Google 2013 Annual Report Download - page 34

28 GOOGLE INC.
PART II
ITEM7.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations
  
Beginning in the third quarter of 2013, Google and Motorola Mobile segment revenues have been impacted by intersegment
transactionsthatareeliminatedinconsolidation.Additionally,segmentrevenuesassociatedwithcertainproductswererecognized
duringtheyearinoursegmentresults,butdeferredtofutureperiodsinourconsolidatednancialstatements.Thispresentation
is consistent with what is provided to the chief operating decision maker for purposes of making decisions about allocating
resourcestoeachsegmentandassessingtheirperformance.
Revenues by Geography
The following table presents our Google segment domestic and international revenues as a percentage of Google segment
revenues, determined based on the billing addresses of our customers for our Google segment:
Year Ended December31,
2011 2012 2013
United States 46% 46% 45%
UnitedKingdom 11% 11% 10%
Rest of the world 43% 43% 45%
The following table presents our consolidated domestic and international revenues as a percentage of consolidated revenues,
determinedbasedonthebillingaddressesofourcustomersforourGooglesegment,andship-toaddressesofourcustomers
for our Motorola Mobile segment:
Year Ended December31,
2011 2012 2013
United States 46% 47% 45%
UnitedKingdom 11% 10% 9%
Rest of the world 43% 43% 46%
The growth in revenues from the rest of the world as a percentage of the Google segment and consolidated revenues from 2012
to 2013 resulted largely from increased acceptance of our advertising programs, and our continued progress in developing
localizedversionsofourproductsfortheinternationalmarketsaswellasincreasedrevenuesfromtherestoftheworldinour
MotorolaMobilesegmentin2013ascomparedto2012.
Foreign Exchange Impact on Revenues
ThegeneralstrengtheningoftheU.S.dollarrelativetocertainforeigncurrencies(primarilytheJapaneseyenandBrazilianreal)
from2012to2013hadanunfavorableimpactonourinternationalrevenues,whichwaspartiallyosetbythegeneralweakening
oftheU.S.dollarrelativetootherforeigncurrencies(primarilytheEuro).Hadforeignexchangeratesremainedconstantinthese
periods,ourrevenuesfromtheUnitedKingdomwouldhavebeen$67millionor1.2%higherandourrevenuesfromtherestof
theworldwouldhavebeenapproximately$613millionor2.2%higherin2013.Thisisbeforeconsiderationofhedginggainsof
$63millionand$32millionrecognizedtorevenuesfromtheUnitedKingdomandtherestoftheworldin2013.
ThegeneralstrengtheningoftheU.S.dollarrelativetocertainforeigncurrencies(primarilytheEuro)from2011to2012hadan
unfavorableimpactonourinternationalrevenues.Hadforeignexchangeratesremainedconstantintheseperiods,ourrevenues
fromtheUnitedKingdomwouldhavebeen$68millionor1.4%higherandourrevenuesfromtherestoftheworldwouldhave
beenapproximately$1,211millionor5.6%higherin2012.Thisisbeforeconsiderationofhedginggainsof$18millionand
$199millionrecognizedtorevenuesfromtheUnitedKingdomandtherestoftheworldin2012.
Although we expect to continue to make investments in international markets, these investments may not result in an increase
inourinternationalrevenuesasapercentageoftotalrevenuesin2014orthereafter.SeeNote15ofNotestoConsolidated
FinancialStatementsincludedinItem8ofthisAnnualReportonForm10-Kforadditionalinformationaboutgeographicareas.
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