Google 2013 Annual Report Download - page 38

32 GOOGLE INC.
PART II
ITEM7.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations
General and Administrative
The following table presents our general and administrative expenses by operating segment for the periods presented (dollars
in millions):
Year Ended December31,
2011 2012 2013
Google $2,421 $3,090 $3,967
Motorola Mobile [phone]
Unallocated items 303 519 510
Total $2,724 $3,845 $4,796
General and administrative expenses consist primarily of compensation and related costs for personnel and facilities, and include
costsrelatedtoourfacilities,nance,humanresources,informationtechnologyandlegalorganizations,aswellasfeesfor
professionalservices.Professionalservicesareprincipallycomprisedofoutsidelegal,audit,informationtechnologyconsulting,and
outsourcingservices.Generalandadministrativeexpensesalsoincludeamortizationofcertainacquisition-relatedintangibleassets.
 
General and administrative expenses for the Google segment increased $877 million from 2012 to 2013 and as a percentage of
Googlesegmentrevenuesremainedrelativelyatfrom2012to2013.Theincreaseinexpenseswasprimarilyduetoanincrease
inlaborandfacilities-relatedcostsof$396million,largelyasaresultofa15%increaseingeneralandadministrativeheadcount,
anincreaseindepreciationandequipment-relatedexpenseof$222million,aswellasanincreaseinamortizationofacquired
intangibleassetsof$157million.
General and administrative expenses for the Google segment increased $669 million from 2011 to 2012 and as a percentage of
Googlesegmentrevenuesremainedrelativelyatfrom2011to2012.Thisincreaseinexpenseswasprimarilyduetoanincrease
inamortizationofacquiredintangibleassetsof$274million,anincreaseinprofessionalservicesexpenseof$147million,the
majorityofwhichwasrelatedtolegalcosts,andanincreaseinlaborandfacilities-relatedcostsof$122million,primarilyasa
resultofan11%increaseingeneralandadministrativeheadcount.
  
General and administrative expenses for the Motorola Mobile segment were not comparable between 2012 and 2013 because
approximatelysevenmonthsofresultswereincludedin2012whiletwelvemonthsofresultswereincludedin2013.Additionally,
we conducted various restructuring activities to simplify the Motorola Mobile product portfolio subsequent to the acquisition in
May2012.
 
Unallocateditems,includingstock-basedcompensationexpense,aswellasrestructuringandrelatedcharges,arenotallocated
toeachsegmentbecausewedonotincludethisinformationinourmeasurementoftheperformanceofouroperatingsegments.
As we expand our business and incur additional expenses, we expect general and administrative expenses will increase in dollar
amountandmayincreaseasapercentageoftotalrevenuesin2014andinfutureperiods.
Charge Related to the Resolution of Department of Justice Investigation
In connection with a resolution of an investigation by the United States Department of Justice into the use of Google advertising by
certainadvertisers,weaccrued$500millionduringtherstquarterof2011,whichwaspaidinAugust2011uponnalresolution
ofthatmatter.
Restructuring and related charges
The following table presents our restructuring and related charges for the periods presented (dollars in millions):
Year Ended December31,
2011 2012 2013
Restructuring and related charges (1) $ 0 $ 632 $182
(1) These amounts are included in the previously discussed sections above, as unallocated items related to cost of revenues, research and
development,salesandmarketing,andgeneralandadministrativeexpenses.
Restructuringandrelatedchargesdecreased$450millionfrom2012to2013becausewecompletedthemajorityofour
restructuringandrelatedactivitiesrelatedtoMotorolain2012.
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