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Google Inc.

CONSOLIDATED BALANCE SHEETS (In millions, except share and par value amounts which are reflected in thousands, and par value per share amounts) As of December 31, 2012 As of March 31, 2013 (unaudited) Assets Current assets: Cash and cash equivalents Marketable securities Total cash, cash equivalents, and marketable securities (including securities loaned of $3,160 and $4,155) Accounts receivable, net of allowance of $581 and $533 Inventories Receivable under reverse repurchase agreements Deferred income taxes, net Income taxes receivable, net Prepaid revenue share, expenses and other assets Total current assets Prepaid revenue share, expenses and other assets, non-current Non-marketable equity investments Property and equipment, net Intangible assets, net Goodwill Total assets Liabilities and Stockholders Equity Current liabilities: Accounts payable Short-term debt Accrued compensation and benefits Accrued expenses and other current liabilities Accrued revenue share Securities lending payable Deferred revenue Income taxes payable, net Total current liabilities Long-term debt Deferred revenue, non-current Income taxes payable, non-current Deferred income taxes, net, non-current 1 $2,012 2,549 2,239 3,258 1,471 1,673 895 240 14,337 2,988 100 2,046 1,872 $2,094 2,150 1,445 3,007 1,437 2,237 882 0 13,252 2,989 79 2,184 1,978 $14,778 33,310 48,088 7,885 505 700 1,144 0 2,132 60,454 2,011 1,469 11,854 7,473 10,537 $93,798 $15,375 34,723 50,098 7,612 648 700 1,017 358 2,375 62,808 2,195 1,470 12,300 7,324 10,595 $96,692

Other long-term liabilities Stockholders' equity: Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding Class A and Class B common stock and additional paid-in capital, $0.001 par value per share: 12,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000); 329,979 (Class A 267,448, Class B 62,531) and par value of $330 (Class A $267, Class B $63) and 331,008 (Class A 270,165, Class B 60,843) and par value of $331 (Class A $270, Class B $61) shares issued and outstanding Class C capital stock, $0.001 par value per share: 3,000,000 shares authorized; no shares issued and outstanding Accumulated other comprehensive income Retained earnings Total stockholders' equity Total liabilities and stockholders equity

740

737

22,835 0 538 48,342 71,715 $93,798

23,429 0 356 51,688 75,473 $96,692

Google Inc. CONSOLIDATED STATEMENTS OF INCOME (In millions, except share amounts which are reflected in thousands and per share amounts)

Three Months Ended March 31, 2012 (unaudited) Revenues: Google (advertising and other) Motorola Mobile (hardware and other) Total revenues Costs and expenses: Cost of revenues - Google (advertising and other) (1) Cost of revenues - Motorola Mobile (hardware and other) (1) Research and development (1) Sales and marketing (1) General and administrative (1) Total costs and expenses Income from operations Interest and other income, net Income from continuing operations before income taxes Provision for income taxes Net income from continuing operations Net income from discontinued operations Net income 3,789 0 1,441 1,269 757 7,256 3,389 156 3,545 655 2,890 0 $2,890 5,136 808 1,837 1,586 1,125 10,492 3,477 134 3,611 287 3,324 22 $3,346 $10,645 0 10,645 $12,951 1,018 13,969 2013

Net income per share - basic: Continuing operations Discontinued operations Net income per share - basic $8.88 0.00 $8.88 $10.06 0.07 $10.13

Net income per share - diluted: Continuing operations Discontinued operations Net income per share - diluted $8.75 0.00 $8.75 $9.87 0.07 $9.94

Shares used in per share calculation - basic 3

325,299

330,454

Shares used in per share calculation - diluted

330,136

336,663

(1) Includes stock-based compensation expense as follows: Cost of revenues - Google (advertising and other) Cost of revenues - Motorola Mobile (hardware and other) Research and development Sales and marketing General and administrative $74 0 299 97 86 $556 $99 5 361 125 107 $697

Google Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Three Months Ended March 31, 2012 (unaudited) Operating activities Net income Adjustments: Depreciation and amortization of property and equipment Amortization of intangible and other assets Stock-based compensation expense Excess tax benefits from stock-based award activities Deferred income taxes Gain on sale of marketable equity securities Other Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable Income taxes, net Inventories Prepaid revenue share, expenses and other assets Accounts payable Accrued expenses and other liabilities Accrued revenue share Deferred revenue Net cash provided by operating activities Investing activities Purchases of property and equipment Purchases of marketable securities Maturities and sales of marketable securities Investments in non-marketable equity investments Cash collateral related to securities lending Investments in reverse repurchase agreements Acquisitions, net of cash acquired, and purchases of intangibles and other assets Net cash provided by (used in) investing activities Financing activities 5 (607) (8,688) 17,201 (103) 245 195 (92) 8,151 (1,203) (7,834) 6,319 (36) 564 0 (251) (2,441) 301 143 (32) (276) 169 (855) (11) 40 3,694 256 (335) (142) (212) 87 (1,059) (27) (33) 3,633 378 133 556 (28) 354 (44) (24) 584 315 708 (94) 202 0 37 $2,890 $3,346 2013

Net payments related to stock-based award activities Excess tax benefits from stock-based award activities Proceeds from issuance of debt, net of costs Repayments of debt Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

(47) 28 3,149 (1,900) 1,230 50 13,125 9,983 $23,108

(210) 94 2,922 (3,323) (517) (78) 597 14,778 $15,375

Reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial meaures The following tables present reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial measures (in millions, unaudited): Three Months Ended March 31, 2012 Google GAAP Revenues Costs and expenses: Cost of revenues Research and development Sales and marketing General and administrative Total costs and expenses 3,789 1,441 1,269 757 7,256 $74 299 97 86 $556 3,715 1,142 1,172 671 6,700 $10,645 Adjustments (1) Non-GAAP $10,645

Income from operations

$3,389

$3,945

Three Months Ended March 31, 2013 Google GAAP Revenues Costs and expenses: Cost of revenues Research and development Sales and marketing General and administrative Total costs and expenses 5,136 1,617 1,435 1,015 9,203 $99 338 118 100 $655 5,037 1,279 1,317 915 8,548 808 220 151 110 1,289 $10 42 15 25 $92 798 178 136 85 1,197 5,944 1,837 1,586 1,125 10,492 $109 380 133 125 $747 5,835 1,457 1,453 1,000 9,745 $12,951 Adjustments (1) Non-GAAP $12,951 GAAP $1,018 Motorola Mobile Adjustments (2) Non-GAAP $1,018 GAAP $13,969 Consolidated Adjustments (2) Non-GAAP $13,969

Income (loss) from operations

$3,748

$4,403

($271)

($179)

$3,477

$4,224

(1) To eliminate stock-based compensation expense. (2) To eliminate stock-based compensation expense, as well as restructuring and related charges recorded in Motorola Mobile.

Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures The following table presents certain non-GAAP results before certain items (in millions, except share amounts which are reflected in thousands and per share amounts, unaudited): Three Months Ended March 31, 2012 Non-GAAP Non-GAAP Operating Results Margin (b) Three Months Ended March 31, 2013 Non-GAAP Non-GAAP Operating Results Margin (b)

Consolidated

GAAP Actual

Operating Margin (a)

Adjustments $556 (c)

GAAP Actual

Operating Margin (a) Adjustments $681 (d) 66 (e)

Income from operations

$3,389

31.8%

$556 $556 (c) (118) (f)

$3,945

37.1%

$3,477

24.9%

$747 681 (d) (149) (f) 66 (e) (23) (g) (22) (h)

$4,224

30.2%

Net income Net income per share - diluted Shares used in per share calculation diluted

$2,890 $8.75 330,136

$438

$3,328 $10.08 330,136

$3,346 $9.94 336,663

$553

$3,899 $11.58 336,663

(a) Operating margin is defined as consolidated income from operations divided by consolidated revenues. (b) Non-GAAP operating margin is defined as non-GAAP consolidated income from operations divided by consolidated revenues. (c) To eliminate $556 million of stock-based compensation expense recorded in the first quarter of 2012. (d) To eliminate $681 million of stock-based compensation expense recorded in the first quarter of 2013. (e)To eliminate $66 million of restructuring and related charges recorded in Motorola Mobile. (f) To eliminate income tax effects related to expenses noted in (c) and (d). (g) To eliminate income tax effects related to expense noted in (e). (h) To eliminate net income from discontinued operations.

The following tables present certain non-GAAP results before certain items by business (in millions, unaudited): Three Months Ended March 31, 2012 Non-GAAP Non-GAAP Operating Results Margin (j) Three Months Ended March 31, 2013 Non-GAAP Non-GAAP Operating Results Margin (j)

Google

GAAP Actual

Operating Margin (i)

Adjustments $556 (k)

GAAP Actual

Operating Margin (i) Adjustments $655 (l)

Income from operations

$3,389

31.8%

$556

$3,945

37.1%

$3,748

28.9%

$655

$4,403

34.0%

(i) Operating margin is defined as Google income from operations divided by Google revenues. (j) Non-GAAP operating margin is defined as non-GAAP Google income from operations divided by Google revenues. (k) To eliminate $556 million of stock-based compensation expense recorded in the first quarter of 2012. (l) To eliminate $655 million of stock-based compensation expense recorded in the first quarter of 2013. Three Months Ended March 31, 2013 Non-GAAP Non-GAAP Operating Results Margin (n)

Motorola Mobile

GAAP Actual

Operating Margin (m) Adjustments $26 (o) 66 (p)

Loss from operations

($271)

-26.6%

$92

($179)

-17.6%

(m) Operating margin is defined as Motorola Mobile loss from operations divided by Motorola Mobile revenues. (n) Non-GAAP operating margin is defined as non-GAAP Motorola Mobile loss from operations divided by Motorola Mobile revenues. (o) To eliminate $26 million of stock-based compensation expense recorded in the first quarter of 2013. (p) To eliminate $66 million of restructuring and related charges recorded in Motorola Mobile.

Reconciliation from net cash provided by operating activities to free cash flow (in millions, unaudited): Three Months Ended March 31, 2013

Net cash provided by operating activities Less purchases of property and equipment Free cash flow

$3,633 (1,203) $2,430

Net cash used in investing activities*

($2,441)

Net cash used in financing activities


*Includes purchases of property and equipment.

($517)

Reconciliation from GAAP international revenues to non-GAAP international revenues (in millions, unaudited):

Consolidated

Three Months Ended March 31, 2013

Three Months Ended March 31, 2013

(using Q1'12's FX rates)


United Kingdom revenues (GAAP) Exclude foreign exchange impact on Q1'13 revenues using Q1'12 rates Exclude foreign exchange impact on Q1'13 revenues using Q4'12 rates Exclude hedging gains recognized in Q1'13 United Kingdom revenues excluding foreign exchange and hedging impact (Non-GAAP) $1,398 5 0 (20) $1,383

(using Q4'12's FX rates)


$1,398 0 28 (20) $1,406

Rest of the world revenues (GAAP) Exclude foreign exchange impact on Q1'13 revenues using Q1'12 rates Exclude foreign exchange impact on Q1'13 revenues using Q4'12 rates Exclude hedging gains recognized in Q1'13 Rest of the world revenues excluding foreign exchange and hedging impact (Non-GAAP)

$6,240 126 0 (15) $6,351

$6,240 0 (20) (15) $6,205

Google

Three Months Ended March 31, 2013

Three Months Ended March 31, 2013

(using Q1'12's FX rates)


United Kingdom revenues (GAAP) Exclude foreign exchange impact on Q1'13 revenues using Q1'12 rates Exclude foreign exchange impact on Q1'13 revenues using Q4'12 rates Exclude hedging gains recognized in Q1'13 United Kingdom revenues excluding foreign exchange and hedging impact (Non-GAAP) $1,387 5 0 (20) $1,372

(using Q4'12's FX rates)


$1,387 0 27 (20) $1,394

Rest of the world revenues (GAAP) Exclude foreign exchange impact on Q1'13 revenues using Q1'12 rates Exclude foreign exchange impact on Q1'13 revenues using Q4'12 rates Exclude hedging gains recognized in Q1'13 Rest of the world revenues excluding foreign exchange and hedging impact (Non-GAAP)

$5,728 105 0 (15) $5,818

$5,728 0 (16) (15) $5,697

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The following table presents our consolidated revenues by revenue source (in millions):

Three Months Ended March 31, 2012 (unaudited) Advertising revenues: Google websites Google Network Members' websites Total advertising revenues Other revenues Total Google revenues (advertising and other) Total Motorola Mobile revenues (hardware and other) Consolidated revenues $7,312 2,913 10,225 420 10,645 0 $10,645 $8,640 3,262 11,902 1,049 12,951 1,018 $13,969 2013

The following table presents our Google revenues, by revenue source, as a percentage of Google revenues:

Three Months Ended March 31, 2012 (unaudited) Advertising revenues: Google websites Google Network Members' websites Total advertising revenues Other revenues Google revenues 69% 27% 96% 4% 100% 67% 25% 92% 8% 100% 2013

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