Google 2009 Annual Report Download - page 69

closing price of our Class A common stock on February 10, 2010. The aggregate consideration payable to AdMob
stockholders is $750 million in stock. The completion of these transactions is subject to customary closing
conditions, and stockholder approval for On2. We expect On2 to close in the first quarter of 2010 and AdMob to
close in the first half of 2010.
Cash provided by operating activities consisted of net income adjusted for certain non-cash items, including
depreciation, amortization, stock-based compensation expense, excess tax benefits from stock-based award
activities, deferred income taxes, and the effect of changes in working capital and other activities. Cash provided
by operating activities in 2009 was $9,316.2 million and consisted of net income of $6,520.4 million, adjustments
for non-cash items of $2,309.8 million and cash provided by working capital and other activities of $486.0 million.
Adjustments for non-cash items primarily consisted of $1,240.0 million of depreciation and amortization expense
on property and equipment, $1,164.1 million of stock-based compensation expense and $284.3 million of
amortization of intangibles and other, partially offset by $268.1 million of deferred income taxes on earnings and
$90.3 million of excess tax benefits from stock-based award activities. In addition, changes in working capital
activities primarily consisted of a decrease of $262.0 million in prepaid revenue share, expenses, and other assets,
an increase in accrued expenses and other liabilities of $243.1 million which is a direct result of the growth of our
business, and a net increase in income taxes payable and deferred income taxes of $217.5 million, which includes
the same $90.3 million of excess tax benefits from stock-based award activities included under adjustments for
non-cash items, and an increase in accrued revenue share of $157.7 million. These increases were partially offset
by an increase of $504.0 million in accounts receivable due to the growth in fees billed to our advertisers. The
increase in net income taxes payable and deferred income taxes was primarily a result of additional tax obligations
accrued, partially offset by an increase in the amount of estimated income taxes we paid during the year. The
increase in accrued revenue share was due to the growth in our AdSense and distribution programs and the timing
of payments made to our partners.
Cash provided by operating activities in 2008 was $7,852.9 million and consisted of net income of $4,226.9
million, adjustments for non-cash items of $3,298.8 million, and cash provided by working capital and other
activities of $327.2 million. Adjustments for non-cash items primarily consisted of $1,212.2 million of depreciation
and amortization expense on property and equipment, $1,119.8 million of stock-based compensation expense, and
$1,094.8 million of impairment charges of equity investments, partially offset by $224.6 million of deferred income
taxes on earnings and $159.1 million of excess tax benefits from stock-based award activities. In addition, changes
in working capital activities primarily consisted of a net increase in income taxes payable and deferred income
taxes of $626.0 million, which includes the same $159.1 million of excess tax benefits from stock-based award
activities included under adjustments for non-cash items, and an increase in accrued expenses and other liabilities
of $338.9 million. The increases in accrued expenses are a direct result of the growth of our business and an
increase in headcount. These increases to working capital activities were partially offset by an increase of $334.5
million in accounts receivable due to the growth in fees billed to our advertisers, a decrease of $211.5 million in
accounts payable due to the timing of invoice processing and payments and an increase of $147.1 million in
prepaid revenue shares, expenses, and other assets.
Cash provided by operating activities in 2007 was $5,775.4 million and consisted of net income of $4,203.7
million, adjustments for non-cash items of $1,253.1 million, and cash provided by working capital and other
activities of $318.6 million. Adjustments for non-cash items primarily consisted of $868.6 million of stock-based
compensation expense and $807.7 million of depreciation and amortization expense on property and equipment,
partially offset by $379.2 million of excess tax benefits from stock-based award activities. In addition, changes in
working capital activities primarily consisted of a net increase in income taxes payable and deferred income taxes
of $744.8 million, which includes the same $379.2 million of excess tax benefits from stock-based award activities
included under adjustments for non-cash items, an increase in accrued expenses and other liabilities of $418.9
million, an increase in accrued revenue share of $150.3 million, an increase in accounts payable of $70.1 million,
and an increase in deferred revenue of $70.3 million. The increases in accounts payable and accrued expenses are
a direct result of the growth of our business and an increase in headcount. These increases to working capital
activities were partially offset by an increase of $837.2 million in accounts receivable due to the growth in fees
billed to our advertisers and an increase of $298.7 million in prepaid revenue shares, expenses, and other assets.
51