8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 8-K

_____________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 2, 2016

____________________________________________________________

ALPHABET INC.

(Exact name of registrant as specified in its charter)

_______________________________________________________________

Delaware	001-37580	61-1767919
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1600 Amphitheatre Parkway

Mountain View, CA 94043

(Address of principal executive offices, including zip code)

(650) 253-0000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

______________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

Alphabet Inc. (the "Company") is filing this Current Report on Form 8-K solely to recast certain information in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, as amended (the "2015 Form 10-K"), in connection with its adoption of Accounting Standards Update No. 2014-10 (ASU 2014-10) "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation", Accounting Standards Update No. 2015-02 (ASU 2015-02) "Consolidation (Topic 810): Amendments to the Consolidation Analysis", and Accounting Standards Update No. 2016-09 (ASU 2016-09), "Compensation - Stock Compensation(Topic 718) Improvements to Employee Share-Based Payment Accounting" beginning in the first quarter of 2016.

ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification (ASC), thereby removing the financial reporting distinction between development stage entities and other reporting entities. The amendment to the consolidation guidance requires companies with interests in development stage entities to reassess whether such entities are variable interest entities under ASC Topic 810, "Consolidation." We adopted this standard on a retrospective basis and have included additional disclosures related to certain entities that are now considered variable interest entities upon adoption.

ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. We adopted this standard on a retrospective basis which resulted in additional investments being considered variable interest entities and additional disclosures as applicable.

ASU 2016-09 amends several aspects of the accounting for share-based payment transactions and requires companies to present excess tax benefits as operating activities in the statement of cash flows, among other changes. We have retrospectively adjusted the presentation of excess tax benefits in our Consolidated Statements of Cash Flows.

The following information included in the 2015 Form 10-K is being recasted in the exhibits attached to, and included in, this Current Report on Form 8-K to reflect the impact from the adoptions of ASU 2014-10, ASU 2015-02 and ASU 2016-09. Such information supersedes in its entirety the information in Items 7 and 8 of the 2015 Form 10-K:

• Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations

• Part II, Item 8 - Financial Statements and Supplementary Data

The information in this Current Report on Form 8-K and the exhibits hereto have not been updated to reflect any event or development occurring after February 11, 2016, the date on which the Company filed the 2015 Form 10-K with the Securities and Exchange Commission ("SEC"), other than with respect to the Company's adoption of ASU 2014-10, ASU 2015-02 and ASU 2016-09. This Current Report on Form 8-K does not represent an amendment to or restatement of the Company's 2015 Form 10-K. This Current Report on Form 8-K should be read in conjunction with the 2015 Form 10-K and the Company's other periodic reports filed with the SEC from the filing date of the 2015 Form 10-K through the date of this Current Report on Form 8-K, including the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
99.1	Updates, where applicable, to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, from Alphabet’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on February 11, 2016
99.2	Updates, where applicable, to Part II, Item 8. Financial Statements and Supplementary Data, from Alphabet’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on February 11, 2016
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALPHABET INC.
Date: May 2, 2016	/s/ JAMES G. CAMPBELL
	James G. Campbell Vice President, Alphabet Corporate Controller

EXHIBIT INDEX

Exhibit Number	Description
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
99.1	Updates, where applicable, to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, from Alphabet’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on February 11, 2016
99.2	Updates, where applicable, to Part II, Item 8. Financial Statements and Supplementary Data, from Alphabet’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on February 11, 2016
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

EX-23.1

EXHIBIT 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-8 No. 333-207254) of Alphabet Inc., pertaining to the Google Inc. 2004 Stock Plan, Alphabet Inc. 2012 Stock Plan, Click Holding Corp. 2005 Stock Incentive Plan, AdMob, Inc. 2006 Stock Plan, UK Sub-Plan of the AdMob, Inc. 2006 Stock Plan, Motorola Mobility Holdings, Inc. 2011 Incentive Compensation Plan and Alphabet Inc. Deferred Compensation Plan,

(2) Registration Statement (Form S-3 No. 333-209510) of Alphabet Inc., pertaining to the registration of Alphabet Inc. debt securities, preferred stock, Class A common stock, Class C capital stock and warrants, and

(3) Registration Statement (Form S-3 No. 333-209518) of Alphabet Inc., pertaining to the sale of Class C capital stock in conjunction with the acquisition of bebop Technologies, Inc.;

of our report dated February 11, 2016 (except for the effects of the retrospective adoption of the updated accounting standards discussed in Notes 1, 3 and 7 to the consolidated financial statements, as to which the date is May 2, 2016), with respect to the consolidated financial statements and schedule (listed in the Index to the 2015 Form 10-K at Item 15(a)2) of Alphabet Inc. and our report dated February 11, 2016, with respect to the effectiveness of internal control over financial reporting of Alphabet Inc., included in this Current Report on Form 8-K.

/s/ Ernst & Young LLP

San Jose, California

May 2, 2016

EX-99.1

PART II

EXHIBIT 99.1

Note: The information contained in this exhibit has been updated for the cash flow presentation requirements associated with the adoption of ASU 2016-09 where excess tax benefits are recognized as part of cash flows from operating activities. This adoption is further discussed in the Notes to Consolidated Financial Statements within Note 1, Nature of Operations and Summary of Significant Accounting Policies. Within this exhibit, the Executive Overview of Results and Capital Resources and Liquidity sections have been updated as applicable. This exhibit has not been updated for any other changes since the filing of the 2015 Annual Report on Form 10-K ("2015 Form 10-K"). For significant developments since the filing of the 2015 Form 10-K, refer to our other periodic reports filed with the SEC through the date of this Current Report on Form 8-K, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Please read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.

Trends in Our Business

The following trends have contributed to the results of our consolidated operations, and we anticipate that they will continue to impact our future results:

•Users' behaviors and advertising continue to shift online as the digital economy evolves.

The continuing shift from an offline to online world has contributed to the growth of our business since inception, resulting in increasing revenues, and we expect that this online shift will continue to benefit our business.

•As online advertising evolves, we continue to expand our product offerings which may impact our monetization.

As interactions between users and advertisers change, we continue to expand our product offerings to serve their changing needs. Over time, we expect our monetization trends to fluctuate. For example, we have seen an increase in YouTube engagement ads, which monetize at a lower rate than traditional search desktop ads. Additionally, advertisers are beginning to shift to programmatic buying which presents opportunities for advertisers to connect with the right user, in the right moment, in the right context. This may also have different monetization profiles to our existing advertising business. These trends will continue to affect our monetization in the future.

•Users are increasingly using multiple devices to access our products and services, and our advertising revenues are increasingly coming from mobile phones and other new formats.

Our users are accessing the Internet via multiple devices. Mobile computing power continues to grow and users want to feel connected no matter where they are or what they are doing. We seek to expand our products and services to stay in front of this shift in order to maintain and grow our business.

In this multi-device world, we generate our advertising revenues increasingly from mobile phones and newer advertising formats, and the margins from the advertising revenues from these sources have generally been lower than those from desktop computers and tablets. Our traffic acquisition cost (TAC) may also be impacted because the rates at which we share mobile revenues with our partners may differ from our traditional desktop and tablet formats.

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We expect both of these trends to continue to put pressure on our overall margins, particularly if we fail to realize the opportunities presented during the transition to a dynamic multi-screen environment.

•As users in developing economies increasingly come online, we generate increasing revenues from international markets, and movements in foreign exchange rates impact such revenues.

The shift to online, as well as the advent of the multi-device world, has brought opportunities outside of the U.S., especially in emerging markets, and we continue to develop localized versions of our products and relevant advertising programs useful to our users in these markets. This has led to a trend of increased revenues from international markets over time and we expect that our results will continue to be impacted by our performance in these markets, particularly as low-cost mobile devices become more available.

Our international revenues represent a significant proportion of our revenues and are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar. While we have a foreign exchange risk management program designed to reduce our exposure to these fluctuations, this program does not fully offset their effect on our revenues and earnings.

•The portion of our revenues that we derive from non-advertising revenues is increasing.

Non-advertising revenues have grown over time. We expect this trend to continue as we focus on expanding our Google offerings to our users through products like Google Play, cloud and apps and hardware products. Across these initiatives, we currently derive non-advertising revenues primarily from sales of digital content products, hardware sales, service and licensing fees; the margins on these non-advertising businesses vary significantly and may be lower than the margins on our advertising business. A number of our Other Bets initiatives are in their initial development stages, and as such, the sources of revenues from these businesses could change over time and the revenues themselves could be volatile.

•As we continue to look for new ways to serve our users and expand our businesses, we will invest heavily in R&D and our capital expenditures will continue to fluctuate.

We continue to make significant research and development (R&D) investments in areas of strategic focus for Google, such as search and advertising, as well as in new products and services across both Google and Other Bets. The amount of our capital expenditures has fluctuated and may continue to fluctuate in the long term as we invest heavily in our systems, data centers, real estate and facilities, and information technology infrastructure.

In addition, acquisitions remain an important part of our strategy and use of capital, and we expect to continue to spend cash on acquisitions and other investments. These acquisitions generally enhance the breadth and depth of our offerings, as well as expanding our expertise in engineering and other functional areas.

• Our employees are critical to our success and we expect to continue investing in them.

Our employees are among our best assets and are critical for our continued success. Their energy and talent drive Alphabet and create our success. We expect to continue hiring talented employees and to provide competitive compensation programs to our employees. As of December 31, 2015, we had 61,814 full-time employees: 23,336 in research and development, 19,082 in sales and marketing, 10,944 in operations, and 8,452 in general and administrative, an increase of 8,214 total headcount from December 31, 2014.

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Alphabet Inc. and Google Inc.

Executive Overview of Results

Here are our key financial results for the fiscal year ended December 31, 2015 (consolidated unless otherwise noted):

• Revenues of $75.0 billion and revenue growth of 14% year over year, constant currency revenue growth of 20% year over year.

• Google segment revenues of $74.5 billion with revenue growth of 14% and Other Bets revenues of $0.4 billion.

• Revenues from the United States, the United Kingdom, and Rest of World were $34.8 billion, $7.1 billion, and $33.1 billion, respectively.

• Cost of revenues was $28.2 billion, consisting of traffic acquisition costs of $14.4 billion and other cost of revenues of $13.8 billion. Our traffic acquisition costs as a percentage of advertising revenues was 21%.

• Operating expenses (excluding cost of revenues) were $27.5 billion.

• Income from operations was $19.4 billion.

• Effective tax rate of 17%.

• Net income was $16.3 billion with diluted net income per share for Class A and B common stock of $22.84 and for Class C capital stock of $24.34.

• Alphabet operating cash flow was $26.6 billion and Google operating cash flow was $26.0 billion.

• Capital expenditures were $9.9 billion.

• Headcount was 61,814 as of December 31, 2015.

Information about Segments

In conjunction with the Alphabet reorganization, in the fourth quarter of 2015, we implemented legal and operational changes in how our Chief Operating Decision Maker (CODM) manages our businesses, including resource allocation and performance assessment. Consequently, we have multiple operating segments, representing the individual businesses that are run separately under the Alphabet structure.

Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the operating segments are combined and disclosed below as Other Bets. All prior-period amounts have been adjusted retrospectively to reflect the reportable segment change.

Our reported segments are described below:

• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome, Google Play as well as hardware products we sell, such as Chromecast, Chromebooks and Nexus. Our technical infrastructure and newer efforts like Virtual Reality are also included in Google.

• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X, and other initiatives.

Please refer to Note 16 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K for further information.

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Alphabet Inc. and Google Inc.

Consolidated Results of Operations

The following table presents our operating results as a percentage of revenues for the periods presented:

	Year Ended December 31,
	2013(1)(2)		2014(1)(2)		2015
Consolidated Statements of Income Data:
Revenues	100.0	%	100.0	%	100.0	%
Costs and expenses:
Cost of revenues	39.6		38.9		37.6
Research and development	12.9		14.9		16.3
Sales and marketing	11.8		12.3		12.1
General and administrative	8.0		8.9		8.2
Total costs and expenses	72.3	%	75.0	%	74.2	%
Income from operations	27.7		25.0		25.8
Other income (expense), net	0.9		1.1		0.4
Income from continuing operations before income taxes	28.6		26.1		26.2
Provision for income taxes	4.9		5.5		4.4
Net income from continuing operations	23.7		20.6		21.8
Net income (loss) from discontinued operations	(0.8	)	0.8		0.0
Net income	22.9	%	21.4	%	21.8	%

⁽¹⁾  Financial results of Motorola Home were included in net income (loss) from discontinued operations for the year ended December 31, 2013. Financial results of Motorola Mobile were included in net income (loss) from discontinued operations for the years ended December 31, 2013 and 2014.

⁽²⁾  In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015. Please refer to Note 1 and Note 17 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

Consolidated Revenues

The following table presents our consolidated revenues, by segment and revenue source (in millions), for the periods presented:

	Year Ended December 31,
	2013		2014		2015
Google segment
Google websites	$	37,422	$	45,085	$	52,357
Google Network Members' websites (1)	13,650		14,539		15,033
Google advertising revenues	51,072		59,624		67,390
Google other revenues (1)	4,435		6,050		7,151
Google segment revenues	$	55,507	$	65,674	$	74,541
Other Bets
Other Bets revenues	$	12	$	327	$	448
Consolidated revenues	$	55,519	$	66,001	$	74,989

⁽¹⁾  Prior period amounts have been adjusted to reflect the reclassification primarily related to DoubleClick ad serving software revenues from Google other revenues to Advertising Revenues from Google Network Members' websites to conform with the current period presentation.

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Google segment

The following table presents our Google segment revenues (in millions), those revenues expressed as a percentage of consolidated revenues, and changes in our aggregate paid clicks and cost-per-click (expressed as a percentage) for the periods presented:

	Year Ended December 31,
	2013			2014			2015
Google segment revenues	$	55,507		$	65,674		$	74,541
Google segment revenues as a percentage of consolidated revenues	100.0		%	99.5		%	99.4		%
Aggregate paid clicks change				20		%	22		%
Aggregate cost-per-click change				(5		)%	(11		)%

Use of Monetization Metrics

When assessing our advertising revenue performance, we present information regarding the number of "paid clicks" and "cost-per-click" for our Google websites and Google Network Members websites. Management views these as important metrics for understanding our business. We periodically review, refine and update our methodologies for monitoring, gathering, and counting the number of paid clicks and for identifying the revenues generated by click activity.

Paid clicks for our Google websites represent engagement by users and include clicks on advertisements by end-users related to searches on Google.com, clicks related to advertisements on other owned and operated properties including Gmail, Finance, Maps, and Google Play; and viewed YouTube engagement ads like TrueView (counted as an engagement when the user chooses not to skip the ad). Paid clicks for our Google Network Members' websites include clicks by end-users related to advertisements served on Google Network Members' properties participating in our AdSense for Search, AdSense for Content and AdMob businesses. In some cases, such as programmatic and reservation based advertising buying, we charge advertisers by impression; while growing, this represents a small part of our revenue base.

Cost-per-click is defined as click-driven revenue divided by our total number of paid clicks and represents the average cost of each engagement by users we charge advertisers.

The rate of change in revenue and revenue growth, as well as the rate of change in paid clicks and cost-per-click on Google websites and Google Network Members' websites and their correlation with the rate of change in revenues, has fluctuated and may fluctuate in the future because of various factors, including:

• growth rates of our revenues from Google websites, including YouTube, compared to those of our revenues from Google Network Members' websites;

• advertiser competition for keywords;

• changes in foreign currency exchange rates;

• seasonality;

• the fees advertisers are willing to pay based on how they manage their advertising costs;

• changes in advertising quality or formats;

• traffic growth in emerging markets compared to more mature markets and across various advertising verticals and channels;

• a shift in the proportion of non-click based revenue generated in Google websites and Google Network Members' websites, including an increase in programmatic and reservation based advertising buying; and

• general economic conditions.

Our revenue growth rate has generally declined over time as a result of a number of factors, including increasing competition, query growth rates, challenges in maintaining our growth rate as our revenues increase to higher levels, the evolution of the online advertising market, our investments in new business strategies, changes in our product

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mix, and shifts in the geographic mix of our revenues. We also expect that our revenue growth rate will continue to be affected by evolving user preferences, the acceptance by users of our products and services as they are delivered on diverse devices, our ability to create a seamless experience for both users and advertisers, and movements in foreign currency exchange rates.

Google websites

The following table presents our Google websites revenues (in millions), those revenues expressed as a percentage of Google segment revenues, and changes in our paid clicks and cost-per-click (expressed as a percentage) for the periods presented:

	Year Ended December 31,
	2013			2014			2015
Google websites	$	37,422		$	45,085		$	52,357
Google websites as a percentage of Google segment revenues	67.4		%	68.6		%	70.2		%
Paid clicks change				29		%	33		%
Cost-per-click change				(7		)%	(15		)%

Google websites revenues consist primarily of:

• AdWords revenue that is generated on Google.com. This includes revenue from traffic generated by search distribution partners who use Google.com as their default search in browsers, toolbars, etc.;

• Advertising revenue generated on YouTube, including, but not limited to YouTube TrueView and Google Preferred; and

• Advertising revenue generated from other Google owned and operated properties like Gmail, Finance, Maps, and Google Play.

Our Google websites revenues increased $7,272 million from 2014 to 2015 and also increased as a percentage of Google segment revenues. Our Google websites revenue growth was primarily driven by increases in mobile search due to ongoing improvements in ad formats, as well as growth in YouTube video advertising across TrueView and Google Preferred, partially offset by the general strengthening of the U.S. dollar compared to certain foreign currencies.

The number of paid clicks through our advertising programs increased from 2014 to 2015 due to an increase in aggregate traffic on Google owned properties, the adoption of advertising formats such as YouTube engagement ads, and continued global expansion of our products, advertisers and user base across all platforms, particularly mobile. The positive impact on our revenues from paid clicks was partially offset by a decrease in the cost-per-click paid by our advertisers. The decrease was primarily driven by continued growth in YouTube engagement ads where cost-per-click remains lower than on our other platforms, as well as changes in property and device mix, product mix, geographic mix, and ongoing product changes, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

Our Google websites revenues increased $7,663 million from 2013 to 2014 and also increased as a percentage of Google segment revenues. Our Google websites revenue growth was driven primarily by growth across all platforms due to ongoing improvements in ad formats, as well as growth in YouTube engagement ads, partially offset by the general strengthening of the U.S. dollar compared to certain foreign currencies.

The increase in the number of paid clicks generated through our advertising programs from 2013 to 2014 was due to certain monetization improvements including new and richer ad formats, an increase in aggregate traffic across all platforms, the continued global expansion of our products, advertisers, and user base, partially offset by certain advertising policy changes. The positive impact on our revenues from paid clicks was partially offset by a decrease in the average cost-per-click paid by our advertisers. The decrease was due to various factors, such as the geographic mix, device mix, property mix, ongoing product and policy changes, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

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Google Network Members' websites

The following table presents our Google Network Members' websites revenues (in millions), those revenues expressed as a percentage of Google segment revenues, and changes in our paid clicks and cost-per-click for the periods presented (in percentage terms):

	Year Ended December 31,
	2013			2014			2015
Google Network Members' websites(1)	$	13,650		$	14,539		$	15,033
Google Network Members' websites revenues as a percentage of Google segment revenues(1)	24.6		%	22.1		%	20.2		%
Paid clicks change				2		%	(7		)%
Cost-per-click change				(6		)%	(3		)%

⁽¹⁾  Prior period amounts have been adjusted to reflect the reclassification primarily related to DoubleClick ad serving software revenues from Google other revenues to Advertising Revenues from Google Network Members' websites to conform with the current period presentation.

Google Network Members' websites revenues consist primarily of:

• AdSense (such as AdSense for Search, AdSense for Content, etc.);

• AdExchange;

• AdMob;

• All DoubleClick-related revenues including DoubleClick Bid Manager revenues; and

• Other Network products including AdSense for Domains.

Our Google Network Members' websites revenues increased $494 million from 2014 to 2015. The increase was primarily driven by strength in programmatic advertising buying, offset by our continued AdSense advertising policy changes aimed at enriching the experience for users and the general strengthening of the U.S. dollar compared to certain foreign currencies. The decrease in Network Members' websites revenues as a percentage of Google segment revenues is due to relatively slower growth of Network Members' websites revenues compared to that of Google websites revenues as well as Google other revenues.

The decreases in both paid clicks and cost-per-click paid by our advertisers from 2014 to 2015 were primarily driven by ongoing product and policy changes designed to reduce lower quality inventory on AdSense for Search, changes in property and device mix, product mix, and geographic mix, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

Our Google Network Members' websites revenues increased $889 million from 2013 to 2014. The increase was mainly due to certain monetization improvements including new and richer ad formats and an increase in the number of Google Network Members, partially offset by certain AdSense advertising policy changes aimed at enriching the experience for users. The decrease in Network Members' websites revenues as a percentage of Google segment revenues is due to relatively slower growth of Network Members' websites revenues compared to that of Google websites revenues as well as Google other revenues.

The increase in paid clicks from 2013 to 2014 was due to certain monetization improvements including new and richer ad formats, an increase in aggregate traffic across all platforms, the continued global expansion of our products, advertisers, and user base, and an increase in the number of Google Network Members, partially offset by certain advertising policy changes. The decrease in the average cost-per-click from 2013 to 2014 was due to various factors, such as the geographic mix, device mix, property mix, ongoing product and policy changes, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

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Google other revenues

The following table presents our Google other revenues (in millions), and those revenues expressed as a percentage of Google segment revenues, for the periods presented:

	Year Ended December 31,
	2013			2014			2015
Google other revenues(1)	$	4,435		$	6,050		$	7,151
Google other revenues as a percentage of Google segment revenues(1)	8.0		%	9.3		%	9.6		%

⁽¹⁾  Prior period amounts have been adjusted to reflect the reclassification primarily related to DoubleClick ad serving software revenues from Google other revenues to Advertising Revenues from Google Network Members' websites to conform with the current period presentation.

Google other revenues consist primarily of:

•Sales of apps and media content in the Google Play store;

• Sales of certain Google branded hardware, such as Chromecast;

•Service fees received for cloud and apps and our Maps API; and

•Licensing-related revenue.

Google other revenues increased $1,101 million from 2014 to 2015 and increased as a percentage of Google segment revenues. These increases were primarily due tothe growth of our sales of digital content products in the Google Play store, primarily apps (revenues which we recognize net of payout to partners). In addition, there was an increase in revenues from service fees received for cloud and apps offerings. These increases were partially offset by the general strengthening of the U.S. dollar compared to certain foreign currencies.

Google other revenues increased $1,615 million from 2013 to 2014 and increased as a percentage of Google segment revenues. The increase was primarily due to growth of our sales of digital content products in the Google Play store, primarily apps.

Other Bets

The following table presents our Other Bets revenues (in millions), and those revenues expressed as a percentage of consolidated revenues, for the periods presented:

	Year Ended December 31,
	2013			2014			2015
Other Bets revenues	$	12		$	327		$	448
Other Bets revenues as a percentage of consolidated revenues	0.0		%	0.5		%	0.6		%

Other Bets revenues consist primarily of:

• Sales of Nest branded hardware;

• Revenues from internet and TV services; and

• Revenues from licensing and R&D services.

Our Other Bets revenues increased $121 million from 2014 to 2015 and remained relatively flat as a percentage of consolidated revenues. The increase was primarily due to increases in revenues from sales of Nest branded hardware and revenues from internet and TV services, partially offset by a decrease in licensing revenues. As Nest was acquired in February 2014, the increase in our Nest revenues is impacted by a partial year of revenues in 2014 as compared to a full year in 2015.

Our Other Bets revenues increased $315 million from 2013 to 2014 and increased as a percentage of consolidated revenues. This is primarily due to the acquisition of Nest in 2014 as well as an increase of licensing revenues.

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Consolidated Revenues by Geography

The following table presents our domestic and international revenues as a percentage of consolidated revenues, determined based on the billing addresses of our customers:

	Year Ended December 31,
	2013		2014		2015
United States	46	%	45	%	46	%
United Kingdom	10	%	10	%	10	%
Rest of the world	44	%	45	%	44	%

For the amounts of revenues by geography, please refer to Note 16 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

Use of Constant Currency and Constant Currency Growth

The impact of exchange rates on our business is an important factor in understanding period to period comparisons. Our international revenues are favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S dollar strengthens relative to other foreign currencies. We believe the presentation of results on a constant currency basis in addition to reported results helps improve the ability to understand our performance because they exclude the effects of foreign currency volatility that are not indicative of our core operating results.

Constant currency information compares results between periods as if exchange rates had remained constant period over period. We define constant currency revenues as total revenues excluding the impact of foreign exchange rate movements and hedging activities, and use it to determine the constant currency revenue growth on a year-on-year basis. Constant currency revenues are calculated by translating current period revenues using prior period exchange rates, as well as excluding any hedging gains realized in the current period.

Constant currency revenue growth (expressed as a percentage) is calculated by determining the increase in current period revenues over prior period revenues where current period foreign currency revenues are translated using prior period exchange rates and hedging benefits are excluded from revenues of both periods.

These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with GAAP.

The following table presents our foreign exchange impact on United Kingdom revenues for the periods presented (in millions; unaudited):

	Year Ended December 31,
	2013			2014			2015
United Kingdom revenues	$	5,600		$	6,483		$	7,067
Exclude: Foreign exchange impact on current year revenues using prior period rates	67			(304		)	538
Exclude: Hedging gains recognized	(63		)	(3		)	(133		)
Constant currency United Kingdom revenues	$	5,604		$	6,176		$	7,472
United Kingdom revenue growth rate				16		%	9		%
United Kingdom constant currency revenue growth rate				12		%	15		%

In 2015, our revenues from the United Kingdom were unfavorably impacted by changes in foreign currency exchange rates over the prior year, primarily as the U.S. dollar strengthened relative to the British pound.

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In 2014, our revenues from the United Kingdom were favorably impacted by changes in foreign currency exchange rates over the prior year, primarily as the U.S. dollar weakened relative to the British pound.

The following table presents our foreign exchange impact on Rest of the world and total revenues for the periods presented (in millions; unaudited):

	Year Ended December 31,
	2013			2014			2015
Rest of the world revenues(1)	$	24,332		$	30,036		$	33,112
Exclude: Foreign exchange impact on current year revenues using prior period rates	535			857			5,052
Exclude: Hedging gains recognized	(32		)	(169		)	(1,267		)
Constant currency Rest of the world revenues	$	24,835		$	30,724		$	36,897
Rest of the world revenue growth rate				23		%	10		%
Rest of the world constant currency revenue growth rate				26		%	24		%
United States revenues(1)	$	25,587		$	29,482		$	34,810
United States revenue growth rate				15		%	18		%
Total consolidated revenues	$	55,519		$	66,001		$	74,989
Constant currency total consolidated revenues	$	56,026		$	66,382		$	79,179
Total consolidated revenue growth rate				19		%	14		%
Constant currency total consolidated revenue growth rate				20		%	20		%

⁽¹⁾  In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities. We revised the classification of such revenues between Rest of the world and U.S. for prior periods. Please refer to Note 1 and Note 17 of the Notes to Consolidated Financial Statements included in Part II of this Annual report t on Form 10-K for further information.

In 2015, our revenues from the Rest of the world (excluding the United Kingdom) were unfavorably impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar strengthened relative to the Euro, Brazilian real, Australian dollar and Japanese yen.

In 2014, our revenues from the Rest of the world (excluding the United Kingdom) were unfavorably impacted by changes in foreign currency exchange rates, as the U.S. dollar strengthened relative to certain currencies, most notably the Japanese yen and the Australian dollar, and partially offset by the favorable impact of the U.S. dollar weakening against certain currencies, most notably the Euro.

Consolidated Costs and Expenses

Cost of Revenues

Cost of revenues consists primarily of traffic acquisition costs which are the advertising revenues shared with our Google Network Members and the amounts paid to our distribution partners who distribute our browser or otherwise direct search queries to our website.

Additionally, other cost of revenues (which is the cost of revenues excluding traffic acquisition costs) includes the following:

• The expenses associated with the operation of our data centers (including depreciation, labor, energy, and bandwidth costs);

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• Content acquisition costs primarily related to payments to certain content providers from whom we license their video and other content for distribution on YouTube and Google Play (we share the fees these sales generate with content providers or pay a fixed fee to these content providers);

• Credit card and other transaction fees related to processing customer transactions;

• Stock-based compensation expense;

• Revenue share payments to mobile carriers;

• Inventory costs for hardware we sell; and

• Amortization of certain intangible assets.

The following tables present our cost of revenues and cost of revenues as a percentage of revenues, and our traffic acquisition costs and traffic acquisition costs as a percentage of advertising revenues, for the periods presented (in millions):

	Year Ended December 31,
	2013			2014			2015
Traffic acquisition costs	$	12,258		$	13,497		$	14,343
Other cost of revenues	9,735			12,194			13,821
Total cost of revenues	$	21,993		$	25,691		$	28,164
Total cost of revenues as a percentage of revenues	39.6		%	38.9		%	37.6		%
	Year Ended December 31,
	2013			2014			2015
Traffic acquisition costs to Google Network Members	$	9,293		$	9,864		$	10,242
Traffic acquisition costs to distribution partners	2,965			3,633			4,101
Traffic acquisition costs	$	12,258		$	13,497		$	14,343
Traffic acquisition costs as a percentage of advertising revenues	24.0		%	22.6		%	21.3		%

The cost of revenues that we incur related to revenues generated from ads placed through our AdSense program on the websites of our Google Network Members are significantly higher than the costs of revenues we incur related to revenues generated from ads placed on Google websites because most of the advertiser fees from ads served on Google Network Members’ websites are shared with our Google Network Members. For the past five years, growth in advertising revenues from Google websites has generally exceeded that from our Google Network Members’ websites. This had a positive impact on our income from operations during this period.

Cost of revenues increased $2,473 million from 2014 to 2015. The increase was primarily due to data center costs and an increase in content acquisition costs as a result of increased activities related to YouTube and digital content. The remaining increase was driven by increases in traffic acquisition costs of $846 million, resulting from more advertiser fees generated through our AdSense program driven primarily by an increase in advertising revenues, as well as more fees paid to our distribution partners for additional traffic directed to our websites. Additionally, there was an impairment charge of $378 million recognized in 2014 related to a patent licensing royalty asset acquired in connection with the Motorola acquisition that did not recur in 2015. The decrease in aggregate traffic acquisition costs as a percentage of advertising revenues was primarily a result of a shift of mix from Google Network Members' websites revenue to Google websites revenue.

Cost of revenues increased $3,698 million from 2013 to 2014. The increase was partially due to increases in traffic acquisition costs of $1,239 million resulting from more distribution fees paid for additional traffic directed to Google websites, as well as more advertiser fees paid to Google Network Members, driven primarily by an increase in advertising revenues. The remaining increase was primarily driven by an increase in data center costs, content acquisition costs as a result of increased usage activities related to YouTube and digital content by our users, and revenue share payments to mobile carriers and original equipment manufacturers (OEMs). In addition, the increase

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was also driven by the impairment charge described above. The decrease in traffic acquisition costs as a percentage of advertising revenues was primarily a result of a shift of mix between Google websites revenue and Google Network Members' websites revenue.

We expect cost of revenues will increase in dollar amount and fluctuate as a percentage of total revenues in 2016 and future periods, based on a number of factors, including the following:

• The relative growth rates of revenues from Google websites and from our Google Network Members' website;

• The growth rates of expenses associated with our data center operations, as well as our hardware inventory costs;

• Increased proportion of other non-advertising revenues as part of our total revenues;

• Whether we are able to enter into more revenue share arrangements with Google Network Members and distribution partners that provide for lower revenue share obligations or whether increased competition for arrangements with existing and potential Google Network Members and distribution partners results in less favorable revenue share arrangements;

• Whether we are able to continue to improve the monetization of traffic on Google websites and our Google Network Members' websites; and

• The relative growth rates of expenses associated with distribution arrangements and the related revenues generated.

Research and Development

The following table presents our R&D expenses, and those expenses as a percentage of revenues, for the periods presented (in millions):

	Year Ended December 31,
	2013			2014			2015
Research and development expenses	$	7,137		$	9,832		$	12,282
Research and development expenses as a percentage of revenues	12.9		%	14.9		%	16.3		%

R&D expenses consist primarily of:

• Labor and facilities-related costs for employees responsible for R&D of our existing and new products and services;

• Depreciation and equipment-related expenses; and

• Stock-based compensation expense.

R&D expenses increased $2,450 million and increased as a percentage of revenues from 2014 to 2015. These increases were primarily due to an increase in labor and facilities-related costs of $1,502 million and an increase in stock-based compensation expense of $487 million, both largely as a result of a 16% increase in R&D headcount. The increase in labor and facilities-related costs was also impacted by expenses resulting from project milestones in Other Bets established several years ago. In addition, there was an increase in depreciation and equipment-related expenses of approximately $248 million and an increase in professional services of $174 million due to additional expenses incurred for consulting and outsourced services.

R&D expenses increased $2,695 million and increased as a percentage of revenues from 2013 to 2014. These increases were primarily due to an increase in labor and facilities-related costs of $1,289 million and an increase in stock-based compensation expense of $559 million, both largely as a result of a 27% increase in R&D headcount. In addition, there was an increase in depreciation and equipment-related expenses of $425 million and an increase in professional services of $371 million due to additional expenses incurred for consulting and outsourced services.

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We expect that R&D expenses will increase in dollar amount and may fluctuate as a percentage of revenues in 2016 and future periods.

Sales and Marketing

The following table presents our sales and marketing expenses, and those expenses as a percentage of revenues, for the periods presented (in millions):

	Year Ended December 31,
	2013			2014			2015
Sales and marketing expenses	$	6,554		$	8,131		$	9,047
Sales and marketing expenses as a percentage of revenues	11.8		%	12.3		%	12.1		%

Sales and marketing expenses consist primarily of:

• Labor and facilities-related costs for our personnel engaged in sales and marketing, sales support, and certain customer service functions;

• Advertising and promotional expenditures related to our products and services; and

• Stock-based compensation expense.

Sales and marketing expenses increased $916 million and remained relatively flat as a percentage of revenues from 2014 to 2015. The increase in dollar amount was primarily due to an increase in labor and facilities-related costs of $329 million and an increase in stock-based compensation expense of $184 million, largely resulting from a 12% increase in sales and marketing headcount. In addition, there was an increase in advertising and promotional expenses of $184 million and an increase in professional service fees of $158 million due to additional expenses incurred for consulting and outsourced services.

Sales and marketing expenses increased $1,577 million from 2013 to 2014 and increased as a percentage of revenues from 2013 to 2014. These increases were primarily due to an increase in advertising and promotional expenses of $614 million. In addition, there was an increase in labor and facilities-related costs of $571 million and an increase in stock-based compensation expense of $163 million, both largely resulting from a 15% increase in sales and marketing headcount.

We expect that sales and marketing expenses will increase in dollar amount and may fluctuate as a percentage of revenues in 2016 and future periods.

General and Administrative

The following table presents our general and administrative expenses, and those expenses as a percentage of revenues, for the periods presented (in millions):

	Year Ended December 31,
	2013			2014			2015
General and administrative expenses	$	4,432		$	5,851		$	6,136
General and administrative expenses as a percentage of revenues	8.0		%	8.9		%	8.2		%

General and administrative expenses consist primarily of:

• Labor and facilities-related costs for personnel in our facilities, finance, human resources, information technology, and legal organizations;

• Depreciation and equipment-related expenses;

• Professional services fees primarily related to outside legal, audit, information technology consulting, and outsourcing services;

• Amortization of certain intangible assets; and

• Stock-based compensation expense.

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General and administrative expenses increased $285 million and decreased as a percentage of revenues from 2014 to 2015. The increase in dollar amount was primarily due to an increase in stock-based compensation expense of $136 million and an increase in labor and facilities-related costs of $69 million, both largely resulting from a 15% increase in general and administrative headcount. In addition, there was an increase in depreciation and equipment-related expenses of $121 million and an increase of $80 million of miscellaneous general and administrative expenses. These factors were partially offset by a decrease in professional service fees and expenses of $128 million, primarily due to lower legal-related costs.

General and administrative expenses increased $1,419 million and increased as a percentage of revenues from 2013 to 2014. The increases were primarily due to an increase in labor and facilities-related costs of $576 million and an increase in stock-based compensation expense of $260 million, both largely resulting from a 24% increase in general and administrative headcount. In addition, there was an increase in professional services related expense of $314 million due to higher legal related costs, as well as additional consulting and outsourced services.

We expect general and administrative expenses will increase in dollar amount and may fluctuate as a percentage of revenues in 2016 and future periods.

Stock-Based Compensation

The following table presents our equity settled stock-based compensation expense, and equity settled stock-based compensation as a percentage of revenues, as reflected in our consolidated results from continuing operations for the periods presented (in millions):

	Year Ended December 31,
	2013			2014			2015
Stock-based compensation	$	3,127		$	4,175		$	5,203
Stock-based compensation as a percentage of revenues	5.6		%	6.3		%	6.9%

Stock-based compensation related to equity settled awards increased $1,028 million from 2014 to 2015 and $1,048 million from 2013 to 2014, and increased as a percentage of revenues in both periods. These increases were primarily driven by headcount growth. Additionally, we recognized stock-based compensation expense associated with awards ultimately settled in cash of $0 million, $0 million, and $50 million in the years ended December 31, 2013, 2014, and 2015, respectively.

We estimate equity settled stock-based compensation expense to be approximately $5.3 billion in 2016 and $5.8 billion thereafter related to stock awards outstanding as of December 31, 2015. This estimate does not include expenses to be recognized related to stock-based awards granted after December 31, 2015. If forfeiture rates are different from what we have anticipated, stock-based compensation related to these awards will be different from our expectations.

Consolidated Other Income (Expense), Net

The following table presents other income (expense), net, and other income (expense), net, as a percentage of revenues (in millions):

	Year Ended December 31,
	2013			2014			2015
Other income (expense), net	$	496		$	763		$	291
Other income (expense), net, as a percentage of revenues	0.9		%	1.1		%	0.4%

Other income (expense), net, decreased $472 million from 2014 to 2015. This decrease was primarily related to a writedown of securities received in conjunction with the sale of a business, as well as, reduced gains on non-

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marketable investments as compared to 2014. These decreases were partially offset by an increase in interest income as a result of increased cash and fixed income investments.

Other income (expense), net, increased $267 million from 2013 to 2014. This increase was primarily driven by realized gains on non-marketable equity investments of $159 million and previously-held equity interests of $126 million, as well as a loss recognized on divestiture of businesses (other than Motorola Home) in 2013. These increases were partially offset by an increase in foreign currency exchange loss of $23 million and a decrease in interest income of $20 million.

The costs of our foreign exchange hedging activities recognized to other income, net, are primarily a function of the notional amount of the option and forward contracts and their related duration, the movement of the foreign exchange rates relative to the strike prices of the contracts, and the volatility of foreign exchange rates.

As we expand our international business, costs related to hedging activities under our foreign exchange risk management program may increase in 2016 and future periods.

Consolidated Provision for Income Taxes

The following table presents our provision for income taxes, and effective tax rate for the periods presented (in millions):

	Year Ended December 31,
	2013(1)			2014(1)			2015
Provision for income taxes	$	2,739		$	3,639		$	3,303
Effective tax rate	17.2		%	21.1		%	16.8		%

⁽¹⁾  In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015. Please refer to Note 1 and Note 17 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

Our provision for income taxes and our effective tax rate decreased from 2014 to 2015, largely due to a discrete benefit recognized in 2015 as a result of the resolution of a multi-year audit in the U.S. and proportionately more earnings realized in countries that have lower statutory tax rates.

Our provision for income taxes and our effective tax rate increased from 2013 to 2014, largely due to proportionately more earnings realized in countries that have higher statutory tax rates and more benefit recognized in 2013 relative to 2014 due to the retroactive extension of the 2012 federal research and development credit, offset by a benefit taken on a valuation allowance release related to a capital loss carryforward in 2014.

A reconciliation of the federal statutory income tax rate to our effective tax rate is set forth in Note 15 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Our future effective tax rates could be adversely affected by earnings being lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates, the net gains and losses recognized by legal entities on certain hedges and related hedged intercompany and other transactions under our foreign exchange risk management program, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.

We are subject to the continuous examination of our income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. Further information on these issues, the treatment of undistributed foreign earnings and

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a reconciliation of the federal statutory income tax rate to our effective tax rate can be found in Notes 11 and 15 of Part II, Item 8 of this Annual Report on Form 10-K.

See Critical Accounting Policies and Estimates below for additional information about our provision for income taxes.

Quarterly Results of Operations

The following tables presenting our quarterly results of operations should be read in conjunction with the consolidated financial statements and related notes included in Item 8 of this Annual Report on Form 10-K. We have prepared the unaudited information on the same basis as our audited consolidated financial statements. Our operating results for any quarter are not necessarily indicative of results for any future quarters or for a full year.

The following table presents our unaudited quarterly results of operations for the eight quarters ended December 31, 2015. This table includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for fair presentation of our consolidated financial position and operating results for the quarters presented. Both seasonal fluctuations in internet usage and traditional retail seasonality have affected, and are likely to continue to affect, our business. Internet usage generally slows during the summer months, and commercial queries typically increase significantly in the fourth quarter of each year. These seasonal trends have caused, and will likely continue to cause, fluctuations in our quarterly results, including fluctuations in sequential revenue growth rates.

	Quarter Ended
	Mar 31, 2014(1)		Jun 30, 2014(1)		Sep 30, 2014(1)		Dec 31, 2014(1)		Mar 31, 2015(1)		Jun 30, 2015		Sep 30, 2015		Dec 31, 2015
	(In millions, except per share amounts) (unaudited)
Consolidated Statements of Income Data:
Revenues	$	15,420	$	15,955	$	16,523	$	18,103	$	17,258	$	17,727	$	18,675	$	21,329
Costs and expenses:
Cost of revenues	5,961		6,114		6,695		6,921		6,356		6,583		7,037		8,188
Research and development	2,126		2,238		2,655		2,813		2,753		2,789		3,230		3,510
Sales and marketing	1,729		1,941		2,084		2,377		2,065		2,080		2,223		2,679
General and administrative	1,489		1,404		1,365		1,593		1,637		1,450		1,477		1,572
Total costs and expenses	11,305		11,697		12,799		13,704		12,811		12,902		13,967		15,949
Income from operations	4,115		4,258		3,724		4,399		4,447		4,825		4,708		5,380
Other income (expense), net	357		145		133		128		157		131		183		(180)
Income from continuing operations before income taxes	4,472		4,403		3,857		4,527		4,604		4,956		4,891		5,200
Provision for income taxes	903		984		933		819		1,089		1,025		912		277
Net income from continuing operations	$	3,569	$	3,419	$	2,924	$	3,708	$	3,515	$	3,931	$	3,979	$	4,923
Net income (loss) from discontinued operations	(198)		(68)		(185)		967		0		0		0		0
Net income	$	3,371	$	3,351	$	2,739	$	4,675	$	3,515	$	3,931	$	3,979	$	4,923
Less: Adjustment Payment to Class C capital stockholders	0		0		0		0		0		522		0		0
Net income available to all stockholders	$	3,371	$	3,351	$	2,739	$	4,675	$	3,515	$	3,409	$	3,979	$	4,923

⁽¹⁾  In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015. Please refer to Note 1 and Note 17 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

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The basic and diluted income per share data as included on the consolidated statements of income of Alphabet Inc. were as follows for the periods presented (not required for Google pursuant to Rule 12g-3(a)):

	Quarter Ended
	Mar 31, 2014(1)			Jun 30, 2014(1)			Sep 30, 2014(1)			Dec 31, 2014(1)		Mar 31, 2015(1)		Jun 30, 2015		Sep 30, 2015		Dec 31, 2015
	(unaudited)
Basic net income (loss) per share of Class A and B common stock:
Continuing operations	$	5.30		$	5.06		$	4.32		$	5.46	$	5.16	$	4.99	$	5.80	$	7.16
Discontinued operations	(0.29		)	(0.10		)	(0.27		)	1.43		0.00		0.00		0.00		0.00
Basic net income per share of Class A and B common stock	$	5.01		$	4.96		$	4.05		$	6.89	$	5.16	$	4.99	$	5.80	$	7.16
Basic net income (loss) per share of Class C capital stock:
Continuing operations	$	5.30		$	5.06		$	4.32		$	5.46	$	5.16	$	6.51	$	5.80	$	7.16
Discontinued operations	(0.29		)	(0.10		)	(0.27		)	1.43		0.00		0.00		0.00		0.00
Basic net income per share of Class C capital stock	$	5.01		$	4.96		$	4.05		$	6.89	$	5.16	$	6.51	$	5.80	$	7.16
Diluted net income (loss) per share of Class A and B common stock:
Continuing operations	$	5.21		$	4.98		$	4.25		$	5.38	$	5.10	$	4.93	$	5.73	$	7.06
Discontinued operations	(0.29		)	(0.10		)	(0.27		)	1.41		0.00		0.00		0.00		0.00
Diluted net income per share of Class A and B common stock	$	4.92		$	4.88		$	3.98		$	6.79	$	5.10	$	4.93	$	5.73	$	7.06
Diluted net income (loss) per share of Class C capital stock:
Continuing operations	$	5.21		$	4.98		$	4.25		$	5.38	$	5.10	$	6.43	$	5.73	$	7.06
Discontinued operations	(0.29		)	(0.10		)	(0.27		)	1.41		0.00		0.00		0.00		0.00
Diluted net income per share of Class C capital stock	$	4.92		$	4.88		$	3.98		$	6.79	$	5.10	$	6.43	$	5.73	$	7.06

⁽¹⁾  In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015. Please refer to Note 1 and Note 17 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

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The following table presents our unaudited quarterly results of operations as a percentage of revenues for the eight quarters ended December 31, 2015:

	Quarter Ended
	Mar 31, 2014(1)		Jun 30, 2014(1)		Sep 30, 2014(1)		Dec 31, 2014(1)		Mar 31, 2015(1)		Jun 30, 2015		Sep 30, 2015		Dec 31, 2015
	(unaudited)
Revenues	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Costs and expenses:
Cost of revenues	38.7		38.3		40.5		38.2		36.8		37.1		37.7		38.4
Research and development	13.8		14.0		16.1		15.5		16.0		15.7		17.3		16.4
Sales and marketing	11.2		12.2		12.6		13.1		12.0		11.8		11.9		12.6
General and administrative	9.6		8.8		8.3		8.9		9.4		8.2		7.9		7.4
Total costs and expenses	73.3		73.3		77.5		75.7		74.2		72.8		74.8		74.8
Income from operations	26.7		26.7		22.5		24.3		25.8		27.2		25.2		25.2
Other income (expense), net	2.3		0.9		0.8		0.7		0.9		0.8		1.0		(0.8	)
Income from continuing operations before income taxes	29.0		27.6		23.3		25.0		26.7		28.0		26.2		24.4
Provision for income taxes	5.8		6.2		5.6		4.5		6.3		5.8		4.9		1.3
Net income from continuing operations	23.2		21.4		17.7		20.5		20.4		22.2		21.3		23.1
Net income (loss) from discontinued operations	(1.3	)	(0.4	)	(1.1	)	5.3		0.0		0.0		0.0		0.0
Net income	21.9	%	21.0	%	16.6	%	25.8	%	20.4	%	22.2	%	21.3	%	23.1	%
Less: Adjustment Payment to Class C capital stockholders	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%	2.9	%	0.0	%	0.0	%
Net income available to all stockholders	21.9	%	21.0	%	16.6	%	25.8	%	20.4	%	19.2	%	21.3	%	23.1	%

⁽¹⁾  In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015. Please refer to Note 1 and Note 17 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

Capital Resources and Liquidity

As of December 31, 2015, we had $73.1 billion of cash, cash equivalents, and marketable securities. Cash equivalents and marketable securities are comprised of time deposits, money market and other funds, including cash collateral received related to our securities lending program, fixed-income bond funds, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments, debt instruments issued by municipalities in the U.S., corporate debt securities, agency mortgage-backed securities, and asset-backed securities. From time to time, we may hold marketable equity securities obtained through acquisitions or strategic investments in private companies that subsequently go public.

As of December 31, 2015, $42.9 billion of the $73.1 billion of cash, cash equivalents, and marketable securities was held by our foreign subsidiaries. If these funds were needed for our operations in the U.S., we would be required to accrue and pay U.S. taxes to repatriate these funds. However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to repatriate them to fund our U.S. operations.

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Table of Contents Alphabet Inc. and Google Inc.

Our principal sources of liquidity are our cash, cash equivalents, and marketable securities, as well as the cash flow that we generate from our operations. As of December 31, 2015, we had unused letters of credit of approximately $752 million. We believe that our sources of funding will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months. Our liquidity could be negatively affected by a decrease in demand for our products and services. In addition, we may make acquisitions, increase our capital expenditures, or license products and technologies complementary to our business and may need to raise additional capital through future debt or equity financing to provide for greater flexibility to fund these activities. Additional financing may not be available or on terms favorable to us.

We have a debt financing program of up to $3.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. As of December 31, 2015, we had $2.0 billion of commercial paper outstanding recorded as short-term debt, with a weighted-average interest rate of 0.2% that matures at various dates through February 2016. In conjunction with this program, we have a $3.0 billion revolving credit facility expiring in July 2016. The interest rate for the credit facility is determined based on a formula using certain market rates. As of December 31, 2015, we were in compliance with the financial covenant in the credit facility and no amounts were outstanding.

We intend to align our capital structure so that debt is held at the holding company level. In January 2016, the board of directors of Alphabet authorized the company to issue up to $5.0 billion of commercial paper from time to time and to enter into a $4.0 billion revolving credit facility to replace Google's existing $3.0 billion revolving credit facility.

In May 2011, we issued $3.0 billion of unsecured senior notes (2011 Notes) in three equal tranches, due in 2014, 2016, and 2021. The net proceeds from the sale of the 2011 Notes were used to repay a portion of our outstanding commercial paper and for general corporate purposes. In February 2014, we issued $1.0 billion of unsecured senior notes (2014 Notes) due in 2024, which was used to repay $1.0 billion of the first tranche of our 2011 Notes that matured in May 2014 and for general corporate purposes.

As of December 31, 2015, the outstanding notes had a total carrying value of $3.0 billion and a total estimated fair value of $3.1 billion. We are not subject to any financial covenants under the notes.

In August 2013, we entered into a $258 million capital lease obligation on certain property expiring in 2028. We intend to exercise the option to purchase the property in 2016. The effective rate of the capital lease obligation approximates the market rate.

In October 2015, the board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock, commencing in the fourth quarter of 2015. The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through the use of 10b5-1 plans. The repurchase program does not have an expiration date. As of December 31, 2015, Alphabet repurchased and subsequently retired $1.8 billion of its Class C capital stock. Alphabet's share repurchases in the year ended December 31, 2015 were funded by Google via a return of capital to Alphabet. In January 2016, the board of directors of Alphabet authorized the company to repurchase an additional amount of approximately 514 thousand shares.

For 2013, 2014 and 2015, our cash flows were as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Net cash provided by operating activities	$	19,140		$	23,024		$	26,572
Net cash used in investing activities	(13,679		)	(21,055		)	(23,711		)
Net cash used in financing activities	(1,338		)	(2,087		)	(4,225		)

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For 2013, 2014 and 2015, cash flows for Google were as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Net cash provided by operating activities	$	18,659		$	22,376		$	26,024
Net cash used in investing activities	(13,679		)	(21,055		)	(23,711		)
Net cash used in financing activities	(857		)	(1,439		)	(3,677		)

Cash Provided by Operating Activities

Our largest source of cash provided by our operations is advertising revenues generated by Google websites and Google Network Members' websites. Additionally, we generate cash through sales of apps and digital content, hardware products, licensing arrangements, and service fees received for cloud and apps and our Maps API. Prior to its divestiture in October 2014, we also generated cash from sales of hardware products related to the Motorola Mobile business.

Our primary uses of cash from our operating activities include payments to our Google Network Members and distribution partners, and payments for content acquisition costs. Prior to the sale of the Motorola Mobile business, our use of cash also included payment for manufacturing and inventory-related costs in the Motorola Mobile business. In addition, uses of cash from operating activities include compensation and related costs, other general corporate expenditures, and income taxes.

Net cash provided by operating activities increased from 2014 to 2015 primarily due to increased net income adjusted for depreciation and stock-based compensation expense, and loss on sales of marketable and non-marketable securities. This is partially offset by a net decrease in cash from changes in working capital.

Net cash provided by operating activities increased from 2013 to 2014 primarily due to increased net income adjusted for depreciation and loss on disposal of property and equipment and stock-based compensation expense, and a net increase in cash from changes in working capital primarily driven by changes in prepaid revenue share, expenses, and other assets.

Cash Used in Investing Activities

Cash provided by or used in investing activities primarily consists of purchases of property and equipment, purchases, maturities, and sales of marketable securities in our investment portfolio, investments in reverse repurchase agreements and the cash collateral received or returned from our securities lending program, as well as acquisitions and divestitures of businesses and intangible assets.

Cash used in investing activities increased from 2014 to 2015 primarily due to net increases in purchases of marketable securities, activities related to security lending and purchases of non-marketable investments. This increase was partially offset by lower spend related to acquisitions, lower investments in reverse repurchase agreements, and a decrease in capital expenditures related to our production equipment, data centers, and real estate purchases.

Cash used in investing activities increased from 2013 to 2014 primarily due to increases in capital expenditures related to our production equipment, data centers, and real estate purchases, higher spend related to acquisitions, and lower proceeds received in 2014 from divestiture of businesses compared to 2013. This increase was partially offset by a net decrease in purchases of marketable securities.

Cash Used in Financing Activities

Cash used in financing activities consists primarily of net proceeds or payments from issuance or repayments of debt, repurchases of capital stock, and net proceeds or payments from stock-based award activities.

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In Alphabet, cash used in financing activities increased from 2014 to 2015 primarily driven by the repurchases of capital stock and an increase in net payments related to stock-based award activities. In Google, cash used in financing activities increased from 2014 to 2015 is primarily driven by capital transactions with Alphabet, partially offset by net payments related to stock-based award activities.

Cash used in financing activities increased from 2013 to 2014 is primarily driven by an increase in net payments related to stock-based award activities, offset partially by a decrease in net cash payments related to debt.

Contractual Obligations as of December 31, 2015

The following summarizes our contractual obligations, excluding open orders for purchases that support normal operations, as of December 31, 2015 (in millions):

	Payments Due By Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating lease obligations, net of sublease income amounts(1)	$	7,406	$	646	$	1,573	$	1,482	$	3,705
Purchase obligations(2)	1,697		946		298		150		303
Long-term debt obligations, including capital lease obligations(3)	3,722		1,306		140		140		2,136
Other long-term liabilities reflected on our balance sheet(4)	1,580		356		430		367		427
Total contractual obligations	$	14,405	$	3,254	$	2,441	$	2,139	$	6,571

⁽¹⁾  For further information, refer to Note 11 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

⁽²⁾  Purchase obligations represent non-cancelable contractual obligations primarily related to data center operations and facility build-outs, video and other content licensing revenue sharing arrangements, as well as purchases of inventory.

⁽³⁾  For further information, refer to Note 4 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on Form 10-K.

⁽⁴⁾  Other long-term liabilities represent cash obligations recorded on our consolidated balance sheets, including the short-term portion of these long-term liabilities and consist primarily of payments owed in connection with certain commercial agreements, investments and asset retirement obligations. In addition to the amounts above, we had long-term tax payable of $3.7 billion as of December 31, 2015 primarily related to uncertain tax positions. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes. As a result, this amount is not included in the above table.

Off-Balance Sheet Arrangements

As of December 31, 2015, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

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Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. We have reviewed our critical accounting policies and estimates with the audit committee of our board of directors.

Please see Note 1 of Part II, Item 8 of this Annual Report on Form 10-K for the summary of significant accounting policies.

Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes.

Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes and the effective tax rate in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest and penalties. In addition, we are subject to the continuous examination of our income tax returns by the IRS and other tax authorities which may assert assessments against us. We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes.

Loss Contingencies

We are regularly subject to claims, suits, government investigations, and other proceedings involving competition and antitrust, intellectual property, privacy, indirect taxes, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, and other matters. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred, and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss in the Notes to the Consolidated Financial Statements.

We evaluate, on a monthly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material. Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material impact on our business, consolidated financial position, results of operations, or cash flows. See Note 11 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding contingencies.

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Business Combinations

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.

Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and acquired patents and developed technology; and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed, as more fully discussed in Note 6 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Goodwill

Goodwill is allocated to reporting units expected to benefit from the business combination. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. We test goodwill for impairment at the reporting unit level at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Goodwill impairment tests require judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. As of December 31, 2015, no impairment of goodwill has been identified.

Long-lived Assets

Long-lived assets, including property and equipment, long-term prepayments, and intangible assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows independent of other assets. An impairment loss would be recognized when estimated undiscounted future cash flows generated from the assets are less than their carrying amount. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value.

Impairment of Marketable and Non-Marketable Securities

We periodically review our marketable and non-marketable securities for impairment. If we conclude that any of these investments are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. For marketable debt securities, we also consider whether (1) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as other income (expense), net.

23

EX-99.2

Alphabet Inc. and Google Inc.

PART II

EXHIBIT 99.2

Note: The information contained in this exhibit has been updated for the cash flow presentation requirements associated with the adoption of ASU 2016-09 where excess tax benefits are recognized as part of cash flows from operating activities. Additionally, disclosure of carrying value and maximum exposure of our renewable energy investments accounted for under the equity method that are variable interest entities(VIEs) has been updated to include additional investments being considered VIEs as a result of the adoption of ASU 2015-02. Disclosure has also been updated to reflect an additional entity being considered a VIE upon adoption of ASU 2014-10. Within this exhibit, updates have been made to our Consolidated Statements of Cash Flows as well as Notes 1, 3 and 7 of the Notes to Consolidated Financial Statements. This exhibit has not been updated for any other changes since the filing of the 2015 Annual Report on Form 10-K ("2015 Form 10-K"). For significant developments since the filing of the 2015 Form 10-K, refer to our other periodic reports filed with the SEC through the date of this Current Report on Form 8-K, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Alphabet Inc. and Google Inc.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm	2
Financial Statements of Alphabet Inc.:
Consolidated Balance Sheets	6
Consolidated Statements of Income	7
Consolidated Statements of Comprehensive Income	8
Consolidated Statements of Stockholders’ Equity	9
Consolidated Statements of Cash Flows	10
Financial Statements of Google Inc.:
Consolidated Balance Sheets	11
Consolidated Statements of Income	12
Consolidated Statements of Comprehensive Income	13
Consolidated Statements of Stockholders’ Equity	14
Consolidated Statements of Cash Flows	15
Notes to Consolidated Financial Statements (Alphabet Inc. and Google Inc.)	16

The supplementary financial information required by this Item 8 is included in Item 7 under the caption “Quarterly Results of Operations.”

1

Alphabet Inc. and Google Inc.

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Alphabet Inc.

We have audited the accompanying consolidated balance sheets of Alphabet Inc. as of December 31, 2014 and 2015, and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index to the 2015 Form 10-K at Item 15(a)2. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Alphabet Inc. as of December 31, 2014 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Alphabet Inc.'s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 11, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

San Jose, California


February 11, 2016, except for the effects of the retrospective adoption of the updated accounting standards discussed in Notes 1, 3 and 7 to the consolidated financial statements, as to which the date is May 2, 2016.

2

Alphabet Inc. and Google Inc.

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Google Inc.

We have audited the accompanying consolidated balance sheets of Google Inc. as of December 31, 2014 and 2015, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index to the 2015 Form 10-K at Item 15(a)2. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Google Inc. as of December 31, 2014 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Google Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 11, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

San Jose, California

February 11, 2016

3

Alphabet Inc. and Google Inc.

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Alphabet Inc.

We have audited Alphabet Inc.'s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Alphabet Inc.'s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Alphabet Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Alphabet Inc. as of December 31, 2014 and 2015, and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2015 of Alphabet Inc. and our report dated February 11, 2016 except for the effects of the retrospective adoption of the updated accounting standards discussed in Notes 1, 3 and 7 to the consolidated financial statements, as to which the date is May 2, 2016, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

San Jose, California

February 11, 2016

4

Alphabet Inc. and Google Inc.

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Google Inc.

We have audited Google Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Google Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Google Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Google Inc. as of December 31, 2014 and 2015, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2015 of Google Inc. and our report dated February 11, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

San Jose, California

February 11, 2016

5

Alphabet Inc. and Google Inc.

Alphabet Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except share and par value amounts which are reflected in thousands,

and par value per share amounts)

	As of December 31, 2014		As of December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	18,347	$	16,549
Marketable securities	46,048		56,517
Total cash, cash equivalents, and marketable securities (including securities loaned of $4,058 and $4,531)	64,395		73,066
Accounts receivable, net of allowance of $225 and $296	9,383		11,556
Receivable under reverse repurchase agreements	875		450
Income taxes receivable, net	591		1,903
Prepaid revenue share, expenses and other assets	3,412		3,139
Total current assets	78,656		90,114
Prepaid revenue share, expenses and other assets, non-current	3,187		3,181
Non-marketable investments	3,079		5,183
Deferred income taxes	176		251
Property and equipment, net	23,883		29,016
Intangible assets, net	4,607		3,847
Goodwill	15,599		15,869
Total assets	$	129,187	$	147,461
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,715	$	1,931
Short-term debt	2,009		3,225
Accrued compensation and benefits	3,069		3,539
Accrued expenses and other current liabilities	4,408		4,768
Accrued revenue share	1,952		2,329
Securities lending payable	2,778		2,428
Deferred revenue	752		788
Income taxes payable, net	96		302
Total current liabilities	16,779		19,310
Long-term debt	3,228		1,995
Deferred revenue, non-current	104		151
Income taxes payable, non-current	3,340		3,663
Deferred income taxes	758		189
Other long-term liabilities	1,118		1,822
Commitments and contingencies (Note 11)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding	0		0
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 680,172 (Class A 286,560, Class B 53,213, Class C 340,399) and par value of $680 (Class A $287, Class B $53, Class C $340) and 687,348 (Class A 292,297, Class B 50,295, Class C 344,756) and par value of $687 (Class A $292, Class B $50, Class C $345) shares issued and outstanding	28,767		32,982
Accumulated other comprehensive income (loss)	27		(1,874		)
Retained earnings	75,066		89,223
Total stockholders’ equity	103,860		120,331
Total liabilities and stockholders’ equity	$	129,187	$	147,461

See accompanying notes.

6

Alphabet Inc. and Google Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

	Year Ended December 31,
	2013			2014		2015
Revenues	$	55,519		$	66,001	$	74,989
Costs and expenses:
Cost of revenues	21,993			25,691		28,164
Research and development	7,137			9,832		12,282
Sales and marketing	6,554			8,131		9,047
General and administrative	4,432			5,851		6,136
Total costs and expenses	40,116			49,505		55,629
Income from operations	15,403			16,496		19,360
Other income (expense), net	496			763		291
Income from continuing operations before income taxes	15,899			17,259		19,651
Provision for income taxes	2,739			3,639		3,303
Net income from continuing operations	$	13,160		$	13,620	$	16,348
Net income (loss) from discontinued operations	(427		)	516		0
Net income	$	12,733		$	14,136	$	16,348
Less: Adjustment Payment to Class C capital stockholders	0			0		522
Net income available to all stockholders	$	12,733		$	14,136	$	15,826
Basic net income (loss) per share of Class A and B common stock:
Continuing operations	$	19.77		$	20.15	$	23.11
Discontinued operations	(0.64		)	0.76		0.00
Basic net income per share of Class A and B common stock	$	19.13		$	20.91	$	23.11
Basic net income (loss) per share of Class C capital stock:
Continuing operations	$	19.77		$	20.15	$	24.63
Discontinued operations	(0.64		)	0.76		0.00
Basic net income per share of Class C capital stock	$	19.13		$	20.91	$	24.63
Diluted net income (loss) per share of Class A and B common stock:
Continuing operations	$	19.42		$	19.82	$	22.84
Discontinued operations	(0.63		)	0.75		0.00
Diluted net income per share of Class A and B common stock	$	18.79		$	20.57	$	22.84
Diluted net income (loss) per share of Class C capital stock:
Continuing operations	$	19.42		$	19.82	$	24.34
Discontinued operations	(0.63		)	0.75		0.00
Diluted net income per share of Class C capital stock	$	18.79		$	20.57	$	24.34

See accompanying notes.

7

Alphabet Inc. and Google Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Year Ended December 31,
	2013			2014			2015
Net income	$	12,733		$	14,136		$	16,348
Other comprehensive income (loss):
Change in foreign currency translation adjustment	89			(996		)	(1,067		)
Available-for-sale investments:
Change in net unrealized gains (losses)	(392		)	505			(715		)
Less: reclassification adjustment for net (gains) losses included in net income	(162		)	(134		)	208
Net change (net of tax effect of $212, $60, and $29)	(554		)	371			(507		)
Cash flow hedges:
Change in net unrealized gains	112			651			676
Less: reclassification adjustment for net gains included in net income	(60		)	(124		)	(1,003		)
Net change (net of tax effect of $30, $196, and $115)	52			527			(327		)
Other comprehensive loss	(413		)	(98		)	(1,901		)
Comprehensive income	$	12,320		$	14,038		$	14,447

See accompanying notes.

8

Alphabet Inc. and Google Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital					Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Stockholders’ Equity
	Shares		Amount
Balance as of December 31, 2012	659,958		$	22,835		$	538		$	48,197		$	71,570
Common stock issued	11,706		1,174			0			0			1,174
Stock-based compensation expense			3,343			0			0			3,343
Stock-based compensation tax benefits			449			0			0			449
Tax withholding related to vesting of restricted stock units			(1,879		)	0			0			(1,879		)
Net income			0			0			12,733			12,733
Other comprehensive loss			0			(413		)	0			(413		)
Balance as of December 31, 2013	671,664		25,922			125			60,930			86,977
Common and capital stock issued	8,508		465			0			0			465
Stock-based compensation expense			4,279			0			0			4,279
Stock-based compensation tax benefits			625			0			0			625
Tax withholding related to vesting of restricted stock units			(2,524		)	0			0			(2,524		)
Net income			0			0			14,136			14,136
Other comprehensive loss			0			(98		)	0			(98		)
Balance as of December 31, 2014	680,172		28,767			27			75,066			103,860
Common and capital stock issued	8,714		664			0			0			664
Stock-based compensation expense			5,151			0			0			5,151
Stock-based compensation tax benefits			815			0			0			815
Tax withholding related to vesting of restricted stock units			(2,779		)	0			0			(2,779		)
Repurchases of capital stock	(2,391	)	(111		)	0			(1,669		)	(1,780		)
Adjustment Payment to Class C capital stockholders	853		475			0			(522		)	(47		)
Net income			0			0			16,348			16,348
Other comprehensive loss			0			(1,901		)	0			(1,901		)
Balance as of December 31, 2015	687,348		$	32,982		$	(1,874	)	$	89,223		$	120,331

See accompanying notes.

9

Alphabet Inc. and Google Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Year Ended December 31,
	2013			2014			2015
Operating activities
Net income	$	12,733		$	14,136		$	16,348
Adjustments:
Depreciation and impairment of property and equipment	2,781			3,523			4,132
Amortization and impairment of intangible assets	1,158			1,456			931
Stock-based compensation expense	3,343			4,279			5,203
Deferred income taxes	(437		)	(104		)	(179		)
Gain on divestiture of business	(700		)	(740		)	0
(Gain) loss on marketable and non-marketable investments, net	(166		)	(390		)	334
Other	272			192			212
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(1,307		)	(1,641		)	(2,094		)
Income taxes, net	588			591			(179		)
Prepaid revenue share, expenses and other assets	(930		)	459			(318		)
Accounts payable	605			436			203
Accrued expenses and other liabilities	713			757			1,597
Accrued revenue share	254			245			339
Deferred revenue	233			(175		)	43
Net cash provided by operating activities	19,140			23,024			26,572
Investing activities
Purchases of property and equipment	(7,358		)	(10,959		)	(9,915		)
Purchases of marketable securities	(45,444		)	(56,310		)	(74,368		)
Maturities and sales of marketable securities	38,314			51,315			62,905
Purchases of non-marketable investments	(569		)	(1,227		)	(2,172		)
Cash collateral related to securities lending	(299		)	1,403			(350		)
Investments in reverse repurchase agreements	600			(775		)	425
Proceeds from divestiture of business	2,525			386			0
Acquisitions, net of cash acquired, and purchases of intangibles and other assets	(1,448		)	(4,888		)	(236		)
Net cash used in investing activities	(13,679		)	(21,055		)	(23,711		)
Financing activities
Net payments related to stock-based award activities	(781		)	(2,069		)	(2,375		)
Adjustment Payment to Class C capital stockholders	0			0			(47		)
Repurchases of capital stock	0			0			(1,780		)
Proceeds from issuance of debt, net of costs	10,768			11,625			13,705
Repayments of debt	(11,325		)	(11,643		)	(13,728		)
Net cash used in financing activities	(1,338		)	(2,087		)	(4,225		)
Effect of exchange rate changes on cash and cash equivalents	(3		)	(433		)	(434		)
Net increase (decrease) in cash and cash equivalents	4,120			(551		)	(1,798		)
Cash and cash equivalents at beginning of period	14,778			18,898			18,347
Cash and cash equivalents at end of period	$	18,898		$	18,347		$	16,549
Supplemental disclosures of cash flow information
Cash paid for taxes	$	1,932		$	2,819		$	3,338
Cash paid for interest	72			86			96

See accompanying notes.

10

Alphabet Inc. and Google Inc.

Google Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except share and par value amounts which are reflected in thousands,

and par value per share amounts)

	As of December 31, 2014		As of December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	18,347	$	16,549
Marketable securities	46,048		56,517
Total cash, cash equivalents, and marketable securities (including securities loaned of $4,058 and $4,531)	64,395		73,066
Accounts receivable, net of allowance of $225 and $296	9,383		11,556
Receivable under reverse repurchase agreements	875		450
Income taxes receivable, net	591		1,903
Prepaid revenue share, expenses and other assets	3,412		3,139
Total current assets	78,656		90,114
Prepaid revenue share, expenses and other assets, non-current	3,187		3,181
Non-marketable investments	3,079		5,183
Deferred income taxes	176		251
Property and equipment, net	23,883		29,016
Intangible assets, net	4,607		3,847
Goodwill	15,599		15,869
Total assets	$	129,187	$	147,461
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,715	$	1,931
Short-term debt	2,009		3,225
Accrued compensation and benefits	3,069		3,539
Accrued expenses and other current liabilities	4,408		4,768
Accrued revenue share	1,952		2,329
Securities lending payable	2,778		2,428
Deferred revenue	752		788
Income taxes payable, net	96		302
Total current liabilities	16,779		19,310
Long-term debt	3,228		1,995
Deferred revenue, non-current	104		151
Income taxes payable, non-current	3,340		3,663
Deferred income taxes	758		189
Other long-term liabilities	1,118		1,822
Commitments and contingencies (Note 11)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value per share; 100,000 shares authorized, no shares issued and outstanding; 0.5 shares authorized, no shares issued and outstanding	0		0
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 680,172 (Class A 286,560, Class B 53,213, Class C 340,399), and par value of $680 (Class A $287, Class B $53, Class C $340); and 1.5 shares authorized (Class A 0.5, Class B 0.5, Class C 0.5); 0.3 (Class A 0.1, Class B 0.1, Class C 0.1), and par value of $0, shares issued and outstanding	28,767		31,313
Accumulated other comprehensive income (loss)	27		(1,874		)
Retained earnings	75,066		90,892
Total stockholders’ equity	103,860		120,331
Total liabilities and stockholders’ equity	$	129,187	$	147,461

See accompanying notes.

11

Alphabet Inc. and Google Inc.

Google Inc.

CONSOLIDATED STATEMENTS OF INCOME

(In millions)

	Year Ended December 31,
	2013			2014		2015
Revenues	$	55,519		$	66,001	$	74,989
Costs and expenses:
Cost of revenues	21,993			25,691		28,164
Research and development	7,137			9,832		12,282
Sales and marketing	6,554			8,131		9,047
General and administrative	4,432			5,851		6,136
Total costs and expenses	40,116			49,505		55,629
Income from operations	15,403			16,496		19,360
Other income (expense), net	496			763		291
Income from continuing operations before income taxes	15,899			17,259		19,651
Provision for income taxes	2,739			3,639		3,303
Net income from continuing operations	$	13,160		$	13,620	$	16,348
Net income (loss) from discontinued operations	(427		)	516		0
Net income	$	12,733		$	14,136	$	16,348
Less: Adjustment Payment to Class C capital stockholders	0			0		522
Net income available to all stockholders	$	12,733		$	14,136	$	15,826

See accompanying notes.

12

Alphabet Inc. and Google Inc.

Google Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Year Ended December 31,
	2013			2014			2015
Net income	$	12,733		$	14,136		$	16,348
Other comprehensive income (loss):
Change in foreign currency translation adjustment	89			(996		)	(1,067		)
Available-for-sale investments:
Change in net unrealized gains (losses)	(392		)	505			(715		)
Less: reclassification adjustment for net (gains) losses included in net income	(162		)	(134		)	208
Net change (net of tax effect of $212, $60, and $29)	(554		)	371			(507		)
Cash flow hedges:
Change in net unrealized gains	112			651			676
Less: reclassification adjustment for net gains included in net income	(60		)	(124		)	(1,003		)
Net change (net of tax effect of $30, $196, and $115)	52			527			(327		)
Other comprehensive loss	(413		)	(98		)	(1,901		)
Comprehensive income	$	12,320		$	14,038		$	14,447

See accompanying notes.

13

Alphabet Inc. and Google Inc.

Google Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital					Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Stockholders’ Equity
	Shares		Amount
Balance as of December 31, 2012	659,958		$	22,835		$	538		$	48,197		$	71,570
Common stock issued	11,706		1,174			0			0			1,174
Stock-based compensation expense			3,343			0			0			3,343
Stock-based compensation tax benefits			449			0			0			449
Tax withholding related to vesting of restricted stock units			(1,879		)	0			0			(1,879		)
Net income			0			0			12,733			12,733
Other comprehensive loss			0			(413		)	0			(413		)
Balance as of December 31, 2013	671,664		25,922			125			60,930			86,977
Common and capital stock issued	8,508		465			0			0			465
Stock-based compensation expense			4,279			0			0			4,279
Stock-based compensation tax benefits			625			0			0			625
Tax withholding related to vesting of restricted stock units			(2,524		)	0			0			(2,524		)
Net income			0			0			14,136			14,136
Other comprehensive loss			0			(98		)	0			(98		)
Balance as of December 31, 2014	680,172		28,767			27			75,066			103,860
Common and capital stock issued	6,659		331			0			0			331
Stock-based compensation expense			5,151			0			0			5,151
Stock-based compensation tax benefits			815			0			0			815
Tax withholding related to vesting of restricted stock units			(1,954		)	0			0			(1,954		)
Alphabet share exchange	(687,684	)	0			0			0			0
Capital transactions with Alphabet			(2,272		)	0			0			(2,272		)
Adjustment Payment to Class C capital stockholders	853		475			0			(522		)	(47		)
Net income			0			0			16,348			16,348
Other comprehensive loss			0			(1,901		)	0			(1,901		)
Balance as of December 31, 2015	0		$	31,313		$	(1,874	)	$	90,892		$	120,331

See accompanying notes.

14

Alphabet Inc. and Google Inc.

Google Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Year Ended December 31,
	2013			2014			2015
Operating activities
Net income	$	12,733		$	14,136		$	16,348
Adjustments:
Depreciation and impairment of property and equipment	2,781			3,523			4,132
Amortization and impairment of intangible assets	1,158			1,456			931
Stock-based compensation expense	3,343			4,279			5,203
Excess tax benefits from stock-based award activities	(481		)	(648		)	(548		)
Deferred income taxes	(437		)	(104		)	(179		)
Gain on divestiture of business	(700		)	(740		)	0
(Gain) loss on marketable and non-marketable investments, net	(166		)	(390		)	334
Other	272			192			212
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(1,307		)	(1,641		)	(2,094		)
Income taxes, net	588			591			(179		)
Prepaid revenue share, expenses and other assets	(930		)	459			(318		)
Accounts payable	605			436			203
Accrued expenses and other liabilities	713			757			1,597
Accrued revenue share	254			245			339
Deferred revenue	233			(175		)	43
Net cash provided by operating activities	18,659			22,376			26,024
Investing activities
Purchases of property and equipment	(7,358		)	(10,959		)	(9,915		)
Purchases of marketable securities	(45,444		)	(56,310		)	(74,368		)
Maturities and sales of marketable securities	38,314			51,315			62,905
Purchases of non-marketable investments	(569		)	(1,227		)	(2,172		)
Cash collateral related to securities lending	(299		)	1,403			(350		)
Investments in reverse repurchase agreements	600			(775		)	425
Proceeds from divestiture of business	2,525			386			0
Acquisitions, net of cash acquired, and purchases of intangibles and other assets	(1,448		)	(4,888		)	(236		)
Net cash used in investing activities	(13,679		)	(21,055		)	(23,711		)
Financing activities
Net payments related to stock-based award activities	(781		)	(2,069		)	(1,612		)
Excess tax benefits from stock-based award activities	481			648			548
Adjustment Payment to Class C capital stockholders	0			0			(47		)
Capital transactions with Alphabet	0			0			(2,543		)
Proceeds from issuance of debt, net of costs	10,768			11,625			13,705
Repayments of debt	(11,325		)	(11,643		)	(13,728		)
Net cash used in financing activities	(857		)	(1,439		)	(3,677		)
Effect of exchange rate changes on cash and cash equivalents	(3		)	(433		)	(434		)
Net increase (decrease) in cash and cash equivalents	4,120			(551		)	(1,798		)
Cash and cash equivalents at beginning of period	14,778			18,898			18,347
Cash and cash equivalents at end of period	$	18,898		$	18,347		$	16,549
Supplemental disclosures of cash flow information
Cash paid for taxes	$	1,932		$	2,819		$	3,338
Cash paid for interest	72			86			96

See accompanying notes.

15

Alphabet Inc. and Google Inc.

Alphabet Inc. and Google Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

We were incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. We generate revenues primarily by delivering relevant, cost-effective online advertising.

On April 17, 2013, we sold the Motorola Home business (Motorola Home) to Arris Group, Inc. (Arris). The financial results of Motorola Home are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income for the year ended December 31, 2013. See Note 9 for further discussion of the sale.

On April 2, 2014, we completed a two-for-one stock split effected in the form of a stock dividend (the Stock Split). All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split. See Note 12 for additional information about the Stock Split.

On October 29, 2014, we sold the Motorola Mobile business (Motorola Mobile) to Lenovo Group Limited (Lenovo). The financial results of Motorola Mobile are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income for the years ended December 31, 2013 and 2014. See Note 9 for further discussion of the sale.

On August 10, 2015, we announced plans to create a new public holding company, Alphabet Inc. (Alphabet), and a new operating structure. On October 2, 2015, we implemented the holding company reorganization, and as a result, Alphabet became the successor issuer to Google Inc. (Google).

The implementation of the holding company reorganization on October 2, 2015 was accounted for as a merger under common control. Alphabet has recognized the assets and liabilities of Google at carryover basis. The consolidated financial statements of Alphabet present comparative information for prior years on a combined basis, as if both Alphabet and Google were under common control for all periods presented.

The consolidated financial statements and notes thereto are being presented in a combined report being filed by two separate registrants: Alphabet and Google. The Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Cash Flows are the only statements with differences between Alphabet and Google.  The differences relate to transactions between Alphabet and Google which are accounted for as capital transactions. Refer to Note 13 for additional information.

Basis of Consolidation

The consolidated financial statements of Alphabet and Google include the accounts of Alphabet and Google, respectively, and all wholly owned subsidiaries as well as all variable interest entities where we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the accounts receivable and sales allowances, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

16

Alphabet Inc. and Google Inc.

Revenue Recognition

The following table presents our revenues by segment and revenue source (in millions):

	Year Ended December 31,
	2013		2014		2015
Google segment
Google websites	$	37,422	$	45,085	$	52,357
Google Network Members' websites (1)	13,650		14,539		15,033
Google advertising revenues	51,072		59,624		67,390
Google other revenues (1)	4,435		6,050		7,151
Google segment revenues	$	55,507	$	65,674	$	74,541
Other Bets
Other Bets revenues	$	12	$	327	$	448
Consolidated revenues	$	55,519	$	66,001	$	74,989

⁽¹⁾  Prior period amounts have been adjusted to reflect the reclassification primarily related to DoubleClick ad serving software revenues from Google other revenues to Advertising Revenues from Google Network Members' websites to conform with current period presentation.

We generate revenues primarily by delivering performance and brand advertising. Performance advertising creates and delivers relevant ads that users will click, leading to direct engagement with advertisers. Brand advertising enhances users’ awareness of and affinity with advertisers’ products and services, through videos, text, images, and other ads that run across various devices.

Google AdWords is our auction-based advertising program that enables performance advertisers to place text-based and display ads on Google websites and our Google Network Members’ websites. Google AdSense refers to the online programs through which we distribute our advertisers’ AdWords ads for display on our Google Network Members’ websites. Most of our customers pay us on a cost-per-click basis, which means that an advertiser pays us only when a user engages with the ads by clicking on an ad on Google websites or Google Network Members' websites or by viewing YouTube engagement ads like TrueView (counted as an engagement when the user chooses not to skip the ad). We also offer advertising on a cost-per-impression basis that enables our brand advertisers to pay us based on the number of times their ads display on Google websites and our Google Network Members’ websites as specified by the advertisers.

Revenue from advertising is recognized when the services have been provided or delivered, the fees we charge are fixed or determinable, we and our advertisers or other customers understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured. We recognize as revenues the fees charged to advertisers each time a user clicks on one of the ads that appears next to the search results or content on Google websites or our Google Network Members’ websites. For those advertisers using our cost-per-impression pricing, we recognize as revenues the fees charged to advertisers each time their ads are displayed on Google websites or our Google Network Members’ websites. We report our Google AdSense revenues and traffic acquisition costs due to our Google Network Members on a gross basis principally because we are the primary obligor to our advertisers.

Revenue from hardware sales to end customers or through distribution channels is generally recognized when products have been shipped, risk of loss has transferred to the customer, objective evidence exists that customer acceptance provisions have been met, no significant obligations remain and allowances for discounts, price protection, returns and customer incentives can be reasonably and reliably estimated. Revenues are reported net of these allowances. Where these allowances cannot be reasonably and reliably estimated, we recognize revenue at the time the product sells through the distribution channel to the end customer or when the return period elapsed, as applicable.

For the sale of certain third-party products and services, we evaluate whether it is appropriate to recognize revenue based on the gross amount billed to the customers or the net amount earned as revenue share. Generally, when we record revenue on a gross basis, we are the primary obligor in a transaction, and have also considered other factors, including whether we are subject to inventory risk or have latitude in establishing prices.

For multi-element arrangements, including those that contain software essential to hardware products’ functionality and services, we allocate revenue to each unit of accounting based on their relative selling prices. In such circumstances, we use a hierarchy to determine the selling prices to be used for allocating revenue: (i) vendor-specific objective

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evidence of fair value (VSOE), (ii) third-party evidence of selling price, and (iii) best estimate of the selling price (ESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. ESPs reflect our best estimates of what the selling price of the deliverable would be if it was sold regularly on a stand-alone basis.

We record deferred revenues when cash payments are received in advance of our performance in the underlying agreement on the accompanying Consolidated Balance Sheets.

Cost of Revenues

Cost of revenues consists of traffic acquisition costs which are the advertising revenues shared with our Google Network Members and the amounts paid to our distribution partners who distribute our browser or otherwise direct search queries to our website.

Additionally, other costs of revenues includes the following:

• The expenses associated with the operation of our data centers (including depreciation, labor, energy, and bandwidth costs);

• Content acquisition costs primarily related to payments to certain content providers from whom we license their video and other content for distribution on YouTube and Google Play (we share most of the fees these sales generate with content providers or pay a fixed fee to these content providers);

• Credit card and other transaction fees related to processing customer transactions;

• Stock-based compensation expense;

• Revenue share payments to mobile carriers;

• Inventory costs for hardware we sell; and

• Amortization of certain intangible assets.

Stock-based Compensation

Restricted stock units (RSUs) are measured based on the fair market value of the underlying stock on the date of grant. Shares are issued on the vesting dates net of the minimum statutory tax withholding to be paid by us on behalf of our employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding. We record the liability for withholding amounts to be paid by us primarily as a reduction to additional paid-in capital when paid.

For stock option awards, we determined fair value using the Black-Scholes-Merton (BSM) option pricing model on the date of grant.

Stock-based compensation includes awards we expect to settle in Alphabet stock as well as awards we will ultimately settle in cash. We recognize stock-based compensation, less an estimate for forfeitures, using the straight-line method over the requisite service period. Additionally, stock-based compensation for liability classified awards reflect changes in fair value during the requisite service period.

We include as part of cash flows from operating activities the benefits of tax deductions in excess of the tax-effected compensation of the related stock-based awards for options exercised and RSUs vested during the period. For Google, such tax benefits are included as part of cash flows from financing activities. During the years ended December 31,2013, 2014, and 2015, the amount of cash received from the exercise of stock options, which is recognized as part of cash flows from financing activities, was $1,174 million, $465 million, and $393 million, respectively.

We have elected to account for the indirect effects of stock-based awards -- primarily the research and development tax credit -- through the Consolidated Statements of Income. Total direct tax benefit realized, including the excess tax benefit, from stock-based award activities during the years ended December 31,2013, 2014, and 2015, was $1,195 million, $1,356 million, and $1,544 million, respectively.

Certain Risks and Concentrations

Our revenues are primarily derived from online advertising, the market for which is highly competitive and rapidly changing. In addition, our revenues are generated from a multitude of vertical market segments in countries around the world. Significant changes in this industry or changes in customer buying or advertiser spending behavior could adversely affect our operating results.

We are subject to concentrations of credit risk principally from cash and cash equivalents, marketable securities, foreign exchange contracts, and accounts receivable. Cash equivalents and marketable securities consist primarily of time deposits, money market and other funds, including cash collateral received related to our securities lending program, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments and municipalities in the U.S., corporate securities, agency mortgage-backed securities, and asset-

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backed securities. Foreign exchange contracts are transacted with various financial institutions with high credit standing. Accounts receivable are typically unsecured and are derived from revenues earned from customers located around the world. In 2013, 2014, and 2015, we generated approximately 46%, 45%, and 46% of our revenues from customers based in the U.S., with the majority of revenues from customers outside of the U.S. located in Europe and Japan. We perform ongoing evaluations to determine customer credit and we limit the amount of credit we extend, but generally we do not require collateral from our customers. We maintain reserves for estimated credit losses and these losses have generally been within our expectations.

No individual customer or groups of affiliated customers represented more than 10% of our revenues in 2013, 2014, or 2015.

Fair Value of Financial Instruments

Our financial assets and financial liabilities that include cash equivalents, marketable securities, foreign currency and interest rate derivative contracts, and non-marketable debt securities are measured and recorded at fair value on a recurring basis. We measure certain financial assets at fair value for disclosure purposes, as well as, on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and our other current financial liabilities have fair values that approximate their carrying value.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Cash, Cash Equivalents, and Marketable Securities

We invest all excess cash primarily in debt securities including those of the U.S. government and its agencies, corporate debt securities, agency mortgage-backed securities, money market and other funds, municipal securities, time deposits, asset backed securities, and debt instruments issued by foreign governments.

We classify all investments that are readily convertible to known amounts of cash and have stated maturities of three months or less from the date of purchase as cash equivalents and those with stated maturities of greater than three months as marketable securities.

We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date. We have classified and accounted for our marketable securities as available-for-sale. After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell these securities prior to their stated maturities. As we view these securities as available to support current operations, we classify highly liquid securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying Consolidated Balance Sheets. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which we record within other income (expense), net. We determine any realized gains or losses on the sale of marketable securities on a specific identification method, and we record such gains and losses as a component of other income (expense), net.

Non-Marketable Investments

We have accounted for non-marketable equity investments either under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the

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equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method.

We have accounted for our non-marketable investments that meet the definition of a debt security as available-for-sale securities. Since these securities do not have contractual maturity dates and we do not intend to liquidate them in the next 12 months, we have classified them as non-current assets on the accompanying Consolidated Balance Sheet.

Variable Interest Entities

We make a determination at the start of each arrangement whether an entity in which we have made an investment is considered a Variable Interest Entity (“VIE”). We consolidate VIEs in which we have a controlling financial interest. If we do not have a controlling financial interest in a VIE, we account for the investment under either the equity or cost method.

Impairment of Marketable and Non-Marketable Investments

We periodically review our marketable and non-marketable investments for impairment. If we conclude that any of these investments are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. For debt securities, we also consider whether (1) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as other income (expense), net.

Accounts Receivable

We record accounts receivable at the invoiced amount and we normally do not charge interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review the accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We also maintain a sales allowance to reserve for potential credits issued to customers. We determine the amount of the reserve based on historical credits issued.

Property and Equipment

We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally two to five years. We depreciate buildings over periods up to 25 years. We amortize leasehold improvements over the shorter of the remaining lease term or the estimated useful lives of the assets. Construction in progress is the construction or development of property and equipment that have not yet been placed in service for our intended use. Depreciation for equipment commences once it is placed in service and depreciation for buildings and leasehold improvements commences once they are ready for our intended use. Land is not depreciated.

Software Development Costs

We expense software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products and as a result, development costs that meet the criteria for capitalization were not material for the periods presented.

Software development costs also include costs to develop software to be used solely to meet internal needs and cloud based applications used to deliver our services. We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Costs capitalized for developing such software applications were not material for the periods presented.

Business Combinations

We include the results of operations of the businesses that we acquire as of the respective dates of acquisition. We allocate the fair value of the purchase price of our acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.

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Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets

We review property and equipment, long-term prepayments and intangible assets, excluding goodwill, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. In 2014, we recorded impairments of intangible assets, including an impairment of $378 million in the third quarter of 2014 related to a patent licensing royalty asset. Impairments of intangible assets were not material in 2015.

We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. We test our goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. No goodwill impairment has been identified in any of the years presented.

Intangible assets with definite lives are amortized over their estimated useful lives. We amortize our acquired intangible assets on a straight-line basis with definite lives over periods ranging from one to twelve years.

Income Taxes

We account for income taxes using the asset and liability method, under which we recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. We measure current and deferred tax assets and liabilities based on provisions of enacted tax law. We evaluate the realization of our deferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more-likely-than-not that they will not be realized.

We recognize the financial statement effects of a tax position when it is more-likely-than not that, based on technical merits, the position will be sustained upon examination. The tax benefits of the position recognized in the financial statements are then measured based on the largest amount of benefit that is greater than 50% likely to be realized upon settlement with a taxing authority. In addition, we recognize interest and penalties related to unrecognized tax benefits as a component of the income tax provision.

Foreign Currency

Generally, the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end exchange rates for assets and liabilities, and average rates for the annual period derived from month-end exchange rates for revenues, costs, and expenses. We record translation gains and losses in accumulated other comprehensive income as a component of stockholders’ equity. We reflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency as a component of foreign currency exchange losses in other income (expense), net.

Advertising and Promotional Expenses

We expense advertising and promotional costs in the period in which they are incurred. For the years ended December 31, 2013, 2014 and 2015, advertising and promotional expenses totaled approximately $2,389 million, $3,004 million, and $3,186 million.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements, implementing accounting system changes related to the adoption, and considering additional disclosure requirements.

In June 2014, the FASB issued Accounting Standards Update No. 2014-10 (ASU 2014-10) "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation." ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification (ASC) thereby removing the financial reporting

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distinction between development stage entities and other reporting entities. The additional elimination of related consolidation guidance will require companies with interests in development stage entities to reassess whether such entities are variable interest entities under ASC Topic 810, Consolidation. We have adopted this standard in the first quarter of 2016 on a retrospective basis and the adoption of this standard did not have a material impact on our consolidated financial statements. Refer to Note 7 for further details. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02) "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. We have adopted this standard in the first quarter of 2016 on a retrospective basis. The adoption of this standard did not have a material impact on our consolidated statement of operations or consolidated balance sheet, but it resulted in additional disclosures. Refer to Note 3 for further details. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”.  ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. We have early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior periods have been retrospectively adjusted.  

As a result of the adoption of ASU 2015-17, the Company made the following adjustments to the 2014 balance sheet: a $1,322 million decrease to current deferred tax assets, a $83 million increase to noncurrent deferred tax asset, a $26 million decrease to current deferred tax liability, and a decrease of $1,213 million to noncurrent deferred tax liability.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. With respect to our consolidated financial statements, the most significant impact relates to the accounting for equity investments. It will impact the disclosure and presentation of financial assets and liabilities. ASU 2016-01 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017. Early adoption by public entities is permitted only for certain provisions. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (ASU 2016-09) "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting". We elected to early adopt these amendments beginning in the first quarter of 2016. Our Consolidated Statements of Cash Flows now present excess tax benefits as an operating activity, with the prior periods adjusted accordingly. The three year impact to our Consolidated Statements of Cash Flows as a result of the adoption of ASU 2016-09 is as follows (in millions):

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	Year Ended December 31, 2013									Year Ended December 31, 2014
	As Previously Reported			Adjustment			Recast			As Previously Reported			Adjustment			Recast
Excess tax benefits	$	(481	)	$	481		$	—		$	(648	)	$	648		$	—
Net cash provided by operating activities	18,659			481			19,140			22,376			648			23,024
Excess tax benefits	481			(481		)	—			648			(648		)	—
Net cash used in financing activities	$	(857	)	$	(481	)	$	(1,338	)	$	(1,439	)	$	(648	)	$	(2,087	)
										Year Ended December 31, 2015
										As Previously Reported			Adjustment			Recast
Excess tax benefits										$	(548	)	$	548		$	—
Net cash provided by operating activities										26,024			548			26,572
Excess tax benefits										548			(548		)	—
Net cash used in financing activities										$	(3,677	)	$	(548	)	$	(4,225	)

Consolidated Statements of Cash Flows for Google have not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

Revision of Previously Issued Financial Statements

In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015 in the cumulative amount of $711 million. We evaluated the materiality of the income tax expense impact quantitatively and qualitatively and concluded it was not material to any of the prior periods impacted and that correction of income tax expense as an out of period adjustment in the quarter ended June 30, 2015 would not be material to our consolidated financial statements for the year ending December 31, 2015. Consolidated revenues are not impacted. We elected to revise previously issued consolidated financial statements for the periods impacted. Refer to Note 17 for additional information.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Note 2. Financial Instruments

We classify our cash equivalents and marketable securities within Level 1 or Level 2 in the fair value hierarchy because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. We classify our foreign currency and interest rate derivative contracts primarily within Level 2 in the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

Cash, Cash Equivalents, and Marketable Securities

The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 31, 2014 and 2015 (in millions):

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	As of December 31, 2014
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	9,863	$	0	$	0		$	9,863	$	9,863	$	0
Level 1:
Money market and other funds	2,532		0		0			2,532		2,532		0
U.S. government notes	15,320		37		(4		)	15,353		1,128		14,225
Marketable equity securities	988		428		(64		)	1,352		0		1,352
	18,840		465		(68		)	19,237		3,660		15,577
Level 2:
Time deposits(1)	2,409		0		0			2,409		2,309		100
Money market and other funds(2)	1,762		0		0			1,762		1,762		0
Fixed-income bond funds(3)	385		0		(38		)	347		0		347
U.S. government agencies	2,327		8		(1		)	2,334		750		1,584
Foreign government bonds	1,828		22		(10		)	1,840		0		1,840
Municipal securities	3,370		33		(6		)	3,397		3		3,394
Corporate debt securities	11,499		114		(122		)	11,491		0		11,491
Agency mortgage-backed securities	8,196		109		(42		)	8,263		0		8,263
Asset-backed securities	3,456		1		(5		)	3,452		0		3,452
	35,232		287		(224		)	35,295		4,824		30,471
Total	$	63,935	$	752	$	(292	)	$	64,395	$	18,347	$	46,048

	As of December 31, 2015
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	7,380	$	0	$	0		$	7,380	$	7,380	$	0
Level 1:
Money market and other funds	5,623		0		0			5,623		5,623		0
U.S. government notes	20,922		27		(48		)	20,901		258		20,643
Marketable equity securities	692		155		0			847		0		847
	27,237		182		(48		)	27,371		5,881		21,490
Level 2:
Time deposits(1)	3,223		0		0			3,223		2,012		1,211
Money market and other funds(2)	1,140		0		0			1,140		1,140		0
Fixed-income bond funds(3)	219		0		0			219		0		219
U.S. government agencies	1,367		2		(3		)	1,366		0		1,366
Foreign government bonds	2,242		14		(23		)	2,233		0		2,233
Municipal securities	3,812		47		(4		)	3,855		0		3,855
Corporate debt securities	13,809		53		(278		)	13,584		136		13,448
Agency mortgage-backed securities	9,680		48		(57		)	9,671		0		9,671
Asset-backed securities	3,032		0		(8		)	3,024		0		3,024
	38,524		164		(373		)	38,315		3,288		35,027
Total	$	73,141	$	346	$	(421	)	$	73,066	$	16,549	$	56,517

⁽¹⁾  The majority of our time deposits are foreign deposits.

⁽²⁾  The balances as of December 31, 2014 and 2015 were related to cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See section titled "Securities Lending Program" below for further discussion of this program.

⁽³⁾  Fixed-income bond funds consist of mutual funds that primarily invest in corporate and government bonds.

We determine realized gains or losses on the marketable securities on a specific identification method. We recognized gross realized gains of $416 million, $238 million, and $357 million for the years ended December 31,

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2013, 2014, and 2015. We recognized gross realized losses of $258 million, $85 million, and $565 million for the years ended December 31, 2013, 2014, and 2015. We reflect these gains and losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions):

	As of December 31, 2015
Due in 1 year	$	7,900
Due in 1 year through 5 years	30,141
Due in 5 years through 10 years	7,199
Due after 10 years	10,211
Total	$	55,451

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2014 and 2015, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2014
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	4,490	$	(4	)	$	0	$	0		$	4,490	$	(4	)
U.S. government agencies	830		(1		)	0		0			830		(1		)
Foreign government bonds	255		(7		)	43		(3		)	298		(10		)
Municipal securities	877		(3		)	174		(3		)	1,051		(6		)
Corporate debt securities	5,851		(112		)	225		(10		)	6,076		(122		)
Agency mortgage-backed securities	609		(1		)	2,168		(41		)	2,777		(42		)
Asset-backed securities	2,388		(4		)	174		(1		)	2,562		(5		)
Fixed-income bond funds	347		(38		)	0		0			347		(38		)
Marketable equity securities	690		(64		)	0		0			690		(64		)
Total	$	16,337	$	(234	)	$	2,784	$	(58	)	$	19,121	$	(292	)

	As of December 31, 2015
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	13,757	$	(48	)	$	0	$	0		$	13,757	$	(48	)
U.S. government agencies	864		(3		)	0		0			864		(3		)
Foreign government bonds	885		(18		)	36		(5		)	921		(23		)
Municipal securities	1,116		(3		)	41		(1		)	1,157		(4		)
Corporate debt securities	9,192		(202		)	784		(76		)	9,976		(278		)
Agency mortgage-backed securities	5,783		(34		)	721		(23		)	6,504		(57		)
Asset-backed securities	2,508		(7		)	386		(1		)	2,894		(8		)
Total	$	34,105	$	(315	)	$	1,968	$	(106	)	$	36,073	$	(421	)

During the years ended December 31, 2013 and 2014, we did not recognize any other-than-temporary impairment loss. During the year ended December 31, 2015, we recognized $281 million of other-than-temporary impairment losses related to our marketable equity securities and fixed-income bond funds. Those losses are included in gains (losses) on marketable securities, net as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. See Note 10 for further details on other income (expense), net.

Securities Lending Program

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From time to time, we enter into securities lending agreements with financial institutions to enhance investment income. We loan certain securities which are collateralized in the form of cash or securities. Cash collateral is usually invested in reverse repurchase agreements which are collateralized in the form of securities.

We classify loaned securities as cash equivalents or marketable securities and record the cash collateral as an asset with a corresponding liability in the accompanying Consolidated Balance Sheets. We classify reverse repurchase agreements maturing within three months as cash equivalents and those longer than three months as receivable under reverse repurchase agreements in the accompanying Consolidated Balance Sheets. For security collateral received, we do not record an asset or liability except in the event of counterparty default.

Our securities lending transactions were accounted for as secured borrowings with significant investment categories as follows (in millions):

	As of December 31, 2015
	Remaining Contractual Maturity of the Agreements
Securities Lending Transactions	Overnight and Continuous		Up to 30 days		30 - 90 Days		Greater Than 90 Days		Total
U.S. government notes	$	1,322	$	31	$	0	$	306	$	1,659
U.S. government agencies	504		77		0		0		581
Corporate debt securities	188		0		0		0		188
Total	$	2,014	$	108	$	0	$	306	$	2,428
Gross amount of recognized liabilities for securities lending in offsetting disclosure									$	2,428
Amounts related to agreements not included in securities lending in offsetting disclosure									$	0

Derivative Financial Instruments

We recognize derivative instruments as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives in the accompanying Consolidated Statements of Income as other income (expense), net, as part of revenues, or as a component of accumulated other comprehensive income (AOCI) in the accompanying Consolidated Balance Sheets, as discussed below.

We enter into foreign currency contracts with financial institutions to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. We use certain interest rate derivative contracts to hedge interest rate exposures on our fixed income securities and debt. Our program is not used for trading or speculative purposes.

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. To further reduce credit risk, we enter into collateral security arrangements under which the counterparty is required to provide collateral when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We can take possession of the collateral in the event of counterparty default. As of December 31, 2014 and 2015, we received cash collateral related to the derivative instruments under our collateral security arrangements of $268 million and $192 million.

Cash Flow Hedges

We use options designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar. The notional principal of these contracts was approximately $13.6 billion and $16.4 billion as of December 31, 2014 and 2015. These foreign exchange contracts have maturities of 36 months or less.

In 2012, we entered into forward-starting interest rate swaps with a total notional amount of $1.0 billion and terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate, that effectively locked in an interest rate on our anticipated debt issuance of $1.0 billion in 2014. We issued $1.0 billion of unsecured senior notes in February 2014 (See details in Note 4). As a result, we terminated the forward-starting interest rate swaps upon the debt issuance. The cash gain associated with the termination is reported within Operating Activities in the Consolidated Statement of Cash Flows for the year ended December 31, 2014, consistent with the impact of the hedged item.

We reflect gain or loss on the effective portion of a cash flow hedge as a component of AOCI and subsequently reclassify cumulative gains and losses to revenues or interest expense when the hedged transactions are recorded. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI would be immediately reclassified to other income (expense), net. Further, we exclude the change in the time value of the options from our

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assessment of hedge effectiveness. We record the premium paid or time value of an option on the date of purchase as an asset. Thereafter, we recognize changes to this time value in other income (expense), net.

As of December 31, 2015, the effective portion of our cash flow hedges before tax effect was $375 million, of which $293 million is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We use forward contracts designated as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. We exclude changes in the time value for forward contracts from the assessment of hedge effectiveness. The notional principal of these contracts was $1.5 billion and $1.8 billion as of December 31, 2014 and 2015.

We use interest rate swaps designated as fair value hedges to hedge interest rate risk for certain fixed rate securities. The notional principal of these contracts was $175 million and $295 million as of December 31, 2014 and 2015.

Gains and losses on these forward contracts and interest rate swaps are recognized in other income (expense), net, along with the offsetting losses and gains of the related hedged items.

Other Derivatives

Other derivatives not designated as hedging instruments consist of forward and option contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts, as well as the related costs in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities. The notional principal of foreign exchange contracts outstanding was $6.2 billion and $7.5 billion as of December 31, 2014 and 2015.

We also use exchange-traded interest rate futures contracts and “To Be Announced” (TBA) forward purchase commitments of mortgage-backed assets to hedge interest rate risks on certain fixed income securities. The TBA contracts meet the definition of derivative instruments in cases where physical delivery of the assets is not taken at the earliest available delivery date. Our interest rate futures and TBA contracts (together interest rate contracts) are not designated as hedging instruments. We recognize gains and losses on these contracts, as well as the related costs, in other income (expense), net. The gains and losses are generally economically offset by unrealized gains and losses in the underlying available-for-sale securities, which are recorded as a component of AOCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are moved from AOCI into other income (expense), net. The total notional amounts of interest rate contracts outstanding were $150 million and $50 million as of December 31, 2014 and 2015.

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The fair values of our outstanding derivative instruments were as follows (in millions):

		As of December 31, 2014
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	851	$	0	$	851
Interest rate contracts	Prepaid revenue share, expenses and other assets, current and non-current	1		0		1
Total		$	852	$	0	$	852
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	0	$	3	$	3
Interest rate contracts	Accrued expenses and other liabilities, current and non-current	1		0		1
Total		$	1	$	3	$	4

		As of December 31, 2015
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	626	$	2	$	628
Total		$	626	$	2	$	628
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	1	$	13	$	14
Interest rate contracts	Accrued expenses and other liabilities, current and non-current	2		0		2
Total		$	3	$	13	$	16

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The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below (in millions):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	2013		2014			2015
Foreign exchange contracts	$	92	$	929		$	964
Interest rate contracts	86		(31		)	0
Total	$	178	$	898		$	964

	Gains Reclassified from AOCI into Income (Effective Portion)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2013		2014		2015
Foreign exchange contracts	Revenues	$	95	$	171	$	1,399
Interest rate contracts	Other income (expense), net	0		4		5
Total		$	95	$	175	$	1,404

	Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from  Effectiveness Testing and Ineffective Portion) (1)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2013			2014			2015
Foreign exchange contracts	Other income (expense), net	$	(280	)	$	(279	)	$	(297	)
Interest rate contracts	Other income (expense), net	0			4			0
Total		$	(280	)	$	(275	)	$	(297	)

⁽¹⁾  Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.

The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives(2)
		Year Ended December 31,
Derivatives in Fair Value Hedging Relationship	Location	2013			2014			2015
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	16		$	115		$	170
Hedged item	Other income (expense), net	(25		)	(123		)	(176		)
Total		$	(9	)	$	(8	)	$	(6	)
Interest Rate Hedges:
Interest rate contracts	Other income (expense), net	$	0		$	0		$	(2	)
Hedged item	Other income (expense), net	0			0			2
Total		$	0		$	0		$	0

⁽²⁾  Losses related to the amount excluded from effectiveness testing of the hedges were $9 million, $8 million, and $6 million for the years ended December 31, 2013, 2014, and 2015.

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The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives
		Year Ended December 31,
Derivatives Not Designated As Hedging Instruments	Location	2013		2014		2015
Foreign exchange contracts	Other income (expense), net, and net loss from discontinued operations	$	118	$	237	$	198
Interest rate contracts	Other income (expense), net	4		2		1
Total		$	122	$	239	$	199

Offsetting of Derivatives, Securities Lending, and Reverse Repurchase Agreements

We present our derivatives, securities lending and reverse repurchase agreements at gross fair values in the Consolidated Balance Sheets. However, our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2014 and 2015, information related to these offsetting arrangements was as follows (in millions):

Offsetting of Assets
	As of December 31, 2014
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	852	$	0	$	852		$	(1	)	(1)	$	(251	)	$	(412	)	$	188
Reverse repurchase agreements	2,637		0		2,637		(2)	0				0			(2,637		)	0
Total	$	3,489	$	0	$	3,489		$	(1	)		$	(251	)	$	(3,049	)	$	188
	As of December 31, 2015
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	628	$	0	$	628		$	(13	)	(1)	$	(189	)	$	(214	)	$	212
Reverse repurchase agreements	1,590		0		1,590		(2)	0				0			(1,590		)	0
Total	$	2,218	$	0	$	2,218		$	(13	)		$	(189	)	$	(1,804	)	$	212

⁽¹⁾  The balances as of December 31, 2014 and 2015 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

⁽²⁾  The balances as of December 31, 2014 and 2015 included $1,762 million and $1,140 million recorded in cash and cash equivalents, respectively, and $875 million and $450 million recorded in receivable under reverse repurchase agreements, respectively.

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Offsetting of Liabilities
	As of December 31, 2014
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	4	$	0	$	4	$	(1	)	(3)	$	0		$	0		$	3
Securities lending agreements	2,778		0		2,778		0				0			(2,740		)	38
Total	$	2,782	$	0	$	2,782	$	(1	)		$	0		$	(2,740	)	$	41
	As of December 31, 2015
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	16	$	0	$	16	$	(13	)	(3)	$	(3	)	$	0		$	0
Securities lending agreements	2,428		0		2,428		0				0			(2,401		)	27
Total	$	2,444	$	0	$	2,444	$	(13	)		$	(3	)	$	(2,401	)	$	27

⁽³⁾  The balances as of December 31, 2014 and 2015 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

Note 3. Non-Marketable Investments

Our non-marketable investments include non-marketable equity investments and non-marketable debt securities.

Non-Marketable Equity Investments

Our non-marketable equity investments are investments we have made in privately-held companies accounted for under the equity or cost method and are not required to be consolidated under the variable interest or voting models. As of December 31, 2014 and 2015, these investments accounted for under the equity method had a carrying value of approximately $1.3 billion and $1.6 billion, respectively, and those investments accounted for under the cost method had a carrying value of $1.8 billion and $2.6 billion, respectively. For investments accounted for under the cost method, the fair value was approximately $7.5 billion as of December 31, 2015. The fair value of the cost method investments are primarily determined from data leveraging private-market transactions and are classified within Level 3 in the fair value hierarchy. We periodically review our non-marketable equity investments for impairment. No material impairments were recognized for the years ended December 31, 2013, 2014, and 2015. Our share of gains and losses in equity method investments for the year ended December 31, 2015 was a net loss of approximately $227 million and not material for the years ended December 31, 2013 and 2014. We reflect these losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

We determined that certain renewable energy investments included in our non-marketable equity investments are VIEs. However, we do not consolidate these entities in our financial statements because we do not have the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and account for those investments under the equity method. Our involvement with investments in renewable energy relate to our equity investments in entities whose activities involve power generation. We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly impact the entity's economic performance such as setting operating budgets. The carrying value of renewable energy investments accounted for under the equity method by Google that are VIEs was $302 million as of December 31, 2015 with the maximum exposure of $316 million. As a result of the adoption of ASU 2015-02, the carrying value of our renewable energy investments accounted for under the equity method by Alphabet that are VIEs were $1.0 billion and $1.3 billion as of December 31, 2014 and 2015, respectively, with a maximum exposure of $1.1 billion and $1.3 billion as of December 31, 2014 and 2015, respectively. The maximum exposure is based on investments to date plus future funding commitments.  We have determined the single source of our exposure to these VIE’s is our capital investment in these entities. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have

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acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

Non-Marketable Debt Securities

Our non-marketable debt securities are primarily preferred stock that are redeemable at our option and convertible notes issued by private companies. These debt securities do not have readily determinable market values and are categorized accordingly as Level 3 in the fair value hierarchy. To estimate the fair value of these securities, we use a combination of valuation methodologies, including market and income approaches based on prior transaction prices; estimated timing, probability, and amount of cash flows; and illiquidity considerations. Financial information of private companies may not be available and consequently we will estimate the value based on the best available information at the measurement date. We estimate a range of fair values based on valuation approaches noted above and as of December 31, 2014 and 2015, the fair value recorded on the Consolidated Balance Sheets for individual investments is within the range. No material impairments were recognized for the years ended December 31, 2013, 2014, and 2015.

The following table presents a reconciliation for our assets measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions):

	Level 3
Balance as of December 31, 2014	$	90
Purchases, issuances, and settlements(1)	934
Balance as of December 31, 2015	$	1,024

⁽¹⁾  Purchases of securities included our $900 million investment in SpaceX, a space exploration and space transport company, made during January 2015.

Note 4. Debt

Short-Term Debt

We have a debt financing program of up to $3.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. As of December 31, 2014 and 2015, we had $2.0 billion of outstanding commercial paper recorded as short-term debt with a weighted-average interest rate of 0.1% and 0.2%, respectively. In conjunction with this program, we have a $3.0 billion revolving credit facility expiring in July 2016. The interest rate for the credit facility is determined based on a formula using certain market rates. As of December 31, 2014 and 2015, we were in compliance with the financial covenant in the credit facility, and no amounts were outstanding under the credit facility as of December 31, 2014 and 2015. The estimated fair value of the short-term debt approximated its carrying value as of December 31, 2014 and 2015.

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Long-Term Debt

We issued $1.0 billion of unsecured senior notes (the "2014 Notes") in February 2014 and $3.0 billion of unsecured senior notes in three tranches (collectively, the "2011 Notes") in May 2011. We used the net proceeds from the issuance of the 2011 Notes to repay a portion of our outstanding commercial paper and for general corporate purposes. We used the net proceeds from the issuance of the 2014 Notes for the repayment of the portion of the principal amount of our 2011 Notes which matured on May 19, 2014 and for general corporate purposes. The total outstanding Notes are summarized below (in millions):

	As of December 31, 2014			As of December 31, 2015
Short-Term Portion of Long-Term Debt
2.125% Notes due on May 19, 2016	$	0		$	1,000
Capital Lease Obligation	10			225
Total Short-Term Portion of Long-Term Debt	$	10		$	1,225
Long-Term Debt
2.125% Notes due on May 19, 2016	$	1,000		$	0
3.625% Notes due on May 19, 2021	1,000			1,000
3.375% Notes due on February 25, 2024	1,000			1,000
Unamortized discount for the Notes above	(8		)	(5		)
Subtotal	2,992			1,995
Capital Lease Obligation	236			0
Total Long-Term Debt	$	3,228		$	1,995

The effective interest yields of the Notes due in 2016, 2021, and 2024 were 2.241%, 3.734%, and 3.377%, respectively. Interest on the 2011 and 2014 Notes is payable semi-annually. The 2011 and 2014 Notes rank equally with each other and with all of our other senior unsecured and unsubordinated indebtedness from time to time outstanding. We may redeem the 2011 and 2014 Notes at any time in whole or in part at specified redemption prices. We are not subject to any financial covenants under the 2011 Notes or the 2014 Notes. The total estimated fair value of the 2011 and 2014 Notes was approximately $3.1 billion at both December 31, 2014 and 2015. The fair value of the outstanding 2011 and 2014 Notes was determined based on observable market prices in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.

In August 2013, we entered into a capital lease obligation on certain property expiring in 2028. We intend to exercise the option to purchase the property in 2016, and as such the long term portion of the capital lease obligation was reclassified as short term. The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value as of December 31, 2014 and 2015.

As of December 31, 2015, aggregate future principal payments for long-term debt (including short-term portion of long-term debt) and capital lease obligation were as follows (in millions):

Years Ending
2016	$	1,225
2017	0
2018	0
2019	0
Thereafter	2,000
Total	$	3,225

In January 2016, the board of directors of Alphabet authorized the company to issue up to $5.0 billion of commercial paper from time to time and to enter into a $4.0 billion revolving credit facility to replace Google's existing $3.0 billion revolving credit facility. 

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Note 5. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):

	As of December 31, 2014			As of December 31, 2015
Land and buildings	$	13,326		$	16,518
Information technology assets	10,918			13,645
Construction in progress	6,555			7,324
Leasehold improvements	1,868			2,576
Furniture and fixtures	79			83
Property and equipment, gross	32,746			40,146
Less: accumulated depreciation and amortization	(8,863		)	(11,130		)
Property and equipment, net	$	23,883		$	29,016

Property under capital lease with a cost basis of $258 million was included in land and buildings as of December 31, 2015.

Prepaid Revenue Share, Expenses and Other Assets, Non-Current

Note Receivable

In connection with the sale of our Motorola Mobile business on October 29, 2014 (see Note 9 for additional information), we received an interest-free, three-year prepayable promissory note (the "Note Receivable") due October 2017 from Lenovo. The Note Receivable is included in prepaid revenue share, expenses and other assets, non-current, on our Consolidated Balance Sheets. Based on the general market conditions and the credit quality of Lenovo, we discounted the Note Receivable at an effective interest rate of 4.5%. The outstanding balances are shown in the table below (in millions):

	As of December 31, 2014			As of December 31, 2015
Principal of the Note Receivable	$	1,500		$	1,448
Less: unamortized discount for the Note Receivable	(175		)	(112		)
Total	$	1,325		$	1,336

As of December 31, 2014 and 2015, we did not recognize a valuation allowance on the Note Receivable.

Accumulated Other Comprehensive Income

The components of AOCI, net of tax, were as follows (in millions):

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2012	$	(73	)	$	604		$	7		$	538
Other comprehensive income (loss) before reclassifications	89			(392		)	112			(191		)
Amounts reclassified from AOCI	0			(162		)	(60		)	(222		)
Other comprehensive income (loss)	89			(554		)	52			(413		)
Balance as of December 31, 2013	$	16		$	50		$	59		$	125

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	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2013	$	16		$	50		$	59		$	125
Other comprehensive income (loss) before reclassifications	(996		)	505			651			160
Amounts reclassified from AOCI	0			(134		)	(124		)	(258		)
Other comprehensive income (loss)	(996		)	371			527			(98		)
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27
Other comprehensive income (loss) before reclassifications	(1,067		)	(715		)	676			(1,106		)
Amounts reclassified from AOCI	0			208			(1,003		)	(795		)
Other comprehensive income (loss)	(1,067		)	(507		)	(327		)	(1,901		)
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)

The effects on net income of amounts reclassified from AOCI were as follows (in millions):

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Year Ended December 31,
AOCI Components	Location	2013			2014			2015
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	158		$	153		$	(208	)
	Net Income (loss) from discontinued operations	43			0			0
	Provision for income taxes	(39		)	(19		)	0
	Net of tax	$	162		$	134		$	(208	)
Unrealized gains on cash flow hedges
Foreign exchange contracts	Revenue	$	95		$	171		$	1,399
Interest rate contracts	Other income (expense), net	0			4			5
	Provision for income taxes	(35		)	(51		)	(401		)
	Net of tax	$	60		$	124		$	1,003
Total amount reclassified, net of tax		$	222		$	258		$	795

Note 6. Acquisitions

2015 Acquisitions

bebop Technologies

In December 2015, we completed the acquisition of bebop Technologies Inc. (bebop), a company with a cloud-based development platform focused on enterprise applications. The fair value of total consideration transferred in connection with the close was $272 million, of which $1 million was paid in cash and $271 million was paid in the form of Alphabet Class C capital stock. We issued a total of approximately 514 thousand shares of Alphabet Class C capital

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stock in relation to this acquisition, part of which will be accounted for as compensation expense. The fair value of the shares of capital stock issued was determined based on the closing market price of Alphabet's Class C capital stock as of the close date. The Class C capital stock issued by Alphabet in connection with the acquisition was treated as a capital contribution from Alphabet to Google. We expect the acquisition will help us provide a new platform to build and maintain enterprise applications. As part of the acquisition, Diane Greene, the former CEO of bebop and a member of our Board of Directors, has joined Google.

Of the total purchase price of $272 million, $28 million was cash acquired, $59 million was attributed to intangible assets, $206 million was attributed to goodwill, and $21 million was attributed to net liabilities assumed. The goodwill of $206 million is primarily attributable to the synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

Other Acquisitions

During the year ended December 31, 2015, we completed other acquisitions and purchases of intangible assets for total consideration of approximately $263 million. In aggregate, $4 million was cash acquired, $88 million was attributed to intangible assets, $138 million was attributed to goodwill, and $33 million was attributed to net assets acquired. These acquisitions generally enhance the breadth and depth of our offerings, as well as expanding our expertise in engineering and other functional areas. The amount of goodwill expected to be deductible for tax purposes is approximately $20 million.

Pro forma results of operations for these acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in aggregate.

For all acquisitions and purchases completed during the year ended December 31, 2015, patents and developed technology have a weighted-average useful life of 4.1 years, customer relationships have a weighted-average useful life of 4.0 years, and trade names and other have a weighted-average useful life of 6.8 years.

2014 Acquisitions

Nest

In February 2014, we completed the acquisition of Nest Labs, Inc. (Nest), a company whose mission is to reinvent devices in the home such as thermostats and smoke alarms. Prior to this transaction, we had an approximately 12% ownership interest in Nest. The acquisition is expected to enhance Google's suite of products and services and allow Nest to continue to innovate upon devices in the home, making them more useful, intuitive, and thoughtful, and to reach more users in more countries.

Of the total $2.6 billion purchase price and the fair value of our previously held equity interest of $152 million, $51 million was cash acquired, $430 million was attributed to intangible assets, $2.3 billion was attributed to goodwill, and $84 million was attributed to net liabilities assumed. The goodwill of $2.3 billion is primarily attributable to synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

This transaction is considered a “step acquisition” under GAAP whereby our ownership interest in Nest held before the acquisition was remeasured to fair value at the date of the acquisition. Such fair value was estimated by using discounted cash flow valuation methodologies. Inputs used in the methodologies primarily included projected future cash flows, discounted at a rate commensurate with the risk involved. The gain of $103 million as a result of remeasurement is included in other income (expense), net, on our Consolidated Statements of Income for the year ended December 31, 2014.

Dropcam

In July 2014, Nest completed the acquisition of Dropcam, Inc. (Dropcam), a company that enables consumers and businesses to monitor their homes and offices via video, for approximately $517 million in cash. With Dropcam on board, Nest expects to continue to reinvent products that will help shape the future of the connected home. Of the total purchase price of $517 million, $11 million was cash acquired, $55 million was attributed to intangible assets, $452 million was attributed to goodwill, and $1 million was attributed to net liabilities assumed. The goodwill of $452 million is primarily attributable to synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

Skybox

In August 2014, we completed the acquisition of Skybox Imaging, Inc. (Skybox), a satellite imaging company, for approximately $478 million in cash. We expect the acquisition to keep Google Maps accurate with up-to-date imagery and, over time, improve internet access and disaster relief. Of the total purchase price of $478 million, $6 million was cash acquired, $69 million was attributed to intangible assets, $388 million was attributed to goodwill, and $15 million

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was attributed to net assets acquired. The goodwill of $388 million is primarily attributable to the synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

Other Acquisitions

During the year ended December 31, 2014, we completed other acquisitions and purchases of intangible assets for total consideration of approximately $1,466 million, which includes the fair value of our previously held equity interest of $33 million. In aggregate, $65 million was cash acquired, $405 million was attributed to intangible assets, $1,045 million was attributed to goodwill, and $49 million was attributed to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our offerings, as well as expanding our expertise in engineering and other functional areas. The amount of goodwill expected to be deductible for tax purposes is approximately $55 million.

Pro forma results of operations for these acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in aggregate.

For all acquisitions and purchases completed during the year ended December 31, 2014, patents and developed technology have a weighted-average useful life of 5.1 years, customer relationships have a weighted-average useful life of 4.5 years, and trade names and other have a weighted-average useful life of 6.9 years.

Note 7. Collaboration Agreement

On September 18, 2013, we announced the formation of Calico, a life science company with a mission to harness advanced technologies to increase our understanding of the biology that controls lifespan. Calico's results of operations and statement of financial position are included in our consolidated financial statements. As of December 31, 2015, Google has contributed $240 million to Calico in exchange for Calico convertible preferred units. As of December 31, 2015, Google has also committed to fund an additional $490 million on an as-needed basis.

In September 2014, AbbVie Inc. (AbbVie) and Calico announced a research and development collaboration intended to help both companies discover, develop, and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. As of December 31, 2015, AbbVie has contributed $750 million to fund the collaboration pursuant to the agreement, which reflects its total commitment. As of December 31, 2015, Calico has contributed $250 million and committed up to an additional $500 million.

Calico will use its scientific expertise to establish a world-class research and development facility, with a focus on drug discovery and early drug development; and AbbVie will provide scientific and clinical development support and its commercial expertise to bring new discoveries to market. Both companies will share costs and profits equally. AbbVie's contribution has been recorded as a liability on Calico's financial statements, which is reduced and reflected as a reduction to research and development expense as eligible research and development costs are incurred by Calico over the next few years.

As a result of the adoption of ASU 2014-10, Calico was determined to be a VIE for Alphabet.

Note 8. Goodwill and Other Intangible Assets

Goodwill

In conjunction with the Alphabet reorganization we are implementing a new operating structure. Consequently, beginning in the fourth quarter of 2015, we have multiple operating segments and reporting units, representing the individual businesses run separately under the Alphabet structure. Refer to Note 16 for further information. In conjunction with the changes to reporting units, we allocated goodwill to each reporting unit based on their relative fair values. The changes in the carrying amount of goodwill allocated to our disclosed segments for the years ended December 31, 2014 and 2015 were as follows (in millions):

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	Google			Other Bets			Total Consolidated
Balance as of December 31, 2013	$	11,492		$	—		$	11,492
Acquisitions	4,208			—			4,208
Dispositions	(43		)	—			(43		)
Foreign currency translation and other adjustments	(58		)	—			(58		)
Balance as of December 31, 2014	$	15,599		$	—		$	15,599
Acquisitions	139			—			139
Foreign currency translation and other adjustments	(71		)	—			(71		)
Allocation in the fourth quarter of 2015	(416		)	416			—
Acquisitions	201			4			205
Foreign currency translation and other adjustments	4			(7		)	(3		)
Balance as of December 31, 2015	$	15,456		$	413		$	15,869

Other Intangible Assets

Information regarding our purchased intangible assets is as follows (in millions):

	As of December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	6,547	$	2,513	$	4,034
Customer relationships	1,410		1,168		242
Trade names and other	696		365		331
Total	$	8,653	$	4,046	$	4,607

	As of December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Patents and developed technology	$	6,592	$	3,213	$	3,379
Customer relationships	1,343		1,201		142
Trade names and other	795		469		326
Total	$	8,730	$	4,883	$	3,847

Patents and developed technology, customer relationships, and trade names and other have weighted-average useful lives from the date of purchase of 7.8 years, 6.0 years, and 5.4 years, respectively. Amortization expense relating to our purchased intangible assets was $1,011 million, $1,079 million, and $892 million for the years ended December 31, 2013, 2014, and 2015.

During the year ended December 31, 2014, we recorded an impairment charge in other cost of revenues of $378 million related to a patent licensing royalty asset acquired in connection with the Motorola acquisition, which we retained subsequent to the sale of Motorola Mobile. The asset was determined to be impaired due to prolonged decreased royalty payments and unpaid interest owed and was written down to its fair value. Fair value was determined based on a discounted cash flow method and reflects estimated future cash flows associated with the patent licensing royalty asset at the measurement date and falls within level 3 in fair value hierarchy. Impairments of intangible assets were not material for the year ended December 31, 2015.

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As of December 31, 2015, expected amortization expense for our purchased intangible assets for each of the next five years and thereafter was as follows (in millions):

2016	$	806
2017	724
2018	637
2019	528
2020	434
Thereafter	718
	$	3,847

Note 9. Discontinued Operations

Motorola Mobile

On October 29, 2014, we closed the sale of the Motorola Mobile business to Lenovo for a total purchase price of approximately $2.9 billion, including $1.4 billion paid at close, comprised of $660 million in cash and $750 million in Lenovo ordinary shares (519.1 million shares). The remaining $1.5 billion was paid in the form of an interest-free, three-year prepayable promissory note.

We maintain ownership of the vast majority of the Motorola Mobile patent portfolio, including pre-closing patent applications and invention disclosures, which we licensed to Motorola Mobile for its continued operations. Additionally, in connection with the sale, we agreed to indemnify Lenovo for certain potential liabilities of the Motorola Mobile business, for which we recorded an indemnification liability of $130 million.

The sale resulted in a gain of $740 million, net of tax, which was presented as part of net income from discontinued operations in the Consolidated Statements of Income for the year ended December 31, 2014. Incremental to this net gain, we recognized additional income of $254 million, net of tax, in connection with certain IP licensing arrangements between the parties, included as part of net income from discontinued operations on the Consolidated Statements of Income for the year ended December 31, 2014.

The financial results of Motorola Mobile through the date of divestiture are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income. The following table presents financial results of the Motorola Mobile business included in net income (loss) from discontinued operations for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31,
	2013			2014 (1)
Revenues	$	4,306		$	5,486
Loss from discontinued operations before income taxes	(1,403		)	(177		)
Benefits from/(Provision for) income taxes	270			(47		)
Gain on disposal	0			740
Net (loss) income from discontinued operations	$	(1,133	)	$	516

⁽¹⁾  The operating results of Motorola Mobile were included in our Consolidated Statements of Income from January 1, 2014 through October 29, 2014, the date of divestiture.

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The following table presents the aggregate carrying amounts of the major classes of assets and liabilities divested (in millions):

Assets:
Cash and cash equivalents	$	160
Accounts receivable	1,103
Inventories	217
Prepaid expenses and other current assets	357
Prepaid expenses and other assets, non-current	290
Property and equipment, net	542
Intangible assets, net	985
Goodwill	43
Total assets	$	3,697
Liabilities:
Accounts payable	$	1,238
Accrued compensation and benefits	163
Accrued expenses and other current liabilities	10
Deferred revenue, current	165
Other long-term liabilities	250
Total liabilities	$	1,826

Motorola Home

On April 17, 2013, we sold the Motorola Home business to Arris for consideration of approximately $2,412 million in cash, including cash of $2,238 million received at the date of close and certain post-close adjustments of $174 million received in the third quarter of 2013, and approximately $175 million in Arris' common stock (10.6 million shares). Subsequent to the transaction, we own approximately 7.8% of the outstanding shares of Arris. Additionally, in connection with the disposition, we agreed to indemnify Arris for potential liability from certain intellectual property infringement litigation, for which we recorded an indemnification liability of $175 million, the majority of which was settled subsequent to the disposition.

The disposition resulted in a net gain of $757 million, which was presented as part of net income from discontinued operations in the Consolidated Statements of Income for the year ended December 31, 2013.

The financial results of Motorola Home through the date of divestiture are presented as net income (loss) from discontinued operations on the Consolidated Statement of Income. The following table presents financial results of the Motorola Home business included in net income (loss) from discontinued operations for the year ended December 31, 2013 (in millions):

	Year Ended December 31,
	2013(1)
Revenues	$	804
Loss from discontinued operations before income taxes	(67		)
Benefits from income taxes	16
Gain on disposal	757
Net income from discontinued operations	$	706

⁽¹⁾  The operating results of Motorola Home were included in our Consolidated Statements of Income from January 1, 2013 through April 17, 2013, the date of divestiture.

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The following table presents the aggregate carrying amounts of the major classes of assets and liabilities divested (in millions):

Assets:
Accounts receivable	$	424
Inventories	228
Deferred income taxes, net	144
Prepaid and other current assets	152
Property and equipment, net	282
Intangible assets, net	701
Other assets, non-current	182
Total assets	$	2,113
Liabilities:
Accounts payable	$	169
Accrued expenses and other liabilities	289
Total liabilities	$	458

Note 10. Other Income (Expense), Net

The components of other income (expense), net, were as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Interest income	$	766		$	746		$	999
Interest expense	(81		)	(101		)	(104		)
Gain (loss) on marketable securities, net	158			153			(208		)
Foreign currency exchange losses, net (1)	(379		)	(402		)	(422		)
Gain (loss) on non-marketable investments, net	8			237			(126		)
Loss on divestiture of businesses (2)	(57		)	0			0
Other	81			130			152
Other income (expense), net	$	496		$	763		$	291

⁽¹⁾  Our foreign currency exchange losses,net are related to the option premium costs and forward points for our foreign currency hedging contracts, our foreign exchange transaction gains and losses from the conversion of the transaction currency to the functional currency, offset by the foreign currency hedging contract losses and gains. The net foreign currency transaction losses were $121 million, $107 million, and $123 million in 2013, 2014, and 2015, respectively.

(2) Gain on divestiture of Motorola Home business was included in net income (loss) from discontinued operations for the year ended December 31, 2013. Gain on divestiture of Motorola Mobile business was included in net income (loss) from discontinued operations for the year ended December 31, 2014.

Note 11. Commitments and Contingencies

Operating Leases

We have entered into various non-cancelable operating lease agreements for certain of our offices, facilities, land, and data centers throughout the world with original lease periods expiring primarily between 2016 and 2063. We are committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below. Certain of these arrangements have free or escalating rent payment provisions. We recognize rent expense under such arrangements on a straight-line basis.

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As of December 31, 2015, future minimum payments under non-cancelable operating leases, net of sublease income amounts, were as follows over each of the next five years and thereafter (in millions):

	Operating Leases		Sub-lease Income		Net Operating Leases
2016	672		26		646
2017	794		13		781
2018	796		4		792
2019	769		3		766
2020	719		3		716
Thereafter	3,706		1		3,705
Total minimum payments	$	7,456	$	50	$	7,406

Certain leases have adjustments for market provisions. Amounts in the above table represent our best estimates of future payments to be made under these leases.

We entered into certain non-cancelable lease agreements with original lease periods expiring between 2021 and 2032 where we are the deemed owner for accounting purposes of new construction projects. Future minimum lease payments under such leases total approximately $678 million, of which $422 million is included on the Consolidated Balance Sheet as of December 31, 2015. These amounts are presented as an asset and corresponding non-current liability, which represents our estimate of construction costs incurred to date. They have been excluded from the table above.

Rent expense under operating leases, including co-location arrangements, was $465 million, $570 million, and $734 million in 2013, 2014, and 2015.

Purchase Obligations

As of December 31, 2015, we had $1.7 billion of other non-cancelable contractual obligations, primarily related to data center operations and facility build-outs, video and other content licensing revenue sharing arrangements, as well as certain inventory purchase commitments.

Letters of Credit

As of December 31, 2015, we had unused letters of credit for $752 million.

Indemnifications

In the normal course of business, to facilitate transactions in our services and products, we indemnify certain parties, including advertisers, Google Network Members, and lessors with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows, or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period.

As of December 31, 2015, we did not have any material indemnification claims that were probable or reasonably possible. As part of the sale of Motorola Home and Motorola Mobile businesses, we issued indemnifications for certain potential liabilities. Please see Note 9 for additional information.

Legal Matters

Antitrust Investigations

On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an investigation into various antitrust-related complaints against us. On April 15, 2015, the EC issued a Statement of

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Objections (SO) regarding the display and ranking of shopping search results. The EC also opened a formal investigation into Android. We responded to the SO on August 27, 2015 and will continue to cooperate with the EC.

The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India (CCI), Brazil's Council for Economic Defense (CADE), the Canadian Competition Bureau (CCB), and the Federal Antimonopoly Service (FAS) of the Russian Federation have also opened investigations into certain of our business practices. In August 2015, we received the CCI Director General's report with interim findings of competition law infringements regarding search and ads. In September 2015, FAS found that there has been a competition law infringement in Android mobile distribution. We will respond to the CCI's report and have filed an appeal of the FAS decision. In July 2015, the Taiwan Fair Trade Commission informed us that it was closing its antitrust investigations of our business practices.

The state attorney general from Mississippi issued subpoenas in 2011 and 2012 in an antitrust investigation of our business practices. We have responded to those subpoenas, and we remain willing to cooperate with them if they have any further information requests.

Patent and Intellectual Property Claims

We have had patent, copyright, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe the intellectual property rights of others. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services, and may also cause us to change our business practices, and require development of non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business. In addition, the U.S. International Trade Commission (ITC) has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss for a company or its suppliers in an ITC action could result in a prohibition on importing infringing products into the U.S. Since the U.S. is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the U.S. or necessitating workarounds that may limit certain features of our products.

Furthermore, many of our agreements with our customers and partners require us to indemnify them for certain intellectual property infringement claims against them, which would increase our costs as a result of defending such claims, and may require that we pay significant damages if there were an adverse ruling in any such claims. Our customers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely impact our business.

Other

We are also regularly subject to claims, suits, government investigations, and other proceedings involving competition (such as the pending EC investigations described above), intellectual property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Such claims, suits, government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences.

Certain of our outstanding legal matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss. We evaluate, on a monthly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters.

With respect to our outstanding legal matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

We expense legal fees in the period in which they are incurred.

Taxes

We are under audit by the Internal Revenue Service (IRS) and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters. We have reserved for potential adjustments to our provision for income taxes and accrual of indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities, and we believe that the final outcome of these examinations or agreements will not have a

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material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state, and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, it would result in a further charge to expense.

Please see Note 15 for additional information regarding contingencies related to our income taxes.

Note 12. Net Income Per Share

Alphabet

We compute net income per share of Class A and Class B common stock and Class C capital stock using the two-class method. Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options, restricted stock units, and other contingently issuable shares. The dilutive effect of outstanding stock options, restricted stock units, and other contingently issuable shares is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock and Class C capital stock are identical, except with respect to voting. Further, there are a number of safeguards built into our certificate of incorporation, as well as Delaware law, which preclude our board of directors from declaring or paying unequal per share dividends on our Class A and Class B common stock and Class C capital stock. Specifically, Delaware law provides that amendments to our certificate of incorporation which would have the effect of adversely altering the rights, powers, or preferences of a given class of stock must be approved by the class of stock adversely affected by the proposed amendment. In addition, our certificate of incorporation provides that before any such amendment may be put to a stockholder vote, it must be approved by the unanimous consent of our board of directors. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common shares and Class C capital stock as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net income per share amounts are the same for Class A and Class B common stock and Class C capital stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Further, as we assume the conversion of Class B common stock in the computation of the diluted net income per share of Class A common stock, the undistributed earnings are equal to net income for that computation.

Stock Split Effected In Form of Stock Dividend

In January 2014, our board of directors approved the distribution of shares of Class C capital stock as a dividend to our holders of Class A and Class B common stock (the Stock Split). The Stock Split had a record date of March 27, 2014 and a payment date of April 2, 2014. 

In the second quarter of 2015, in accordance with a settlement of litigation involving the authorization to distribute Class C capital stock, at the close of trading on April 2, 2015, the last trading day of the 365 day period following the first date the Class C shares traded on NASDAQ (Lookback Period), we determined that a payment (the Adjustment Payment) in the amount of $522 million was due to Class C capital stockholders. The amount of the Adjustment Payment was based on the percentage difference that developed between the volume-weighted average price of Class A and Class C shares during the Lookback Period, as supplied by NASDAQ Data-on-Demand, and was payable to holders of Class C capital stock as of the end of the Lookback Period in cash, Class A common stock, Class C capital stock, or a combination thereof, at the discretion of our board of directors. On April 22, 2015, our board of directors approved the Adjustment Payment in shares of Class C capital stock, and cash in lieu of any fractional shares of Class C capital stock. In May 2015, the Adjustment Payment was made, resulting in the issuance of approximately 853 thousand shares of Class C capital stock, with $475 million reflected in additional-paid in capital and $47 million of cash in lieu of fractional shares of Class C capital stock.

In the year ended December 31, 2015, the Adjustment Payment was allocated to the numerator for calculating net income per share of Class C capital stock from net income available to all stockholders and the remaining undistributed earnings were allocated on a pro rata basis to Class A and Class B common stock and Class C capital stock based on the number of shares used in the per share computation for each class of stock. The weighted-average share impact of the Adjustment Payment is included in the denominator of both basic and diluted net income per share computations for the year ended December 31, 2015.

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In the years ended December 31, 2013 and 2014, the net income per share amounts are the same for Class A and Class B common stock and Class C capital stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with our Amended and Restated Certificate of Incorporation of Alphabet Inc.

The par value per share of our shares of Class A and Class B common stock remained unchanged at $0.001 per share after the Stock Split. On the effective date of the Stock Split, a transfer between retained earnings and common stock occurred in an amount equal to the $0.001 par value of the Class C capital stock that was issued.

Share and per share amounts for the prior periods presented below have been retroactively adjusted to reflect the Stock Split.

Computation of Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock and Class C capital stock (in millions, except share amounts which are reflected in thousands and per share amounts):

	Year Ended December 31,
	2013
	Class A			Class B			Class C
Basic net income (loss) per share:
Numerator
Allocation of undistributed earnings - continuing operations	$	5,407		$	1,173		$	6,580
Allocation of undistributed earnings - discontinued operations	(175		)	(38		)	(214		)
Total	$	5,232		$	1,135		$	6,366
Denominator
Number of shares used in per share computation	273,518			59,328			332,846
Basic net income (loss) per share:
Continuing operations	$	19.77		$	19.77		$	19.77
Discontinued operations	(0.64		)	(0.64		)	(0.64		)
Basic net income per share	$	19.13		$	19.13		$	19.13
Diluted net income (loss) per share:
Numerator
Allocation of undistributed earnings for basic computation - continuing operations	$	5,407		$	1,173		$	6,580
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,173			0			0
Reallocation of undistributed earnings	0			(21		)	0
Allocation of undistributed earnings - continuing operations	$	6,580		$	1,152		$	6,580
Allocation of undistributed earnings for basic computation - discontinued operations	(175		)	(38		)	(214		)
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	(38		)	0			0
Reallocation of undistributed earnings	(1		)	1			1
Allocation of undistributed earnings - discontinued operations	$	(214	)	$	(37	)	$	(213	)
Denominator
Number of shares used in basic computation	273,518			59,328			332,846
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	59,328			0			0
Employee stock options	2,748			4			2,748
Restricted stock units and other contingently issuable shares	3,215			0			3,215
Number of shares used in per share computation	338,809			59,332			338,809
Diluted net income (loss) per share:
Continuing operations	$	19.42		$	19.42		$	19.42
Discontinued operations	(0.63		)	(0.63		)	(0.63		)
Diluted net income per share	$	18.79		$	18.79		$	18.79

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Alphabet Inc. and Google Inc.

	Year Ended December 31,
	2014
	Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings - continuing operations	$	5,700		$	1,107		$	6,813
Allocation of undistributed earnings - discontinued operations	216			42			258
Total	$	5,916		$	1,149		$	7,071
Denominator
Number of shares used in per share computation	282,877			54,928			338,130
Basic net income per share:
Continuing operations	$	20.15		$	20.15		$	20.15
Discontinued operations	0.76			0.76			0.76
Basic net income per share	$	20.91		$	20.91		$	20.91
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation - continuing operations	$	5,700		$	1,107		$	6,813
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,107			0			0
Reallocation of undistributed earnings	(20		)	(18		)	20
Allocation of undistributed earnings - continuing operations	$	6,787		$	1,089		$	6,833
Allocation of undistributed earnings for basic computation - discontinued operations	216			42			258
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	42			0			0
Reallocation of undistributed earnings	(1		)	(1		)	1
Allocation of undistributed earnings - discontinued operations	$	257		$	41		$	259
Denominator
Number of shares used in basic computation	282,877			54,928			338,130
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	54,928			0			0
Employee stock options	2,057			0			2,038
Restricted stock units and other contingently issuable shares	2,515			0			4,525
Number of shares used in per share computation	342,377			54,928			344,693
Diluted net income per share:
Continuing operations	$	19.82		$	19.82		$	19.82
Discontinued operations	0.75			0.75			0.75
Diluted net income per share	$	20.57		$	20.57		$	20.57

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Alphabet Inc. and Google Inc.

	Year Ended December 31,
	2015
	Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	522
Allocation of undistributed earnings - continuing operations	6,695			1,196			7,935
Allocation of undistributed earnings - discontinued operations	0			0			0
Total	$	6,695		$	1,196		$	8,457
Denominator
Number of shares used in per share computation	289,640			51,745			343,241
Basic net income per share:
Continuing operations	$	23.11		$	23.11		$	24.63
Discontinued operations	0.00			0.00			0.00
Basic net income per share	$	23.11		$	23.11		$	24.63
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	522
Allocation of undistributed earnings for basic computation - continuing operations	$	6,695		$	1,196		$	7,935
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,196			0			0
Reallocation of undistributed earnings	(39		)	(14		)	39
Allocation of undistributed earnings - continuing operations	7,852			1,182			7,974
Allocation of undistributed earnings for basic computation - discontinued operations	0			0			0
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0			0			0
Reallocation of undistributed earnings	0			0			0
Allocation of undistributed earnings - discontinued operations	$	0		$	0		$	0
Denominator
Number of shares used in basic computation	289,640			51,745			343,241
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	51,745			0			0
Employee stock options	1,475			0			1,428
Restricted stock units and other contingently issuable shares	920			0			4,481
Number of shares used in per share computation	343,780			51,745			349,150
Diluted net income per share:
Continuing operations	$	22.84		$	22.84		$	24.34
Discontinued operations	0.00			0.00			0.00
Diluted net income per share	$	22.84		$	22.84		$	24.34

Google

Net income per share for Google is not required as its shares are not publicly traded.

Note 13. Stockholders’ Equity

Alphabet Reorganization

On October 2, 2015, Google implemented a legal reorganization, which resulted in Alphabet owning all of the outstanding stock of Google. Consequently, Google became a direct, wholly owned subsidiary of Alphabet. Each share of each class of Google stock issued and outstanding immediately prior to the legal reorganization automatically converted into an equivalent corresponding share of Alphabet stock, and Google’s stockholders immediately prior to the consummation of the legal reorganization became stockholders of Alphabet.

As a result of the reorganization, on October 2, 2015, the Fourth Amended and Restated Certificate of Incorporation of Google was amended to decrease the authorized number of shares of Class A common stock, Class B common

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Alphabet Inc. and Google Inc.

stock and Class C capital stock, par value $0.001 per share, from 9 billion shares, 3 billion shares and 3 billion shares, respectively, to 500 shares of each class of stock, respectively. Additionally, the authorized number of shares of preferred stock, par value $0.001 per share, was decreased from 100 million shares to 500 shares. As of December 31, 2015, Google had 100 shares of Class A common stock, 100 shares of Class B common stock, and 100 shares of Class C capital stock outstanding, of which Alphabet was the sole owner.

Alphabet Convertible Preferred Stock

Our board of directors has authorized 100 million shares of convertible preferred stock, $0.001 par value, issuable in series. As of December 31,2014 and 2015, there were no shares issued or outstanding.

Alphabet Class A and Class B Common Stock and Class C Capital Stock

Our board of directors has authorized three classes of stock, Class A and Class B common stock, and Class C capital stock. The rights of the holders of each class of our common and capital stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share. Class C capital stock has no voting rights, except as required by applicable law. Shares of Class B common stock may be converted at any time at the option of the stockholder and automatically convert upon sale or transfer to Class A common stock.

Stock Plans

As a result of the Alphabet reorganization, on October 2, 2015, Google transferred to Alphabet, and Alphabet assumed, sponsorship of all of Google's stock plans along with all of Google's rights and obligations under each plan.

During the year ended December 31,2014, shares reserved for future grants under the 2004 Stock Plan expired and we began granting awards from the 2012 Stock Plan (“Stock Plan”). Under our Stock Plan, RSUs or stock options may be granted. An RSU award is an agreement to issue shares of our publicly traded stock at the time the award vests. Incentive and non-qualified stock options, or rights to purchase common stock, are generally granted for a term of 10 years. Options and RSUs granted to participants under the Stock Plan generally vest over four years contingent upon employment or service with us on the vesting date.

As of December 31, 2015, there were 23,336,944 shares of stock reserved for future issuance under our Stock Plan.

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):

	Year Ended December 31,
	2013		2014		2015
Cost of revenues	$	469	$	535	$	806
Research and development	1,641		2,200		2,687
Sales and marketing	552		715		899
General and administrative	465		725		861
Discontinued operations	216		104		0
Total stock-based compensation expense	$	3,343	$	4,279	$	5,253

For the years ended December 31,2013, 2014, and 2015, we recognized tax benefits on total stock-based compensation expense from continuing operations of $685 million, $867 million, and $1,133 million, respectively, and from discontinued operations of $59 million, $30 million and $0 million, respectively. In addition, as a result of the Tax Court ruling in Altera Corp. v. Commissioner, we have recorded a tax benefit of $522 million related to 2015 stock-based compensation expense that will be subject to reimbursement of cost share payments if the tax court's opinion is sustained. Refer to Note 15 for more detail regarding the Altera case.

Of the total stock-based compensation expense from continuing operations recognized in the years ended December 31,2013, 2014, and 2015, $0 million, $0 million, and $50 million, respectively, was associated with awards ultimately settled in cash. Awards which will be ultimately settled in cash are classified as liabilities in our Consolidated Balance Sheets.

Stock-based compensation associated with Alphabet equity awards granted to Google employees in the fourth quarter ended December 31, 2015, was treated as a capital contribution from Alphabet to Google. Stock-based

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Alphabet Inc. and Google Inc.

compensation associated with equity awards for the years ended December 31,2013, 2014 and 2015 are presented as stock-based compensation expense in Alphabet's and Google's Consolidated Statements of Stockholders' Equity.

Alphabet Stock-Based Award Activities

The following table summarizes the activities for our options for the year ended December 31, 2015:

	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)(1)
Balance as of December 31, 2014	7,240,419		$	215.56
Granted	0		N/A
Exercised	(2,072,550	)	$	189.64
Forfeited/canceled	(268,886	)	$	310.47
Balance as of December 31, 2015	4,898,983		$	221.31	3.7	$	2,682
Exercisable as of December 31, 2015	4,462,847		$	212.02	3.4	$	2,484
Exercisable as of December 31, 2015 and expected to vest thereafter (2)	4,846,996		$	220.29	3.6	$	2,658

⁽¹⁾  The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock prices of $778.01 and $758.88 of our Class A common stock and Class C capital stock, respectively, on December 31, 2015.

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

The total grant date fair value of stock options vested during 2013, 2014 and 2015 was $223 million, $94 million, and $33 million. The aggregate intrinsic value of all options and warrants exercised during 2013, 2014 and 2015 was $1,793 million, $589 million, and $867 million. These amounts do not include the aggregate sales price of options sold under our Transferable Stock Options (TSO) program, which was discontinued as of November 29, 2013.

As of December 31, 2015, there was $12 million of unrecognized compensation cost related to outstanding employee stock options. This amount is expected to be recognized over a weighted-average period of 0.6 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 RSUs for the year ended December 31, 2015:

	Unvested Restricted Stock Units
	Number of     Shares		Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2014	24,619,549		$	487.80
Granted	14,415,740		$	546.46
Vested	(11,182,606	)	$	442.01
Forfeited/canceled	(2,111,497	)	$	481.37
Unvested as of December 31, 2015	25,741,186		$	531.74
Expected to vest after December 31, 2015 (1)	22,672,837		$	531.74

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

As of December 31, 2015, there was $11.1 billion of unrecognized compensation cost related to unvested RSUs. This amount is expected to be recognized over a weighted-average period of 2.7 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.

Share Repurchases

In October 2015, the board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock, commencing in the fourth quarter of 2015. The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market

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Alphabet Inc. and Google Inc.

purchases or privately negotiated transactions, including through the use of 10b5-1 plans. The repurchase program does not have an expiration date. As of December 31, 2015, we repurchased and subsequently retired approximately 2,391 thousand shares of Alphabet Class C capital stock for an aggregate amount of approximately $1,780 million. Alphabet's share repurchases in the year ended December 31, 2015 were funded by Google via a return of capital to Alphabet.

In January 2016, the board of directors of Alphabet authorized the company to repurchase an additional amount of approximately 514 thousand shares.

Google Stockholders' Equity

As a result of the Alphabet reorganization, Google has recorded various intercompany activities during the fourth quarter ended December 31, 2015 as capital transactions, which are reflected in Google's Consolidated Statements of Stockholders' Equity. Refer to Stock-Based Compensation and Share Repurchases section above, and Note 6, for descriptions of certain activities. Additionally, subsequent to the reorganization, shares withheld to satisfy employee withholding tax obligations and cash received from the exercise of stock options were recorded as capital transactions between Alphabet and Google and are reflected as such in Google's Consolidated Statements of Stockholders' Equity.

Note 14. 401(k) Plans

We have two 401(k) Savings Plans (401(k) Plans) that qualify as deferred salary arrangements under Section 401(k) of the Internal Revenue Code. Under these 401(k) Plans, matching contributions are based upon the amount of the employees’ contributions subject to certain limitations. We contributed approximately $202 million, $259 million, and $309 million for the years ended December 31, 2013, 2014, and 2015.

Note 15. Income Taxes

Income from continuing operations before income taxes included income from domestic operations of $7,651 million, $8,894 million, and $8,271 million for the years ended December 31, 2013, 2014, and 2015, and income from foreign operations of $8,248 million, $8,365 million, and $11,380 million for the years ended December 31, 2013, 2014, and 2015.

The provision for income taxes consists of the following (in millions):

	Year Ended December 31,
	2013			2014			2015
Current:
Federal	$	2,394		$	2,716		$	3,235
State	127			157			(397		)
Foreign	711			774			723
Total	3,232			3,647			3,561
Deferred:
Federal	(421		)	29			(198		)
State	0			6			(43		)
Foreign	(72		)	(43		)	(17		)
Total	(493		)	(8		)	(258		)
Provision for income taxes	$	2,739		$	3,639		$	3,303

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Alphabet Inc. and Google Inc.

The reconciliation of federal statutory income tax rate to our effective income tax rate is as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Expected provision at federal statutory tax rate (35%)	$	5,567		$	6,041		$	6,878
State taxes, net of federal benefit	133			132			(291		)
Change in valuation allowance	(641		)	(164		)	(65		)
Foreign rate differential	(2,482		)	(2,109		)	(2,624		)
Federal research credit	(433		)	(318		)	(407		)
Basis difference in investment of Arris	644			0			0
Other adjustments	(49		)	57			(188		)
Provision for income taxes	$	2,739		$	3,639		$	3,303

A retroactive and permanent reinstatement of the federal research credit was signed into law on December 18, 2015 in accordance with the Protecting Americans from Tax Hikes Act of 2015. As such, our effective tax rate for 2015 reflects the benefit of the 2015 federal research and development tax credit.

A retroactive extension of the 2012 federal research and development credit was signed into law on January 2, 2013 in accordance with The American Taxpayer Act of 2012. The benefit of $189 million related to the 2012 federal research and development credit is included in the year ended December 31, 2013.

Our effective tax rate for 2015 included a discrete tax benefit related to refunds and reductions in uncertain tax positions due to the resolution of a multi-year tax audit in the U.S.

Our effective tax rate is impacted by earnings realized in foreign jurisdictions with statutory tax rates lower than the federal statutory tax rate. Substantially all of the income from foreign operations was earned by an Irish subsidiary.

We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2015 because we intend to permanently reinvest such earnings outside the U.S. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability may be reduced by any foreign income taxes previously paid on these earnings. As of December 31, 2015, the cumulative amount of earnings upon which U.S. income taxes have not been provided is approximately $58.3 billion. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

On July 27, 2015, the United States Tax Court, in an opinion in Altera Corp. v. Commissioner, invalidated the portion of the Treasury regulations issued under IRC Section 482 requiring related-party participants in a cost sharing arrangement to share stock-based compensation costs. The U.S. Tax Court issued the final decision on December 28, 2015. The government has 90 days from the final decision date to file a notice of appeal. At this time, the U.S. Treasury has not withdrawn the requirement to include stock-based compensation from its regulations. We have evaluated the opinion and have recorded a tax benefit of $3.5 billion related to reimbursement of cost share payments for the previously shared stock-based compensation costs. In addition, we have recorded a tax liability of $3.5 billion for the U.S. tax cost of potential repatriation of the associated contingent foreign earnings because at this time we cannot reasonably conclude that the Company has the ability and the intent to indefinitely reinvest these contingent earnings. The net impact to our consolidated financial statements is not material. We will continue to monitor developments related to the case and the potential impact on our consolidated financial statements.

Deferred Income Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows (in millions):

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Alphabet Inc. and Google Inc.

	As of December 31,
	2014			2015
Deferred tax assets:
Stock-based compensation expense	$	376		$	534
State taxes	133			119
Investment loss	133			144
Legal settlement accruals	175			101
Accrued employee benefits	671			832
Accruals and reserves not currently deductible	175			245
Net operating losses	207			230
Tax credits	262			503
Basis difference in investment of Arris	1,347			1,357
Prepaid cost sharing	0			3,468
Other	243			337
Total deferred tax assets	3,722			7,870
Valuation allowance	(1,659		)	(1,732		)
Total deferred tax assets net of valuation allowance	2,063			6,138
Deferred tax liabilities:
Depreciation and amortization	(852		)	(1,126		)
Identified intangibles	(965		)	(787		)
Mark-to-market investments	(273		)	(93		)
Renewable energy investments	(430		)	(529		)
Foreign earnings	0			(3,468		)
Other	(125		)	(73		)
Total deferred tax liabilities	(2,645		)	(6,076		)
Net deferred tax liabilities	$	(582	)	$	62

As of December 31, 2015, our federal and state net operating loss carryforwards for income tax purposes were approximately $482 million and $443 million. If not utilized, the federal net operating loss carryforwards will begin to expire in 2021 and the state net operating loss carryforwards will begin to expire in 2016. The net operating loss carryforwards are subject to various annual limitations under the tax laws of the different jurisdictions. Our foreign net operating loss carryforwards for income tax purposes were $263 million that can be carried over indefinitely.

As of December 31, 2015, our California research and development credit carryforwards for income tax purposes were approximately $1,044 million that can be carried over indefinitely. We believe the state tax credit is not likely to be realized. Our foreign tax credit carryforwards for income tax purposes were approximately $223 million that will start to expire in 2025. We believe it is more likely than not that all of the foreign tax credit will be realized.

As of December 31, 2015, we maintained a valuation allowance with respect to certain of our deferred tax assets relating primarily to investment losses that are capital in nature, California deferred tax assets, and certain foreign net operating losses that we believe are not likely to be realized. We established a deferred tax asset for the book-to-tax basis difference in our investments in Arris shares received from the sale of the Motorola Home business to Arris in 2013. Since any future losses to be recognized upon the sale of Arris shares will be capital losses, a valuation allowance has been recorded against this deferred tax asset to the extent such deferred tax asset is not covered by capital gains generated as of 2015. We reassess the valuation allowance quarterly and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.

As a result of the Altera opinion, we have recorded a deferred tax asset of $3.5 billion and a deferred tax liability of $3.5 billion. Refer to above for more details on the Altera case.

Uncertain Tax Positions

The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2013 to December 31, 2015 (in millions):

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Alphabet Inc. and Google Inc.

Balance as of January 1, 2013	$	1,907
Increases related to prior year tax positions	158
Decreases related to prior year tax positions	(37		)
Decreases related to settlement with tax authorities	(78		)
Increases related to current year tax positions	552
Balance as of December 31, 2013	2,502
Increases related to prior year tax positions	66
Decreases related to prior year tax positions	(44		)
Decreases related to settlement with tax authorities	(1		)
Increases related to current year tax positions	771
Balance as of December 31, 2014	3,294
Increases related to prior year tax positions	224
Decreases related to prior year tax positions	(176		)
Decreases related to settlement with tax authorities	(27		)
Increases related to current year tax positions	852
Balance as of December 31, 2015	$	4,167

The total amount of gross unrecognized tax benefits was $2,502 million, $3,294 million, and $4,167 million as of December 31, 2013, 2014, and 2015, respectively, of which, $2,309 million, $2,909 million, and $3,614 million, if recognized, would affect our effective tax rate.

As of December 31, 2014 and 2015, we had accrued $239 million and $348 million in interest and penalties in provision for income taxes.

We file income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions, our two major tax jurisdictions are the U.S. federal and Ireland. We are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. The IRS completed its examination of our 2003 through 2006 tax years; all issues have been settled except for one which we have filed an appeal with the IRS and plan to litigate in court. The IRS is currently in examination of our 2007 through 2012 tax years. We have also received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend any and all such claims as presented.

Our 2013, 2014, and 2015 tax years remain subject to examination by the IRS for U.S. federal tax purposes, and our 2011 through 2015 tax years remain subject to examination by the appropriate governmental agencies for Irish tax purposes. There are other ongoing audits in various other jurisdictions that are not material to our financial statements.

We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.

We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs. Although the timing of resolution, settlement, closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits will materially change in the next 12 months.

Note 16. Information about Segments and Geographic Areas

In conjunction with the Alphabet reorganization, in the fourth quarter of 2015, we implemented legal and operational changes in how our Chief Operating Decision Maker (CODM) manages our businesses, including resource allocation and performance assessment. Consequently, we have multiple operating segments, representing the individual businesses run separately under the Alphabet structure.

Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the operating segments are combined and disclosed below as Other Bets. All prior-period amounts have been adjusted retrospectively to reflect the reportable segment change.

Our reported segments are described below:

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Alphabet Inc. and Google Inc.

• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome, Google Play as well as hardware products we sell, such as Chromecast, Chromebooks and Nexus. Our technical infrastructure and newer efforts like Virtual Reality are also included in Google. Google generates revenues primarily from advertising, sales of digital content, apps and cloud services, as well as sales of Google branded hardware.

• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X, and other initiatives. Revenues from the Other Bets is derived primarily through the sales of Nest hardware products, internet and TV services through Google Fiber and licensing and R&D services through Verily.

Revenue, cost of revenue, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our CODM does not evaluate operating segments using asset information.

Information about segments during the periods presented were as follows (in millions):

	Year Ended December 31,
	2013		2014		2015
Revenues:
Google	$	55,507	$	65,674	$	74,541
Other Bets	12		327		448
Total revenues	$	55,519	$	66,001	$	74,989

	Year Ended December 31,
	2013			2014			2015
Segment operating income (loss):
Google	$	16,260		$	19,011		$	23,425
Other Bets	(527		)	(1,942		)	(3,567		)
Reconciling items(1)	(330		)	(573		)	(498		)
Total income from operations	$	15,403		$	16,496		$	19,360

⁽¹⁾  Reconciling items are primarily related to corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

	Year Ended December 31,
	2013		2014			2015
Capital expenditures:
Google	$	7,006	$	11,173		$	8,849
Other Bets	187		501			869
Reconciling items(2)	165		(715		)	197
Total capital expenditures as presented in Consolidated Statements of Cash Flow	$	7,358	$	10,959		$	9,915

⁽²⁾  Reconciling items are primarily related to timing differences of payments as segment capital expenditures are on accrual basis while total capital expenditures shown on the Consolidated Statements of Cash Flow are on cash basis, capital expenditures of Motorola Mobile and Home, and other miscellaneous differences.

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Alphabet Inc. and Google Inc.

Stock-based compensation and depreciation, amortization and impairment are included in segment operating income (loss) as below (in millions):

	Year Ended December 31,
	2013		2014		2015
Stock-based compensation:
Google	$	2,911	$	3,677	$	4,587
Other Bets	124		347		498
Reconciling items(3)	92		151		118
Total stock based compensation, excluding discontinued operations(4)	$	3,127	$	4,175	$	5,203
Depreciation, amortization and impairment:
Google	$	3,668	$	4,778	$	4,839
Other Bets	24		148		203
Reconciling items(5)	247		53		21
Total depreciation, amortization and impairment as presented in Consolidated Statements of Cash Flow	$	3,939	$	4,979	$	5,063

⁽³⁾  Reconciling items represent corporate administrative costs that are not allocated to individual segments.

⁽⁴⁾  For purposes of segment reporting, we define SBC as awards accounted for under FASB ASC Topic 718 that we expect to settle in stock. SBC does not include expenses related to awards that we will ultimately settle in cash. Amounts exclude SBC from discontinued operations.

⁽⁵⁾  Reconciling items primarily represent depreciation, amortization and impairment related to Motorola Mobile and Motorola Home.

Revenues by geography are based on the billing addresses of our customers. The following tables set forth revenues and long-lived assets by geographic area (in millions):

	Year Ended December 31,
	2013		2014		2015
Revenues:
United States	$	25,587	$	29,482	$	34,810
United Kingdom	5,600		6,483		7,067
Rest of the world	24,332		30,036		33,112
Total revenues	$	55,519	$	66,001	$	74,989

	As of December 31, 2014		As of December 31, 2015
Long-lived assets:
United States	$	37,421	$	43,686
International	13,110		13,661
Total long-lived assets	$	50,531	$	57,347

Note 17. Revision of Previously Issued Financial Statements

In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015 in the cumulative amount of $711 million. We have evaluated the materiality of the income tax expense impact quantitatively and qualitatively and concluded it was not material to any of the prior periods impacted and that correction of income tax expense as an out of period adjustment in the quarter ended June 30, 2015 is not material to our consolidated financial statements for the year ended December 31, 2015. Consolidated revenues are not impacted. We elected to revise previously issued consolidated financial statements contained within this Annual Report on Form 10-K for the periods impacted to correct the effect of this immaterial income tax expense underaccrual for the corresponding periods.

55

Alphabet Inc. and Google Inc.

The following table presents the impact of these corrections on affected Consolidated Balance Sheet line items as of December 31, 2014 (in millions):

	As of December 31, 2014
	As Previously Reported (1)		Adjustment			As Revised
Selected Balance Sheets Data:
Income tax receivable, net	$	1,298	$	(707	)	$	591
Total current assets	79,363		(707		)	78,656
Total assets	129,894		(707		)	129,187
Income taxes payable, non-current	3,407		(67		)	3,340
Retained earnings	75,706		(640		)	75,066
Total stockholders' equity	104,500		(640		)	103,860
Total liabilities and stockholders' equity	$	129,894	$	(707	)	$	129,187

⁽¹⁾    Includes reclassifications of deferred tax assets and liabilities related to ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” Refer to Note 1 for further information.

The following table presents the impact of these corrections on affected Consolidated Statements of Income line items, including net income per share amounts for Class A and B common stock and Class C capital stock, for the years ended December 31, 2013 and 2014 (in millions, except per share amounts):

	Year Ended December 31, 2013							Year Ended December 31, 2014
	As Previously Reported		Adjustment			As Revised		As Previously Reported		Adjustment			As Revised
Selected Statements of Income Data:
Provision for income taxes	$	2,552	$	187		$	2,739	$	3,331	$	308		$	3,639
Net income from continuing operations	13,347		(187		)	$	13,160	13,928		(308		)	$	13,620
Net income	12,920		(187		)	$	12,733	14,444		(308		)	$	14,136
Basic net income per share from continuing operations	$	20.05	$	(0.28	)	$	19.77	$	20.61	$	(0.46	)	$	20.15
Basic net income per share	19.41		(0.28		)	19.13		21.37		(0.46		)	20.91
Diluted net income per share from continuing operations	19.70		(0.28		)	19.42		20.27		(0.45		)	19.82
Diluted net income per share	$	19.07	$	(0.28	)	$	18.79	$	21.02	$	(0.45	)	$	20.57

The following table presents the impact of these corrections on affected Consolidated Statements of Comprehensive Income line items for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31, 2013				Year Ended December 31, 2014
	As Previously Reported	Adjustment		As Revised	As Previously Reported	Adjustment		As Revised
Selected Statements of Comprehensive Income Data:
Net income	12,920	(187	)	12,733	14,444	(308	)	14,136
Comprehensive income	12,507	(187	)	12,320	14,346	(308	)	14,038

56

Alphabet Inc. and Google Inc.

The following table presents the impact of these corrections on affected Consolidated Statements of Cash Flows line items for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31, 2013						Year Ended December 31, 2014
	As Previously Reported		Adjustment			As Revised	As Previously Reported		Adjustment			As Revised
Selected Statements of Cash Flows Data:
Net income	$	12,920	$	(187	)	12,733	$	14,444	$	(308	)	$	14,136
Changes in income taxes, net	401		187			588	283		308			591

57

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Feb. 01, 2016	Jun. 30, 2015
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Trading Symbol	GOOG, GOOGL
Entity Registrant Name	Alphabet Inc.
Entity Central Index Key	0001652044
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 0
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		292,580,627
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		50,199,837
Class C Capital Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		345,539,303
Google Inc.
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Entity Registrant Name	Google Inc.
Entity Central Index Key	0001288776
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		0
Entity Public Float			$ 311,000,000,000

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 16,549	$ 18,347
Marketable securities	56,517	46,048
Total cash, cash equivalents, and marketable securities (including securities loaned of $4,058 and $4,531)	73,066	64,395
Accounts receivable, net of allowance of $225 and $296	11,556	9,383
Receivable under reverse repurchase agreements	450	875
Income taxes receivable, net	1,903	591
Prepaid revenue share, expenses and other assets	3,139	3,412
Total current assets	90,114	78,656
Prepaid revenue share, expenses and other assets, non-current	3,181	3,187
Non-marketable investments	5,183	3,079
Deferred income taxes	251	176
Property and equipment, net	29,016	23,883
Intangible assets, net	3,847	4,607
Goodwill	15,869	15,599
Total assets	147,461	129,187
Current liabilities:
Accounts payable	1,931	1,715
Short-term debt	3,225	2,009
Accrued compensation and benefits	3,539	3,069
Accrued expenses and other current liabilities	4,768	4,408
Accrued revenue share	2,329	1,952
Securities lending payable	2,428	2,778
Deferred revenue	788	752
Income taxes payable, net	302	96
Total current liabilities	19,310	16,779
Long-term debt	1,995	3,228
Deferred revenue, non-current	151	104
Income taxes payable, non-current	3,663	3,340
Deferred income taxes	189	758
Other long-term liabilities	$ 1,822	$ 1,118
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock	$ 0	$ 0
Class A and Class B common stock, and Class C capital stock and additional paid-in capital	32,982	28,767
Accumulated other comprehensive income (loss)	(1,874)	27
Retained earnings	89,223	75,066
Total stockholders’ equity	120,331	103,860
Total liabilities and stockholders’ equity	147,461	129,187
Google Inc.
Current assets:
Cash and cash equivalents	16,549	18,347
Marketable securities	56,517	46,048
Total cash, cash equivalents, and marketable securities (including securities loaned of $4,058 and $4,531)	73,066	64,395
Accounts receivable, net of allowance of $225 and $296	11,556	9,383
Receivable under reverse repurchase agreements	450	875
Income taxes receivable, net	1,903	591
Prepaid revenue share, expenses and other assets	3,139	3,412
Total current assets	90,114	78,656
Prepaid revenue share, expenses and other assets, non-current	3,181	3,187
Non-marketable investments	5,183	3,079
Deferred income taxes	251	176
Property and equipment, net	29,016	23,883
Intangible assets, net	3,847	4,607
Goodwill	15,869	15,599
Total assets	147,461	129,187
Current liabilities:
Accounts payable	1,931	1,715
Short-term debt	3,225	2,009
Accrued compensation and benefits	3,539	3,069
Accrued expenses and other current liabilities	4,768	4,408
Accrued revenue share	2,329	1,952
Securities lending payable	2,428	2,778
Deferred revenue	788	752
Income taxes payable, net	302	96
Total current liabilities	19,310	16,779
Long-term debt	1,995	3,228
Deferred revenue, non-current	151	104
Income taxes payable, non-current	3,663	3,340
Deferred income taxes	189	758
Other long-term liabilities	$ 1,822	$ 1,118
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock	$ 0	$ 0
Class A and Class B common stock, and Class C capital stock and additional paid-in capital	31,313	28,767
Accumulated other comprehensive income (loss)	(1,874)	27
Retained earnings	90,892	75,066
Total stockholders’ equity	120,331	103,860
Total liabilities and stockholders’ equity	$ 147,461	$ 129,187

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2015	Dec. 31, 2014
Total cash, cash equivalents, and marketable securities, securities loaned	$ 4,531,000,000	$ 4,058,000,000
Accounts receivable, allowance	$ 296,000,000	$ 225,000,000
Convertible preferred stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Convertible preferred stock, shares issued (in shares)	0	0
Convertible preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	15,000,000,000	15,000,000,000
Common stock, par value (in USD per share)	$ 687,000	$ 680,000
Common stock, shares issued (in shares)	687,348,000	680,172,000
Common stock, shares outstanding (in shares)	687,348,000	680,172,000
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	9,000,000,000	9,000,000,000
Common stock, par value (in USD per share)	$ 292,000	$ 287,000
Common stock, shares issued (in shares)	292,297,000	286,560,000
Common stock, shares outstanding (in shares)	292,297,000	286,560,000
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock, par value (in USD per share)	$ 50,000	$ 53,000
Common stock, shares issued (in shares)	50,295,000	53,213,000
Common stock, shares outstanding (in shares)	50,295,000	53,213,000
Class C Capital Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock, par value (in USD per share)	$ 345,000	$ 340,000
Common stock, shares issued (in shares)	344,756,000	340,399,000
Common stock, shares outstanding (in shares)	344,756,000	340,399,000
Google Inc.
Total cash, cash equivalents, and marketable securities, securities loaned	$ 4,531,000,000	$ 4,058,000,000
Accounts receivable, allowance	$ 296,000,000	$ 225,000,000
Convertible preferred stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized (in shares)	500.0	100,000,000
Convertible preferred stock, shares issued (in shares)	0	0
Convertible preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	1,500.0	15,000,000,000
Common stock, par value (in USD per share)	$ 0	$ 680,000
Common stock, shares issued (in shares)	300.0	680,172,000
Common stock, shares outstanding (in shares)	300.0	680,172,000
Google Inc. | Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	500.0	9,000,000,000
Common stock, par value (in USD per share)	$ 0	$ 287,000
Common stock, shares issued (in shares)	100.0	286,560,000
Common stock, shares outstanding (in shares)	100.0	286,560,000
Google Inc. | Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	500.0	3,000,000,000
Common stock, par value (in USD per share)	$ 0	$ 53,000
Common stock, shares issued (in shares)	100.0	53,213,000
Common stock, shares outstanding (in shares)	100	53,213,000
Google Inc. | Class C Capital Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	500.0	3,000,000,000
Common stock, par value (in USD per share)	$ 0	$ 340,000
Common stock, shares issued (in shares)	100.0	340,399,000
Common stock, shares outstanding (in shares)	100	340,399,000

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenues	$ 74,989	$ 66,001	$ 55,519
Costs and expenses:
Cost of revenues	28,164	25,691	21,993
Research and development	12,282	9,832	7,137
Sales and marketing	9,047	8,131	6,554
General and administrative	6,136	5,851	4,432
Total costs and expenses	55,629	49,505	40,116
Income from operations	19,360	16,496	15,403
Other income (expense), net	291	763	496
Income from continuing operations before income taxes	19,651	17,259	15,899
Provision for income taxes	3,303	3,639	2,739
Net income from continuing operations	16,348	13,620	13,160
Net income (loss) from discontinued operations	0	516	(427)
Net income	16,348	14,136	12,733
Less: Adjustment Payment to Class C capital stockholders	522	0	0
Net income available to all stockholders	$ 15,826	$ 14,136	$ 12,733
Net income (loss) per share of Class A and Class B common stock and Class C capital stock - basic:
Continuing operations (in USD per share)		$ 20.15	$ 19.77
Net income (loss) per share - basic (in USD per share)		20.91	19.13
Net income (loss) per share of Class A and Class B common stock and Class C capital stock - diluted:
Continuing operations (in USD per share)		19.82	19.42
Net income (loss) per share - diluted (in USD per share)		20.57	18.79
Common Class A and Common Class B
Net income (loss) per share of Class A and Class B common stock and Class C capital stock - basic:
Continuing operations (in USD per share)	$ 23.11	20.15	19.77
Discontinued operations (in USD per share)	0.00	0.76	(0.64)
Net income (loss) per share - basic (in USD per share)	23.11	20.91	19.13
Net income (loss) per share of Class A and Class B common stock and Class C capital stock - diluted:
Continuing operations (in USD per share)	22.84	19.82	19.42
Discontinued operations (in USD per share)	0.00	0.75	(0.63)
Net income (loss) per share - diluted (in USD per share)	$ 22.84	$ 20.57	$ 18.79
Class C Capital Stock
Costs and expenses:
Net income from continuing operations	$ 7,935	$ 6,813	$ 6,580
Net income (loss) from discontinued operations	0	258	(214)
Less: Adjustment Payment to Class C capital stockholders	(522)
Net income available to all stockholders	$ 8,457	$ 7,071	$ 6,366
Net income (loss) per share of Class A and Class B common stock and Class C capital stock - basic:
Continuing operations (in USD per share)	$ 24.63	$ 20.15	$ 19.77
Discontinued operations (in USD per share)	0.00	0.76	(0.64)
Net income (loss) per share - basic (in USD per share)	24.63	20.91	19.13
Net income (loss) per share of Class A and Class B common stock and Class C capital stock - diluted:
Continuing operations (in USD per share)	24.34	19.82	19.42
Discontinued operations (in USD per share)	0.00	0.75	(0.63)
Net income (loss) per share - diluted (in USD per share)	$ 24.34	$ 20.57	$ 18.79
Google Inc.
Revenues	$ 74,989	$ 66,001	$ 55,519
Costs and expenses:
Cost of revenues	28,164	25,691	21,993
Research and development	12,282	9,832	7,137
Sales and marketing	9,047	8,131	6,554
General and administrative	6,136	5,851	4,432
Total costs and expenses	55,629	49,505	40,116
Income from operations	19,360	16,496	15,403
Other income (expense), net	291	763	496
Income from continuing operations before income taxes	19,651	17,259	15,899
Provision for income taxes	3,303	3,639	2,739
Net income from continuing operations	16,348	13,620	13,160
Net income (loss) from discontinued operations	0	516	(427)
Net income	16,348	14,136	12,733
Less: Adjustment Payment to Class C capital stockholders	522	0	0
Net income available to all stockholders	$ 15,826	$ 14,136	$ 12,733

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Net income	$ 16,348	$ 14,136	$ 12,733
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(1,067)	(996)	89
Available-for-sale investments:
Change in net unrealized gains (losses)	(715)	505	(392)
Less: reclassification adjustment for net (gains) losses included in net income	208	(134)	(162)
Net change (net of tax effect of $212, $60, and $29)	(507)	371	(554)
Cash flow hedges:
Change in net unrealized gains	676	651	112
Less: reclassification adjustment for net gains included in net income	(1,003)	(124)	(60)
Net change (net of tax effect of $30, $196, and $115)	(327)	527	52
Other comprehensive loss	(1,901)	(98)	(413)
Comprehensive income	14,447	14,038	12,320
Google Inc.
Net income	16,348	14,136	12,733
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(1,067)	(996)	89
Available-for-sale investments:
Change in net unrealized gains (losses)	(715)	505	(392)
Less: reclassification adjustment for net (gains) losses included in net income	208	(134)	(162)
Net change (net of tax effect of $212, $60, and $29)	(507)	371	(554)
Cash flow hedges:
Change in net unrealized gains	676	651	112
Less: reclassification adjustment for net gains included in net income	(1,003)	(124)	(60)
Net change (net of tax effect of $30, $196, and $115)	(327)	527	52
Other comprehensive loss	(1,901)	(98)	(413)
Comprehensive income	$ 14,447	$ 14,038	$ 12,320

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Tax effect related to available-for-sale investments	$ (29)	$ 60	$ (212)
Tax effect related to cash flow hedges	(115)	196	30
Google Inc.
Tax effect related to available-for-sale investments	(29)	60	(212)
Tax effect related to cash flow hedges	$ (115)	$ 196	$ 30

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Millions	Total	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Google Inc.	Google Inc. Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital	Google Inc. Accumulated Other Comprehensive Income (Loss)	Google Inc. Retained Earnings	Class C Capital Stock	Class C Capital Stock Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital	Class C Capital Stock Accumulated Other Comprehensive Income (Loss)	Class C Capital Stock Retained Earnings	Class C Capital Stock Google Inc.	Class C Capital Stock Google Inc. Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital	Class C Capital Stock Google Inc. Accumulated Other Comprehensive Income (Loss)	Class C Capital Stock Google Inc. Retained Earnings
Beginning Balance (in shares) at Dec. 31, 2012		659,958				659,958
Beginning Balance at Dec. 31, 2012	$ 71,570	$ 22,835	$ 538	$ 48,197	$ 71,570	$ 22,835	$ 538	$ 48,197
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued (in shares)		11,706				11,706
Common stock issued	1,174	$ 1,174	0	0	1,174	$ 1,174	0	0
Stock-based compensation expense	3,343	3,343	0	0	3,343	3,343	0	0
Stock-based compensation tax benefits	449	449	0	0	449	449	0	0
Tax withholding related to vesting of restricted stock units	(1,879)	(1,879)	0	0	(1,879)	(1,879)	0	0
Net income	12,733	0	0	12,733	12,733	0	0	12,733
Other comprehensive loss	(413)	0	(413)	0	(413)	0	(413)	0
Ending Balance at Dec. 31, 2013	86,977	$ 25,922	125	60,930	86,977	$ 25,922	125	60,930
Ending Balance (in shares) at Dec. 31, 2013		671,664				671,664
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued (in shares)		8,508				8,508
Common stock issued	465	$ 465	0	0	465	$ 465	0	0
Stock-based compensation expense	4,279	4,279	0	0	4,279	4,279	0	0
Stock-based compensation tax benefits	625	625	0	0	625	625	0	0
Tax withholding related to vesting of restricted stock units	(2,524)	(2,524)	0	0	(2,524)	(2,524)	0	0
Net income	14,136	0	0	14,136	14,136	0	0	14,136
Other comprehensive loss	(98)	0	(98)	0	(98)	0	(98)	0
Ending Balance at Dec. 31, 2014	103,860	$ 28,767	27	75,066	103,860	$ 28,767	27	75,066
Ending Balance (in shares) at Dec. 31, 2014		680,172				680,172
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued (in shares)		8,714				6,659
Common stock issued	664	$ 664	0	0	331	$ 331	0	0
Stock-based compensation expense	5,151	5,151	0	0	5,151	5,151	0	0
Stock-based compensation tax benefits	815	815	0	0	815	815	0	0
Tax withholding related to vesting of restricted stock units	(2,779)	$ (2,779)	0	0	(1,954)	$ (1,954)	0	0
Repurchases of capital stock (in shares)		(2,391)				(687,684)
Repurchases of capital stock	(1,780)	$ (111)	0	(1,669)	0	$ 0	0	0
Capital transactions with Alphabet					(2,272)	(2,272)	0	0
Adjustment Payment to Class C capital stockholders (in shares)										853				853
Adjustment Payment to Class C capital stockholders									$ (47)	$ 475	$ 0	$ (522)	$ (47)	$ 475	$ 0	$ (522)
Net income	16,348	0	0	16,348	16,348	0	0	16,348
Other comprehensive loss	(1,901)	0	(1,901)	0	(1,901)	0	(1,901)	0
Ending Balance at Dec. 31, 2015	$ 120,331	$ 32,982	$ (1,874)	$ 89,223	$ 120,331	$ 31,313	$ (1,874)	$ 90,892
Ending Balance (in shares) at Dec. 31, 2015		687,348				0

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating activities
Net income	$ 16,348	$ 14,136	$ 12,733
Adjustments:
Depreciation and impairment of property and equipment	4,132	3,523	2,781
Amortization and impairment of intangible assets	931	1,456	1,158
Stock-based compensation expense	5,203	4,279	3,343
Excess tax benefits from stock-based award activities	0	0	0
Deferred income taxes	(179)	(104)	(437)
Gain on divestiture of business	0	(740)	(700)
(Gain) loss on marketable and non-marketable investments, net	334	(390)	(166)
Other	212	192	272
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(2,094)	(1,641)	(1,307)
Income taxes, net	(179)	591	588
Prepaid revenue share, expenses and other assets	(318)	459	(930)
Accounts payable	203	436	605
Accrued expenses and other liabilities	1,597	757	713
Accrued revenue share	339	245	254
Deferred revenue	43	(175)	233
Net cash provided by operating activities	26,572	23,024	19,140
Investing activities
Purchases of property and equipment	(9,915)	(10,959)	(7,358)
Purchases of marketable securities	(74,368)	(56,310)	(45,444)
Maturities and sales of marketable securities	62,905	51,315	38,314
Purchases of non-marketable investments	(2,172)	(1,227)	(569)
Cash collateral related to securities lending	(350)	1,403	(299)
Investments in reverse repurchase agreements	425	(775)	600
Proceeds from divestiture of business	0	386	2,525
Acquisitions, net of cash acquired, and purchases of intangibles and other assets	(236)	(4,888)	(1,448)
Net cash used in investing activities	(23,711)	(21,055)	(13,679)
Financing activities
Net payments related to stock-based award activities	(2,375)	(2,069)	(781)
Excess tax benefits from stock-based award activities	0	0	0
Adjustment Payment to Class C capital stockholders	(47)	0	0
Repurchases of capital stock	(1,780)	0	0
Proceeds from issuance of debt, net of costs	13,705	11,625	10,768
Repayments of debt	(13,728)	(11,643)	(11,325)
Net cash used in financing activities	(4,225)	(2,087)	(1,338)
Effect of exchange rate changes on cash and cash equivalents	(434)	(433)	(3)
Net increase (decrease) in cash and cash equivalents	(1,798)	(551)	4,120
Cash and cash equivalents at beginning of period	18,347	18,898	14,778
Cash and cash equivalents at end of period	16,549	18,347	18,898
Supplemental disclosures of cash flow information
Cash paid for taxes	3,338	2,819	1,932
Cash paid for interest	96	86	72
Google Inc.
Operating activities
Net income	16,348	14,136	12,733
Adjustments:
Depreciation and impairment of property and equipment	4,132	3,523	2,781
Amortization and impairment of intangible assets	931	1,456	1,158
Stock-based compensation expense	5,203	4,279	3,343
Excess tax benefits from stock-based award activities	(548)	(648)	(481)
Deferred income taxes	(179)	(104)	(437)
Gain on divestiture of business	0	(740)	(700)
(Gain) loss on marketable and non-marketable investments, net	334	(390)	(166)
Other	212	192	272
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(2,094)	(1,641)	(1,307)
Income taxes, net	(179)	591	588
Prepaid revenue share, expenses and other assets	(318)	459	(930)
Accounts payable	203	436	605
Accrued expenses and other liabilities	1,597	757	713
Accrued revenue share	339	245	254
Deferred revenue	43	(175)	233
Net cash provided by operating activities	26,024	22,376	18,659
Investing activities
Purchases of property and equipment	(9,915)	(10,959)	(7,358)
Purchases of marketable securities	(74,368)	(56,310)	(45,444)
Maturities and sales of marketable securities	62,905	51,315	38,314
Purchases of non-marketable investments	(2,172)	(1,227)	(569)
Cash collateral related to securities lending	(350)	1,403	(299)
Investments in reverse repurchase agreements	425	(775)	600
Proceeds from divestiture of business	0	386	2,525
Acquisitions, net of cash acquired, and purchases of intangibles and other assets	(236)	(4,888)	(1,448)
Net cash used in investing activities	(23,711)	(21,055)	(13,679)
Financing activities
Net payments related to stock-based award activities	(1,612)	(2,069)	(781)
Excess tax benefits from stock-based award activities	548	648	481
Adjustment Payment to Class C capital stockholders	(47)	0	0
Capital transactions with Alphabet	2,543	0	0
Proceeds from issuance of debt, net of costs	13,705	11,625	10,768
Repayments of debt	(13,728)	(11,643)	(11,325)
Net cash used in financing activities	(3,677)	(1,439)	(857)
Effect of exchange rate changes on cash and cash equivalents	(434)	(433)	(3)
Net increase (decrease) in cash and cash equivalents	(1,798)	(551)	4,120
Cash and cash equivalents at beginning of period	18,347	18,898	14,778
Cash and cash equivalents at end of period	16,549	18,347	18,898
Supplemental disclosures of cash flow information
Cash paid for taxes	3,338	2,819	1,932
Cash paid for interest	$ 96	$ 86	$ 72

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Nature of Operations and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

We were incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. We generate revenues primarily by delivering relevant, cost-effective online advertising.

On April 17, 2013, we sold the Motorola Home business (Motorola Home) to Arris Group, Inc. (Arris). The financial results of Motorola Home are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income for the year ended December 31, 2013. See Note 9 for further discussion of the sale.

On April 2, 2014, we completed a two-for-one stock split effected in the form of a stock dividend (the Stock Split). All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split. See Note 12 for additional information about the Stock Split.

On October 29, 2014, we sold the Motorola Mobile business (Motorola Mobile) to Lenovo Group Limited (Lenovo). The financial results of Motorola Mobile are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income for the years ended December 31, 2013 and 2014. See Note 9 for further discussion of the sale.

On August 10, 2015, we announced plans to create a new public holding company, Alphabet Inc. (Alphabet), and a new operating structure. On October 2, 2015, we implemented the holding company reorganization, and as a result, Alphabet became the successor issuer to Google Inc. (Google).

The implementation of the holding company reorganization on October 2, 2015 was accounted for as a merger under common control. Alphabet has recognized the assets and liabilities of Google at carryover basis. The consolidated financial statements of Alphabet present comparative information for prior years on a combined basis, as if both Alphabet and Google were under common control for all periods presented.

The consolidated financial statements and notes thereto are being presented in a combined report being filed by two separate registrants: Alphabet and Google. The Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Cash Flows are the only statements with differences between Alphabet and Google.  The differences relate to transactions between Alphabet and Google which are accounted for as capital transactions. Refer to Note 13 for additional information.

Basis of Consolidation

The consolidated financial statements of Alphabet and Google include the accounts of Alphabet and Google, respectively, and all wholly owned subsidiaries as well as all variable interest entities where we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the accounts receivable and sales allowances, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Revenue Recognition

The following table presents our revenues by segment and revenue source (in millions):

	Year Ended December 31,
	2013		2014		2015
Google segment
Google websites	$	37,422	$	45,085	$	52,357
Google Network Members' websites (1)	13,650		14,539		15,033
Google advertising revenues	51,072		59,624		67,390
Google other revenues (1)	4,435		6,050		7,151
Google segment revenues	$	55,507	$	65,674	$	74,541
Other Bets
Other Bets revenues	$	12	$	327	$	448
Consolidated revenues	$	55,519	$	66,001	$	74,989

⁽¹⁾  Prior period amounts have been adjusted to reflect the reclassification primarily related to DoubleClick ad serving software revenues from Google other revenues to Advertising Revenues from Google Network Members' websites to conform with current period presentation.

We generate revenues primarily by delivering performance and brand advertising. Performance advertising creates and delivers relevant ads that users will click, leading to direct engagement with advertisers. Brand advertising enhances users’ awareness of and affinity with advertisers’ products and services, through videos, text, images, and other ads that run across various devices.

Google AdWords is our auction-based advertising program that enables performance advertisers to place text-based and display ads on Google websites and our Google Network Members’ websites. Google AdSense refers to the online programs through which we distribute our advertisers’ AdWords ads for display on our Google Network Members’ websites. Most of our customers pay us on a cost-per-click basis, which means that an advertiser pays us only when a user engages with the ads by clicking on an ad on Google websites or Google Network Members' websites or by viewing YouTube engagement ads like TrueView (counted as an engagement when the user chooses not to skip the ad). We also offer advertising on a cost-per-impression basis that enables our brand advertisers to pay us based on the number of times their ads display on Google websites and our Google Network Members’ websites as specified by the advertisers.

Revenue from advertising is recognized when the services have been provided or delivered, the fees we charge are fixed or determinable, we and our advertisers or other customers understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured. We recognize as revenues the fees charged to advertisers each time a user clicks on one of the ads that appears next to the search results or content on Google websites or our Google Network Members’ websites. For those advertisers using our cost-per-impression pricing, we recognize as revenues the fees charged to advertisers each time their ads are displayed on Google websites or our Google Network Members’ websites. We report our Google AdSense revenues and traffic acquisition costs due to our Google Network Members on a gross basis principally because we are the primary obligor to our advertisers.

Revenue from hardware sales to end customers or through distribution channels is generally recognized when products have been shipped, risk of loss has transferred to the customer, objective evidence exists that customer acceptance provisions have been met, no significant obligations remain and allowances for discounts, price protection, returns and customer incentives can be reasonably and reliably estimated. Revenues are reported net of these allowances. Where these allowances cannot be reasonably and reliably estimated, we recognize revenue at the time the product sells through the distribution channel to the end customer or when the return period elapsed, as applicable.

For the sale of certain third-party products and services, we evaluate whether it is appropriate to recognize revenue based on the gross amount billed to the customers or the net amount earned as revenue share. Generally, when we record revenue on a gross basis, we are the primary obligor in a transaction, and have also considered other factors, including whether we are subject to inventory risk or have latitude in establishing prices.

For multi-element arrangements, including those that contain software essential to hardware products’ functionality and services, we allocate revenue to each unit of accounting based on their relative selling prices. In such circumstances, we use a hierarchy to determine the selling prices to be used for allocating revenue: (i) vendor-specific objective evidence of fair value (VSOE), (ii) third-party evidence of selling price, and (iii) best estimate of the selling price (ESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. ESPs reflect our best estimates of what the selling price of the deliverable would be if it was sold regularly on a stand-alone basis.

We record deferred revenues when cash payments are received in advance of our performance in the underlying agreement on the accompanying Consolidated Balance Sheets.

Cost of Revenues

Cost of revenues consists of traffic acquisition costs which are the advertising revenues shared with our Google Network Members and the amounts paid to our distribution partners who distribute our browser or otherwise direct search queries to our website.

Additionally, other costs of revenues includes the following:

• The expenses associated with the operation of our data centers (including depreciation, labor, energy, and bandwidth costs);

• Content acquisition costs primarily related to payments to certain content providers from whom we license their video and other content for distribution on YouTube and Google Play (we share most of the fees these sales generate with content providers or pay a fixed fee to these content providers);

• Credit card and other transaction fees related to processing customer transactions;

• Stock-based compensation expense;

• Revenue share payments to mobile carriers;

• Inventory costs for hardware we sell; and

• Amortization of certain intangible assets.

Stock-based Compensation

Restricted stock units (RSUs) are measured based on the fair market value of the underlying stock on the date of grant. Shares are issued on the vesting dates net of the minimum statutory tax withholding to be paid by us on behalf of our employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding. We record the liability for withholding amounts to be paid by us primarily as a reduction to additional paid-in capital when paid.

For stock option awards, we determined fair value using the Black-Scholes-Merton (BSM) option pricing model on the date of grant.

Stock-based compensation includes awards we expect to settle in Alphabet stock as well as awards we will ultimately settle in cash. We recognize stock-based compensation, less an estimate for forfeitures, using the straight-line method over the requisite service period. Additionally, stock-based compensation for liability classified awards reflect changes in fair value during the requisite service period.

We include as part of cash flows from operating activities the benefits of tax deductions in excess of the tax-effected compensation of the related stock-based awards for options exercised and RSUs vested during the period. For Google, such tax benefits are included as part of cash flows from financing activities. During the years ended December 31,2013, 2014, and 2015, the amount of cash received from the exercise of stock options, which is recognized as part of cash flows from financing activities, was $1,174 million, $465 million, and $393 million, respectively.

We have elected to account for the indirect effects of stock-based awards -- primarily the research and development tax credit -- through the Consolidated Statements of Income. Total direct tax benefit realized, including the excess tax benefit, from stock-based award activities during the years ended December 31,2013, 2014, and 2015, was $1,195 million, $1,356 million, and $1,544 million, respectively.

Certain Risks and Concentrations

Our revenues are primarily derived from online advertising, the market for which is highly competitive and rapidly changing. In addition, our revenues are generated from a multitude of vertical market segments in countries around the world. Significant changes in this industry or changes in customer buying or advertiser spending behavior could adversely affect our operating results.

We are subject to concentrations of credit risk principally from cash and cash equivalents, marketable securities, foreign exchange contracts, and accounts receivable. Cash equivalents and marketable securities consist primarily of time deposits, money market and other funds, including cash collateral received related to our securities lending program, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments and municipalities in the U.S., corporate securities, agency mortgage-backed securities, and asset-backed securities. Foreign exchange contracts are transacted with various financial institutions with high credit standing. Accounts receivable are typically unsecured and are derived from revenues earned from customers located around the world. In 2013, 2014, and 2015, we generated approximately 46%, 45%, and 46% of our revenues from customers based in the U.S., with the majority of revenues from customers outside of the U.S. located in Europe and Japan. We perform ongoing evaluations to determine customer credit and we limit the amount of credit we extend, but generally we do not require collateral from our customers. We maintain reserves for estimated credit losses and these losses have generally been within our expectations.

No individual customer or groups of affiliated customers represented more than 10% of our revenues in 2013, 2014, or 2015.

Fair Value of Financial Instruments

Our financial assets and financial liabilities that include cash equivalents, marketable securities, foreign currency and interest rate derivative contracts, and non-marketable debt securities are measured and recorded at fair value on a recurring basis. We measure certain financial assets at fair value for disclosure purposes, as well as, on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and our other current financial liabilities have fair values that approximate their carrying value.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Cash, Cash Equivalents, and Marketable Securities

We invest all excess cash primarily in debt securities including those of the U.S. government and its agencies, corporate debt securities, agency mortgage-backed securities, money market and other funds, municipal securities, time deposits, asset backed securities, and debt instruments issued by foreign governments.

We classify all investments that are readily convertible to known amounts of cash and have stated maturities of three months or less from the date of purchase as cash equivalents and those with stated maturities of greater than three months as marketable securities.

We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date. We have classified and accounted for our marketable securities as available-for-sale. After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell these securities prior to their stated maturities. As we view these securities as available to support current operations, we classify highly liquid securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying Consolidated Balance Sheets. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which we record within other income (expense), net. We determine any realized gains or losses on the sale of marketable securities on a specific identification method, and we record such gains and losses as a component of other income (expense), net.

Non-Marketable Investments

We have accounted for non-marketable equity investments either under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method.

We have accounted for our non-marketable investments that meet the definition of a debt security as available-for-sale securities. Since these securities do not have contractual maturity dates and we do not intend to liquidate them in the next 12 months, we have classified them as non-current assets on the accompanying Consolidated Balance Sheet.

Variable Interest Entities

We make a determination at the start of each arrangement whether an entity in which we have made an investment is considered a Variable Interest Entity (“VIE”). We consolidate VIEs in which we have a controlling financial interest. If we do not have a controlling financial interest in a VIE, we account for the investment under either the equity or cost method.

Impairment of Marketable and Non-Marketable Investments

We periodically review our marketable and non-marketable investments for impairment. If we conclude that any of these investments are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. For debt securities, we also consider whether (1) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as other income (expense), net.

Accounts Receivable

We record accounts receivable at the invoiced amount and we normally do not charge interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review the accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We also maintain a sales allowance to reserve for potential credits issued to customers. We determine the amount of the reserve based on historical credits issued.

Property and Equipment

We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally two to five years. We depreciate buildings over periods up to 25 years. We amortize leasehold improvements over the shorter of the remaining lease term or the estimated useful lives of the assets. Construction in progress is the construction or development of property and equipment that have not yet been placed in service for our intended use. Depreciation for equipment commences once it is placed in service and depreciation for buildings and leasehold improvements commences once they are ready for our intended use. Land is not depreciated.

Software Development Costs

We expense software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products and as a result, development costs that meet the criteria for capitalization were not material for the periods presented.

Software development costs also include costs to develop software to be used solely to meet internal needs and cloud based applications used to deliver our services. We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Costs capitalized for developing such software applications were not material for the periods presented.

Business Combinations

We include the results of operations of the businesses that we acquire as of the respective dates of acquisition. We allocate the fair value of the purchase price of our acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets

We review property and equipment, long-term prepayments and intangible assets, excluding goodwill, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. In 2014, we recorded impairments of intangible assets, including an impairment of $378 million in the third quarter of 2014 related to a patent licensing royalty asset. Impairments of intangible assets were not material in 2015.

We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. We test our goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. No goodwill impairment has been identified in any of the years presented.

Intangible assets with definite lives are amortized over their estimated useful lives. We amortize our acquired intangible assets on a straight-line basis with definite lives over periods ranging from one to twelve years.

Income Taxes

We account for income taxes using the asset and liability method, under which we recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. We measure current and deferred tax assets and liabilities based on provisions of enacted tax law. We evaluate the realization of our deferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more-likely-than-not that they will not be realized.

We recognize the financial statement effects of a tax position when it is more-likely-than not that, based on technical merits, the position will be sustained upon examination. The tax benefits of the position recognized in the financial statements are then measured based on the largest amount of benefit that is greater than 50% likely to be realized upon settlement with a taxing authority. In addition, we recognize interest and penalties related to unrecognized tax benefits as a component of the income tax provision.

Foreign Currency

Generally, the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end exchange rates for assets and liabilities, and average rates for the annual period derived from month-end exchange rates for revenues, costs, and expenses. We record translation gains and losses in accumulated other comprehensive income as a component of stockholders’ equity. We reflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency as a component of foreign currency exchange losses in other income (expense), net.

Advertising and Promotional Expenses

We expense advertising and promotional costs in the period in which they are incurred. For the years ended December 31, 2013, 2014 and 2015, advertising and promotional expenses totaled approximately $2,389 million, $3,004 million, and $3,186 million.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements, implementing accounting system changes related to the adoption, and considering additional disclosure requirements.

In June 2014, the FASB issued Accounting Standards Update No. 2014-10 (ASU 2014-10) "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation." ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification (ASC) thereby removing the financial reporting distinction between development stage entities and other reporting entities. The additional elimination of related consolidation guidance will require companies with interests in development stage entities to reassess whether such entities are variable interest entities under ASC Topic 810, Consolidation. We have adopted this standard in the first quarter of 2016 on a retrospective basis and the adoption of this standard did not have a material impact on our consolidated financial statements. Refer to Note 7 for further details. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02) "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. We have adopted this standard in the first quarter of 2016 on a retrospective basis. The adoption of this standard did not have a material impact on our consolidated statement of operations or consolidated balance sheet, but it resulted in additional disclosures. Refer to Note 3 for further details. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”.  ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. We have early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior periods have been retrospectively adjusted.  

As a result of the adoption of ASU 2015-17, the Company made the following adjustments to the 2014 balance sheet: a $1,322 million decrease to current deferred tax assets, a $83 million increase to noncurrent deferred tax asset, a $26 million decrease to current deferred tax liability, and a decrease of $1,213 million to noncurrent deferred tax liability.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. With respect to our consolidated financial statements, the most significant impact relates to the accounting for equity investments. It will impact the disclosure and presentation of financial assets and liabilities. ASU 2016-01 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017. Early adoption by public entities is permitted only for certain provisions. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (ASU 2016-09) "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting". We elected to early adopt these amendments beginning in the first quarter of 2016. Our Consolidated Statements of Cash Flows now present excess tax benefits as an operating activity, with the prior periods adjusted accordingly. The three year impact to our Consolidated Statements of Cash Flows as a result of the adoption of ASU 2016-09 is as follows (in millions):

	Year Ended December 31, 2013									Year Ended December 31, 2014
	As Previously Reported			Adjustment			Recast			As Previously Reported			Adjustment			Recast
Excess tax benefits	$	(481	)	$	481		$	—		$	(648	)	$	648		$	—
Net cash provided by operating activities	18,659			481			19,140			22,376			648			23,024
Excess tax benefits	481			(481		)	—			648			(648		)	—
Net cash used in financing activities	$	(857	)	$	(481	)	$	(1,338	)	$	(1,439	)	$	(648	)	$	(2,087	)
										Year Ended December 31, 2015
										As Previously Reported			Adjustment			Recast
Excess tax benefits										$	(548	)	$	548		$	—
Net cash provided by operating activities										26,024			548			26,572
Excess tax benefits										548			(548		)	—
Net cash used in financing activities										$	(3,677	)	$	(548	)	$	(4,225	)

Consolidated Statements of Cash Flows for Google have not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

Revision of Previously Issued Financial Statements

In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015 in the cumulative amount of $711 million. We evaluated the materiality of the income tax expense impact quantitatively and qualitatively and concluded it was not material to any of the prior periods impacted and that correction of income tax expense as an out of period adjustment in the quarter ended June 30, 2015 would not be material to our consolidated financial statements for the year ending December 31, 2015. Consolidated revenues are not impacted. We elected to revise previously issued consolidated financial statements for the periods impacted. Refer to Note 17 for additional information.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

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Financial Instruments

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Financial Instruments

Financial Instruments

We classify our cash equivalents and marketable securities within Level 1 or Level 2 in the fair value hierarchy because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. We classify our foreign currency and interest rate derivative contracts primarily within Level 2 in the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

Cash, Cash Equivalents, and Marketable Securities

The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 31, 2014 and 2015 (in millions):

	As of December 31, 2014
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	9,863	$	0	$	0		$	9,863	$	9,863	$	0
Level 1:
Money market and other funds	2,532		0		0			2,532		2,532		0
U.S. government notes	15,320		37		(4		)	15,353		1,128		14,225
Marketable equity securities	988		428		(64		)	1,352		0		1,352
	18,840		465		(68		)	19,237		3,660		15,577
Level 2:
Time deposits(1)	2,409		0		0			2,409		2,309		100
Money market and other funds(2)	1,762		0		0			1,762		1,762		0
Fixed-income bond funds(3)	385		0		(38		)	347		0		347
U.S. government agencies	2,327		8		(1		)	2,334		750		1,584
Foreign government bonds	1,828		22		(10		)	1,840		0		1,840
Municipal securities	3,370		33		(6		)	3,397		3		3,394
Corporate debt securities	11,499		114		(122		)	11,491		0		11,491
Agency mortgage-backed securities	8,196		109		(42		)	8,263		0		8,263
Asset-backed securities	3,456		1		(5		)	3,452		0		3,452
	35,232		287		(224		)	35,295		4,824		30,471
Total	$	63,935	$	752	$	(292	)	$	64,395	$	18,347	$	46,048

	As of December 31, 2015
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	7,380	$	0	$	0		$	7,380	$	7,380	$	0
Level 1:
Money market and other funds	5,623		0		0			5,623		5,623		0
U.S. government notes	20,922		27		(48		)	20,901		258		20,643
Marketable equity securities	692		155		0			847		0		847
	27,237		182		(48		)	27,371		5,881		21,490
Level 2:
Time deposits(1)	3,223		0		0			3,223		2,012		1,211
Money market and other funds(2)	1,140		0		0			1,140		1,140		0
Fixed-income bond funds(3)	219		0		0			219		0		219
U.S. government agencies	1,367		2		(3		)	1,366		0		1,366
Foreign government bonds	2,242		14		(23		)	2,233		0		2,233
Municipal securities	3,812		47		(4		)	3,855		0		3,855
Corporate debt securities	13,809		53		(278		)	13,584		136		13,448
Agency mortgage-backed securities	9,680		48		(57		)	9,671		0		9,671
Asset-backed securities	3,032		0		(8		)	3,024		0		3,024
	38,524		164		(373		)	38,315		3,288		35,027
Total	$	73,141	$	346	$	(421	)	$	73,066	$	16,549	$	56,517

⁽¹⁾  The majority of our time deposits are foreign deposits.

⁽²⁾  The balances as of December 31, 2014 and 2015 were related to cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See section titled "Securities Lending Program" below for further discussion of this program.

⁽³⁾  Fixed-income bond funds consist of mutual funds that primarily invest in corporate and government bonds.

We determine realized gains or losses on the marketable securities on a specific identification method. We recognized gross realized gains of $416 million, $238 million, and $357 million for the years ended December 31, 2013, 2014, and 2015. We recognized gross realized losses of $258 million, $85 million, and $565 million for the years ended December 31, 2013, 2014, and 2015. We reflect these gains and losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions):

	As of December 31, 2015
Due in 1 year	$	7,900
Due in 1 year through 5 years	30,141
Due in 5 years through 10 years	7,199
Due after 10 years	10,211
Total	$	55,451

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2014 and 2015, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2014
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	4,490	$	(4	)	$	0	$	0		$	4,490	$	(4	)
U.S. government agencies	830		(1		)	0		0			830		(1		)
Foreign government bonds	255		(7		)	43		(3		)	298		(10		)
Municipal securities	877		(3		)	174		(3		)	1,051		(6		)
Corporate debt securities	5,851		(112		)	225		(10		)	6,076		(122		)
Agency mortgage-backed securities	609		(1		)	2,168		(41		)	2,777		(42		)
Asset-backed securities	2,388		(4		)	174		(1		)	2,562		(5		)
Fixed-income bond funds	347		(38		)	0		0			347		(38		)
Marketable equity securities	690		(64		)	0		0			690		(64		)
Total	$	16,337	$	(234	)	$	2,784	$	(58	)	$	19,121	$	(292	)

	As of December 31, 2015
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	13,757	$	(48	)	$	0	$	0		$	13,757	$	(48	)
U.S. government agencies	864		(3		)	0		0			864		(3		)
Foreign government bonds	885		(18		)	36		(5		)	921		(23		)
Municipal securities	1,116		(3		)	41		(1		)	1,157		(4		)
Corporate debt securities	9,192		(202		)	784		(76		)	9,976		(278		)
Agency mortgage-backed securities	5,783		(34		)	721		(23		)	6,504		(57		)
Asset-backed securities	2,508		(7		)	386		(1		)	2,894		(8		)
Total	$	34,105	$	(315	)	$	1,968	$	(106	)	$	36,073	$	(421	)

During the years ended December 31, 2013 and 2014, we did not recognize any other-than-temporary impairment loss. During the year ended December 31, 2015, we recognized $281 million of other-than-temporary impairment losses related to our marketable equity securities and fixed-income bond funds. Those losses are included in gains (losses) on marketable securities, net as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. See Note 10 for further details on other income (expense), net.

Securities Lending Program

From time to time, we enter into securities lending agreements with financial institutions to enhance investment income. We loan certain securities which are collateralized in the form of cash or securities. Cash collateral is usually invested in reverse repurchase agreements which are collateralized in the form of securities.

We classify loaned securities as cash equivalents or marketable securities and record the cash collateral as an asset with a corresponding liability in the accompanying Consolidated Balance Sheets. We classify reverse repurchase agreements maturing within three months as cash equivalents and those longer than three months as receivable under reverse repurchase agreements in the accompanying Consolidated Balance Sheets. For security collateral received, we do not record an asset or liability except in the event of counterparty default.

Our securities lending transactions were accounted for as secured borrowings with significant investment categories as follows (in millions):

	As of December 31, 2015
	Remaining Contractual Maturity of the Agreements
Securities Lending Transactions	Overnight and Continuous		Up to 30 days		30 - 90 Days		Greater Than 90 Days		Total
U.S. government notes	$	1,322	$	31	$	0	$	306	$	1,659
U.S. government agencies	504		77		0		0		581
Corporate debt securities	188		0		0		0		188
Total	$	2,014	$	108	$	0	$	306	$	2,428
Gross amount of recognized liabilities for securities lending in offsetting disclosure									$	2,428
Amounts related to agreements not included in securities lending in offsetting disclosure									$	0

Derivative Financial Instruments

We recognize derivative instruments as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives in the accompanying Consolidated Statements of Income as other income (expense), net, as part of revenues, or as a component of accumulated other comprehensive income (AOCI) in the accompanying Consolidated Balance Sheets, as discussed below.

We enter into foreign currency contracts with financial institutions to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. We use certain interest rate derivative contracts to hedge interest rate exposures on our fixed income securities and debt. Our program is not used for trading or speculative purposes.

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. To further reduce credit risk, we enter into collateral security arrangements under which the counterparty is required to provide collateral when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We can take possession of the collateral in the event of counterparty default. As of December 31, 2014 and 2015, we received cash collateral related to the derivative instruments under our collateral security arrangements of $268 million and $192 million.

Cash Flow Hedges

We use options designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar. The notional principal of these contracts was approximately $13.6 billion and $16.4 billion as of December 31, 2014 and 2015. These foreign exchange contracts have maturities of 36 months or less.

In 2012, we entered into forward-starting interest rate swaps with a total notional amount of $1.0 billion and terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate, that effectively locked in an interest rate on our anticipated debt issuance of $1.0 billion in 2014. We issued $1.0 billion of unsecured senior notes in February 2014 (See details in Note 4). As a result, we terminated the forward-starting interest rate swaps upon the debt issuance. The cash gain associated with the termination is reported within Operating Activities in the Consolidated Statement of Cash Flows for the year ended December 31, 2014, consistent with the impact of the hedged item.

We reflect gain or loss on the effective portion of a cash flow hedge as a component of AOCI and subsequently reclassify cumulative gains and losses to revenues or interest expense when the hedged transactions are recorded. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI would be immediately reclassified to other income (expense), net. Further, we exclude the change in the time value of the options from our assessment of hedge effectiveness. We record the premium paid or time value of an option on the date of purchase as an asset. Thereafter, we recognize changes to this time value in other income (expense), net.

As of December 31, 2015, the effective portion of our cash flow hedges before tax effect was $375 million, of which $293 million is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We use forward contracts designated as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. We exclude changes in the time value for forward contracts from the assessment of hedge effectiveness. The notional principal of these contracts was $1.5 billion and $1.8 billion as of December 31, 2014 and 2015.

We use interest rate swaps designated as fair value hedges to hedge interest rate risk for certain fixed rate securities. The notional principal of these contracts was $175 million and $295 million as of December 31, 2014 and 2015.

Gains and losses on these forward contracts and interest rate swaps are recognized in other income (expense), net, along with the offsetting losses and gains of the related hedged items.

Other Derivatives

Other derivatives not designated as hedging instruments consist of forward and option contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts, as well as the related costs in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities. The notional principal of foreign exchange contracts outstanding was $6.2 billion and $7.5 billion as of December 31, 2014 and 2015.

We also use exchange-traded interest rate futures contracts and “To Be Announced” (TBA) forward purchase commitments of mortgage-backed assets to hedge interest rate risks on certain fixed income securities. The TBA contracts meet the definition of derivative instruments in cases where physical delivery of the assets is not taken at the earliest available delivery date. Our interest rate futures and TBA contracts (together interest rate contracts) are not designated as hedging instruments. We recognize gains and losses on these contracts, as well as the related costs, in other income (expense), net. The gains and losses are generally economically offset by unrealized gains and losses in the underlying available-for-sale securities, which are recorded as a component of AOCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are moved from AOCI into other income (expense), net. The total notional amounts of interest rate contracts outstanding were $150 million and $50 million as of December 31, 2014 and 2015.

The fair values of our outstanding derivative instruments were as follows (in millions):

		As of December 31, 2014
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	851	$	0	$	851
Interest rate contracts	Prepaid revenue share, expenses and other assets, current and non-current	1		0		1
Total		$	852	$	0	$	852
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	0	$	3	$	3
Interest rate contracts	Accrued expenses and other liabilities, current and non-current	1		0		1
Total		$	1	$	3	$	4

		As of December 31, 2015
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	626	$	2	$	628
Total		$	626	$	2	$	628
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	1	$	13	$	14
Interest rate contracts	Accrued expenses and other liabilities, current and non-current	2		0		2
Total		$	3	$	13	$	16

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below (in millions):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	2013		2014			2015
Foreign exchange contracts	$	92	$	929		$	964
Interest rate contracts	86		(31		)	0
Total	$	178	$	898		$	964

	Gains Reclassified from AOCI into Income (Effective Portion)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2013		2014		2015
Foreign exchange contracts	Revenues	$	95	$	171	$	1,399
Interest rate contracts	Other income (expense), net	0		4		5
Total		$	95	$	175	$	1,404

	Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from  Effectiveness Testing and Ineffective Portion) (1)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2013			2014			2015
Foreign exchange contracts	Other income (expense), net	$	(280	)	$	(279	)	$	(297	)
Interest rate contracts	Other income (expense), net	0			4			0
Total		$	(280	)	$	(275	)	$	(297	)

⁽¹⁾  Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.

The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives(2)
		Year Ended December 31,
Derivatives in Fair Value Hedging Relationship	Location	2013			2014			2015
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	16		$	115		$	170
Hedged item	Other income (expense), net	(25		)	(123		)	(176		)
Total		$	(9	)	$	(8	)	$	(6	)
Interest Rate Hedges:
Interest rate contracts	Other income (expense), net	$	0		$	0		$	(2	)
Hedged item	Other income (expense), net	0			0			2
Total		$	0		$	0		$	0

⁽²⁾  Losses related to the amount excluded from effectiveness testing of the hedges were $9 million, $8 million, and $6 million for the years ended December 31, 2013, 2014, and 2015.

The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives
		Year Ended December 31,
Derivatives Not Designated As Hedging Instruments	Location	2013		2014		2015
Foreign exchange contracts	Other income (expense), net, and net loss from discontinued operations	$	118	$	237	$	198
Interest rate contracts	Other income (expense), net	4		2		1
Total		$	122	$	239	$	199

Offsetting of Derivatives, Securities Lending, and Reverse Repurchase Agreements

We present our derivatives, securities lending and reverse repurchase agreements at gross fair values in the Consolidated Balance Sheets. However, our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2014 and 2015, information related to these offsetting arrangements was as follows (in millions):

Offsetting of Assets
	As of December 31, 2014
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	852	$	0	$	852		$	(1	)	(1)	$	(251	)	$	(412	)	$	188
Reverse repurchase agreements	2,637		0		2,637		(2)	0				0			(2,637		)	0
Total	$	3,489	$	0	$	3,489		$	(1	)		$	(251	)	$	(3,049	)	$	188
	As of December 31, 2015
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	628	$	0	$	628		$	(13	)	(1)	$	(189	)	$	(214	)	$	212
Reverse repurchase agreements	1,590		0		1,590		(2)	0				0			(1,590		)	0
Total	$	2,218	$	0	$	2,218		$	(13	)		$	(189	)	$	(1,804	)	$	212

⁽¹⁾  The balances as of December 31, 2014 and 2015 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

⁽²⁾  The balances as of December 31, 2014 and 2015 included $1,762 million and $1,140 million recorded in cash and cash equivalents, respectively, and $875 million and $450 million recorded in receivable under reverse repurchase agreements, respectively.

Offsetting of Liabilities
	As of December 31, 2014
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	4	$	0	$	4	$	(1	)	(3)	$	0		$	0		$	3
Securities lending agreements	2,778		0		2,778		0				0			(2,740		)	38
Total	$	2,782	$	0	$	2,782	$	(1	)		$	0		$	(2,740	)	$	41
	As of December 31, 2015
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	16	$	0	$	16	$	(13	)	(3)	$	(3	)	$	0		$	0
Securities lending agreements	2,428		0		2,428		0				0			(2,401		)	27
Total	$	2,444	$	0	$	2,444	$	(13	)		$	(3	)	$	(2,401	)	$	27

⁽³⁾  The balances as of December 31, 2014 and 2015 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Non-Marketable Investments

12 Months Ended

Dec. 31, 2015

Investments, All Other Investments [Abstract]

Non-Marketable Investments

Non-Marketable Investments

Our non-marketable investments include non-marketable equity investments and non-marketable debt securities.

Non-Marketable Equity Investments

Our non-marketable equity investments are investments we have made in privately-held companies accounted for under the equity or cost method and are not required to be consolidated under the variable interest or voting models. As of December 31, 2014 and 2015, these investments accounted for under the equity method had a carrying value of approximately $1.3 billion and $1.6 billion, respectively, and those investments accounted for under the cost method had a carrying value of $1.8 billion and $2.6 billion, respectively. For investments accounted for under the cost method, the fair value was approximately $7.5 billion as of December 31, 2015. The fair value of the cost method investments are primarily determined from data leveraging private-market transactions and are classified within Level 3 in the fair value hierarchy. We periodically review our non-marketable equity investments for impairment. No material impairments were recognized for the years ended December 31, 2013, 2014, and 2015. Our share of gains and losses in equity method investments for the year ended December 31, 2015 was a net loss of approximately $227 million and not material for the years ended December 31, 2013 and 2014. We reflect these losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

We determined that certain renewable energy investments included in our non-marketable equity investments are VIEs. However, we do not consolidate these entities in our financial statements because we do not have the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and account for those investments under the equity method. Our involvement with investments in renewable energy relate to our equity investments in entities whose activities involve power generation. We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly impact the entity's economic performance such as setting operating budgets. The carrying value of renewable energy investments accounted for under the equity method by Google that are VIEs was $302 million as of December 31, 2015 with the maximum exposure of $316 million. As a result of the adoption of ASU 2015-02, the carrying value of our renewable energy investments accounted for under the equity method by Alphabet that are VIEs were $1.0 billion and $1.3 billion as of December 31, 2014 and 2015, respectively, with a maximum exposure of $1.1 billion and $1.3 billion as of December 31, 2014 and 2015, respectively. The maximum exposure is based on investments to date plus future funding commitments.  We have determined the single source of our exposure to these VIE’s is our capital investment in these entities. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

Non-Marketable Debt Securities

Our non-marketable debt securities are primarily preferred stock that are redeemable at our option and convertible notes issued by private companies. These debt securities do not have readily determinable market values and are categorized accordingly as Level 3 in the fair value hierarchy. To estimate the fair value of these securities, we use a combination of valuation methodologies, including market and income approaches based on prior transaction prices; estimated timing, probability, and amount of cash flows; and illiquidity considerations. Financial information of private companies may not be available and consequently we will estimate the value based on the best available information at the measurement date. We estimate a range of fair values based on valuation approaches noted above and as of December 31, 2014 and 2015, the fair value recorded on the Consolidated Balance Sheets for individual investments is within the range. No material impairments were recognized for the years ended December 31, 2013, 2014, and 2015.

The following table presents a reconciliation for our assets measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions):

	Level 3
Balance as of December 31, 2014	$	90
Purchases, issuances, and settlements(1)	934
Balance as of December 31, 2015	$	1,024

⁽¹⁾  Purchases of securities included our $900 million investment in SpaceX, a space exploration and space transport company, made during January 2015.

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Debt

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Debt

Debt

Short-Term Debt

We have a debt financing program of up to $3.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. As of December 31, 2014 and 2015, we had $2.0 billion of outstanding commercial paper recorded as short-term debt with a weighted-average interest rate of 0.1% and 0.2%, respectively. In conjunction with this program, we have a $3.0 billion revolving credit facility expiring in July 2016. The interest rate for the credit facility is determined based on a formula using certain market rates. As of December 31, 2014 and 2015, we were in compliance with the financial covenant in the credit facility, and no amounts were outstanding under the credit facility as of December 31, 2014 and 2015. The estimated fair value of the short-term debt approximated its carrying value as of December 31, 2014 and 2015.

Long-Term Debt

We issued $1.0 billion of unsecured senior notes (the "2014 Notes") in February 2014 and $3.0 billion of unsecured senior notes in three tranches (collectively, the "2011 Notes") in May 2011. We used the net proceeds from the issuance of the 2011 Notes to repay a portion of our outstanding commercial paper and for general corporate purposes. We used the net proceeds from the issuance of the 2014 Notes for the repayment of the portion of the principal amount of our 2011 Notes which matured on May 19, 2014 and for general corporate purposes. The total outstanding Notes are summarized below (in millions):

	As of December 31, 2014			As of December 31, 2015
Short-Term Portion of Long-Term Debt
2.125% Notes due on May 19, 2016	$	0		$	1,000
Capital Lease Obligation	10			225
Total Short-Term Portion of Long-Term Debt	$	10		$	1,225
Long-Term Debt
2.125% Notes due on May 19, 2016	$	1,000		$	0
3.625% Notes due on May 19, 2021	1,000			1,000
3.375% Notes due on February 25, 2024	1,000			1,000
Unamortized discount for the Notes above	(8		)	(5		)
Subtotal	2,992			1,995
Capital Lease Obligation	236			0
Total Long-Term Debt	$	3,228		$	1,995

The effective interest yields of the Notes due in 2016, 2021, and 2024 were 2.241%, 3.734%, and 3.377%, respectively. Interest on the 2011 and 2014 Notes is payable semi-annually. The 2011 and 2014 Notes rank equally with each other and with all of our other senior unsecured and unsubordinated indebtedness from time to time outstanding. We may redeem the 2011 and 2014 Notes at any time in whole or in part at specified redemption prices. We are not subject to any financial covenants under the 2011 Notes or the 2014 Notes. The total estimated fair value of the 2011 and 2014 Notes was approximately $3.1 billion at both December 31, 2014 and 2015. The fair value of the outstanding 2011 and 2014 Notes was determined based on observable market prices in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.

In August 2013, we entered into a capital lease obligation on certain property expiring in 2028. We intend to exercise the option to purchase the property in 2016, and as such the long term portion of the capital lease obligation was reclassified as short term. The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value as of December 31, 2014 and 2015.

As of December 31, 2015, aggregate future principal payments for long-term debt (including short-term portion of long-term debt) and capital lease obligation were as follows (in millions):

Years Ending
2016	$	1,225
2017	0
2018	0
2019	0
Thereafter	2,000
Total	$	3,225

In January 2016, the board of directors of Alphabet authorized the company to issue up to $5.0 billion of commercial paper from time to time and to enter into a $4.0 billion revolving credit facility to replace Google's existing $3.0 billion revolving credit facility.

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Balance Sheet Components

12 Months Ended

Dec. 31, 2015

Balance Sheet Components Disclosure [Abstract]

Balance Sheet Components

Balance Sheet Components

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):

	As of December 31, 2014			As of December 31, 2015
Land and buildings	$	13,326		$	16,518
Information technology assets	10,918			13,645
Construction in progress	6,555			7,324
Leasehold improvements	1,868			2,576
Furniture and fixtures	79			83
Property and equipment, gross	32,746			40,146
Less: accumulated depreciation and amortization	(8,863		)	(11,130		)
Property and equipment, net	$	23,883		$	29,016

Property under capital lease with a cost basis of $258 million was included in land and buildings as of December 31, 2015.

Prepaid Revenue Share, Expenses and Other Assets, Non-Current

Note Receivable

In connection with the sale of our Motorola Mobile business on October 29, 2014 (see Note 9 for additional information), we received an interest-free, three-year prepayable promissory note (the "Note Receivable") due October 2017 from Lenovo. The Note Receivable is included in prepaid revenue share, expenses and other assets, non-current, on our Consolidated Balance Sheets. Based on the general market conditions and the credit quality of Lenovo, we discounted the Note Receivable at an effective interest rate of 4.5%. The outstanding balances are shown in the table below (in millions):

	As of December 31, 2014			As of December 31, 2015
Principal of the Note Receivable	$	1,500		$	1,448
Less: unamortized discount for the Note Receivable	(175		)	(112		)
Total	$	1,325		$	1,336

As of December 31, 2014 and 2015, we did not recognize a valuation allowance on the Note Receivable.

Accumulated Other Comprehensive Income

The components of AOCI, net of tax, were as follows (in millions):

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2012	$	(73	)	$	604		$	7		$	538
Other comprehensive income (loss) before reclassifications	89			(392		)	112			(191		)
Amounts reclassified from AOCI	0			(162		)	(60		)	(222		)
Other comprehensive income (loss)	89			(554		)	52			(413		)
Balance as of December 31, 2013	$	16		$	50		$	59		$	125

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2013	$	16		$	50		$	59		$	125
Other comprehensive income (loss) before reclassifications	(996		)	505			651			160
Amounts reclassified from AOCI	0			(134		)	(124		)	(258		)
Other comprehensive income (loss)	(996		)	371			527			(98		)
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27
Other comprehensive income (loss) before reclassifications	(1,067		)	(715		)	676			(1,106		)
Amounts reclassified from AOCI	0			208			(1,003		)	(795		)
Other comprehensive income (loss)	(1,067		)	(507		)	(327		)	(1,901		)
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)

The effects on net income of amounts reclassified from AOCI were as follows (in millions):

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Year Ended December 31,
AOCI Components	Location	2013			2014			2015
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	158		$	153		$	(208	)
	Net Income (loss) from discontinued operations	43			0			0
	Provision for income taxes	(39		)	(19		)	0
	Net of tax	$	162		$	134		$	(208	)
Unrealized gains on cash flow hedges
Foreign exchange contracts	Revenue	$	95		$	171		$	1,399
Interest rate contracts	Other income (expense), net	0			4			5
	Provision for income taxes	(35		)	(51		)	(401		)
	Net of tax	$	60		$	124		$	1,003
Total amount reclassified, net of tax		$	222		$	258		$	795

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Acquisitions

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

Acquisitions

Acquisitions

2015 Acquisitions

bebop Technologies

In December 2015, we completed the acquisition of bebop Technologies Inc. (bebop), a company with a cloud-based development platform focused on enterprise applications. The fair value of total consideration transferred in connection with the close was $272 million, of which $1 million was paid in cash and $271 million was paid in the form of Alphabet Class C capital stock. We issued a total of approximately 514 thousand shares of Alphabet Class C capital stock in relation to this acquisition, part of which will be accounted for as compensation expense. The fair value of the shares of capital stock issued was determined based on the closing market price of Alphabet's Class C capital stock as of the close date. The Class C capital stock issued by Alphabet in connection with the acquisition was treated as a capital contribution from Alphabet to Google. We expect the acquisition will help us provide a new platform to build and maintain enterprise applications. As part of the acquisition, Diane Greene, the former CEO of bebop and a member of our Board of Directors, has joined Google.

Of the total purchase price of $272 million, $28 million was cash acquired, $59 million was attributed to intangible assets, $206 million was attributed to goodwill, and $21 million was attributed to net liabilities assumed. The goodwill of $206 million is primarily attributable to the synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

Other Acquisitions

During the year ended December 31, 2015, we completed other acquisitions and purchases of intangible assets for total consideration of approximately $263 million. In aggregate, $4 million was cash acquired, $88 million was attributed to intangible assets, $138 million was attributed to goodwill, and $33 million was attributed to net assets acquired. These acquisitions generally enhance the breadth and depth of our offerings, as well as expanding our expertise in engineering and other functional areas. The amount of goodwill expected to be deductible for tax purposes is approximately $20 million.

Pro forma results of operations for these acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in aggregate.

For all acquisitions and purchases completed during the year ended December 31, 2015, patents and developed technology have a weighted-average useful life of 4.1 years, customer relationships have a weighted-average useful life of 4.0 years, and trade names and other have a weighted-average useful life of 6.8 years.

2014 Acquisitions

Nest

In February 2014, we completed the acquisition of Nest Labs, Inc. (Nest), a company whose mission is to reinvent devices in the home such as thermostats and smoke alarms. Prior to this transaction, we had an approximately 12% ownership interest in Nest. The acquisition is expected to enhance Google's suite of products and services and allow Nest to continue to innovate upon devices in the home, making them more useful, intuitive, and thoughtful, and to reach more users in more countries.

Of the total $2.6 billion purchase price and the fair value of our previously held equity interest of $152 million, $51 million was cash acquired, $430 million was attributed to intangible assets, $2.3 billion was attributed to goodwill, and $84 million was attributed to net liabilities assumed. The goodwill of $2.3 billion is primarily attributable to synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

This transaction is considered a “step acquisition” under GAAP whereby our ownership interest in Nest held before the acquisition was remeasured to fair value at the date of the acquisition. Such fair value was estimated by using discounted cash flow valuation methodologies. Inputs used in the methodologies primarily included projected future cash flows, discounted at a rate commensurate with the risk involved. The gain of $103 million as a result of remeasurement is included in other income (expense), net, on our Consolidated Statements of Income for the year ended December 31, 2014.

Dropcam

In July 2014, Nest completed the acquisition of Dropcam, Inc. (Dropcam), a company that enables consumers and businesses to monitor their homes and offices via video, for approximately $517 million in cash. With Dropcam on board, Nest expects to continue to reinvent products that will help shape the future of the connected home. Of the total purchase price of $517 million, $11 million was cash acquired, $55 million was attributed to intangible assets, $452 million was attributed to goodwill, and $1 million was attributed to net liabilities assumed. The goodwill of $452 million is primarily attributable to synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

Skybox

In August 2014, we completed the acquisition of Skybox Imaging, Inc. (Skybox), a satellite imaging company, for approximately $478 million in cash. We expect the acquisition to keep Google Maps accurate with up-to-date imagery and, over time, improve internet access and disaster relief. Of the total purchase price of $478 million, $6 million was cash acquired, $69 million was attributed to intangible assets, $388 million was attributed to goodwill, and $15 million was attributed to net assets acquired. The goodwill of $388 million is primarily attributable to the synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.

Other Acquisitions

During the year ended December 31, 2014, we completed other acquisitions and purchases of intangible assets for total consideration of approximately $1,466 million, which includes the fair value of our previously held equity interest of $33 million. In aggregate, $65 million was cash acquired, $405 million was attributed to intangible assets, $1,045 million was attributed to goodwill, and $49 million was attributed to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our offerings, as well as expanding our expertise in engineering and other functional areas. The amount of goodwill expected to be deductible for tax purposes is approximately $55 million.

Pro forma results of operations for these acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in aggregate.

For all acquisitions and purchases completed during the year ended December 31, 2014, patents and developed technology have a weighted-average useful life of 5.1 years, customer relationships have a weighted-average useful life of 4.5 years, and trade names and other have a weighted-average useful life of 6.9 years.

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Collaboration Agreement

12 Months Ended

Dec. 31, 2015

Research and Development [Abstract]

Collaboration Agreement

Collaboration Agreement

On September 18, 2013, we announced the formation of Calico, a life science company with a mission to harness advanced technologies to increase our understanding of the biology that controls lifespan. Calico's results of operations and statement of financial position are included in our consolidated financial statements. As of December 31, 2015, Google has contributed $240 million to Calico in exchange for Calico convertible preferred units. As of December 31, 2015, Google has also committed to fund an additional $490 million on an as-needed basis.

In September 2014, AbbVie Inc. (AbbVie) and Calico announced a research and development collaboration intended to help both companies discover, develop, and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. As of December 31, 2015, AbbVie has contributed $750 million to fund the collaboration pursuant to the agreement, which reflects its total commitment. As of December 31, 2015, Calico has contributed $250 million and committed up to an additional $500 million.

Calico will use its scientific expertise to establish a world-class research and development facility, with a focus on drug discovery and early drug development; and AbbVie will provide scientific and clinical development support and its commercial expertise to bring new discoveries to market. Both companies will share costs and profits equally. AbbVie's contribution has been recorded as a liability on Calico's financial statements, which is reduced and reflected as a reduction to research and development expense as eligible research and development costs are incurred by Calico over the next few years.

As a result of the adoption of ASU 2014-10, Calico was determined to be a VIE for Alphabet.

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

In conjunction with the Alphabet reorganization we are implementing a new operating structure. Consequently, beginning in the fourth quarter of 2015, we have multiple operating segments and reporting units, representing the individual businesses run separately under the Alphabet structure. Refer to Note 16 for further information. In conjunction with the changes to reporting units, we allocated goodwill to each reporting unit based on their relative fair values. The changes in the carrying amount of goodwill allocated to our disclosed segments for the years ended December 31, 2014 and 2015 were as follows (in millions):

	Google			Other Bets			Total Consolidated
Balance as of December 31, 2013	$	11,492		$	—		$	11,492
Acquisitions	4,208			—			4,208
Dispositions	(43		)	—			(43		)
Foreign currency translation and other adjustments	(58		)	—			(58		)
Balance as of December 31, 2014	$	15,599		$	—		$	15,599
Acquisitions	139			—			139
Foreign currency translation and other adjustments	(71		)	—			(71		)
Allocation in the fourth quarter of 2015	(416		)	416			—
Acquisitions	201			4			205
Foreign currency translation and other adjustments	4			(7		)	(3		)
Balance as of December 31, 2015	$	15,456		$	413		$	15,869

Other Intangible Assets

Information regarding our purchased intangible assets is as follows (in millions):

	As of December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	6,547	$	2,513	$	4,034
Customer relationships	1,410		1,168		242
Trade names and other	696		365		331
Total	$	8,653	$	4,046	$	4,607

	As of December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Patents and developed technology	$	6,592	$	3,213	$	3,379
Customer relationships	1,343		1,201		142
Trade names and other	795		469		326
Total	$	8,730	$	4,883	$	3,847

Patents and developed technology, customer relationships, and trade names and other have weighted-average useful lives from the date of purchase of 7.8 years, 6.0 years, and 5.4 years, respectively. Amortization expense relating to our purchased intangible assets was $1,011 million, $1,079 million, and $892 million for the years ended December 31, 2013, 2014, and 2015.

During the year ended December 31, 2014, we recorded an impairment charge in other cost of revenues of $378 million related to a patent licensing royalty asset acquired in connection with the Motorola acquisition, which we retained subsequent to the sale of Motorola Mobile. The asset was determined to be impaired due to prolonged decreased royalty payments and unpaid interest owed and was written down to its fair value. Fair value was determined based on a discounted cash flow method and reflects estimated future cash flows associated with the patent licensing royalty asset at the measurement date and falls within level 3 in fair value hierarchy. Impairments of intangible assets were not material for the year ended December 31, 2015.

As of December 31, 2015, expected amortization expense for our purchased intangible assets for each of the next five years and thereafter was as follows (in millions):

2016	$	806
2017	724
2018	637
2019	528
2020	434
Thereafter	718
	$	3,847

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Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Motorola Mobile

On October 29, 2014, we closed the sale of the Motorola Mobile business to Lenovo for a total purchase price of approximately $2.9 billion, including $1.4 billion paid at close, comprised of $660 million in cash and $750 million in Lenovo ordinary shares (519.1 million shares). The remaining $1.5 billion was paid in the form of an interest-free, three-year prepayable promissory note.

We maintain ownership of the vast majority of the Motorola Mobile patent portfolio, including pre-closing patent applications and invention disclosures, which we licensed to Motorola Mobile for its continued operations. Additionally, in connection with the sale, we agreed to indemnify Lenovo for certain potential liabilities of the Motorola Mobile business, for which we recorded an indemnification liability of $130 million.

The sale resulted in a gain of $740 million, net of tax, which was presented as part of net income from discontinued operations in the Consolidated Statements of Income for the year ended December 31, 2014. Incremental to this net gain, we recognized additional income of $254 million, net of tax, in connection with certain IP licensing arrangements between the parties, included as part of net income from discontinued operations on the Consolidated Statements of Income for the year ended December 31, 2014.

The financial results of Motorola Mobile through the date of divestiture are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income. The following table presents financial results of the Motorola Mobile business included in net income (loss) from discontinued operations for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31,
	2013			2014 (1)
Revenues	$	4,306		$	5,486
Loss from discontinued operations before income taxes	(1,403		)	(177		)
Benefits from/(Provision for) income taxes	270			(47		)
Gain on disposal	0			740
Net (loss) income from discontinued operations	$	(1,133	)	$	516

⁽¹⁾  The operating results of Motorola Mobile were included in our Consolidated Statements of Income from January 1, 2014 through October 29, 2014, the date of divestiture.

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities divested (in millions):

Assets:
Cash and cash equivalents	$	160
Accounts receivable	1,103
Inventories	217
Prepaid expenses and other current assets	357
Prepaid expenses and other assets, non-current	290
Property and equipment, net	542
Intangible assets, net	985
Goodwill	43
Total assets	$	3,697
Liabilities:
Accounts payable	$	1,238
Accrued compensation and benefits	163
Accrued expenses and other current liabilities	10
Deferred revenue, current	165
Other long-term liabilities	250
Total liabilities	$	1,826

Motorola Home

On April 17, 2013, we sold the Motorola Home business to Arris for consideration of approximately $2,412 million in cash, including cash of $2,238 million received at the date of close and certain post-close adjustments of $174 million received in the third quarter of 2013, and approximately $175 million in Arris' common stock (10.6 million shares). Subsequent to the transaction, we own approximately 7.8% of the outstanding shares of Arris. Additionally, in connection with the disposition, we agreed to indemnify Arris for potential liability from certain intellectual property infringement litigation, for which we recorded an indemnification liability of $175 million, the majority of which was settled subsequent to the disposition.

The disposition resulted in a net gain of $757 million, which was presented as part of net income from discontinued operations in the Consolidated Statements of Income for the year ended December 31, 2013.

The financial results of Motorola Home through the date of divestiture are presented as net income (loss) from discontinued operations on the Consolidated Statement of Income. The following table presents financial results of the Motorola Home business included in net income (loss) from discontinued operations for the year ended December 31, 2013 (in millions):

	Year Ended December 31,
	2013(1)
Revenues	$	804
Loss from discontinued operations before income taxes	(67		)
Benefits from income taxes	16
Gain on disposal	757
Net income from discontinued operations	$	706

⁽¹⁾  The operating results of Motorola Home were included in our Consolidated Statements of Income from January 1, 2013 through April 17, 2013, the date of divestiture.

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities divested (in millions):

Assets:
Accounts receivable	$	424
Inventories	228
Deferred income taxes, net	144
Prepaid and other current assets	152
Property and equipment, net	282
Intangible assets, net	701
Other assets, non-current	182
Total assets	$	2,113
Liabilities:
Accounts payable	$	169
Accrued expenses and other liabilities	289
Total liabilities	$	458

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Other Income (Expense), Net

12 Months Ended

Dec. 31, 2015

Other Income and Expenses [Abstract]

Other Income (Expense), Net

Other Income (Expense), Net

The components of other income (expense), net, were as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Interest income	$	766		$	746		$	999
Interest expense	(81		)	(101		)	(104		)
Gain (loss) on marketable securities, net	158			153			(208		)
Foreign currency exchange losses, net (1)	(379		)	(402		)	(422		)
Gain (loss) on non-marketable investments, net	8			237			(126		)
Loss on divestiture of businesses (2)	(57		)	0			0
Other	81			130			152
Other income (expense), net	$	496		$	763		$	291

⁽¹⁾  Our foreign currency exchange losses,net are related to the option premium costs and forward points for our foreign currency hedging contracts, our foreign exchange transaction gains and losses from the conversion of the transaction currency to the functional currency, offset by the foreign currency hedging contract losses and gains. The net foreign currency transaction losses were $121 million, $107 million, and $123 million in 2013, 2014, and 2015, respectively.

(2) Gain on divestiture of Motorola Home business was included in net income (loss) from discontinued operations for the year ended December 31, 2013. Gain on divestiture of Motorola Mobile business was included in net income (loss) from discontinued operations for the year ended December 31, 2014.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Operating Leases

We have entered into various non-cancelable operating lease agreements for certain of our offices, facilities, land, and data centers throughout the world with original lease periods expiring primarily between 2016 and 2063. We are committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below. Certain of these arrangements have free or escalating rent payment provisions. We recognize rent expense under such arrangements on a straight-line basis.

As of December 31, 2015, future minimum payments under non-cancelable operating leases, net of sublease income amounts, were as follows over each of the next five years and thereafter (in millions):

	Operating Leases		Sub-lease Income		Net Operating Leases
2016	672		26		646
2017	794		13		781
2018	796		4		792
2019	769		3		766
2020	719		3		716
Thereafter	3,706		1		3,705
Total minimum payments	$	7,456	$	50	$	7,406

Certain leases have adjustments for market provisions. Amounts in the above table represent our best estimates of future payments to be made under these leases.

We entered into certain non-cancelable lease agreements with original lease periods expiring between 2021 and 2032 where we are the deemed owner for accounting purposes of new construction projects. Future minimum lease payments under such leases total approximately $678 million, of which $422 million is included on the Consolidated Balance Sheet as of December 31, 2015. These amounts are presented as an asset and corresponding non-current liability, which represents our estimate of construction costs incurred to date. They have been excluded from the table above.

Rent expense under operating leases, including co-location arrangements, was $465 million, $570 million, and $734 million in 2013, 2014, and 2015.

Purchase Obligations

As of December 31, 2015, we had $1.7 billion of other non-cancelable contractual obligations, primarily related to data center operations and facility build-outs, video and other content licensing revenue sharing arrangements, as well as certain inventory purchase commitments.

Letters of Credit

As of December 31, 2015, we had unused letters of credit for $752 million.

Indemnifications

In the normal course of business, to facilitate transactions in our services and products, we indemnify certain parties, including advertisers, Google Network Members, and lessors with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows, or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period.

As of December 31, 2015, we did not have any material indemnification claims that were probable or reasonably possible. As part of the sale of Motorola Home and Motorola Mobile businesses, we issued indemnifications for certain potential liabilities. Please see Note 9 for additional information.

Legal Matters

Antitrust Investigations

On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an investigation into various antitrust-related complaints against us. On April 15, 2015, the EC issued a Statement of Objections (SO) regarding the display and ranking of shopping search results. The EC also opened a formal investigation into Android. We responded to the SO on August 27, 2015 and will continue to cooperate with the EC.

The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India (CCI), Brazil's Council for Economic Defense (CADE), the Canadian Competition Bureau (CCB), and the Federal Antimonopoly Service (FAS) of the Russian Federation have also opened investigations into certain of our business practices. In August 2015, we received the CCI Director General's report with interim findings of competition law infringements regarding search and ads. In September 2015, FAS found that there has been a competition law infringement in Android mobile distribution. We will respond to the CCI's report and have filed an appeal of the FAS decision. In July 2015, the Taiwan Fair Trade Commission informed us that it was closing its antitrust investigations of our business practices.

The state attorney general from Mississippi issued subpoenas in 2011 and 2012 in an antitrust investigation of our business practices. We have responded to those subpoenas, and we remain willing to cooperate with them if they have any further information requests.

Patent and Intellectual Property Claims

We have had patent, copyright, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe the intellectual property rights of others. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services, and may also cause us to change our business practices, and require development of non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business. In addition, the U.S. International Trade Commission (ITC) has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss for a company or its suppliers in an ITC action could result in a prohibition on importing infringing products into the U.S. Since the U.S. is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the U.S. or necessitating workarounds that may limit certain features of our products.

Furthermore, many of our agreements with our customers and partners require us to indemnify them for certain intellectual property infringement claims against them, which would increase our costs as a result of defending such claims, and may require that we pay significant damages if there were an adverse ruling in any such claims. Our customers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely impact our business.

Other

We are also regularly subject to claims, suits, government investigations, and other proceedings involving competition (such as the pending EC investigations described above), intellectual property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Such claims, suits, government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences.

Certain of our outstanding legal matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss. We evaluate, on a monthly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters.

With respect to our outstanding legal matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

We expense legal fees in the period in which they are incurred.

Taxes

We are under audit by the Internal Revenue Service (IRS) and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters. We have reserved for potential adjustments to our provision for income taxes and accrual of indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities, and we believe that the final outcome of these examinations or agreements will not have a material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state, and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, it would result in a further charge to expense.

Please see Note 15 for additional information regarding contingencies related to our income taxes.

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Net Income Per Share

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per Share

Alphabet

We compute net income per share of Class A and Class B common stock and Class C capital stock using the two-class method. Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options, restricted stock units, and other contingently issuable shares. The dilutive effect of outstanding stock options, restricted stock units, and other contingently issuable shares is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B common stock and Class C capital stock are identical, except with respect to voting. Further, there are a number of safeguards built into our certificate of incorporation, as well as Delaware law, which preclude our board of directors from declaring or paying unequal per share dividends on our Class A and Class B common stock and Class C capital stock. Specifically, Delaware law provides that amendments to our certificate of incorporation which would have the effect of adversely altering the rights, powers, or preferences of a given class of stock must be approved by the class of stock adversely affected by the proposed amendment. In addition, our certificate of incorporation provides that before any such amendment may be put to a stockholder vote, it must be approved by the unanimous consent of our board of directors. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common shares and Class C capital stock as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net income per share amounts are the same for Class A and Class B common stock and Class C capital stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Further, as we assume the conversion of Class B common stock in the computation of the diluted net income per share of Class A common stock, the undistributed earnings are equal to net income for that computation.

Stock Split Effected In Form of Stock Dividend

In January 2014, our board of directors approved the distribution of shares of Class C capital stock as a dividend to our holders of Class A and Class B common stock (the Stock Split). The Stock Split had a record date of March 27, 2014 and a payment date of April 2, 2014. 

In the second quarter of 2015, in accordance with a settlement of litigation involving the authorization to distribute Class C capital stock, at the close of trading on April 2, 2015, the last trading day of the 365 day period following the first date the Class C shares traded on NASDAQ (Lookback Period), we determined that a payment (the Adjustment Payment) in the amount of $522 million was due to Class C capital stockholders. The amount of the Adjustment Payment was based on the percentage difference that developed between the volume-weighted average price of Class A and Class C shares during the Lookback Period, as supplied by NASDAQ Data-on-Demand, and was payable to holders of Class C capital stock as of the end of the Lookback Period in cash, Class A common stock, Class C capital stock, or a combination thereof, at the discretion of our board of directors. On April 22, 2015, our board of directors approved the Adjustment Payment in shares of Class C capital stock, and cash in lieu of any fractional shares of Class C capital stock. In May 2015, the Adjustment Payment was made, resulting in the issuance of approximately 853 thousand shares of Class C capital stock, with $475 million reflected in additional-paid in capital and $47 million of cash in lieu of fractional shares of Class C capital stock.

In the year ended December 31, 2015, the Adjustment Payment was allocated to the numerator for calculating net income per share of Class C capital stock from net income available to all stockholders and the remaining undistributed earnings were allocated on a pro rata basis to Class A and Class B common stock and Class C capital stock based on the number of shares used in the per share computation for each class of stock. The weighted-average share impact of the Adjustment Payment is included in the denominator of both basic and diluted net income per share computations for the year ended December 31, 2015.

In the years ended December 31, 2013 and 2014, the net income per share amounts are the same for Class A and Class B common stock and Class C capital stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with our Amended and Restated Certificate of Incorporation of Alphabet Inc.

The par value per share of our shares of Class A and Class B common stock remained unchanged at $0.001 per share after the Stock Split. On the effective date of the Stock Split, a transfer between retained earnings and common stock occurred in an amount equal to the $0.001 par value of the Class C capital stock that was issued.

Share and per share amounts for the prior periods presented below have been retroactively adjusted to reflect the Stock Split.

Computation of Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock and Class C capital stock (in millions, except share amounts which are reflected in thousands and per share amounts):

	Year Ended December 31,
	2013
	Class A			Class B			Class C
Basic net income (loss) per share:
Numerator
Allocation of undistributed earnings - continuing operations	$	5,407		$	1,173		$	6,580
Allocation of undistributed earnings - discontinued operations	(175		)	(38		)	(214		)
Total	$	5,232		$	1,135		$	6,366
Denominator
Number of shares used in per share computation	273,518			59,328			332,846
Basic net income (loss) per share:
Continuing operations	$	19.77		$	19.77		$	19.77
Discontinued operations	(0.64		)	(0.64		)	(0.64		)
Basic net income per share	$	19.13		$	19.13		$	19.13
Diluted net income (loss) per share:
Numerator
Allocation of undistributed earnings for basic computation - continuing operations	$	5,407		$	1,173		$	6,580
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,173			0			0
Reallocation of undistributed earnings	0			(21		)	0
Allocation of undistributed earnings - continuing operations	$	6,580		$	1,152		$	6,580
Allocation of undistributed earnings for basic computation - discontinued operations	(175		)	(38		)	(214		)
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	(38		)	0			0
Reallocation of undistributed earnings	(1		)	1			1
Allocation of undistributed earnings - discontinued operations	$	(214	)	$	(37	)	$	(213	)
Denominator
Number of shares used in basic computation	273,518			59,328			332,846
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	59,328			0			0
Employee stock options	2,748			4			2,748
Restricted stock units and other contingently issuable shares	3,215			0			3,215
Number of shares used in per share computation	338,809			59,332			338,809
Diluted net income (loss) per share:
Continuing operations	$	19.42		$	19.42		$	19.42
Discontinued operations	(0.63		)	(0.63		)	(0.63		)
Diluted net income per share	$	18.79		$	18.79		$	18.79

	Year Ended December 31,
	2014
	Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings - continuing operations	$	5,700		$	1,107		$	6,813
Allocation of undistributed earnings - discontinued operations	216			42			258
Total	$	5,916		$	1,149		$	7,071
Denominator
Number of shares used in per share computation	282,877			54,928			338,130
Basic net income per share:
Continuing operations	$	20.15		$	20.15		$	20.15
Discontinued operations	0.76			0.76			0.76
Basic net income per share	$	20.91		$	20.91		$	20.91
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation - continuing operations	$	5,700		$	1,107		$	6,813
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,107			0			0
Reallocation of undistributed earnings	(20		)	(18		)	20
Allocation of undistributed earnings - continuing operations	$	6,787		$	1,089		$	6,833
Allocation of undistributed earnings for basic computation - discontinued operations	216			42			258
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	42			0			0
Reallocation of undistributed earnings	(1		)	(1		)	1
Allocation of undistributed earnings - discontinued operations	$	257		$	41		$	259
Denominator
Number of shares used in basic computation	282,877			54,928			338,130
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	54,928			0			0
Employee stock options	2,057			0			2,038
Restricted stock units and other contingently issuable shares	2,515			0			4,525
Number of shares used in per share computation	342,377			54,928			344,693
Diluted net income per share:
Continuing operations	$	19.82		$	19.82		$	19.82
Discontinued operations	0.75			0.75			0.75
Diluted net income per share	$	20.57		$	20.57		$	20.57

	Year Ended December 31,
	2015
	Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	522
Allocation of undistributed earnings - continuing operations	6,695			1,196			7,935
Allocation of undistributed earnings - discontinued operations	0			0			0
Total	$	6,695		$	1,196		$	8,457
Denominator
Number of shares used in per share computation	289,640			51,745			343,241
Basic net income per share:
Continuing operations	$	23.11		$	23.11		$	24.63
Discontinued operations	0.00			0.00			0.00
Basic net income per share	$	23.11		$	23.11		$	24.63
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	522
Allocation of undistributed earnings for basic computation - continuing operations	$	6,695		$	1,196		$	7,935
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,196			0			0
Reallocation of undistributed earnings	(39		)	(14		)	39
Allocation of undistributed earnings - continuing operations	7,852			1,182			7,974
Allocation of undistributed earnings for basic computation - discontinued operations	0			0			0
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0			0			0
Reallocation of undistributed earnings	0			0			0
Allocation of undistributed earnings - discontinued operations	$	0		$	0		$	0
Denominator
Number of shares used in basic computation	289,640			51,745			343,241
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	51,745			0			0
Employee stock options	1,475			0			1,428
Restricted stock units and other contingently issuable shares	920			0			4,481
Number of shares used in per share computation	343,780			51,745			349,150
Diluted net income per share:
Continuing operations	$	22.84		$	22.84		$	24.34
Discontinued operations	0.00			0.00			0.00
Diluted net income per share	$	22.84		$	22.84		$	24.34

Google

Net income per share for Google is not required as its shares are not publicly traded.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Alphabet Reorganization

On October 2, 2015, Google implemented a legal reorganization, which resulted in Alphabet owning all of the outstanding stock of Google. Consequently, Google became a direct, wholly owned subsidiary of Alphabet. Each share of each class of Google stock issued and outstanding immediately prior to the legal reorganization automatically converted into an equivalent corresponding share of Alphabet stock, and Google’s stockholders immediately prior to the consummation of the legal reorganization became stockholders of Alphabet.

As a result of the reorganization, on October 2, 2015, the Fourth Amended and Restated Certificate of Incorporation of Google was amended to decrease the authorized number of shares of Class A common stock, Class B common stock and Class C capital stock, par value $0.001 per share, from 9 billion shares, 3 billion shares and 3 billion shares, respectively, to 500 shares of each class of stock, respectively. Additionally, the authorized number of shares of preferred stock, par value $0.001 per share, was decreased from 100 million shares to 500 shares. As of December 31, 2015, Google had 100 shares of Class A common stock, 100 shares of Class B common stock, and 100 shares of Class C capital stock outstanding, of which Alphabet was the sole owner.

Alphabet Convertible Preferred Stock

Our board of directors has authorized 100 million shares of convertible preferred stock, $0.001 par value, issuable in series. As of December 31,2014 and 2015, there were no shares issued or outstanding.

Alphabet Class A and Class B Common Stock and Class C Capital Stock

Our board of directors has authorized three classes of stock, Class A and Class B common stock, and Class C capital stock. The rights of the holders of each class of our common and capital stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share. Class C capital stock has no voting rights, except as required by applicable law. Shares of Class B common stock may be converted at any time at the option of the stockholder and automatically convert upon sale or transfer to Class A common stock.

Stock Plans

As a result of the Alphabet reorganization, on October 2, 2015, Google transferred to Alphabet, and Alphabet assumed, sponsorship of all of Google's stock plans along with all of Google's rights and obligations under each plan.

During the year ended December 31,2014, shares reserved for future grants under the 2004 Stock Plan expired and we began granting awards from the 2012 Stock Plan (“Stock Plan”). Under our Stock Plan, RSUs or stock options may be granted. An RSU award is an agreement to issue shares of our publicly traded stock at the time the award vests. Incentive and non-qualified stock options, or rights to purchase common stock, are generally granted for a term of 10 years. Options and RSUs granted to participants under the Stock Plan generally vest over four years contingent upon employment or service with us on the vesting date.

As of December 31, 2015, there were 23,336,944 shares of stock reserved for future issuance under our Stock Plan.

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):

	Year Ended December 31,
	2013		2014		2015
Cost of revenues	$	469	$	535	$	806
Research and development	1,641		2,200		2,687
Sales and marketing	552		715		899
General and administrative	465		725		861
Discontinued operations	216		104		0
Total stock-based compensation expense	$	3,343	$	4,279	$	5,253

For the years ended December 31,2013, 2014, and 2015, we recognized tax benefits on total stock-based compensation expense from continuing operations of $685 million, $867 million, and $1,133 million, respectively, and from discontinued operations of $59 million, $30 million and $0 million, respectively. In addition, as a result of the Tax Court ruling in Altera Corp. v. Commissioner, we have recorded a tax benefit of $522 million related to 2015 stock-based compensation expense that will be subject to reimbursement of cost share payments if the tax court's opinion is sustained. Refer to Note 15 for more detail regarding the Altera case.

Of the total stock-based compensation expense from continuing operations recognized in the years ended December 31,2013, 2014, and 2015, $0 million, $0 million, and $50 million, respectively, was associated with awards ultimately settled in cash. Awards which will be ultimately settled in cash are classified as liabilities in our Consolidated Balance Sheets.

Stock-based compensation associated with Alphabet equity awards granted to Google employees in the fourth quarter ended December 31, 2015, was treated as a capital contribution from Alphabet to Google. Stock-based compensation associated with equity awards for the years ended December 31,2013, 2014 and 2015 are presented as stock-based compensation expense in Alphabet's and Google's Consolidated Statements of Stockholders' Equity.

Alphabet Stock-Based Award Activities

The following table summarizes the activities for our options for the year ended December 31, 2015:

	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)(1)
Balance as of December 31, 2014	7,240,419		$	215.56
Granted	0		N/A
Exercised	(2,072,550	)	$	189.64
Forfeited/canceled	(268,886	)	$	310.47
Balance as of December 31, 2015	4,898,983		$	221.31	3.7	$	2,682
Exercisable as of December 31, 2015	4,462,847		$	212.02	3.4	$	2,484
Exercisable as of December 31, 2015 and expected to vest thereafter (2)	4,846,996		$	220.29	3.6	$	2,658

⁽¹⁾  The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock prices of $778.01 and $758.88 of our Class A common stock and Class C capital stock, respectively, on December 31, 2015.

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

The total grant date fair value of stock options vested during 2013, 2014 and 2015 was $223 million, $94 million, and $33 million. The aggregate intrinsic value of all options and warrants exercised during 2013, 2014 and 2015 was $1,793 million, $589 million, and $867 million. These amounts do not include the aggregate sales price of options sold under our Transferable Stock Options (TSO) program, which was discontinued as of November 29, 2013.

As of December 31, 2015, there was $12 million of unrecognized compensation cost related to outstanding employee stock options. This amount is expected to be recognized over a weighted-average period of 0.6 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 RSUs for the year ended December 31, 2015:

	Unvested Restricted Stock Units
	Number of     Shares		Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2014	24,619,549		$	487.80
Granted	14,415,740		$	546.46
Vested	(11,182,606	)	$	442.01
Forfeited/canceled	(2,111,497	)	$	481.37
Unvested as of December 31, 2015	25,741,186		$	531.74
Expected to vest after December 31, 2015 (1)	22,672,837		$	531.74

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

As of December 31, 2015, there was $11.1 billion of unrecognized compensation cost related to unvested RSUs. This amount is expected to be recognized over a weighted-average period of 2.7 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.

Share Repurchases

In October 2015, the board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock, commencing in the fourth quarter of 2015. The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through the use of 10b5-1 plans. The repurchase program does not have an expiration date. As of December 31, 2015, we repurchased and subsequently retired approximately 2,391 thousand shares of Alphabet Class C capital stock for an aggregate amount of approximately $1,780 million. Alphabet's share repurchases in the year ended December 31, 2015 were funded by Google via a return of capital to Alphabet.

In January 2016, the board of directors of Alphabet authorized the company to repurchase an additional amount of approximately 514 thousand shares.

Google Stockholders' Equity

As a result of the Alphabet reorganization, Google has recorded various intercompany activities during the fourth quarter ended December 31, 2015 as capital transactions, which are reflected in Google's Consolidated Statements of Stockholders' Equity. Refer to Stock-Based Compensation and Share Repurchases section above, and Note 6, for descriptions of certain activities. Additionally, subsequent to the reorganization, shares withheld to satisfy employee withholding tax obligations and cash received from the exercise of stock options were recorded as capital transactions between Alphabet and Google and are reflected as such in Google's Consolidated Statements of Stockholders' Equity.

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401(k) Plans

12 Months Ended

Dec. 31, 2015

Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]

401(k) Plans

401(k) Plans

We have two 401(k) Savings Plans (401(k) Plans) that qualify as deferred salary arrangements under Section 401(k) of the Internal Revenue Code. Under these 401(k) Plans, matching contributions are based upon the amount of the employees’ contributions subject to certain limitations. We contributed approximately $202 million, $259 million, and $309 million for the years ended December 31, 2013, 2014, and 2015.

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income from continuing operations before income taxes included income from domestic operations of $7,651 million, $8,894 million, and $8,271 million for the years ended December 31, 2013, 2014, and 2015, and income from foreign operations of $8,248 million, $8,365 million, and $11,380 million for the years ended December 31, 2013, 2014, and 2015.

The provision for income taxes consists of the following (in millions):

	Year Ended December 31,
	2013			2014			2015
Current:
Federal	$	2,394		$	2,716		$	3,235
State	127			157			(397		)
Foreign	711			774			723
Total	3,232			3,647			3,561
Deferred:
Federal	(421		)	29			(198		)
State	0			6			(43		)
Foreign	(72		)	(43		)	(17		)
Total	(493		)	(8		)	(258		)
Provision for income taxes	$	2,739		$	3,639		$	3,303

The reconciliation of federal statutory income tax rate to our effective income tax rate is as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Expected provision at federal statutory tax rate (35%)	$	5,567		$	6,041		$	6,878
State taxes, net of federal benefit	133			132			(291		)
Change in valuation allowance	(641		)	(164		)	(65		)
Foreign rate differential	(2,482		)	(2,109		)	(2,624		)
Federal research credit	(433		)	(318		)	(407		)
Basis difference in investment of Arris	644			0			0
Other adjustments	(49		)	57			(188		)
Provision for income taxes	$	2,739		$	3,639		$	3,303

A retroactive and permanent reinstatement of the federal research credit was signed into law on December 18, 2015 in accordance with the Protecting Americans from Tax Hikes Act of 2015. As such, our effective tax rate for 2015 reflects the benefit of the 2015 federal research and development tax credit.

A retroactive extension of the 2012 federal research and development credit was signed into law on January 2, 2013 in accordance with The American Taxpayer Act of 2012. The benefit of $189 million related to the 2012 federal research and development credit is included in the year ended December 31, 2013.

Our effective tax rate for 2015 included a discrete tax benefit related to refunds and reductions in uncertain tax positions due to the resolution of a multi-year tax audit in the U.S.

Our effective tax rate is impacted by earnings realized in foreign jurisdictions with statutory tax rates lower than the federal statutory tax rate. Substantially all of the income from foreign operations was earned by an Irish subsidiary.

We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2015 because we intend to permanently reinvest such earnings outside the U.S. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability may be reduced by any foreign income taxes previously paid on these earnings. As of December 31, 2015, the cumulative amount of earnings upon which U.S. income taxes have not been provided is approximately $58.3 billion. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

On July 27, 2015, the United States Tax Court, in an opinion in Altera Corp. v. Commissioner, invalidated the portion of the Treasury regulations issued under IRC Section 482 requiring related-party participants in a cost sharing arrangement to share stock-based compensation costs. The U.S. Tax Court issued the final decision on December 28, 2015. The government has 90 days from the final decision date to file a notice of appeal. At this time, the U.S. Treasury has not withdrawn the requirement to include stock-based compensation from its regulations. We have evaluated the opinion and have recorded a tax benefit of $3.5 billion related to reimbursement of cost share payments for the previously shared stock-based compensation costs. In addition, we have recorded a tax liability of $3.5 billion for the U.S. tax cost of potential repatriation of the associated contingent foreign earnings because at this time we cannot reasonably conclude that the Company has the ability and the intent to indefinitely reinvest these contingent earnings. The net impact to our consolidated financial statements is not material. We will continue to monitor developments related to the case and the potential impact on our consolidated financial statements.

Deferred Income Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows (in millions):

	As of December 31,
	2014			2015
Deferred tax assets:
Stock-based compensation expense	$	376		$	534
State taxes	133			119
Investment loss	133			144
Legal settlement accruals	175			101
Accrued employee benefits	671			832
Accruals and reserves not currently deductible	175			245
Net operating losses	207			230
Tax credits	262			503
Basis difference in investment of Arris	1,347			1,357
Prepaid cost sharing	0			3,468
Other	243			337
Total deferred tax assets	3,722			7,870
Valuation allowance	(1,659		)	(1,732		)
Total deferred tax assets net of valuation allowance	2,063			6,138
Deferred tax liabilities:
Depreciation and amortization	(852		)	(1,126		)
Identified intangibles	(965		)	(787		)
Mark-to-market investments	(273		)	(93		)
Renewable energy investments	(430		)	(529		)
Foreign earnings	0			(3,468		)
Other	(125		)	(73		)
Total deferred tax liabilities	(2,645		)	(6,076		)
Net deferred tax liabilities	$	(582	)	$	62

As of December 31, 2015, our federal and state net operating loss carryforwards for income tax purposes were approximately $482 million and $443 million. If not utilized, the federal net operating loss carryforwards will begin to expire in 2021 and the state net operating loss carryforwards will begin to expire in 2016. The net operating loss carryforwards are subject to various annual limitations under the tax laws of the different jurisdictions. Our foreign net operating loss carryforwards for income tax purposes were $263 million that can be carried over indefinitely.

As of December 31, 2015, our California research and development credit carryforwards for income tax purposes were approximately $1,044 million that can be carried over indefinitely. We believe the state tax credit is not likely to be realized. Our foreign tax credit carryforwards for income tax purposes were approximately $223 million that will start to expire in 2025. We believe it is more likely than not that all of the foreign tax credit will be realized.

As of December 31, 2015, we maintained a valuation allowance with respect to certain of our deferred tax assets relating primarily to investment losses that are capital in nature, California deferred tax assets, and certain foreign net operating losses that we believe are not likely to be realized. We established a deferred tax asset for the book-to-tax basis difference in our investments in Arris shares received from the sale of the Motorola Home business to Arris in 2013. Since any future losses to be recognized upon the sale of Arris shares will be capital losses, a valuation allowance has been recorded against this deferred tax asset to the extent such deferred tax asset is not covered by capital gains generated as of 2015. We reassess the valuation allowance quarterly and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.

As a result of the Altera opinion, we have recorded a deferred tax asset of $3.5 billion and a deferred tax liability of $3.5 billion. Refer to above for more details on the Altera case.

Uncertain Tax Positions

The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2013 to December 31, 2015 (in millions):

Balance as of January 1, 2013	$	1,907
Increases related to prior year tax positions	158
Decreases related to prior year tax positions	(37		)
Decreases related to settlement with tax authorities	(78		)
Increases related to current year tax positions	552
Balance as of December 31, 2013	2,502
Increases related to prior year tax positions	66
Decreases related to prior year tax positions	(44		)
Decreases related to settlement with tax authorities	(1		)
Increases related to current year tax positions	771
Balance as of December 31, 2014	3,294
Increases related to prior year tax positions	224
Decreases related to prior year tax positions	(176		)
Decreases related to settlement with tax authorities	(27		)
Increases related to current year tax positions	852
Balance as of December 31, 2015	$	4,167

The total amount of gross unrecognized tax benefits was $2,502 million, $3,294 million, and $4,167 million as of December 31, 2013, 2014, and 2015, respectively, of which, $2,309 million, $2,909 million, and $3,614 million, if recognized, would affect our effective tax rate.

As of December 31, 2014 and 2015, we had accrued $239 million and $348 million in interest and penalties in provision for income taxes.

We file income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions, our two major tax jurisdictions are the U.S. federal and Ireland. We are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. The IRS completed its examination of our 2003 through 2006 tax years; all issues have been settled except for one which we have filed an appeal with the IRS and plan to litigate in court. The IRS is currently in examination of our 2007 through 2012 tax years. We have also received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend any and all such claims as presented.

Our 2013, 2014, and 2015 tax years remain subject to examination by the IRS for U.S. federal tax purposes, and our 2011 through 2015 tax years remain subject to examination by the appropriate governmental agencies for Irish tax purposes. There are other ongoing audits in various other jurisdictions that are not material to our financial statements.

We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.

We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs. Although the timing of resolution, settlement, closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits will materially change in the next 12 months.

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Information about Segments and Geographic Areas

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Information about Segments and Geographic Areas

Information about Segments and Geographic Areas

In conjunction with the Alphabet reorganization, in the fourth quarter of 2015, we implemented legal and operational changes in how our Chief Operating Decision Maker (CODM) manages our businesses, including resource allocation and performance assessment. Consequently, we have multiple operating segments, representing the individual businesses run separately under the Alphabet structure.

Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the operating segments are combined and disclosed below as Other Bets. All prior-period amounts have been adjusted retrospectively to reflect the reportable segment change.

Our reported segments are described below:

• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome, Google Play as well as hardware products we sell, such as Chromecast, Chromebooks and Nexus. Our technical infrastructure and newer efforts like Virtual Reality are also included in Google. Google generates revenues primarily from advertising, sales of digital content, apps and cloud services, as well as sales of Google branded hardware.

• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X, and other initiatives. Revenues from the Other Bets is derived primarily through the sales of Nest hardware products, internet and TV services through Google Fiber and licensing and R&D services through Verily.

Revenue, cost of revenue, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our CODM does not evaluate operating segments using asset information.

Information about segments during the periods presented were as follows (in millions):

	Year Ended December 31,
	2013		2014		2015
Revenues:
Google	$	55,507	$	65,674	$	74,541
Other Bets	12		327		448
Total revenues	$	55,519	$	66,001	$	74,989

	Year Ended December 31,
	2013			2014			2015
Segment operating income (loss):
Google	$	16,260		$	19,011		$	23,425
Other Bets	(527		)	(1,942		)	(3,567		)
Reconciling items(1)	(330		)	(573		)	(498		)
Total income from operations	$	15,403		$	16,496		$	19,360

⁽¹⁾  Reconciling items are primarily related to corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

	Year Ended December 31,
	2013		2014			2015
Capital expenditures:
Google	$	7,006	$	11,173		$	8,849
Other Bets	187		501			869
Reconciling items(2)	165		(715		)	197
Total capital expenditures as presented in Consolidated Statements of Cash Flow	$	7,358	$	10,959		$	9,915

⁽²⁾  Reconciling items are primarily related to timing differences of payments as segment capital expenditures are on accrual basis while total capital expenditures shown on the Consolidated Statements of Cash Flow are on cash basis, capital expenditures of Motorola Mobile and Home, and other miscellaneous differences.

Stock-based compensation and depreciation, amortization and impairment are included in segment operating income (loss) as below (in millions):

	Year Ended December 31,
	2013		2014		2015
Stock-based compensation:
Google	$	2,911	$	3,677	$	4,587
Other Bets	124		347		498
Reconciling items(3)	92		151		118
Total stock based compensation, excluding discontinued operations(4)	$	3,127	$	4,175	$	5,203
Depreciation, amortization and impairment:
Google	$	3,668	$	4,778	$	4,839
Other Bets	24		148		203
Reconciling items(5)	247		53		21
Total depreciation, amortization and impairment as presented in Consolidated Statements of Cash Flow	$	3,939	$	4,979	$	5,063

⁽³⁾  Reconciling items represent corporate administrative costs that are not allocated to individual segments.

⁽⁴⁾  For purposes of segment reporting, we define SBC as awards accounted for under FASB ASC Topic 718 that we expect to settle in stock. SBC does not include expenses related to awards that we will ultimately settle in cash. Amounts exclude SBC from discontinued operations.

⁽⁵⁾  Reconciling items primarily represent depreciation, amortization and impairment related to Motorola Mobile and Motorola Home.

Revenues by geography are based on the billing addresses of our customers. The following tables set forth revenues and long-lived assets by geographic area (in millions):

	Year Ended December 31,
	2013		2014		2015
Revenues:
United States	$	25,587	$	29,482	$	34,810
United Kingdom	5,600		6,483		7,067
Rest of the world	24,332		30,036		33,112
Total revenues	$	55,519	$	66,001	$	74,989

	As of December 31, 2014		As of December 31, 2015
Long-lived assets:
United States	$	37,421	$	43,686
International	13,110		13,661
Total long-lived assets	$	50,531	$	57,347

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Revision of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2015

Accounting Changes and Error Corrections [Abstract]

Revision of Previously Issued Financial Statements

Revision of Previously Issued Financial Statements

In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015 in the cumulative amount of $711 million. We have evaluated the materiality of the income tax expense impact quantitatively and qualitatively and concluded it was not material to any of the prior periods impacted and that correction of income tax expense as an out of period adjustment in the quarter ended June 30, 2015 is not material to our consolidated financial statements for the year ended December 31, 2015. Consolidated revenues are not impacted. We elected to revise previously issued consolidated financial statements contained within this Annual Report on Form 10-K for the periods impacted to correct the effect of this immaterial income tax expense underaccrual for the corresponding periods.

The following table presents the impact of these corrections on affected Consolidated Balance Sheet line items as of December 31, 2014 (in millions):

	As of December 31, 2014
	As Previously Reported (1)		Adjustment			As Revised
Selected Balance Sheets Data:
Income tax receivable, net	$	1,298	$	(707	)	$	591
Total current assets	79,363		(707		)	78,656
Total assets	129,894		(707		)	129,187
Income taxes payable, non-current	3,407		(67		)	3,340
Retained earnings	75,706		(640		)	75,066
Total stockholders' equity	104,500		(640		)	103,860
Total liabilities and stockholders' equity	$	129,894	$	(707	)	$	129,187

⁽¹⁾    Includes reclassifications of deferred tax assets and liabilities related to ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” Refer to Note 1 for further information.

The following table presents the impact of these corrections on affected Consolidated Statements of Income line items, including net income per share amounts for Class A and B common stock and Class C capital stock, for the years ended December 31, 2013 and 2014 (in millions, except per share amounts):

	Year Ended December 31, 2013							Year Ended December 31, 2014
	As Previously Reported		Adjustment			As Revised		As Previously Reported		Adjustment			As Revised
Selected Statements of Income Data:
Provision for income taxes	$	2,552	$	187		$	2,739	$	3,331	$	308		$	3,639
Net income from continuing operations	13,347		(187		)	$	13,160	13,928		(308		)	$	13,620
Net income	12,920		(187		)	$	12,733	14,444		(308		)	$	14,136
Basic net income per share from continuing operations	$	20.05	$	(0.28	)	$	19.77	$	20.61	$	(0.46	)	$	20.15
Basic net income per share	19.41		(0.28		)	19.13		21.37		(0.46		)	20.91
Diluted net income per share from continuing operations	19.70		(0.28		)	19.42		20.27		(0.45		)	19.82
Diluted net income per share	$	19.07	$	(0.28	)	$	18.79	$	21.02	$	(0.45	)	$	20.57

The following table presents the impact of these corrections on affected Consolidated Statements of Comprehensive Income line items for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31, 2013				Year Ended December 31, 2014
	As Previously Reported	Adjustment		As Revised	As Previously Reported	Adjustment		As Revised
Selected Statements of Comprehensive Income Data:
Net income	12,920	(187	)	12,733	14,444	(308	)	14,136
Comprehensive income	12,507	(187	)	12,320	14,346	(308	)	14,038

The following table presents the impact of these corrections on affected Consolidated Statements of Cash Flows line items for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31, 2013						Year Ended December 31, 2014
	As Previously Reported		Adjustment			As Revised	As Previously Reported		Adjustment			As Revised
Selected Statements of Cash Flows Data:
Net income	$	12,920	$	(187	)	12,733	$	14,444	$	(308	)	$	14,136
Changes in income taxes, net	401		187			588	283		308			591

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Schedule II: Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2015

Valuation and Qualifying Accounts [Abstract]

Schedule II: Valuation and Qualifying Accounts

Schedule II: Valuation and Qualifying Accounts

The table below details the activity of the allowance for doubtful accounts for the three years ended December 31, 2015 (in millions):

	Balance at Beginning of Year		Additions		Usage			Balance at End of Year
	(In millions)
Year ended December 31, 2013	$	581	$	1,128	$	(1,078	)	$	631
Year ended December 31, 2014	$	631	$	1,240	$	(1,646	)	$	225
Year ended December 31, 2015	$	225	$	579	$	(508	)	$	296

Note: Additions to the allowance for doubtful accounts are charged to expense. Additions to the allowance for sales credits are charged against revenues. For the year ended December 31, 2013 and 2014, additions included the impact from the Motorola acquisition. For the years ended December 31, 2013 and 2014, usages include the impact from the sale of Motorola Home and Mobile businesses, respectively.

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

We were incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. We generate revenues primarily by delivering relevant, cost-effective online advertising.

On April 17, 2013, we sold the Motorola Home business (Motorola Home) to Arris Group, Inc. (Arris). The financial results of Motorola Home are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income for the year ended December 31, 2013. See Note 9 for further discussion of the sale.

On April 2, 2014, we completed a two-for-one stock split effected in the form of a stock dividend (the Stock Split). All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split. See Note 12 for additional information about the Stock Split.

On October 29, 2014, we sold the Motorola Mobile business (Motorola Mobile) to Lenovo Group Limited (Lenovo). The financial results of Motorola Mobile are presented as net income (loss) from discontinued operations on the Consolidated Statements of Income for the years ended December 31, 2013 and 2014. See Note 9 for further discussion of the sale.

On August 10, 2015, we announced plans to create a new public holding company, Alphabet Inc. (Alphabet), and a new operating structure. On October 2, 2015, we implemented the holding company reorganization, and as a result, Alphabet became the successor issuer to Google Inc. (Google).

The implementation of the holding company reorganization on October 2, 2015 was accounted for as a merger under common control. Alphabet has recognized the assets and liabilities of Google at carryover basis. The consolidated financial statements of Alphabet present comparative information for prior years on a combined basis, as if both Alphabet and Google were under common control for all periods presented.

The consolidated financial statements and notes thereto are being presented in a combined report being filed by two separate registrants: Alphabet and Google. The Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Cash Flows are the only statements with differences between Alphabet and Google.  The differences relate to transactions between Alphabet and Google which are accounted for as capital transactions. Refer to Note 13 for additional information.

Basis of Consolidation

Basis of Consolidation

The consolidated financial statements of Alphabet and Google include the accounts of Alphabet and Google, respectively, and all wholly owned subsidiaries as well as all variable interest entities where we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the accounts receivable and sales allowances, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Revenue Recognition

Revenue Recognition

The following table presents our revenues by segment and revenue source (in millions):

	Year Ended December 31,
	2013		2014		2015
Google segment
Google websites	$	37,422	$	45,085	$	52,357
Google Network Members' websites (1)	13,650		14,539		15,033
Google advertising revenues	51,072		59,624		67,390
Google other revenues (1)	4,435		6,050		7,151
Google segment revenues	$	55,507	$	65,674	$	74,541
Other Bets
Other Bets revenues	$	12	$	327	$	448
Consolidated revenues	$	55,519	$	66,001	$	74,989

⁽¹⁾  Prior period amounts have been adjusted to reflect the reclassification primarily related to DoubleClick ad serving software revenues from Google other revenues to Advertising Revenues from Google Network Members' websites to conform with current period presentation.

We generate revenues primarily by delivering performance and brand advertising. Performance advertising creates and delivers relevant ads that users will click, leading to direct engagement with advertisers. Brand advertising enhances users’ awareness of and affinity with advertisers’ products and services, through videos, text, images, and other ads that run across various devices.

Google AdWords is our auction-based advertising program that enables performance advertisers to place text-based and display ads on Google websites and our Google Network Members’ websites. Google AdSense refers to the online programs through which we distribute our advertisers’ AdWords ads for display on our Google Network Members’ websites. Most of our customers pay us on a cost-per-click basis, which means that an advertiser pays us only when a user engages with the ads by clicking on an ad on Google websites or Google Network Members' websites or by viewing YouTube engagement ads like TrueView (counted as an engagement when the user chooses not to skip the ad). We also offer advertising on a cost-per-impression basis that enables our brand advertisers to pay us based on the number of times their ads display on Google websites and our Google Network Members’ websites as specified by the advertisers.

Revenue from advertising is recognized when the services have been provided or delivered, the fees we charge are fixed or determinable, we and our advertisers or other customers understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured. We recognize as revenues the fees charged to advertisers each time a user clicks on one of the ads that appears next to the search results or content on Google websites or our Google Network Members’ websites. For those advertisers using our cost-per-impression pricing, we recognize as revenues the fees charged to advertisers each time their ads are displayed on Google websites or our Google Network Members’ websites. We report our Google AdSense revenues and traffic acquisition costs due to our Google Network Members on a gross basis principally because we are the primary obligor to our advertisers.

Revenue from hardware sales to end customers or through distribution channels is generally recognized when products have been shipped, risk of loss has transferred to the customer, objective evidence exists that customer acceptance provisions have been met, no significant obligations remain and allowances for discounts, price protection, returns and customer incentives can be reasonably and reliably estimated. Revenues are reported net of these allowances. Where these allowances cannot be reasonably and reliably estimated, we recognize revenue at the time the product sells through the distribution channel to the end customer or when the return period elapsed, as applicable.

For the sale of certain third-party products and services, we evaluate whether it is appropriate to recognize revenue based on the gross amount billed to the customers or the net amount earned as revenue share. Generally, when we record revenue on a gross basis, we are the primary obligor in a transaction, and have also considered other factors, including whether we are subject to inventory risk or have latitude in establishing prices.

For multi-element arrangements, including those that contain software essential to hardware products’ functionality and services, we allocate revenue to each unit of accounting based on their relative selling prices. In such circumstances, we use a hierarchy to determine the selling prices to be used for allocating revenue: (i) vendor-specific objective evidence of fair value (VSOE), (ii) third-party evidence of selling price, and (iii) best estimate of the selling price (ESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. ESPs reflect our best estimates of what the selling price of the deliverable would be if it was sold regularly on a stand-alone basis.

We record deferred revenues when cash payments are received in advance of our performance in the underlying agreement on the accompanying Consolidated Balance Sheets.

Cost of Revenues

Cost of Revenues

Cost of revenues consists of traffic acquisition costs which are the advertising revenues shared with our Google Network Members and the amounts paid to our distribution partners who distribute our browser or otherwise direct search queries to our website.

Additionally, other costs of revenues includes the following:

• The expenses associated with the operation of our data centers (including depreciation, labor, energy, and bandwidth costs);

• Content acquisition costs primarily related to payments to certain content providers from whom we license their video and other content for distribution on YouTube and Google Play (we share most of the fees these sales generate with content providers or pay a fixed fee to these content providers);

• Credit card and other transaction fees related to processing customer transactions;

• Stock-based compensation expense;

• Revenue share payments to mobile carriers;

• Inventory costs for hardware we sell; and

• Amortization of certain intangible assets.

Stock-based Compensation

Stock-based Compensation

Restricted stock units (RSUs) are measured based on the fair market value of the underlying stock on the date of grant. Shares are issued on the vesting dates net of the minimum statutory tax withholding to be paid by us on behalf of our employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding. We record the liability for withholding amounts to be paid by us primarily as a reduction to additional paid-in capital when paid.

For stock option awards, we determined fair value using the Black-Scholes-Merton (BSM) option pricing model on the date of grant.

Stock-based compensation includes awards we expect to settle in Alphabet stock as well as awards we will ultimately settle in cash. We recognize stock-based compensation, less an estimate for forfeitures, using the straight-line method over the requisite service period. Additionally, stock-based compensation for liability classified awards reflect changes in fair value during the requisite service period.

We include as part of cash flows from operating activities the benefits of tax deductions in excess of the tax-effected compensation of the related stock-based awards for options exercised and RSUs vested during the period. For Google, such tax benefits are included as part of cash flows from financing activities. During the years ended December 31,2013, 2014, and 2015, the amount of cash received from the exercise of stock options, which is recognized as part of cash flows from financing activities, was $1,174 million, $465 million, and $393 million, respectively.

We have elected to account for the indirect effects of stock-based awards -- primarily the research and development tax credit -- through the Consolidated Statements of Income. Total direct tax benefit realized, including the excess tax benefit, from stock-based award activities during the years ended December 31,2013, 2014, and 2015, was $1,195 million, $1,356 million, and $1,544 million, respectively.

Certain Risks and Concentrations

Certain Risks and Concentrations

Our revenues are primarily derived from online advertising, the market for which is highly competitive and rapidly changing. In addition, our revenues are generated from a multitude of vertical market segments in countries around the world. Significant changes in this industry or changes in customer buying or advertiser spending behavior could adversely affect our operating results.

We are subject to concentrations of credit risk principally from cash and cash equivalents, marketable securities, foreign exchange contracts, and accounts receivable. Cash equivalents and marketable securities consist primarily of time deposits, money market and other funds, including cash collateral received related to our securities lending program, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments and municipalities in the U.S., corporate securities, agency mortgage-backed securities, and asset-backed securities. Foreign exchange contracts are transacted with various financial institutions with high credit standing. Accounts receivable are typically unsecured and are derived from revenues earned from customers located around the world. In 2013, 2014, and 2015, we generated approximately 46%, 45%, and 46% of our revenues from customers based in the U.S., with the majority of revenues from customers outside of the U.S. located in Europe and Japan. We perform ongoing evaluations to determine customer credit and we limit the amount of credit we extend, but generally we do not require collateral from our customers. We maintain reserves for estimated credit losses and these losses have generally been within our expectations.

No individual customer or groups of affiliated customers represented more than 10% of our revenues in 2013, 2014, or 2015.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Our financial assets and financial liabilities that include cash equivalents, marketable securities, foreign currency and interest rate derivative contracts, and non-marketable debt securities are measured and recorded at fair value on a recurring basis. We measure certain financial assets at fair value for disclosure purposes, as well as, on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and our other current financial liabilities have fair values that approximate their carrying value.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Cash, Cash Equivalents, and Marketable Securities

Cash, Cash Equivalents, and Marketable Securities

We invest all excess cash primarily in debt securities including those of the U.S. government and its agencies, corporate debt securities, agency mortgage-backed securities, money market and other funds, municipal securities, time deposits, asset backed securities, and debt instruments issued by foreign governments.

We classify all investments that are readily convertible to known amounts of cash and have stated maturities of three months or less from the date of purchase as cash equivalents and those with stated maturities of greater than three months as marketable securities.

We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date. We have classified and accounted for our marketable securities as available-for-sale. After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell these securities prior to their stated maturities. As we view these securities as available to support current operations, we classify highly liquid securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying Consolidated Balance Sheets. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which we record within other income (expense), net. We determine any realized gains or losses on the sale of marketable securities on a specific identification method, and we record such gains and losses as a component of other income (expense), net.

Non Marketable Equity Investments

Non-Marketable Investments

We have accounted for non-marketable equity investments either under the equity or cost method. Investments through which we exercise significant influence but do not have control over the investee are accounted for under the equity method. Investments through which we are not able to exercise significant influence over the investee are accounted for under the cost method.

We have accounted for our non-marketable investments that meet the definition of a debt security as available-for-sale securities. Since these securities do not have contractual maturity dates and we do not intend to liquidate them in the next 12 months, we have classified them as non-current assets on the accompanying Consolidated Balance Sheet.

Variable Interest Entities

Variable Interest Entities

We make a determination at the start of each arrangement whether an entity in which we have made an investment is considered a Variable Interest Entity (“VIE”). We consolidate VIEs in which we have a controlling financial interest. If we do not have a controlling financial interest in a VIE, we account for the investment under either the equity or cost method.

Impairment of Marketable and Non-Marketable Securities

Impairment of Marketable and Non-Marketable Investments

We periodically review our marketable and non-marketable investments for impairment. If we conclude that any of these investments are impaired, we determine whether such impairment is other-than-temporary. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. For debt securities, we also consider whether (1) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If any impairment is considered other-than-temporary, we will write down the asset to its fair value and record the corresponding charge as other income (expense), net.

Accounts Receivable

Accounts Receivable

We record accounts receivable at the invoiced amount and we normally do not charge interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review the accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We also maintain a sales allowance to reserve for potential credits issued to customers. We determine the amount of the reserve based on historical credits issued.

Property and Equipment

Property and Equipment

We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally two to five years. We depreciate buildings over periods up to 25 years. We amortize leasehold improvements over the shorter of the remaining lease term or the estimated useful lives of the assets. Construction in progress is the construction or development of property and equipment that have not yet been placed in service for our intended use. Depreciation for equipment commences once it is placed in service and depreciation for buildings and leasehold improvements commences once they are ready for our intended use. Land is not depreciated.

Software Development Costs

Software Development Costs

We expense software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products and as a result, development costs that meet the criteria for capitalization were not material for the periods presented.

Software development costs also include costs to develop software to be used solely to meet internal needs and cloud based applications used to deliver our services. We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Costs capitalized for developing such software applications were not material for the periods presented.

Business Combinations

Business Combinations

We include the results of operations of the businesses that we acquire as of the respective dates of acquisition. We allocate the fair value of the purchase price of our acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets

Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets

We review property and equipment, long-term prepayments and intangible assets, excluding goodwill, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. In 2014, we recorded impairments of intangible assets, including an impairment of $378 million in the third quarter of 2014 related to a patent licensing royalty asset. Impairments of intangible assets were not material in 2015.

We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. We test our goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. No goodwill impairment has been identified in any of the years presented.

Intangible assets with definite lives are amortized over their estimated useful lives. We amortize our acquired intangible assets on a straight-line basis with definite lives over periods ranging from one to twelve years.

Income Taxes

Income Taxes

We account for income taxes using the asset and liability method, under which we recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. We measure current and deferred tax assets and liabilities based on provisions of enacted tax law. We evaluate the realization of our deferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more-likely-than-not that they will not be realized.

We recognize the financial statement effects of a tax position when it is more-likely-than not that, based on technical merits, the position will be sustained upon examination. The tax benefits of the position recognized in the financial statements are then measured based on the largest amount of benefit that is greater than 50% likely to be realized upon settlement with a taxing authority. In addition, we recognize interest and penalties related to unrecognized tax benefits as a component of the income tax provision.

Foreign Currency

Foreign Currency

Generally, the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end exchange rates for assets and liabilities, and average rates for the annual period derived from month-end exchange rates for revenues, costs, and expenses. We record translation gains and losses in accumulated other comprehensive income as a component of stockholders’ equity. We reflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency as a component of foreign currency exchange losses in other income (expense), net.

Advertising and Promotional Expenses

Advertising and Promotional Expenses

We expense advertising and promotional costs in the period in which they are incurred.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements, implementing accounting system changes related to the adoption, and considering additional disclosure requirements.

In June 2014, the FASB issued Accounting Standards Update No. 2014-10 (ASU 2014-10) "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation." ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification (ASC) thereby removing the financial reporting distinction between development stage entities and other reporting entities. The additional elimination of related consolidation guidance will require companies with interests in development stage entities to reassess whether such entities are variable interest entities under ASC Topic 810, Consolidation. We have adopted this standard in the first quarter of 2016 on a retrospective basis and the adoption of this standard did not have a material impact on our consolidated financial statements. Refer to Note 7 for further details. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02) "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. We have adopted this standard in the first quarter of 2016 on a retrospective basis. The adoption of this standard did not have a material impact on our consolidated statement of operations or consolidated balance sheet, but it resulted in additional disclosures. Refer to Note 3 for further details. Information for Google has not been updated as Google ceased reporting for periods subsequent to the year ended December 31, 2015.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”.  ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. We have early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior periods have been retrospectively adjusted.  

As a result of the adoption of ASU 2015-17, the Company made the following adjustments to the 2014 balance sheet: a $1,322 million decrease to current deferred tax assets, a $83 million increase to noncurrent deferred tax asset, a $26 million decrease to current deferred tax liability, and a decrease of $1,213 million to noncurrent deferred tax liability.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. With respect to our consolidated financial statements, the most significant impact relates to the accounting for equity investments. It will impact the disclosure and presentation of financial assets and liabilities. ASU 2016-01 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017. Early adoption by public entities is permitted only for certain provisions. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (ASU 2016-09) "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting". We elected to early adopt these amendments beginning in the first quarter of 2016. Our Consolidated Statements of Cash Flows now present excess tax benefits as an operating activity, with the prior periods adjusted accordingly. The three year impact to our Consolidated Statements of Cash Flows as a result of the adoption of ASU 2016-09 is as follows (in millions):

Prior Period Reclassifications

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

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Nature of Operations and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Revenues by Revenue Source

The following table presents our revenues by segment and revenue source (in millions):

	Year Ended December 31,
	2013		2014		2015
Google segment
Google websites	$	37,422	$	45,085	$	52,357
Google Network Members' websites (1)	13,650		14,539		15,033
Google advertising revenues	51,072		59,624		67,390
Google other revenues (1)	4,435		6,050		7,151
Google segment revenues	$	55,507	$	65,674	$	74,541
Other Bets
Other Bets revenues	$	12	$	327	$	448
Consolidated revenues	$	55,519	$	66,001	$	74,989

⁽¹⁾  Prior period amounts have been adjusted to reflect the reclassification primarily related to DoubleClick ad serving software revenues from Google other revenues to Advertising Revenues from Google Network Members' websites to conform with current period presentation.

Schedule of Adjustments for New Accounting Pronouncement

	Year Ended December 31, 2013									Year Ended December 31, 2014
	As Previously Reported			Adjustment			Recast			As Previously Reported			Adjustment			Recast
Excess tax benefits	$	(481	)	$	481		$	—		$	(648	)	$	648		$	—
Net cash provided by operating activities	18,659			481			19,140			22,376			648			23,024
Excess tax benefits	481			(481		)	—			648			(648		)	—
Net cash used in financing activities	$	(857	)	$	(481	)	$	(1,338	)	$	(1,439	)	$	(648	)	$	(2,087	)
										Year Ended December 31, 2015
										As Previously Reported			Adjustment			Recast
Excess tax benefits										$	(548	)	$	548		$	—
Net cash provided by operating activities										26,024			548			26,572
Excess tax benefits										548			(548		)	—
Net cash used in financing activities										$	(3,677	)	$	(548	)	$	(4,225	)

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Schedule of cash and short-term investments

The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 31, 2014 and 2015 (in millions):

	As of December 31, 2014
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	9,863	$	0	$	0		$	9,863	$	9,863	$	0
Level 1:
Money market and other funds	2,532		0		0			2,532		2,532		0
U.S. government notes	15,320		37		(4		)	15,353		1,128		14,225
Marketable equity securities	988		428		(64		)	1,352		0		1,352
	18,840		465		(68		)	19,237		3,660		15,577
Level 2:
Time deposits(1)	2,409		0		0			2,409		2,309		100
Money market and other funds(2)	1,762		0		0			1,762		1,762		0
Fixed-income bond funds(3)	385		0		(38		)	347		0		347
U.S. government agencies	2,327		8		(1		)	2,334		750		1,584
Foreign government bonds	1,828		22		(10		)	1,840		0		1,840
Municipal securities	3,370		33		(6		)	3,397		3		3,394
Corporate debt securities	11,499		114		(122		)	11,491		0		11,491
Agency mortgage-backed securities	8,196		109		(42		)	8,263		0		8,263
Asset-backed securities	3,456		1		(5		)	3,452		0		3,452
	35,232		287		(224		)	35,295		4,824		30,471
Total	$	63,935	$	752	$	(292	)	$	64,395	$	18,347	$	46,048

	As of December 31, 2015
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	7,380	$	0	$	0		$	7,380	$	7,380	$	0
Level 1:
Money market and other funds	5,623		0		0			5,623		5,623		0
U.S. government notes	20,922		27		(48		)	20,901		258		20,643
Marketable equity securities	692		155		0			847		0		847
	27,237		182		(48		)	27,371		5,881		21,490
Level 2:
Time deposits(1)	3,223		0		0			3,223		2,012		1,211
Money market and other funds(2)	1,140		0		0			1,140		1,140		0
Fixed-income bond funds(3)	219		0		0			219		0		219
U.S. government agencies	1,367		2		(3		)	1,366		0		1,366
Foreign government bonds	2,242		14		(23		)	2,233		0		2,233
Municipal securities	3,812		47		(4		)	3,855		0		3,855
Corporate debt securities	13,809		53		(278		)	13,584		136		13,448
Agency mortgage-backed securities	9,680		48		(57		)	9,671		0		9,671
Asset-backed securities	3,032		0		(8		)	3,024		0		3,024
	38,524		164		(373		)	38,315		3,288		35,027
Total	$	73,141	$	346	$	(421	)	$	73,066	$	16,549	$	56,517

⁽¹⁾  The majority of our time deposits are foreign deposits.

⁽²⁾  The balances as of December 31, 2014 and 2015 were related to cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See section titled "Securities Lending Program" below for further discussion of this program.

⁽³⁾  Fixed-income bond funds consist of mutual funds that primarily invest in corporate and government bonds.

Investments by maturity date

The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions):

	As of December 31, 2015
Due in 1 year	$	7,900
Due in 1 year through 5 years	30,141
Due in 5 years through 10 years	7,199
Due after 10 years	10,211
Total	$	55,451

Schedule of unrealized loss on investments

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2014 and 2015, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2014
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	4,490	$	(4	)	$	0	$	0		$	4,490	$	(4	)
U.S. government agencies	830		(1		)	0		0			830		(1		)
Foreign government bonds	255		(7		)	43		(3		)	298		(10		)
Municipal securities	877		(3		)	174		(3		)	1,051		(6		)
Corporate debt securities	5,851		(112		)	225		(10		)	6,076		(122		)
Agency mortgage-backed securities	609		(1		)	2,168		(41		)	2,777		(42		)
Asset-backed securities	2,388		(4		)	174		(1		)	2,562		(5		)
Fixed-income bond funds	347		(38		)	0		0			347		(38		)
Marketable equity securities	690		(64		)	0		0			690		(64		)
Total	$	16,337	$	(234	)	$	2,784	$	(58	)	$	19,121	$	(292	)

	As of December 31, 2015
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	13,757	$	(48	)	$	0	$	0		$	13,757	$	(48	)
U.S. government agencies	864		(3		)	0		0			864		(3		)
Foreign government bonds	885		(18		)	36		(5		)	921		(23		)
Municipal securities	1,116		(3		)	41		(1		)	1,157		(4		)
Corporate debt securities	9,192		(202		)	784		(76		)	9,976		(278		)
Agency mortgage-backed securities	5,783		(34		)	721		(23		)	6,504		(57		)
Asset-backed securities	2,508		(7		)	386		(1		)	2,894		(8		)
Total	$	34,105	$	(315	)	$	1,968	$	(106	)	$	36,073	$	(421	)

Schedule of repurchase agreements

Our securities lending transactions were accounted for as secured borrowings with significant investment categories as follows (in millions):

	As of December 31, 2015
	Remaining Contractual Maturity of the Agreements
Securities Lending Transactions	Overnight and Continuous		Up to 30 days		30 - 90 Days		Greater Than 90 Days		Total
U.S. government notes	$	1,322	$	31	$	0	$	306	$	1,659
U.S. government agencies	504		77		0		0		581
Corporate debt securities	188		0		0		0		188
Total	$	2,014	$	108	$	0	$	306	$	2,428
Gross amount of recognized liabilities for securities lending in offsetting disclosure									$	2,428
Amounts related to agreements not included in securities lending in offsetting disclosure									$	0

Schedule of derivative instruments

The fair values of our outstanding derivative instruments were as follows (in millions):

		As of December 31, 2014
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	851	$	0	$	851
Interest rate contracts	Prepaid revenue share, expenses and other assets, current and non-current	1		0		1
Total		$	852	$	0	$	852
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	0	$	3	$	3
Interest rate contracts	Accrued expenses and other liabilities, current and non-current	1		0		1
Total		$	1	$	3	$	4

		As of December 31, 2015
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	626	$	2	$	628
Total		$	626	$	2	$	628
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	1	$	13	$	14
Interest rate contracts	Accrued expenses and other liabilities, current and non-current	2		0		2
Total		$	3	$	13	$	16

Schedule of gain (loss) on derivative instruments

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below (in millions):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	2013		2014			2015
Foreign exchange contracts	$	92	$	929		$	964
Interest rate contracts	86		(31		)	0
Total	$	178	$	898		$	964

	Gains Reclassified from AOCI into Income (Effective Portion)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2013		2014		2015
Foreign exchange contracts	Revenues	$	95	$	171	$	1,399
Interest rate contracts	Other income (expense), net	0		4		5
Total		$	95	$	175	$	1,404

	Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from  Effectiveness Testing and Ineffective Portion) (1)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2013			2014			2015
Foreign exchange contracts	Other income (expense), net	$	(280	)	$	(279	)	$	(297	)
Interest rate contracts	Other income (expense), net	0			4			0
Total		$	(280	)	$	(275	)	$	(297	)

⁽¹⁾  Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.

The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives(2)
		Year Ended December 31,
Derivatives in Fair Value Hedging Relationship	Location	2013			2014			2015
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	16		$	115		$	170
Hedged item	Other income (expense), net	(25		)	(123		)	(176		)
Total		$	(9	)	$	(8	)	$	(6	)
Interest Rate Hedges:
Interest rate contracts	Other income (expense), net	$	0		$	0		$	(2	)
Hedged item	Other income (expense), net	0			0			2
Total		$	0		$	0		$	0

⁽²⁾  Losses related to the amount excluded from effectiveness testing of the hedges were $9 million, $8 million, and $6 million for the years ended December 31, 2013, 2014, and 2015.

The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives
		Year Ended December 31,
Derivatives Not Designated As Hedging Instruments	Location	2013		2014		2015
Foreign exchange contracts	Other income (expense), net, and net loss from discontinued operations	$	118	$	237	$	198
Interest rate contracts	Other income (expense), net	4		2		1
Total		$	122	$	239	$	199

Offsetting assets

As of December 31, 2014 and 2015, information related to these offsetting arrangements was as follows (in millions):

Offsetting of Assets
	As of December 31, 2014
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	852	$	0	$	852		$	(1	)	(1)	$	(251	)	$	(412	)	$	188
Reverse repurchase agreements	2,637		0		2,637		(2)	0				0			(2,637		)	0
Total	$	3,489	$	0	$	3,489		$	(1	)		$	(251	)	$	(3,049	)	$	188
	As of December 31, 2015
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	628	$	0	$	628		$	(13	)	(1)	$	(189	)	$	(214	)	$	212
Reverse repurchase agreements	1,590		0		1,590		(2)	0				0			(1,590		)	0
Total	$	2,218	$	0	$	2,218		$	(13	)		$	(189	)	$	(1,804	)	$	212

⁽¹⁾  The balances as of December 31, 2014 and 2015 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

⁽²⁾  The balances as of December 31, 2014 and 2015 included $1,762 million and $1,140 million recorded in cash and cash equivalents, respectively, and $875 million and $450 million recorded in receivable under reverse repurchase agreements, respectively.

Offsetting liabilities

Offsetting of Liabilities
	As of December 31, 2014
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	4	$	0	$	4	$	(1	)	(3)	$	0		$	0		$	3
Securities lending agreements	2,778		0		2,778		0				0			(2,740		)	38
Total	$	2,782	$	0	$	2,782	$	(1	)		$	0		$	(2,740	)	$	41
	As of December 31, 2015
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	16	$	0	$	16	$	(13	)	(3)	$	(3	)	$	0		$	0
Securities lending agreements	2,428		0		2,428		0				0			(2,401		)	27
Total	$	2,444	$	0	$	2,444	$	(13	)		$	(3	)	$	(2,401	)	$	27

⁽³⁾  The balances as of December 31, 2014 and 2015 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Non-Marketable Investments (Tables)

12 Months Ended

Dec. 31, 2015

Investments, All Other Investments [Abstract]

Investment in other assets

The following table presents a reconciliation for our assets measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions):

	Level 3
Balance as of December 31, 2014	$	90
Purchases, issuances, and settlements(1)	934
Balance as of December 31, 2015	$	1,024

⁽¹⁾  Purchases of securities included our $900 million investment in SpaceX, a space exploration and space transport company, made during January 2015.

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Debt (Tables)

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule of debt instruments

The total outstanding Notes are summarized below (in millions):

	As of December 31, 2014			As of December 31, 2015
Short-Term Portion of Long-Term Debt
2.125% Notes due on May 19, 2016	$	0		$	1,000
Capital Lease Obligation	10			225
Total Short-Term Portion of Long-Term Debt	$	10		$	1,225
Long-Term Debt
2.125% Notes due on May 19, 2016	$	1,000		$	0
3.625% Notes due on May 19, 2021	1,000			1,000
3.375% Notes due on February 25, 2024	1,000			1,000
Unamortized discount for the Notes above	(8		)	(5		)
Subtotal	2,992			1,995
Capital Lease Obligation	236			0
Total Long-Term Debt	$	3,228		$	1,995

Schedule of debt maturities

As of December 31, 2015, aggregate future principal payments for long-term debt (including short-term portion of long-term debt) and capital lease obligation were as follows (in millions):

Years Ending
2016	$	1,225
2017	0
2018	0
2019	0
Thereafter	2,000
Total	$	3,225

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Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2015

Balance Sheet Components Disclosure [Abstract]

Property and Equipment

Property and equipment, net, consisted of the following (in millions):

	As of December 31, 2014			As of December 31, 2015
Land and buildings	$	13,326		$	16,518
Information technology assets	10,918			13,645
Construction in progress	6,555			7,324
Leasehold improvements	1,868			2,576
Furniture and fixtures	79			83
Property and equipment, gross	32,746			40,146
Less: accumulated depreciation and amortization	(8,863		)	(11,130		)
Property and equipment, net	$	23,883		$	29,016

Schedule of Notes Receivable

The outstanding balances are shown in the table below (in millions):

	As of December 31, 2014			As of December 31, 2015
Principal of the Note Receivable	$	1,500		$	1,448
Less: unamortized discount for the Note Receivable	(175		)	(112		)
Total	$	1,325		$	1,336

Components of Accumulated Other Comprehensive Income

The components of AOCI, net of tax, were as follows (in millions):

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2012	$	(73	)	$	604		$	7		$	538
Other comprehensive income (loss) before reclassifications	89			(392		)	112			(191		)
Amounts reclassified from AOCI	0			(162		)	(60		)	(222		)
Other comprehensive income (loss)	89			(554		)	52			(413		)
Balance as of December 31, 2013	$	16		$	50		$	59		$	125

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2013	$	16		$	50		$	59		$	125
Other comprehensive income (loss) before reclassifications	(996		)	505			651			160
Amounts reclassified from AOCI	0			(134		)	(124		)	(258		)
Other comprehensive income (loss)	(996		)	371			527			(98		)
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27
Other comprehensive income (loss) before reclassifications	(1,067		)	(715		)	676			(1,106		)
Amounts reclassified from AOCI	0			208			(1,003		)	(795		)
Other comprehensive income (loss)	(1,067		)	(507		)	(327		)	(1,901		)
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)

Schedule of Effects on Net Income of Amounts Reclassified from Accumulated OCI

The effects on net income of amounts reclassified from AOCI were as follows (in millions):

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Year Ended December 31,
AOCI Components	Location	2013			2014			2015
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	158		$	153		$	(208	)
	Net Income (loss) from discontinued operations	43			0			0
	Provision for income taxes	(39		)	(19		)	0
	Net of tax	$	162		$	134		$	(208	)
Unrealized gains on cash flow hedges
Foreign exchange contracts	Revenue	$	95		$	171		$	1,399
Interest rate contracts	Other income (expense), net	0			4			5
	Provision for income taxes	(35		)	(51		)	(401		)
	Net of tax	$	60		$	124		$	1,003
Total amount reclassified, net of tax		$	222		$	258		$	795

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The changes in the carrying amount of goodwill allocated to our disclosed segments for the years ended December 31, 2014 and 2015 were as follows (in millions):

	Google			Other Bets			Total Consolidated
Balance as of December 31, 2013	$	11,492		$	—		$	11,492
Acquisitions	4,208			—			4,208
Dispositions	(43		)	—			(43		)
Foreign currency translation and other adjustments	(58		)	—			(58		)
Balance as of December 31, 2014	$	15,599		$	—		$	15,599
Acquisitions	139			—			139
Foreign currency translation and other adjustments	(71		)	—			(71		)
Allocation in the fourth quarter of 2015	(416		)	416			—
Acquisitions	201			4			205
Foreign currency translation and other adjustments	4			(7		)	(3		)
Balance as of December 31, 2015	$	15,456		$	413		$	15,869

Schedule of finite-lived intangible assets

Information regarding our purchased intangible assets is as follows (in millions):

	As of December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	6,547	$	2,513	$	4,034
Customer relationships	1,410		1,168		242
Trade names and other	696		365		331
Total	$	8,653	$	4,046	$	4,607

	As of December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Patents and developed technology	$	6,592	$	3,213	$	3,379
Customer relationships	1,343		1,201		142
Trade names and other	795		469		326
Total	$	8,730	$	4,883	$	3,847

Schedule of future amortization expense

As of December 31, 2015, expected amortization expense for our purchased intangible assets for each of the next five years and thereafter was as follows (in millions):

2016	$	806
2017	724
2018	637
2019	528
2020	434
Thereafter	718
	$	3,847

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Revenues, Earnings, Assets and Liabilities Attributable to Motorola Home/Mobile Business

The following table presents financial results of the Motorola Mobile business included in net income (loss) from discontinued operations for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31,
	2013			2014 (1)
Revenues	$	4,306		$	5,486
Loss from discontinued operations before income taxes	(1,403		)	(177		)
Benefits from/(Provision for) income taxes	270			(47		)
Gain on disposal	0			740
Net (loss) income from discontinued operations	$	(1,133	)	$	516

⁽¹⁾  The operating results of Motorola Mobile were included in our Consolidated Statements of Income from January 1, 2014 through October 29, 2014, the date of divestiture.

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities divested (in millions):

Assets:
Cash and cash equivalents	$	160
Accounts receivable	1,103
Inventories	217
Prepaid expenses and other current assets	357
Prepaid expenses and other assets, non-current	290
Property and equipment, net	542
Intangible assets, net	985
Goodwill	43
Total assets	$	3,697
Liabilities:
Accounts payable	$	1,238
Accrued compensation and benefits	163
Accrued expenses and other current liabilities	10
Deferred revenue, current	165
Other long-term liabilities	250
Total liabilities	$	1,826

The following table presents financial results of the Motorola Home business included in net income (loss) from discontinued operations for the year ended December 31, 2013 (in millions):

	Year Ended December 31,
	2013(1)
Revenues	$	804
Loss from discontinued operations before income taxes	(67		)
Benefits from income taxes	16
Gain on disposal	757
Net income from discontinued operations	$	706

⁽¹⁾  The operating results of Motorola Home were included in our Consolidated Statements of Income from January 1, 2013 through April 17, 2013, the date of divestiture.

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities divested (in millions):

Assets:
Accounts receivable	$	424
Inventories	228
Deferred income taxes, net	144
Prepaid and other current assets	152
Property and equipment, net	282
Intangible assets, net	701
Other assets, non-current	182
Total assets	$	2,113
Liabilities:
Accounts payable	$	169
Accrued expenses and other liabilities	289
Total liabilities	$	458

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Other Income (Expense), Net (Tables)

12 Months Ended

Dec. 31, 2015

Other Income and Expenses [Abstract]

Schedule of other income (expense)

The components of other income (expense), net, were as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Interest income	$	766		$	746		$	999
Interest expense	(81		)	(101		)	(104		)
Gain (loss) on marketable securities, net	158			153			(208		)
Foreign currency exchange losses, net (1)	(379		)	(402		)	(422		)
Gain (loss) on non-marketable investments, net	8			237			(126		)
Loss on divestiture of businesses (2)	(57		)	0			0
Other	81			130			152
Other income (expense), net	$	496		$	763		$	291

⁽¹⁾  Our foreign currency exchange losses,net are related to the option premium costs and forward points for our foreign currency hedging contracts, our foreign exchange transaction gains and losses from the conversion of the transaction currency to the functional currency, offset by the foreign currency hedging contract losses and gains. The net foreign currency transaction losses were $121 million, $107 million, and $123 million in 2013, 2014, and 2015, respectively.

(2) Gain on divestiture of Motorola Home business was included in net income (loss) from discontinued operations for the year ended December 31, 2013. Gain on divestiture of Motorola Mobile business was included in net income (loss) from discontinued operations for the year ended December 31, 2014.

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Future minimum lease payments

As of December 31, 2015, future minimum payments under non-cancelable operating leases, net of sublease income amounts, were as follows over each of the next five years and thereafter (in millions):

	Operating Leases		Sub-lease Income		Net Operating Leases
2016	672		26		646
2017	794		13		781
2018	796		4		792
2019	769		3		766
2020	719		3		716
Thereafter	3,706		1		3,705
Total minimum payments	$	7,456	$	50	$	7,406

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Net Income Per Share (Tables)

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock and Class C capital stock (in millions, except share amounts which are reflected in thousands and per share amounts):

	Year Ended December 31,
	2013
	Class A			Class B			Class C
Basic net income (loss) per share:
Numerator
Allocation of undistributed earnings - continuing operations	$	5,407		$	1,173		$	6,580
Allocation of undistributed earnings - discontinued operations	(175		)	(38		)	(214		)
Total	$	5,232		$	1,135		$	6,366
Denominator
Number of shares used in per share computation	273,518			59,328			332,846
Basic net income (loss) per share:
Continuing operations	$	19.77		$	19.77		$	19.77
Discontinued operations	(0.64		)	(0.64		)	(0.64		)
Basic net income per share	$	19.13		$	19.13		$	19.13
Diluted net income (loss) per share:
Numerator
Allocation of undistributed earnings for basic computation - continuing operations	$	5,407		$	1,173		$	6,580
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,173			0			0
Reallocation of undistributed earnings	0			(21		)	0
Allocation of undistributed earnings - continuing operations	$	6,580		$	1,152		$	6,580
Allocation of undistributed earnings for basic computation - discontinued operations	(175		)	(38		)	(214		)
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	(38		)	0			0
Reallocation of undistributed earnings	(1		)	1			1
Allocation of undistributed earnings - discontinued operations	$	(214	)	$	(37	)	$	(213	)
Denominator
Number of shares used in basic computation	273,518			59,328			332,846
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	59,328			0			0
Employee stock options	2,748			4			2,748
Restricted stock units and other contingently issuable shares	3,215			0			3,215
Number of shares used in per share computation	338,809			59,332			338,809
Diluted net income (loss) per share:
Continuing operations	$	19.42		$	19.42		$	19.42
Discontinued operations	(0.63		)	(0.63		)	(0.63		)
Diluted net income per share	$	18.79		$	18.79		$	18.79

	Year Ended December 31,
	2014
	Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings - continuing operations	$	5,700		$	1,107		$	6,813
Allocation of undistributed earnings - discontinued operations	216			42			258
Total	$	5,916		$	1,149		$	7,071
Denominator
Number of shares used in per share computation	282,877			54,928			338,130
Basic net income per share:
Continuing operations	$	20.15		$	20.15		$	20.15
Discontinued operations	0.76			0.76			0.76
Basic net income per share	$	20.91		$	20.91		$	20.91
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation - continuing operations	$	5,700		$	1,107		$	6,813
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,107			0			0
Reallocation of undistributed earnings	(20		)	(18		)	20
Allocation of undistributed earnings - continuing operations	$	6,787		$	1,089		$	6,833
Allocation of undistributed earnings for basic computation - discontinued operations	216			42			258
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	42			0			0
Reallocation of undistributed earnings	(1		)	(1		)	1
Allocation of undistributed earnings - discontinued operations	$	257		$	41		$	259
Denominator
Number of shares used in basic computation	282,877			54,928			338,130
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	54,928			0			0
Employee stock options	2,057			0			2,038
Restricted stock units and other contingently issuable shares	2,515			0			4,525
Number of shares used in per share computation	342,377			54,928			344,693
Diluted net income per share:
Continuing operations	$	19.82		$	19.82		$	19.82
Discontinued operations	0.75			0.75			0.75
Diluted net income per share	$	20.57		$	20.57		$	20.57

	Year Ended December 31,
	2015
	Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	522
Allocation of undistributed earnings - continuing operations	6,695			1,196			7,935
Allocation of undistributed earnings - discontinued operations	0			0			0
Total	$	6,695		$	1,196		$	8,457
Denominator
Number of shares used in per share computation	289,640			51,745			343,241
Basic net income per share:
Continuing operations	$	23.11		$	23.11		$	24.63
Discontinued operations	0.00			0.00			0.00
Basic net income per share	$	23.11		$	23.11		$	24.63
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	522
Allocation of undistributed earnings for basic computation - continuing operations	$	6,695		$	1,196		$	7,935
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,196			0			0
Reallocation of undistributed earnings	(39		)	(14		)	39
Allocation of undistributed earnings - continuing operations	7,852			1,182			7,974
Allocation of undistributed earnings for basic computation - discontinued operations	0			0			0
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0			0			0
Reallocation of undistributed earnings	0			0			0
Allocation of undistributed earnings - discontinued operations	$	0		$	0		$	0
Denominator
Number of shares used in basic computation	289,640			51,745			343,241
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	51,745			0			0
Employee stock options	1,475			0			1,428
Restricted stock units and other contingently issuable shares	920			0			4,481
Number of shares used in per share computation	343,780			51,745			349,150
Diluted net income per share:
Continuing operations	$	22.84		$	22.84		$	24.34
Discontinued operations	0.00			0.00			0.00
Diluted net income per share	$	22.84		$	22.84		$	24.34

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Schedule of allocated share-based compensation expense

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

	Year Ended December 31,
	2013		2014		2015
Cost of revenues	$	469	$	535	$	806
Research and development	1,641		2,200		2,687
Sales and marketing	552		715		899
General and administrative	465		725		861
Discontinued operations	216		104		0
Total stock-based compensation expense	$	3,343	$	4,279	$	5,253

Schedule of stock option activity

The following table summarizes the activities for our options for the year ended December 31, 2015:

	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)(1)
Balance as of December 31, 2014	7,240,419		$	215.56
Granted	0		N/A
Exercised	(2,072,550	)	$	189.64
Forfeited/canceled	(268,886	)	$	310.47
Balance as of December 31, 2015	4,898,983		$	221.31	3.7	$	2,682
Exercisable as of December 31, 2015	4,462,847		$	212.02	3.4	$	2,484
Exercisable as of December 31, 2015 and expected to vest thereafter (2)	4,846,996		$	220.29	3.6	$	2,658

⁽¹⁾  The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock prices of $778.01 and $758.88 of our Class A common stock and Class C capital stock, respectively, on December 31, 2015.

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

Schedule of restricted stock activity

The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2015:

	Unvested Restricted Stock Units
	Number of     Shares		Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2014	24,619,549		$	487.80
Granted	14,415,740		$	546.46
Vested	(11,182,606	)	$	442.01
Forfeited/canceled	(2,111,497	)	$	481.37
Unvested as of December 31, 2015	25,741,186		$	531.74
Expected to vest after December 31, 2015 (1)	22,672,837		$	531.74

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

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of components of income tax expense (benefit)

The provision for income taxes consists of the following (in millions):

	Year Ended December 31,
	2013			2014			2015
Current:
Federal	$	2,394		$	2,716		$	3,235
State	127			157			(397		)
Foreign	711			774			723
Total	3,232			3,647			3,561
Deferred:
Federal	(421		)	29			(198		)
State	0			6			(43		)
Foreign	(72		)	(43		)	(17		)
Total	(493		)	(8		)	(258		)
Provision for income taxes	$	2,739		$	3,639		$	3,303

Schedule of effective income tax rate reconciliation

The reconciliation of federal statutory income tax rate to our effective income tax rate is as follows (in millions):

	Year Ended December 31,
	2013			2014			2015
Expected provision at federal statutory tax rate (35%)	$	5,567		$	6,041		$	6,878
State taxes, net of federal benefit	133			132			(291		)
Change in valuation allowance	(641		)	(164		)	(65		)
Foreign rate differential	(2,482		)	(2,109		)	(2,624		)
Federal research credit	(433		)	(318		)	(407		)
Basis difference in investment of Arris	644			0			0
Other adjustments	(49		)	57			(188		)
Provision for income taxes	$	2,739		$	3,639		$	3,303

Schedule of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities are as follows (in millions):

	As of December 31,
	2014			2015
Deferred tax assets:
Stock-based compensation expense	$	376		$	534
State taxes	133			119
Investment loss	133			144
Legal settlement accruals	175			101
Accrued employee benefits	671			832
Accruals and reserves not currently deductible	175			245
Net operating losses	207			230
Tax credits	262			503
Basis difference in investment of Arris	1,347			1,357
Prepaid cost sharing	0			3,468
Other	243			337
Total deferred tax assets	3,722			7,870
Valuation allowance	(1,659		)	(1,732		)
Total deferred tax assets net of valuation allowance	2,063			6,138
Deferred tax liabilities:
Depreciation and amortization	(852		)	(1,126		)
Identified intangibles	(965		)	(787		)
Mark-to-market investments	(273		)	(93		)
Renewable energy investments	(430		)	(529		)
Foreign earnings	0			(3,468		)
Other	(125		)	(73		)
Total deferred tax liabilities	(2,645		)	(6,076		)
Net deferred tax liabilities	$	(582	)	$	62

Summary of income tax contingencies

The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2013 to December 31, 2015 (in millions):

Balance as of January 1, 2013	$	1,907
Increases related to prior year tax positions	158
Decreases related to prior year tax positions	(37		)
Decreases related to settlement with tax authorities	(78		)
Increases related to current year tax positions	552
Balance as of December 31, 2013	2,502
Increases related to prior year tax positions	66
Decreases related to prior year tax positions	(44		)
Decreases related to settlement with tax authorities	(1		)
Increases related to current year tax positions	771
Balance as of December 31, 2014	3,294
Increases related to prior year tax positions	224
Decreases related to prior year tax positions	(176		)
Decreases related to settlement with tax authorities	(27		)
Increases related to current year tax positions	852
Balance as of December 31, 2015	$	4,167

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Information about Segments and Geographic Areas (Tables)

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Schedule of segment information by segment

Information about segments during the periods presented were as follows (in millions):

	Year Ended December 31,
	2013		2014		2015
Revenues:
Google	$	55,507	$	65,674	$	74,541
Other Bets	12		327		448
Total revenues	$	55,519	$	66,001	$	74,989

	Year Ended December 31,
	2013			2014			2015
Segment operating income (loss):
Google	$	16,260		$	19,011		$	23,425
Other Bets	(527		)	(1,942		)	(3,567		)
Reconciling items(1)	(330		)	(573		)	(498		)
Total income from operations	$	15,403		$	16,496		$	19,360

⁽¹⁾  Reconciling items are primarily related to corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

	Year Ended December 31,
	2013		2014			2015
Capital expenditures:
Google	$	7,006	$	11,173		$	8,849
Other Bets	187		501			869
Reconciling items(2)	165		(715		)	197
Total capital expenditures as presented in Consolidated Statements of Cash Flow	$	7,358	$	10,959		$	9,915

⁽²⁾  Reconciling items are primarily related to timing differences of payments as segment capital expenditures are on accrual basis while total capital expenditures shown on the Consolidated Statements of Cash Flow are on cash basis, capital expenditures of Motorola Mobile and Home, and other miscellaneous differences.

Stock-based compensation and depreciation, amortization and impairment are included in segment operating income (loss) as below (in millions):

	Year Ended December 31,
	2013		2014		2015
Stock-based compensation:
Google	$	2,911	$	3,677	$	4,587
Other Bets	124		347		498
Reconciling items(3)	92		151		118
Total stock based compensation, excluding discontinued operations(4)	$	3,127	$	4,175	$	5,203
Depreciation, amortization and impairment:
Google	$	3,668	$	4,778	$	4,839
Other Bets	24		148		203
Reconciling items(5)	247		53		21
Total depreciation, amortization and impairment as presented in Consolidated Statements of Cash Flow	$	3,939	$	4,979	$	5,063

⁽³⁾  Reconciling items represent corporate administrative costs that are not allocated to individual segments.

⁽⁴⁾  For purposes of segment reporting, we define SBC as awards accounted for under FASB ASC Topic 718 that we expect to settle in stock. SBC does not include expenses related to awards that we will ultimately settle in cash. Amounts exclude SBC from discontinued operations.

⁽⁵⁾  Reconciling items primarily represent depreciation, amortization and impairment related to Motorola Mobile and Motorola Home.

Revenue by geographic area

Revenues by geography are based on the billing addresses of our customers. The following tables set forth revenues and long-lived assets by geographic area (in millions):

	Year Ended December 31,
	2013		2014		2015
Revenues:
United States	$	25,587	$	29,482	$	34,810
United Kingdom	5,600		6,483		7,067
Rest of the world	24,332		30,036		33,112
Total revenues	$	55,519	$	66,001	$	74,989

Schedule of long-lived assets by geographic area

	As of December 31, 2014		As of December 31, 2015
Long-lived assets:
United States	$	37,421	$	43,686
International	13,110		13,661
Total long-lived assets	$	50,531	$	57,347

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Revision of Previously Issued Financial Statements (Tables)

12 Months Ended

Dec. 31, 2015

Accounting Changes and Error Corrections [Abstract]

Schedule prior period adjustments

The following table presents the impact of these corrections on affected Consolidated Balance Sheet line items as of December 31, 2014 (in millions):

	As of December 31, 2014
	As Previously Reported (1)		Adjustment			As Revised
Selected Balance Sheets Data:
Income tax receivable, net	$	1,298	$	(707	)	$	591
Total current assets	79,363		(707		)	78,656
Total assets	129,894		(707		)	129,187
Income taxes payable, non-current	3,407		(67		)	3,340
Retained earnings	75,706		(640		)	75,066
Total stockholders' equity	104,500		(640		)	103,860
Total liabilities and stockholders' equity	$	129,894	$	(707	)	$	129,187

⁽¹⁾    Includes reclassifications of deferred tax assets and liabilities related to ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” Refer to Note 1 for further information.

The following table presents the impact of these corrections on affected Consolidated Statements of Income line items, including net income per share amounts for Class A and B common stock and Class C capital stock, for the years ended December 31, 2013 and 2014 (in millions, except per share amounts):

	Year Ended December 31, 2013							Year Ended December 31, 2014
	As Previously Reported		Adjustment			As Revised		As Previously Reported		Adjustment			As Revised
Selected Statements of Income Data:
Provision for income taxes	$	2,552	$	187		$	2,739	$	3,331	$	308		$	3,639
Net income from continuing operations	13,347		(187		)	$	13,160	13,928		(308		)	$	13,620
Net income	12,920		(187		)	$	12,733	14,444		(308		)	$	14,136
Basic net income per share from continuing operations	$	20.05	$	(0.28	)	$	19.77	$	20.61	$	(0.46	)	$	20.15
Basic net income per share	19.41		(0.28		)	19.13		21.37		(0.46		)	20.91
Diluted net income per share from continuing operations	19.70		(0.28		)	19.42		20.27		(0.45		)	19.82
Diluted net income per share	$	19.07	$	(0.28	)	$	18.79	$	21.02	$	(0.45	)	$	20.57

The following table presents the impact of these corrections on affected Consolidated Statements of Comprehensive Income line items for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31, 2013				Year Ended December 31, 2014
	As Previously Reported	Adjustment		As Revised	As Previously Reported	Adjustment		As Revised
Selected Statements of Comprehensive Income Data:
Net income	12,920	(187	)	12,733	14,444	(308	)	14,136
Comprehensive income	12,507	(187	)	12,320	14,346	(308	)	14,038

The following table presents the impact of these corrections on affected Consolidated Statements of Cash Flows line items for the years ended December 31, 2013 and 2014 (in millions):

	Year Ended December 31, 2013						Year Ended December 31, 2014
	As Previously Reported		Adjustment			As Revised	As Previously Reported		Adjustment			As Revised
Selected Statements of Cash Flows Data:
Net income	$	12,920	$	(187	)	12,733	$	14,444	$	(308	)	$	14,136
Changes in income taxes, net	401		187			588	283		308			591

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Nature of Operations and Summary of Significant Accounting Policies (Revenue by Revenue Source) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue from External Customer [Line Items]
Revenues	$ 74,989	$ 66,001	$ 55,519
Google
Revenue from External Customer [Line Items]
Advertising revenues	67,390	59,624	51,072
Other revenues	7,151	6,050	4,435
Revenues	74,541	65,674	55,507
Google | Google websites
Revenue from External Customer [Line Items]
Advertising revenues	52,357	45,085	37,422
Google | Google Network Members' websites
Revenue from External Customer [Line Items]
Advertising revenues	15,033	14,539	13,650
Other Bets
Revenue from External Customer [Line Items]
Revenues	$ 448	$ 327	$ 12

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Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details)		12 Months Ended
	Apr. 02, 2014	Dec. 31, 2015 USD ($) customer	Dec. 31, 2014 USD ($) customer	Dec. 31, 2013 USD ($) customer	Mar. 31, 2015 USD ($)
Organization And Summary Of Significant Accounting Policies [Line Items]
Stock split ratio	2
Cash received from the exercise of stock options		$ 393,000,000	$ 465,000,000	$ 1,174,000,000
Total direct tax benefit realized, including the excess tax benefit from stock-based award activity		$ 1,544,000,000	$ 1,356,000,000	$ 1,195,000,000
Percentage of revenues generated from customers in the United States		46.00%	45.00%	46.00%
Impairment of goodwill		$ 0	$ 0	$ 0
Advertising and promotional expenses		3,186,000,000	3,004,000,000	$ 2,389,000,000
Deferred income taxes		251,000,000	176,000,000
Deferred income taxes		$ 189,000,000	$ 758,000,000
Minimum
Organization And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives		2 years
Acquired intangible assets, estimated useful lives		1 year
Maximum
Organization And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives		5 years
Acquired intangible assets, estimated useful lives		12 years
Building | Maximum
Organization And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives		25 years
Sales Revenue, Net
Organization And Summary Of Significant Accounting Policies [Line Items]
Number of customers | customer		0	0	0
Percent for concentration risk		10.00%
Patent Royalty Licensing Agreement
Organization And Summary Of Significant Accounting Policies [Line Items]
Impairment of intangible asset			$ 378,000,000
Adjustment
Organization And Summary Of Significant Accounting Policies [Line Items]
Cumulative adjustment to income tax expense (benefit)					$ 711,000,000
New Accounting Pronouncement, Early Adoption, Effect
Organization And Summary Of Significant Accounting Policies [Line Items]
Reclassification of deferred tax assets, current			1,322,000,000
Deferred income taxes			83,000,000
Reclassification of deferred tax liabilities, current			26,000,000
Deferred income taxes			$ 1,213,000,000

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Nature of Operations and Summary of Significant Accounting Policies (Adjustments for New Accounting Pronouncement) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Excess tax benefits from stock-based award activities	$ 0	$ 0	$ 0
Net cash provided by operating activities	26,572	23,024	19,140
Excess tax benefits from stock-based award activities	0	0	0
Net cash used in financing activities	(4,225)	(2,087)	(1,338)
As Previously Reported
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Excess tax benefits from stock-based award activities	(548)	(648)	(481)
Net cash provided by operating activities	26,024	22,376	18,659
Excess tax benefits from stock-based award activities	548	648	481
Net cash used in financing activities	(3,677)	(1,439)	(857)
Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Excess tax benefits from stock-based award activities	548	648	481
Net cash provided by operating activities	548	648	481
Excess tax benefits from stock-based award activities	(548)	(648)	(481)
Net cash used in financing activities	$ (548)	$ (648)	$ (481)

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Financial Instruments (Cash, Cash Equivalents and Marketable Securities Measured at Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses, and Fair Value By Significant Investment Category) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	$ 73,141	$ 63,935
Gross Unrealized Gains	346	752
Gross Unrealized Losses	(421)	(292)
Fair Value	73,066	64,395
Cash and Cash Equivalents	16,549	18,347	$ 18,898	$ 14,778
Marketable Securities	56,517	46,048
Cash
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	7,380	9,863
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	7,380	9,863
Cash and Cash Equivalents	7,380	9,863
Marketable Securities	0	0
Level 1
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	27,237	18,840
Gross Unrealized Gains	182	465
Gross Unrealized Losses	(48)	(68)
Fair Value	27,371	19,237
Cash and Cash Equivalents	5,881	3,660
Marketable Securities	21,490	15,577
Level 1 | Money market and other funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	5,623	2,532
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	5,623	2,532
Cash and Cash Equivalents	5,623	2,532
Marketable Securities	0	0
Level 1 | U.S. government notes
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	20,922	15,320
Gross Unrealized Gains	27	37
Gross Unrealized Losses	(48)	(4)
Fair Value	20,901	15,353
Cash and Cash Equivalents	258	1,128
Marketable Securities	20,643	14,225
Level 1 | Marketable equity securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	692	988
Gross Unrealized Gains	155	428
Gross Unrealized Losses	0	(64)
Fair Value	847	1,352
Cash and Cash Equivalents	0	0
Marketable Securities	847	1,352
Level 2
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	38,524	35,232
Gross Unrealized Gains	164	287
Gross Unrealized Losses	(373)	(224)
Fair Value	38,315	35,295
Cash and Cash Equivalents	3,288	4,824
Marketable Securities	35,027	30,471
Level 2 | Money market and other funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	1,140	1,762
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	1,140	1,762
Cash and Cash Equivalents	1,140	1,762
Marketable Securities	0	0
Level 2 | Fixed-income bond funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	219	385
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	(38)
Fair Value	219	347
Cash and Cash Equivalents	0	0
Marketable Securities	219	347
Level 2 | Time deposits
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	3,223	2,409
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	3,223	2,409
Cash and Cash Equivalents	2,012	2,309
Marketable Securities	1,211	100
Level 2 | U.S. government agencies
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	1,367	2,327
Gross Unrealized Gains	2	8
Gross Unrealized Losses	(3)	(1)
Fair Value	1,366	2,334
Cash and Cash Equivalents	0	750
Marketable Securities	1,366	1,584
Level 2 | Foreign government bonds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	2,242	1,828
Gross Unrealized Gains	14	22
Gross Unrealized Losses	(23)	(10)
Fair Value	2,233	1,840
Cash and Cash Equivalents	0	0
Marketable Securities	2,233	1,840
Level 2 | Municipal securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	3,812	3,370
Gross Unrealized Gains	47	33
Gross Unrealized Losses	(4)	(6)
Fair Value	3,855	3,397
Cash and Cash Equivalents	0	3
Marketable Securities	3,855	3,394
Level 2 | Corporate debt securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	13,809	11,499
Gross Unrealized Gains	53	114
Gross Unrealized Losses	(278)	(122)
Fair Value	13,584	11,491
Cash and Cash Equivalents	136	0
Marketable Securities	13,448	11,491
Level 2 | Agency mortgage-backed securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	9,680	8,196
Gross Unrealized Gains	48	109
Gross Unrealized Losses	(57)	(42)
Fair Value	9,671	8,263
Cash and Cash Equivalents	0	0
Marketable Securities	9,671	8,263
Level 2 | Asset-backed securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	3,032	3,456
Gross Unrealized Gains	0	1
Gross Unrealized Losses	(8)	(5)
Fair Value	3,024	3,452
Cash and Cash Equivalents	0	0
Marketable Securities	$ 3,024	$ 3,452

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Financial Instruments (Contractual Maturity Date of Marketable Debt Securities) (Details) $ in Millions	Dec. 31, 2015 USD ($)
Available-for-sale Securities, Debt Maturities, Single Maturity Date [Abstract]
Due in 1 year	$ 7,900
Due in 1 year through 5 years	30,141
Due in 5 years through 10 years	7,199
Due after 10 years	10,211
Total	$ 55,451

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Financial Instruments (Gross Unrealized Losses and Fair Values for Investments in Unrealized Loss Position) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	$ 34,105	$ 16,337
Less than 12 months, unrealized loss	(315)	(234)
12 months or greater, fair value	1,968	2,784
12 months or greater, unrealized loss	(106)	(58)
Fair Value	36,073	19,121
Unrealized Loss	(421)	(292)
U.S. government notes
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	13,757	4,490
Less than 12 months, unrealized loss	(48)	(4)
12 months or greater, fair value	0	0
12 months or greater, unrealized loss	0	0
Fair Value	13,757	4,490
Unrealized Loss	(48)	(4)
U.S. government agencies
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	864	830
Less than 12 months, unrealized loss	(3)	(1)
12 months or greater, fair value	0	0
12 months or greater, unrealized loss	0	0
Fair Value	864	830
Unrealized Loss	(3)	(1)
Foreign government bonds
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	885	255
Less than 12 months, unrealized loss	(18)	(7)
12 months or greater, fair value	36	43
12 months or greater, unrealized loss	(5)	(3)
Fair Value	921	298
Unrealized Loss	(23)	(10)
Municipal securities
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	1,116	877
Less than 12 months, unrealized loss	(3)	(3)
12 months or greater, fair value	41	174
12 months or greater, unrealized loss	(1)	(3)
Fair Value	1,157	1,051
Unrealized Loss	(4)	(6)
Corporate debt securities
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	9,192	5,851
Less than 12 months, unrealized loss	(202)	(112)
12 months or greater, fair value	784	225
12 months or greater, unrealized loss	(76)	(10)
Fair Value	9,976	6,076
Unrealized Loss	(278)	(122)
Agency mortgage-backed securities
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	5,783	609
Less than 12 months, unrealized loss	(34)	(1)
12 months or greater, fair value	721	2,168
12 months or greater, unrealized loss	(23)	(41)
Fair Value	6,504	2,777
Unrealized Loss	(57)	(42)
Asset-backed securities
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	2,508	2,388
Less than 12 months, unrealized loss	(7)	(4)
12 months or greater, fair value	386	174
12 months or greater, unrealized loss	(1)	(1)
Fair Value	2,894	2,562
Unrealized Loss	$ (8)	(5)
Fixed-income bond funds
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value		347
Less than 12 months, unrealized loss		(38)
12 months or greater, fair value		0
12 months or greater, unrealized loss		0
Fair Value		347
Unrealized Loss		(38)
Marketable equity securities
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value		690
Less than 12 months, unrealized loss		(64)
12 months or greater, fair value		0
12 months or greater, unrealized loss		0
Fair Value		690
Unrealized Loss		$ (64)

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Financial Instruments (Securities Lending Program) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Assets Sold under Agreements to Repurchase [Line Items]
Total	$ 2,428
Gross amount of recognized liabilities for securities lending in offsetting disclosure	2,428	$ 2,778
Amounts related to agreements not included in securities lending in offsetting disclosure	0
Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	2,014
Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	108
30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0
Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	306
U.S. government notes
Assets Sold under Agreements to Repurchase [Line Items]
Total	1,659
U.S. government notes | Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	1,322
U.S. government notes | Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	31
U.S. government notes | 30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0
U.S. government notes | Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	306
U.S. government agencies
Assets Sold under Agreements to Repurchase [Line Items]
Total	581
U.S. government agencies | Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	504
U.S. government agencies | Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	77
U.S. government agencies | 30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0
U.S. government agencies | Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0
Corporate debt securities
Assets Sold under Agreements to Repurchase [Line Items]
Total	188
Corporate debt securities | Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	188
Corporate debt securities | Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0
Corporate debt securities | 30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0
Corporate debt securities | Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	$ 0

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Financial Instruments (Fair Values of Outstanding Derivative Instruments) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Derivative Assets:
Derivative assets	$ 628	$ 852
Derivative Liabilities:
Derivative liabilities	16	4
Level 2
Derivative Assets:
Derivative assets	628	852
Derivative Liabilities:
Derivative liabilities	16	4
Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative assets	628	851
Level 2 | Foreign exchange contracts | Accrued expenses and other current liabilities
Derivative Liabilities:
Derivative liabilities	14	3
Level 2 | Interest rate contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative assets		1
Level 2 | Interest rate contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative liabilities	2	1
Fair Value of Derivatives Designated as Hedging Instruments | Level 2
Derivative Assets:
Derivative assets	626	852
Derivative Liabilities:
Derivative liabilities	3	1
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative assets	626	851
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Accrued expenses and other current liabilities
Derivative Liabilities:
Derivative liabilities	1	0
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Interest rate contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative assets		1
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Interest rate contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative liabilities	2	1
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2
Derivative Assets:
Derivative assets	2	0
Derivative Liabilities:
Derivative liabilities	13	3
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative assets	2	0
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Accrued expenses and other current liabilities
Derivative Liabilities:
Derivative liabilities	13	3
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Interest rate contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative assets		0
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Interest rate contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative liabilities	$ 0	$ 0

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Financial Instruments (Effect of Derivative Instruments on Income and Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)	$ 964	$ 898	$ 178
Gains Reclassified from AOCI into Income (Effective Portion)	1,404	175	95
Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing and Ineffective Portion)	(297)	(275)	(280)
Fair Value of Derivatives Not Designated as Hedging Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives	199	239	122
Fair Value of Derivatives Not Designated as Hedging Instruments | Foreign exchange contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives	198	237	118
Fair Value of Derivatives Not Designated as Hedging Instruments | Interest rate contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives	1	2	4
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)	964	929	92
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Revenues
Derivative Instruments, Gain (Loss) [Line Items]
Gains Reclassified from AOCI into Income (Effective Portion)	1,399	171	95
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing and Ineffective Portion)	(297)	(279)	(280)
Derivatives in Cash Flow Hedging Relationship | Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)	0	(31)	86
Derivatives in Cash Flow Hedging Relationship | Interest rate contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains Reclassified from AOCI into Income (Effective Portion)	5	4	0
Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing and Ineffective Portion)	0	4	0
Derivatives in Fair Value Hedging Relationship | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Losses related to the amount excluded from effectiveness testing of the hedges	6	8	9
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total	(6)	(8)	(9)
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts	170	115	16
Hedged item	(176)	(123)	(25)
Derivatives in Fair Value Hedging Relationship | Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total	0	0	0
Derivatives in Fair Value Hedging Relationship | Interest rate contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Interest rate contracts	(2)	0	0
Hedged item	$ 2	$ 0	$ 0

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Financial Instruments (Offsetting of Financial Assets and Financial Liabilities) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Derivative Assets [Abstract]
Gross Amounts of Recognized Assets	$ 628	$ 852
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	628	852
Financial Instruments	(13)	(1)
Cash Collateral Received	(189)	(251)
Non-Cash Collateral Received	(214)	(412)
Net Assets Exposed	212	188
Offsetting Securities Purchased under Agreements to Resell and Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	1,590	2,637
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	1,590	2,637
Financial Instruments	0	0
Cash Collateral Received	0	0
Non-Cash Collateral Received	(1,590)	(2,637)
Net Assets Exposed	0	0
Offsetting Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	2,218	3,489
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2,218	3,489
Financial Instruments	(13)	(1)
Cash Collateral Received	(189)	(251)
Non-Cash Collateral Received	(1,804)	(3,049)
Net Assets Exposed	212	188
Offsetting Derivative Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	16	4
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	16	4
Financial Instruments	(13)	(1)
Cash Collateral Pledged	(3)	0
Non-Cash Collateral Pledged	0	0
Net Liabilities	0	3
Offsetting Securities Loaned [Abstract]
Gross Amounts of Recognized Liabilities	2,428	2,778
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2,428	2,778
Financial Instruments	0	0
Cash Collateral Pledged	0	0
Non-Cash Collateral Pledged	(2,401)	(2,740)
Net Liabilities	27	38
Offsetting Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned [Abstract]
Gross Amounts of Recognized Liabilities	2,444	2,782
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2,444	2,782
Financial Instruments	(13)	(1)
Cash Collateral Pledged	(3)	0
Non-Cash Collateral Pledged	(2,401)	(2,740)
Net Liabilities	27	41
Cash and cash equivalents
Offsetting Securities Purchased under Agreements to Resell and Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	1,140	1,762
Receivable under reverse repurchase agreements
Offsetting Securities Purchased under Agreements to Resell and Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	$ 450	$ 875

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Financial Instruments (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Feb. 28, 2014	Dec. 31, 2012
Financial Instruments and Fair Value [Line Items]
Gross realized gains on the sale of our marketable securities	$ 357	$ 238	$ 416
Gross realized losses on the sale of our marketable securities	565	85	258
OTTI on securities	281	0	$ 0
Cash collateral received from derivative financial instruments	192	268
Forward-starting interest swaps, anticipated debt issuance amount				$ 1,000
Effective portion of our cash flow hedges before tax effect	375
Foreign currency gain (loss) to be reclassified during next 12 months	293
Foreign exchange contracts | Fair Value of Derivatives Not Designated as Hedging Instruments
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	7,500	6,200
Interest rate swap | Fair Value of Derivatives Not Designated as Hedging Instruments
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative					$ 1,000
Interest rate contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	50	150
Cash Flow Hedging Relationship | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	$ 16,400	13,600
Foreign exchange option contracts, maximum maturities	36 months
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	$ 1,800	1,500
Derivatives in Fair Value Hedging Relationship | Interest rate contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	$ 295	$ 175

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Non-Marketable Investments (Non-Marketable Debt Securities) (Details) - Level 3 - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2015	Dec. 31, 2015
Other Investments Not Readily Marketable [Roll Forward]
Balance as of December 31, 2014	$ 90	$ 90
Purchases, issuances, and settlements		934
Balance as of December 31, 2015		$ 1,024
SpaceX
Other Investments Not Readily Marketable [Roll Forward]
Purchases, issuances, and settlements	$ 900

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Non-Marketable Investments (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Investments, All Other Investments [Abstract]
Equity method investments	$ 1,600	$ 1,300
Cost method investments	2,600	1,800
Fair value of cost method investments	7,500
Loss on equity method investments	227
VIE, Not Primary Beneficiary, Aggregated Disclosure
Variable Interest Entity [Line Items]
Net assets of VIE	1,300	1,000
Maximum loss exposure	1,300	$ 1,100
Google Inc. | VIE, Not Primary Beneficiary, Aggregated Disclosure
Variable Interest Entity [Line Items]
Net assets of VIE	302
Maximum loss exposure	$ 316

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Debt (Long-Term Debt) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Short-Term Portion of Long-Term Debt
Capital Lease Obligation	$ 225	$ 10
Total Short-Term Portion of Long-Term Debt	1,225	10
Long-Term Debt
Unamortized discount for the Notes above	(5)	(8)
Subtotal	1,995	2,992
Capital Lease Obligation	0	236
Total Long-Term Debt	1,995	3,228
2.125% Notes due on May 19, 2016
Short-Term Portion of Long-Term Debt
Short-term Portion of Notes	1,000	0
Long-Term Debt
Long-Term Debt, gross	$ 0	$ 1,000
Long-term debt, stated interest rate	2.125%	2.125%
3.625% Notes due on May 19, 2021
Long-Term Debt
Long-Term Debt, gross	$ 1,000	$ 1,000
Long-term debt, stated interest rate	3.625%	3.625%
3.375% Notes due on February 25, 2024
Long-Term Debt
Long-Term Debt, gross	$ 1,000	$ 1,000
Long-term debt, stated interest rate	3.375%	3.375%

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Debt (Future Principal Payments for Borrowings) (Details) $ in Millions	Dec. 31, 2015 USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]
2016	$ 1,225
2017	0
2018	0
2019	0
Thereafter	2,000
Total	$ 3,225

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Debt (Narrative) (Details)	Jan. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Feb. 28, 2014 USD ($)	May. 31, 2011 USD ($) Tranche
Debt Instrument [Line Items]
Outstanding commercial paper		$ 2,000,000,000	$ 2,000,000,000
Estimated fair value of long-term debt		$ 3,100,000,000	$ 3,100,000,000
2.125% Notes due on May 19, 2016
Debt Instrument [Line Items]
Effective interest rate		2.241%
3.625% Notes due on May 19, 2021
Debt Instrument [Line Items]
Effective interest rate		3.734%
3.375% Notes due on February 25, 2024
Debt Instrument [Line Items]
Effective interest rate		3.377%
Unsecured debt
Debt Instrument [Line Items]
Debt instrument issued				$ 1,000,000,000.0	$ 3,000,000,000.0
Number of unsecured senior notes tranches | Tranche					3
Commercial Paper
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit		$ 3,000,000,000.0
Weighted average yield for commercial paper outstanding		0.20%	0.10%
Commercial Paper | Subsequent Event
Debt Instrument [Line Items]
Board authorized debt limit	$ 5,000,000,000.0
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit		$ 3,000,000,000.0
Line of credit drawn		$ 0	$ 0
Revolving Credit Facility | Subsequent Event
Debt Instrument [Line Items]
Board authorized debt limit	$ 4,000,000,000.0

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Balance Sheet Components (Property and Equipment) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 40,146	$ 32,746
Less: accumulated depreciation and amortization	(11,130)	(8,863)
Property and equipment, net	29,016	23,883
Construction in progress
Property, Plant and Equipment, Net [Abstract]
Cost basis of property and equipment under capital lease	258
Land and buildings
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	16,518	13,326
Information technology assets
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	13,645	10,918
Construction in progress
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	7,324	6,555
Furniture and fixtures
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	2,576	1,868
Furniture and fixtures
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 83	$ 79

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Balance Sheet Components (Notes Receivable) (Details) - Motorola Mobile - USD ($)	Oct. 29, 2014	Dec. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Effective yield on note	4.50%
Principal of the Note Receivable		$ 1,448,000,000	$ 1,500,000,000
Less: unamortized discount for the Note Receivable		(112,000,000)	(175,000,000)
Total		1,336,000,000	1,325,000,000
Allowance on note receivable		$ 0	$ 0
Sale of Motorola Home and Motorola Mobile
Accounts, Notes, Loans and Financing Receivable [Line Items]
Promissory note received in connection with divestiture, term	3 years
Principal of the Note Receivable	$ 1,500,000,000

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Balance Sheet Components (Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 103,860	$ 86,977	$ 71,570
Other comprehensive income (loss) before reclassifications	(1,106)	160	(191)
Amounts reclassified from AOCI	(795)	(258)	(222)
Other comprehensive income (loss)	(1,901)	(98)	(413)
Ending Balance	120,331	103,860	86,977
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(980)	16	(73)
Other comprehensive income (loss) before reclassifications	(1,067)	(996)	89
Amounts reclassified from AOCI	0	0	0
Other comprehensive income (loss)	(1,067)	(996)	89
Ending Balance	(2,047)	(980)	16
Unrealized Gains (Losses) on Available-for-Sale Investments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	421	50	604
Other comprehensive income (loss) before reclassifications	(715)	505	(392)
Amounts reclassified from AOCI	208	(134)	(162)
Other comprehensive income (loss)	(507)	371	(554)
Ending Balance	(86)	421	50
Unrealized Gains on Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	586	59	7
Other comprehensive income (loss) before reclassifications	676	651	112
Amounts reclassified from AOCI	(1,003)	(124)	(60)
Other comprehensive income (loss)	(327)	527	52
Ending Balance	259	586	59
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	27	125	538
Ending Balance	$ (1,874)	$ 27	$ 125

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Balance Sheet Components (Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	$ 291	$ 763	$ 496
Net Income (loss) from discontinued operations	0	516	(427)
Revenue	74,989	66,001	55,519
Net of tax	(3,303)	(3,639)	(2,739)
Reclassification out of AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	795	258	222
Reclassification out of AOCI | Unrealized gains (losses) on available-for-sale investments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	(208)	153	158
Net Income (loss) from discontinued operations	0	0	43
Net of tax	0	(19)	(39)
Net income	(208)	134	162
Reclassification out of AOCI | Foreign exchange contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	1,003	124	60
Reclassification out of AOCI | Foreign exchange contracts | Foreign exchange contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Revenue	1,399	171	95
Reclassification out of AOCI | Foreign exchange contracts | Interest rate contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	5	4	0
Net of tax	$ (401)	$ (51)	$ (35)

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Acquisitions (Narrative) (Details) - USD ($) shares in Thousands, $ in Millions	1 Months Ended				12 Months Ended
	Dec. 31, 2015	Aug. 31, 2014	Jul. 31, 2014	Feb. 28, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Business Acquisition [Line Items]
Goodwill	$ 15,869				$ 15,869	$ 15,599	$ 11,492
bebop Technologies
Business Acquisition [Line Items]
Total acquisition price	272
Total cash consideration	1
Total stock consideration	271
Cash acquired	28				28
Acquired intangible assets	59				59
Goodwill	206				206
Liabilities assumed	$ (21)				(21)
bebop Technologies | Class C Capital Stock
Business Acquisition [Line Items]
Total shares issued (in shares)	514
Series of individually immaterial business acquisitions
Business Acquisition [Line Items]
Total acquisition price					263	1,466
Cash acquired	$ 4				4	65
Acquired intangible assets	88				88	405
Goodwill	138				138	1,045
Liabilities assumed						(49)
Assets assumed	33				33
Amount of goodwill expected to be deductible for tax purposes	$ 20				$ 20	55
Fair value of equity in acquiree						$ 33
Series of individually immaterial business acquisitions | Patents and developed technology
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life					4 years 1 month	5 years 1 month
Series of individually immaterial business acquisitions | Customer relationships
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life					4 years	4 years 6 months
Series of individually immaterial business acquisitions | Trade names and other
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life					6 years 9 months 15 days	6 years 11 months
Nest Labs
Business Acquisition [Line Items]
Total acquisition price				$ 2,600
Cash acquired				51
Acquired intangible assets				430
Goodwill				2,300
Liabilities assumed				$ (84)
Percentage of ownership before acquisition				12.00%
Fair value of equity in acquiree				$ 152
Gain on equity interest						$ 103
Dropcam Inc.
Business Acquisition [Line Items]
Total cash consideration			$ 517
Cash acquired			11
Acquired intangible assets			55
Goodwill			452
Liabilities assumed			$ (1)
Skybox Imaging
Business Acquisition [Line Items]
Total cash consideration		$ 478
Cash acquired		6
Acquired intangible assets		69
Goodwill		388
Assets assumed		$ 15

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Collaboration Agreement (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($)
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Payments to acquire interest in joint venture	$ 240
Research and Development Arrangement
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research commitments	490
Research and Development Arrangement | AbbVie Inc
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Accumulated payments for interest in subsidiary	750
Research and Development Arrangement | Calico
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Payments to acquire interest in joint venture	250
Research commitments	$ 500

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Goodwill and Other Intangible Assets (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Goodwill [Roll Forward]
Goodwill, Beginning of Period		$ 15,599	$ 11,492
Acquisitions	$ 205	139	4,208
Dispositions			(43)
Foreign currency translation and other adjustments	(3)	(71)	(58)
Allocation in the fourth quarter of 2015	0
Goodwill, End of Period	15,869		15,599
Google
Goodwill [Roll Forward]
Goodwill, Beginning of Period		15,599	11,492
Acquisitions	201	139	4,208
Dispositions			(43)
Foreign currency translation and other adjustments	4	(71)	(58)
Allocation in the fourth quarter of 2015	(416)
Goodwill, End of Period	15,456		15,599
Other Bets
Goodwill [Roll Forward]
Goodwill, Beginning of Period		0	0
Acquisitions	4	0	0
Dispositions			0
Foreign currency translation and other adjustments	(7)	$ 0	0
Allocation in the fourth quarter of 2015	416
Goodwill, End of Period	$ 413		$ 0

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Goodwill and Other Intangible Assets (Acquisition-Related Intangible Assets that are being Amortized) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 8,730	$ 8,653
Accumulated Amortization	4,883	4,046
Net Carrying Amount	3,847	4,607
Patents and developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	6,592	6,547
Accumulated Amortization	3,213	2,513
Net Carrying Amount	3,379	4,034
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,343	1,410
Accumulated Amortization	1,201	1,168
Net Carrying Amount	142	242
Trade names and other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	795	696
Accumulated Amortization	469	365
Net Carrying Amount	$ 326	$ 331

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Goodwill and Other Intangible Assets (Expected Amortization Expense for Acquisition-Related Intangible Assets) (Details) $ in Millions	Dec. 31, 2015 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2016	$ 806
2017	724
2018	637
2019	528
2020	434
Thereafter	718
Total	$ 3,847

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Patents and developed technology
Finite-Lived Intangible Assets [Line Items]
Weighted-average useful life	7 years 9 months 15 days
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted-average useful life	6 years
Trade names and other
Finite-Lived Intangible Assets [Line Items]
Weighted-average useful life	5 years 4 months 24 days
Acquisition-related intangible assets
Finite-Lived Intangible Assets [Line Items]
Amortization expense of acquisition-related intangible assets	$ 892	$ 1,079	$ 1,011
Patent Royalty Licensing Agreement
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible asset		$ 378

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Discontinued Operations (Revenues and Earnings Attributable to Divestiture) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Net (loss) income from discontinued operations	$ 0	$ 516	$ (427)
Sale of Motorola Home and Motorola Mobile | Motorola Mobile
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Revenues		5,486	4,306
Loss from discontinued operations before income taxes		(177)	(1,403)
Benefits from/(Provision for) income taxes		(47)	270
Gain on disposal		740	0
Net (loss) income from discontinued operations		$ 516	(1,133)
Sale of Motorola Home and Motorola Mobile | Motorola Home
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Revenues			804
Loss from discontinued operations before income taxes			(67)
Benefits from/(Provision for) income taxes			16
Gain on disposal			757
Net (loss) income from discontinued operations			$ 706

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Discontinued Operations (Major Classes of Assets and Liabilities Divested) (Details) - Sale of Motorola Home and Motorola Mobile - USD ($) $ in Millions	Oct. 29, 2014	Apr. 17, 2013
Motorola Mobile
Assets:
Cash and cash equivalents	$ 160
Accounts receivable	1,103
Inventories	217
Prepaid expenses and other current assets	357
Prepaid expenses and other assets, non-current	290
Property and equipment, net	542
Intangible assets, net	985
Goodwill	43
Total assets	3,697
Liabilities:
Accounts payable	1,238
Accrued compensation and benefits	163
Accrued expenses and other current liabilities	10
Deferred revenue, current	165
Other long-term liabilities	250
Total liabilities	$ 1,826
Motorola Home
Assets:
Accounts receivable		$ 424
Inventories		228
Deferred income taxes, net		144
Prepaid expenses and other current assets		152
Property and equipment, net		282
Intangible assets, net		701
Other assets, non-current		182
Total assets		2,113
Liabilities:
Accounts payable		169
Accrued expenses and other current liabilities		289
Total liabilities		$ 458

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Discontinued Operations (Narrative) (Details) - USD ($) shares in Millions, $ in Millions			3 Months Ended	12 Months Ended
	Oct. 29, 2014	Apr. 17, 2013	Sep. 30, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of business				$ 0	$ 386	$ 2,525
Motorola Mobile
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Principal of the Note Receivable				$ 1,448	1,500
Sale of Motorola Home and Motorola Mobile | Motorola Mobile
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Aggregate consideration received in connection with divestiture	$ 2,900
Consideration received in connection with divestiture at transaction close date	1,400
Cash received per the purchase and sale agreement	660
Value of shares received in divestiture	$ 750
Number of shares of common stock received as part of sale consideration (in shares)	519.1
Principal of the Note Receivable	$ 1,500
Promissory note received in connection with divestiture, term	3 years
Liability from divestiture	$ 1,826
Gain on disposal					740	0
Net income from IP licensing arrangement					$ 254
Sale of Motorola Home and Motorola Mobile | Motorola Mobile | Indemnification Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Liability from divestiture	$ 130
Sale of Motorola Home and Motorola Mobile | Motorola Home
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Aggregate consideration received in connection with divestiture		$ 2,412
Value of shares received in divestiture			$ 175
Number of shares of common stock received as part of sale consideration (in shares)			10.6
Liability from divestiture		458
Gain on disposal						$ 757
Proceeds from divestiture of business		$ 2,238
Proceeds from previous divestiture			$ 174
Sale of Motorola Home and Motorola Mobile | Motorola Home | Arris
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Investment ownership percentage		7.80%
Sale of Motorola Home and Motorola Mobile | Motorola Home | Indemnification Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Liability from divestiture		$ 175

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Other Income (Expense), Net (Components of Interest and Other Income, Net) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Other Income and Expenses [Abstract]
Interest income	$ 999	$ 746	$ 766
Interest expense	(104)	(101)	(81)
Gain (loss) on marketable securities, net	(208)	153	158
Foreign currency exchange losses, net	(422)	(402)	(379)
Gain (loss) on non-marketable investments, net	(126)	237	8
Loss on divestiture of businesses	0	0	(57)
Other	152	130	81
Other	291	763	496
Foreign currency loss net of recognized foreign exchange contracts	$ 123	$ 107	$ 121

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Commitments and Contingencies (Future Minimum Payments Under Non-Cancelable Operating Leases, Along with Sublease Income Amounts) (Details) $ in Millions	Dec. 31, 2015 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2016	$ 672
2017	794
2018	796
2019	769
2020	719
Thereafter	3,706
Total minimum payments	7,456
Operating Leases, Future Minimum Payments Receivable [Abstract]
2016	26
2017	13
2018	4
2019	3
2020	3
Thereafter	1
Total minimum payments	50
Operating Leases, Future Minimum Payments Due, Net, Fiscal Year Maturity [Abstract]
2016	646
2017	781
2018	792
2019	766
2020	716
Thereafter	3,705
Total minimum payments	$ 7,406

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Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Line Items]
Non-cancelable future minimum lease payments	$ 678
Rent expense under operating leases, including co-location arrangements	734	$ 570	$ 465
Other non-cancelable contractual obligations	1,700
Unused letters of credit	752
Property, Plant and Equipment | Construction in progress
Commitments and Contingencies Disclosure [Line Items]
Leases recorded on the balance sheet during the period	422
Other Noncurrent Liabilities
Commitments and Contingencies Disclosure [Line Items]
Leases recorded as non-current liabilities on the balance sheet during the period	$ 422

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Net Income Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$ (522)	$ 0	$ 0
Allocation of undistributed earnings - continuing operations	16,348	13,620	13,160
Allocation of undistributed earnings - discontinued operations	0	516	(427)
Net income available to all stockholders	15,826	$ 14,136	$ 12,733
Denominator
Continuing operations (in USD per share)		$ 20.15	$ 19.77
Net income (loss) per share - basic (in USD per share)		$ 20.91	$ 19.13
Numerator
Adjustment Payment to Class C capital stockholders	(522)	$ 0	$ 0
Allocation of undistributed earnings - continuing operations	16,348	13,620	13,160
Allocation of undistributed earnings - discontinued operations	0	$ 516	$ (427)
Weighted-average effect of dilutive securities
Continuing operations (in USD per share)		$ 19.82	$ 19.42
Net income (loss) per share - diluted (in USD per share)		$ 20.57	$ 18.79
Class A Common Stock
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	0
Allocation of undistributed earnings - continuing operations	6,695	$ 5,700	$ 5,407
Allocation of undistributed earnings - discontinued operations	0	216	(175)
Net income available to all stockholders	$ 6,695	$ 5,916	$ 5,232
Denominator
Number of shares used in basic computation (in shares)	289,640	282,877	273,518
Continuing operations (in USD per share)	$ 23.11	$ 20.15	$ 19.77
Discontinued operations (in USD per share)	0.00	0.76	(0.64)
Net income (loss) per share - basic (in USD per share)	$ 23.11	$ 20.91	$ 19.13
Numerator
Adjustment Payment to Class C capital stockholders	$ 0
Allocation of undistributed earnings - continuing operations	6,695	$ 5,700	$ 5,407
Allocation of undistributed earnings - discontinued operations	$ 0	$ 216	$ (175)
Denominator
Number of shares used in basic computation (in shares)	289,640	282,877	273,518
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (in shares)	51,745	54,928	59,328
Employee stock options (in shares)	1,475	2,057	2,748
Restricted stock units and other contingently issuable shares (in shares)	920	2,515	3,215
Number of shares used in per share computation (in shares)	343,780	342,377	338,809
Continuing operations (in USD per share)	$ 22.84	$ 19.82	$ 19.42
Discontinued operations (in USD per share)	0.00	0.75	(0.63)
Net income (loss) per share - diluted (in USD per share)	$ 22.84	$ 20.57	$ 18.79
Class A Common Stock | Continuing operations
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$ 0
Allocation of undistributed earnings - continuing operations	6,695	$ 5,700	$ 5,407
Numerator
Adjustment Payment to Class C capital stockholders	0
Allocation of undistributed earnings - continuing operations	6,695	5,700	5,407
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,196	1,107	1,173
Reallocation of undistributed earnings	(39)	(20)	0
Allocation of undistributed earnings	7,852	6,787	6,580
Class A Common Stock | Discontinued operations
Numerator
Allocation of undistributed earnings - discontinued operations	0	216	(175)
Numerator
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	42	(38)
Reallocation of undistributed earnings	0	(1)	(1)
Allocation of undistributed earnings	0	257	(214)
Allocation of undistributed earnings - discontinued operations	0	216	(175)
Class B Common Stock
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	0
Allocation of undistributed earnings - continuing operations	1,196	1,107	1,173
Allocation of undistributed earnings - discontinued operations	0	42	(38)
Net income available to all stockholders	$ 1,196	$ 1,149	$ 1,135
Denominator
Number of shares used in basic computation (in shares)	51,745	54,928	59,328
Continuing operations (in USD per share)	$ 23.11	$ 20.15	$ 19.77
Discontinued operations (in USD per share)	0.00	0.76	(0.64)
Net income (loss) per share - basic (in USD per share)	$ 23.11	$ 20.91	$ 19.13
Numerator
Adjustment Payment to Class C capital stockholders	$ 0
Allocation of undistributed earnings - continuing operations	1,196	$ 1,107	$ 1,173
Allocation of undistributed earnings - discontinued operations	$ 0	$ 42	$ (38)
Denominator
Number of shares used in basic computation (in shares)	51,745	54,928	59,328
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (in shares)	0	0	0
Employee stock options (in shares)	0	0	4
Restricted stock units and other contingently issuable shares (in shares)	0	0	0
Number of shares used in per share computation (in shares)	51,745	54,928	59,332
Continuing operations (in USD per share)	$ 22.84	$ 19.82	$ 19.42
Discontinued operations (in USD per share)	0.00	0.75	(0.63)
Net income (loss) per share - diluted (in USD per share)	$ 22.84	$ 20.57	$ 18.79
Class B Common Stock | Continuing operations
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$ 0
Allocation of undistributed earnings - continuing operations	1,196	$ 1,107	$ 1,173
Numerator
Adjustment Payment to Class C capital stockholders	0
Allocation of undistributed earnings - continuing operations	1,196	1,107	1,173
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0
Reallocation of undistributed earnings	(14)	(18)	(21)
Allocation of undistributed earnings	1,182	1,089	1,152
Class B Common Stock | Discontinued operations
Numerator
Allocation of undistributed earnings - discontinued operations	0	42	(38)
Numerator
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0
Reallocation of undistributed earnings	0	(1)	1
Allocation of undistributed earnings	0	41	(37)
Allocation of undistributed earnings - discontinued operations	0	42	(38)
Class C Capital Stock
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	522
Allocation of undistributed earnings - continuing operations	7,935	6,813	6,580
Allocation of undistributed earnings - discontinued operations	0	258	(214)
Net income available to all stockholders	$ 8,457	$ 7,071	$ 6,366
Denominator
Number of shares used in basic computation (in shares)	343,241	338,130	332,846
Continuing operations (in USD per share)	$ 24.63	$ 20.15	$ 19.77
Discontinued operations (in USD per share)	0.00	0.76	(0.64)
Net income (loss) per share - basic (in USD per share)	$ 24.63	$ 20.91	$ 19.13
Numerator
Adjustment Payment to Class C capital stockholders	$ 522
Allocation of undistributed earnings - continuing operations	7,935	$ 6,813	$ 6,580
Allocation of undistributed earnings - discontinued operations	$ 0	$ 258	$ (214)
Denominator
Number of shares used in basic computation (in shares)	343,241	338,130	332,846
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (in shares)	0	0	0
Employee stock options (in shares)	1,428	2,038	2,748
Restricted stock units and other contingently issuable shares (in shares)	4,481	4,525	3,215
Number of shares used in per share computation (in shares)	349,150	344,693	338,809
Continuing operations (in USD per share)	$ 24.34	$ 19.82	$ 19.42
Discontinued operations (in USD per share)	0.00	0.75	(0.63)
Net income (loss) per share - diluted (in USD per share)	$ 24.34	$ 20.57	$ 18.79
Class C Capital Stock | Continuing operations
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$ 522
Allocation of undistributed earnings - continuing operations	7,935	$ 6,813	$ 6,580
Numerator
Adjustment Payment to Class C capital stockholders	522
Allocation of undistributed earnings - continuing operations	7,935	6,813	6,580
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0
Reallocation of undistributed earnings	39	20	0
Allocation of undistributed earnings	7,974	6,833	6,580
Class C Capital Stock | Discontinued operations
Numerator
Allocation of undistributed earnings - discontinued operations	0	258	(214)
Numerator
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0
Reallocation of undistributed earnings	0	1	1
Allocation of undistributed earnings	0	259	(213)
Allocation of undistributed earnings - discontinued operations	$ 0	$ 258	$ (214)

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Net Income Per Share (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	1 Months Ended	12 Months Ended
	May. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Apr. 02, 2015
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Class C adjustment payment					$ 522
APIC Adjustment		$ 664	$ 465	$ 1,174
Cash payment in lieu of fraction shares		$ 47	$ 0	$ 0
Common stock, par value (in dollars per share)		$ 0.001	$ 0.001
Class C Capital Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common share issued (in shares)	853
Cash payment in lieu of fraction shares	$ 47
Common stock, par value (in dollars per share)		0.001	0.001
Class A Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common stock, par value (in dollars per share)		0.001	0.001
Class B Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common stock, par value (in dollars per share)		$ 0.001	$ 0.001
Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common share issued (in shares)		8,714	8,508	11,706
APIC Adjustment		$ 664	$ 465	$ 1,174
Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital | Class C Capital Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
APIC Adjustment	$ 475

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Stockholders' Equity (Stock-based Compensation Expense) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 5,253	$ 4,279	$ 3,343
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	806	535	469
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2,687	2,200	1,641
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	899	715	552
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	861	725	465
Discontinued operations
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 0	$ 104	$ 216

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Stockholders' Equity (Stock Option Activity) (Details) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($) $ / shares shares
Options Outstanding - Number of Shares
Balance at December 31 (in shares) | shares	7,240,419
Granted (in shares) | shares	0
Exercised (in shares) | shares	(2,072,550)
Forfeited/canceled (in shares) | shares	(268,886)
Balance at December 31 (in shares) | shares	4,898,983
Exercisable as of December 31 (in shares) | shares	4,462,847
Exercisable as of December 31 and expected to vest thereafter in (in shares) | shares	4,846,996
Options Outstanding - Weighted-Average Exercise Price
Balance at December 31 (in dollars per share)	$ 215.56
Exercised (in dollars per share)	189.64
Forfeited/canceled (in dollars per share)	310.47
Balance at December 31 (in dollars per share)	221.31
Exercisable as of December 31 (in dollars per share)	212.02
Exercisable as of December 31 and expected to vest thereafter (in dollars per share)	$ 220.29
Options Outstanding - Weighted-Average Remaining Contractual Term
Balance as of December 31	3 years 8 months
Exercisable as of December 31	3 years 5 months
Exercisable as of December 31 and expected to vest thereafter	3 years 7 months
Options Outstanding - Average Intrinsic Value
Balance as of December 31 | $	$ 2,682
Exercisable as of December 31 | $	2,484
Exercisable as of December 31 and expected to vest thereafter | $	$ 2,658
Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing stock price (in USD per share)	$ 778.01
Class C Capital Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing stock price (in USD per share)	$ 758.88

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Stockholders' Equity (Unvested Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs)	12 Months Ended
	Dec. 31, 2015 $ / shares shares
Unvested restricted stock units - number of shares
Unvested at December 31 (in shares) | shares	24,619,549
Granted (in shares) | shares	14,415,740
Vested (in shares) | shares	(11,182,606)
Forfeited/canceled (in shares) | shares	(2,111,497)
Unvested at December 31 (in shares) | shares	25,741,186
Expected to vest after December 31 (in shares) | shares	22,672,837
Unvested restricted stock units - weighted-average grant-date fair value
Unvested at December 31 (in dollars per share) | $ / shares	$ 487.80
Granted (in dollars per share) | $ / shares	546.46
Vested (in dollars per share) | $ / shares	442.01
Forfeited/canceled (in dollars per share) | $ / shares	481.37
Unvested at December 31 (in dollars per share) | $ / shares	531.74
Expected to vest after December 31 (in dollars per share) | $ / shares	$ 531.74

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Stockholders' Equity (Narrative) (Details)	1 Months Ended	12 Months Ended
	Dec. 31, 2015 USD ($) class vote $ / shares shares	Dec. 31, 2015 USD ($) class vote $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2013 USD ($)	Jan. 31, 2016 shares	Oct. 31, 2015 USD ($)	Oct. 02, 2015 $ / shares shares	Oct. 01, 2015 $ / shares shares
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	15,000,000,000	15,000,000,000	15,000,000,000
Convertible preferred stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized (in shares)	100,000,000	100,000,000	100,000,000
Common stock, shares outstanding (in shares)	687,348,000	687,348,000	680,172,000
Convertible preferred stock, shares issued (in shares)	0	0	0
Convertible preferred stock, shares outstanding (in shares)	0	0	0
Number of authorized classes of stock | class	3	3
Shares reserved for future issuance (in shares)	23,336,944	23,336,944
Cash settled awards | $		$ 50,000,000	$ 0	$ 0
Total grant date fair value of stock options vested | $		33,000,000	94,000,000	223,000,000
Aggregate intrinsic value of all options and warrants exercised | $		867,000,000	$ 589,000,000	1,793,000,000
Repurchases of capital stock | $		$ 1,780,000,000
Employee stock options
Stockholders Equity Note [Line Items]
Expiration term of award		10 years
Vesting period		4 years
Unrecognized compensation cost | $	$ 12,000,000	$ 12,000,000
Weighted average recognition period for unrecognized stock-based compensation expense		7 months 9 days
Restricted Stock Units (RSUs)
Stockholders Equity Note [Line Items]
Vesting period		4 years
Unrecognized compensation cost | $	$ 11,100,000,000	$ 11,100,000,000
Weighted average recognition period for unrecognized stock-based compensation expense		2 years 8 months
Class A Common Stock
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	9,000,000,000	9,000,000,000	9,000,000,000
Common stock, shares outstanding (in shares)	292,297,000	292,297,000	286,560,000
Votes per share class (in votes) | vote	1	1
Class B Common Stock
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000	3,000,000,000
Common stock, shares outstanding (in shares)	50,295,000	50,295,000	53,213,000
Votes per share class (in votes) | vote	10	10
Class C Capital Stock
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000	3,000,000,000
Common stock, shares outstanding (in shares)	344,756,000	344,756,000	340,399,000
Votes per share class (in votes) | vote	0	0
Class C Capital Stock | October 2015 Share Repurchase Program
Stockholders Equity Note [Line Items]
Authorized share repurchase amount | $						$ 5,099,019,513.59
Repurchases of capital stock (in shares)		2,391,000
Repurchases of capital stock | $		$ 1,780,000,000
Continuing operations
Stockholders Equity Note [Line Items]
Stock-based compensation expense, related tax benefits | $		1,133,000,000	$ 867,000,000	685,000,000
Discontinued operations
Stockholders Equity Note [Line Items]
Stock-based compensation expense, related tax benefits | $		$ 0	$ 30,000,000	$ 59,000,000
Google Inc.
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	1,500.0	1,500.0	15,000,000,000
Convertible preferred stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001					$ 0.001
Convertible preferred stock, shares authorized (in shares)	500.0	500.0	100,000,000				500	100,000,000
Common stock, shares outstanding (in shares)	300.0	300.0	680,172,000
Convertible preferred stock, shares issued (in shares)	0	0	0
Convertible preferred stock, shares outstanding (in shares)	0	0	0
Repurchases of capital stock | $		$ 0
Google Inc. | Class A Common Stock
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001				$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	500.0	500.0	9,000,000,000				500	9,000,000,000
Common stock, shares outstanding (in shares)	100.0	100.0	286,560,000
Google Inc. | Class B Common Stock
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001				$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	500.0	500.0	3,000,000,000				500	3,000,000,000
Common stock, shares outstanding (in shares)	100	100	53,213,000
Google Inc. | Class C Capital Stock
Stockholders Equity Note [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001				$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	500.0	500.0	3,000,000,000				500	3,000,000,000
Common stock, shares outstanding (in shares)	100	100	340,399,000
Subsequent Event
Stockholders Equity Note [Line Items]
Additional shares authorized to repurchase (in shares)					514,000
Altera Corp. v. Commissioner
Stockholders Equity Note [Line Items]
Stock-based compensation expense, related tax benefits | $	$ 522,000,000

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401(k) Plans (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($) plan	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]
Number of 401(k) plans | plan	2
401(k) savings plan employer contribution | $	$ 309	$ 259	$ 202

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Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current:
Federal	$ 3,235	$ 2,716	$ 2,394
State	(397)	157	127
Foreign	723	774	711
Total	3,561	3,647	3,232
Deferred:
Federal	(198)	29	(421)
State	(43)	6	0
Foreign	(17)	(43)	(72)
Total	(258)	(8)	(493)
Provision for income taxes	$ 3,303	$ 3,639	$ 2,739

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Income Taxes (Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Statutory income tax rate (in percent)	35.00%	35.00%	35.00%
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Expected provision at federal statutory tax rate (35%)	$ 6,878	$ 6,041	$ 5,567
State taxes, net of federal benefit	(291)	132	133
Change in valuation allowance	(65)	(164)	(641)
Foreign rate differential	(2,624)	(2,109)	(2,482)
Federal research credit	(407)	(318)	(433)
Basis difference in investment of Arris	0	0	644
Other adjustments	(188)	57	(49)
Provision for income taxes	$ 3,303	$ 3,639	$ 2,739

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Income Taxes (Significant Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Deferred tax assets:
Stock-based compensation expense	$ 534	$ 376
State taxes	119	133
Investment loss	144	133
Legal settlement accruals	101	175
Accrued employee benefits	832	671
Accruals and reserves not currently deductible	245	175
Net operating losses	230	207
Tax credits	503	262
Basis difference in investment of Arris	1,357	1,347
Prepaid cost sharing	3,468	0
Other	337	243
Total deferred tax assets	7,870	3,722
Valuation allowance	(1,732)	(1,659)
Total deferred tax assets net of valuation allowance	6,138	2,063
Deferred tax liabilities:
Depreciation and amortization	(1,126)	(852)
Identified intangibles	(787)	(965)
Mark-to-market investments	(93)	(273)
Renewable energy investments	(529)	(430)
Foreign earnings	(3,468)	0
Other	(73)	(125)
Total deferred tax liabilities	(6,076)	(2,645)
Net deferred tax liabilities		$ (582)
Net deferred tax liabilities	$ 62

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Income Taxes (Summary of Activity Related to Gross Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning Balance	$ 3,294	$ 2,502	$ 1,907
Increases related to prior year tax positions	224	66	158
Decreases related to prior year tax positions	(176)	(44)	(37)
Decreases related to settlement with tax authorities	(27)	(1)	(78)
Increases related to current year tax positions	852	771	552
Ending Balance	$ 4,167	$ 3,294	$ 2,502

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Income Taxes (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($) tax_issue jurisdiction	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)
Income Taxes [Line Items]
Income before income taxes, income from domestic operations amount	$ 8,271	$ 8,894	$ 7,651
Income before income taxes, income from foreign operations amount	11,380	8,365	8,248
Research tax credit from retroactive extension of prior period tax law			189
Cumulative amount of foreign subsidiaries earnings upon which U.S. income taxes have not been provided	58,300
Prepaid cost sharing	3,468	0
Foreign earnings	(3,468)	0
Net tax credit carryforwards	1,044
Total unrecognized tax benefits	4,167	3,294	2,502	$ 1,907
Total unrecognized tax benefits that, if recognized, would affect our effective tax rate	3,614	2,909	$ 2,309
Uncertain tax positions, accrued interest and penalties	$ 348	$ 239
Number of tax jurisdictions | jurisdiction	2
IRS
Income Taxes [Line Items]
Net operating loss carryforwards	$ 482
Tax issues planned to be litigated in court | tax_issue	1
State
Income Taxes [Line Items]
Net operating loss carryforwards	$ 443
Foreign Tax Authority
Income Taxes [Line Items]
Net operating loss carryforwards	263
Net tax credit carryforwards	$ 223

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Information about Segments and Geographic Areas (Revenue by Segment) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Revenues	$ 74,989	$ 66,001	$ 55,519
Google
Segment Reporting Information [Line Items]
Revenues	74,541	65,674	55,507
Other Bets
Segment Reporting Information [Line Items]
Revenues	$ 448	$ 327	$ 12

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Information about Segments and Geographic Areas (Operating Income/Loss by Segment) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Segment operating income / (loss)	$ 19,360	$ 16,496	$ 15,403
Operating Segments | Google
Segment Reporting Information [Line Items]
Segment operating income / (loss)	23,425	19,011	16,260
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Segment operating income / (loss)	(3,567)	(1,942)	(527)
Reconciling items
Segment Reporting Information [Line Items]
Segment operating income / (loss)	$ (498)	$ (573)	$ (330)

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Information about Segments and Geographic Areas (Capital Expenditures by Segment) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Capital expenditures	$ 9,915	$ 10,959	$ 7,358
Operating Segments | Google
Segment Reporting Information [Line Items]
Capital expenditures	8,849	11,173	7,006
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Capital expenditures	869	501	187
Reconciling items
Segment Reporting Information [Line Items]
Capital expenditures	$ 197	$ (715)	$ 165

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Information about Segments and Geographic Areas (Stock-based Compensation and Depreciation, Amortization and Impairment by Segment) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Stock-based compensation	$ 5,203	$ 4,175	$ 3,127
Depreciation, amortization and impairment	5,063	4,979	3,939
Operating Segments | Google
Segment Reporting Information [Line Items]
Stock-based compensation	4,587	3,677	2,911
Depreciation, amortization and impairment	4,839	4,778	3,668
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Stock-based compensation	498	347	124
Depreciation, amortization and impairment	203	148	24
Reconciling items
Segment Reporting Information [Line Items]
Stock-based compensation	118	151	92
Depreciation, amortization and impairment	$ 21	$ 53	$ 247

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Information about Segments and Geographic Areas (Revenues by Geographic Area) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 74,989	$ 66,001	$ 55,519
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	34,810	29,482	25,587
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	7,067	6,483	5,600
Rest of the world
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 33,112	$ 30,036	$ 24,332

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Information about Segments and Geographic Areas (Long-Lived Assets by Geographic Area) (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 57,347	$ 50,531
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	43,686	37,421
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 13,661	$ 13,110

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Revision of Previously Issued Financial Statements - Balance Sheet (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Income taxes receivable, net	$ 1,903	$ 591
Total current assets	90,114	78,656
Total assets	147,461	129,187
Income taxes payable, non-current	3,663	3,340
Retained earnings	89,223	75,066
Total stockholders' equity	120,331	103,860	$ 86,977	$ 71,570
Total liabilities and stockholders' equity	$ 147,461	129,187
As Previously Reported (1)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Income taxes receivable, net		1,298
Total current assets		79,363
Total assets		129,894
Income taxes payable, non-current		3,407
Retained earnings		75,706
Total stockholders' equity		104,500
Total liabilities and stockholders' equity		129,894
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Income taxes receivable, net		(707)
Total current assets		(707)
Total assets		(707)
Income taxes payable, non-current		(67)
Retained earnings		(640)
Total stockholders' equity		(640)
Total liabilities and stockholders' equity		$ (707)

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Revision of Previously Issued Financial Statements - Income Statement (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Provision for income taxes	$ 3,303	$ 3,639	$ 2,739
Net income from continuing operations	16,348	13,620	13,160
Net income	$ 16,348	$ 14,136	$ 12,733
Basic net income per share from continuing operations (in USD per share)		$ 20.15	$ 19.77
Basic net income per share (in USD per share)		20.91	19.13
Diluted net income per share from continuing operations (in USD per share)		19.82	19.42
Diluted net income per share (in USD per share)		$ 20.57	$ 18.79
As Previously Reported (1)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Provision for income taxes		$ 3,331	$ 2,552
Net income from continuing operations		13,928	13,347
Net income		$ 14,444	$ 12,920
Basic net income per share from continuing operations (in USD per share)		$ 20.61	$ 20.05
Basic net income per share (in USD per share)		21.37	19.41
Diluted net income per share from continuing operations (in USD per share)		20.27	19.70
Diluted net income per share (in USD per share)		$ 21.02	$ 19.07
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Provision for income taxes		$ 308	$ 187
Net income from continuing operations		(308)	(187)
Net income		$ (308)	$ (187)
Basic net income per share from continuing operations (in USD per share)		$ (0.46)	$ (0.28)
Basic net income per share (in USD per share)		(0.46)	(0.28)
Diluted net income per share from continuing operations (in USD per share)		(0.45)	(0.28)
Diluted net income per share (in USD per share)		$ (0.45)	$ (0.28)

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Revision of Previously Issued Financial Statements - Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income	$ 16,348	$ 14,136	$ 12,733
Comprehensive income	$ 14,447	14,038	12,320
As Previously Reported (1)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income		14,444	12,920
Comprehensive income		14,346	12,507
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income		(308)	(187)
Comprehensive income		$ (308)	$ (187)

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Revision of Previously Issued Financial Statements - Cash Flow (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income	$ 16,348	$ 14,136	$ 12,733
Income taxes, net	$ (179)	591	588
As Previously Reported (1)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income		14,444	12,920
Income taxes, net		283	401
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income		(308)	(187)
Income taxes, net		$ 308	$ 187

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Revision of Previously Issued Financial Statements - Narrative (Details) $ in Millions	Mar. 31, 2015 USD ($)
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cumulative adjustment to income tax expense (benefit)	$ 711

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Schedule II: Valuation and Qualifying Accounts (Details) - Allowance for doubtful accounts and sales credits - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	$ 225	$ 631	$ 581
Additions	579	1,240	1,128
Usage	(508)	(1,646)	(1,078)
Balance at End of Year	$ 296	$ 225	$ 631