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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 Six Months Ended

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June 30, June 30,

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2013 2014 2013 2014

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(unaudited) (unaudited)

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Operating activities

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

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Adjustments:

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Depreciation expense and loss on disposal of property and equipment 747 813 1,331 1,629

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Amortization of intangible and other assets 283 266 598 536

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Stock-based compensation expense 847 915 1,555 1,802

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Excess tax benefits from stock-based award activities (104) (137) (198) (292)

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Deferred income taxes 63 (282) 265 (138)

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Gain on divestiture of businesses (716) 0 (690) 0

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Gain on equity interest 0 (23) 0 (126)

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Gain on sale of non-marketable equity investments 0 (21) 0 (138)

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Other (65) 4 (54) (10)

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

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Accounts receivable (194) (721) 62 (454)

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Income taxes, net 179 (263) (156) (62)

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Inventories (16) (6) (158) 20

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Prepaid revenue share, expenses and other assets (136) 833 (348) 499

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Accounts payable (159) (163) (72) 14

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Accrued expenses and other liabilities 696 1,011 (363) (68)

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Accrued revenue share 35 2 8 (68)

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Deferred revenue 17 (23) (16) 0

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Net cash provided by operating activities 4,705 5,627 8,338 10,018

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Investing activities

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Purchases of property and equipment (1,611) (2,646) (2,814) (4,991)

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Purchases of marketable securities (14,948) (12,775) (22,782) (24,857)

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Maturities and sales of marketable securities 10,687 14,199 17,006 23,605

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Investments in non-marketable equity investments (136) (299) (172) (467)

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Cash collateral related to securities lending 974 934 1,538 1,713

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Investments in reverse repurchase agreements (70) (50) (70) 0

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Proceeds from divestiture of businesses 2,313 0 2,351 0

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Acquisitions, net of cash acquired, and purchases of intangibles and other assets (1,012) (543) (1,301) (3,490)

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Net cash used in investing activities (3,803) (1,180) (6,244) (8,487)

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Financing activities

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Net payments related to stock-based award activities (58) (595) (268) (921)

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Excess tax benefits from stock-based award activities 104 137 198 292

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Proceeds from issuance of debt, net of costs 2,729 2,877 5,651 6,293

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Repayments of debt (2,880) (3,881) (6,203) (6,304)

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Net cash used in financing activities (105) (1,462) (622) (640)

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Effect of exchange rate changes on cash and cash equivalents (8) (4) (86) (9)

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Net increase in cash and cash equivalents 789 2,981 1,386 882

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Cash and cash equivalents at beginning of period 15,375 16,639 14,778 18,898

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Reclassification to assets held for sale 0 0 0 (160)

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Cash and cash equivalents at end of period $16,164 $19,620 $16,164 $19,620