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Google Inc. Announces Third Quarter 2013 Results
https://investor.google.com/earnings/2013/Q3_google_earnings.html
Oct 17th 2013, 20:51
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MOUNTAIN VIEW, Calif. – October 17, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended September 30, 2013.
"Google had another strong quarter with $14.9 billion in revenue and great product progress," said Larry Page, CEO of Google. "We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device."
Q3 Financial Summary
Google Inc. reported consolidated revenues of $14.89 billion for the quarter ended September 30, 2013, an increase of 12% compared to the third quarter of 2012. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the third quarter of 2013, TAC totaled $2.97 billion, or 24% of advertising revenues.
Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.
GAAP operating income in the third quarter of 2013 was $3.44 billion, or 23% of revenues. This compares to GAAP operating income of $2.74 billion, or 21% of revenues, in the third quarter of 2012. Non-GAAP operating income in the third quarter of 2013 was $4.34 billion, or 29% of revenues. This compares to non-GAAP operating income of $3.76 billion, or 28% of revenues, in the third quarter of 2012.
GAAP net income including net income from discontinued operations in the third quarter of 2013 was $2.97 billion, compared to $2.18 billion in the third quarter of 2012. Non-GAAP net income in the third quarter of 2013 was $3.64 billion, compared to $2.96 billion in the third quarter of 2012.
GAAP EPS including impact from net income from discontinued operations in the third quarter of 2013 was $8.75 on 339 million diluted shares outstanding, compared to $6.53 in the third quarter of 2012 on 333 million diluted shares outstanding. Non-GAAP EPS in the third quarter of 2013 was $10.74, compared to $8.87 in the third quarter of 2012.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net income or loss from discontinued operations. In the third quarter of 2013, the expense related to SBC and the related tax benefits were $886 million and $207 million compared to $706 million and $155 million in the third quarter of 2012. In the third quarter of 2013, restructuring and related charges and the related tax benefits were $12 million and $3 million, compared to $313 million and $67 million in the third quarter of 2012. In addition, net income from discontinued operations in the third quarter of 2013 was $15 million, compared to net income from discontinued operations of $18 million in the third quarter of 2012.
Q3 Financial Highlights
Revenues and other information – On a consolidated basis, Google Inc. revenues for the quarter ended September 30, 2013 were $14.89 billion, an increase of 12% compared to the third quarter of 2012.
Google Segment Revenues – Google segment revenues were $13.77 billion, or 92% of consolidated revenues, in the third quarter of 2013, representing a 19% increase over third quarter 2012 Google segment revenues of $11.53 billion.
Google Sites Revenues – Google-owned sites generated segment revenues of $9.39 billion, or 68% of total Google segment revenues, in the third quarter of 2013. This represents a 22% increase over third quarter 2012 Google sites segment revenues of $7.73 billion.
Google Network Revenues – Google's partner sites generated segment revenues of $3.15 billion, or 23% of total Google segment revenues, in the third quarter of 2013, compared to $3.13 billion of Google network segment revenues in the third quarter of 2012.
Other Google Revenues – Other revenues from the Google segment were $1.23 billion, or 9% of total Google segment revenues, in the third quarter of 2013. This represents an 85% increase over third quarter 2012 other Google segment revenues of $666 million.
Google Segment International Revenues – Google segment revenues from outside of the United States totaled $7.67 billion, representing 56% of total Google segment revenues in the third quarter of 2013, compared to 55% in the second quarter of 2013 and 53% in the third quarter of 2012.
Google segment revenues from the United Kingdom totaled $1.39 billion, representing 10% of total Google segment revenues in the third quarter of 2013, compared to 11% in the third quarter of 2012.
Foreign Exchange Impact on Google Segment Revenues – Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the second quarter of 2013 through the third quarter of 2013, our Google segment revenues in the third quarter of 2013 would have been $41 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the third quarter of 2012 through the third quarter of 2013, our Google segment revenues in the third quarter of 2013 would have been $135 million higher.
In the third quarter of 2013, we recognized a benefit of $22 million to Google segment revenues through our foreign exchange risk management program, compared to $62 million in the third quarter of 2012.
Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the third quarter of 2012 and increased approximately 8% over the second quarter of 2013.
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 8% over the third quarter of 2012 and decreased approximately 4% over the second quarter of 2013.
TAC – Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $2.97 billion in the third quarter of 2013, compared to $2.77 billion in the third quarter of 2012. TAC as a percentage of advertising revenues was 24% in the third quarter of 2013, compared to 26% in the third quarter of 2012.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.22 billion in the third quarter of 2013. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $755 million in the third quarter of 2013.
Motorola Mobile Segment Revenues – Motorola Mobile segment revenues were $1.18 billion, or 8% of consolidated revenues in the third quarter of 2013, compared to $1.78 billion, or 13% of consolidated revenues in the third quarter of 2012.
Elimination and Other – Beginning in Q3 2013, Google and Motorola segment revenues are impacted by intersegment transactions that are eliminated in consolidation. Additionally, segment revenues associated with certain products were recognized this quarter in the segment results, but deferred to future periods in our consolidated financial statements. Such intersegment revenues and deferred revenues were $63 million in the third quarter of 2013.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of manufacturing and inventory-related costs, data center operational expenses, amortization of intangible assets, and content acquisition costs, increased to $3.44 billion, or 23% of revenues, in the third quarter of 2013, compared to $3.19 billion, or 24% of revenues, in the third quarter of 2012.
Operating Expenses – Operating expenses, other than cost of revenues, were $5.04 billion in the third quarter of 2013, or 34% of revenues, compared to $4.61 billion in the third quarter of 2012, or 35% of revenues.
Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $281 million for the third quarter of 2013, compared to $287 million in the third quarter of 2012. Of the $281 million, $153 million was as a result of the acquisition of Motorola, of which $116 million is included in Google segment results and $37 million is included in Motorola Mobile segment results.
Stock-Based Compensation (SBC) – In the third quarter of 2013, the total charge related to SBC was $886 million, compared to $750 million in the third quarter of 2012. We currently estimate SBC charges for grants to employees prior to September 30, 2013 to be approximately $3.29 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after September 30, 2013 or non-employee stock awards that have been or may be granted.
Operating Income – On a consolidated basis, GAAP operating income in the third quarter of 2013 was $3.44 billion, or 23% of revenues. This compares to GAAP operating income of $2.74 billion, or 21% of revenues, in the third quarter of 2012. Non-GAAP operating income in the third quarter of 2013 was $4.34 billion, or 29% of revenues. This compares to non-GAAP operating income of $3.76 billion, or 28% of revenues, in the third quarter of 2012.
Google Segment Operating Income – Google segment operating income in the third quarter of 2013 was $4.64 billion, or 34% of Google segment revenues. This compares to segment operating income of $3.95 billion in the third quarter of 2012, or 34% of Google segment revenues.
Motorola Mobile Segment Operating Loss – Motorola Mobile segment operating loss in the third quarter of 2013 was $248 million, or -21% of Motorola Mobile segment revenues. This compares to segment operating loss of $192 million, or -11% of Motorola Mobile segment revenues in the third quarter of 2012.
Interest and Other Income, Net – Interest and other income, net, was $24 million in the third quarter of 2013, compared to $65 million in the third quarter of 2012.
Income Taxes – Our effective tax rate was 15% for the third quarter of 2013.
Net Income – Consolidated GAAP net income in the third quarter of 2013 was $2.97 billion, compared to $2.18 billion in the third quarter of 2012. Non-GAAP consolidated net income was $3.64 billion in the third quarter of 2013, compared to $2.96 billion in the third quarter of 2012. GAAP EPS in the third quarter of 2013 was $8.75 on 339 million diluted shares outstanding, compared to $6.53 in the third quarter of 2012 on 333 million diluted shares outstanding. Non-GAAP EPS in the third quarter of 2013 was $10.74, compared to $8.87 in the third quarter of 2012.
Cash Flow and Capital Expenditures – Net cash provided by operating activities in the third quarter of 2013 totaled $5.08 billion, compared to $4.0 billion in the third quarter of 2012. In the third quarter of 2013, capital expenditures were $2.29 billion, the majority of which was for production equipment, data-center construction, and real estate purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the third quarter of 2013, free cash flow was $2.79 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of September 30, 2013, cash, cash equivalents, and marketable securities were $56.52 billion.
Headcount – On a worldwide basis, we employed 46,421 full-time employees (42,162 in Google and 4,259 in Motorola Mobile) as of September 30, 2013, compared to 44,777 full-time employees (40,178 in Google and 4,599 Motorola Mobile) as of June 30, 2013.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google's third quarter 2013 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including segment results and the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site.
We also announce investor information, including news and commentary about our business and financial performance, SEC filings, notices of investor events and our press and earnings releases, on our investor relations website (http://investor.google.com) and our investor relations Google+ page (https://plus.google.com/+GoogleInvestorRelations/posts).
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our investments in areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2012 and our most recent Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 which are on file with the SEC and are available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013. All information provided in this release and in the attachments is as of October 17, 2013, and we undertake no duty to update this information unless required by law.
SEGMENT RESULTS
In addition to consolidated results, management reviews financial information for the Google and Motorola operating segments. The presentation of segment results is a required disclosure in accordance with GAAP as part of our consolidated financial statements, and in accordance with GAAP, segment results are consistent with what is provided to the chief operating decision maker (CODM) for purposes of making decisions about allocating resources to the segment and assessing its performance. Certain items, including stock-based compensation expense and restructuring and other related charges, are not reflected in our segment results because this information is not reviewed by the CODM when assessing the performance of our operating segments. Similarly, revenues resulting from intersegment transactions that would be eliminated on consolidation, and revenues from certain product sales whose recognition would be deferred in our consolidated financial statements, are included in our segment results because this information is reviewed by the CODM when assessing the performance of the operating segments. Because of the eliminations, the sum of the two segment results will not equal the consolidated results unless the eliminations are taken into account. For more information on segment results, please see the table captioned "Reconciliations of selected non-GAAP financial measures and segment results to the nearest comparable GAAP financial measures," which shows the adjustments to our consolidated results for the quarter ended September 30, 2013 that we have made in presenting our segment results, included at the end of this release.
ABOUT NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of selected non-GAAP financial measures and segments results to the nearest comparable GAAP financial measures," "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures," "Reconciliation from net cash provided by operating activities to free cash flow," and "Reconciliation from GAAP international revenues to non-GAAP international revenues" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature or relate to restructuring activities. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income excluding expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC, and as applicable, other special items so that Google's management and investors can compare Google's recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google's management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google's recurring core business operating results and those of other companies, as well as providing Google's management with an important tool for financial and operational decision making and for evaluating Google's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google's business. Second, SBC is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP net income and EPS. We define non-GAAP net income as net income excluding expenses related to SBC and, as applicable, other special items less the related tax effects, as well as net income (loss) from discontinued operations. The tax effects of SBC and, as applicable, other special items are calculated using the tax-deductible portion of SBC, and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year.
Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange rate movements and hedging activities. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management's internal comparison to our historical performance.
The accompanying tables have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.
Contact
Julia Duncan
Investor Relations
+1 650-253-3045
juliaduncan@google.com
For Media: press@google.com
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Thursday, October 17, 2013
Monday, September 30, 2013
Google News - Investor Relations - Google: Google Announces Date of Third Quarter 2013 Financial Results Conference Call
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Announces Date of Third Quarter 2013 Financial Results Conference Call
https://investor.google.com/releases/2013/0930.html
Sep 30th 2013, 20:41
MOUNTAIN VIEW, Calif. (September 30, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss third quarter 2013 financial results on Thursday, October 17th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on October 17th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Julia Duncan
Investor Relations
juliaduncan@google.com
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News for Google's Investor Relations
Google Announces Date of Third Quarter 2013 Financial Results Conference Call
https://investor.google.com/releases/2013/0930.html
Sep 30th 2013, 20:41
MOUNTAIN VIEW, Calif. (September 30, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss third quarter 2013 financial results on Thursday, October 17th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on October 17th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Julia Duncan
Investor Relations
juliaduncan@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Massacres That Matter - Part 1 - 'Responsibility To Protect' In Egypt, Libya And SyriaMassacres That Matter - Part 2 - The Media Response On Egypt, Libya And SyriaNational demonstration: No attack on Syria - Saturday 31 August, 12 noon, Temple Place, London, UK
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Thursday, July 18, 2013
Google News - Investor Relations - Google: Google Inc. Announces Second Quarter 2013 Results
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Inc. Announces Second Quarter 2013 Results
https://investor.google.com/earnings/2013/Q2_google_earnings.html
Jul 18th 2013, 20:42
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MOUNTAIN VIEW, Calif. – July 18, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended June 30, 2013.
"Google had a great quarter with over $14 billion in revenue – up 19% year-on-year," said Larry Page, CEO of Google. "The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google. With more devices, more information, and more activity online than ever, the potential to improve people's lives even more is immense."
Q2 Financial Summary
Google Inc. reported consolidated revenues of $14.11 billion for the quarter ended June 30, 2013, an increase of 19% compared to the second quarter of 2012. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the second quarter of 2013, TAC totaled $3.01 billion, or 25% of advertising revenues.
Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.
GAAP operating income in the second quarter of 2013 was $3.12 billion, or 22% of revenues. This compares to GAAP operating income of $3.24 billion, or 27% of revenues, in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $3.99 billion, or 28% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 33% of revenues, in the second quarter of 2012.
GAAP net income including net income from discontinued operations in the second quarter of 2013 was $3.23 billion, compared to $2.79 billion in the second quarter of 2012. Non-GAAP net income in the second quarter of 2013 was $3.23 billion, compared to $3.36 billion in the second quarter of 2012.
GAAP EPS including impact from net income from discontinued operations in the second quarter of 2013 was$9.54 on 338 million diluted shares outstanding, compared to $8.42 in the second quarter of 2012 on 331 million diluted shares outstanding. Non-GAAP EPS in the second quarter of 2013 was $9.56, compared to $10.16 in the second quarter of 2012.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net income or loss from discontinued operations. In the second quarter of 2013, the expense related to SBC and the related tax benefits were $778 million and $167 million compared to $561 million and $134 million in the second quarter of 2012. In the second quarter of 2013, restructuring and related charges recorded in our Motorola Mobile business and the related tax benefits were $89 million and $21 million, compared to $141 million and $39 million in the second quarter of 2012. In addition, net income from discontinued operations in the second quarter of 2013 was $674 million, compared to net loss from discontinued operations of $48 million in the second quarter of 2012.
Q2 Financial Highlights
Revenues and other information – On a consolidated basis, Google Inc. revenues for the quarter ended June 30, 2013 were $14.11 billion, an increase of 19% compared to the second quarter of 2012.
Google Revenues (advertising and other) – Google revenues were $13.11 billion, or 93% of consolidated revenues, in the second quarter of 2013, representing a 20% increase over second quarter 2012 revenues of $10.96 billion.
Google Sites Revenues – Google-owned sites generated revenues of $8.87 billion, or 68% of total Google revenues, in the second quarter of 2013. This represents an 18% increase over second quarter 2012 Google sites revenues of $7.54 billion.
Google Network Revenues - Google's partner sites generated revenues of $3.19 billion, or 24% of total Google revenues, in the second quarter of 2013. This represents a 7% increase from second quarter 2012 Google network revenues of $2.98 billion.
Other Revenues – Other revenues from Google were $1.05 billion, or 8% of total Google revenues, in the second quarter of 2013. This represents a 138% increase over second quarter 2012 other revenues of $439 million.
Google International Revenues – Google revenues from outside of the United States totaled $7.2 billion, representing 55% of total Google revenues in the second quarter of 2013, compared to 55% in the first quarter of 2013 and 54% in the second quarter of 2012.
Foreign Exchange Impact on Google Revenues - Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2013 through the second quarter of 2013, our Google revenues in the second quarter of 2013 would have been $177 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the second quarter of 2012 through the second quarter of 2013, our Google revenues in the second quarter of 2013 would have been $217 million higher.
Google revenues from the United Kingdom totaled $1.32 billion, representing 10% of Google revenues in the second quarter of 2013, compared to 11% in the second quarter of 2012.
In the second quarter of 2013, we recognized a benefit of $35 million to Google revenues through our foreign exchange risk management program, compared to $81 million in the second quarter of 2012.
Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 23% over the second quarter of 2012 and increased approximately 4% over the first quarter of 2013.
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the second quarter of 2012 and decreased approximately 2% over the first quarter of 2013.
TAC – Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.01 billion in the second quarter of 2013, compared to $2.60 billion in the second quarter of 2012. TAC as a percentage of advertising revenues was 25% in the second quarter of 2013, compared to 25% in the second quarter of 2012.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.31 billion in the second quarter of 2013. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $706 million in the second quarter of 2013.
Motorola Mobile Revenues (hardware and other) - Motorola Mobile revenues were $998 million, or 7% of consolidated revenues in the second quarter of 2013, compared to $843 million, or 7% of consolidated revenues in the second quarter of 2012.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of manufacturing and inventory-related costs, data center operational expenses, amortization of intangible assets, and content acquisition costs, increased to $3.05 billion, or 22% of revenues, in the second quarter of 2013, compared to $2.08 billion, or 18% of revenues, in the second quarter of 2012.
Operating Expenses – Operating expenses, other than cost of revenues, were $4.92 billion in the second quarter of 2013, or 35% of revenues, compared to $3.89 billion in the second quarter of 2012, or 33% of revenues.
Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $283 million for the second quarter of 2013, compared to $184 million in the second quarter of 2012. Of the $283 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.
Stock-Based Compensation (SBC) – In the second quarter of 2013, the total charge related to SBC was $783 million, compared to $635 million in the second quarter of 2012. We currently estimate SBC charges for grants to employees prior to June 30, 2013 to be approximately $3.2 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after June 30, 2013 or non-employee stock awards that have been or may be granted.
Operating Income – On a consolidated basis, GAAP operating income in the second quarter of 2013 was $3.12 billion, or 22% of revenues. This compares to GAAP operating income of $3.24 billion, or 27% of revenues, in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $3.99 billion, or 28% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 33% of revenues, in the second quarter of 2012.
Google Operating Income – GAAP operating income for Google was $3.47 billion, or 26% of Google revenues, in the second quarter of 2013. This compares to GAAP operating income of $3.44 billion, or 31% of Google revenues, in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $4.21 billion, or 32% of Google revenues. This compares to non-GAAP operating income of $3.99 billion in the second quarter of 2012, or 36% of Google revenues.
Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $342 million, or -34% of Motorola Mobile revenues in the second quarter of 2013. This compares to GAAP operating loss of $199 million, or -24% of Motorola Mobile revenues in the second quarter of 2012. Non-GAAP operating loss for Motorola Mobile in the second quarter of 2013 was $218 million, or -22% of Motorola Mobile revenues. This compares to non-GAAP operating loss of $49 million, or -6% of Motorola Mobile revenues in the second quarter of 2012.
Interest and Other Income, Net – Interest and other income, net, was $247 million in the second quarter of 2013, compared to $253 million in the second quarter of 2012.
Income Taxes – Our effective tax rate was 24% for the second quarter of 2013.
Net Income (Loss) from Discontinued Operations – Net income from discontinued operations in the second quarter of 2013 was $674 million which included a gain on disposal of Motorola Home of $747 million, compared to a loss of $48 million in the second quarter of 2012.
Net Income – GAAP net income in the second quarter of 2013 was $3.23 billion, compared to $2.79 billion in the second quarter of 2012. Non-GAAP net income was $3.23 billion in the second quarter of 2013, compared to $3.36 billion in the second quarter of 2012. GAAP EPS in the second quarter of 2013 was $9.54 on 338 million diluted shares outstanding, compared to $8.42 in the second quarter of 2012 on 331 million diluted shares outstanding. Non-GAAP EPS in the second quarter of 2013 was $9.56, compared to $10.16 in the second quarter of 2012.
Cash Flow and Capital Expenditures - Net cash provided by operating activities in the second quarter of 2013 totaled $4.71 billion, compared to $4.25 billion in the second quarter of 2012. In the second quarter of 2013, capital expenditures were $1.6 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the second quarter of 2013, free cash flow was $3.09 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of June 30, 2013, cash, cash equivalents, and marketable securities were $54.4 billion.
Headcount – On a worldwide basis, we employed 44,777 full-time employees (40,178 in Google and 4,599 in Motorola Mobile) as of June 30, 2013, compared to 53,891 full-time employees (38,739 in Google, 9,982 Motorola Mobile, and 5,170 Motorola Home) as of March 31, 2013.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google's second quarter 2013 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site.
We also announce investor information, including news and commentary about our business and financial performance, SEC filings, notices of investor events and our press and earnings releases, on our investor relations website (http://investor.google.com) and our investor relations Google+ page (https://plus.google.com/+GoogleInvestorRelations/posts).
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our investments in areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2012 and our most recent Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 which are on file with the SEC and are available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. All information provided in this release and in the attachments is as of July 18, 2013, and we undertake no duty to update this information unless required by law.
ABOUT NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial measures,"
"Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures," "Reconciliation from net cash provided by operating activities to free cash flow," and "Reconciliation from GAAP international revenues to non-GAAP international revenues" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC, and as applicable, other special items so that Google's management and investors can compare Google's recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google's management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google's recurring core business operating results and those of other companies, as well as providing Google's management with an important tool for financial and operational decision making and for evaluating Google's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google's business. Second, SBC is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP net income and EPS. We define non-GAAP net income as net income plus expenses related to SBC and, as applicable, other special items less the related tax effects, as well as net income (loss) from discontinued operations. The tax effects of SBC and, as applicable, other special items are calculated using the tax-deductible portion of SBC, and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year.
Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange and hedging. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management's internal comparison to our historical performance.
The accompanying tables have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
For Media:
press@google.com
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News for Google's Investor Relations
Google Inc. Announces Second Quarter 2013 Results
https://investor.google.com/earnings/2013/Q2_google_earnings.html
Jul 18th 2013, 20:42
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MOUNTAIN VIEW, Calif. – July 18, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended June 30, 2013.
"Google had a great quarter with over $14 billion in revenue – up 19% year-on-year," said Larry Page, CEO of Google. "The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google. With more devices, more information, and more activity online than ever, the potential to improve people's lives even more is immense."
Q2 Financial Summary
Google Inc. reported consolidated revenues of $14.11 billion for the quarter ended June 30, 2013, an increase of 19% compared to the second quarter of 2012. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the second quarter of 2013, TAC totaled $3.01 billion, or 25% of advertising revenues.
Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.
GAAP operating income in the second quarter of 2013 was $3.12 billion, or 22% of revenues. This compares to GAAP operating income of $3.24 billion, or 27% of revenues, in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $3.99 billion, or 28% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 33% of revenues, in the second quarter of 2012.
GAAP net income including net income from discontinued operations in the second quarter of 2013 was $3.23 billion, compared to $2.79 billion in the second quarter of 2012. Non-GAAP net income in the second quarter of 2013 was $3.23 billion, compared to $3.36 billion in the second quarter of 2012.
GAAP EPS including impact from net income from discontinued operations in the second quarter of 2013 was$9.54 on 338 million diluted shares outstanding, compared to $8.42 in the second quarter of 2012 on 331 million diluted shares outstanding. Non-GAAP EPS in the second quarter of 2013 was $9.56, compared to $10.16 in the second quarter of 2012.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net income or loss from discontinued operations. In the second quarter of 2013, the expense related to SBC and the related tax benefits were $778 million and $167 million compared to $561 million and $134 million in the second quarter of 2012. In the second quarter of 2013, restructuring and related charges recorded in our Motorola Mobile business and the related tax benefits were $89 million and $21 million, compared to $141 million and $39 million in the second quarter of 2012. In addition, net income from discontinued operations in the second quarter of 2013 was $674 million, compared to net loss from discontinued operations of $48 million in the second quarter of 2012.
Q2 Financial Highlights
Revenues and other information – On a consolidated basis, Google Inc. revenues for the quarter ended June 30, 2013 were $14.11 billion, an increase of 19% compared to the second quarter of 2012.
Google Revenues (advertising and other) – Google revenues were $13.11 billion, or 93% of consolidated revenues, in the second quarter of 2013, representing a 20% increase over second quarter 2012 revenues of $10.96 billion.
Google Sites Revenues – Google-owned sites generated revenues of $8.87 billion, or 68% of total Google revenues, in the second quarter of 2013. This represents an 18% increase over second quarter 2012 Google sites revenues of $7.54 billion.
Google Network Revenues - Google's partner sites generated revenues of $3.19 billion, or 24% of total Google revenues, in the second quarter of 2013. This represents a 7% increase from second quarter 2012 Google network revenues of $2.98 billion.
Other Revenues – Other revenues from Google were $1.05 billion, or 8% of total Google revenues, in the second quarter of 2013. This represents a 138% increase over second quarter 2012 other revenues of $439 million.
Google International Revenues – Google revenues from outside of the United States totaled $7.2 billion, representing 55% of total Google revenues in the second quarter of 2013, compared to 55% in the first quarter of 2013 and 54% in the second quarter of 2012.
Foreign Exchange Impact on Google Revenues - Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2013 through the second quarter of 2013, our Google revenues in the second quarter of 2013 would have been $177 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the second quarter of 2012 through the second quarter of 2013, our Google revenues in the second quarter of 2013 would have been $217 million higher.
Google revenues from the United Kingdom totaled $1.32 billion, representing 10% of Google revenues in the second quarter of 2013, compared to 11% in the second quarter of 2012.
In the second quarter of 2013, we recognized a benefit of $35 million to Google revenues through our foreign exchange risk management program, compared to $81 million in the second quarter of 2012.
Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 23% over the second quarter of 2012 and increased approximately 4% over the first quarter of 2013.
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the second quarter of 2012 and decreased approximately 2% over the first quarter of 2013.
TAC – Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.01 billion in the second quarter of 2013, compared to $2.60 billion in the second quarter of 2012. TAC as a percentage of advertising revenues was 25% in the second quarter of 2013, compared to 25% in the second quarter of 2012.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.31 billion in the second quarter of 2013. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $706 million in the second quarter of 2013.
Motorola Mobile Revenues (hardware and other) - Motorola Mobile revenues were $998 million, or 7% of consolidated revenues in the second quarter of 2013, compared to $843 million, or 7% of consolidated revenues in the second quarter of 2012.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of manufacturing and inventory-related costs, data center operational expenses, amortization of intangible assets, and content acquisition costs, increased to $3.05 billion, or 22% of revenues, in the second quarter of 2013, compared to $2.08 billion, or 18% of revenues, in the second quarter of 2012.
Operating Expenses – Operating expenses, other than cost of revenues, were $4.92 billion in the second quarter of 2013, or 35% of revenues, compared to $3.89 billion in the second quarter of 2012, or 33% of revenues.
Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $283 million for the second quarter of 2013, compared to $184 million in the second quarter of 2012. Of the $283 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.
Stock-Based Compensation (SBC) – In the second quarter of 2013, the total charge related to SBC was $783 million, compared to $635 million in the second quarter of 2012. We currently estimate SBC charges for grants to employees prior to June 30, 2013 to be approximately $3.2 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after June 30, 2013 or non-employee stock awards that have been or may be granted.
Operating Income – On a consolidated basis, GAAP operating income in the second quarter of 2013 was $3.12 billion, or 22% of revenues. This compares to GAAP operating income of $3.24 billion, or 27% of revenues, in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $3.99 billion, or 28% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 33% of revenues, in the second quarter of 2012.
Google Operating Income – GAAP operating income for Google was $3.47 billion, or 26% of Google revenues, in the second quarter of 2013. This compares to GAAP operating income of $3.44 billion, or 31% of Google revenues, in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $4.21 billion, or 32% of Google revenues. This compares to non-GAAP operating income of $3.99 billion in the second quarter of 2012, or 36% of Google revenues.
Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $342 million, or -34% of Motorola Mobile revenues in the second quarter of 2013. This compares to GAAP operating loss of $199 million, or -24% of Motorola Mobile revenues in the second quarter of 2012. Non-GAAP operating loss for Motorola Mobile in the second quarter of 2013 was $218 million, or -22% of Motorola Mobile revenues. This compares to non-GAAP operating loss of $49 million, or -6% of Motorola Mobile revenues in the second quarter of 2012.
Interest and Other Income, Net – Interest and other income, net, was $247 million in the second quarter of 2013, compared to $253 million in the second quarter of 2012.
Income Taxes – Our effective tax rate was 24% for the second quarter of 2013.
Net Income (Loss) from Discontinued Operations – Net income from discontinued operations in the second quarter of 2013 was $674 million which included a gain on disposal of Motorola Home of $747 million, compared to a loss of $48 million in the second quarter of 2012.
Net Income – GAAP net income in the second quarter of 2013 was $3.23 billion, compared to $2.79 billion in the second quarter of 2012. Non-GAAP net income was $3.23 billion in the second quarter of 2013, compared to $3.36 billion in the second quarter of 2012. GAAP EPS in the second quarter of 2013 was $9.54 on 338 million diluted shares outstanding, compared to $8.42 in the second quarter of 2012 on 331 million diluted shares outstanding. Non-GAAP EPS in the second quarter of 2013 was $9.56, compared to $10.16 in the second quarter of 2012.
Cash Flow and Capital Expenditures - Net cash provided by operating activities in the second quarter of 2013 totaled $4.71 billion, compared to $4.25 billion in the second quarter of 2012. In the second quarter of 2013, capital expenditures were $1.6 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the second quarter of 2013, free cash flow was $3.09 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of June 30, 2013, cash, cash equivalents, and marketable securities were $54.4 billion.
Headcount – On a worldwide basis, we employed 44,777 full-time employees (40,178 in Google and 4,599 in Motorola Mobile) as of June 30, 2013, compared to 53,891 full-time employees (38,739 in Google, 9,982 Motorola Mobile, and 5,170 Motorola Home) as of March 31, 2013.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google's second quarter 2013 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site.
We also announce investor information, including news and commentary about our business and financial performance, SEC filings, notices of investor events and our press and earnings releases, on our investor relations website (http://investor.google.com) and our investor relations Google+ page (https://plus.google.com/+GoogleInvestorRelations/posts).
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our investments in areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2012 and our most recent Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 which are on file with the SEC and are available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. All information provided in this release and in the attachments is as of July 18, 2013, and we undertake no duty to update this information unless required by law.
ABOUT NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial measures,"
"Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures," "Reconciliation from net cash provided by operating activities to free cash flow," and "Reconciliation from GAAP international revenues to non-GAAP international revenues" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC, and as applicable, other special items so that Google's management and investors can compare Google's recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google's management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google's recurring core business operating results and those of other companies, as well as providing Google's management with an important tool for financial and operational decision making and for evaluating Google's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google's business. Second, SBC is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP net income and EPS. We define non-GAAP net income as net income plus expenses related to SBC and, as applicable, other special items less the related tax effects, as well as net income (loss) from discontinued operations. The tax effects of SBC and, as applicable, other special items are calculated using the tax-deductible portion of SBC, and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year.
Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange and hedging. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management's internal comparison to our historical performance.
The accompanying tables have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
For Media:
press@google.com
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Google News - Investor Relations - Google: Google Announces Date of Second Quarter 2013 Financial Results Conference Call
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Announces Date of Second Quarter 2013 Financial Results Conference Call
https://investor.google.com/releases/2013/0627.html
Jul 18th 2013, 20:42
MOUNTAIN VIEW, Calif. (June 27, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss second quarter 2013 financial results on Thursday, July 18th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on July 18th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
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News for Google's Investor Relations
Google Announces Date of Second Quarter 2013 Financial Results Conference Call
https://investor.google.com/releases/2013/0627.html
Jul 18th 2013, 20:42
MOUNTAIN VIEW, Calif. (June 27, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss second quarter 2013 financial results on Thursday, July 18th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on July 18th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: 'You Say What You Like, Because They Like What You Say' - http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/731-you-say-what-you-like-because-they-like-what-you-say.html
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Google News - Investor Relations - Google: Google Announces Internet Availability of Proxy Materials for its 2013 Annual Meeting of Stockholders
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Announces Internet Availability of Proxy Materials for its 2013 Annual Meeting of Stockholders
https://investor.google.com/releases/2013/0424.html
Jul 18th 2013, 20:42
MOUNTAIN VIEW, Calif. (April 24, 2013) - Google Inc. (NASDAQ: GOOG) today announced the internet availability of proxy materials for its 2013 Annual Meeting of Stockholders pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules.
Pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules, companies may satisfy their obligation to deliver proxy materials by delivering a "Notice of Internet Availability of Proxy Materials" to stockholders, providing internet access to the proxy materials, and providing a printed set of proxy materials by mail to any stockholder who requests them. Google has elected to take full advantage of these rules in order to minimize impact on the environment and the maximize cost savings relating to the printing of the proxy materials.
Google's Annual Report on Form 10-K for the year ended December 31, 2012 and proxy statement for its 2013 Annual Meeting of Stockholders have been filed with the U.S. Securities and Exchange Commission, and may be viewed on Google's investor relations website at http://investor.google.com/proxy.html. Google's stockholders may obtain hard copies of these proxy materials at no charge by following the instructions provided on its website or in the "Notice of Internet Availability of Proxy Materials."
Google's 2013 Annual Meeting of Stockholders will be held on Thursday, June 6, 2013 at 2:00 p.m., local time, at Google's corporate headquarters at 1600 Amphitheatre Parkway, Mountain View, California 94043. For your convenience, we are pleased to offer a live webcast of the Annual Meeting at http://investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contacts:
Investor Relations
Willa Chalmers
+1-650-214-3381
willa@google.com
Corporate Communications:
press@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: 'You Say What You Like, Because They Like What You Say' - http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/731-you-say-what-you-like-because-they-like-what-you-say.html
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News for Google's Investor Relations
Google Announces Internet Availability of Proxy Materials for its 2013 Annual Meeting of Stockholders
https://investor.google.com/releases/2013/0424.html
Jul 18th 2013, 20:42
MOUNTAIN VIEW, Calif. (April 24, 2013) - Google Inc. (NASDAQ: GOOG) today announced the internet availability of proxy materials for its 2013 Annual Meeting of Stockholders pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules.
Pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules, companies may satisfy their obligation to deliver proxy materials by delivering a "Notice of Internet Availability of Proxy Materials" to stockholders, providing internet access to the proxy materials, and providing a printed set of proxy materials by mail to any stockholder who requests them. Google has elected to take full advantage of these rules in order to minimize impact on the environment and the maximize cost savings relating to the printing of the proxy materials.
Google's Annual Report on Form 10-K for the year ended December 31, 2012 and proxy statement for its 2013 Annual Meeting of Stockholders have been filed with the U.S. Securities and Exchange Commission, and may be viewed on Google's investor relations website at http://investor.google.com/proxy.html. Google's stockholders may obtain hard copies of these proxy materials at no charge by following the instructions provided on its website or in the "Notice of Internet Availability of Proxy Materials."
Google's 2013 Annual Meeting of Stockholders will be held on Thursday, June 6, 2013 at 2:00 p.m., local time, at Google's corporate headquarters at 1600 Amphitheatre Parkway, Mountain View, California 94043. For your convenience, we are pleased to offer a live webcast of the Annual Meeting at http://investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contacts:
Investor Relations
Willa Chalmers
+1-650-214-3381
willa@google.com
Corporate Communications:
press@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: 'You Say What You Like, Because They Like What You Say' - http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/731-you-say-what-you-like-because-they-like-what-you-say.html
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Thursday, June 27, 2013
Google News - Investor Relations - Google: Google Announces Date of Second Quarter 2013 Financial Results Conference Call
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Announces Date of Second Quarter 2013 Financial Results Conference Call
http://investor.google.com/releases/2013/0627.html
Jun 27th 2013, 20:37
MOUNTAIN VIEW, Calif. (June 27, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss second quarter 2013 financial results on Thursday, July 18th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on July 18th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: 'You Say What You Like, Because They Like What You Say' - http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/731-you-say-what-you-like-because-they-like-what-you-say.html
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News for Google's Investor Relations
Google Announces Date of Second Quarter 2013 Financial Results Conference Call
http://investor.google.com/releases/2013/0627.html
Jun 27th 2013, 20:37
MOUNTAIN VIEW, Calif. (June 27, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss second quarter 2013 financial results on Thursday, July 18th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on July 18th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: 'You Say What You Like, Because They Like What You Say' - http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/731-you-say-what-you-like-because-they-like-what-you-say.html
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Thursday, May 30, 2013
Google News - Investor Relations - Google: Google Announces Internet Availability of Proxy Materials for its 2013 Annual Meeting of Stockholders
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Announces Internet Availability of Proxy Materials for its 2013 Annual Meeting of Stockholders
http://investor.google.com/releases/2013/0424.html
May 30th 2013, 21:06
MOUNTAIN VIEW, Calif. (April 24, 2013) - Google Inc. (NASDAQ: GOOG) today announced the internet availability of proxy materials for its 2013 Annual Meeting of Stockholders pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules.
Pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules, companies may satisfy their obligation to deliver proxy materials by delivering a "Notice of Internet Availability of Proxy Materials" to stockholders, providing internet access to the proxy materials, and providing a printed set of proxy materials by mail to any stockholder who requests them. Google has elected to take full advantage of these rules in order to minimize impact on the environment and the maximize cost savings relating to the printing of the proxy materials.
Google's Annual Report on Form 10-K for the year ended December 31, 2012 and proxy statement for its 2013 Annual Meeting of Stockholders have been filed with the U.S. Securities and Exchange Commission, and may be viewed on Google's investor relations website at http://investor.google.com/proxy.html. Google's stockholders may obtain hard copies of these proxy materials at no charge by following the instructions provided on its website or in the "Notice of Internet Availability of Proxy Materials."
Google's 2013 Annual Meeting of Stockholders will be held on Thursday, June 6, 2013 at 2:00 p.m., local time, at Google's corporate headquarters at 1600 Amphitheatre Parkway, Mountain View, California 94043. For your convenience, we are pleased to offer a live webcast of the Annual Meeting at http://investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contacts:
Investor Relations
Willa Chalmers
+1-650-214-3381
willa@google.com
Corporate Communications:
press@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: 'You Say What You Like, Because They Like What You Say' - http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/731-you-say-what-you-like-because-they-like-what-you-say.html
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News for Google's Investor Relations
Google Announces Internet Availability of Proxy Materials for its 2013 Annual Meeting of Stockholders
http://investor.google.com/releases/2013/0424.html
May 30th 2013, 21:06
MOUNTAIN VIEW, Calif. (April 24, 2013) - Google Inc. (NASDAQ: GOOG) today announced the internet availability of proxy materials for its 2013 Annual Meeting of Stockholders pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules.
Pursuant to the U.S. Securities and Exchange Commission's Notice and Access rules, companies may satisfy their obligation to deliver proxy materials by delivering a "Notice of Internet Availability of Proxy Materials" to stockholders, providing internet access to the proxy materials, and providing a printed set of proxy materials by mail to any stockholder who requests them. Google has elected to take full advantage of these rules in order to minimize impact on the environment and the maximize cost savings relating to the printing of the proxy materials.
Google's Annual Report on Form 10-K for the year ended December 31, 2012 and proxy statement for its 2013 Annual Meeting of Stockholders have been filed with the U.S. Securities and Exchange Commission, and may be viewed on Google's investor relations website at http://investor.google.com/proxy.html. Google's stockholders may obtain hard copies of these proxy materials at no charge by following the instructions provided on its website or in the "Notice of Internet Availability of Proxy Materials."
Google's 2013 Annual Meeting of Stockholders will be held on Thursday, June 6, 2013 at 2:00 p.m., local time, at Google's corporate headquarters at 1600 Amphitheatre Parkway, Mountain View, California 94043. For your convenience, we are pleased to offer a live webcast of the Annual Meeting at http://investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contacts:
Investor Relations
Willa Chalmers
+1-650-214-3381
willa@google.com
Corporate Communications:
press@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: 'You Say What You Like, Because They Like What You Say' - http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/731-you-say-what-you-like-because-they-like-what-you-say.html
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Thursday, April 18, 2013
Google News - Investor Relations - Google: Google Inc. Announces First Quarter 2013 Results
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Inc. Announces First Quarter 2013 Results
http://investor.google.com/earnings/2013/Q1_google_earnings.html
Apr 18th 2013, 20:46
Download press release · Download financial data · Open financial data in new window
MOUNTAIN VIEW, Calif. – April 18, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended March 31, 2013.
"We had a very strong start to 2013, with $14.0 billion in revenue, up 31% year-on-year," said Larry Page, CEO of Google. "We are working hard and investing in our products that aim to improve billions of people's lives all around the world."
Q1 Financial Summary
Google Inc. reported consolidated revenues of $13.97 billion for the quarter ended March 31, 2013, an increase of 31% compared to the first quarter of 2012. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the first quarter of 2013, TAC totaled $2.96 billion, or 25% of advertising revenues.
Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.
GAAP operating income in the first quarter of 2013 was $3.48 billion, or 25% of revenues. This compares to GAAP operating income of $3.39 billion, or 32% of revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.22 billion, or 30% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 37% of revenues, in the first quarter of 2012.
GAAP net income including net income from discontinued operations in the first quarter of 2013 was $3.35 billion, compared to $2.89 billion in the first quarter of 2012. Non-GAAP net income in the first quarter of 2013 was $3.90 billion, compared to $3.33 billion in the first quarter of 2012.
GAAP EPS including impact from net income from discontinued operations in the first quarter of 2013 was$9.94 on 337 million diluted shares outstanding, compared to $8.75 in the first quarter of 2012 on 330 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2013 was $11.58, compared to $10.08 in the first quarter of 2012.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net income from discontinued operations. In the first quarter of 2013, the expense related to SBC and the related tax benefits were $681 million and $149 million compared to $556 million and $118 million in the first quarter of 2012. In the first quarter of 2013, restructuring and related charges recorded in our Motorola Mobile business were $66 million, and the related tax benefits were $23 million. In addition, net income from discontinued operations, in the first quarter of 2013, was $22 million.
Q1 Financial Highlights
Revenues and other information - On a consolidated basis, Google Inc. revenues for the quarter ended March 31, 2013 were $13.97 billion, an increase of 31% compared to the first quarter of 2012.
Google Revenues (advertising and other) - Google revenues were $12.95 billion, or 93% of consolidated revenues, in the first quarter of 2013, representing a 22% increase over first quarter 2012 revenues of $10.65 billion.
Google Sites Revenues – Google-owned sites generated revenues of $8.64 billion, or 67% of total Google revenues, in the first quarter of 2013. This represents an 18% increase over first quarter 2012 Google sites revenues of $7.31 billion.
Google Network Revenues – Google's partner sites generated revenues of $3.26 billion, or 25% of total Google revenues, in the first quarter of 2013. This represents a 12% increase from first quarter 2012 Google network revenues of $2.91 billion.
Other Revenues – Other revenues from Google were $1.05 billion, or 8% of total Google revenues, in the first quarter of 2013. This represents a 150% increase over first quarter 2012 other revenues of $420 million.
Google International Revenues – Google revenues from outside of the United States totaled $7.1 billion, representing 55% of total Google revenues in the first quarter of 2013, compared to 54% in the fourth quarter of 2012 and in the first quarter of 2012.
Foreign Exchange Impact on Google Revenues – Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2012 through the first quarter of 2013, our Google revenues in the first quarter of 2013 would have been $11 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2012 through the first quarter of 2013, our Google revenues in the first quarter of 2013 would have been $110 million higher.
Google revenues from the United Kingdom totaled $1.39 billion, representing 11% of Google revenues in the first quarter of 2013, compared to 11% in the first quarter of 2012.
In the first quarter of 2013, we recognized a benefit of $35 million to Google revenues through our foreign exchange risk management program, compared to $37 million in the first quarter of 2012.
Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 20% over the first quarter of 2012 and increased approximately 3% over the fourth quarter of 2012.
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 4% over the first quarter of 2012 and decreased approximately 4% over the fourth quarter of 2012.
TAC – Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $2.96 billion in the first quarter of 2013, compared to $2.51 billion in the first quarter of 2012. TAC as a percentage of advertising revenues was 25% in the first quarter of 2013, compared to 25% in the first quarter of 2012.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.28 billion in the first quarter of 2013. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $680 million in the first quarter of 2013.
Motorola Mobile Revenues (hardware and other) – Motorola Mobile revenues were $1.02 billion, or 7% of consolidated revenues in the first quarter of 2013.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of manufacturing and inventory-related costs, data center operational expenses, amortization of intangible assets, and content acquisition costs, increased to $2.98 billion, or 21% of revenues, in the first quarter of 2013, compared to $1.28 billion, or 12% of revenues, in the first quarter of 2012.
Operating Expenses – Operating expenses, other than cost of revenues, were $4.55 billion in the first quarter of 2013, or 33% of revenues, compared to $3.47 billion in the first quarter of 2012, or 33% of revenues.
Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $315 million for the first quarter of 2013. Of the $315 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.
Stock-Based Compensation (SBC) – In the first quarter of 2013, the total charge related to SBC was $697 million, compared to $556 million in the first quarter of 2012. We currently estimate SBC charges for grants to employees prior to March 31, 2013 to be approximately $2.7 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after March 31, 2013 or non-employee stock awards that have been or may be granted.
Operating Income – On a consolidated basis, GAAP operating income in the first quarter of 2013 was $3.48 billion, or 25% of revenues. This compares to GAAP operating income of $3.39 billion, or 32% of revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.22 billion, or 30% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 37% of revenues, in the first quarter of 2012.
Google Operating Income – GAAP operating income for Google was $3.75 billion, or 29% of Google revenues, in the first quarter of 2013. This compares to GAAP operating income of $3.39 billion, or 32% of Google revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.40 billion, or 34% of Google revenues. This compares to non-GAAP operating income of $3.94 billion in the first quarter of 2012, or 37% of Google revenues.
Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $271 million, or -27% of Motorola Mobile revenues in the first quarter of 2013. Non-GAAP operating loss for Motorola Mobile in the first quarter of 2013 was $179 million, or -18% of Motorola Mobile revenues.
Interest and Other Income, Net – Interest and other income, net, was $134 million in the first quarter of 2013, compared to $156 million in the first quarter of 2012.
Income Taxes – Our effective tax rate was 8% for the first quarter of 2013.
Net Income – GAAP net income in the first quarter of 2013 was $3.35 billion, compared to $2.89 billion in the first quarter of 2012. Non-GAAP net income was $3.90 billion in the first quarter of 2013, compared to $3.33 billion in the first quarter of 2012. GAAP EPS in the first quarter of 2013 was $9.94 on 337 million diluted shares outstanding, compared to $8.75 in the first quarter of 2012 on 330 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2013 was $11.58, compared to $10.08 in the first quarter of 2012.
Cash Flow and Capital Expenditures – Net cash provided by operating activities in the first quarter of 2013 totaled $3.63 billion, compared to $3.69 billion in the first quarter of 2012. In the first quarter of 2013, capital expenditures were $1.2 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter of 2013, free cash flow was $2.43 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of March 31, 2013, cash, cash equivalents, and marketable securities were $50.1 billion.
Headcount – On a worldwide basis, we employed 53,891 full-time employees (38,739 in Google and 9,982 in Motorola Mobile and 5,170 in Motorola Home) as of March 31, 2013, compared to 53,861 full-time employees as of December 31, 2012.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google's first quarter 2013 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site.
We also announce investor information, including news and commentary about our business and financial performance, SEC filings, notices of investor events, and our press and earnings releases, on our investor relations website (http://investor.google.com) and our investor relations Google+ page (https://plus.google.com/+GoogleInvestorRelations/posts).
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our continued investments in our core areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2012 which are on file with the SEC and are available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013. All information provided in this release and in the attachments is as of April 18, 2013, and we undertake no duty to update this information unless required by law.
ABOUT NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial measures", "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures," "Reconciliation from net cash provided by operating activities to free cash flow," and "Reconciliation from GAAP international revenues to non-GAAP international revenues" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC, and as applicable, other special items so that Google's management and investors can compare Google's recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google's management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google's recurring core business operating results and those of other companies, as well as providing Google's management with an important tool for financial and operational decision making and for evaluating Google's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google's business. Second, SBC is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP net income and EPS. We define non-GAAP net income as net income plus expenses related to SBC and, as applicable, other special items less the related tax effects, as well as net income from discontinued operations. The tax effects of SBC and, as applicable, other special items are calculated using the tax-deductible portion of SBC, and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year.
Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange and hedging. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management's internal comparison to our historical performance.
The accompanying tables have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
For Media:
press@google.com
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News for Google's Investor Relations
Google Inc. Announces First Quarter 2013 Results
http://investor.google.com/earnings/2013/Q1_google_earnings.html
Apr 18th 2013, 20:46
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MOUNTAIN VIEW, Calif. – April 18, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended March 31, 2013.
"We had a very strong start to 2013, with $14.0 billion in revenue, up 31% year-on-year," said Larry Page, CEO of Google. "We are working hard and investing in our products that aim to improve billions of people's lives all around the world."
Q1 Financial Summary
Google Inc. reported consolidated revenues of $13.97 billion for the quarter ended March 31, 2013, an increase of 31% compared to the first quarter of 2012. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the first quarter of 2013, TAC totaled $2.96 billion, or 25% of advertising revenues.
Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.
GAAP operating income in the first quarter of 2013 was $3.48 billion, or 25% of revenues. This compares to GAAP operating income of $3.39 billion, or 32% of revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.22 billion, or 30% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 37% of revenues, in the first quarter of 2012.
GAAP net income including net income from discontinued operations in the first quarter of 2013 was $3.35 billion, compared to $2.89 billion in the first quarter of 2012. Non-GAAP net income in the first quarter of 2013 was $3.90 billion, compared to $3.33 billion in the first quarter of 2012.
GAAP EPS including impact from net income from discontinued operations in the first quarter of 2013 was$9.94 on 337 million diluted shares outstanding, compared to $8.75 in the first quarter of 2012 on 330 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2013 was $11.58, compared to $10.08 in the first quarter of 2012.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net income from discontinued operations. In the first quarter of 2013, the expense related to SBC and the related tax benefits were $681 million and $149 million compared to $556 million and $118 million in the first quarter of 2012. In the first quarter of 2013, restructuring and related charges recorded in our Motorola Mobile business were $66 million, and the related tax benefits were $23 million. In addition, net income from discontinued operations, in the first quarter of 2013, was $22 million.
Q1 Financial Highlights
Revenues and other information - On a consolidated basis, Google Inc. revenues for the quarter ended March 31, 2013 were $13.97 billion, an increase of 31% compared to the first quarter of 2012.
Google Revenues (advertising and other) - Google revenues were $12.95 billion, or 93% of consolidated revenues, in the first quarter of 2013, representing a 22% increase over first quarter 2012 revenues of $10.65 billion.
Google Sites Revenues – Google-owned sites generated revenues of $8.64 billion, or 67% of total Google revenues, in the first quarter of 2013. This represents an 18% increase over first quarter 2012 Google sites revenues of $7.31 billion.
Google Network Revenues – Google's partner sites generated revenues of $3.26 billion, or 25% of total Google revenues, in the first quarter of 2013. This represents a 12% increase from first quarter 2012 Google network revenues of $2.91 billion.
Other Revenues – Other revenues from Google were $1.05 billion, or 8% of total Google revenues, in the first quarter of 2013. This represents a 150% increase over first quarter 2012 other revenues of $420 million.
Google International Revenues – Google revenues from outside of the United States totaled $7.1 billion, representing 55% of total Google revenues in the first quarter of 2013, compared to 54% in the fourth quarter of 2012 and in the first quarter of 2012.
Foreign Exchange Impact on Google Revenues – Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2012 through the first quarter of 2013, our Google revenues in the first quarter of 2013 would have been $11 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2012 through the first quarter of 2013, our Google revenues in the first quarter of 2013 would have been $110 million higher.
Google revenues from the United Kingdom totaled $1.39 billion, representing 11% of Google revenues in the first quarter of 2013, compared to 11% in the first quarter of 2012.
In the first quarter of 2013, we recognized a benefit of $35 million to Google revenues through our foreign exchange risk management program, compared to $37 million in the first quarter of 2012.
Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 20% over the first quarter of 2012 and increased approximately 3% over the fourth quarter of 2012.
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 4% over the first quarter of 2012 and decreased approximately 4% over the fourth quarter of 2012.
TAC – Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $2.96 billion in the first quarter of 2013, compared to $2.51 billion in the first quarter of 2012. TAC as a percentage of advertising revenues was 25% in the first quarter of 2013, compared to 25% in the first quarter of 2012.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.28 billion in the first quarter of 2013. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $680 million in the first quarter of 2013.
Motorola Mobile Revenues (hardware and other) – Motorola Mobile revenues were $1.02 billion, or 7% of consolidated revenues in the first quarter of 2013.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of manufacturing and inventory-related costs, data center operational expenses, amortization of intangible assets, and content acquisition costs, increased to $2.98 billion, or 21% of revenues, in the first quarter of 2013, compared to $1.28 billion, or 12% of revenues, in the first quarter of 2012.
Operating Expenses – Operating expenses, other than cost of revenues, were $4.55 billion in the first quarter of 2013, or 33% of revenues, compared to $3.47 billion in the first quarter of 2012, or 33% of revenues.
Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $315 million for the first quarter of 2013. Of the $315 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.
Stock-Based Compensation (SBC) – In the first quarter of 2013, the total charge related to SBC was $697 million, compared to $556 million in the first quarter of 2012. We currently estimate SBC charges for grants to employees prior to March 31, 2013 to be approximately $2.7 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after March 31, 2013 or non-employee stock awards that have been or may be granted.
Operating Income – On a consolidated basis, GAAP operating income in the first quarter of 2013 was $3.48 billion, or 25% of revenues. This compares to GAAP operating income of $3.39 billion, or 32% of revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.22 billion, or 30% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 37% of revenues, in the first quarter of 2012.
Google Operating Income – GAAP operating income for Google was $3.75 billion, or 29% of Google revenues, in the first quarter of 2013. This compares to GAAP operating income of $3.39 billion, or 32% of Google revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.40 billion, or 34% of Google revenues. This compares to non-GAAP operating income of $3.94 billion in the first quarter of 2012, or 37% of Google revenues.
Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $271 million, or -27% of Motorola Mobile revenues in the first quarter of 2013. Non-GAAP operating loss for Motorola Mobile in the first quarter of 2013 was $179 million, or -18% of Motorola Mobile revenues.
Interest and Other Income, Net – Interest and other income, net, was $134 million in the first quarter of 2013, compared to $156 million in the first quarter of 2012.
Income Taxes – Our effective tax rate was 8% for the first quarter of 2013.
Net Income – GAAP net income in the first quarter of 2013 was $3.35 billion, compared to $2.89 billion in the first quarter of 2012. Non-GAAP net income was $3.90 billion in the first quarter of 2013, compared to $3.33 billion in the first quarter of 2012. GAAP EPS in the first quarter of 2013 was $9.94 on 337 million diluted shares outstanding, compared to $8.75 in the first quarter of 2012 on 330 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2013 was $11.58, compared to $10.08 in the first quarter of 2012.
Cash Flow and Capital Expenditures – Net cash provided by operating activities in the first quarter of 2013 totaled $3.63 billion, compared to $3.69 billion in the first quarter of 2012. In the first quarter of 2013, capital expenditures were $1.2 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter of 2013, free cash flow was $2.43 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of March 31, 2013, cash, cash equivalents, and marketable securities were $50.1 billion.
Headcount – On a worldwide basis, we employed 53,891 full-time employees (38,739 in Google and 9,982 in Motorola Mobile and 5,170 in Motorola Home) as of March 31, 2013, compared to 53,861 full-time employees as of December 31, 2012.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google's first quarter 2013 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site.
We also announce investor information, including news and commentary about our business and financial performance, SEC filings, notices of investor events, and our press and earnings releases, on our investor relations website (http://investor.google.com) and our investor relations Google+ page (https://plus.google.com/+GoogleInvestorRelations/posts).
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our continued investments in our core areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2012 which are on file with the SEC and are available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013. All information provided in this release and in the attachments is as of April 18, 2013, and we undertake no duty to update this information unless required by law.
ABOUT NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial measures", "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures," "Reconciliation from net cash provided by operating activities to free cash flow," and "Reconciliation from GAAP international revenues to non-GAAP international revenues" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC, and as applicable, other special items so that Google's management and investors can compare Google's recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google's management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google's recurring core business operating results and those of other companies, as well as providing Google's management with an important tool for financial and operational decision making and for evaluating Google's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google's business. Second, SBC is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP net income and EPS. We define non-GAAP net income as net income plus expenses related to SBC and, as applicable, other special items less the related tax effects, as well as net income from discontinued operations. The tax effects of SBC and, as applicable, other special items are calculated using the tax-deductible portion of SBC, and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year.
Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange and hedging. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management's internal comparison to our historical performance.
The accompanying tables have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
For Media:
press@google.com
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Google News - Investor Relations - Google: Google Announces Date of First Quarter 2013 Financial Results Conference Call
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Announces Date of First Quarter 2013 Financial Results Conference Call
http://investor.google.com/releases/2013/0328.html
Mar 29th 2013, 21:05
MOUNTAIN VIEW, Calif. (March 29, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss first quarter 2013 financial results on Thursday, April 18th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on April 18th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Jousting With Toothpicks - The Case For Challenging Corporate Journalism http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/719-jousting-with-toothpicks-the-case-for-challenging-corporate-journalism.html.
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News for Google's Investor Relations
Google Announces Date of First Quarter 2013 Financial Results Conference Call
http://investor.google.com/releases/2013/0328.html
Mar 29th 2013, 21:05
MOUNTAIN VIEW, Calif. (March 29, 2013) – Google Inc. (NASDAQ: GOOG) will hold its quarterly conference call to discuss first quarter 2013 financial results on Thursday, April 18th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call.
Please visit Google's Investor Relations website at investor.google.com on April 18th, 2013 to view the earnings release prior to the conference call.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Jousting With Toothpicks - The Case For Challenging Corporate Journalism http://www.medialens.org/index.php/alerts/alert-archive/alerts-2013/719-jousting-with-toothpicks-the-case-for-challenging-corporate-journalism.html.
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Monday, February 25, 2013
Google News - Investor Relations - Google: Google to Present at the Deutsche Bank Media and Telecom Conference
Google News - Investor Relations - Google
News for Google's Investor Relations
Google to Present at the Deutsche Bank Media and Telecom Conference
http://investor.google.com/releases/2013/0225.html
Feb 25th 2013, 22:06
MOUNTAIN VIEW, Calif. (February 25, 2013) - Google Inc. (NASDAQ:GOOG) announced today that Nikesh Arora, SVP and Chief Business Officer, will participate in a question-and-answer session at the Deutsche Bank Media and Telecom Conference in Palm Beach. The session is scheduled for 1:10 p.m. Eastern Time / 10:10 a.m. Pacific Time on Tuesday, March 5, 2013.
To access the live audio webcast of the session, please visit http://investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
###
Google is a trademark of Google Inc. All other company and product names may be trademarks of the respective companies with which they are associated.
Contact:
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
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News for Google's Investor Relations
Google to Present at the Deutsche Bank Media and Telecom Conference
http://investor.google.com/releases/2013/0225.html
Feb 25th 2013, 22:06
MOUNTAIN VIEW, Calif. (February 25, 2013) - Google Inc. (NASDAQ:GOOG) announced today that Nikesh Arora, SVP and Chief Business Officer, will participate in a question-and-answer session at the Deutsche Bank Media and Telecom Conference in Palm Beach. The session is scheduled for 1:10 p.m. Eastern Time / 10:10 a.m. Pacific Time on Tuesday, March 5, 2013.
To access the live audio webcast of the session, please visit http://investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
###
Google is a trademark of Google Inc. All other company and product names may be trademarks of the respective companies with which they are associated.
Contact:
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Eyes Like Blank Discs - The Guardian's Steven Poole On George Orwell's Politics And The English Language.
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Tuesday, February 19, 2013
Google News - Investor Relations - Google: Google to Present at the Morgan Stanley TMT Conference
Google News - Investor Relations - Google
News for Google's Investor Relations
Google to Present at the Morgan Stanley TMT Conference
http://investor.google.com/releases/2013/0219.html
Feb 20th 2013, 05:33
MOUNTAIN VIEW, Calif. (February 19, 2013) - Google Inc. (NASDAQ:GOOG) announced today that Patrick Pichette, SVP and CFO, will participate in a question-and-answer session at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco. The session is scheduled for 12:30 p.m. Eastern Time / 9:30 a.m. Pacific Time on Thursday, February 28, 2013.
To access the live audio webcast of the session, please visit investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
###
Google is a trademark of Google Inc. All other company and product names may be trademarks of the respective companies with which they are associated.
Contact:
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Eyes Like Blank Discs - The Guardian's Steven Poole On George Orwell's Politics And The English Language.
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News for Google's Investor Relations
Google to Present at the Morgan Stanley TMT Conference
http://investor.google.com/releases/2013/0219.html
Feb 20th 2013, 05:33
MOUNTAIN VIEW, Calif. (February 19, 2013) - Google Inc. (NASDAQ:GOOG) announced today that Patrick Pichette, SVP and CFO, will participate in a question-and-answer session at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco. The session is scheduled for 12:30 p.m. Eastern Time / 9:30 a.m. Pacific Time on Thursday, February 28, 2013.
To access the live audio webcast of the session, please visit investor.google.com/webcast.html.
About Google Inc.
Google is a global technology leader focused on improving the ways people connect with information. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.
###
Google is a trademark of Google Inc. All other company and product names may be trademarks of the respective companies with which they are associated.
Contact:
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Eyes Like Blank Discs - The Guardian's Steven Poole On George Orwell's Politics And The English Language.
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Google News - Investor Relations - Google: Google Inc. Announces Fourth Quarter and Fiscal Year 2012 Results
Google News - Investor Relations - Google
News for Google's Investor Relations
Google Inc. Announces Fourth Quarter and Fiscal Year 2012 Results
http://investor.google.com/earnings/2012/Q4_google_earnings.html
Feb 20th 2013, 05:33
Download press release · Download financial data · Open financial data in new window
Google Inc. reported consolidated revenues of $14.42 billion for the quarter ended December 31, 2012. Consolidated revenues would have been $15.24 billion had Motorola Home been included.
MOUNTAIN VIEW, Calif. – January 22, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter and the fiscal year ended December 31, 2012.
"We ended 2012 with a strong quarter," said Larry Page, CEO of Google. "Revenues were up 36% year-on-year, and 8% quarter-on-quarter. And we hit $50 billion in revenues for the first time last year – not a bad achievement in just a decade and a half. In today's multi-screen world we face tremendous opportunities as a technology company focused on user benefit. It's an incredibly exciting time to be at Google."
Q4 Financial Summary
In December 2012, we entered into an agreement with Arris Group, Inc. and certain other persons to dispose the Motorola Home business for a total consideration of approximately $2.35 billion in cash and stock, subject to certain adjustments. The transaction is expected to close in 2013. As a result, financial results related to the Home business are presented as net loss from discontinued operations on the consolidated statements of income, and are excluded from all other results unless otherwise noted. Assets and liabilities of the Home business are not presented separately because they are not material.
Google Inc. reported consolidated revenues of $14.42 billion for the quarter ended December 31, 2012, an increase of 36% compared to the fourth quarter of 2011. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the fourth quarter of 2012, TAC totaled $3.08 billion, or 25% of advertising revenues.
Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.
GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues. This compares to GAAP operating income of $3.51 billion, or 33% of revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.27 billion, or 30% of revenues. This compares to non-GAAP operating income of $4.04 billion, or 38% of revenues, in the fourth quarter of 2011. Had we included Home, non-GAAP operating income in the fourth quarter of 2012 would have been $4.31 billion.
GAAP net income including net loss from discontinued operations in the fourth quarter of 2012 was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011. Non-GAAP net income in the fourth quarter of 2012 was $3.57 billion, compared to $3.13 billion in the fourth quarter of 2011.
GAAP EPS including impact from net loss from discontinued operations in the fourth quarter of 2012 was $8.62 on 335 million diluted shares outstanding, compared to $8.22 in the fourth quarter of 2011 on 329 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2012 was $10.65, compared to $9.50 in the fourth quarter of 2011.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net loss from discontinued operations. In the fourth quarter of 2012, the expense related to SBC and the related tax benefits were $700 million and $152 million compared to $536 million and $114 million in the fourth quarter of 2011. In the fourth quarter of 2012, restructuring and related charges recorded in our Motorola Mobile business were $178 million, and the related tax benefits were $65 million. In addition, net loss from discontinued operations, in the fourth quarter of 2012, was $21 million. In the fourth quarter of 2012, non-GAAP operating income with Home included the impact from Home of $35 million and excludes the above SBC expense and restructuring and related charges.
Q4 Financial Highlights
Revenues and other information – On a consolidated basis, Google Inc. revenues for the quarter ended December 31, 2012 was $14.42 billion, an increase of 36% compared to the fourth quarter of 2011.
Google Revenues (advertising and other) – Google revenues were $12.91 billion, or 89% of consolidated revenues, in the fourth quarter of 2012, representing a 22% increase over fourth quarter 2011 revenues of $10.58 billion.
Google Sites Revenues – Google-owned sites generated revenues of $8.64 billion, or 67% of total Google revenues, in the fourth quarter of 2012. This represents a 18% increase over fourth quarter 2011 Google sites revenues of $7.29 billion.
Google Network Revenues – Google's partner sites generated revenues of $3.44 billion, or 27% of total Google revenues, in the fourth quarter of 2012. This represents a 19% increase from fourth quarter 2011 Google network revenues of $2.88 billion.
Other Revenues – Other revenues from Google were $829 million, or 6% of total Google revenues, in the fourth quarter of 2012. This represents a 102% increase over fourth quarter 2011 other revenues of $410 million.
Google International Revenues – Google revenues from outside of the United States totaled $6.9 billion, representing 54% of total Google revenues in the fourth quarter of 2012, compared to 53% in the third quarter of 2012 and 53% in the fourth quarter of 2011.
Foreign Exchange Impact on Google Revenues – Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the third quarter of 2012 through the fourth quarter of 2012, our Google revenues in the fourth quarter of 2012 would have been $130 million lower. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2011 through the fourth quarter of 2012, our Google revenues in the fourth quarter of 2012 would have been $193 million higher.
Google revenues from the United Kingdom totaled $1.30 billion, representing 10% of Google revenues in the fourth quarter of 2012, compared to 10% in the fourth quarter of 2011.
In the fourth quarter of 2012, we recognized a benefit of $37 million to Google revenues through our foreign exchange risk management program, compared to $25 million in the fourth quarter of 2011.
Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 24% over the fourth quarter of 2011 and increased approximately 9% over the third quarter of 2012.
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.
TAC – Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.08 billion in the fourth quarter of 2012, compared to $2.45 billion in the fourth quarter of 2011. TAC as a percentage of advertising revenues was 25% in the fourth quarter of 2012, compared to 24% in the fourth quarter of 2011.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.44 billion in the fourth quarter of 2012. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $634 million in the fourth quarter of 2012.
Motorola Mobile Revenues (hardware and other) – Motorola Mobile revenues were $1.51 billion, or 11% of consolidated revenues in the fourth quarter of 2012.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs, credit card processing charges, and manufacturing and inventory-related costs, increased to $3.14 billion, or 22% of revenues, in the fourth quarter of 2012, compared to $1.25 billion, or 12% of revenues, in the fourth quarter of 2011.
Operating Expenses – Operating expenses, other than cost of revenues, were $4.81 billion in the fourth quarter of 2012, or 33% of revenues, compared to $3.38 billion in the fourth quarter of 2011, or 32% of revenues.
Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $289 million for the fourth quarter of 2012. Of the $289 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.
Stock-Based Compensation (SBC) – In the fourth quarter of 2012, the total charge related to SBC was $708 million, compared to $536 million in the fourth quarter of 2011.
We currently estimate SBC charges for grants to employees prior to January 1, 2013 to be approximately $2.5 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after December 31, 2012 or non-employee stock awards that have been or may be granted.
Operating Income – On a consolidated basis, GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues. This compares to GAAP operating income of $3.51 billion, or 33% of revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.27 billion, or 30% of revenues. This compares to non-GAAP operating income of $4.04 billion, or 38% of revenues, in the fourth quarter of 2011.
Google Operating Income – GAAP operating income for Google was $3.75 billion, or 29% of Google revenues, in the fourth quarter of 2012. This compares to GAAP operating income of $3.51 billion, or 33% of Google revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.42 billion, or 34% of Google revenues. This compares to non-GAAP operating income of $4.04 billion in the fourth quarter of 2011, or 38% of Google revenues.
Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $353 million, or -23% of Motorola Mobile revenues in the fourth quarter of 2012. Non-GAAP operating loss for Motorola Mobile in the fourth quarter of 2012 was $152 million, or -10% of Motorola Mobile revenues.
Interest and Other Income, Net – Interest and other income, net, was $152 million in the fourth quarter of 2012, compared to an expense of $18 million in the fourth quarter of 2011.
Income Taxes – Our effective tax rate was 18% for the fourth quarter of 2012.
Net Income – GAAP net income in the fourth quarter of 2012 was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011. Non-GAAP net income was $3.57 billion in the fourth quarter of 2012, compared to $3.13 billion in the fourth quarter of 2011. GAAP EPS in the fourth quarter of 2012 was $8.62 on 335 million diluted shares outstanding, compared to $8.22 in the fourth quarter of 2011 on 329 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2012 was $10.65, compared to $9.50 in the fourth quarter of 2011.
Cash Flow and Capital Expenditures (including Home) – Net cash provided by operating activities in the fourth quarter of 2012 totaled $4.67 billion, compared to $3.92 billion in the fourth quarter of 2011. In the fourth quarter of 2012, capital expenditures were $1.02 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the fourth quarter of 2012, free cash flow was $3.65 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of December 31, 2012, cash, cash equivalents, and marketable securities were $48.1 billion.
Headcount – On a worldwide basis, we employed 53,861 full-time employees (37,544 in Google and 11,113 in Motorola Mobile and 5,204 in Motorola Home) as of December 31, 2012, compared to 53,546 full-time employees as of September 30, 2012.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google's fourth quarter and fiscal year 2012 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our continued investments in our core areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2011 and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, which are on file with the SEC and are available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2012. All information provided in this release and in the attachments is as of January 22, 2013, and we undertake no duty to update this information unless required by law.
ABOUT NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial measures," "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures," "Reconciliation from net cash provided by operating activities to free cash flow," and "Reconciliation from GAAP international revenues to non-GAAP international revenues" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC, and as applicable, other special items so that Google's management and investors can compare Google's recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google's management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google's recurring core business operating results and those of other companies, as well as providing Google's management with an important tool for financial and operational decision making and for evaluating Google's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google's business. Second, SBC is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP operating income with Home. We define non-GAAP operating income with Home as operating income plus SBC expense, restructuring and related charges, and the impact from Home. We consider this non-GAAP financial measure to be a useful metric for management and investors for the same reasons that Google uses non-GAAP operating income.
Non-GAAP net income and EPS. We define non-GAAP net income as net income plus expenses related to SBC and, as applicable, other special items less the related tax effects, as well as net loss from discontinued operations. The tax effects of SBC and, as applicable, other special items are calculated using the tax-deductible portion of SBC, and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be a useful metric for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year.
Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange and hedging. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management's internal comparison to our historical performance.
The accompanying tables have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
For Media:
press@google.com
Download press release · Download financial data · Open financial data in new window
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News for Google's Investor Relations
Google Inc. Announces Fourth Quarter and Fiscal Year 2012 Results
http://investor.google.com/earnings/2012/Q4_google_earnings.html
Feb 20th 2013, 05:33
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Google Inc. reported consolidated revenues of $14.42 billion for the quarter ended December 31, 2012. Consolidated revenues would have been $15.24 billion had Motorola Home been included.
MOUNTAIN VIEW, Calif. – January 22, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter and the fiscal year ended December 31, 2012.
"We ended 2012 with a strong quarter," said Larry Page, CEO of Google. "Revenues were up 36% year-on-year, and 8% quarter-on-quarter. And we hit $50 billion in revenues for the first time last year – not a bad achievement in just a decade and a half. In today's multi-screen world we face tremendous opportunities as a technology company focused on user benefit. It's an incredibly exciting time to be at Google."
Q4 Financial Summary
In December 2012, we entered into an agreement with Arris Group, Inc. and certain other persons to dispose the Motorola Home business for a total consideration of approximately $2.35 billion in cash and stock, subject to certain adjustments. The transaction is expected to close in 2013. As a result, financial results related to the Home business are presented as net loss from discontinued operations on the consolidated statements of income, and are excluded from all other results unless otherwise noted. Assets and liabilities of the Home business are not presented separately because they are not material.
Google Inc. reported consolidated revenues of $14.42 billion for the quarter ended December 31, 2012, an increase of 36% compared to the fourth quarter of 2011. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the fourth quarter of 2012, TAC totaled $3.08 billion, or 25% of advertising revenues.
Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.
GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues. This compares to GAAP operating income of $3.51 billion, or 33% of revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.27 billion, or 30% of revenues. This compares to non-GAAP operating income of $4.04 billion, or 38% of revenues, in the fourth quarter of 2011. Had we included Home, non-GAAP operating income in the fourth quarter of 2012 would have been $4.31 billion.
GAAP net income including net loss from discontinued operations in the fourth quarter of 2012 was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011. Non-GAAP net income in the fourth quarter of 2012 was $3.57 billion, compared to $3.13 billion in the fourth quarter of 2011.
GAAP EPS including impact from net loss from discontinued operations in the fourth quarter of 2012 was $8.62 on 335 million diluted shares outstanding, compared to $8.22 in the fourth quarter of 2011 on 329 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2012 was $10.65, compared to $9.50 in the fourth quarter of 2011.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net loss from discontinued operations. In the fourth quarter of 2012, the expense related to SBC and the related tax benefits were $700 million and $152 million compared to $536 million and $114 million in the fourth quarter of 2011. In the fourth quarter of 2012, restructuring and related charges recorded in our Motorola Mobile business were $178 million, and the related tax benefits were $65 million. In addition, net loss from discontinued operations, in the fourth quarter of 2012, was $21 million. In the fourth quarter of 2012, non-GAAP operating income with Home included the impact from Home of $35 million and excludes the above SBC expense and restructuring and related charges.
Q4 Financial Highlights
Revenues and other information – On a consolidated basis, Google Inc. revenues for the quarter ended December 31, 2012 was $14.42 billion, an increase of 36% compared to the fourth quarter of 2011.
Google Revenues (advertising and other) – Google revenues were $12.91 billion, or 89% of consolidated revenues, in the fourth quarter of 2012, representing a 22% increase over fourth quarter 2011 revenues of $10.58 billion.
Google Sites Revenues – Google-owned sites generated revenues of $8.64 billion, or 67% of total Google revenues, in the fourth quarter of 2012. This represents a 18% increase over fourth quarter 2011 Google sites revenues of $7.29 billion.
Google Network Revenues – Google's partner sites generated revenues of $3.44 billion, or 27% of total Google revenues, in the fourth quarter of 2012. This represents a 19% increase from fourth quarter 2011 Google network revenues of $2.88 billion.
Other Revenues – Other revenues from Google were $829 million, or 6% of total Google revenues, in the fourth quarter of 2012. This represents a 102% increase over fourth quarter 2011 other revenues of $410 million.
Google International Revenues – Google revenues from outside of the United States totaled $6.9 billion, representing 54% of total Google revenues in the fourth quarter of 2012, compared to 53% in the third quarter of 2012 and 53% in the fourth quarter of 2011.
Foreign Exchange Impact on Google Revenues – Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the third quarter of 2012 through the fourth quarter of 2012, our Google revenues in the fourth quarter of 2012 would have been $130 million lower. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2011 through the fourth quarter of 2012, our Google revenues in the fourth quarter of 2012 would have been $193 million higher.
Google revenues from the United Kingdom totaled $1.30 billion, representing 10% of Google revenues in the fourth quarter of 2012, compared to 10% in the fourth quarter of 2011.
In the fourth quarter of 2012, we recognized a benefit of $37 million to Google revenues through our foreign exchange risk management program, compared to $25 million in the fourth quarter of 2011.
Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 24% over the fourth quarter of 2011 and increased approximately 9% over the third quarter of 2012.
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.
TAC – Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.08 billion in the fourth quarter of 2012, compared to $2.45 billion in the fourth quarter of 2011. TAC as a percentage of advertising revenues was 25% in the fourth quarter of 2012, compared to 24% in the fourth quarter of 2011.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.44 billion in the fourth quarter of 2012. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $634 million in the fourth quarter of 2012.
Motorola Mobile Revenues (hardware and other) – Motorola Mobile revenues were $1.51 billion, or 11% of consolidated revenues in the fourth quarter of 2012.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs, credit card processing charges, and manufacturing and inventory-related costs, increased to $3.14 billion, or 22% of revenues, in the fourth quarter of 2012, compared to $1.25 billion, or 12% of revenues, in the fourth quarter of 2011.
Operating Expenses – Operating expenses, other than cost of revenues, were $4.81 billion in the fourth quarter of 2012, or 33% of revenues, compared to $3.38 billion in the fourth quarter of 2011, or 32% of revenues.
Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $289 million for the fourth quarter of 2012. Of the $289 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.
Stock-Based Compensation (SBC) – In the fourth quarter of 2012, the total charge related to SBC was $708 million, compared to $536 million in the fourth quarter of 2011.
We currently estimate SBC charges for grants to employees prior to January 1, 2013 to be approximately $2.5 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after December 31, 2012 or non-employee stock awards that have been or may be granted.
Operating Income – On a consolidated basis, GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues. This compares to GAAP operating income of $3.51 billion, or 33% of revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.27 billion, or 30% of revenues. This compares to non-GAAP operating income of $4.04 billion, or 38% of revenues, in the fourth quarter of 2011.
Google Operating Income – GAAP operating income for Google was $3.75 billion, or 29% of Google revenues, in the fourth quarter of 2012. This compares to GAAP operating income of $3.51 billion, or 33% of Google revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.42 billion, or 34% of Google revenues. This compares to non-GAAP operating income of $4.04 billion in the fourth quarter of 2011, or 38% of Google revenues.
Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $353 million, or -23% of Motorola Mobile revenues in the fourth quarter of 2012. Non-GAAP operating loss for Motorola Mobile in the fourth quarter of 2012 was $152 million, or -10% of Motorola Mobile revenues.
Interest and Other Income, Net – Interest and other income, net, was $152 million in the fourth quarter of 2012, compared to an expense of $18 million in the fourth quarter of 2011.
Income Taxes – Our effective tax rate was 18% for the fourth quarter of 2012.
Net Income – GAAP net income in the fourth quarter of 2012 was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011. Non-GAAP net income was $3.57 billion in the fourth quarter of 2012, compared to $3.13 billion in the fourth quarter of 2011. GAAP EPS in the fourth quarter of 2012 was $8.62 on 335 million diluted shares outstanding, compared to $8.22 in the fourth quarter of 2011 on 329 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2012 was $10.65, compared to $9.50 in the fourth quarter of 2011.
Cash Flow and Capital Expenditures (including Home) – Net cash provided by operating activities in the fourth quarter of 2012 totaled $4.67 billion, compared to $3.92 billion in the fourth quarter of 2011. In the fourth quarter of 2012, capital expenditures were $1.02 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the fourth quarter of 2012, free cash flow was $3.65 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of December 31, 2012, cash, cash equivalents, and marketable securities were $48.1 billion.
Headcount – On a worldwide basis, we employed 53,861 full-time employees (37,544 in Google and 11,113 in Motorola Mobile and 5,204 in Motorola Home) as of December 31, 2012, compared to 53,546 full-time employees as of September 30, 2012.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google's fourth quarter and fiscal year 2012 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our continued investments in our core areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2011 and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, which are on file with the SEC and are available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2012. All information provided in this release and in the attachments is as of January 22, 2013, and we undertake no duty to update this information unless required by law.
ABOUT NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of selected non-GAAP financial measures to the nearest comparable GAAP financial measures," "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures," "Reconciliation from net cash provided by operating activities to free cash flow," and "Reconciliation from GAAP international revenues to non-GAAP international revenues" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results, meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC, and as applicable, other special items so that Google's management and investors can compare Google's recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google's management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google's recurring core business operating results and those of other companies, as well as providing Google's management with an important tool for financial and operational decision making and for evaluating Google's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google's business. Second, SBC is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
Non-GAAP operating income with Home. We define non-GAAP operating income with Home as operating income plus SBC expense, restructuring and related charges, and the impact from Home. We consider this non-GAAP financial measure to be a useful metric for management and investors for the same reasons that Google uses non-GAAP operating income.
Non-GAAP net income and EPS. We define non-GAAP net income as net income plus expenses related to SBC and, as applicable, other special items less the related tax effects, as well as net loss from discontinued operations. The tax effects of SBC and, as applicable, other special items are calculated using the tax-deductible portion of SBC, and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be a useful metric for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year.
Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange and hedging. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management's internal comparison to our historical performance.
The accompanying tables have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.
Contact
Willa Chalmers
Investor Relations
+1-650-214-3381
willa@google.com
For Media:
press@google.com
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