Debt

6 Months Ended

Jun. 30, 2020

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, 2019 and June 30, 2020.

Our short-term debt balance also includes the short-term portion of certain long-term debt.

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 debt is summarized below (in millions):


	As of December 31, 2019		As of June 30, 2020
			(unaudited)
Short-term portion of long-term debt
3.625% Notes due on May 19, 2021	$	0	$	999
Total future finance lease payments	117		139
Less: imputed interest for finance leases	(2)		(2)
Total short-term portion of long-term debt⁽¹⁾	$	115	$	1,136

Long-term debt
3.625% Notes due on May 19, 2021	$	1,000	$	0
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	(42)		(37)
Subtotal	3,958		2,963
Total future finance lease payments	685		1,171
Less: imputed interest for finance leases	(89)		(116)
Total long-term debt	$	4,554	$	4,018

⁽¹⁾Total short-term portion of long-term debt is included within other accrued expenses and current liabilities. See Note 7.

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 $4.1 billion and $4.3 billion as of December 31, 2019 and June 30, 2020, respectively. 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, 2020, we have $4.0 billion of revolving credit facilities which expire in July 2023. The interest rate for the credit facilities is determined based on a formula using certain market rates. No amounts were outstanding under the credit facilities as of December 31, 2019 and June 30, 2020.