
|
0 |
|
|
0 |
|
|
166年 |
|
|||||
税收扣缴相关限制性股票的期权 |
|
|
(1023 |
) |
|
0 |
|
|
0 |
|
|
(1023 |
) |
|||||
净收益 |
|
|
0 |
|
|
0 |
|
|
10737年 |
|
|
10737年 |
|
|||||
其他综合收益 |
|
|
0 |
|
|
262年 |
|
|
0 |
|
|
262年 |
|
|||||
在December31结余2012 |
329979年 |
|
|
22835年 |
|
|
538年 |
|
|
48342年 |
|
|
71715年 |
|
||||
发行的普通股 |
5853年 |
|
|
1174年 |
|
|
0 |
|
|
0 |
|
|
1174年 |
|
||||
股票补偿费用 |
|
|
3343年 |
|
|
0 |
|
|
0 |
|
|
3343年 |
|
|||||
reuters estimates调查税收优惠 |
|
|
449年 |
|
|
0 |
|
|
0 |
|
|
449年 |
|
|||||
税收扣缴相关限制性股票的期权 |
|
|
(1879 |
) |
|
0 |
|
|
0 |
|
|
(1879 |
) |
|||||
净收益 |
|
|
0 |
|
|
0 |
|
|
12920年 |
|
|
12920年 |
|
|||||
其他综合收益 |
|
|
0 |
|
|
(413 |
) |
|
0 |
|
|
(413 |
) |
|||||
在December31结余2013 |
335832年 |
|
|
$ |
25922年 |
|
|
$ |
125年 |
|
|
$ |
61262年 |
|
|
$ |
87309年 |
|
看到随行笔记。
51
表的内容
谷歌(goog . o:行情)。
合并报表的现金流
(百万)
|
||
|
|
|
