Q3 2012 Quarterly Earnings Summary

Third Quarter 2012 Highlights

Consolidated revenue growth of 45% Y/Y and 15% Q/Q

Consolidated revenues were $14.1 billion

Google business revenues (advertising and other) were $11.5 billion

Google properties revenues increased 15% Y/Y and 2% Q/Q Network revenues increased 21% Y/Y and 5% Q/Q

Motorola business revenues (hardware and other) were $2.6 billion

Consolidated international revenues were $7.1 billion

Operational Highlights

Strong financial metrics: revenue growth and cash flow Continuing to invest in three major areas of focus:

Core ads: Search and Display advertising Businesses demonstrating high consumer success: YouTube, Android, Chrome New businesses where were investing to drive adoption and innovation: Social, Enterprise, Commerce, Local

Consolidated Quarterly Revenues

$15,000 $14,000 $13,000 $12,000 1,250 $11,000 $10,000 9,720 9,026 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 4,439 $2,000 $1,000 $0 300 Q1'10 258 Q2'10 254 Q3'10 273 Q4'10
Other
3

Q312 Y/Y Growth = 45% Q312 Q/Q Growth = 15%

12,214

14,101

2,575

10,584

10,645 3,133

($ in millions)

8,440 7,286 6,775 2,036 6,820 2,063 2,199 2,495

8,575 2,595 2,484 2,427

2,880

2,913

2,983

5,672 4,499 4,833

5,879

6,232

6,740

7,294

7,312

7,542

7,727

269 Q1'11
Google.com

310 Q2'11
Network

385 Q3'11

410 Q4'11

420 Q1'12

439 Q2'12

666 Q3'12

Motorola

U.S. vs. International Revenues - Consolidated

($ in millions)
100% 90% 80% 53% 70% 60% 50% 40% 30% 47% 20% 10% 0% Q1'10 Q2'10 Q3'10 Q4'10 Q1'11
US

6,775

6,820

7,286

8,440

8,575

9,026

9,720

10,584

10,645

12,214

14,101

52%

52%

52%

53%

54%

55%

53%

54%

53%

50%

48%

48%

48%

47%

46%

45%

47%

46%

47%

50%

Q2'11

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

International

Traffic Acquisition Costs

$3,000 26.4% $2,500 26.4% 30% 25.7% 25.3% 24.5% 24.5% 24.7% 25.5%

24.2%

23.7%

24.1%

$2,000

20%

($ in millions)

$1,500 2,770 2,453 $1,000 1,711 1,732 1,805 2,069 2,038 2,110 2,210 10% 2,510 2,600

$500

$0 Q1'10
5

0% Q2'10 Q3'10 Q4'10

TAC

Q1'11

Q2'11

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

TAC as % of Advertising Revenues

Consolidated Costs and Expenses

GAAP ($ in millions)
Cost of Revenue
Percent of revenues

Q3'11
$3,378
35%

Q2'12
$5,013
41%

Q3'12
$6,554
46%

Research & Development

Percent of revenues

$1,404
14%

$1,585
13%

$2,009
14%

Sales & Marketing

Percent of revenues

$1,204
12%

$1,433
12%

$1,760
12%

General & Administrative

Percent of revenues

$676
7%

$980
8%

$1,042
7%

Total Costs & Expenses

Percent of revenues

$6,662
69%

$9,011
74%

$11,365
81%

Non-GAAP ($ in millions)
Cost of Revenue
Percent of revenues

Q3'11
$3,306
34%

Q3'12
$4,918
40%

Q3'12
$6,360
45%

Research & Development

Percent of revenues

$1,093
11%

$1,281
10%

$1,527
11%

Sales & Marketing

Percent of revenues

$1,100
11%

$1,294
11%

$1,521
11%

General & Administrative

Percent of revenues

$592
6%

$771
6%

$893
6%

Total Costs & Expenses

Percent of revenues

$6,091
63%

$8,264
68%

$10,301
73%

Note: Please refer to supporting Table 1 for reconciliations of non-GAAP costs and expenses to GAAP costs and expenses

Profitability
Consolidated GAAP ($ in millions except per share amounts) Income from Operations Operating Margin Net Income EPS (diluted) $ $ Q3'11 $ 3,058 31% 2,729 8.33 $ $ Q2'12 $ 3,203 26% 2,785 8.42 $ $ Q3'12 $ 2,736 19% 2,176 6.53

Non-GAAP ($ in millions except per share amounts) Income from Operations Operating Margin Net Income EPS (diluted) Google Inc. GAAP ($ in millions except per share amounts) Income from Operations Google Operating Margin

Q3'11 $ $ $ 3,629 37% 3,184 9.72

Q2'12 $ $ $ 3,950 32% 3,346 10.12

Q3'12 $ $ $ 3,800 27% 3,009 9.03

Q3'11 $ 3,058 31%

Q2'12 $ 3,436 31%

Q3'12 $ 3,263 28%

Non-GAAP ($ in millions except per share amounts) Income from Operations Google Operating Margin Motorola GAAP ($ in millions except per share amounts) Loss from Operations Motorola Operating Margin

Q3'11 $ 3,629 37%

Q2'12 $ 3,988 36%

Q3'12 $ 3,951 34%

Q3'11

Q2'12 $ (233) -19%

Q3'12 $ (527) -20%

Non-GAAP ($ in millions except per share amounts) Loss from Operations Motorola Operating Margin

Q3'11

Q2'12 $ (38) -3%

Q3'12 $ (151) -6%

Note: Please refer to supporting Table 2 for reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures

Consolidated Free Cash Flow

($ in millions) Net cash provided by operating activities Less purchases of property and equipment

Q3'11
$3,950

Q2'12
$4,252

Q3'12
$4,004

($680)

($774)

($872)

Free cash flow (non-GAAP)

$3,270

$3,478

$3,132

Overview of Q3 2012 OI&E and FX

In Interest and Other Income, Net, we recognized net income of $63M for Q3 In Q3, we recognized $172M of interest income earned on our investments and $36M in net realized gains. We expensed $124M related to our FX cash flow hedging program. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the second quarter of 2012 through the third quarter of 2012, our Google business revenues in the third quarter of 2012 would have been $136 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the third quarter of 2011 through the third quarter of 2012, our Google business revenues in the third quarter of 2012 would have been $557 million higher. In addition, our FX cash flow hedging program allowed us to recognize a benefit of approximately $62M to Google business international revenue this quarter.

Google Business - Revenues by Geography

Q3'11 ($ in millions)

Q2'12

Q3'12

United States

4,420

5,005

5,416

United Kingdom

1,047

1,175

1,216

Rest of the world

4,253

4,784

4,894

Total Revenues

9,720

10,964

11,526

10

Google Business - International Revenues Excluding Hedging and FX Impact (Y/Y)

($ in millions) UK revenues (GAAP) exclude: a) f/x impact on Q3'12 revenues using Q3'11 rates (gains)/losses b) hedging gains UK revenues excluding f/x and hedging impact (NonGAAP) Y/Y % (Non-GAAP) Q3'11 Q3'12 $1,047 $1,216 ($ in millions) UK revenues (GAAP) exclude: a) f/x impact on Q2'12 revenues using Q2'11 rates (gains)/losses b) hedging gains UK revenues excluding f/x and hedging impact (NonGAAP) Y/Y % (Non-GAAP) Q2'11 Q2'12 $976 $1,175

n/a -

47 (6)

n/a -

30 (7)

$1,047 $1,257 20%

$976 $1,198 23%

($ in millions) ROW revenues (GAAP) exclude: a) f/x impact on Q3'12 revenues using Q3'11 rates (gains)/losses b) hedging gains ROW revenues excluding f/x and hedging impact (Non-GAAP) Y/Y % (Non-GAAP)

Q3'11 Q3'12 $4,253 $4,894

($ in millions) ROW revenues (GAAP) exclude: a) f/x impact on Q2'12 revenues using Q2'11 rates (gains)/losses b) hedging gains ROW revenues excluding f/x and hedging impact (Non-GAAP) Y/Y % (Non-GAAP)

Q2'11 Q2'12 $3,895 $4,784

n/a (1)

510 (56)

n/a (4)

320 (74)

$4,252 $5,348 26%

$3,891 $5,030 29%

11

Google Business - International Revenues Excluding Hedging and FX Impact (Q/Q)

($ in millions) UK revenues (GAAP) exclude: a) f/x impact on Q3'12 revenues using Q2'12 rates (gains)/losses b) hedging gains UK revenues excluding f/x and hedging impact (NonGAAP) Q/Q % (Non-GAAP)

Q2'12 Q3'12 $1,175 $1,216

($ in millions) UK revenues (GAAP) exclude: a) f/x impact on Q2'12 revenues using Q1'12 rates (gains)/losses b) hedging gains UK revenues excluding f/x and hedging impact (NonGAAP) Q/Q % (Non-GAAP)

Q1'12 Q2'12 $1,150 $1,175

n/a (7)

17 (6)

n/a (4)

(10) (7)

$1,168 $1,227 5%

$1,146 $1,158 1%

($ in millions) ROW revenues (GAAP) exclude: a) f/x impact on Q3'12 revenues using Q2'12 rates (gains)/losses b) hedging gains

Q2'12 Q3'12 $4,784 $4,894

($ in millions) ROW revenues (GAAP) exclude: a) f/x impact on Q2'12 revenues using Q1'12 rates (gains)/losses b) hedging gains

Q1'12 Q2'12 $4,621 $4,784

n/a (74)

119 (56)

n/a (33)

78 (74)

ROW revenues excluding f/x and hedging impact (NonGAAP) $4,710 $4,957 Q/Q % (Non-GAAP) 5%

ROW revenues excluding f/x and hedging impact (NonGAAP) $4,588 $4,788 Q/Q % (Non-GAAP) 4%

12

Table 1 - Reconciliations of consolidated non-GAAP costs and expenses to GAAP costs and expenses

($ in millions) Cost of revenue - (GAAP) Less: non-GAAP adjustments (2) Cost of revenue - (non-GAAP) Research and development - (GAAP) Less: non-GAAP adjustments (2) Research and development (non-GAAP) Sales and marketing - (GAAP) Less: non-GAAP adjustments (2) Sales and marketing (non-GAAP) General and administrative - (GAAP) Less: non-GAAP adjustments (2) General and administrative (non-GAAP) Total costs and expenses (GAAP) Less: non-GAAP adjustments (2) Total costs and expenses (non-GAAP)

As a % of Q3'11 Revenues (1) $ 3,378 35% (72) $ 3,306 34% $ $ $ $ $ $ $ $ 1,404 (311) 1,093 1,204 (104) 1,100 676 (84) 592 6,662 (571) 6,091 14% 11% 12% 11% 7% 6% 69% 63%

As a % of Q2'12 Revenues (1) $ 5,013 41% (95) $ 4,918 40% $ $ $ $ $ $ $ $ 1,585 (304) 1,281 1,433 (139) 1,294 980 (209) 771 9,011 (747) 8,264 13% 10% 12% 11% 8% 6% 74% 68%

As a % of Q3'12 Revenues (1) $ 6,554 46% (194) $ 6,360 45% $ $ $ $ $ $ $ $ 2,009 (482) 1,527 1,760 (239) 1,521 1,042 (149) 893 11,365 (1,064) 10,301 14% 11% 12% 11% 7% 6% 81% 73%

(1) Percentages based on consolidated revenues of $9,720 million in Q3'11, $12,214 million in Q2'12 and $14,101 million in Q3'12. (2) Pertains to stock-based compensation expense and Motorola restructuring and related charges

13

Table 2 - Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures

Consolidated (In millions except per share amounts) Income from operations (GAAP) Add: Stock-based compensation expense Add: Motorola restructuring and related charges Income from operations (non-GAAP) Net income (GAAP) Add: Stock-based compensation expense (net of tax) (2) Add: Motorola restructuring and related charges (net of tax) (2) Net income (non-GAAP) Net income per share - diluted (GAAP) Net income per share - diluted (non-GAAP) Shares used in per share calculation - diluted Q3'11 $ 3,058 571 $ $ 3,629 2,729 455 3,184 8.33 9.72 327 Operating Operating Margin (1) Q2'12 Margin (1) 31% $ 3,203 26% $ 565 182 (3) 37% $ 3,950 32% $ $ 2,785 430 131 3,346 8.42 10.12 331 $ Operating Q3'12 Margin (1) 2,736 19% 715 349 (3) 3,800 27% 2,176 560 273 3,009 6.53 9.03 333

$ $ $

$ $ $

$ $ $

(1) Percentages based on consolidated revenues of $9,720 million in Q3'11, $12,214 million in Q2'12 and $14,101 million in Q3'12. (2) The tax effects are calculated using the tax-deductible portion of stock-based compensation expense and Motorola restructuring and related charges, applying the entity-specific, US federal and blended state tax rates. (3) Includes stock-based compensation expense of $93 million in Q212 and $47 million in Q312

Google and Motorola Google (4) (In millions except per share amounts) Income from operations (GAAP) Add: Stock-based compensation expense Add: Motorola restructuring and related charges Income from operations (non-GAAP) Q3'12 3,263 688 3,951 Motorola (4) Operating Operating Margin Q3'12 Margin 28% $ (527) -20% 27 349 (5) 34% $ (151) -6%

(4) Percentages based on Google revenues of $11,526 million in Q3'12 and Motorola revenues of $2,575 million in Q3'12 (5) Includes stock-based compensation expense of $47 million.

14

Q3 2012 Quarterly Earnings Summary