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Google Inc.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

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(In millions)

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Three Months Ended Twelve Months Ended

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December 31, December 31,

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2012 2013 2012 2013

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(unaudited) (unaudited)

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Operating activities

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Net income $2,886 $3,376 $10,737 $12,920

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Adjustments:

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Depreciation and amortization of property and equipment 630 757 1,988 2,781

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Amortization of intangible and other assets 323 279 974 1,158

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Stock-based compensation expense 716 902 2,692 3,343

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Excess tax benefits from stock-based award activities (75) (179) (188) (481)

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Deferred income taxes (289) (562) (266) (437)

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Loss (gain) on divestiture of businesses 0 5 (188) (700)

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Other (4) 62 (28) 106

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Changes in assets and liabilities, net of effects of acquisitions:

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Accounts receivable (559) (853) (787) (1,307)

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Income taxes, net 156 480 1,492 401

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Inventories 113 (188) 301 (234)

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Prepaid revenue share, expenses and other assets 382 (547) (833) (696)

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Accounts payable (225) 320 (499) 605

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Accrued expenses and other liabilities 278 983 762 713

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Accrued revenue share 356 246 299 254

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Deferred revenue (19) 157 163 233

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Net cash provided by operating activities 4,669 5,238 16,619 18,659

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Investing activities

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Purchases of property and equipment (1,020) (2,255) (3,273) (7,358)

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Purchases of marketable securities (9,164) (13,698) (33,410) (45,444)

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Maturities and sales of marketable securities 5,380 15,073 35,180 38,314

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Investments in non-marketable equity investments (450) (98) (696) (569)

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Cash collateral related to securities lending (13) (519) (334) (299)

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Investments in reverse repurchase agreements (150) 0 45 600

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Proceeds from divestiture of businesses 0 0 0 2,525

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Acquisitions, net of cash acquired, and purchases of intangibles and other assets (97) (120) (10,568) (1,448)

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Net cash used in investing activities (5,514) (1,617) (13,056) (13,679)

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Financing activities

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Net payments related to stock-based award activities (98) (144) (287) (781)

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Excess tax benefits from stock-based award activities 75 179 188 481

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Proceeds from issuance of debt, net of costs 3,984 2,418 16,109 10,768

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Repayments of debt (4,653) (2,421) (14,781) (11,325)

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Net cash provided by (used in) financing activities (692) 32 1,229 (857)

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Effect of exchange rate changes on cash and cash equivalents 55 3 3 (3)

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Net increase (decrease) in cash and cash equivalents (1,482) 3,656 4,795 4,120

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Cash and cash equivalents at beginning of period 16,260 15,242 9,983 14,778

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Cash and cash equivalents at end of period $14,778 $18,898 $14,778 $18,898