Google 2011 Annual Report Download - page 108

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As of December 31, 2011, there was $3,727 million of unrecognized compensation cost related to unvested
employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.9 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.
Note 14. 401(k) Plan
We have a 401(k) Savings Plan (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. Employee and our contributions
are fully vested when contributed. We contributed approximately $83 million, $100 million, and $136 million during
2009, 2010, and 2011.
Note 15. Income Taxes
Income before income taxes included income from domestic operations of $3,579 million, $4,948 million,
and $4,693 million for 2009, 2010, and 2011, and income from foreign operations of $4,802 million, $5,848
million, and $7,633 million for 2009, 2010, and 2011. Substantially all of the income from foreign operations was
earned by an Irish subsidiary.
The provision for income taxes consists of the following (in millions):
Year Ended December 31,
2009 2010 2011
Current:
Federal ................................................................ $1,531 $ 1,657 $ 1,724
State .................................................................. 450 458 274
Foreign ................................................................ 148 167 248
Total .............................................................. 2,129 2,282 2,246
Deferred:
Federal ................................................................ (273) (25) 452
State .................................................................. 13 47 (109)
Foreign ................................................................ (8) (13) (0)
Total .............................................................. (268) 9 343
Provision for income taxes .................................................... $1,861 $ 2,291 $2,589
The reconciliation of federal statutory income tax rate to our effective income tax rate is as follows
(in millions):
Year ended December 31,
2009 2010 2011
Expected provision at federal statutory tax rate (35%) .......................... $2,933 $ 3,779 $ 4,314
State taxes, net of federal benefit ............................................. 302 322 122
Stock-based compensation expense .......................................... 63 79 105
Change in valuation allowance ............................................... (41) (34) 27
Foreign rate differential ..................................................... (1,339) (1,769) (2,001)
Federal research credit ...................................................... (56) (84) (140)
Tax exempt interest ......................................................... (15) (12) (10)
Non-deductible legal settlement .............................................. 0 0 175
Other permanent differences ................................................ 14 10 (3)
Provision for income taxes ................................................... $ 1,861 $ 2,291 $ 2,589
79