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Please find page 38 of the 2013 Google annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.32 GOOGLE INC.
PART II
ITEM7.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations
General and Administrative
The following table presents our general and administrative expenses by operating segment for the periods presented (dollars
in millions):
Year Ended December31,
2011 2012 2013
Google $2,421 $3,090 $3,967
Motorola Mobile 0 236 319
Unallocated items 303 519 510
Total $2,724 $3,845 $4,796
General and administrative expenses consist primarily of compensation and related costs for personnel and facilities, and include
costsrelatedtoourfacilities,nance,humanresources,informationtechnologyandlegalorganizations,aswellasfeesfor
professionalservices.Professionalservicesareprincipallycomprisedofoutsidelegal,audit,informationtechnologyconsulting,and
outsourcingservices.Generalandadministrativeexpensesalsoincludeamortizationofcertainacquisition-relatedintangibleassets.
General and administrative expenses for the Google segment increased $877 million from 2012 to 2013 and as a percentage of
Googlesegmentrevenuesremainedrelativelyatfrom2012to2013.Theincreaseinexpenseswasprimarilyduetoanincrease
inlaborandfacilities-relatedcostsof$396million,largelyasaresultofa15%increaseingeneralandadministrativeheadcount,
anincreaseindepreciationandequipment-relatedexpenseof$222million,aswellasanincreaseinamortizationofacquired
intangibleassetsof$157million.
General and administrative expenses for the Google segment increased $669 million from 2011 to 2012 and as a percentage of
Googlesegmentrevenuesremainedrelativelyatfrom2011to2012.Thisincreaseinexpenseswasprimarilyduetoanincrease
inamortizationofacquiredintangibleassetsof$274million,anincreaseinprofessionalservicesexpenseof$147million,the
majorityofwhichwasrelatedtolegalcosts,andanincreaseinlaborandfacilities-relatedcostsof$122million,primarilyasa
resultofan11%increaseingeneralandadministrativeheadcount.
General and administrative expenses for the Motorola Mobile segment were not comparable between 2012 and 2013 because
approximatelysevenmonthsofresultswereincludedin2012whiletwelvemonthsofresultswereincludedin2013.Additionally,
we conducted various restructuring activities to simplify the Motorola Mobile product portfolio subsequent to the acquisition in
May2012.
Unallocateditems,includingstock-basedcompensationexpense,aswellasrestructuringandrelatedcharges,arenotallocated
toeachsegmentbecausewedonotincludethisinformationinourmeasurementoftheperformanceofouroperatingsegments.
As we expand our business and incur additional expenses, we expect general and administrative expenses will increase in dollar
amountandmayincreaseasapercentageoftotalrevenuesin2014andinfutureperiods.
Charge Related to the Resolution of Department of Justice Investigation
In connection with a resolution of an investigation by the United States Department of Justice into the use of Google advertising by
certainadvertisers,weaccrued$500millionduringtherstquarterof2011,whichwaspaidinAugust2011uponnalresolution
ofthatmatter.
Restructuring and related charges
The following table presents our restructuring and related charges for the periods presented (dollars in millions):
Year Ended December31,
2011 2012 2013
Restructuring and related charges (1) $ 0 $ 632 $182
(1) These amounts are included in the previously discussed sections above, as unallocated items related to cost of revenues, research and
development,salesandmarketing,andgeneralandadministrativeexpenses.
Restructuringandrelatedchargesdecreased$450millionfrom2012to2013becausewecompletedthemajorityofour
restructuringandrelatedactivitiesrelatedtoMotorolain2012.
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