ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 61-1767919 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
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) |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer (Do not check if a smaller reporting company) | ¨ | Smaller reporting company | ¨ | |
Emerging growth company | ¨ |
Alphabet Inc. |
Page No. | ||
Item 1 | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 6 | ||
Alphabet Inc. |
• | the growth of our business and revenues and our expectations about the factors that influence our success and trends in our business; |
• | our plans to continue to invest in new businesses, products, services and technologies, systems, facilities, and infrastructure, to continue to hire aggressively and provide competitive compensation programs, as well as to continue to invest in acquisitions; |
• | seasonal fluctuations in internet usage and advertiser expenditures, underlying business trends such as traditional retail seasonality, and macroeconomic conditions, which are likely to cause fluctuations in our quarterly results; |
• | the potential for declines in our revenue growth rate; |
• | our expectation that we will continue to take steps to improve the relevance of the ads we deliver and to reduce the number of accidental clicks; |
• | fluctuations in our revenue growth, as well as the change in paid clicks and cost-per-click on Google properties and the change in impressions and cost-per-impression on Google Network Members’ properties, and various factors contributing to such fluctuations; |
• | our expectation that our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currency exchange rates; |
• | the expected variability of costs related to hedging activities under our foreign exchange risk management program; |
• | the anticipated effect of, and our response to, new accounting pronouncements; |
• | our expectation that our cost of revenues, research and development expenses, sales and marketing expenses, and general and administrative expenses will increase in dollars and may increase as a percentage of revenues; |
• | our potential exposure in connection with pending investigations, proceedings, and other contingencies; |
• | our expectation that our monetization trends will fluctuate, which could affect our revenues and margins in the future; |
• | our expectation that our traffic acquisition costs (TAC) and the associated TAC rates will increase in the future; |
• | our expectation that our results will be affected by our performance in international markets as users in developing economies increasingly come online; |
• | our expectation that the portion of our revenues that we derive from non-advertising revenues will continue to increase and may affect margins; |
• | our expectation that our other income (expense), net, will fluctuate in the future, as it is largely driven by market dynamics; |
• | estimates of our future compensation expenses; |
• | fluctuations in our effective tax rate; |
• | the effect of the U.S. Tax Cuts and Jobs Act (Tax Act); |
• | the sufficiency of our sources of funding; |
• | our payment terms to certain advertisers, which may increase our working capital requirements; |
• | fluctuations in our capital expenditures; |
• | our expectations related to the operating structure implemented pursuant to the Alphabet holding company reorganization; |
• | the expected timing and amount of Alphabet Inc.'s share repurchases; |
Alphabet Inc. |
Alphabet Inc. |
PART I. | FINANCIAL INFORMATION |
ITEM 1. | FINANCIAL STATEMENTS |
As of December 31, 2017 | As of June 30, 2018 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10,715 | $ | 14,148 | |||
Marketable securities | 91,156 | 88,106 | |||||
Total cash, cash equivalents, and marketable securities | 101,871 | 102,254 | |||||
Accounts receivable, net of allowance of $674 and $630 | 18,336 | 17,043 | |||||
Income taxes receivable, net | 369 | 201 | |||||
Inventory | 749 | 698 | |||||
Other current assets | 2,983 | 3,961 | |||||
Total current assets | 124,308 | 124,157 | |||||
Non-marketable investments | 7,813 | 11,487 | |||||
Deferred income taxes | 680 | 685 | |||||
Property and equipment, net | 42,383 | 51,672 | |||||
Intangible assets, net | 2,692 | 2,662 | |||||
Goodwill | 16,747 | 17,895 | |||||
Other non-current assets | 2,672 | 3,052 | |||||
Total assets | $ | 197,295 | $ | 211,610 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,137 | $ | 3,369 | |||
Accrued compensation and benefits | 4,581 | 4,642 | |||||
Accrued expenses and other current liabilities | 10,177 | 15,261 | |||||
Accrued revenue share | 3,975 | 3,728 | |||||
Deferred revenue | 1,432 | 1,714 | |||||
Income taxes payable, net | 881 | 1,189 | |||||
Total current liabilities | 24,183 | 29,903 | |||||
Long-term debt | 3,969 | 3,981 | |||||
Deferred revenue, non-current | 340 | 358 | |||||
Income taxes payable, non-current | 12,812 | 11,652 | |||||
Deferred income taxes | 430 | 479 | |||||
Other long-term liabilities | 3,059 | 3,237 | |||||
Total liabilities | 44,793 | 49,610 | |||||
Commitments and Contingencies (Note 9) | |||||||
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); 694,783 (Class A 298,470, Class B 46,972, Class C 349,341) and 695,946 (Class A 298,895, Class B 46,891, Class C 350,160) shares issued and outstanding | 40,247 | 42,243 | |||||
Accumulated other comprehensive loss | (992 | ) | (1,525 | ) | |||
Retained earnings | 113,247 | 121,282 | |||||
Total stockholders’ equity | 152,502 | 162,000 | |||||
Total liabilities and stockholders’ equity | $ | 197,295 | $ | 211,610 |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Revenues | $ | 26,010 | $ | 32,657 | $ | 50,760 | $ | 63,803 | |||||||
Costs and expenses: | |||||||||||||||
Cost of revenues | 10,373 | 13,883 | 20,168 | 27,350 | |||||||||||
Research and development | 4,172 | 5,114 | 8,114 | 10,153 | |||||||||||
Sales and marketing | 2,897 | 3,780 | 5,541 | 7,384 | |||||||||||
General and administrative | 1,700 | 2,002 | 3,501 | 4,037 | |||||||||||
European Commission fines | 2,736 | 5,071 | 2,736 | 5,071 | |||||||||||
Total costs and expenses | 21,878 | 29,850 | 40,060 | 53,995 | |||||||||||
Income from operations | 4,132 | 2,807 | 10,700 | 9,808 | |||||||||||
Other income (expense), net | 245 | 1,408 | 496 | 4,950 | |||||||||||
Income before income taxes | 4,377 | 4,215 | 11,196 | 14,758 | |||||||||||
Provision for income taxes | 853 | 1,020 | 2,246 | 2,162 | |||||||||||
Net income | $ | 3,524 | $ | 3,195 | $ | 8,950 | $ | 12,596 | |||||||
Basic net income per share of Class A and B common stock and Class C capital stock | $ | 5.09 | $ | 4.60 | $ | 12.94 | $ | 18.13 | |||||||
Diluted net income per share of Class A and B common stock and Class C capital stock | $ | 5.01 | $ | 4.54 | $ | 12.74 | $ | 17.89 |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Net income | $ | 3,524 | $ | 3,195 | $ | 8,950 | $ | 12,596 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Change in foreign currency translation adjustment | 565 | (1,142 | ) | 1,016 | (485 | ) | |||||||||
Available-for-sale investments: | |||||||||||||||
Change in net unrealized gains (losses) | 86 | (148 | ) | 225 | (356 | ) | |||||||||
Less: reclassification adjustment for net (gains) losses included in net income | 26 | (6 | ) | 51 | 33 | ||||||||||
Net change (net of tax effect of $0, $60, $0, and $60) | 112 | (154 | ) | 276 | (323 | ) | |||||||||
Cash flow hedges: | |||||||||||||||
Change in net unrealized gains (losses) | (230 | ) | 363 | (459 | ) | 101 | |||||||||
Less: reclassification adjustment for net (gains) losses included in net income | (6 | ) | 78 | (159 | ) | 272 | |||||||||
Net change (net of tax effect of $143, $109, $292, and $97) | (236 | ) | 441 | (618 | ) | 373 | |||||||||
Other comprehensive income (loss) | 441 | (855 | ) | 674 | (435 | ) | |||||||||
Comprehensive income | $ | 3,965 | $ | 2,340 | $ | 9,624 | $ | 12,161 |
Alphabet Inc. |
Six Months Ended | |||||||
June 30, | |||||||
2017 | 2018 | ||||||
Operating activities | |||||||
Net income | $ | 8,950 | $ | 12,596 | |||
Adjustments: | |||||||
Depreciation and impairment of property and equipment | 2,711 | 3,653 | |||||
Amortization and impairment of intangible assets | 417 | 447 | |||||
Stock-based compensation expense | 4,012 | 4,870 | |||||
Deferred income taxes | 538 | (157 | ) | ||||
(Gain) loss on debt and equity securities, net | 22 | (4,060 | ) | ||||
Other | 96 | (120 | ) | ||||
Changes in assets and liabilities, net of effects of acquisitions: | |||||||
Accounts receivable | 431 | 1,388 | |||||
Income taxes, net | (1,779 | ) | (656 | ) | |||
Other assets | (454 | ) | (756 | ) | |||
Accounts payable | 119 | (23 | ) | ||||
Accrued expenses and other liabilities | 1,687 | 4,600 | |||||
Accrued revenue share | 6 | (303 | ) | ||||
Deferred revenue | 195 | 295 | |||||
Net cash provided by operating activities | 16,951 | 21,774 | |||||
Investing activities | |||||||
Purchases of property and equipment | (5,339 | ) | (12,776 | ) | |||
Proceeds from disposals of property and equipment | 54 | 49 | |||||
Purchases of marketable securities | (39,676 | ) | (23,041 | ) | |||
Maturities and sales of marketable securities | 34,238 | 25,523 | |||||
Purchases of non-marketable investments | (694 | ) | (732 | ) | |||
Maturities and sales of non-marketable investments | 118 | 1,191 | |||||
Acquisitions, net of cash acquired, and purchases of intangible assets | (143 | ) | (1,434 | ) | |||
Proceeds from collection of notes receivable | 1,419 | 0 | |||||
Net cash used in investing activities | (10,023 | ) | (11,220 | ) | |||
Financing activities | |||||||
Net payments related to stock-based award activities | (2,093 | ) | (2,699 | ) | |||
Repurchases of capital stock | (2,745 | ) | (4,225 | ) | |||
Proceeds from issuance of debt, net of costs | 0 | 6,236 | |||||
Repayments of debt | (56 | ) | (6,267 | ) | |||
Proceeds from sale of subsidiary shares | 480 | 0 | |||||
Net cash used in financing activities | (4,414 | ) | (6,955 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 279 | (166 | ) | ||||
Net increase in cash and cash equivalents | 2,793 | 3,433 | |||||
Cash and cash equivalents at beginning of period | 12,918 | 10,715 | |||||
Cash and cash equivalents at end of period | $ | 15,711 | $ | 14,148 |
Alphabet Inc. |
Alphabet Inc. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Google properties | $ | 18,425 | $ | 23,262 | $ | 35,828 | $ | 45,260 | |||||||
Google Network Members' properties | 4,247 | 4,825 | 8,255 | 9,469 | |||||||||||
Google advertising revenues | 22,672 | 28,087 | 44,083 | 54,729 | |||||||||||
Google other revenues | 3,241 | 4,425 | 6,448 | 8,779 | |||||||||||
Other Bets revenues | 97 | 145 | 229 | 295 | |||||||||||
Total revenues(1) | $ | 26,010 | $ | 32,657 | $ | 50,760 | $ | 63,803 |
(1) | Revenues include hedging gains (losses) of $3 million and $(103) million for the three months ended June 30, 2017 and 2018, respectively, and $220 million and $(342) million for the six months ended June 30, 2017 and 2018, respectively, which do not represent revenues recognized from contracts with customers. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
United States | $ | 12,322 | $ | 14,933 | $ | 24,091 | $ | 29,077 | |||||||
EMEA(1) | 8,545 | 10,785 | 16,636 | 21,259 | |||||||||||
APAC(1) | 3,730 | 5,090 | 7,349 | 9,894 | |||||||||||
Other Americas(1) | 1,413 | 1,849 | 2,684 | 3,573 | |||||||||||
Total revenues(2) | $ | 26,010 | $ | 32,657 | $ | 50,760 | $ | 63,803 |
(1) | Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (Other Americas). |
(2) | Revenues include hedging gains (losses) for the three and six months ended June 30, 2017 and 2018. |
Alphabet Inc. |
• | Apps, in-app purchases, and digital content in the Google Play store; |
• | Google Cloud offerings; |
• | Hardware; and |
• | Other miscellaneous products and services. |
Alphabet Inc. |
As of December 31, 2017 | |||||||||||||||||||||||||||
Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Marketable Securities | Non-Marketable Securities | |||||||||||||||||||||
Level 2: | |||||||||||||||||||||||||||
Time deposits(1) | $ | 359 | $ | 0 | $ | 0 | $ | 359 | $ | 357 | $ | 2 | $ | 0 | |||||||||||||
Government bonds(2) | 51,548 | 10 | (406 | ) | 51,152 | 1,241 | 49,911 | 0 | |||||||||||||||||||
Corporate debt securities | 24,269 | 21 | (135 | ) | 24,155 | 126 | 24,029 | 0 | |||||||||||||||||||
Mortgage-backed and asset-backed securities | 16,789 | 13 | (180 | ) | 16,622 | 0 | 16,622 | 0 | |||||||||||||||||||
92,965 | 44 | (721 | ) | 92,288 | 1,724 | 90,564 | 0 | ||||||||||||||||||||
Level 3: | |||||||||||||||||||||||||||
Non-marketable debt securities | 1,083 | 811 | 0 | 1,894 | 0 | 0 | 1,894 | ||||||||||||||||||||
Total | $ | 94,048 | $ | 855 | $ | (721 | ) | $ | 94,182 | $ | 1,724 | $ | 90,564 | $ | 1,894 |
As of June 30, 2018 | |||||||||||||||||||||||||||
Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Marketable Securities | Non-Marketable Securities | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Level 2: | |||||||||||||||||||||||||||
Time deposits(1) | $ | 252 | $ | 0 | $ | 0 | $ | 252 | $ | 251 | $ | 1 | $ | 0 | |||||||||||||
Government bonds(2) | 48,567 | 11 | (575 | ) | 48,003 | 783 | 47,220 | 0 | |||||||||||||||||||
Corporate debt securities | 24,490 | 10 | (383 | ) | 24,117 | 21 | 24,096 | 0 | |||||||||||||||||||
Mortgage-backed and asset-backed securities | 15,746 | 3 | (398 | ) | 15,351 | 12 | 15,339 | 0 | |||||||||||||||||||
89,055 | 24 | (1,356 | ) | 87,723 | 1,067 | 86,656 | 0 | ||||||||||||||||||||
Level 3: | |||||||||||||||||||||||||||
Non-marketable debt securities | 1,026 | 1,184 | 0 | 2,210 | 0 | 0 | 2,210 | ||||||||||||||||||||
Total | $ | 90,081 | $ | 1,208 | $ | (1,356 | ) | $ | 89,933 | $ | 1,067 | $ | 86,656 | $ | 2,210 |
(1) | The majority of our time deposits are foreign deposits. |
(2) | Government bonds are comprised primarily of U.S. government notes, and also includes U.S. government agencies, foreign government bonds, and municipal securities. |
Alphabet Inc. |
As of June 30, 2018 | |||
Due in 1 year | $ | 15,357 | |
Due in 1 year through 5 years | 57,525 | ||
Due in 5 years through 10 years | 2,429 | ||
Due after 10 years | 11,345 | ||
Total | $ | 86,656 |
As of December 31, 2017 | |||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Government bonds(1) | $ | 28,836 | $ | (211 | ) | $ | 17,660 | $ | (195 | ) | $ | 46,496 | $ | (406 | ) | ||||||||
Corporate debt securities | 18,300 | (114 | ) | 1,710 | (21 | ) | 20,010 | (135 | ) | ||||||||||||||
Mortgage-backed and asset-backed securities | 11,061 | (105 | ) | 3,449 | (75 | ) | 14,510 | (180 | ) | ||||||||||||||
Total | $ | 58,197 | $ | (430 | ) | $ | 22,819 | $ | (291 | ) | $ | 81,016 | $ | (721 | ) |
As of June 30, 2018 | |||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
Government bonds(1) | $ | 32,284 | $ | (414 | ) | $ | 8,144 | $ | (161 | ) | $ | 40,428 | $ | (575 | ) | ||||||||
Corporate debt securities | 19,955 | (357 | ) | 1,153 | (26 | ) | 21,108 | (383 | ) | ||||||||||||||
Mortgage-backed and asset-backed securities | 11,139 | (282 | ) | 2,742 | (116 | ) | 13,881 | (398 | ) | ||||||||||||||
Total | $ | 63,378 | $ | (1,053 | ) | $ | 12,039 | $ | (303 | ) | $ | 75,417 | $ | (1,356 | ) |
(1) | Government bonds are comprised primarily of U.S. government notes, and also includes U.S. government agencies, foreign government bonds and municipal securities. |
Alphabet Inc. |
Six Months Ended | |||||||
June 30, | |||||||
2017 | 2018 | ||||||
Beginning balance | $ | 1,165 | $ | 1,894 | |||
Total net gains (losses) | |||||||
Included in earnings | (5 | ) | 10 | ||||
Included in other comprehensive income | 126 | 395 | |||||
Purchases | 70 | 12 | |||||
Sales | (1 | ) | (41 | ) | |||
Settlements | (3 | ) | (60 | ) | |||
Ending balance | $ | 1,352 | $ | 2,210 |
As of December 31, 2017 | ||||||||
Cash and Cash Equivalents | Marketable Securities | |||||||
Level 1: | ||||||||
Money market funds | $ | 1,833 | $ | 0 | ||||
Marketable equity securities | 0 | 340 | ||||||
1,833 | 340 | |||||||
Level 2: | ||||||||
Mutual funds(1) | 0 | 252 | ||||||
Total | $ | 1,833 | $ | 592 |
(1) | The fair value option was elected for mutual funds with gains (losses) recognized in other income (expense), net. |
Alphabet Inc. |
As of June 30, 2018 | ||||||||
(unaudited) | ||||||||
Cash and Cash Equivalents | Marketable Securities | |||||||
Level 1: | ||||||||
Money market funds | $ | 3,698 | $ | 0 | ||||
Marketable equity securities | 0 | 1,211 | ||||||
3,698 | 1,211 | |||||||
Level 2: | ||||||||
Mutual funds | 0 | 239 | ||||||
Total | $ | 3,698 | $ | 1,450 |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||
Upward adjustments | $ | 572 | $ | 3,080 | |||
Downward adjustments (including impairment) | (81 | ) | (104 | ) | |||
Total unrealized gain (loss) for non-marketable equity securities | $ | 491 | $ | 2,976 |
Initial cost basis | $ | 4,952 | ||
Upward adjustments | 3,080 | |||
Downward adjustments (including impairment) | (104 | ) | ||
Total carrying value at the end of the period | $ | 7,928 |
Alphabet Inc. |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||
Realized gain (loss) for equity securities sold during the period | $ | 515 | $ | 900 | |||
Unrealized gain (loss) on equity securities held as of the end of the period(1) | 547 | 3,193 | |||||
Total gain (loss) recognized in other income (expense), net | $ | 1,062 | $ | 4,093 |
(1) | Includes $491 million and $2,976 million related to non-marketable equity securities for the three and six months ended June 30, 2018, respectively. |
Alphabet Inc. |
As of December 31, 2017 | |||||||||||||
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 | Other current and non-current assets | $ | 51 | $ | 29 | $ | 80 | ||||||
Total | $ | 51 | $ | 29 | $ | 80 | |||||||
Derivative Liabilities: | |||||||||||||
Level 2: | |||||||||||||
Foreign exchange contracts | Accrued expenses and other liabilities, current and non-current | $ | 230 | $ | 122 | $ | 352 | ||||||
Total | $ | 230 | $ | 122 | $ | 352 |
Alphabet Inc. |
As of June 30, 2018 | |||||||||||||
Balance Sheet Location | Fair Value of Derivatives Designated as Hedging Instruments | Fair Value of Derivatives Not Designated as Hedging Instruments | Total Fair Value | ||||||||||
(unaudited) | |||||||||||||
Derivative Assets: | |||||||||||||
Level 2: | |||||||||||||
Foreign exchange contracts | Other current and non-current assets | $ | 310 | $ | 111 | $ | 421 | ||||||
Total | $ | 310 | $ | 111 | $ | 421 | |||||||
Derivative Liabilities: | |||||||||||||
Level 2: | |||||||||||||
Foreign exchange contracts | Accrued expenses and other liabilities, current and non-current | $ | 2 | $ | 221 | $ | 223 | ||||||
Total | $ | 2 | $ | 221 | $ | 223 |
Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
Derivatives in Cash Flow Hedging Relationship | 2017 | 2018 | 2017 | 2018 | |||||||||||
Foreign exchange contracts | |||||||||||||||
Amount included in the assessment of effectiveness | $ | (374 | ) | $ | 443 | $ | (687 | ) | $ | 124 | |||||
Amount excluded from the assessment of effectiveness | 0 | 8 | 0 | 1 | |||||||||||
Total | $ | (374 | ) | $ | 451 | $ | (687 | ) | $ | 125 |
Alphabet Inc. |
Gains (Losses) Recognized in Income | ||||||||||||||||
Three Months Ended | ||||||||||||||||
June 30, | ||||||||||||||||
2017 | 2018 | |||||||||||||||
Revenues | Other income (expense), net | Revenues | Other income (expense), net | |||||||||||||
Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow and fair value hedges are recorded | $ | 26,010 | $ | 245 | $ | 32,657 | $ | 1,408 | ||||||||
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship: | ||||||||||||||||
Foreign exchange contracts | ||||||||||||||||
Amount of gains (losses) reclassified from AOCI to income | $ | 3 | $ | 0 | $ | (101 | ) | $ | 0 | |||||||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | (2 | ) | 0 | |||||||||||
Amount excluded from the assessment of effectiveness | 0 | 20 | 0 | 0 | ||||||||||||
Gains (Losses) on Derivatives in Fair Value Hedging Relationship: | ||||||||||||||||
Foreign exchange contracts | ||||||||||||||||
Hedged items | 0 | 85 | 0 | (158 | ) | |||||||||||
Derivatives designated as hedging instruments | 0 | (85 | ) | 0 | 158 | |||||||||||
Amount excluded from the assessment of effectiveness | 0 | 5 | 0 | 10 | ||||||||||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||
Foreign exchange contracts | ||||||||||||||||
Derivatives not designated as hedging instruments | 0 | (22 | ) | 0 | 200 | |||||||||||
Total gains (losses) | $ | 3 | $ | 3 | $ | (103 | ) | $ | 210 |
Alphabet Inc. |
Gains (Losses) Recognized in Income | ||||||||||||||||
Six Months Ended | ||||||||||||||||
June 30, | ||||||||||||||||
2017 | 2018 | |||||||||||||||
Revenues | Other income (expense), net | Revenues | Other income (expense), net | |||||||||||||
Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow and fair value hedges are recorded | $ | 50,760 | $ | 496 | $ | 63,803 | $ | 4,950 | ||||||||
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship: | ||||||||||||||||
Foreign exchange contracts | ||||||||||||||||
Amount of gains (losses) reclassified from AOCI to income | $ | 220 | $ | 0 | $ | (348 | ) | $ | 0 | |||||||
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach | 0 | 0 | 6 | 0 | ||||||||||||
Amount excluded from the assessment of effectiveness | 0 | 46 | 0 | 0 | ||||||||||||
Gains (Losses) on Derivatives in Fair Value Hedging Relationship: | ||||||||||||||||
Foreign exchange contracts | ||||||||||||||||
Hedged items | 0 | 136 | 0 | (45 | ) | |||||||||||
Derivatives designated as hedging instruments | 0 | (136 | ) | 0 | 45 | |||||||||||
Amount excluded from the assessment of effectiveness | 0 | 9 | 0 | 21 | ||||||||||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||
Foreign exchange contracts | ||||||||||||||||
Derivatives not designated as hedging instruments | 0 | (224 | ) | 0 | 100 | |||||||||||
Total gains (losses) | $ | 220 | $ | (169 | ) | $ | (342 | ) | $ | 121 |
Alphabet Inc. |
As of December 31, 2017 | |||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset | |||||||||||||||||||||||||||
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 | $ | 102 | $ | (22 | ) | $ | 80 | $ | (64 | ) | (1) | $ | (4 | ) | $ | (2 | ) | $ | 10 | ||||||||
As of June 30, 2018 | |||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset | |||||||||||||||||||||||||||
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 | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Derivatives | $ | 451 | $ | (30 | ) | $ | 421 | $ | (95 | ) | (1) | $ | (300 | ) | $ | 0 | $ | 26 |
(1) | The balances as of December 31, 2017 and June 30, 2018 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements. |
As of December 31, 2017 | |||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset | |||||||||||||||||||||||||||
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 | $ | 374 | $ | (22 | ) | $ | 352 | $ | (64 | ) | (2) | $ | 0 | $ | 0 | $ | 288 | ||||||||||
As of June 30, 2018 | |||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset | |||||||||||||||||||||||||||
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 | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Derivatives | $ | 253 | $ | (30 | ) | $ | 223 | $ | (95 | ) | (2) | $ | 0 | $ | 0 | $ | 128 |
(2) | The balances as of December 31, 2017 and June 30, 2018 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements. |
Alphabet Inc. |
Alphabet Inc. |
As of December 31, 2017 | As of June 30, 2018 | ||||||
(unaudited) | |||||||
Long-term debt | |||||||
3.625% Notes due on May 19, 2021 | $ | 1,000 | $ | 1,000 | |||
3.375% Notes due on February 25, 2024 | 1,000 | 1,000 | |||||
1.998% Notes due on August 15, 2026 | 2,000 | 2,000 | |||||
Unamortized discount for the Notes above | (57 | ) | (53 | ) | |||
Subtotal(1) | $ | 3,943 | $ | 3,947 | |||
Capital lease obligation | 26 | 34 | |||||
Total long-term debt | $ | 3,969 | $ | 3,981 |
(1) | Includes the outstanding (and unexchanged) Google Notes issued in 2011 and 2014 and the Alphabet notes exchanged in 2016. |
Alphabet Inc. |
As of December 31, 2017 | As of June 30, 2018 | ||||||
(unaudited) | |||||||
Land and buildings | $ | 23,183 | $ | 27,253 | |||
Information technology assets | 21,429 | 26,148 | |||||
Construction in progress | 10,491 | 13,669 | |||||
Leasehold improvements | 4,496 | 4,758 | |||||
Furniture and fixtures | 48 | 48 | |||||
Property and equipment, gross | 59,647 | 71,876 | |||||
Less: accumulated depreciation | (17,264 | ) | (20,204 | ) | |||
Property and equipment, net | $ | 42,383 | $ | 51,672 |
As of December 31, 2017 | As of June 30, 2018 | ||||||
(unaudited) | |||||||
European Commission fines(1) | $ | 2,874 | $ | 7,914 | |||
Accrued customer liabilities | 1,489 | 1,445 | |||||
Other accrued expenses and current liabilities | 5,814 | 5,902 | |||||
Accrued expenses and other current liabilities | $ | 10,177 | $ | 15,261 |
(1) | Includes the effects of foreign exchange and interest. See Note 9 for further details. |
Foreign Currency Translation Adjustments | Unrealized Gains (Losses) on Available-for-Sale Investments | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||||||
Balance as of December 31, 2016 | $ | (2,646 | ) | $ | (179 | ) | $ | 423 | $ | (2,402 | ) | ||||
Other comprehensive income (loss) before reclassifications | 1,016 | 225 | (459 | ) | 782 | ||||||||||
Amounts reclassified from AOCI | 0 | 51 | (159 | ) | (108 | ) | |||||||||
Other comprehensive income (loss) | 1,016 | 276 | (618 | ) | 674 | ||||||||||
Balance as of June 30, 2017 | $ | (1,630 | ) | $ | 97 | $ | (195 | ) | $ | (1,728 | ) |
Alphabet Inc. |
Foreign Currency Translation Adjustments | Unrealized Gains (Losses) on Available-for-Sale Investments | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||||||
Balance as of December 31, 2017 | $ | (1,103 | ) | $ | 233 | $ | (122 | ) | $ | (992 | ) | ||||
Other comprehensive income (loss) before reclassifications(1) | (485 | ) | (454 | ) | 100 | (839 | ) | ||||||||
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI | 0 | 0 | 1 | 1 | |||||||||||
Amounts reclassified from AOCI | 0 | 33 | 272 | 305 | |||||||||||
Other comprehensive income (loss) | (485 | ) | (421 | ) | 373 | (533 | ) | ||||||||
Balance as of June 30, 2018 | $ | (1,588 | ) | $ | (188 | ) | $ | 251 | $ | (1,525 | ) |
(1) | The change in unrealized gains (losses) on available-for-sale investments included a $98 million reclassification of net unrealized gains related to marketable equity securities from AOCI to opening retained earnings as a result of the adoption of ASU 2016-01 on January 1, 2018. |
Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
AOCI Components | Location | 2017 | 2018 | 2017 | 2018 | |||||||||||||
Unrealized gains (losses) on available-for-sale investments | ||||||||||||||||||
Other income (expense), net | $ | (26 | ) | $ | 6 | $ | (51 | ) | $ | (33 | ) | |||||||
Provision for income taxes | 0 | 0 | 0 | 0 | ||||||||||||||
Net of tax | $ | (26 | ) | $ | 6 | $ | (51 | ) | $ | (33 | ) | |||||||
Unrealized gains (losses) on cash flow hedges | ||||||||||||||||||
Foreign exchange contracts | Revenue | $ | 3 | $ | (101 | ) | $ | 220 | $ | (348 | ) | |||||||
Interest rate contracts | Other income (expense), net | 2 | 1 | 3 | 2 | |||||||||||||
Benefit (provision) for income taxes | 1 | 22 | (64 | ) | 74 | |||||||||||||
Net of tax | $ | 6 | $ | (78 | ) | $ | 159 | $ | (272 | ) | ||||||||
Total amount reclassified, net of tax | $ | (20 | ) | $ | (72 | ) | $ | 108 | $ | (305 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Interest income | $ | 294 | $ | 456 | $ | 606 | $ | 855 | |||||||
Interest expense(1) | (21 | ) | (27 | ) | (46 | ) | (57 | ) | |||||||
Foreign currency exchange losses, net | (46 | ) | (33 | ) | (48 | ) | (57 | ) | |||||||
Gain (loss) on debt securities, net | (26 | ) | 6 | (51 | ) | (33 | ) | ||||||||
Gain on equity securities, net | 23 | 1,062 | 29 | 4,093 | |||||||||||
Loss and impairment from equity method investments, net | (13 | ) | (105 | ) | (62 | ) | (112 | ) | |||||||
Other | 34 | 49 | 68 | 261 | |||||||||||
Other income (expense), net | $ | 245 | $ | 1,408 | $ | 496 | $ | 4,950 |
(1) | Interest expense is net of $12 million and $23 million of interest capitalized for the three months ended June 30, 2017 and 2018, respectively, and $19 million and $39 million for the six months ended June 30, 2017 and 2018, respectively. |
Alphabet Inc. |
Google | Other Bets | Total Consolidated | |||||||||
Balance as of December 31, 2017 | $ | 16,295 | $ | 452 | $ | 16,747 | |||||
Acquisitions | 1,202 | 0 | 1,202 | ||||||||
Transfers | 80 | (80 | ) | 0 | |||||||
Foreign currency translation and other adjustments | (51 | ) | (3 | ) | (54 | ) | |||||
Balance as of June 30, 2018 | $ | 17,526 | $ | 369 | $ | 17,895 |
As of December 31, 2017 | |||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||
Patents and developed technology | $ | 5,260 | $ | 3,040 | $ | 2,220 | |||||
Customer relationships | 359 | 263 | 96 | ||||||||
Trade names and other | 544 | 168 | 376 | ||||||||
Total | $ | 6,163 | $ | 3,471 | $ | 2,692 | |||||
As of June 30, 2018 | |||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||
(unaudited) | |||||||||||
Patents and developed technology | $ | 5,331 | $ | 3,252 | $ | 2,079 | |||||
Customer relationships | 355 | 282 | 73 | ||||||||
Trade names and other | 701 | 191 | 510 | ||||||||
Total | $ | 6,387 | $ | 3,725 | $ | 2,662 |
Alphabet Inc. |
Remainder of 2018 | $ | 412 | |
2019 | 717 | ||
2020 | 588 | ||
2021 | 534 | ||
2022 | 207 | ||
Thereafter | 204 | ||
Total | $ | 2,662 |
Alphabet Inc. |
Alphabet Inc. |
Three Months Ended June 30, | |||||||||||||||||||||||
2017 | 2018 | ||||||||||||||||||||||
Class A | Class B | Class C | Class A | Class B | Class C | ||||||||||||||||||
Basic net income per share: | |||||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Allocation of undistributed earnings | $ | 1,514 | $ | 240 | $ | 1,770 | $ | 1,371 | $ | 216 | $ | 1,608 | |||||||||||
Denominator | |||||||||||||||||||||||
Number of shares used in per share computation | 297,288 | 47,133 | 347,538 | 298,264 | 46,915 | 349,756 | |||||||||||||||||
Basic net income per share | $ | 5.09 | $ | 5.09 | $ | 5.09 | $ | 4.60 | $ | 4.60 | $ | 4.60 | |||||||||||
Diluted net income per share: | |||||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Allocation of undistributed earnings for basic computation | $ | 1,514 | $ | 240 | $ | 1,770 | $ | 1,371 | $ | 216 | $ | 1,608 | |||||||||||
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares | 240 | 0 | 0 | 216 | 0 | 0 | |||||||||||||||||
Reallocation of undistributed earnings | (22 | ) | (4 | ) | 22 | (16 | ) | (3 | ) | 16 | |||||||||||||
Allocation of undistributed earnings | $ | 1,732 | $ | 236 | $ | 1,792 | $ | 1,571 | $ | 213 | $ | 1,624 | |||||||||||
Denominator | |||||||||||||||||||||||
Number of shares used in basic computation | 297,288 | 47,133 | 347,538 | 298,264 | 46,915 | 349,756 | |||||||||||||||||
Weighted-average effect of dilutive securities | |||||||||||||||||||||||
Add: | |||||||||||||||||||||||
Conversion of Class B to Class A common shares outstanding | 47,133 | 0 | 0 | 46,915 | 0 | 0 | |||||||||||||||||
Restricted stock units and other contingently issuable shares | 1,258 | 0 | 10,286 | 713 | 0 | 7,599 | |||||||||||||||||
Number of shares used in per share computation | 345,679 | 47,133 | 357,824 | 345,892 | 46,915 | 357,355 | |||||||||||||||||
Diluted net income per share | $ | 5.01 | $ | 5.01 | $ | 5.01 | $ | 4.54 | $ | 4.54 | $ | 4.54 |
Alphabet Inc. |
Six Months Ended June 30, | |||||||||||||||||||||||
2017 | 2018 | ||||||||||||||||||||||
Class A | Class B | Class C | Class A | Class B | Class C | ||||||||||||||||||
Basic net income per share: | |||||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Allocation of undistributed earnings | $ | 3,845 | $ | 611 | $ | 4,494 | $ | 5,407 | $ | 851 | $ | 6,338 | |||||||||||
Denominator | |||||||||||||||||||||||
Number of shares used in per share computation | 297,210 | 47,234 | 347,313 | 298,292 | 46,934 | 349,618 | |||||||||||||||||
Basic net income per share | $ | 12.94 | $ | 12.94 | $ | 12.94 | $ | 18.13 | $ | 18.13 | $ | 18.13 | |||||||||||
Diluted net income per share: | |||||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Allocation of undistributed earnings for basic computation | $ | 3,845 | $ | 611 | $ | 4,494 | $ | 5,407 | $ | 851 | $ | 6,338 | |||||||||||
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares | 611 | 0 | 0 | 851 | 0 | 0 | |||||||||||||||||
Reallocation of undistributed earnings | (52 | ) | (9 | ) | 52 | (68 | ) | (11 | ) | 68 | |||||||||||||
Allocation of undistributed earnings | $ | 4,404 | $ | 602 | $ | 4,546 | $ | 6,190 | $ | 840 | $ | 6,406 | |||||||||||
Denominator | |||||||||||||||||||||||
Number of shares used in basic computation | 297,210 | 47,234 | 347,313 | 298,292 | 46,934 | 349,618 | |||||||||||||||||
Weighted-average effect of dilutive securities | |||||||||||||||||||||||
Add: | |||||||||||||||||||||||
Conversion of Class B to Class A common shares outstanding | 47,234 | 0 | 0 | 46,934 | 0 | 0 | |||||||||||||||||
Restricted stock units and other contingently issuable shares | 1,342 | 0 | 9,671 | 804 | 0 | 8,543 | |||||||||||||||||
Number of shares used in per share computation | 345,786 | 47,234 | 356,984 | 346,030 | 46,934 | 358,161 | |||||||||||||||||
Diluted net income per share | $ | 12.74 | $ | 12.74 | $ | 12.74 | $ | 17.89 | $ | 17.89 | $ | 17.89 |
Unvested Restricted Stock Units | ||||||
Number of Shares | Weighted- Average Grant-Date Fair Value | |||||
Unvested as of December 31, 2017 | 20,077,346 | $ | 712.45 | |||
Granted | 10,102,033 | $ | 1,082.22 | |||
Vested | (7,088,915 | ) | $ | 718.22 | ||
Forfeited/canceled | (776,371 | ) | $ | 742.02 | ||
Unvested as of June 30, 2018 | 22,314,093 | $ | 876.95 |
Alphabet Inc. |
• | Google – Google includes our main products such as Ads, Android, Chrome, Commerce, Google Cloud, Google Maps, Google Play, Hardware (including Nest), Search, and YouTube. Our technical infrastructure and some newer efforts like virtual reality are also included in Google. Google generates revenues primarily from advertising; sales of apps, in-app purchases, digital content products, and hardware; and licensing and service fees, including fees received for Google Cloud offerings. |
• | Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access, Calico, CapitalG, Chronicle, GV, Verily, Waymo, and X. Revenues from the Other Bets are derived primarily through the sales of internet and TV services through Access as well as licensing and R&D services through Verily. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Revenues: | |||||||||||||||
Google | $ | 25,913 | $ | 32,512 | $ | 50,531 | $ | 63,508 | |||||||
Other Bets | 97 | 145 | 229 | 295 | |||||||||||
Total revenues | $ | 26,010 | $ | 32,657 | $ | 50,760 | $ | 63,803 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Operating income (loss): | |||||||||||||||
Google | $ | 7,664 | $ | 8,959 | $ | 15,110 | $ | 17,327 | |||||||
Other Bets | (633 | ) | (732 | ) | (1,336 | ) | (1,303 | ) | |||||||
Reconciling items(1) | (2,899 | ) | (5,420 | ) | (3,074 | ) | (6,216 | ) | |||||||
Total income from operations | $ | 4,132 | $ | 2,807 | $ | 10,700 | $ | 9,808 |
(1) | Reconciling items are primarily comprised of the European Commission fines for the three and six months ended June 30, 2017 and 2018, respectively, and performance fees for the three and six months ended June 30, 2018, as well as corporate administrative costs and other miscellaneous items that are not allocated to individual segments. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Capital expenditures: | |||||||||||||||
Google | $ | 2,838 | $ | 5,299 | $ | 5,247 | $ | 12,968 | |||||||
Other Bets | 148 | 10 | 315 | 65 | |||||||||||
Reconciling items(2) | (155 | ) | 168 | (223 | ) | (257 | ) | ||||||||
Total capital expenditures as presented on the Consolidated Statements of Cash Flows | $ | 2,831 | $ | 5,477 | $ | 5,339 | $ | 12,776 |
(2) | Reconciling items are 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 and other miscellaneous differences. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Stock-based compensation: | |||||||||||||||
Google | $ | 1,884 | $ | 2,288 | $ | 3,766 | $ | 4,592 | |||||||
Other Bets | 81 | 127 | 167 | 239 | |||||||||||
Reconciling items(3) | 38 | (2 | ) | 79 | 39 | ||||||||||
Total stock-based compensation(4) | $ | 2,003 | $ | 2,413 | $ | 4,012 | $ | 4,870 | |||||||
Depreciation, amortization, and impairment: | |||||||||||||||
Google | $ | 1,564 | $ | 2,031 | $ | 2,980 | $ | 3,932 | |||||||
Other Bets | 61 | 83 | 148 | 168 | |||||||||||
Total depreciation, amortization, and impairment as presented on the Consolidated Statements of Cash Flows | $ | 1,625 | $ | 2,114 | $ | 3,128 | $ | 4,100 |
(3) | Reconciling items represent corporate administrative costs that are not allocated to individual segments. |
(4) | For purposes of segment reporting, SBC represents awards that we expect to settle in Alphabet stock. |
As of December 31, 2017 | As of June 30, 2018 | ||||||
(unaudited) | |||||||
Long-lived assets: | |||||||
United States | $ | 55,113 | $ | 66,460 | |||
International | 17,874 | 20,993 | |||||
Total long-lived assets | $ | 72,987 | $ | 87,453 |
Alphabet Inc. |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Revenues of $32.7 billion and revenue growth of 26% year over year, constant currency revenue growth of 23% year over year. |
• | Google segment revenues of $32.5 billion with revenue growth of 25% year over year and Other Bets revenues of $145.0 million with revenue growth of 49% year over year. |
• | Revenues from the United States, EMEA, APAC, and Other Americas were $14.9 billion, $10.8 billion, $5.1 billion, and $1.8 billion, respectively. |
• | Cost of revenues was $13.9 billion, consisting of TAC of $6.4 billion and other cost of revenues of $7.5 billion. Our TAC as a percentage of advertising revenues was 23%. |
• | Operating expenses (excluding cost of revenues) were $16.0 billion, including the European Commission (EC) Android fine of $5.1 billion. |
• | Income from operations was $2.8 billion. |
• | Other income (expense), net, was $1.4 billion. |
• | Effective tax rate was 24%. |
• | Net income was $3.2 billion with diluted net income per share of $4.54. |
• | Operating cash flow was $10.1 billion. |
• | Capital expenditures were $5.5 billion. |
• | Number of employees was 89,058 as of June 30, 2018. |
• | Google – Google includes our main products such as Ads, Android, Chrome, Commerce, Google Cloud, Google Maps, Google Play, Hardware (including Nest), Search, and YouTube. Our technical infrastructure and some newer efforts like virtual reality are also included in Google. Google generates revenues primarily from advertising; sales of apps, in-app purchases, digital content products, and hardware; and licensing and service fees, including fees received for Google Cloud offerings. |
• | Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access, Calico, CapitalG, Chronicle, GV, Verily, Waymo, and X. Revenues from the Other Bets are derived primarily through the sales of internet and TV services through Access as well as licensing and R&D services through Verily. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Google segment | |||||||||||||||
Google properties revenues | $ | 18,425 | $ | 23,262 | $ | 35,828 | $ | 45,260 | |||||||
Google Network Members' properties revenues | 4,247 | 4,825 | 8,255 | 9,469 | |||||||||||
Google advertising revenues | 22,672 | 28,087 | 44,083 | 54,729 | |||||||||||
Google other revenues | 3,241 | 4,425 | 6,448 | 8,779 | |||||||||||
Google segment revenues | 25,913 | 32,512 | 50,531 | 63,508 | |||||||||||
Other Bets | |||||||||||||||
Other Bets revenues | 97 | 145 | 229 | 295 | |||||||||||
Revenues | $ | 26,010 | $ | 32,657 | $ | 50,760 | $ | 63,803 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Google segment revenues | $ | 25,913 | $ | 32,512 | $ | 50,531 | $ | 63,508 | |||||||
Google segment revenues as a percentage of total revenues | 99.6 | % | 99.6 | % | 99.5 | % | 99.5 | % |
Alphabet Inc. |
• | advertiser competition for keywords; |
• | changes in advertising quality or formats; |
• | changes in device mix; |
• | changes in foreign currency exchange rates; |
• | fees advertisers are willing to pay based on how they manage their advertising costs; |
• | general economic conditions; |
• | growth rates of revenues within Google properties; |
• | seasonality; and |
• | traffic growth in emerging markets compared to more mature markets and across various advertising verticals and channels. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Google properties revenues | $ | 18,425 | $ | 23,262 | $ | 35,828 | $ | 45,260 | |||||||
Google properties revenues as a percentage of Google segment revenues | 71.1 | % | 71.5 | % | 70.9 | % | 71.3 | % | |||||||
Paid clicks change | 58 | % | 59 | % | |||||||||||
Cost-per-click change | (22 | )% | (21 | )% |
• | Google search properties which includes revenues from traffic generated by search distribution partners who use Google.com as their default search in browsers, toolbars, etc.; and |
• | Other Google owned and operated properties like Gmail, Google Maps, Google Play, and YouTube. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Google Network Members' properties revenues | $ | 4,247 | $ | 4,825 | $ | 8,255 | $ | 9,469 | |||||||
Google Network Members' properties revenues as a percentage of Google segment revenues | 16.4 | % | 14.8 | % | 16.3 | % | 14.9 | % | |||||||
Impressions change | 1 | % | 1 | % | |||||||||||
Cost-per-impression change | 14 | % | 16 | % |
• | AdMob; |
• | AdSense (such as AdSense for Content, AdSense for Search, etc.); and |
• | DoubleClick AdExchange. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Google other revenues | $ | 3,241 | $ | 4,425 | $ | 6,448 | $ | 8,779 | |||||||
Google other revenues as a percentage of Google segment revenues | 12.5 | % | 13.6 | % | 12.8 | % | 13.8 | % |
• | Google Cloud offerings; and |
• | Hardware. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Other Bets revenues | $ | 97 | $ | 145 | $ | 229 | $ | 295 | |||||||
Other Bets revenues as a percentage of total revenues | 0.4 | % | 0.4 | % | 0.5 | % | 0.5 | % |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||
United States | 47 | % | 46 | % | 47 | % | 46 | % | |||
EMEA | 33 | % | 33 | % | 33 | % | 33 | % | |||
APAC | 14 | % | 15 | % | 15 | % | 15 | % | |||
Other Americas | 6 | % | 6 | % | 5 | % | 6 | % |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
EMEA revenues | $ | 8,545 | $ | 10,785 | $ | 16,636 | $ | 21,259 | |||||||
Exclude foreign exchange effect on current period revenues using prior year rates | 396 | (721 | ) | 840 | (1,815 | ) | |||||||||
Exclude hedging effect recognized in current period | 12 | 103 | (146 | ) | 320 | ||||||||||
EMEA constant currency revenues | $ | 8,953 | $ | 10,167 | $ | 17,330 | $ | 19,764 | |||||||
Prior period EMEA revenues, excluding hedging effect | $ | 7,415 | $ | 8,557 | $ | 14,426 | $ | 16,490 | |||||||
EMEA revenue growth | 14 | % | 26 | % | 14 | % | 28 | % | |||||||
EMEA constant currency revenue growth | 21 | % | 19 | % | 20 | % | 20 | % | |||||||
APAC revenues | $ | 3,730 | $ | 5,090 | $ | 7,349 | $ | 9,894 | |||||||
Exclude foreign exchange effect on current period revenues using prior year rates | (24 | ) | (91 | ) | (87 | ) | (289 | ) | |||||||
Exclude hedging effect recognized in current period | (11 | ) | — | (70 | ) | 15 | |||||||||
APAC constant currency revenues | $ | 3,695 | $ | 4,999 | $ | 7,192 | $ | 9,620 | |||||||
Prior period APAC revenues, excluding hedging effect | $ | 2,900 | $ | 3,719 | $ | 5,672 | $ | 7,279 | |||||||
APAC revenue growth | 28 | % | 36 | % | 29 | % | 35 | % | |||||||
APAC constant currency revenue growth | 27 | % | 34 | % | 27 | % | 32 | % | |||||||
Other Americas revenues | $ | 1,413 | $ | 1,849 | $ | 2,684 | $ | 3,573 | |||||||
Exclude foreign exchange effect on current period revenues using prior year rates | (8 | ) | 44 | (85 | ) | 25 | |||||||||
Exclude hedging effect recognized in current period | (4 | ) | — | (4 | ) | 7 | |||||||||
Other Americas constant currency revenues | $ | 1,401 | $ | 1,893 | $ | 2,595 | $ | 3,605 | |||||||
Prior period Other Americas revenues, excluding hedging effect | $ | 1,072 | $ | 1,409 | $ | 1,996 | $ | 2,680 | |||||||
Other Americas revenue growth | 31 | % | 31 | % | 33 | % | 33 | % | |||||||
Other Americas constant currency revenue growth | 31 | % | 34 | % | 30 | % | 35 | % | |||||||
United States revenues | $ | 12,322 | $ | 14,933 | $ | 24,091 | $ | 29,077 | |||||||
United States revenue growth | 23 | % | 21 | % | 24 | % | 21 | % | |||||||
Total revenues | $ | 26,010 | $ | 32,657 | $ | 50,760 | $ | 63,803 | |||||||
Total constant currency revenues | $ | 26,371 | $ | 31,992 | $ | 51,208 | $ | 62,066 | |||||||
Total revenue growth | 21 | % | 26 | % | 22 | % | 26 | % | |||||||
Total constant currency revenue growth | 23 | % | 23 | % | 23 | % | 23 | % |
Alphabet Inc. |
• | Amortization of certain intangible assets; |
• | Content acquisition costs primarily related to payments to content providers from whom we license video and other content for distribution on YouTube and Google Play (we pay fees to these content providers based on revenues generated or a flat fee); |
• | Credit card and other transaction fees related to processing customer transactions; |
• | Expenses associated with our data centers and other operations (including bandwidth, compensation expenses (including SBC), depreciation, energy, and other equipment costs); and |
• | Inventory related costs for hardware we sell. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
TAC | $ | 5,091 | $ | 6,420 | $ | 9,720 | $ | 12,708 | |||||||
Other cost of revenues | 5,282 | 7,463 | 10,448 | 14,642 | |||||||||||
Total cost of revenues | $ | 10,373 | $ | 13,883 | $ | 20,168 | $ | 27,350 | |||||||
Total cost of revenues as a percentage of revenues | 39.9 | % | 42.5 | % | 39.7 | % | 42.9 | % | |||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
TAC to distribution partners | $ | 2,049 | $ | 3,009 | $ | 3,854 | $ | 5,911 | |||||||
TAC to distribution partners as a percentage of Google properties revenues(1) (Google properties TAC rate) | 11.1 | % | 12.9 | % | 10.8 | % | 13.1 | % | |||||||
TAC to Google Network Members | $ | 3,042 | $ | 3,411 | $ | 5,866 | $ | 6,797 | |||||||
TAC to Google Network Members as a percentage of Google Network Members' properties revenues(1) (Network Members TAC rate) | 71.6 | % | 70.7 | % | 71.1 | % | 71.8 | % | |||||||
TAC | $ | 5,091 | $ | 6,420 | $ | 9,720 | $ | 12,708 | |||||||
TAC as a percentage of advertising revenues(1) (Aggregate TAC rate) | 22.5 | % | 22.9 | % | 22.0 | % | 23.2 | % |
(1) | Revenues include hedging gains (losses) which affect TAC rates. |
Alphabet Inc. |
• | Google Network Members TAC rates, which are affected by the ongoing shift in advertising buying from our traditional network business to programmatic advertising buying which carries higher TAC; |
• | Google properties TAC rates, which are affected by changes in device mix between mobile, desktop, and tablet, partner mix, partner agreement terms such as revenue share arrangements, and the percentage of queries channeled through paid access points; |
• | Growth rates of expenses associated with our data centers and other operations, content acquisition costs, as well as our hardware inventory and related costs; |
• | Increased proportion of non-advertising revenues, whose costs of revenues are generally higher in relation to our advertising revenues; and |
• | Relative revenue growth rates of Google properties and our Google Network Members' properties. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Research and development expenses | $ | 4,172 | $ | 5,114 | $ | 8,114 | $ | 10,153 | |||||||
Research and development expenses as a percentage of revenues | 16.0 | % | 15.7 | % | 16.0 | % | 15.9 | % |
• | Compensation expenses (including SBC) and facilities-related costs for employees responsible for R&D of our existing and new products and services; and |
• | Depreciation and equipment-related expenses. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Sales and marketing expenses | $ | 2,897 | $ | 3,780 | $ | 5,541 | $ | 7,384 | |||||||
Sales and marketing expenses as a percentage of revenues | 11.1 | % | 11.6 | % | 10.9 | % | 11.6 | % |
Alphabet Inc. |
• | Advertising and promotional expenditures related to our products and services; and |
• | Compensation expenses (including SBC) and facilities-related costs for employees engaged in sales and marketing, sales support, and certain customer service functions. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
General and administrative expenses | $ | 1,700 | $ | 2,002 | $ | 3,501 | $ | 4,037 | |||||||
General and administrative expenses as a percentage of revenues | 6.5 | % | 6.1 | % | 6.9 | % | 6.3 | % |
• | Amortization of certain intangible assets; |
• | Compensation expenses (including SBC) and facilities-related costs for employees in our facilities, finance, human resources, information technology, and legal organizations; |
• | Depreciation and equipment-related expenses; and |
• | Professional services fees primarily related to audit, information technology consulting, outside legal, and outsourcing services. |
Alphabet Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Other income (expense), net | $ | 245 | $ | 1,408 | $ | 496 | $ | 4,950 | |||||||
Other income (expense), net, as a percentage of revenues | 0.9 | % | 4.3 | % | 1.0 | % | 7.8 | % |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||
Provision for income taxes | $ | 853 | $ | 1,020 | $ | 2,246 | $ | 2,162 | |||||||
Effective tax rate | 19.5 | % | 24.2 | % | 20.1 | % | 14.6 | % |
Alphabet Inc. |
Six Months Ended | |||||||
June 30, | |||||||
2017 | 2018 | ||||||
Net cash provided by operating activities | $ | 16,951 | $ | 21,774 | |||
Net cash used in investing activities | $ | (10,023 | ) | $ | (11,220 | ) | |
Net cash used in financing activities | $ | (4,414 | ) | $ | (6,955 | ) |
Alphabet Inc. |
Alphabet Inc. |
Alphabet Inc. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
Alphabet Inc. |
PART II. | OTHER INFORMATION |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased (in thousands) (1) | Average Price Paid per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Programs (in thousands) (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions) | ||||||||||
April 1 - 30 | 698 | $ | 1,034.35 | 698 | $ | 7,868 | ||||||||
May 1 - 31 | 681 | $ | 1,066.14 | 681 | $ | 7,142 | ||||||||
June 1 - 30 | 529 | $ | 1,140.18 | 529 | $ | 6,538 | ||||||||
Total | 1,908 | $ | 1,075.05 | 1,908 |
(1) | In January 2018, the board of directors of Alphabet authorized the company to repurchase up to $8.6 billion of its Class C capital stock. 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 Rule 10b5-1 plans. The repurchase program does not have an expiration date. See Note 10 in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to share repurchases. |
(2) | Average price paid per share includes costs associated with the repurchases. |
Alphabet Inc. |
ITEM 6. | EXHIBITS |
Exhibit Number | Description | Incorporated by reference herein | ||||
Form | Date | |||||
10.01 | Current Report on Form 8-K (File No. 001-37580) | June 8, 2018 | ||||
31.01 | * | |||||
31.02 | * | |||||
32.01 | ‡ | |||||
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 |
* | Filed herewith. |
‡ | Furnished herewith. |
Alphabet Inc. |
ALPHABET INC. | ||
July 23, 2018 | By: | /s/ RUTH M. PORAT |
Ruth M. Porat | ||
Senior Vice President and Chief Financial Officer |
ALPHABET INC. | ||
July 23, 2018 | By: | /s/ AMIE THUENER O'TOOLE |
Amie Thuener O'Toole | ||
Vice President and Chief Accounting Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Alphabet Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ LARRY PAGE |
Larry Page |
Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Alphabet Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ RUTH PORAT |
Ruth Porat |
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
By: | /S/ LARRY PAGE |
Name: | Larry Page |
Title: | Chief Executive Officer (Principal Executive Officer) |
By: | /S/ RUTH PORAT |
Name: | Ruth Porat |
Title: | Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 18, 2018 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | GOOG, GOOGL | |
Entity Registrant Name | Alphabet Inc. | |
Entity Central Index Key | 0001652044 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 298,914,199 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 46,880,076 | |
Class C Capital Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 349,883,498 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement [Abstract] | ||||
Revenues | $ 32,657 | $ 26,010 | $ 63,803 | $ 50,760 |
Costs and expenses: | ||||
Cost of revenues | 13,883 | 10,373 | 27,350 | 20,168 |
Research and development | 5,114 | 4,172 | 10,153 | 8,114 |
Sales and marketing | 3,780 | 2,897 | 7,384 | 5,541 |
General and administrative | 2,002 | 1,700 | 4,037 | 3,501 |
European Commission fines | 5,071 | 2,736 | 5,071 | 2,736 |
Total costs and expenses | 29,850 | 21,878 | 53,995 | 40,060 |
Income from operations | 2,807 | 4,132 | 9,808 | 10,700 |
Other income (expense), net | 1,408 | 245 | 4,950 | 496 |
Income before income taxes | 4,215 | 4,377 | 14,758 | 11,196 |
Provision for income taxes | 1,020 | 853 | 2,162 | 2,246 |
Net income | $ 3,195 | $ 3,524 | $ 12,596 | $ 8,950 |
Basic net income per share of Class A and B common stock and Class C capital stock (in dollars per share) | $ 4.60 | $ 5.09 | $ 18.13 | $ 12.94 |
Diluted net income per share of Class A and B common stock and Class C capital stock (in dollars per share) | $ 4.54 | $ 5.01 | $ 17.89 | $ 12.74 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 3,195 | $ 3,524 | $ 12,596 | $ 8,950 |
Other comprehensive income (loss): | ||||
Change in foreign currency translation adjustment | (1,142) | 565 | (485) | 1,016 |
Available-for-sale investments: | ||||
Change in net unrealized gains (losses) | (148) | 86 | (356) | 225 |
Less: reclassification adjustment for net (gains) losses included in net income | (6) | 26 | 33 | 51 |
Net change (net of tax effect of $0, $60, $0, and $60) | (154) | 112 | (323) | 276 |
Cash flow hedges: | ||||
Change in net unrealized gains (losses) | 363 | (230) | 101 | (459) |
Less: reclassification adjustment for net (gains) losses included in net income | 78 | (6) | 272 | (159) |
Net change (net of tax effect of $143, $109, $292, and $97) | 441 | (236) | 373 | (618) |
Other comprehensive income (loss) | (855) | 441 | (435) | 674 |
Comprehensive income | $ 2,340 | $ 3,965 | $ 12,161 | $ 9,624 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Tax expense (benefit) related to available-for-sale investments | $ (60) | $ 0 | $ (60) | $ 0 |
Tax expense (benefit) related to cash flow hedges | $ (109) | $ (143) | $ (97) | $ (292) |
Nature of Operations and Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. (Alphabet) became the successor issuer to Google. We generate revenues primarily by delivering relevant, cost-effective online advertising. Basis of Consolidation The consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated under the variable interest and voting models. All intercompany balances and transactions have been eliminated. Unaudited Interim Financial Information The Consolidated Balance Sheets as of June 30, 2018, the Consolidated Statements of Income for the three and six months ended June 30, 2017 and 2018, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2018, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2018 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2018, our results of operations for the three and six months ended June 30, 2017 and 2018, and our cash flows for the six months ended June 30, 2017 and 2018. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on February 5, 2018. Use of Estimates Preparation of consolidated financial statements in conformity with 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, 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 assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Fair Value of Financial Instruments Our financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents, marketable securities, derivative contracts, and non-marketable debt securities. Our financial assets that are measured at fair value on a nonrecurring basis include non-marketable equity securities measured at fair value when observable price changes are identified or are impaired. Other financial assets and liabilities are carried at cost with fair value disclosed, if required. 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 - 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. Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. As currently issued, entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. There are additional optional practical expedients that an entity may elect to apply. Based on our current portfolio of leases, approximately $8 billion of lease assets and liabilities would be recognized on our balance sheet, primarily relating to real estate. We are in the process of implementing changes to our systems and processes in conjunction with our review of lease agreements. We will adopt Topic 842 effective January 1, 2019 and expect to elect certain available transitional practical expedients. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. We are currently in the process of evaluating the effect of the adoption of ASU 2016-13 on our consolidated financial statements. Recently adopted accounting pronouncements 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," which amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. We adopted ASU 2016-01 as of January 1, 2018 using the modified retrospective method for our marketable equity securities and the prospective method for our non-marketable equity securities. This resulted in a $98 million reclassification of net unrealized gains from accumulated other comprehensive income (AOCI) to opening retained earnings. We have elected to use the measurement alternative for our non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. The adoption of ASU 2016-01 increases the volatility of our other income (expense), net, as a result of the remeasurement of our equity securities. For further information on unrealized gains from equity securities, see Note 3. In October 2016, the FASB issued Accounting Standards Update No. 2016-16 (ASU 2016-16) "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory." ASU 2016-16 generally accelerates the recognition of income tax consequences for asset transfers between entities under common control. We adopted ASU 2016-16 as of January 1, 2018 using a modified retrospective transition method, resulting in a $701 million reclassification of unrecognized income tax effects related to asset transfers that occurred prior to adoption from other current and non-current assets to opening retained earnings. Prior Period Reclassifications Certain amounts in prior periods have been reclassified to conform with current period presentation. |
Revenues |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Sales and usage-based taxes are excluded from revenues.
The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in millions, unaudited):
Advertising Revenues We generate revenues primarily by delivering advertising on Google properties and Google Network Members’ properties. Google properties revenues consist primarily of advertising revenues generated on Google.com, the Google Search app, and other Google owned and operated properties like Gmail, Google Maps, Google Play, and YouTube. Google Network Members’ properties revenues consist primarily of advertising revenues generated on Google Network Members’ properties. Our customers generally purchase advertising inventory through AdWords, DoubleClick AdExchange, and DoubleClick Bid Manager, among others. We offer advertising on a cost-per-click basis, which means that an advertiser pays us only when a user clicks on an ad on Google properties or Google Network Members' properties or when a user views certain YouTube engagement ads. For these customers, we recognize revenue each time a user clicks on the ad or when a user views the ad for a specified period of time. We also offer advertising on other bases such as cost-per-impression, which means an advertiser pays us based on the number of times their ads are displayed on Google properties or Google Network Members’ properties. For these customers, we recognize revenue each time an ad is displayed. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. For ads placed on Google Network Members’ properties, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed on Google Network Members’ properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, and amounts paid to Google Network Members are recorded as cost of revenues. Where we are the principal, we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory before it is transferred to our customers, and is further supported by us being primarily responsible to our customers and having a level of discretion in establishing pricing. Other Revenues Google other revenues and Other Bets revenues consist primarily of revenues from:
As it relates to Google other revenues, the most significant judgment is determining whether we are the principal or agent for app sales and in-app purchases through the Google Play store. We report revenues from these transactions on a net basis because our performance obligation is to facilitate a transaction between app developers and end users, for which we earn a commission. Consequently, the portion of the gross amount billed to end users that is remitted to app developers is not reflected as revenues. Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenues to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin. Deferred Revenues We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. The increase in the deferred revenue balance for the six months ended June 30, 2018 is primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $1.0 billion of revenues recognized that were included in the deferred revenue balance as of December 31, 2017. Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Debt Securities We classify our marketable debt securities within Level 2 in the fair value hierarchy because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value. We reclassified our U.S. government notes included in marketable debt securities from Level 1 to Level 2 within the fair value hierarchy as these securities are priced based on a combination of quoted prices for identical or similar instruments in active markets and models with significant observable market inputs. Prior period amounts have been reclassified to conform with current period presentation. The vast majority of our government bond holdings are highly liquid U.S. government notes. We classify our non-marketable debt securities within Level 3 in the fair value hierarchy because they are primarily preferred stock and convertible notes issued by private companies without quoted market prices. To estimate the fair value of our non-marketable debt 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 fair value based on the best available information at the measurement date. The following tables summarize our debt securities by significant investment categories as of December 31, 2017 and June 30, 2018 (in millions):
We determine realized gains or losses on the sale of debt securities on a specific identification method. We recognized gross realized gains of $17 million and $37 million for the three months ended June 30, 2017 and 2018, respectively, and $162 million and $39 million for the six months ended June 30, 2017 and 2018, respectively. We recognized gross realized losses of $43 million and $31 million for the three months ended June 30, 2017 and 2018, respectively, and $213 million and $72 million for the six months ended June 30, 2017 and 2018, respectively. We reflect these gains and losses as a component of other income (expense), net, in the Consolidated Statements of Income. The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions, unaudited):
The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2017 and June 30, 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):
During the three and six months ended June 30, 2017 and 2018, we did not recognize any significant other-than-temporary impairment losses. Losses on impairment are included as a component of other income (expense), net, in the Consolidated Statements of Income. See Note 6 for further details on other income (expense), net. The following table presents a reconciliation for our non-marketable debt securities measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions, unaudited):
Equity Investments The following discusses our marketable equity securities, non-marketable equity securities, realized and unrealized gains and losses on marketable and non-marketable equity securities, as well as our equity method investments. Marketable equity securities Our marketable equity securities are publicly traded stocks or funds measured at fair value and classified within Level 1 and 2 in the fair value hierarchy because we use quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets. Prior to January 1, 2018, we accounted for the majority of our marketable equity securities at fair value with unrealized gains and losses recognized in accumulated other comprehensive income on the balance sheet. Realized gains and losses on marketable equity securities sold or impaired were recognized in other income (expense), net. On January 1, 2018, we adopted ASU 2016-01. Our marketable equity securities are measured at fair value. Starting January 1, 2018, unrealized gains and losses are recognized in other income (expense), net. Upon adoption, we reclassified $98 million net unrealized gains related to marketable equity securities from accumulated other comprehensive income to opening retained earnings. The following table summarizes marketable equity securities measured at fair value by significant investment categories as of December 31, 2017 and June 30, 2018 (in millions):
Non-marketable equity securities Our non-marketable equity securities are investments in privately held companies without readily determinable market values. Prior to January 1, 2018, we accounted for our non-marketable equity securities at cost less impairment. Realized gains and losses on non-marketable securities sold or impaired were recognized in other income (expense), net. As of December 31, 2017, non-marketable equity securities accounted for under the cost method had a carrying value of $4.5 billion and a fair value of approximately $8.8 billion. On January 1, 2018, we adopted ASU 2016-01 which changed the way we account for non-marketable securities. The carrying value of our non-marketable equity securities is adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. Because we adopted ASU 2016-01 prospectively, we recognize unrealized gains that occurred in prior periods in the first period after January 1, 2018 when there is an observable transaction for our securities. Non-marketable equity securities remeasured during the six months ended June 30, 2018 are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities we hold. The following is a summary of unrealized gains and losses recorded in other income (expense), net, and included as adjustments to the carrying value of non-marketable equity securities held as of June 30, 2018 (in millions, unaudited):
The following table summarizes the total carrying value of our non-marketable equity securities held as of June 30, 2018 including cumulative unrealized upward and downward adjustments made to the initial cost basis of the securities (in millions, unaudited):
During the three months ended June 30, 2018, included in the $7.9 billion of non-marketable equity securities, $1.6 billion were measured at fair value based on observable market transactions, resulting in a net unrealized gain of $491 million. Gains and losses on marketable and non-marketable equity securities Realized and unrealized gains and losses for our marketable and non-marketable equity securities for the three and six months ended June 30, 2018 are summarized below (in millions, unaudited):
Investments accounted for under the Equity Method As of December 31, 2017 and June 30, 2018, investments accounted for under the equity method had a carrying value of approximately $1.4 billion and $1.3 billion, respectively. Our share of gains and losses in equity method investments including impairment are included as a component of other income (expense), net, in the Consolidated Statements of Income. See Note 6 for further details on other income (expense), net. Derivative Financial Instruments 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. We recognize derivative instruments as either assets or liabilities in the Consolidated Balance Sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives in the Consolidated Statements of Income as either other income (expense), net, or revenues, or in the Consolidated Balance Sheets in AOCI, as discussed below. As a result of our adoption of Accounting Standard Update No. 2017-12 (ASU 2017-12) "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities," the components excluded from the assessment of hedge effectiveness are recognized in the same income statement line as the hedged item beginning January 1, 2018. 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 also use interest rate derivative contracts to hedge interest rate exposures on our fixed income securities and debt issuances. 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, 2017 and June 30, 2018, we received cash collateral related to the derivative instruments under our collateral security arrangements of $15 million and $443 million, respectively, which was included in other current assets. Cash Flow Hedges We use foreign currency forwards and option contracts, including collars (an option strategy comprised of a combination of purchased and written 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 $11.7 billion and $11.8 billion as of December 31, 2017 and June 30, 2018, respectively. These contracts have maturities of 24 months or less. For forwards and option contracts, we exclude the change in the forward points and time value from our assessment of hedge effectiveness. The initial value of the excluded component is amortized on a straight-line basis over the life of the hedging instrument and recognized in revenues. The difference between fair value changes of the excluded component and the amount amortized to revenues is recorded in AOCI. We reflect the gains or losses of a cash flow hedge included in our hedge effective assessment as a component of AOCI and subsequently reclassify these gains and losses to revenues when the hedged transactions are recorded. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI are immediately reclassified to other income (expense), net. As of June 30, 2018, the net gain or loss of our foreign currency cash flow hedges before tax effect was a net accumulated gain of $248 million, of which a net gain of $248 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 forward points for the forward contracts from the assessment of hedge effectiveness. We recognize changes in the excluded component in other income (expense), net. The notional principal of these contracts was $2.9 billion and $1.5 billion as of December 31, 2017 and June 30, 2018, respectively. Gains and losses on these forward contracts are recognized in other income (expense), net, along with the offsetting gains and losses of the related hedged items. Other Derivatives Other derivatives not designated as hedging instruments consist of foreign currency forward 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 the outstanding foreign exchange contracts was $15.2 billion and $16.0 billion as of December 31, 2017 and June 30, 2018, respectively. The fair values of our outstanding derivative instruments were as follows (in millions):
The gains (losses) on derivatives in cash flow hedging relationships recognized in other comprehensive income (OCI) is summarized below (in millions, unaudited):
The effect of derivative instruments on income is summarized below (in millions, unaudited):
Offsetting of Derivatives We present our forwards and purchased options at gross fair values in the Consolidated Balance Sheets. For foreign currency collars, we present at net fair values where both purchased and written options are with the same counterparty. Our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2017 and June 30, 2018, information related to these offsetting arrangements were as follows (in millions): Offsetting of Assets
Offsetting of Liabilities
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities (VIEs) Consolidated VIEs We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. We are the primary beneficiary because we have the power to direct activities that most significantly affect their economic performance and have the obligation to absorb the majority of their losses or benefits. The results of operations and financial position of these VIEs are included in our consolidated financial statements. For certain consolidated VIEs, their assets are not available to us and their creditors do not have recourse to us. As of December 31, 2017 and June 30, 2018, assets that can only be used to settle obligations of these VIEs were $1.7 billion and $1.5 billion, respectively, and the liabilities for which creditors do not have recourse to us were $997 million and $949 million, respectively. Calico Calico is a life science company with a mission to harness advanced technologies to increase our understanding of the biology that controls lifespan. In September 2014, AbbVie Inc. (AbbVie) and Calico entered into a research and development collaboration agreement intended to help both companies discover, develop, and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. In the second quarter of 2018, AbbVie and Calico amended the collaboration agreement resulting in an increase in total commitments. As of June 30, 2018, AbbVie has contributed $750 million to fund the collaboration pursuant to the agreement and is committed to an additional $500 million which will be paid by the fourth quarter of 2019. As of June 30, 2018, Calico has contributed $250 million and has committed up to an additional $1.0 billion. Calico has used its scientific expertise to establish a world-class research and development facility, with a focus on drug discovery and early drug development; and AbbVie provides scientific and clinical development support and its commercial expertise to bring new discoveries to market. Both companies share costs and profits for projects covered under this agreement 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. As of June 30, 2018, we have contributed $240 million to Calico in exchange for Calico convertible preferred units and are committed to fund up to an additional $990 million on an as-needed basis and subject to certain conditions. Verily Verily is a life science company with a mission to make the world's health data useful so that people enjoy healthier lives. In 2017, Temasek, a Singapore-based investment company, purchased a noncontrolling interest in Verily for an aggregate of $800 million in cash. The transaction was accounted for as an equity transaction and no gain or loss was recognized. Noncontrolling interest and net loss attributable to noncontrolling interest were not separately presented on our consolidated financial statements as of and for the three and six months ended June 30, 2018 as the amounts were not material. Unconsolidated VIEs Certain renewable energy investments included in our non-marketable equity investments accounted for under the equity method are VIEs. These entities' activities involve power generation using renewable sources. We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly affect their economic performance such as setting operating budgets. Therefore, we do not consolidate these VIEs in our consolidated financial statements. The carrying value and maximum exposure of these VIEs were $896 million and $759 million as of December 31, 2017 and June 30, 2018, respectively. The maximum exposure is based on current investments to date. We have determined the single source of our exposure to these VIEs is our capital investment in them. Other unconsolidated VIEs were not material as of December 31, 2017 and June 30, 2018. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Short-Term Debt We have a debt financing program of up to $5.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. We had no commercial paper outstanding as of December 31, 2017 and June 30, 2018, respectively. Long-Term Debt Google issued $3.0 billion of senior unsecured notes in three tranches (collectively, 2011 Notes) in May 2011, due in 2014, 2016, and 2021, as well as $1.0 billion of senior unsecured notes (2014 Notes) in February 2014 due in 2024. In April 2016, we completed an exchange offer with eligible holders of Google’s 2011 Notes due 2021 and 2014 Notes due 2024 (collectively, the Google Notes). An aggregate principal amount of approximately $1.7 billion of the Google Notes was exchanged for approximately $1.7 billion of Alphabet notes with identical interest rate and maturity. Because the exchange was between a parent and the subsidiary company and for substantially identical notes, the change was treated as a debt modification for accounting purposes with no gain or loss recognized. In August 2016, Alphabet issued $2.0 billion of senior unsecured notes (2016 Notes) due 2026. The net proceeds from the issuance of the 2016 Notes were used for general corporate purposes, including the repayment of outstanding commercial paper. The Alphabet notes due in 2021, 2024, and 2026 rank equally with each other and are structurally subordinate to the outstanding Google Notes. The total outstanding long-term debt is summarized below (in millions):
The effective interest yields based on proceeds received from the outstanding notes due in 2021, 2024, and 2026 were 3.734%, 3.377%, and 2.231%, respectively, with interest payable semi-annually. We may redeem these notes at any time in whole or in part at specified redemption prices. The total estimated fair value of all outstanding notes was approximately $4.0 billion as of December 31, 2017 and $3.8 billion as of June 30, 2018. The fair value was determined based on observable market prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy. Credit Facility As of June 30, 2018, we have a $4.0 billion revolving credit facility which expires in February 2021. The interest rate for the credit facility is determined based on a formula using certain market rates. No amounts were outstanding under the credit facility as of December 31, 2017 and June 30, 2018. |
Supplemental Financial Statement Information |
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Balance Sheet Components Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Statement Information | Supplemental Financial Statement Information Property and Equipment, Net Property and equipment, net, consisted of the following (in millions):
As of December 31, 2017 and June 30, 2018, assets under capital lease with a cost basis of $390 million and $520 million were included in property and equipment, respectively. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following (in millions):
Accumulated Other Comprehensive Income (Loss) The components of AOCI, net of tax, were as follows (in millions, unaudited):
The effects on net income of amounts reclassified from AOCI were as follows (in millions, unaudited):
Other Income (Expense), Net The components of other income (expense), net, were as follows (in millions, unaudited):
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Acquisitions |
6 Months Ended |
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Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Agreement with HTC Corporation (HTC) In January 2018, we completed the acquisition of a team of engineers and a non-exclusive license of intellectual property from HTC for $1.1 billion in cash. In aggregate, $10 million was cash acquired, $165 million was attributed to intangible assets, $934 million was attributed to goodwill, and $9 million was attributed to net liabilities assumed. Goodwill, which was included in Google, is not deductible for tax purposes. We expect this transaction to accelerate Google’s ongoing hardware efforts. The transaction was accounted for as a business combination. Other Acquisitions During the six months ended June 30, 2018, we completed other acquisitions and purchases of intangible assets for total consideration of approximately $520 million. In aggregate, $10 million was cash acquired, $273 million was attributed to intangible assets, $268 million was attributed to goodwill, and $31 million was attributed to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our offerings and expand our expertise in engineering and other functional areas. The amount of goodwill expected to be deductible for tax purposes is approximately $78 million. Pro forma results of operations for these acquisitions, including HTC, have not been presented because they are not material to the consolidated results of operations, either individually or in the aggregate. For all intangible assets acquired and purchased during the six months ended June 30, 2018, patents and developed technology have a weighted-average useful life of 3.8 years, customer relationships have a weighted-average useful life of 2.2 years, and trade names and other have a weighted-average useful life of 3.7 years. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill Changes in the carrying amount of goodwill for the six months ended June 30, 2018 were as follows (in millions, unaudited):
Other Intangible Assets Information regarding purchased intangible assets were as follows (in millions):
Amortization expense relating to purchased intangible assets was $200 million and $250 million for the three months ended June 30, 2017 and 2018, respectively, and $406 million and $445 million for the six months ended June 30, 2017 and 2018, respectively. As of June 30, 2018, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter are as follows (in millions, unaudited):
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Contingencies |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies 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 and ads, to which we responded on August 27, 2015. On July 14, 2016, the EC issued a Supplementary SO regarding shopping search results and ads. On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display and ranking of shopping search results and ads infringed European competition law. The EC decision imposed a €2.42 billion ($2.74 billion as of June 27, 2017) fine. On September 11, 2017, we appealed the EC decision and on September 27, 2017, we implemented product changes to bring shopping ads into compliance with the EC's decision. We recognized a charge of $2.74 billion for the fine in the second quarter of 2017. The fine is included in accrued expenses and other current liabilities on our Consolidated Balance Sheets as we provided bank guarantees in lieu of a cash payment for the fine. On April 20, 2016, the EC issued an SO regarding certain Android distribution practices. We responded to the SO and the EC's informational requests. On July 18, 2018, the EC announced its decision that certain provisions in Google’s Android-related distribution agreements infringed European competition law. The EC decision imposed a €4.34 billion ($5.07 billion as of June 30, 2018) fine and directed the termination of the conduct at issue. The EC decision represented a recognized subsequent event and accordingly a charge was recorded in the second quarter 2018 results. We intend to appeal the decision. On July 14, 2016, the EC issued an SO regarding the syndication of AdSense for Search. We responded to the SO and continue to respond to the EC's informational requests. There is significant uncertainty as to the outcome of this investigation; however, an adverse decision could result in fines and directives to alter or terminate certain conduct. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any. We remain committed to working with the EC to resolve these matters. The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India (CCI), Brazil's Administrative Council for Economic Defense (CADE), and the Korean Fair Trade Commission have also opened investigations into certain of our business practices. In November 2016, we responded to the CCI Director General's report with interim findings of competition law infringements regarding search and ads. On February 8, 2018, the CCI issued its final decision, including a fine of approximately $21 million that was accrued for in the first quarter of 2018, finding no violation of competition law infringement on most of the issues it investigated, but finding violations, including in the display of the “flights unit” in search results, and a contractual provision in certain direct search intermediation agreements. We have appealed the CCI decision. 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. Because 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 affect our business. In 2010, Oracle America, Inc. (Oracle) brought a copyright lawsuit against Google in the Northern District of California, alleging that Google's Android operating system infringes Oracle's copyrights related to certain Java application programming interfaces. After trial, final judgment was entered by the district court in favor of Google on June 8, 2016, and the court decided post-trial motions in favor of Google. Oracle appealed and on March 27, 2018, the appeals court reversed and remanded the case for a trial on damages. On May 29, 2018, we filed a petition to the appeals court for rehearing en banc. We believe this lawsuit is without merit and are defending ourselves vigorously. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter. Other We are also regularly subject to claims, suits, regulatory and 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, regulatory and 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 reasonably possible loss. We evaluate 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 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. Non-Income Taxes We are under audit by various domestic and foreign tax authorities with regards to non-income tax matters. The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the sale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We believe these matters are without merit and we are defending ourselves vigorously. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from our expectations. For information regarding income tax contingencies, see Note 13. |
Stockholders' Equity |
6 Months Ended |
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Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Share Repurchases In October 2016, the board of directors of Alphabet authorized the company to repurchase up to $7.0 billion of its Class C capital stock, which was completed during the first quarter of 2018. In January 2018, the board of directors of Alphabet authorized the company to repurchase up to $8.6 billion of its Class C capital stock. 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 Rule 10b5-1 plans. The repurchase program does not have an expiration date. During the six months ended June 30, 2018, we repurchased and subsequently retired 3.9 million shares of Alphabet Class C capital stock for an aggregate amount of $4.2 billion. |
Net Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | 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, unaudited):
For the periods presented above, 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 the Amended and Restated Certificate of Incorporation of Alphabet Inc. |
Compensation Plans |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Plans | Compensation Plans Stock-Based Compensation For the three months ended June 30, 2017 and 2018, total stock-based compensation (SBC) expense was $2.1 billion and $2.5 billion, including amounts associated with awards we expect to settle in Alphabet stock of $2.0 billion and $2.4 billion, respectively. For the six months ended June 30, 2017 and 2018, total stock-based compensation expense was $4.1 billion and $5.0 billion, respectively, including amounts associated with awards that we expect to settle in Alphabet stock of $4.0 billion and $4.9 billion, respectively. Stock-Based Award Activities The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2018 (unaudited):
As of June 30, 2018, there was $18.4 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.7 years. Performance Fees We have compensation arrangements with payouts based on realized investment returns. We recognize compensation expense based on the estimated payouts, which may result in expense recognized before investment returns are realized. For the three and six months ended June 30, 2018, performance fees of $238 million and $870 million, respectively, primarily related to gains on equity securities (for further information on gains on equity securities, see Note 3) were accrued and recorded as a component of general and administrative expenses. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Our total gross unrecognized tax benefits were $4.7 billion and $5.1 billion as of December 31, 2017 and June 30, 2018, respectively. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $3.0 billion and $3.3 billion as of December 31, 2017 and June 30, 2018, respectively. The Tax Act enacted in December 2017 introduced significant changes to U.S. income tax law. Effective 2018, the Tax Act reduced the U.S. statutory tax rate from 35% to 21% and created new taxes on certain foreign-sourced earnings and certain intercompany payments. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of December 31, 2017. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service (IRS), and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially affect our provision for income taxes and effective tax rate in the period in which the adjustments are made. The adjustments made in the second quarter of 2018 were not significant. The accounting for the tax effects of the Tax Act will be completed later in 2018. In addition, we are subject to the continuous examination of our income tax returns by the 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 effect, 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 the provision for income taxes in the period such resolution occurs. We have received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend against any and all such claims as presented. While we believe it is more likely than not that our tax position will be sustained, it is reasonably possible that we will have future obligations related to these matters. For information regarding non-income taxes, see Note 9. |
Information about Segments and Geographic Areas |
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Information about Segments and Geographic Areas | Information about Segments and Geographic Areas We operate our business in multiple operating segments. Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the other operating segments are combined and disclosed as Other Bets. Our reported segments are:
Revenues, cost of revenues, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our Chief Operating Decision Maker does not evaluate operating segments using asset information. In Q1 2018, Nest joined forces with Google’s hardware team. Consequently, the financial results of Nest have been reported in the Google segment, with Nest revenues reflected in Google other revenues. Prior period segment information has been recast to conform to the current period segment presentation. Consolidated financial results are not affected. Information about segments during the periods presented were as follows (in millions, unaudited):
Stock-based compensation and depreciation, amortization, and impairment are included in segment operating income (loss) as shown below (in millions, unaudited):
The following table presents our long-lived assets by geographic area (in millions):
For revenues by geography, see Note 2. |
Nature of Operations and Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||
Nature of Operations | Nature of Operations Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. (Alphabet) became the successor issuer to Google. We generate revenues primarily by delivering relevant, cost-effective online advertising. |
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Basis of Consolidation | Basis of Consolidation The consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated under the variable interest and voting models. All intercompany balances and transactions have been eliminated. |
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Unaudited Interim Financial Information | Unaudited Interim Financial Information The Consolidated Balance Sheets as of June 30, 2018, the Consolidated Statements of Income for the three and six months ended June 30, 2017 and 2018, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2018, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2018 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2018, our results of operations for the three and six months ended June 30, 2017 and 2018, and our cash flows for the six months ended June 30, 2017 and 2018. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on February 5, 2018. |
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Use of Estimates | Use of Estimates Preparation of consolidated financial statements in conformity with 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, 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 assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents, marketable securities, derivative contracts, and non-marketable debt securities. Our financial assets that are measured at fair value on a nonrecurring basis include non-marketable equity securities measured at fair value when observable price changes are identified or are impaired. Other financial assets and liabilities are carried at cost with fair value disclosed, if required. Debt Securities We classify our marketable debt securities within Level 2 in the fair value hierarchy because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value. We reclassified our U.S. government notes included in marketable debt securities from Level 1 to Level 2 within the fair value hierarchy as these securities are priced based on a combination of quoted prices for identical or similar instruments in active markets and models with significant observable market inputs. Prior period amounts have been reclassified to conform with current period presentation. The vast majority of our government bond holdings are highly liquid U.S. government notes. We classify our non-marketable debt securities within Level 3 in the fair value hierarchy because they are primarily preferred stock and convertible notes issued by private companies without quoted market prices. To estimate the fair value of our non-marketable debt 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 fair value based on the best available information at the measurement date. Equity Investments The following discusses our marketable equity securities, non-marketable equity securities, realized and unrealized gains and losses on marketable and non-marketable equity securities, as well as our equity method investments. Marketable equity securities Our marketable equity securities are publicly traded stocks or funds measured at fair value and classified within Level 1 and 2 in the fair value hierarchy because we use quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets. Prior to January 1, 2018, we accounted for the majority of our marketable equity securities at fair value with unrealized gains and losses recognized in accumulated other comprehensive income on the balance sheet. Realized gains and losses on marketable equity securities sold or impaired were recognized in other income (expense), net. On January 1, 2018, we adopted ASU 2016-01. Our marketable equity securities are measured at fair value. Starting January 1, 2018, unrealized gains and losses are recognized in other income (expense), net. Upon adoption, we reclassified $98 million net unrealized gains related to marketable equity securities from accumulated other comprehensive income to opening retained earnings. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. As currently issued, entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. There are additional optional practical expedients that an entity may elect to apply. Based on our current portfolio of leases, approximately $8 billion of lease assets and liabilities would be recognized on our balance sheet, primarily relating to real estate. We are in the process of implementing changes to our systems and processes in conjunction with our review of lease agreements. We will adopt Topic 842 effective January 1, 2019 and expect to elect certain available transitional practical expedients. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. We are currently in the process of evaluating the effect of the adoption of ASU 2016-13 on our consolidated financial statements. Recently adopted accounting pronouncements 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," which amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. We adopted ASU 2016-01 as of January 1, 2018 using the modified retrospective method for our marketable equity securities and the prospective method for our non-marketable equity securities. This resulted in a $98 million reclassification of net unrealized gains from accumulated other comprehensive income (AOCI) to opening retained earnings. We have elected to use the measurement alternative for our non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. The adoption of ASU 2016-01 increases the volatility of our other income (expense), net, as a result of the remeasurement of our equity securities. For further information on unrealized gains from equity securities, see Note 3. In October 2016, the FASB issued Accounting Standards Update No. 2016-16 (ASU 2016-16) "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory." ASU 2016-16 generally accelerates the recognition of income tax consequences for asset transfers between entities under common control. We adopted ASU 2016-16 as of January 1, 2018 using a modified retrospective transition method, resulting in a $701 million reclassification of unrecognized income tax effects related to asset transfers that occurred prior to adoption from other current and non-current assets to opening retained earnings. |
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Prior Period Reclassifications | Prior Period Reclassifications Certain amounts in prior periods have been reclassified to conform with current period presentation. |
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Revenue Recognition | Advertising Revenues We generate revenues primarily by delivering advertising on Google properties and Google Network Members’ properties. Google properties revenues consist primarily of advertising revenues generated on Google.com, the Google Search app, and other Google owned and operated properties like Gmail, Google Maps, Google Play, and YouTube. Google Network Members’ properties revenues consist primarily of advertising revenues generated on Google Network Members’ properties. Our customers generally purchase advertising inventory through AdWords, DoubleClick AdExchange, and DoubleClick Bid Manager, among others. We offer advertising on a cost-per-click basis, which means that an advertiser pays us only when a user clicks on an ad on Google properties or Google Network Members' properties or when a user views certain YouTube engagement ads. For these customers, we recognize revenue each time a user clicks on the ad or when a user views the ad for a specified period of time. We also offer advertising on other bases such as cost-per-impression, which means an advertiser pays us based on the number of times their ads are displayed on Google properties or Google Network Members’ properties. For these customers, we recognize revenue each time an ad is displayed. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. For ads placed on Google Network Members’ properties, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed on Google Network Members’ properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, and amounts paid to Google Network Members are recorded as cost of revenues. Where we are the principal, we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory before it is transferred to our customers, and is further supported by us being primarily responsible to our customers and having a level of discretion in establishing pricing. Other Revenues Google other revenues and Other Bets revenues consist primarily of revenues from:
As it relates to Google other revenues, the most significant judgment is determining whether we are the principal or agent for app sales and in-app purchases through the Google Play store. We report revenues from these transactions on a net basis because our performance obligation is to facilitate a transaction between app developers and end users, for which we earn a commission. Consequently, the portion of the gross amount billed to end users that is remitted to app developers is not reflected as revenues. Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenues to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin. Deferred Revenues We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. |
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Segment Reporting | We operate our business in multiple operating segments. Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the other operating segments are combined and disclosed as Other Bets. |
Revenues (Tables) |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by revenue source | The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Sales and usage-based taxes are excluded from revenues.
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Revenue by geographic location | The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in millions, unaudited):
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Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale debt securities | The following tables summarize our debt securities by significant investment categories as of December 31, 2017 and June 30, 2018 (in millions):
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Investments by maturity date | The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions, unaudited):
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Schedule of unrealized loss on debt securities | The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2017 and June 30, 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):
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Non-marketable debt securities | The following table presents a reconciliation for our non-marketable debt securities measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions, unaudited):
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Marketable equity securities | The following table summarizes marketable equity securities measured at fair value by significant investment categories as of December 31, 2017 and June 30, 2018 (in millions):
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Summary of unrealized gains and losses for non-marketable equity securities | The following is a summary of unrealized gains and losses recorded in other income (expense), net, and included as adjustments to the carrying value of non-marketable equity securities held as of June 30, 2018 (in millions, unaudited):
The following table summarizes the total carrying value of our non-marketable equity securities held as of June 30, 2018 including cumulative unrealized upward and downward adjustments made to the initial cost basis of the securities (in millions, unaudited):
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Gains and losses on equity securities | Realized and unrealized gains and losses for our marketable and non-marketable equity securities for the three and six months ended June 30, 2018 are summarized below (in millions, unaudited):
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Schedule of derivative instruments | The fair values of our outstanding derivative instruments were as follows (in millions):
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Schedule of gain (loss) on derivative instruments | The gains (losses) on derivatives in cash flow hedging relationships recognized in other comprehensive income (OCI) is summarized below (in millions, unaudited):
The effect of derivative instruments on income is summarized below (in millions, unaudited):
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Offsetting assets | As of December 31, 2017 and June 30, 2018, information related to these offsetting arrangements were as follows (in millions): Offsetting of Assets
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Offsetting liabilities | Offsetting of Liabilities
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | The total outstanding long-term debt is summarized below (in millions):
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Supplemental Financial Statement Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | Property and equipment, net, consisted of the following (in millions):
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Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in millions):
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Components of accumulated other comprehensive income | The components of AOCI, net of tax, were as follows (in millions, unaudited):
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Schedule of effects on net income of amounts reclassified from AOCI | The effects on net income of amounts reclassified from AOCI were as follows (in millions, unaudited):
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Schedule of other income (expense), net | The components of other income (expense), net, were as follows (in millions, unaudited):
|
Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amount of goodwill | Changes in the carrying amount of goodwill for the six months ended June 30, 2018 were as follows (in millions, unaudited):
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Information regarding purchased intangible assets | Information regarding purchased intangible assets were as follows (in millions):
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Expected amortization expense related to purchased intangible assets | As of June 30, 2018, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter are as follows (in millions, unaudited):
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Net Income Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, unaudited):
|
Compensation Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted stock activity | The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2018 (unaudited):
|
Information about Segments and Geographic Areas (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment information by segment | Information about segments during the periods presented were as follows (in millions, unaudited):
Stock-based compensation and depreciation, amortization, and impairment are included in segment operating income (loss) as shown below (in millions, unaudited):
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Schedule of long-lived assets by geographic area | The following table presents our long-lived assets by geographic area (in millions):
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Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions |
Jan. 01, 2019 |
Jun. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings | $ 121,282 | $ 113,247 | ||
Accounting Standards Update 2016-02 | Scenario, Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease assets | $ 8,000 | |||
Lease liability | $ 8,000 | |||
Accounting Standards Update 2016-01 | Accumulated other comprehensive income | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative adjustment to equity | $ (98) | |||
Accounting Standards Update 2016-01 | Retained earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative adjustment to equity | 98 | |||
Accounting Standards Update 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings | 701 | |||
Other assets | $ (701) |
Revenues (Narrative) (Details) $ in Billions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Revenue Recognition [Abstract] | |
Deferred revenue recognized during period | $ 1.0 |
Revenues (Revenue by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Revenue | $ 32,657 | $ 26,010 | $ 63,803 | $ 50,760 |
Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Hedging gains (losses) included in consolidated revenue | (103) | 3 | (342) | 220 |
Segment Reporting Information [Line Items] | ||||
Revenue | 4,425 | 3,241 | 8,779 | 6,448 |
Google | Google properties | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 23,262 | 18,425 | 45,260 | 35,828 |
Google | Google Network Members' properties | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 4,825 | 4,247 | 9,469 | 8,255 |
Google | Google advertising revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 28,087 | 22,672 | 54,729 | 44,083 |
Other Bets | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 145 | $ 97 | $ 295 | $ 229 |
Revenues (Revenue by Geographic Location) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 32,657 | $ 26,010 | $ 63,803 | $ 50,760 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 14,933 | 12,322 | 29,077 | 24,091 |
EMEA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 10,785 | 8,545 | 21,259 | 16,636 |
APAC | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 5,090 | 3,730 | 9,894 | 7,349 |
Other Americas | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 1,849 | $ 1,413 | $ 3,573 | $ 2,684 |
Financial Instruments (Contractual Maturity Date of Marketable Debt Securities) (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 89,933 | $ 94,182 |
Marketable Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Due in 1 year | 15,357 | |
Due in 1 year through 5 years | 57,525 | |
Due in 5 years through 10 years | 2,429 | |
Due after 10 years | 11,345 | |
Total | $ 86,656 |
Financial Instruments (Non-Marketable Debt Securities) (Details) - Level 3 - Non-Marketable Debt Securities - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Other Investments Not Readily Marketable | ||
Beginning balance | $ 1,894 | $ 1,165 |
Total net gains (losses) | ||
Included in earnings | 10 | (5) |
Included in other comprehensive income | 395 | 126 |
Purchases | 12 | 70 |
Sales | (41) | (1) |
Settlements | (60) | (3) |
Ending balance | $ 2,210 | $ 1,352 |
Financial Instruments (Measurement Alternative Investments) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Adjustments to Carrying Value of Non-Marketable Equity Securities | ||||
Initial cost basis | $ 4,952 | $ 4,952 | ||
Upward adjustments | 572 | 3,080 | ||
Downward adjustments (including impairment) | (81) | (104) | ||
Total unrealized gain (loss) for non-marketable equity securities | 491 | 2,976 | ||
Total carrying value at the end of the period | 7,928 | 7,928 | ||
Equity Securities, FV-NI, Gain (Loss), Alternative [Abstract] | ||||
Realized gain (loss) for equity securities sold during the period | 515 | 900 | ||
Unrealized gain (loss) on equity securities held as of the end of the period(1) | 547 | 3,193 | ||
Total gain (loss) recognized in other income (expense), net | $ 1,062 | $ 23 | $ 4,093 | $ 29 |
Financial Instruments (Offsetting of Financial Assets and Financial Liabilities) (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Offsetting of Assets | ||
Gross Amounts of Recognized Assets | $ 451 | $ 102 |
Gross Amounts Offset in the Consolidated Balance Sheets | (30) | (22) |
Net Presented in the Consolidated Balance Sheets | 421 | 80 |
Financial Instruments | (95) | (64) |
Cash Collateral Received | (300) | (4) |
Non-Cash Collateral Received | 0 | (2) |
Net Assets Exposed | 26 | 10 |
Offsetting of Liabilities | ||
Gross Amounts of Recognized Liabilities | 253 | 374 |
Gross Amounts Offset in the Consolidated Balance Sheets | (30) | (22) |
Net Presented in the Consolidated Balance Sheets | 223 | 352 |
Financial Instruments | (95) | (64) |
Cash Collateral Pledged | 0 | 0 |
Non-Cash Collateral Pledged | 0 | 0 |
Net Liabilities | $ 128 | $ 288 |
Debt (Long-Term Debt) (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Long-Term Debt | ||
Unamortized discount for the Notes above | $ (53) | $ (57) |
Subtotal | 3,947 | 3,943 |
Capital lease obligation | 34 | 26 |
Total long-term debt | 3,981 | 3,969 |
3.625% Notes due on May 19, 2021 | ||
Long-Term Debt | ||
Long-term debt | $ 1,000 | 1,000 |
Long-term debt, interest rate | 3.625% | |
3.375% Notes due on February 25, 2024 | ||
Long-Term Debt | ||
Long-term debt | $ 1,000 | 1,000 |
Long-term debt, interest rate | 3.375% | |
1.998% Notes due on August 15, 2026 | ||
Long-Term Debt | ||
Long-term debt | $ 2,000 | $ 2,000 |
Long-term debt, interest rate | 1.998% |
Supplemental Financial Statement Information (Property and Equipment) (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment, Net [Abstract] | ||
Property and equipment, gross | $ 71,876 | $ 59,647 |
Less: accumulated depreciation | (20,204) | (17,264) |
Property and equipment, net | 51,672 | 42,383 |
Cost basis of property and equipment under capital lease | 520 | 390 |
Land and buildings | ||
Property, Plant and Equipment, Net [Abstract] | ||
Property and equipment, gross | 27,253 | 23,183 |
Information technology assets | ||
Property, Plant and Equipment, Net [Abstract] | ||
Property and equipment, gross | 26,148 | 21,429 |
Construction in progress | ||
Property, Plant and Equipment, Net [Abstract] | ||
Property and equipment, gross | 13,669 | 10,491 |
Leasehold improvements | ||
Property, Plant and Equipment, Net [Abstract] | ||
Property and equipment, gross | 4,758 | 4,496 |
Furniture and fixtures | ||
Property, Plant and Equipment, Net [Abstract] | ||
Property and equipment, gross | $ 48 | $ 48 |
Supplemental Financial Statement Information (Accrued Expenses and Other Current Liabilities) (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Balance Sheet Components Disclosure [Abstract] | ||
European Commission fines | $ 7,914 | $ 2,874 |
Accrued customer liabilities | 1,445 | 1,489 |
Other accrued expenses and current liabilities | 5,902 | 5,814 |
Accrued expenses and other current liabilities | $ 15,261 | $ 10,177 |
Supplemental Financial Statement Information (Schedule of Other Income (Expense), Net) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Balance Sheet Components Disclosure [Abstract] | ||||
Interest income | $ 456 | $ 294 | $ 855 | $ 606 |
Interest expense | (27) | (21) | (57) | (46) |
Foreign currency exchange losses, net | (33) | (46) | (57) | (48) |
Gain (loss) on debt securities, net | 6 | (26) | (33) | (51) |
Gain on equity securities, net | 1,062 | 23 | 4,093 | 29 |
Loss and impairment from equity method investments, net | (105) | (13) | (112) | (62) |
Other | 49 | 34 | 261 | 68 |
Other income (expense), net | 1,408 | 245 | 4,950 | 496 |
Interest costs capitalized | $ 23 | $ 12 | $ 39 | $ 19 |
Goodwill and Other Intangible Assets (Changes in Carrying Amount of Goodwill) (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Changes in Carrying Amount of Goodwill | |
Balance as of December 31, 2017 | $ 16,747 |
Acquisitions | 1,202 |
Transfers | 0 |
Foreign currency translation and other adjustments | (54) |
Balance as of June 30, 2018 | 17,895 |
Changes in Carrying Amount of Goodwill | |
Balance as of December 31, 2017 | 16,295 |
Acquisitions | 1,202 |
Transfers | 80 |
Foreign currency translation and other adjustments | (51) |
Balance as of June 30, 2018 | 17,526 |
Other Bets | |
Changes in Carrying Amount of Goodwill | |
Balance as of December 31, 2017 | 452 |
Acquisitions | 0 |
Transfers | (80) |
Foreign currency translation and other adjustments | (3) |
Balance as of June 30, 2018 | $ 369 |
Goodwill and Other Intangible Assets (Expected Amortization Expense for Acquisition-Related Intangible Assets) (Details) $ in Millions |
Jun. 30, 2018
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2018 | $ 412 |
2019 | 717 |
2020 | 588 |
2021 | 534 |
2022 | 207 |
Thereafter | 204 |
Total | $ 2,662 |
Contingencies (Details) € in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 27, 2017
EUR (€)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2018
EUR (€)
|
Jun. 30, 2017
USD ($)
|
|
Loss Contingencies [Line Items] | |||||||
European Commission fines | $ 5,071 | $ 2,736 | $ 5,071 | $ 2,736 | |||
European Commission Antitrust Investigation | |||||||
Loss Contingencies [Line Items] | |||||||
European Commission fines | € 2,420 | $ 2,740 | $ 21 | $ 2,740 | $ 5,070 | € 4,340 |
Stockholders' Equity (Narrative) (Details) - Class C Capital Stock - Share Repurchase Program - USD ($) shares in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Jan. 31, 2018 |
Oct. 31, 2016 |
|
Stockholders Equity Note [Line Items] | |||
Authorized share repurchase amount | $ 8,589,869,056 | $ 7,000,000,000.0 | |
Repurchases of capital stock (in shares) | 3.9 | ||
Repurchases of capital stock | $ 4,200,000,000 |
Compensation Plans (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Stockholders Equity Note [Line Items] | ||||
Stock-based compensation expense | $ 2,500 | $ 2,100 | $ 5,000 | $ 4,100 |
Awards expected to be settled with stock | 2,413 | $ 2,003 | 4,870 | $ 4,012 |
Performance fees | 238 | 870 | ||
Restricted Stock Units (RSUs) | ||||
Stockholders Equity Note [Line Items] | ||||
Unrecognized compensation cost | $ 18,400 | $ 18,400 | ||
Weighted average recognition period for unrecognized stock-based compensation expense | 2 years 8 months 12 days |
Compensation Plans (Unvested Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs) |
6 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
shares
| |
Unvested restricted stock units - number of shares | |
Unvested at beginning of period (in shares) | shares | 20,077,346 |
Granted (in shares) | shares | 10,102,033 |
Vested (in shares) | shares | (7,088,915) |
Forfeited/canceled (in shares) | shares | (776,371) |
Unvested at end of period (in shares) | shares | 22,314,093 |
Unvested restricted stock units - weighted-average grant-date fair value | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 712.45 |
Granted (in dollars per share) | $ / shares | 1,082.22 |
Vested (in dollars per share) | $ / shares | 718.22 |
Forfeited/canceled (in dollars per share) | $ / shares | 742.02 |
Unvested at end of period (in dollars per share) | $ / shares | $ 876.95 |
Income Taxes (Details) - USD ($) $ in Billions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Gross unrecognized tax benefits | $ 5.1 | $ 4.7 |
Unrecognized tax benefits that would impact effective tax rate | $ 3.3 | $ 3.0 |
Information about Segments and Geographic Areas (Revenue by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Revenues | $ 32,657 | $ 26,010 | $ 63,803 | $ 50,760 |
Segment Reporting Information [Line Items] | ||||
Revenues | 32,512 | 25,913 | 63,508 | 50,531 |
Other Bets | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 145 | $ 97 | $ 295 | $ 229 |
Information about Segments and Geographic Areas (Operating Income (Loss) by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | $ 2,807 | $ 4,132 | $ 9,808 | $ 10,700 |
Operating Segments | Google | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | 8,959 | 7,664 | 17,327 | 15,110 |
Operating Segments | Other Bets | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | (732) | (633) | (1,303) | (1,336) |
Reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income (loss) | $ (5,420) | $ (2,899) | $ (6,216) | $ (3,074) |
Information about Segments and Geographic Areas (Capital Expenditures by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 5,477 | $ 2,831 | $ 12,776 | $ 5,339 |
Operating Segments | Google | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 5,299 | 2,838 | 12,968 | 5,247 |
Operating Segments | Other Bets | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 10 | 148 | 65 | 315 |
Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 168 | $ (155) | $ (257) | $ (223) |
Information about Segments and Geographic Areas (Stock-based Compensation and Depreciation, Amortization and Impairment by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | $ 2,413 | $ 2,003 | $ 4,870 | $ 4,012 |
Depreciation, amortization and impairment | 2,114 | 1,625 | 4,100 | 3,128 |
Operating Segments | Google | ||||
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | 2,288 | 1,884 | 4,592 | 3,766 |
Depreciation, amortization and impairment | 2,031 | 1,564 | 3,932 | 2,980 |
Operating Segments | Other Bets | ||||
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | 127 | 81 | 239 | 167 |
Depreciation, amortization and impairment | 83 | 61 | 168 | 148 |
Reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | $ (2) | $ 38 | $ 39 | $ 79 |
Information about Segments and Geographic Areas (Long-Lived Assets by Geographic Area) (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 87,453 | $ 72,987 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 66,460 | 55,113 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 20,993 | $ 17,874 |
L!\
M&J#G $T"LJNS::B_5$.UW73M9=5=5^M