Google 2009 Annual Report Download - page 68

The following table presents our unaudited quarterly results of operations as a percentage of revenues for the
eight quarters ended December 31, 2009.
Quarter Ended
Mar 31,
2008 Jun 30, 2008 Sep 30, 2008 Dec 31, 2008 Mar 31, 2009 Jun 30, 2009 Sep 30, 2009 Dec 31, 2009
Revenues ............................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Cost of revenues ...................... 40.7 40.0 39.2 38.4 38.1 38.2 37.4 36.1
Research and development ............. 13.0 12.7 12.7 12.9 11.6 12.8 12.7 11.0
Sales and marketing ................... 8.6 9.0 9.2 8.9 7.9 8.5 8.4 8.7
General and administrative .............. 7.9 8.9 9.2 7.2 8.2 6.6 6.6 7.0
Total costs and expenses ............... 70.2 70.6 70.3 67.4 65.8 66.1 65.1 62.8
Income from operations ................ 29.8 29.4 29.7 32.6 34.2 33.9 34.9 37.2
Impairment of equity investments ....... — — — (19.2) — — — —
Interest income and other, net ........... 3.2 1.1 0.4 1.3 0.1 (0.3) (0.1) 1.3
Income before income taxes ............ 33.0 30.5 30.1 14.7 34.3 33.6 34.8 38.5
Provision for income taxes .............. 7.8 7.3 6.8 8.0 8.5 6.7 7.2 8.9
Net income ........................... 25.2% 23.2% 23.3% 6.7% 25.8% 26.9% 27.6% 29.6%
Liquidity and Capital Resources
In summary, our cash flows are as follows (in millions):
Year Ended December 31,
2007 2008 2009
Net cash provided by operating activities ................................. $5,775.4 $7,852.9 $ 9,316.2
Net cash used in investing activities ..................................... (3,681.6) (5,319.4) (8,019.2)
Net cash provided by financing activities ................................. 403.1 87.6 233.4
At December 31, 2009 we had $24.5 billion of cash, cash equivalents, and marketable securities. Cash
equivalents and marketable securities are comprised of highly liquid debt instruments of the U.S. government and
its agencies, municipalities in the U.S., debt instruments issued by foreign governments, time deposits, money
market mutual funds, mortgage-backed securities, and corporate securities. Note 3 of Notes to Consolidated
Financial Statements included in Item 8 of this Annual Report on Form 10-K describes further the composition of
our cash, cash equivalents, and marketable securities.
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, 2008 and 2009, we had unused letters of credit for
approximately $109.9 million and $101.2 million. We believe that our existing cash, cash equivalents, marketable
securities, and cash generated from operations 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. Also, if the banking system or the financial markets further deteriorate or
remain volatile, our investment portfolio may be impacted and the values and liquidity of our investments could be
adversely affected. 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. During the second half of 2009, we entered into agreements to acquire On2 Technologies,
Inc. (On2) and AdMob, Inc. (AdMob). In the first quarter of 2010, we entered into an amendment to our agreement
to acquire On2 pursuant to which we agreed to increase the consideration payable to On2 stockholders. The
aggregate consideration payable to On2 stockholders is approximately $124 million in stock and cash based on the
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