Google 2011 Annual Report Download - page 70

award activities. In addition, the decrease in cash from changes in working capital activities primarily consisted of
an increase of $1,129 million in accounts receivable due to the growth in fees billed to our advertisers and an
increase of $414 million in prepaid revenue share, expenses and other assets. These increases were partially offset
by an increase in accrued expenses and other liabilities of $745 million, an increase in accounts payable of $272
million, an increase in accrued revenue share of $214 million, an increase in deferred revenue of $111 million, and a
net increase in income tax payable and deferred income taxes of $102 million, which includes the same $94 million
of excess tax benefits from stock-based award activities included under adjustments for non-cash items. The
increase in accrued expense and other liabilities, accounts payable, accrued revenue share, and deferred revenues
are primarily a result of the growth in our business and headcount. The increase in net income taxes payable and
deferred income taxes was primarily a result of additional tax obligations accrued, partially offset by the release of
certain tax reserves as a result of the settlement of our tax audits for our 2005 and 2006 tax years.
Cash provided by operating activities in 2009 was $9,316 million, and consisted of net income of $6,520
million, adjustments for non-cash items of $2,310 million, and cash provided by working capital and other activities
of $486 million. Adjustments for non-cash items primarily consisted of $1,240 million of depreciation and
amortization expense on property and equipment, $1,164 million of stock-based compensation expense, and $284
million of amortization of intangible and other assets, partially offset by $268 million of deferred income taxes on
earnings and $90 million of excess tax benefits from stock-based award activities. In addition, changes in working
capital activities primarily consisted of a decrease of $262 million in prepaid revenue share, expenses, and other
assets, an increase in accrued expenses and other liabilities of $243 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 million, which includes
the same $90 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 $158 million. These increases were partially offset by
an increase of $504 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.
As we expand our business internationally, we have offered payment terms to certain advertisers that are
standard in their locales but longer than terms we would generally offer to our domestic advertisers. This may
increase our working capital requirements and may have a negative effect on cash provided by our operating
activities.
Cash used in investing activities in 2011 of $19,041 million was primarily attributable to net purchases of
marketable securities of $12,926 million, capital expenditures of $3,438 million related principally to our facilities,
data centers, and related equipment, and cash consideration used in acquisitions and other investments of $2,328
million, including $676 million paid in connection with the acquisition of ITA. Also, in connection with our securities
lending program, we returned $354 million of cash collateral. See Note 3 of Notes to Consolidated Financial
Statements included in Item 8 of this Annual Report on Form 10-K for further information about our securities
lending program.
Cash used in investing activities in 2010 of $10,680 million was primarily attributable to net purchases of
marketable securities of $6,886 million, capital expenditures of $4,018 million of which $1.8 billion was for the
purchase of an office building in New York City in December 2010, and remaining amounts related principally to
our data centers and related equipment, and cash consideration used in acquisitions and other investments of
$1,067 million. Also, in connection with our securities lending program, we received $2,361 million of cash
collateral which was invested in reverse repurchase agreements. Of the $2,361 million, $1,611 million was classified
as cash and cash equivalents, and $750 million was classified as receivable under reverse repurchase agreements
in the accompanying Consolidated Balance Sheet.
Cash used in investing activities in 2009 of $8,019 million was primarily attributable to net purchases of
marketable securities of $7,036 million and capital expenditures of $810 million.
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