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Google Inc.

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CONSOLIDATED STATEMENTS OF INCOME

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(In millions, except share amounts which are reflected in thousands and per share amounts)

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Three Months Ended Six Months Ended

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June 30, June 30,

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2013 2014 2013 2014

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(unaudited)

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Revenues $13,107 $15,955 $26,058 $31,375

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Costs and expenses:

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Cost of revenues (1) 5,195 6,114 10,331 12,075

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Research and development (1) 1,766 2,238 3,383 4,364

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Sales and marketing (1) 1,583 1,941 3,018 3,670

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General and administrative (1) 1,098 1,404 2,113 2,893

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Total costs and expenses 9,642 11,697 18,845 23,002

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Income from operations 3,465 4,258 7,213 8,373

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Interest and other income, net 236 145 370 502

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Income from continuing operations before income taxes 3,701 4,403 7,583 8,875

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Provision for income taxes 927 913 1,281 1,735

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Net income from continuing operations 2,774 3,490 6,302 7,140

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Net income (loss) from discontinued operations (1) 454 (68) 272 (266)

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Net income $3,228 $3,422 $6,574 $6,874

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Net income (loss) per share -- basic:

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Continuing operations $4.17 $5.17 $9.51 $10.59

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Discontinued operations 0.68 (0.10) 0.41 (0.39)

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Net income per share - basic $4.85 $5.07 $9.92 $10.20

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Net income (loss) per share - diluted:

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Continuing operations $4.10 $5.09 $9.34 $10.41

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Discontinued operations 0.67 (0.10) 0.40 (0.39)

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Net income per share - diluted $4.77 $4.99 $9.74 $10.02

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Shares used in per share calculation - basic 664,960 675,115 662,934 673,851

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Shares used in per share calculation - diluted 676,674 686,363 675,000 685,788

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(1) Includes stock-based compensation expense as follows:

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Cost of revenues $110 $100 $209 $195

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Research and development 401 447 739 903

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Sales and marketing 125 158 243 305

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General and administrative 107 175 207 316

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Discontinued operations 104 35 157 83

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Total stock-based compensation expense $847 $915 $1,555 $1,802