Google 2007 Annual Report Download - page 106

Download and view the complete annual report

Please find page 106 of the 2007 Google annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

Google Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At December 31, 2007, there were 2,063 unvested restricted stock units held by a non-employee with a 30 month
remaining vesting period.
Warrants to Purchase Class A Common Stock
We issued warrants to purchase 15,904 shares of Class A common stock in connection with our YouTube acquisition.
The warrants have an exercise price of $23.28 and a nine month remaining vesting period at December 31, 2007.
Note 12. 401(k) Plan
We have a 401(k) Savings Plan (the “401(k) Plan”) that qualifies as a deferred salary arrangement under Section 401(k)
of the Internal Revenue Code. Under the 401(k) Plan, participating employees may elect to contribute up to 60% of their
eligible compensation, subject to certain limitations. We match employee contributions up to $7,750 per year. Employee and
our contributions are fully vested when contributed. We contributed approximately $8.4 million, $14.3 million and $51.1
million during 2005, 2006 and 2007, respectively.
Note 13. Income Taxes
Income before income taxes included income from foreign operations of approximately $590.8 million, $1,318.4
million and $2,466.9 million for 2005, 2006 and 2007.
The provision for income taxes consisted of the following (in thousands):
Year Ended December 31,
2005 2006 2007
Current:
Federal ........................................................ $506,322 $ 812,280 $1,288,310
State .......................................................... 141,101 191,266 294,935
Foreign ........................................................ 7,694 28,516 51,227
Total ...................................................... 655,117 1,032,062 1,634,472
Deferred:
Federal ........................................................ 14,273 (80,073) (135,047)
State .......................................................... 6,890 (18,395) (29,165)
Total ...................................................... 21,163 (98,468) (164,212)
Provision for income taxes ............................................. $676,280 $ 933,594 $1,470,260
The reconciliation of federal statutory income tax rate to our effective income tax rate is as follows (in thousands):
Year ended December 31,
2005 2006 2007
Expected provision at federal statutory rate (35%) ......................... $ 749,588 $1,403,864 $1,985,893
State taxes, net of federal benefit ....................................... 96,194 112,366 172,750
Stock-based compensation expense ..................................... 25,058 26,878 123,869
Disqualifying dispositions of incentive stock options ....................... (46,092) (6,128) —
Foreign rate differential ............................................... (134,185) (505,729) (705,400)
Federal research credit ............................................... (12,287) (77,859) (81,469)
Tax exempt interest .................................................. (20,177) (31,583) (50,662)
Other permanent differences .......................................... 18,181 11,785 25,279
Provision for income taxes ............................................ $ 676,280 $ 933,594 $1,470,260
92