Google 2007 Annual Report Download - page 102

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Google Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Taxes
We are currently under audit by the Internal Revenue Service and various other tax authorities. We have reserved for
potential adjustments to our provision for income 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 affect 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 tax benefits in the period we determine the liabilities are no
longer necessary. If our estimates of the federal, state, and foreign income tax liabilities are less than the ultimate
assessment, a further charge to expense would result.
Upon adoption of FIN 48 on January 1, 2007, we decreased current taxes payable by $219.4 million and increased
long-term taxes payable by the same amount as FIN 48 specifies that tax positions for which the timing of the ultimate
resolution is uncertain should be recognized as long-term liabilities. We also recognized additional long-term taxes
payable of $181.0 million in the year ended December 31, 2007. 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.
Note 10. Google Foundation
The Google Foundation (the “Foundation”), a private foundation, was formed in the third quarter of
2004. The Foundation’s mission is to fund and support philanthropic programs focused on poverty and the
environment. In the fourth quarter of 2005, we funded the Foundation with non-recourse, non-refundable cash donation
of $90.0 million.
The Board of Directors of the Foundation currently consists of four members, two of whom are directors and
executive officers of Google and one of whom is a vice president of Google. The fourth member is the executive director of
the Foundation.
Since the Foundation’s inception, we have provided at no charge certain resources to the Foundation such as office
space.
Note 11. 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. At December 31, 2007 and 2006, 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, 2007,
there were 6,000,000,000 and 3,000,000,000 shares authorized and there were 236,432,822 and 76,844,348 shares legally
outstanding of Class A and Class B common stock. 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.
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