Stockholders' Equity

9 Months Ended

Sep. 30, 2015

Stockholders’ Equity

Stock-Based Compensation

The following table presents our aggregate stock-based compensation expense by type of costs and expenses per the Consolidated Statements of Income (in millions):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2015		2014		2015
	(unaudited)
Cost of revenues	$	169	$	231	$	364	$	554
Research and development	666		741		1,569		1,939
Sales and marketing	197		250		502		651
General and administrative	223		210		539		623
Discontinued operations	35		0		118		0
Total stock-based compensation expense	$	1,290	$	1,432	$	3,092	$	3,767

Stock-Based Award Activities

The following table summarizes the activities for our stock options for the nine months ended September 30, 2015:



	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)⁽¹⁾
	(unaudited)
Balance as of December 31, 2014	7,240,419		$	215.56
Granted	0		N/A
Exercised	(1,736,987	)	$	191.10
Forfeited/canceled	(266,388	)	$	311.31
Balance as of September 30, 2015	5,237,044		$	218.80	3.8	$	2,120
Exercisable as of September 30, 2015	4,768,764		$	209.30	3.6	$	1,976
Exercisable as of September 30, 2015 and expected to vest thereafter ⁽²⁾	5,181,225		$	217.75	3.8	$	2,103


⁽¹⁾	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $638.37 and $608.42 for our Class A common stock and Class C capital stock, respectively, on September 30, 2015.


⁽²⁾	Options expected to vest reflect an estimated forfeiture rate.

As of September 30, 2015, there was $18 million of unrecognized compensation cost related to outstanding Google employee stock options. This amount is expected to be recognized over a weighted-average period of 0.8 years. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation expense related to these awards will be different from our expectations.

The following table summarizes the activities for our unvested restricted stock units (RSUs) for the nine months ended September 30, 2015:



	Unvested Restricted Stock Units
	Number of Shares		Weighted- Average Grant-Date Fair Value
	(unaudited)
Unvested as of December 31, 2014	24,619,549		$	487.80
Granted	13,116,639		$	530.39
Vested	(8,322,365	)	$	443.27
Forfeited/canceled	(1,757,674	)	$	487.20
Unvested as of September 30, 2015	27,656,149		$	520.97
Expected to vest after September 30, 2015 ⁽¹⁾	24,359,536		$	520.97


⁽¹⁾	RSUs expected to vest reflect an estimated forfeiture rate.

As of September 30, 2015, there was $11.7 billion of unrecognized compensation cost related to unvested Google employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.8 years. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation expense related to these awards will be different from our expectations.