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TEXT-S&P puts Google's 'AA-' rating on watch positive
August 21, 2012 / 5:47 PM / 5 years ago

TEXT-S&P puts Google's 'AA-' rating on watch positive

Overview
     -- Google Inc.'s revenues have risen almost 30% year over year,
its net income grew by 32%, and the company ended with $43.1 billion of cash and
securities.
     -- We placed the 'AA-' corporate credit rating on CreditWatch with 
positive implications. 
     -- At the same time, we affirmed our 'A-1+' short-term rating on the 
company.
     -- We will meet with management to review its strategic direction, 
financial policy, and growth objectives before resolving the CreditWatch.
 
Rating Action
On Aug. 21, 2012, Standard & Poor's Ratings Services placed its 'AA-' 
corporate credit rating on Mountain View, Calif.-based Google Inc. on 
CreditWatch with positive implications. At the same time, we affirmed our 
'A-1+' short-term rating on the company.
 
Rationale
The CreditWatch reflects Google's continued strong operating performance, 
while the company maintains exceptional liquidity, a conservative financial 
policy, and a minimal financial risk profile. In the six months ended June 30, 
2012, revenues grew almost 30% year over year, net income rose 32%, and the 
company ended with $43.1 billion of cash and securities.

The ratings on search-based advertising service provider Google Inc. reflect 
its "minimal" financial risk profile, its "strong" business risk profile, and 
Standard & Poor's Ratings Services' belief that the company will maintain the 
technical, managerial, and financial wherewithal to adapt to evolving market 
and delivery transitions. Operating lease-adjusted debt to EBITDA is below 
0.5x.
 
CreditWatch
We will meet with management to review its strategic direction, financial 
policy, and growth objectives before resolving the CreditWatch. We likely will 
limit any upgrade to one notch.
 
Related Criteria And Research
     -- Top 10 Investor Questions: How Will The Global Technology Industry 
Fare Amid An Economy In Flux?, April 26, 2012
     -- Global Technology Ratings Trend Shifts To Negative In The First 
Quarter, April 11, 2012
     -- Issuer Ranking: Global Technology Ratings, Strongest To Weakest, March 
29, 2012
     -- U.S. Technology Companies' Liquidity Is Higher, For Now, Jan. 18, 2012
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
     -- Key Credit Factors: Methodology And Assumptions On Risks In The Global 
High Technology Industry, Oct. 15, 2009
     -- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded, 
May 27, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
 
Ratings List

Ratings Affirmed; CreditWatch Action
                                        To                 From
Google Inc.
 Corporate Credit Rating                AA-/Watch Pos/A-1+ AA-/Stable/A-1+

Google Inc.
 Senior Unsecured                       AA-/Watch Pos      AA-

Ratings Affirmed

Google Inc.
 Commercial Paper                       A-1+               


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

Our Standards:The Thomson Reuters Trust Principles.
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