10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 001-37580

________________________________________________________________________________________

Alphabet Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________

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)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value	GOOGL	Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)
Class C Capital Stock, $0.001 par value	GOOG	Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

________________________________________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐    No ☒

As of October 22, 2020, there were 300,643,829 shares of Alphabet’s Class A common stock outstanding, 45,915,231 shares of Alphabet's Class B common stock outstanding, and 329,867,212 shares of Alphabet's Class C capital stock outstanding.

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Alphabet Inc.

Form 10-Q

For the Quarterly Period Ended September 30, 2020

TABLE OF CONTENTS

		Page No.
Note About Forward-Looking Statements		1
PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	3
	Consolidated Balance Sheets - December 31, 2019 and September 30, 2020	3
	Consolidated Statements of Income - Three and Nine Months Ended September 30, 2019 and 2020	4
	Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2019 and 2020	5
	Consolidated Statements of Stockholders' Equity - Three and Nine Months Ended September 30, 2019 and 2020	6
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2019 and 2020	8
	Notes to Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4	Controls and Procedures	51
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	53
Item 1A	Risk Factors	53
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 6	Exhibits	69
Signature		71

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Note About Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding:

•the ongoing effect of the novel coronavirus pandemic ("COVID-19"), including its macroeconomic effects on our business, operations, and financial results; and the effect of governmental lockdowns, restrictions and new regulations on our operations and processes;

•the growth of our business and revenues and our expectations about the factors that influence our success and trends in our business;

•the potential for declines in our revenue growth rate and operating margin;

•our expectation that the shift from an offline to online world will continue to benefit our business;

•our expectation that the portion of our revenues that we derive from non-advertising revenues will continue to increase and may affect our margins;

•our expectation that our traffic acquisition costs ("TAC") and the associated TAC rate will fluctuate, which could affect our overall margins;

•our expectation that our monetization trends will fluctuate, which could affect our revenues and margins;

•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 we will continue to periodically review, refine, and update our methodologies for monitoring, gathering, and counting the number of paid clicks on Google properties and impressions on Google Network Members’ properties;

•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 our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currency exchange rates;

•the expected variability of gains and losses related to hedging activities under our foreign exchange risk management program;

•the amount and timing of revenue recognition from customer contracts with commitments for performance obligations, including our estimate of the remaining amount of commitments and when we expect to recognize revenue;

•fluctuations in our capital expenditures;

•our plans to continue to invest in new businesses, products, services and technologies, systems, land and buildings for data centers and offices, and infrastructure, as well as to continue to invest in acquisitions;

•our pace of hiring and our plans to provide competitive compensation programs;

•our expectation that our cost of revenues, research and development ("R&D") expenses, sales and marketing expenses, and general and administrative expenses may increase in amount and/or may increase as a percentage of revenues and may be affected by a number of factors;

•estimates of our future compensation expenses;

•our expectation that our other income (expense), net ("OI&E"), will fluctuate in the future, as it is largely driven by market dynamics;

•fluctuations in our effective tax rate;

•seasonal fluctuations in internet usage and advertiser expenditures, underlying business trends such as traditional retail seasonality (including developments and volatility arising from COVID-19), which are likely to cause fluctuations in our quarterly results;

•the sufficiency of our sources of funding;

•our potential exposure in connection with pending investigations, proceedings, and other contingencies;

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•the sufficiency and timing of our proposed remedies in response to the European Commission's ("EC") and others' decisions;

•our expectations regarding the timing, design and implementation of our new global enterprise resource planning ("ERP") system;

•the expected timing and amount of Alphabet Inc.'s share repurchases;

•our long-term sustainability goals;

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements may appear throughout this report and other documents we file with the Securities and Exchange Commission ("SEC"), including without limitation, the following sections: Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q, as may be updated in our subsequent Quarterly Reports on Form 10-Q. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "may," "could," "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed in Part II, Item 1A, "Risk Factors" and those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, "Alphabet," "the company," "we," "us," "our," and similar terms include Alphabet Inc. and its subsidiaries, unless the context indicates otherwise.

"Alphabet," "Google," and other trademarks of ours appearing in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

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PART I.    FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

Alphabet Inc.

CONSOLIDATED BALANCE SHEETS

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

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	18,498	$	20,129
Marketable securities	101,177		112,467
Total cash, cash equivalents, and marketable securities	119,675		132,596
Accounts receivable, net	25,326		24,925
Income taxes receivable, net	2,166		588
Inventory	999		835
Other current assets	4,412		5,425
Total current assets	152,578		164,369
Non-marketable investments	13,078		14,656
Deferred income taxes	721		972
Property and equipment, net	73,646		81,636
Operating lease assets	10,941		11,946
Intangible assets, net	1,979		1,520
Goodwill	20,624		20,870
Other non-current assets	2,342		3,274
Total assets	$	275,909	$	299,243
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,561	$	4,391
Accrued compensation and benefits	8,495		8,747
Accrued expenses and other current liabilities	23,067		25,631
Accrued revenue share	5,916		6,030
Deferred revenue	1,908		2,302
Income taxes payable, net	274		1,099
Total current liabilities	45,221		48,200
Long-term debt	4,554		13,902
Deferred revenue, non-current	358		454
Income taxes payable, non-current	9,885		8,616
Deferred income taxes	1,701		1,973
Operating lease liabilities	10,214		10,984
Other long-term liabilities	2,534		2,194
Total liabilities	74,467		86,323
Contingencies (Note 10)
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); 688,335 (Class A 299,828, Class B 46,441, Class C 342,066) and 677,724 (Class A 300,641, Class B 45,915, Class C 331,168) shares issued and outstanding	50,552		57,307
Accumulated other comprehensive income (loss)	(1,232)		46
Retained earnings	152,122		155,567
Total stockholders’ equity	201,442		212,920
Total liabilities and stockholders’ equity	$	275,909	$	299,243

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts; unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Revenues	$	40,499	$	46,173	$	115,782	$	125,629
Costs and expenses:
Cost of revenues	17,568		21,117		50,876		58,652
Research and development	6,554		6,856		18,796		20,551
Sales and marketing	4,609		4,231		12,726		12,632
General and administrative	2,591		2,756		6,722		8,221
European Commission fines	0		0		1,697		0
Total costs and expenses	31,322		34,960		90,817		100,056
Income from operations	9,177		11,213		24,965		25,573
Other income (expense), net	(549)		2,146		3,956		3,820
Income before income taxes	8,628		13,359		28,921		29,393
Provision for income taxes	1,560		2,112		5,249		4,351
Net income	$	7,068	$	11,247	$	23,672	$	25,042
Basic net income per share of Class A and B common stock and Class C capital stock	$	10.20	$	16.55	$	34.12	$	36.69
Diluted net income per share of Class A and B common stock and Class C capital stock	$	10.12	$	16.40	$	33.83	$	36.38

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions; unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Net income	$	7,068	$	11,247	$	23,672	$	25,042
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(408)		459		(326)		193
Available-for-sale investments:
Change in net unrealized gains (losses)	153		(19)		1,613		1,346
Less: reclassification adjustment for net (gains) losses included in net income	(39)		(73)		(107)		(391)
Net change, net of tax benefit (expense) of $(32), $27, $(223) and $(274)	114		(92)		1,506		955
Cash flow hedges:
Change in net unrealized gains (losses)	264		(48)		209		244
Less: reclassification adjustment for net (gains) losses included in net income	(75)		23		(249)		(114)
Net change, net of tax benefit (expense) of $(46), $8, $(23) and $(38)	189		(25)		(40)		130
Other comprehensive income (loss)	(105)		342		1,140		1,278
Comprehensive income	$	6,963	$	11,589	$	24,812	$	26,320

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

	Three Months Ended September 30, 2019
	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of June 30, 2019	694,050	$	47,937	$	(1,091)	$	145,346	$	192,192
Common and capital stock issued	1,616	49		0		0		49
Stock-based compensation expense	0	2,645		0		0		2,645
Tax withholding related to vesting of restricted stock units and other	0	(1,184)		0		0		(1,184)
Repurchases of capital stock	(4,760)	(407)		0		(5,289)		(5,696)
Net income	0	0		0		7,068		7,068
Other comprehensive income (loss)	0	0		(105)		0		(105)
Balance as of September 30, 2019	690,906	$	49,040	$	(1,196)	$	147,125	$	194,969

	Nine Months Ended September 30, 2019
	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2018	695,556	$	45,049	$	(2,306)	$	134,885	$	177,628
Cumulative effect of accounting change	0	0		(30)		(4)		(34)
Common and capital stock issued	5,931	122		0		0		122
Stock-based compensation expense	0	8,215		0		0		8,215
Tax withholding related to vesting of restricted stock units and other	0	(3,636)		0		0		(3,636)
Repurchases of capital stock	(10,581)	(870)		0		(11,428)		(12,298)
Sale of interest in consolidated entities	0	160		0		0		160
Net income	0	0		0		23,672		23,672
Other comprehensive income (loss)	0	0		1,140		0		1,140
Balance as of September 30, 2019	690,906	$	49,040	$	(1,196)	$	147,125	$	194,969

	Three Months Ended September 30, 2020
	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of June 30, 2020	681,215	$	55,937	$	(296)	$	151,681	$	207,322
Common and capital stock issued	1,669	15		0		0		15
Stock-based compensation expense	0	3,230		0		0		3,230
Tax withholding related to vesting of restricted stock units and other	0	(1,339)		0		0		(1,339)
Repurchases of capital stock	(5,160)	(536)		0		(7,361)		(7,897)
Net income	0	0		0		11,247		11,247
Other comprehensive income (loss)	0	0		342		0		342
Balance as of September 30, 2020	677,724	$	57,307	$	46	$	155,567	$	212,920

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	Nine Months Ended September 30, 2020
	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2019	688,335	$	50,552	$	(1,232)	$	152,122	$	201,442
Common and capital stock issued	6,185	158		0		0		158
Stock-based compensation expense	0	9,865		0		0		9,865
Tax withholding related to vesting of restricted stock units and other	0	(4,076)		0		0		(4,076)
Repurchases of capital stock	(16,796)	(1,648)		0		(21,597)		(23,245)
Sale of interest in consolidated entities	0	2,456		0		0		2,456
Net income	0	0		0		25,042		25,042
Other comprehensive income (loss)	0	0		1,278		0		1,278
Balance as of September 30, 2020	677,724	$	57,307	$	46	$	155,567	$	212,920

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

	Nine Months Ended
	September 30,
	2019		2020
Operating activities
Net income	$	23,672	$	25,042
Adjustments:
Depreciation and impairment of property and equipment	7,774		9,366
Amortization and impairment of intangible assets	594		606
Stock-based compensation expense	8,149		9,768
Deferred income taxes	381		(280)
Gain on debt and equity securities, net	(2,399)		(3,055)
Other	(119)		875
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	25		(1,079)
Income taxes, net	210		469
Other assets	(787)		(592)
Accounts payable	(386)		(269)
Accrued expenses and other liabilities	2,927		891
Accrued revenue share	201		277
Deferred revenue	(149)		428
Net cash provided by operating activities	40,093		42,447
Investing activities
Purchases of property and equipment	(17,496)		(16,802)
Purchases of marketable securities	(80,968)		(104,932)
Maturities and sales of marketable securities	74,783		97,751
Purchases of non-marketable investments	(1,499)		(1,864)
Maturities and sales of non-marketable investments	297		598
Acquisitions, net of cash acquired, and purchases of intangible assets	(373)		(368)
Other investing activities	468		125
Net cash used in investing activities	(24,788)		(25,492)
Financing activities
Net payments related to stock-based award activities	(3,566)		(4,073)
Repurchases of capital stock	(12,298)		(23,245)
Proceeds from issuance of debt, net of costs	317		11,761
Repayments of debt	(538)		(2,043)
Proceeds from sale of interest in consolidated entities, net	202		2,462
Net cash used in financing activities	(15,883)		(15,138)
Effect of exchange rate changes on cash and cash equivalents	(91)		(186)
Net increase (decrease) in cash and cash equivalents	(669)		1,631
Cash and cash equivalents at beginning of period	16,701		18,498
Cash and cash equivalents at end of period	$	16,032	$	20,129

See accompanying notes.

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Alphabet Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. 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 Sheet as of September 30, 2020, the Consolidated Statements of Income for the three and nine months ended September 30, 2019 and 2020, the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2020, the Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2019 and 2020 and the Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2020 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 September 30, 2020, our results of operations for the three and nine months ended September 30, 2019 and 2020, and our cash flows for the nine months ended September 30, 2019 and 2020. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020.

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, 2019 filed with the SEC.

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 allowance for credit losses, fair values of financial instruments, non-marketable equity securities, 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.

As of September 30, 2020 the impact of COVID-19 continues to unfold and the extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; the uneven impact to certain industries; advances in testing, treatment and prevention; and the macroeconomic impact of government measures to contain the spread of the virus and related government stimulus measures. As a result, certain of our estimates and assumptions, including the allowance for credit losses for accounts receivable, the credit worthiness of customers entering into revenue arrangements, the valuation of non-marketable equity securities, including our impairment assessment, the fair values of our financial instruments, and income taxes, require increased judgment and carry a higher degree of variability and volatility that could result in material changes to our estimates in future periods.

Accounts Receivable

Our payment terms for accounts receivable 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 customers, we require payment before the products or services are delivered to the customer.

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We maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the Consolidated Statements of Income. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, we consider historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. We also consider customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

For the nine months ended September 30, 2020, our assessment considered the impact of COVID-19 and estimates of expected credit and collectibility trends. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability and volatility that may have a material impact on our allowance for credit losses in future periods. The allowance for credit losses on accounts receivable was $275 million and $834 million as of December 31, 2019 and September 30, 2020, respectively.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("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 which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to certain 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 result in earlier recognition of credit losses. We adopted ASU 2016-13 using the modified retrospective approach as of January 1, 2020. The cumulative effect upon adoption was not material to our consolidated financial statements. See "Accounts Receivable" above as well as Note 3 for the effect on our consolidated financial statements.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation. Hedging gains (losses), which were previously included in Google revenues, are now reported separately as a component of total revenues for all periods presented. See Note 2 for further details.

Note 2. Revenues

Disaggregated Revenues

The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Certain amounts in prior periods have been reclassified to conform with current period presentation.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Google Search & other	$	24,741	$	26,338	$	70,930	$	72,159
YouTube ads(1)	3,804		5,037		10,432		12,887
Google properties	28,545		31,375		81,362		85,046
Google Network Members' properties	5,251		5,720		15,515		15,679
Google advertising	33,796		37,095		96,877		100,725
Google Cloud	2,379		3,444		6,304		9,228
Google other(1)	4,050		5,478		11,750		15,037
Google revenues	40,225		46,017		114,931		124,990
Other Bets revenues	155		178		487		461
Hedging gains (losses)	119		(22)		364		178
Total revenues	$	40,499	$	46,173	$	115,782	$	125,629

(1)     YouTube non-advertising revenues are included in Google other revenues.

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The following table presents our revenues disaggregated by geography, based on the addresses of our customers (in millions, unaudited):

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2019				2020				2019				2020
United States	$	18,711	46	%	$	21,442	47	%	$	53,106	46	%	$	58,311	47	%
EMEA(1)	12,565		31		13,924		30		36,546		32		38,132		30
APAC(1)	6,814		17		8,458		18		19,446		17		22,641		18
Other Americas(1)	2,290		6		2,371		5		6,320		5		6,367		5
Hedging gains (losses)	119		0		(22)		0		364		0		178		0
Total revenues	$	40,499	100	%	$	46,173	100	%	$	115,782	100	%	$	125,629	100	%

(1)    Regions represent Europe, the Middle East, and Africa ("EMEA"); Asia-Pacific ("APAC"); and Canada and Latin America ("Other Americas").

Deferred Revenues and Remaining Performance Obligations

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 nine months ended September 30, 2020 was primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $1.6 billion of revenues recognized that were included in the deferred revenue balance as of December 31, 2019.

Additionally, we have performance obligations associated with commitments in customer contracts, primarily related to Google Cloud, for future services that have not yet been recognized in revenue. This includes related deferred revenue currently recorded and amounts that will be invoiced in future periods. As of September 30, 2020, the amount not yet recognized in revenue from these commitments is $19.0 billion, which reflects our assessment of relevant contract terms and expectations of our customers’ intent and ability to utilize our services. This amount excludes contracts (i) 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. We expect to recognize approximately half over the next 24 months with the remaining thereafter. However, the amount and timing of revenue recognition is largely driven by customer utilization, which could impact our estimate of the remaining amount of commitments and when we expect to recognize such revenues.

Note 3. Financial Instruments

Debt Securities

We classify and account for our marketable debt securities as available-for-sale and carry these securities at fair value.

We report the unrealized gains and losses, net of taxes, as a component of stockholders' equity, except for certain unrealized gains and losses recorded in other income (expense), net, described below.

For debt securities in an unrealized loss position, we determine whether a credit loss exists. The estimate of credit loss is determined by considering available information relevant to the collectibility of the security and information about past events, current conditions, and reasonable and supportable forecasts. The allowance for credit loss is recorded as a charge to other income (expense), net, not to exceed the amount of the unrealized loss. Any excess unrealized loss greater than the credit loss at a security level is recognized in accumulated other comprehensive income ("AOCI"). We assess expected credit losses at the end of each reporting period and adjust the allowance through other income (expense), net.

For certain debt securities we have elected the fair value option for which changes in fair value are recorded in other income (expense), net. The fair value option was elected for these securities to align with the unrealized gains and losses from related derivative contracts. Unrealized net gains related to debt securities still held where we have elected the fair value option were $45 million as of September 30, 2020. As of September 30, 2020 the fair value of these debt securities was $2.3 billion. Balances as of December 31, 2019 were not material.

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.

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The following tables summarize our debt securities, for which we did not elect the fair value option, by significant investment categories as of December 31, 2019 and September 30, 2020 (in millions):

	As of December 31, 2019
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Level 2:
Time deposits(1)	$	2,294	$	0	$	0	$	2,294	$	2,294	$	0
Government bonds	55,033		434		(30)		55,437		4,518		50,919
Corporate debt securities	27,164		337		(3)		27,498		44		27,454
Mortgage-backed and asset-backed securities	19,453		96		(41)		19,508		0		19,508
Total	$	103,944	$	867	$	(74)	$	104,737	$	6,856	$	97,881

	As of September 30, 2020
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Level 2:
Time deposits(1)	$	2,009	$	0	$	0	$	2,009	$	2,009	$	0
Government bonds	59,073		1,023		(9)		60,087		1,264		58,823
Corporate debt securities	28,632		678		(20)		29,290		17		29,273
Mortgage-backed and asset-backed securities	17,149		381		(13)		17,517		0		17,517
Total	$	106,863	$	2,082	$	(42)	$	108,903	$	3,290	$	105,613

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

We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method. We recognized gross realized gains of $85 million and $127 million for the three months ended September 30, 2019 and 2020, respectively, and $250 million and $690 million for the nine months ended September 30, 2019 and 2020, respectively. We recognized gross realized losses of $36 million and $8 million for the three months ended September 30, 2019 and 2020, respectively, and $105 million and $135 million for the nine months ended September 30, 2019 and 2020, respectively. We reflect these gains and losses as a component of other income (expense), net.

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):

	As of September 30, 2020
Due in 1 year or less	$	21,943
Due in 1 year through 5 years	67,496
Due in 5 years through 10 years	5,237
Due after 10 years	13,204
Total	$	107,880

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The following tables present fair values and gross unrealized losses recorded to AOCI as of December 31, 2019 and September 30, 2020, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2019
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	6,752	$	(20)	$	4,590	$	(10)	$	11,342	$	(30)
Corporate debt securities	1,665		(2)		978		(1)		2,643		(3)
Mortgage-backed and asset-backed securities	4,536		(13)		2,835		(28)		7,371		(41)
Total	$	12,953	$	(35)	$	8,403	$	(39)	$	21,356	$	(74)

	As of September 30, 2020
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(unaudited)
Government bonds	$	5,473	$	(9)	$	0	$	0	$	5,473	$	(9)
Corporate debt securities	5,764		(10)		0		0		5,764		(10)
Mortgage-backed and asset-backed securities	1,990		(8)		273		(5)		2,263		(13)
Total	$	13,227	$	(27)	$	273	$	(5)	$	13,500	$	(32)

For marketable debt securities, during the three months ended September 30, 2020, we increased the allowance for credit losses by $8 million. During the nine months ended September 30, 2020 we recognized an allowance for credit losses of $10 million and the ending allowance for credit losses was $10 million. See Note 7 for further details on other income (expense), net.

Equity Investments

The following discusses our marketable equity securities, non-marketable equity securities, gains and losses on marketable and non-marketable equity securities, as well as our equity securities accounted for under the equity method.

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. All gains and losses on marketable equity securities, realized and unrealized, are recognized in other income (expense), net.

Our non-marketable equity securities are investments in privately held companies without readily determinable market values. 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). We qualitatively assess whether indicators of impairment exist. Factors considered in our impairment assessment include the companies’ financial and liquidity position, access to capital resources, effects of COVID-19, and the time since the last adjustment to fair value, among others. If the assessment indicates that the investment is impaired, we estimate the fair value by using the best information available, which may include cash flow projections or other available market data.

All gains and losses, realized and unrealized, and impairments on non-marketable equity securities are recognized in other income (expense), net. Non-marketable equity securities that have been remeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities we hold. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.

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Gains and losses on marketable and non-marketable equity securities

Gains and losses recorded in other income (expense), net, for our marketable and non-marketable equity securities are summarized below (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Net gain (loss) on equity securities sold during the period	$	(63)	$	(5)	$	381	$	426
Net unrealized gain (loss) on equity securities held as of the end of the period(1)	(1,465)		1,904		1,873		2,114
Total gain (loss) recognized in other income (expense), net	$	(1,528)	$	1,899	$	2,254	$	2,540

(1)Includes net unrealized gain related to non-marketable equity securities of $166 million and $1.2 billion for the three months ended September 30, 2019 and 2020, respectively. Includes a net unrealized gain of $1.4 billion and $357 million for the nine months ended September 30, 2019 and 2020, respectively.

In the table above, net gain (loss) on equity securities sold during the period reflects the difference between the sale proceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later. 

Cumulative net gains on equity securities sold during the period, which is summarized in the following table (in millions, unaudited), represents the total net gains (losses) recognized after the initial purchase date of the equity security. While these net gains may have been reflected in periods prior to the period of sale, we believe they are important supplemental information as they reflect the economic realized net gains on the securities sold during the period. Cumulative net gains are calculated as the difference between the sale price and the initial purchase price for the equity security sold during the period.

	Equity Securities Sold
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Total sale price	$	445	$	1,389	$	1,074	$	2,888
Total initial cost	133		1,146		460		1,831
Cumulative net gains	$	312	$	243	$	614	$	1,057

Carrying value of marketable and non-marketable equity securities

The carrying value is measured as the total initial cost plus the cumulative net gain (loss). The carrying values for our marketable and non-marketable equity securities are summarized below (in millions):

	As of December 31, 2019
	Marketable Securities		Non-Marketable Securities		Total
Total initial cost	$	1,935	$	8,297	$	10,232
Cumulative net gain(1)	1,361		3,056		4,417
Carrying value	$	3,296	$	11,353	$	14,649

(1)Non-marketable securities cumulative net gain is comprised of $3.5 billion unrealized gains and $445 million unrealized losses (including impairment).

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	As of September 30, 2020
	Marketable Securities(2)		Non-Marketable Securities		Total
	(unaudited)
Total initial cost	$	2,438	$	9,615	$	12,053
Cumulative net gain(1)	2,596		3,304		5,900
Carrying value	$	5,034	$	12,919	$	17,953

(1)Non-marketable securities cumulative net gain is comprised of $5.1 billion unrealized gains and $1.8 billion unrealized losses (including impairment).

(2)The long-term portion of marketable equity securities of $447 million is included within other non-current assets.

Marketable equity securities

The following table summarizes marketable equity securities measured at fair value by significant investment categories as of December 31, 2019 and September 30, 2020 (in millions):

	As of December 31, 2019				As of September 30, 2020
	Cash and Cash Equivalents		Marketable Securities		Cash and Cash Equivalents		Marketable Securities
					(unaudited)
Level 1:
Money market funds	$	4,604	$	0	$	10,102	$	0
Marketable equity securities(1)(2)	0		3,046		0		4,626
	4,604		3,046		10,102		4,626
Level 2:
Mutual funds	0		250		0		408
Total	$	4,604	$	3,296	$	10,102	$	5,034

(1)The balance as of December 31, 2019 and September 30, 2020 includes investments that were reclassified from non-marketable equity securities following the initial public offering of the issuers.

(2)The long-term portion of marketable equity securities of $447 million is included within other non-current assets.

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 (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Unrealized gains	$	398	$	1,225	$	1,816	$	1,770
Unrealized losses (including impairment)	(232)		(27)		(370)		(1,413)
Total unrealized gain (loss) for non-marketable equity securities	$	166	$	1,198	$	1,446	$	357

During the three months ended September 30, 2020, included in the $12.9 billion of non-marketable equity securities, $5.2 billion were measured at fair value resulting in a net unrealized gain of $1.2 billion.

Equity securities accounted for under the Equity Method

Equity securities accounted for under the equity method had a carrying value of approximately $1.3 billion as of December 31, 2019 and September 30, 2020. Our share of gains and losses including impairment are included as a component of other income (expense), net, in the Consolidated Statements of Income. See Note 7 for further details on other income (expense), net.

Derivative Financial Instruments

We enter into derivative instruments to manage risks relating to our ongoing business operations. The primary risk managed with derivative instruments is foreign exchange risk. We use foreign currency contracts to reduce the risk that our cash flows, earnings, and investment in foreign subsidiaries will be adversely affected by foreign

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currency exchange rate fluctuations. We also enter into derivative instruments to partially offset our exposure to other risks and enhance investment returns.

We recognize derivative instruments as either assets or liabilities in the Consolidated Balance Sheets at fair value and classify the derivatives primarily within Level 2 in the fair value hierarchy. We present our collar contracts (an option strategy comprised of a combination of purchased and written options) at net fair values where both the purchased and written options are with the same counterparty. For other derivative contracts, we present at gross fair values. We primarily record changes in the fair value 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.

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. Further, we enter into collateral security arrangements that provide for collateral to be received or pledged when the net fair value of certain financial instruments fluctuates from contractually established thresholds. Cash collateral received related to derivative instruments under our collateral security arrangements are included in other current assets with a corresponding liability. Cash and non-cash collateral pledged related to derivative instruments under our collateral security arrangements are included in other current assets.

Cash Flow Hedges

We designate foreign currency forward and option contracts (including collars) as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar. These contracts have maturities of 24 months or less.

Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and subsequently reclassified to revenue when the hedged item is recognized in earnings. We exclude the change in 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. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI are immediately reclassified to other income (expense), net.

As of September 30, 2020, the net accumulated gain on our foreign currency cash flow hedges before tax effect was $111 million, which is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We designate foreign currency forward contracts as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. Fair value hedge amounts included in the assessment of hedge effectiveness are recognized in other income (expense), net, along with the offsetting gains and losses of the related hedged items. We exclude changes in forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in other income (expense), net.

Net Investment Hedges

We designate foreign currency forward contracts as net investment hedges to hedge the foreign currency risks related to our investment in foreign subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI along with the foreign currency translation adjustment. We exclude changes in forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in other income (expense), net.

Other Derivatives

Other derivatives not designated as hedging instruments consist primarily 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. Gains and losses on these contracts, as well as the related costs, are recognized in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities.

We also use derivatives not designated as hedging instruments to manage risks relating to interest rates, equity and commodity prices, credit exposures and to enhance investment returns.

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The gross notional amounts of our outstanding derivative instruments were as follows (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Derivatives Designated as Hedging Instruments:
Foreign exchange contracts
Cash flow hedges	$	13,207	$	7,388
Fair value hedges	$	455	$	476
Net investment hedges	$	9,318	$	9,812
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	$	43,497	$	38,367
Other contracts	$	117	$	1,999

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

		As of December 31, 2019
	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	$	91	$	253	$	344
Other contracts	Other current and non-current assets	0		1		1
Total		$	91	$	254	$	345
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	173	$	196	$	369
Other contracts	Accrued expenses and other liabilities, current and non-current	0		13		13
Total		$	173	$	209	$	382

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		As of September 30, 2020
	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	$	291	$	189	$	480
Other contracts	Other current and non-current assets	$	0	$	13	$	13
Total		$	291	$	202	$	493
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	167	$	175	$	342
Other contracts	Accrued expenses and other liabilities, current and non-current	$	0	$	453	$	453
Total		$	167	$	628	$	795

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized in other comprehensive income ("OCI") are summarized below (in millions, unaudited):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	325	$	(37)	$	277	$	331
Amount excluded from the assessment of effectiveness	6		(23)		(13)		(20)
Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	328		(371)		309		(412)
Total	$	659	$	(431)	$	573	$	(101)

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 The effect of derivative instruments on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income
	Three Months Ended
	September 30,
	2019				2020
	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	$	40,499	$	(549)	$	46,173	$	2,146
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	$	93	$	0	$	(28)	$	0
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	26		0		6		0
Gains (Losses) on Derivatives in Fair Value Hedging Relationship:
Foreign exchange contracts
Hedged items	0		(35)		0		14
Derivatives designated as hedging instruments	0		35		0		(14)
Amount excluded from the assessment of effectiveness	0		4		0		0
Gains (Losses) on Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		62		0		20
Gains (Losses) on Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	0		(233)		0		382
Other Contracts	0		0		0		(181)
Total gains (losses)	$	119	$	(167)	$	(22)	$	221

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	Gains (Losses) Recognized in Income
	Nine Months Ended
	September 30,
	2019				2020
	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	$	115,782	$	3,956	$	125,629	$	3,820
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	$	306	$	0	$	138	$	0
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	58		0		40		0
Gains (Losses) on Derivatives in Fair Value Hedging Relationship:
Foreign exchange contracts
Hedged items	0		(26)		0		6
Derivatives designated as hedging instruments	0		26		0		(6)
Amount excluded from the assessment of effectiveness	0		24		0		2
Gains (Losses) on Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		173		0		131
Gains (Losses) on Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	0		(387)		0		542
Other Contracts	0		0		0		(420)
Total gains (losses)	$	364	$	(190)	$	178	$	255

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Offsetting of Derivatives

The gross amounts of our derivative instruments subject to master netting arrangements with various counterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (in millions):

Offsetting of Assets

	As of December 31, 2019
							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	$	365	$	(21)	$	344	$	(88)	(1)	$	(234)	$	0	$	22
	As of September 30, 2020
							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	$	511	$	(18)	$	493	$	(315)	(1)	$	(121)	$	(1)	$	56

(1)The balances as of December 31, 2019 and September 30, 2020 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

Offsetting of Liabilities

	As of December 31, 2019
							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	$	390	$	(21)	$	369	$	(88)	(2)	$	0	$	0	$	281
	As of September 30, 2020
							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	$	813	$	(18)	$	795	$	(315)	(2)	$	0	$	(444)	$	36

(2)    The balances as of December 31, 2019 and September 30, 2020 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

Note 4. Leases

We have entered into operating and finance lease agreements primarily for data centers, land and offices throughout the world with lease periods expiring between 2020 and 2063.

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Components of operating lease expense were as follows (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Operating lease cost	$	477	$	582	$	1,302	$	1,649
Variable lease cost	134		159		392		454
Total operating lease cost	$	611	$	741	$	1,694	$	2,103

Supplemental information related to operating leases is as follows (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Cash payments for operating leases	$	442	$	527	$	1,212	$	1,450
New operating lease assets obtained in exchange for operating lease liabilities	$	1,045	$	711	$	3,498	$	2,152

As of September 30, 2020, our operating leases had a weighted average remaining lease term of 9 years and a weighted average discount rate of 2.7%. Future lease payments under operating leases that have commenced as of September 30, 2020 were as follows (in millions, unaudited):

	Operating Leases
Remainder of 2020	$	446
2021	2,182
2022	2,048
2023	1,869
2024	1,616
Thereafter	6,775
Total future lease payments	14,936
Less imputed interest	(2,417)
Total lease liability balance	$	12,519

As of September 30, 2020, we have entered into leases that have not yet commenced with future lease payments of $7.5 billion, excluding purchase options, that are not yet recorded on our Consolidated Balance Sheets. These leases will commence between 2020 and 2026 with non-cancelable lease terms of 1 to 25 years.

Note 5. 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, 2019 and September 30, 2020, assets that can only be used to settle obligations of these VIEs were $3.1 billion and $5.5 billion, respectively, and the liabilities for which creditors only have recourse to the VIEs were $1.2 billion and $2.3 billion, respectively.

Total noncontrolling interests, including redeemable noncontrolling interests, in our consolidated subsidiaries increased from $1.2 billion to $3.7 billion from December 31, 2019 to September 30, 2020, primarily due to external investments in Waymo. Net loss attributable to noncontrolling interests was not material for any period presented.

Waymo

Waymo is a self-driving technology development company with a mission to make it safe and easy for people and things to get where they're going. In the first half of 2020, Waymo completed its externally led investment round, bringing the total funding to $3.2 billion, which includes investment from Alphabet. No gain or loss was recognized.

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The investments related to external parties were accounted for as equity transactions and resulted in recognition of noncontrolling interests.

Unconsolidated VIEs

Certain of our non-marketable investments, including certain renewable energy investments accounted for under the equity method and certain other investments in private companies, are VIEs. The renewable energy entities' activities involve power generation using renewable sources. Private companies that we invest in are primarily early stage companies.

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. Therefore, we do not consolidate these VIEs in our consolidated financial statements.

Our maximum exposure to these unconsolidated VIEs is generally based on the current carrying value of the investments and any future funding commitments. The carrying value and maximum exposure of these unconsolidated VIEs were not material as of December 31, 2019 and September 30, 2020.

Note 6. 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, 2019 and September 30, 2020.

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

Long-Term Debt

In August 2020, Alphabet issued $10.0 billion of fixed-rate senior unsecured notes in six tranches (collectively, “2020 Notes”): $1.0 billion due in 2025, $1.0 billion due in 2027, $2.25 billion due in 2030, $1.25 billion due in 2040, $2.5 billion due in 2050 and $2.0 billion due in 2060. The 2020 Notes had a weighted average duration of 21.5 years and weighted average coupon rate of 1.57%. Of the total issuance, $5.75 billion was designated as Sustainability Bonds, the net proceeds of which are used to fund environmentally and socially responsible projects in the following eight areas: energy efficiency, clean energy, green buildings, clean transportation, circular economy and design, affordable housing, commitment to racial equity, and support for small business and COVID-19 crisis response. The remaining net proceeds are used for general corporate purposes.

The total outstanding debt is summarized below (in millions, except percentages):

	Maturity	Coupon Rate	Effective Interest Rate	As of December 31, 2019		As of September 30, 2020
						(unaudited)
Debt
2011-2016 Notes Issuances	2021 - 2026	2.00% - 3.63%	2.23% - 3.73%	$	4,000	$	4,000
2020 Notes Issuance	2025 - 2060	0.45% - 2.25%	0.57% - 2.33%	—		10,000
Future finance lease payments, net(1)				711		1,196
Total debt				4,711		15,196
Unamortized discount and debt issuance costs				(42)		(173)
Less: Current portion of Notes(2)				—		(999)
Less: Current portion future finance lease payments, net(1)(2)				(115)		(122)
Total long-term debt				$	4,554	$	13,902

(1)Net of imputed interest.

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

The notes in the table above are comprised of fixed-rate senior unsecured obligations and generally rank equally with each other. We may redeem the notes at any time in whole or in part at specified redemption prices. The effective interest rates are based on proceeds received with interest payable semi-annually.

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The total estimated fair value of the outstanding notes, including the current portion, was approximately $4.1 billion and $13.9 billion as of December 31, 2019 and September 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 September 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 September 30, 2020.

Note 7. Supplemental Financial Statement Information

Property and Equipment, Net

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

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Land and buildings	$	39,865	$	46,787
Information technology assets	36,840		42,883
Construction in progress	21,036		23,115
Leasehold improvements	6,310		7,303
Furniture and fixtures	156		199
Property and equipment, gross	104,207		120,287
Less: accumulated depreciation	(30,561)		(38,651)
Property and equipment, net	$	73,646	$	81,636

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
European Commission fines(1)	$	9,405	$	9,921
Accrued customer liabilities	2,245		2,559
Accrued purchases of property and equipment	2,411		2,157
Current operating lease liabilities	1,199		1,535
Other accrued expenses and current liabilities	7,807		9,459
Accrued expenses and other current liabilities	$	23,067	$	25,631

(1)    Includes the effects of foreign exchange and interest. See Note 10 for further details.

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Accumulated Other Comprehensive Income (Loss)

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

	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, 2018	$	(1,884)	$	(688)	$	266	$	(2,306)
Cumulative effect of accounting change	0		0		(30)		(30)
Other comprehensive income (loss) before reclassifications	(326)		1,613		222		1,509
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		(13)		(13)
Amounts reclassified from AOCI	0		(107)		(249)		(356)
Other comprehensive income (loss)	(326)		1,506		(40)		1,140
Balance as of September 30, 2019	$	(2,210)	$	818	$	196	$	(1,196)

	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, 2019	$	(2,003)	$	812	$	(41)	$	(1,232)
Other comprehensive income (loss) before reclassifications	193		1,346		264		1,803
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		(20)		(20)
Amounts reclassified from AOCI	0		(391)		(114)		(505)
Other comprehensive income (loss)	193		955		130		1,278
Balance as of September 30, 2020	$	(1,810)	$	1,767	$	89	$	46

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

		Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
AOCI Components	Location	2019		2020		2019		2020
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	49	$	93	$	145	$	496
	Benefit (provision) for income taxes	(10)		(20)		(38)		(105)
	Net of tax	39		73		107		391
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Revenue	93		(28)		306		138
Interest rate contracts	Other income (expense), net	1		1		4		4
	Benefit (provision) for income taxes	(19)		4		(61)		(28)
	Net of tax	75		(23)		249		114
Total amount reclassified, net of tax		$	114	$	50	$	356	$	505

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Other Income (Expense), Net

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Interest income	$	631	$	460	$	1,806	$	1,479
Interest expense(1)	(23)		(48)		(83)		(82)
Foreign currency exchange gain (loss), net	41		(84)		63		(257)
Gain (loss) on debt securities, net	49		116		145		515
Gain (loss) on equity securities, net	(1,528)		1,899		2,254		2,540
Performance fees	227		(135)		(333)		(204)
Income (loss) and impairment from equity method investments, net	(14)		26		(70)		46
Other	68		(88)		174		(217)
Other income (expense), net	$	(549)	$	2,146	$	3,956	$	3,820

(1)Interest expense is net of interest capitalized of $46 million and $53 million for the three months ended September 30, 2019 and 2020, respectively, and $113 million and $162 million for the nine months ended September 30, 2019 and 2020, respectively.

Note 8. Acquisitions

During the nine months ended September 30, 2020, we completed acquisitions and purchases of intangible assets for total consideration of approximately $387 million, net of cash acquired. In aggregate, $139 million was attributed to intangible assets, $204 million to goodwill, and $44 million to net assets acquired. These acquisitions generally enhance the breadth and depth of our offerings and expand our expertise in engineering and other functional areas.

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

For all intangible assets acquired and purchased during the nine months ended September 30, 2020, patents and developed technology have a weighted-average useful life of 3.8 years, customer relationships have a weighted-average useful life of 4.8 years, and trade names and other have a weighted-average useful life of 5.0 years.

Pending Acquisition of Fitbit

In November 2019, we entered into an agreement to acquire Fitbit, a leading wearables brand, for $7.35 per share, representing a total purchase price of approximately $2.1 billion as of the date of the agreement. While we still expect to secure the necessary regulatory approvals and to close the transaction in 2020, the time frame may extend beyond that.

Note 9. Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill for the nine months ended September 30, 2020 were as follows (in millions, unaudited):

	Google		Other Bets		Total Consolidated
Balance as of December 31, 2019	$	19,921	$	703	$	20,624
Acquisitions	204		0		204
Foreign currency translation and other adjustments	46		(4)		42
Balance as of September 30, 2020	$	20,171	$	699	$	20,870

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Other Intangible Assets

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

	As of December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	4,972	$	3,570	$	1,402
Customer relationships	254		30		224
Trade names and other	703		350		353
Total	$	5,929	$	3,950	$	1,979

	As of September 30, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(unaudited)
Patents and developed technology	$	4,612	$	3,552	$	1,060
Customer relationships	235		39		196
Trade names and other	700		436		264
Total	$	5,547	$	4,027	$	1,520

Amortization expense relating to purchased intangible assets was $188 million and $189 million for the three months ended September 30, 2019 and 2020, respectively, and $594 million and $587 million for the nine months ended September 30, 2019 and 2020, respectively.

As of September 30, 2020, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter was as follows (in millions, unaudited):

Remainder of 2020	$	181
2021	694
2022	354
2023	81
2024	57
Thereafter	153
Total	$	1,520

Note 10. Contingencies

Indemnifications

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

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

As of September 30, 2020, we did not have any material indemnification claims that were probable or reasonably possible.

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Legal Matters

Antitrust Investigations

On November 30, 2010, the EC's Directorate General for Competition opened an investigation into various antitrust-related complaints against us.

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 €2.4 billion ($2.7 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 $2.7 billion for the fine in the second quarter of 2017.

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 €4.3 billion ($5.1 billion as of June 30, 2018) fine and directed the termination of the conduct at issue. On October 9, 2018, we appealed the EC decision. On October 29, 2018, we implemented changes to certain of our Android distribution practices. We recognized a charge of $5.1 billion for the fine in the second quarter of 2018.

On March 20, 2019, the EC announced its decision that certain contractual provisions in agreements that Google had with AdSense for Search partners infringed European competition law. The EC decision imposed a fine of €1.5 billion ($1.7 billion as of March 20, 2019) and directed actions related to AdSense for Search partners' agreements, which we implemented prior to the decision. On June 4, 2019, we appealed the EC decision. We recognized a charge of $1.7 billion for the fine in the first quarter of 2019.

While each EC decision is under appeal, we included the fines 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 fines.

From time to time we are subject to formal and informal inquiries and investigations by competition authorities in the United States, Europe, and other jurisdictions. For example, in August 2019, we began receiving civil investigative demands from the U.S. Department of Justice ("DOJ") requesting information and documents relating to our prior antitrust investigations and certain aspects of our business. On October 20, 2020, the DOJ and 11 state Attorneys General filed a lawsuit alleging that Google violated U.S. antitrust laws relating to Search and Search advertising. We believe this complaint is without merit and will defend ourselves vigorously. The DOJ and state Attorneys General continue their investigations into certain aspects of our business. We continue to cooperate with federal and state regulators in the United States, and other regulators around the world.

Patent and Intellectual Property Claims

We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe others' intellectual property rights. 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. As a result, we may have to change our business practices, and develop 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 in an ITC action can 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 against certain intellectual property infringement claims, 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. In addition, 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 for a rehearing at the Federal Circuit, and on August 28, 2018, the Federal Circuit denied the petition. On January 24, 2019, we filed a petition to the Supreme Court of the United States to review this case. On April 29, 2019, the Supreme Court requested the views of the Solicitor General regarding our petition. On September 27, 2019, the

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Solicitor General recommended denying our petition, and we provided our response on October 16, 2019. On November 15, 2019, the Supreme Court granted our petition and made a decision to review the case. The Supreme Court heard oral arguments in our case on October 7, 2020. If the Supreme Court does not rule in our favor, the case will be remanded to the district court for further determination of the remaining issues in the case, including damages, if any. 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, intellectual property, privacy, tax and related compliance, 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 these outstanding matters include speculative, substantial or indeterminate monetary amounts. 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 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 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 not material and/or 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 14.

Note 11. Stockholders' Equity

Share Repurchases

In July 2019, the Board of Directors of Alphabet authorized the company to repurchase up to $25.0 billion of its Class C capital stock, which was completed during the third quarter of 2020. In July 2020, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $28.0 billion of its Class C capital stock. As of September 30, 2020, $25.5 billion remains available for repurchase. 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 three and nine months ended September 30, 2020, we repurchased and subsequently retired 5.2 million and 16.8 million shares of Alphabet Class C capital stock for an aggregate amount of $7.9 billion and $23.2 billion, respectively.

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Note 12. 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):

	Three Months Ended September 30,
	2019						2020
	Class A		Class B		Class C		Class A		Class B		Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	3,059	$	475	$	3,534	$	4,973	$	763	$	5,511
Denominator
Number of shares used in per share computation	299,835		46,515		346,391		300,411		46,108		332,930
Basic net income per share	$	10.20	$	10.20	$	10.20	$	16.55	$	16.55	$	16.55
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	3,059	$	475	$	3,534	$	4,973	$	763	$	5,511
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	475		0		0		763		0		0
Reallocation of undistributed earnings	(24)		(4)		24		(53)		(7)		53
Allocation of undistributed earnings	$	3,510	$	471	$	3,558	$	5,683	$	756	$	5,564
Denominator
Number of shares used in basic computation	299,835		46,515		346,391		300,411		46,108		332,930
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	46,515		0		0		46,108		0		0
Restricted stock units and other contingently issuable shares	381		0		5,077		47		0		6,355
Number of shares used in per share computation	346,731		46,515		351,468		346,566		46,108		339,285
Diluted net income per share	$	10.12	$	10.12	$	10.12	$	16.40	$	16.40	$	16.40

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	Nine Months Ended September 30,
	2019						2020
	Class A		Class B		Class C		Class A		Class B		Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	10,218	$	1,588	$	11,866	$	11,004	$	1,697	$	12,341
Denominator
Number of shares used in per share computation	299,493		46,549		347,818		299,934		46,266		336,361
Basic net income per share	$	34.12	$	34.12	$	34.12	$	36.69	$	36.69	$	36.69
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	10,218	$	1,588	$	11,866	$	11,004	$	1,697	$	12,341
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,588		0		0		1,697		0		0
Reallocation of undistributed earnings	(83)		(13)		83		(103)		(14)		103
Allocation of undistributed earnings	$	11,723	$	1,575	$	11,949	$	12,598	$	1,683	$	12,444
Denominator
Number of shares used in basic computation	299,493		46,549		347,818		299,934		46,266		336,361
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	46,549		0		0		46,266		0		0
Restricted stock units and other contingently issuable shares	448		0		5,369		105		0		5,715
Number of shares used in per share computation	346,490		46,549		353,187		346,305		46,266		342,076
Diluted net income per share	$	33.83	$	33.83	$	33.83	$	36.38	$	36.38	$	36.38

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.

Note 13. Compensation Plans

Stock-Based Compensation

For the three months ended September 30, 2019 and 2020, total stock-based compensation ("SBC") expense was $2.8 billion and $3.3 billion, respectively, including amounts associated with awards we expect to settle in Alphabet stock of $2.6 billion and $3.1 billion, respectively. For the nine months ended September 30, 2019 and 2020, total SBC expense was $8.6 billion and $10.1 billion, respectively, including amounts associated with awards we expect to settle in Alphabet stock of $8.2 billion and $9.6 billion, respectively.

Stock-Based Award Activities

The following table summarizes the activities for our unvested restricted stock units ("RSUs") in Alphabet stock for the nine months ended September 30, 2020 (unaudited):

	Unvested Restricted Stock Units
	Number of Shares	Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2019	19,394,236	$	1,055.22
Granted	11,635,680	$	1,394.72
Vested	(8,437,980)	$	1,071.16
Forfeited/canceled	(951,715)	$	1,150.93
Unvested as of September 30, 2020	21,640,221	$	1,228.65

As of September 30, 2020, there was $24.6 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.6 years.

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Note 14. Income Taxes

Our effective tax rate for the three months ended September 30, 2020 was lower than the U.S. federal statutory rate, primarily due to the Foreign-Derived Intangible Income tax benefit, the U.S. Research and Development Tax Credit, and stock-based compensation related tax benefits. Our effective tax rate is based on forecasted annual results which may fluctuate through the rest of the year, in particular due to COVID-19.

Our effective tax rate for the three months ended September 30, 2019 was lower than the U.S. federal statutory rate primarily due to foreign earnings taxed at lower rates and the U.S. Research and Development Tax Credit, partially offset by changes in unrecognized tax benefits.

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 $3.4 billion and $3.7 billion as of December 31, 2019 and September 30, 2020. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $2.3 billion and $2.5 billion as of December 31, 2019 and September 30, 2020. Although the timing of the resolution, settlement, and closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits will materially change in the next 12 months.

For information regarding non-income taxes, see Note 10.

Note 15. 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:

•Google – Google includes our main products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube. Our technical infrastructure is 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 and subscription-based products.

•Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes Access, Calico, CapitalG, GV, Verily, Waymo, and X, among others. Revenues from the Other Bets are derived primarily through the sale of internet services through Access as well as licensing and R&D services through Verily.

Starting in the quarter ending December 31, 2020 we will disclose Google Cloud as a separate segment.

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.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Revenues:
Google	$	40,225	$	46,017	$	114,931	$	124,990
Other Bets	155		178		487		461
Hedging gains (losses)	119		(22)		364		178
Total revenues	$	40,499	$	46,173	$	115,782	$	125,629

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	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Operating income (loss):
Google	$	10,746	$	12,589	$	30,214	$	29,431
Other Bets	(941)		(1,103)		(2,798)		(3,340)
Reconciling items(1)	(628)		(273)		(2,451)		(518)
Total income from operations	$	9,177	$	11,213	$	24,965	$	25,573

(1)    Reconciling items are generally comprised of corporate administrative costs, hedging gains (losses) and other miscellaneous items that are not allocated to individual segments. Reconciling items for the three and nine months ended September 30, 2019 include a charge from a legal settlement. Reconciling items for the nine months ended September 30, 2019 also include the EC fine for which we recognized a charge in the first quarter of 2019.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Capital expenditures:
Google	$	7,228	$	5,465	$	18,658	$	15,964
Other Bets	71		120		195		320
Reconciling items(2)	(567)		(179)		(1,357)		518
Total capital expenditures as presented on the Consolidated Statements of Cash Flows	$	6,732	$	5,406	$	17,496	$	16,802

(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.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Stock-based compensation:
Google	$	2,470	$	2,921	$	7,682	$	9,035
Other Bets	117		130		365		401
Reconciling items(3)	34		66		103		200
Total stock-based compensation(4)	$	2,621	$	3,117	$	8,150	$	9,636
Depreciation, amortization, and impairment:
Google	$	2,837	$	3,383	$	8,122	$	9,688
Other Bets	83		95		246		281
Reconciling items(3)	0		0		0		3
Total depreciation, amortization, and impairment	$	2,920	$	3,478	$	8,368	$	9,972

(3)    Reconciling items relate to corporate administrative and other 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.

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The following table presents our long-lived assets by geographic area (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Long-lived assets:
United States	$	94,907	$	101,405
International	28,424		33,469
Total long-lived assets	$	123,331	$	134,874

For revenues by geography, see Note 2.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Please read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Executive Overview of Results

Below are our key financial results for the three months ended September 30, 2020 (consolidated unless otherwise noted):

•Revenues of $46.2 billion and revenue growth of 14% year over year, constant currency revenues growth of 15% year over year.

•Google segment revenues of $46.0 billion with revenue growth of 14% year over year and Other Bets revenues of $178 million with revenue growth of 15% year over year.

•Revenues from the United States, EMEA, APAC, and Other Americas were $21.4 billion, $13.9 billion, $8.5 billion, and $2.4 billion, respectively.

•Cost of revenues was $21.1 billion, consisting of TAC of $8.2 billion and other cost of revenues of $13.0 billion. TAC as a percentage of advertising revenues ("TAC rate") was 22.0%.

•Operating expenses (excluding cost of revenues) were $13.8 billion.

•Income from operations was $11.2 billion.

•Other income (expense), net, was a gain of $2.1 billion.

•Effective tax rate was 15.8%.

•Net income was $11.2 billion with diluted net income per share of $16.40.

•Operating cash flow was $17.0 billion.

•Capital expenditures were $5.4 billion.

•Number of employees was 132,121 as of September 30, 2020. The majority of new hires during the quarter were engineers and product managers. By product area, the largest headcount additions were in Google Cloud.

The Impact of COVID-19 on our Results and Operations

In late 2019, an outbreak of COVID-19 emerged and by March 11, 2020 was declared a global pandemic by The World Health Organization. Across the United States and the world, governments and municipalities instituted measures in an effort to control the spread of COVID-19, including quarantines, shelter-in-place orders, school closings, travel restrictions and the closure of non-essential businesses. The macroeconomic impacts of COVID-19 are significant and continue to evolve, as exhibited by, among other things, a rise in unemployment, changes in consumer behavior, and market volatility.

We began to observe the impact of COVID-19 on our financial results late in the quarter ended March 31, 2020. For the quarter ended June 30, 2020, our advertising revenues declined compared to the prior year due to the continued impacts of COVID-19 and the related reductions in global economic activity. During the course of the quarter ended June 30, 2020, we observed a gradual return in user search activity to more commercial topics, followed by increased spending by our advertisers. During the quarter ended September 30, 2020, our advertising revenues benefited from increased spending by our advertisers.

We continue to assess the realized and potential credit deterioration of our customers due to changes in the macroeconomic environment, which has been reflected in our allowance for credit losses for accounts receivable. We have, and may, experience variability in our margins as many of our expenses are less variable in nature and/or may not correlate to changes in revenues, including costs associated with our data centers and facilities as well as employee compensation. In addition, market volatility has contributed to fluctuations in the valuation of our equity investments.

While we continued to make investments in land and buildings for data centers, offices and information technology infrastructure, we have slowed the pace of our investments, primarily as it relates to office facilities.

Looking ahead, the ongoing impact of COVID-19 on our business continues to evolve and be unpredictable. For example, to the extent the pandemic continues to disrupt economic activity globally we, like other businesses,

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are not immune to continued adverse impacts to our business, operations and financial results from prolonged decreases in advertising spend, changes in user behavior and preferences, credit deterioration and liquidity of our customers, depressed economic activity, or volatility in capital markets. The extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; the uneven impact to certain industries; advances in testing, treatment and prevention; the macroeconomic impact of government measures to contain the spread of the virus and related government stimulus measures. To address the potential impact to our business, over the near-term, we continue to evaluate the pace of our investment plans, including, but not limited to, our hiring, investments in data centers, servers, network equipment, real estate and facilities, marketing and travel spending, as well as taking certain measures to support our customers, employees, and communities we operate in. At the same time, we believe the current environment is accelerating digital transformation and we remain focused on innovating and investing in the services we offer to consumers and businesses. For example, as it relates to Google Cloud, we continue to invest aggressively in our go-to-market capabilities, product development and technical infrastructure to support long term growth. The ongoing impact of COVID-19 and the extent of these measures we may implement could have a material impact on our financial results. Our past results may not be indicative of our future performance, and historical trends in our financial results may differ materially.

Information about Segments

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:

•Google – Google includes our main products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube. Our technical infrastructure is 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 and subscription-based products.

•Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes Access, Calico, CapitalG, GV, Verily, Waymo, and X, among others. Revenues from the Other Bets are derived primarily through the sale of internet services through Access as well as licensing and R&D services through Verily.

Starting in the quarter ending December 31, 2020 we will disclose Google Cloud as a separate segment.

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Revenues

The following table presents our revenues, by segment and revenue source (in millions, unaudited). Certain amounts in prior periods have been reclassified to conform with current period presentation:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Google Search & other	$	24,741	$	26,338	$	70,930	$	72,159
YouTube ads(1)	3,804		5,037		10,432		12,887
Google properties	28,545		31,375		81,362		85,046
Google Network Members' properties	5,251		5,720		15,515		15,679
Google advertising	33,796		37,095		96,877		100,725
Google Cloud	2,379		3,444		6,304		9,228
Google other(1)	4,050		5,478		11,750		15,037
Google revenues	40,225		46,017		114,931		124,990
Other Bets revenues	155		178		487		461
Hedging gains (losses)	119		(22)		364		178
Total revenues	$	40,499	$	46,173	$	115,782	$	125,629

(1)    YouTube non-advertising revenues are included in Google other revenues.

Google advertising revenues

In addition to the impact of COVID-19, our advertising 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 the correlation between these items, have been affected and may continue to be affected by various factors, including:

•advertiser competition for keywords;

•changes in advertising quality, formats, delivery or policy;

•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;

•seasonality; and

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

Our advertising revenue growth rate has been affected over time as a result of a number of factors, including challenges in maintaining our growth rate as revenues increase to higher levels; changes in our product mix; changes in advertising quality or formats and delivery; the evolution of the online advertising market; increasing competition; our investments in new business strategies; query growth rates; and shifts in the geographic mix of our revenues. We also expect that our revenue growth rate will continue to be affected by evolving user preferences, the acceptance by users of our products and services as they are delivered on diverse devices and modalities, our ability to create a seamless experience for both users and advertisers, and movements in foreign currency exchange rates.

The following table presents our Google advertising revenues (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
Google Search & other	$	24,741		$	26,338		$	70,930		$	72,159
YouTube ads(1)	3,804			5,037			10,432			12,887
Google Network Members' properties	5,251			5,720			15,515			15,679
Google advertising	$	33,796		$	37,095		$	96,877		$	100,725
Google advertising revenues as a percentage of Google segment revenues	84.0		%	80.6		%	84.3		%	80.6		%

(1)    YouTube non-advertising revenues are included in Google other revenues.

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Google advertising revenues are generated on our Google properties (including Google Search & other properties and YouTube) and Google Network Members’ properties. Google advertising revenues consist primarily of the following:

•Google Search & other consists of revenues generated on Google search properties (including 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, and Google Play;

•YouTube ads consists of revenues generated primarily on YouTube properties; and

•Google Network Members' properties consist of revenues generated primarily on Google Network Members' properties participating in AdMob, AdSense, and Google Ad Manager.

Google Search & other

Our Google Search & other revenues increased $1,597 million and $1,229 million from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020, respectively. The overall growth was primarily driven by interrelated factors including increases in search queries resulting from ongoing growth in user adoption and usage, primarily on mobile devices, growth in advertiser activity, and improvements we have made in ad formats and delivery. This increase was partially offset by volatility in advertiser spending throughout the nine months ended September 30, 2020 driven by the impact of COVID-19.

YouTube ads

YouTube ads revenues increased $1,233 million and $2,455 million from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020, respectively. The increase was primarily driven by our direct response advertising products, which benefited from improvements to ad formats and delivery and increased advertiser spending. For the three months ended September 30, 2020, growth was also driven by an increase in revenues for our brand advertising products primarily due to increased advertiser spending. For the nine months ended September 30, 2020, brand advertising revenues were adversely impacted by volatility in advertiser spending driven by the impact of COVID-19.

Google Network Members' properties

Our Google Network Members' properties revenues increased $469 million from the three months ended September 30, 2019 to the three months ended September 30, 2020. The increase was primarily driven by strength in both AdMob and Ad Manager.

Our Google Network Members' properties revenues increased $164 million from the nine months ended September 30, 2019 to the nine months ended September 30, 2020 primarily driven by an increase in revenues for AdMob. This increase was partially offset by a decline in revenues for AdSense due to reduced advertiser spending driven by the impact of COVID-19.

Use of Monetization Metrics

Paid clicks for our Google properties represent engagement by users and include clicks on advertisements by end-users related to searches on Google.com and other owned and operated properties including Gmail, Google Maps, and Google Play; and viewed YouTube engagement ads (certain YouTube ad formats are not included in our click or impression based metrics). Impressions for our Google Network Members' properties include impressions displayed to users served on Google Network Members' properties participating primarily in AdMob, AdSense and Google Ad Manager.

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

Cost-per-impression is defined as impression-based and click-based revenues divided by our total number of impressions and represents the average amount we charge advertisers for each impression displayed to users.

As our business evolves, we periodically review, refine and update our methodologies for monitoring, gathering, and counting the number of paid clicks on our Google properties and the number of impressions on Google Network Members’ properties and for identifying the revenues generated by click activity on our Google properties and the revenues generated by impression activity on Google Network Members’ properties.

Google properties

The following table presents changes in our paid clicks and cost-per-click (expressed as a percentage):

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	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Paid clicks change	18	%	27	%	28	%	11	%
Cost-per-click change	(2)	%	(15)	%	(11)	%	(8)	%

The number of paid clicks through our advertising programs on Google properties increased from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020 due to an increase in paid clicks driven by growth in views of YouTube engagement ads; an increase in clicks due to interrelated factors, including an increase in search queries resulting from ongoing growth in user adoption and usage, primarily on mobile devices; and improvements we have made in ad formats and delivery. The overall positive effect on our revenues from an increase in paid clicks was partially offset by a decrease in the cost-per-click paid by our advertisers. The decrease in cost-per-click was driven by continued growth in YouTube engagement ads where cost-per-click remains lower than on our other advertising platforms. In addition, the decrease in cost-per-click was also driven by a mix shift to less commercial topics and reduced advertiser spending in response to COVID-19.

Google Network Members' properties

The following table presents changes in our impressions and cost-per-impression (expressed as a percentage):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Impressions change	12	%	15	%	9	%	13	%
Cost-per-impression change	(3)	%	(7)	%	(1)	%	(13)	%

Impressions increased from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020 primarily due to growth in AdManager. The positive effect on our revenues from an increase in impressions was partially offset by a decrease in the cost-per-impression paid by our advertisers which was driven by a reduction in advertiser spending in response to COVID-19 as well as the effect of a combination of factors including ongoing product and policy changes and improvements we have made in ad formats and delivery, changes in device mix, geographic mix, product mix, property mix, and fluctuations of the U.S. dollar compared to certain foreign currencies.

Google Cloud

The following table presents our Google Cloud revenues (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
Google Cloud	$	2,379		$	3,444		$	6,304		$	9,228
Google Cloud revenues as a percentage of Google segment revenues	5.9		%	7.5		%	5.5		%	7.4		%

Google Cloud revenues consist primarily of revenues from Cloud offerings, including:

•Google Cloud Platform ("GCP"), which includes infrastructure, data and analytics, and other services;

•Google Workspace (formerly known as G Suite) productivity tools; and

•other enterprise cloud services.

Our Google Cloud revenues increased $1,065 million and $2,924 million from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020, respectively. The growth was primarily driven by our GCP and Google Workspace offerings. Our infrastructure and our data and analytics platform products were the largest drivers of growth in GCP.

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Google other revenues

The following table presents our Google other revenues (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
Google other	$	4,050		$	5,478		$	11,750		$	15,037
Google other revenues as a percentage of Google segment revenues	10.1		%	11.9		%	10.2		%	12.0		%

Google other revenues consist primarily of revenues from:

•Google Play, which includes revenues from sales of apps and in-app purchases (which we recognize net of payout to developers) and digital content sold in the Google Play store;

•hardware, including Google Nest home products, Pixelbooks, Pixel phones and other devices;

•YouTube non-advertising, including YouTube Premium and YouTube TV subscriptions and other services; and

•other products and services.

Our Google other revenues increased $1,428 million and $3,287 million from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020, respectively. The growth was primarily driven by Google Play and YouTube subscriptions. Growth for Google Play was primarily driven by sales of apps and in-app purchases, which benefited from elevated user engagement partially due to the impact of COVID-19, and growth for YouTube subscriptions was primarily driven by an increase in paid subscribers.

Over time, our growth rate for Google Cloud and Google other revenues may be affected by the seasonality associated with new product and service launches, as well as market dynamics.

Other Bets

The following table presents our Other Bets revenues (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
Other Bets revenues	$	155		$	178		$	487		$	461
Other Bets revenues as a percentage of total revenues	0.4		%	0.4		%	0.4		%	0.4		%

Other Bets revenues consist primarily of revenues from the sale of Access internet services and Verily licensing and R&D services.

Revenues by Geography

The following table presents our revenues by geography as a percentage of revenues, determined based on the addresses of our customers (unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
United States	46	%	47	%	46	%	47	%
EMEA	31	%	30	%	32	%	30	%
APAC	17	%	18	%	17	%	18	%
Other Americas	6	%	5	%	5	%	5	%

For further details on revenues by geography, see Note 2 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Use of Constant Currency Revenues and Constant Currency Revenue Percentage Change

The effect of currency exchange rates on our business is an important factor in understanding period to period comparisons. Our international revenues are favorably affected as the U.S. dollar weakens relative to other foreign currencies, and unfavorably affected as the U.S. dollar strengthens relative to other foreign currencies. Our revenues are also favorably affected by net hedging gains and unfavorably affected by net hedging losses.

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We use non-GAAP constant currency revenues and non-GAAP percentage change in constant currency revenues for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe the presentation of results on a constant currency basis in addition to GAAP results helps improve the ability to understand our performance because they exclude the effects of foreign currency volatility that are not indicative of our core operating results.

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

Constant currency revenue percentage change is calculated by determining the change in period revenues over prior period revenues where current period foreign currency revenues are translated using prior period exchange rates and hedging effects are excluded from revenues of both periods.

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

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The following table presents the foreign exchange effect on our international revenues and total revenues (in millions, except percentages, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
EMEA revenues	$	12,565		$	13,924		$	36,546		$	38,132
Exclude foreign exchange effect on current period revenues using prior year rates	456			(250)			2,034			346
EMEA constant currency revenues	$	13,021		$	13,674		$	38,580		$	38,478
Prior period EMEA revenues	$	10,909		$	12,565		$	32,488		$	36,546
EMEA revenue percentage change	15		%	11		%	12		%	4		%
EMEA constant currency revenue percentage change	19		%	9		%	19		%	5		%
APAC revenues	$	6,814		$	8,458		$	19,446		$	22,641
Exclude foreign exchange effect on current period revenues using prior year rates	17			1			433			167
APAC constant currency revenues	$	6,831		$	8,459		$	19,879		$	22,808
Prior period APAC revenues	$	5,401		$	6,814		$	15,310		$	19,446
APAC revenue percentage change	26		%	24		%	27		%	16		%
APAC constant currency revenue percentage change	26		%	24		%	30		%	17		%
Other Americas revenues	$	2,290		$	2,371		$	6,320		$	6,367
Exclude foreign exchange effect on current period revenues using prior year rates	66			304			442			640
Other Americas constant currency revenues	$	2,356		$	2,675		$	6,762		$	7,007
Prior period Other Americas revenues	$	1,827		$	2,290		$	5,407		$	6,320
Other Americas revenue percentage change	25		%	4		%	17		%	1		%
Other Americas constant currency revenue percentage change	29		%	17		%	25		%	11		%
United States revenues	$	18,711		$	21,442		$	53,106		$	58,311
United States revenue percentage change	21		%	15		%	19		%	10		%
Hedging gains (losses)	$	119		$	(22)		$	364		$	178
Total revenues	$	40,499		$	46,173		$	115,782		$	125,629
Total constant currency revenues	$	40,919		$	46,250		$	118,327		$	126,604
Prior period revenues, excluding hedging effect(1)	$	33,660		$	40,380		$	97,805		$	115,418
Total revenue percentage change	20		%	14		%	19		%	9		%
Total constant currency revenue percentage change	22		%	15		%	21		%	10		%

(1)    Total revenues and hedging (losses) were $33,740 million and $80 million for the three months ended September 30, 2018, respectively, and $97,543 million and $(262) million for the nine months ended September 30, 2018, respectively.

Our EMEA revenue percentage change from the three months ended September 30, 2019 to the three months ended September 30, 2020 was favorably affected by changes in foreign currency exchange rates, primarily due to the U.S. dollar weakening relative to the Euro and British pound, partially offset by the U.S. dollar strengthening relative to the Turkish lira. Our EMEA revenue percentage change from the nine months ended September 30, 2019 to the nine months ended September 30, 2020 was unfavorably affected by changes in foreign currency exchange rates, primarily due to the U.S. dollar strengthening relative to the Turkish lira and Euro.

Our APAC revenue percentage change from the three months ended September 30, 2019 to the three months ended September 30, 2020 was not materially affected by foreign currency exchange rates. Our APAC revenue percentage change from the nine months ended September 30, 2019 to the nine months ended September 30,

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2020 was unfavorably affected by changes in foreign currency exchange rates primarily due to the U.S. dollar strengthening relative to Australian dollar and South Korean won, partially offset by the U.S. dollar weakening relative to the Japanese yen.

Our Other Americas revenue percentage change from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020 was unfavorably affected by changes in foreign currency exchange rates, primarily due to the U.S. dollar strengthening relative to the Brazilian real.

Costs and Expenses

Cost of Revenues

Cost of revenues consists of TAC which are paid to Google Network Members primarily for ads displayed on their properties and amounts paid to our distribution partners who make available our search access points and services. Our distribution partners include browser providers, mobile carriers, original equipment manufacturers, and software developers.

The cost of revenues as a percentage of revenues generated from ads placed on Google Network Members' properties are significantly higher than the cost of revenues as a percentage of revenues generated from ads placed on Google properties because most of the advertiser revenues from ads served on Google Network Members’ properties are paid as TAC to our Google Network Members.

Additionally, other cost of revenues (which is the cost of revenues excluding TAC) includes the following:

•Content acquisition costs primarily related to payments to content providers from whom we license video and other content for distribution on YouTube advertising and subscription services and Google Play (we pay fees to these content providers based on revenues generated or a flat fee);

•Expenses associated with our data centers (including bandwidth, compensation expenses (including SBC), depreciation, energy, and other equipment costs) as well as other operations costs (such as content review and customer support costs). These costs are generally less variable in nature and may not correlate with related changes in revenues; and

•Inventory related costs for hardware we sell.

The following tables present our cost of revenues, including TAC (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
TAC	$	7,490		$	8,166		$	21,588		$	22,312
Other cost of revenues	10,078			12,951			29,288			36,340
Total cost of revenues	$	17,568		$	21,117		$	50,876		$	58,652
Total cost of revenues as a percentage of revenues	43.4		%	45.7		%	43.9		%	46.7		%

Cost of revenues increased $3,549 million from the three months ended September 30, 2019 to the three months ended September 30, 2020. The increase was due to increases in other cost of revenues of $2,873 million and TAC of $676 million. Cost of revenues increased $7,776 million from the nine months ended September 30, 2019 to the nine months ended September 30, 2020. The increase was due to increases in other cost of revenues of $7,052 million and TAC of $724 million.

The increase in other cost of revenues from the three and nine months ended September 30, 2019 to the three and nine months ended September 30, 2020 was due to an increase in data center and other operations costs and an increase in content acquisition costs primarily for YouTube consistent with the growth in YouTube revenues. This increase was partially offset by a decline in hardware costs for the nine months ended September 30, 2020.

TAC increased from the three months ended September 30, 2019 to the three months ended September 30, 2020 due to increases in TAC paid to distribution partners and to Google Network Members, primarily driven by an increase in revenues subject to TAC.

The TAC rate decreased from 22.2% to 22.0% from the three months ended September 30, 2019 to the three months ended September 30, 2020 primarily due to the favorable revenue mix shift from Google Network Members’ properties to Google properties. The TAC rate on Google properties revenues and the TAC rate on Google Network revenues were both substantially consistent from the three months ended September 30, 2019 to the three months ended September 30, 2020.

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TAC increased from the nine months ended September 30, 2019 to the nine months ended September 30, 2020 due to increases in TAC paid to distribution partners and to Google Network Members. The increase in TAC paid to distribution partners was due to both an increase in revenues subject to TAC and the ongoing shift to mobile, which carries higher TAC because more mobile searches are channeled through paid access points. The increase in TAC paid to Google Network Members was primarily due to an increase in revenues subject to TAC.

The TAC rate decreased from 22.3% to 22.2% from the nine months ended September 30, 2019 to the nine months ended September 30, 2020 primarily due to the favorable revenue mix shift from Google Network Members' properties to Google properties. The TAC rate on Google properties revenues and the TAC rate on Google Network revenues were both substantially consistent from the nine months ended September 30, 2019 to the nine months ended September 30, 2020.

Over time, cost of revenues as a percentage of total revenues may be affected by a number of factors, including the following:

•The amount of TAC paid to Google Network Members, which is affected by a combination of factors such as geographic mix, product mix, revenue share terms, and fluctuations of the U.S. dollar compared to certain foreign currencies;

•The amount of TAC paid to distribution partners, which is affected by changes in device mix, geographic mix, partner mix, partner agreement terms such as revenue share arrangements, and the percentage of queries channeled through paid access points;

•Relative revenue growth rates of Google properties and Google Network Members' properties;

•Certain costs that are less variable in nature and may not correlate with the related revenues;

•Costs associated with our data centers and other operations to support ads, Google Cloud, Search and YouTube and other products;

•Content acquisition costs, which are primarily affected by the relative growth rates in our YouTube advertising and subscription revenues;

•Costs related to hardware sales; and

•Increased proportion of non-advertising revenues, which generally have higher costs of revenues, relative to our advertising revenues.

Research and Development

The following table presents our R&D expenses (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
Research and development expenses	$	6,554		$	6,856		$	18,796		$	20,551
Research and development expenses as a percentage of revenues	16.2		%	14.8		%	16.2		%	16.4		%

R&D expenses consist primarily of:

•Compensation expenses (including SBC) and facilities-related costs for engineering and technical employees responsible for R&D of our existing and new products and services;

•Depreciation expenses;

•Equipment-related expenses; and

•Professional services fees primarily related to consulting and outsourcing services.

R&D expenses increased $302 million from the three months ended September 30, 2019 to the three months ended September 30, 2020. The increase was primarily due to an increase in compensation expenses (including SBC) and facilities-related costs of $439 million, largely resulting from a 10% increase in headcount. This increase was partially offset by a decrease in travel and entertainment expenses of $122 million.

R&D expenses increased $1,755 million from the nine months ended September 30, 2019 to the nine months ended September 30, 2020. The increase was primarily due to an increase in compensation expenses (including SBC) and facilities-related costs of $1,815 million, largely resulting from a 13% increase in headcount. This increase was partially offset by a decrease in travel and entertainment expenses of $261 million.

Over time, R&D expenses as a percentage of revenues may fluctuate due to certain expenses that are generally less variable in nature and may not correlate to the changes in revenues. In addition, R&D expenses may be affected by a number of factors including continued investment in ads, Android, Chrome, Google Cloud, Google Play, hardware, machine learning, Other Bets, Search and YouTube.

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Sales and Marketing

The following table presents our sales and marketing expenses (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
Sales and marketing expenses	$	4,609		$	4,231		$	12,726		$	12,632
Sales and marketing expenses as a percentage of revenues	11.4		%	9.2		%	11.0		%	10.1		%

Sales and marketing expenses consist primarily of:

•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.

Sales and marketing expenses decreased $378 million from the three months ended September 30, 2019 to the three months ended September 30, 2020. The decrease was primarily due to a decrease in advertising and promotional expenses of $299 million driven by reduced spending and a decrease in travel and entertainment expenses of $136 million. This decrease was partially offset by an increase in compensation expenses (including SBC) and facilities-related costs of $157 million, largely resulting from a 7% increase in headcount.

Sales and marketing expenses decreased $94 million from the nine months ended September 30, 2019 to the nine months ended September 30, 2020. The decrease was primarily due to a decrease in advertising and promotional expenses of $718 million, as we reduced spending and paused or rescheduled campaigns and changed some events to digital-only formats as a result of COVID-19, and a decrease in travel and entertainment expenses of $234 million. This decrease was partially offset by an increase in compensation expenses (including SBC) and facilities-related costs of $890 million, largely resulting from an 8% increase in headcount.

Over time, sales and marketing expenses as a percentage of revenues may fluctuate due to certain expenses that are generally less variable in nature and may not correlate to the changes in revenues. In addition, sales and marketing expenses may be affected by a number of factors including the seasonality associated with new product and service launches and strategic decisions regarding the timing and extent of our spending.

General and Administrative

The following table presents our general and administrative expenses (in millions, unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
General and administrative expenses	$	2,591		$	2,756		$	6,722		$	8,221
General and administrative expenses as a percentage of revenues	6.4		%	6.0		%	5.8		%	6.5		%

General and administrative expenses consist primarily of:

•Compensation expenses (including SBC) and facilities-related costs for employees in our finance, human resources, information technology, and legal organizations;

•Depreciation;

•Equipment-related expenses;

•Legal-related expenses; and

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

General and administrative expenses increased $165 million from the three months ended September 30, 2019 to the three months ended September 30, 2020. The increase was primarily due to an increase in compensation expenses (including SBC) and facilities-related costs of $335 million, largely resulting from a 15% increase in headcount. The increase was partially offset by a $554 million charge recognized in the prior year period relating to a legal settlement.

General and administrative expenses increased $1,499 million from the nine months ended September 30, 2019 to the nine months ended September 30, 2020. The increase was primarily due to an increase in compensation expenses (including SBC) and facilities-related costs of $873 million, largely resulting from a 17%

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increase in headcount. In addition, there was an increase of $545 million related to allowance for credit losses for accounts receivable primarily due to the impact of COVID-19 and an increase of $282 million in non-income tax-related items. The increase was partially offset by a $554 million charge recognized in the prior year period relating to a legal settlement.

Over time, general and administrative expenses as a percentage of revenues may fluctuate due to certain expenses that are generally less variable in nature and may not correlate to the changes in revenues, the effect of discrete items such as legal settlements, or further allowances for credit losses for accounts receivable associated with the impact of COVID-19.

European Commission Fines

In March 2019, the EC announced its decision that certain contractual provisions in agreements that Google had with AdSense for Search partners infringed European competition law. The EC decision imposed a €1.5 billion ($1.7 billion as of March 20, 2019) fine, which was accrued in the first quarter of 2019.

Please refer to Note 10 of the Notes to Consolidated Financial Statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for further information.

Other Income (Expense), Net

The following table presents other income (expense), net (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Other income (expense), net	$	(549)	$	2,146	$	3,956	$	3,820

Other income (expense), net, increased $2,695 million from the three months ended September 30, 2019 to the three months ended September 30, 2020. The change was primarily driven by increases in unrealized gains on equity securities, partially offset by an increase in accrued performance fees.

Other income (expense), net, decreased $136 million from the nine months ended September 30, 2019 to the nine months ended September 30, 2020. The change was primarily driven by a decrease in interest income and an increase in foreign currency exchange loss, partially offset by an increase in gains on debt securities.

Over time, other income (expense), net, may be affected by market dynamics and other factors. Equity values generally change daily for marketable equity securities and upon the occurrence of observable price changes or upon impairment of non-marketable equity securities. In addition, volatility in the global economic climate and financial markets, including the effects of COVID-19, could result in a significant change in the value of our investments. Fluctuations in the value of these investments has, and we expect will continue to, contribute to volatility of OI&E in future periods. For additional information about our investments, see Note 3 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Provision for Income Taxes

The following table presents our provision for income taxes (in millions, except for effective tax rate; unaudited):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2020			2019			2020
Provision for income taxes	$	1,560		$	2,112		$	5,249		$	4,351
Effective tax rate	18.1		%	15.8		%	18.1		%	14.8		%

Our effective tax rate decreased 2.3% from the three months ended September 30, 2019 to the three months ended September 30, 2020. The decrease in effective tax rate is primarily due to an increase in the U.S. federal Foreign-Derived Intangible Income tax benefit, and a decrease in unrecognized tax benefits in 2020 as compared to 2019, partially offset by higher earnings in countries that have higher statutory rates resulting from the change in our corporate legal entity structure implemented as of December 31, 2019.

Our effective tax rate decreased 3.3% from the nine months ended September 30, 2019 to the nine months ended September 30, 2020. The decrease in effective tax rate is primarily due to an increase in the U.S. federal Foreign-Derived Intangible Income tax benefit, an increase in the stock-based compensation related tax benefits including the reversal of the Altera tax benefit as a result of the U.S. Court of Appeals decision in 2019, and the non-

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deductible EC fine in 2019, both of which did not recur in 2020, partially offset by higher earnings in countries that have higher statutory rates, resulting from the change in our corporate legal entity structure implemented as of December 31, 2019.

Our effective tax rate is based on forecasted annual results which may fluctuate through the rest of the year, in particular due to COVID-19. As such, evolving facts and circumstances surrounding these forecasts could result in the application of different provisions of tax laws and cause our estimated annual effective tax rate to change significantly through the remainder of the year.

In addition, our future effective tax rate may be affected by changes in the geographic mix of earnings in countries with different statutory rates, the valuation of our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.

Capital Resources and Liquidity

As of September 30, 2020, we had $132.6 billion in cash, cash equivalents, and marketable securities. Cash equivalents and marketable securities are comprised of time deposits, money market funds, highly liquid government bonds, corporate debt securities, mortgage-backed and asset-backed securities and marketable equity securities.

As of September 30, 2020, we had long-term taxes payable of $6.5 billion related to a one-time transition tax payable incurred as a result of the U.S. Tax Cuts and Jobs Act ("Tax Act"). As permitted by the Tax Act, we will pay the transition tax in annual interest-free installments through 2025.

In 2017, 2018 and 2019, the EC announced decisions that certain actions taken by Google infringed European competition law and imposed fines of €2.4 billion ($2.7 billion as of June 27, 2017), €4.3 billion ($5.1 billion as of June 30, 2018), and €1.5 billion ($1.7 billion as of March 20, 2019), respectively. While each EC decision is under appeal, we included the fines 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 fines.

In November 2019, we entered into an agreement to acquire Fitbit, a leading wearables brand, for $7.35 per share, representing a total purchase price of approximately $2.1 billion as of the date of the agreement. While we still expect to secure the necessary regulatory approvals and to close the transaction in 2020, the time frame may extend beyond that.

In July 2020, we entered into an agreement to invest approximately INR 33,737 crore ($4.5 billion as of July 15, 2020) in Jio Platforms Ltd. for a 7.7% stake in the company. This agreement is subject to regulatory review in India and is expected to be completed later this year.

Our principal sources of liquidity are our cash, cash equivalents, and marketable securities, as well as the cash flow that we generate from our operations. The primary use of capital continues to be to invest for the long term growth of the business. We regularly evaluate our cash and capital structure, including the size, pace and form of capital return to stockholders.

We have a short-term 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. As of September 30, 2020, we had no commercial paper outstanding. As of September 30, 2020, we have $4.0 billion of revolving credit facilities expiring in July 2023 with no amounts outstanding. The interest rate for the credit facilities is determined based on a formula using certain market rates. We believe that our sources of funding will be sufficient to satisfy our currently anticipated cash requirements including capital expenditures, working capital requirements, potential acquisitions, and other liquidity requirements through at least the next 12 months.

In August 2020, we issued $10.0 billion of fixed-rate senior unsecured notes in six tranches: $1.0 billion due in 2025, $1.0 billion due in 2027, $2.25 billion due in 2030, $1.25 billion due in 2040, $2.5 billion due in 2050 and $2.0 billion due in 2060. The 2020 Notes had a weighted average duration of 21.5 years and weighted average coupon rate of 1.57%. Of the total issuance, $5.75 billion was designated as Sustainability Bonds, the net proceeds of which are used to fund environmentally and socially responsible projects in the following eight areas: energy efficiency, clean energy, green buildings, clean transportation, circular economy and design, affordable housing, commitment to racial equity, and support for small business and COVID-19 crisis response. The remaining net proceeds are used for general corporate purposes. As of September 30, 2020, we have senior unsecured notes outstanding with a total carrying value of $13.8 billion. Refer to Note 6 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the debts.

In July 2019, the Board of Directors of Alphabet authorized the company to repurchase up to $25.0 billion of its Class C capital stock, which was completed during the third quarter of 2020. In July 2020, the Board of Directors of

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Alphabet authorized the company to repurchase up to an additional $28.0 billion of its Class C capital stock. As of September 30, 2020, $25.5 billion remains available for repurchase. 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. Refer to Note 11 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

During the nine months ended September 30, 2020 we spent $16.8 billion on capital expenditures and recognized total operating lease assets of $2.2 billion. As of September 30, 2020, the amount of total future lease payments under operating leases, which had a weighted average remaining lease term of 9 years, was $14.9 billion. Finance leases were not material for the nine months ended September 30, 2020. Refer to Note 4 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the leases.

The following table presents our cash flows (in millions, unaudited):

	Nine Months Ended
	September 30,
	2019		2020
Net cash provided by operating activities	$	40,093	$	42,447
Net cash used in investing activities	$	(24,788)	$	(25,492)
Net cash used in financing activities	$	(15,883)	$	(15,138)

Cash Provided by Operating Activities

Our largest source of cash provided by our operations are advertising revenues generated by Google properties and Google Network Members' properties. Additionally, we generate cash through sales of apps, in-app purchases, digital content products, and hardware; and licensing and service fees including fees received for Google Cloud offerings and subscription-based products.

Our primary uses of cash from our operating activities include payments to our Google Network Members and distribution partners, and payments for content acquisition costs. In addition, uses of cash from operating activities include compensation and related costs, hardware inventory costs, other general corporate expenditures, and income taxes.

Net cash provided by operating activities increased from the nine months ended September 30, 2019 to the nine months ended September 30, 2020 primarily due to the net impact of increases in cash received from revenues and cash paid for cost of revenues and operating expenses, and changes in operating assets and liabilities.

Cash Used in Investing Activities

Cash provided by investing activities consists primarily of maturities and sales of our investments in marketable and non-marketable securities. Cash used in investing activities consists primarily of purchases of property and equipment, which primarily includes our investments in land and buildings for data centers, offices and information technology infrastructure to provide capacity for the growth of our businesses; purchases of marketable and non-marketable securities; and payments for acquisitions.

Net cash used in investing activities increased from the nine months ended September 30, 2019 to the nine months ended September 30, 2020 primarily due to an increase in purchases of marketable securities, partially offset by a net increase in maturities and sales of marketable securities.

Cash Used in Financing Activities

Cash provided by financing activities consists primarily of proceeds from issuance of debt and proceeds from the sale of interest in consolidated entities. Cash used in financing activities consists primarily of net payments related to stock-based award activities, repurchases of capital stock, and repayments of debt.

Net cash used in financing activities decreased from the nine months ended September 30, 2019 to the nine months ended September 30, 2020 primarily due to increases in proceeds from issuance of debt and proceeds from the sale of interest in consolidated entities, partially offset by an increase in cash payments for repurchases of capital stock.

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Critical Accounting Policies and Estimates

See Part II, Item 7, "Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2019, certain of which are further described below.

As of September 30, 2020 the impact of COVID-19 continues to unfold and as a result, certain of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility that could result in material changes to our estimates in future periods.

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 interim tax accruals are based on an estimated annual effective tax rate applied to year-to-date income along with certain discrete items recorded in the period. Estimates of the annual effective tax rate at the end of an interim period are based on our best estimate of future events and transactions which, as a result of COVID-19, may be impacted by a higher degree of variability and volatility. As such, evolving facts and circumstances surrounding these forecasts could result in the application of different provisions of tax laws and cause our estimated annual effective tax rate to change significantly through the remainder of the year.

Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes and the effective tax rate in the period in which such determination is made.

The provision for income taxes includes the effect of reserve provisions and changes to reserves that are considered appropriate as well as the related net interest and penalties. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service ("IRS") and other tax authorities which may assert assessments against us. We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes.

Available Information

Our website is located at www.abc.xyz, and our investor relations website is located at www.abc.xyz/investor. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our Proxy Statements, and any amendments to these reports, are available through our investor relations website, free of charge, after we file them with the SEC. We also provide a link to the section of the SEC's website at www.sec.gov that has all of the reports that we file or furnish with the SEC.

We webcast via our investor relations website our earnings calls and certain events we participate in or host with members of the investment community. Our investor relations website also provides notifications of news or announcements regarding our financial performance and other items of interest to our investors, including SEC filings, investor events, press and earnings releases, and blogs. We also share Google news and product updates on Google’s Keyword blog at https://www.blog.google/, which may be of interest or material to our investors. Further, corporate governance information, including our certificate of incorporation, bylaws, governance guidelines, board committee charters, and code of conduct, is also available on our investor relations website under the heading "Other." The content of our websites are not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks, including changes in foreign currency exchange rates, interest rates and equity investment risks. Due to financial market movements in fiscal year 2020 and changes to our expectations of near-term possible movements caused by the impact of COVID-19, we are providing an update to the disclosures made in our Annual Report on Form 10-K for the year ended December 31, 2019 regarding quantitative and qualitative disclosures about market risk as of September 30, 2020.

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Foreign Currency Exchange Risk

We transact business globally in multiple currencies. Our international revenues, as well as costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar. Principal currencies hedged included the Australian dollar, British pound, Canadian dollar, Euro and Japanese yen. For the purpose of analyzing foreign currency exchange risk, we considered the historical trends in foreign currency exchange rates and determined that it was reasonably possible that adverse changes in exchange rates of 10% could be experienced in the near term.

We use foreign exchange forward contracts to offset the foreign exchange risk on our assets and liabilities denominated in currencies other than the local currency of the subsidiary. These forward contracts reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements on our assets and liabilities. The foreign currency gains and losses on the assets and liabilities are recorded in other income (expense), net, which are offset by the gains and losses on the forward contracts.

If an adverse 10% foreign currency exchange rate change was applied to total monetary assets and liabilities denominated in currencies other than the local currencies at the balance sheet date, it would have resulted in an adverse effect on income before income taxes of approximately $339 million as of September 30, 2020 after consideration of the effect of foreign exchange contracts in place.

We use foreign currency forwards and option contracts, including collars (an option strategy comprised of a combination of purchased and written options) to protect our forecasted U.S. dollar-equivalent earnings from changes in foreign currency exchange rates. When the U.S. dollar strengthens, gains from foreign currency options and forwards reduce the foreign currency losses related to our earnings. When the U.S. dollar weakens, losses from foreign currency collars and forwards offset the foreign currency gains related to our earnings. These hedging contracts reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements. We designate these contracts as cash flow hedges for accounting purposes. We reflect the gains or losses of foreign currency spot rate changes as a component of AOCI and subsequently reclassify them into revenues to offset the hedged exposures as they occur.

If the U.S. dollar weakened by 10% as of September 30, 2020, the amount recorded in AOCI related to our foreign exchange contracts before tax effect would have been approximately $685 million lower as of September 30, 2020. The change in the value recorded in AOCI would be expected to offset a corresponding foreign currency change in forecasted hedged revenues when recognized.

We use foreign exchange forward contracts designated as net investment hedges to hedge the foreign currency risks related to our investment in foreign subsidiaries. These forward contracts serve to offset the foreign currency translation risk from our foreign operations.

If the U.S. dollar weakened by 10%, the amount recorded in cumulative translation adjustment ("CTA") within AOCI related to our net investment hedge would have been approximately $977 million lower as of September 30, 2020. The change in value recorded in CTA would be expected to offset a corresponding foreign currency translation gain or loss from our investment in foreign subsidiaries.

Interest Rate Risk

Our Corporate Treasury investment strategy is to achieve a return that will allow us to preserve capital and maintain liquidity. We invest primarily in debt securities including those of the U.S. government and its agencies, corporate debt securities, mortgage-backed securities, money market and other funds, municipal securities, time deposits, asset backed securities, and debt instruments issued by foreign governments. By policy, we limit the amount of credit exposure to any one issuer. Our investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. Unrealized gains or losses on our marketable debt securities are primarily due to interest rate fluctuations as compared to interest rates at the time of purchase. We account for both fixed and variable rate securities at fair value with gains and losses recorded in AOCI until the securities are sold, less any expected credit losses.

We use value-at-risk ("VaR") analysis to determine the potential effect of fluctuations in interest rates on the value of our marketable debt security portfolio. The VaR is the expected loss in fair value, for a given confidence interval, for our investment portfolio due to adverse movements in interest rates. We use a variance/covariance VaR

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model with 95% confidence interval. The estimated one-day loss in fair value of our marketable debt securities as of September 30, 2020 are shown below (in millions):

	As of September 30, 2020		12-Month Average as of September 30, 2020
Risk Category - Interest Rate	$	169	$	153

Actual future gains and losses associated with our marketable debt security portfolio may differ materially from the sensitivity analyses performed as of September 30, 2020 due to the inherent limitations associated with predicting the timing and amount of changes in interest rates and our actual exposures and positions. VaR analysis is not intended to represent actual losses but is used as a risk estimation.

Equity Investment Risk

Our marketable and non-marketable equity securities are subject to a wide variety of market-related risks that could substantially reduce or increase the fair value of our holdings.

Our marketable equity securities are publicly traded stocks or funds and our non-marketable equity securities are investments in privately held companies, some of which are in the startup or development stages.

We record our marketable equity securities not accounted for under the equity method at fair value based on readily determinable market values, of which publicly traded stocks and mutual funds are subject to market price volatility, and represent $5.0 billion of our investments as of September 30, 2020. A hypothetical adverse price change of 30%, which could be experienced in the near term, would decrease the fair value of our marketable equity securities by $1.5 billion.

Our non-marketable equity securities not accounted for under the equity method are adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). The fair value measured at the time of the observable transaction is not necessarily an indication of the current fair value as of the balance sheet date. These investments, especially those that are in the early stages, are inherently risky because the technologies or products these companies have under development are typically in the early phases and may never materialize and they may experience a decline in financial condition, which could result in a loss of a substantial part of our investment in these companies. The success of our investment in any private company is also typically dependent on the likelihood of our ability to realize appreciation in the value of our investments through liquidity events such as public offerings, acquisitions, private sales or other market events. As of September 30, 2020, the carrying value of our non-marketable equity securities, which were accounted for under the measurement alternative, was $12.9 billion. Valuations of our equity investments in private companies are inherently more complex due to the lack of readily available market data. Volatility in the global economic climate and financial markets could result in a significant impairment charge relating to our non-marketable equity securities. Changes in valuation of non-marketable equity securities may not directly correlate with changes in valuation of marketable equity securities. Additionally, observable transactions at lower valuations could result in significant losses on our non-marketable equity securities. The effect of COVID-19 on our impairment assessment requires significant judgment due to the uncertainty around the duration and severity of the impact.

The carrying values of our equity method investments, which totaled approximately $1.3 billion as of September 30, 2020, generally do not fluctuate based on market price changes, however these investments could be impaired if the carrying value exceeds the fair value and is not expected to recover.

For further information about our equity investments, please refer to Note 3 of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of September 30, 2020, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management,

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including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

We rely extensively on information systems to manage our business and summarize and report operating results. In 2019, we began a multi-year implementation of a new global enterprise resource planning (“ERP”) system, which will replace much of our existing core financial systems. The ERP system is designed to accurately maintain our financial records, enhance the flow of financial information, improve data management and provide timely information to our management team. The implementation is expected to occur in phases over the next several years. During the quarter ended September 30, 2020, we completed the general ledger and consolidated financial reporting phase of the implementation which included select changes to our financial close processes, procedures and internal control over financial reporting. As we continue with our phased implementation, we will evaluate quarterly whether such changes materially affect our internal control over financial reporting.

Other than the implementation of the general ledger and consolidated financial reporting phase of our new global ERP system, as described above, there were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As a result of COVID-19, our global workforce continued to operate primarily in a work from home environment for the quarter ended September 30, 2020. While pre-existing controls were not specifically designed to operate in our current work from home operating environment, we believe that our internal controls over financial reporting continue to be effective. We have continued to re-evaluate and refine our financial reporting process to provide reasonable assurance that we could report our financial results accurately and timely.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II.     OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see Note 10 “Contingencies - Legal Matters” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1A.RISK FACTORS                

Our operations and financial results are subject to various risks and uncertainties, including but not limited to those described below, which could harm our business, reputation, financial condition, and operating results.

Risks Specific to our Company

We generate a significant portion of our revenues from advertising, and reduced spending by advertisers, a loss of partners, or new and existing technologies that block ads online and/or affect our ability to customize ads could harm our business.

We generated over 83% of total revenues from the display of ads online in 2019 and 80% in the nine months ended September 30, 2020. Many of our advertisers, companies that distribute our products and services, digital publishers, and content providers can terminate their contracts with us at any time. These partners may not continue to do business with us if we do not create more value (such as increased numbers of users or customers, new sales leads, increased brand awareness, or more effective monetization) than their available alternatives. Changes to our advertising policies and data privacy practices, as well as changes to other companies’ advertising policies or practices may affect the advertising that we are able to provide, which could harm our business. In addition, technologies have been developed that make customized ads more difficult or that block the display of ads altogether and some providers of online services have integrated technologies that could potentially impair the availability and functionality of third-party digital advertising. Failing to provide superior value or deliver advertisements effectively and competitively could harm our reputation, financial condition, and operating results.

In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Adverse macroeconomic conditions, including COVID-19 and its effects on the global economy (as discussed in greater detail in our COVID-19 risk factor under ‘General Risks’ below), have impacted the demand for advertising and resulted in fluctuations in the amounts our advertisers spend on advertising, and could have an adverse impact on such demand and spend, which could harm our financial condition and operating results.

We face intense competition. If we do not continue to innovate and provide products and services that are useful to users, we may not remain competitive, which could harm our business and operating results.

Our business environment is rapidly evolving and intensely competitive. Our businesses face changing technologies, shifting user needs, and frequent introductions of rival products and services. To compete successfully, we must accurately anticipate technology developments and deliver innovative, relevant and useful products, services, and technologies in a timely manner. As our businesses evolve, the competitive pressure to innovate will encompass a wider range of products and services. We must continue to invest significant resources in research and development, including through acquisitions, in order to enhance our technology and new and existing products and services.

We have many competitors in different industries. Our current and potential domestic and international competitors range from large and established companies to emerging start-ups. Some competitors have longer operating histories in various sectors. They can use their experience and resources in ways that could affect our competitive position, including by making acquisitions, continuing to invest heavily in research and development and in talent, aggressively initiating intellectual property claims (whether or not meritorious), and continuing to compete aggressively for users, advertisers, customers, and content providers. Our competitors may be able to innovate and provide products and services faster than we can or may foresee the need for products and services before us. For example, we are investing significantly in subscription-based products and services such as YouTube, which face intense competition from large experienced companies with well established relationships with users.

Our operating results may also suffer if our products and services are not responsive to the needs of our users, advertisers, publishers, customers, and content providers. As technologies continue to develop, our competitors may be able to offer experiences that are, or that are seen to be, substantially similar to or better than ours. This may force us to compete in different ways and expend significant resources in order to remain competitive. If our competitors are more successful than we are in developing compelling products or in attracting and retaining users, advertisers, publishers, customers, and content providers, our operating results could be harmed.

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Our ongoing investment in new businesses, products, services, and technologies is inherently risky, and could disrupt our current operations and harm our financial condition and operating results.

We have invested and expect to continue to invest in new businesses, products, services, and technologies. The investments that we are making across Google and Other Bets reflect our ongoing efforts to innovate and provide products and services that are useful to users, advertisers, publishers, customers, and content providers. Our investments in Google and Other Bets span a wide range of industries beyond online advertising. Such investments ultimately may not be commercially viable or may not result in an adequate return of capital and, in pursuing new strategies, we may incur unanticipated liabilities. These endeavors may involve significant risks and uncertainties, including diversion of management resources and, with respect to Other Bets, the use of alternative investment, governance, or compensation structures that may fail to adequately align incentives across the company or otherwise accomplish their objectives.

Within Google, we continue to invest heavily in hardware, including our smartphones and home devices, which is a highly competitive market with frequent introduction of new products and services, rapid adoption of technological advancements by competitors, short product life cycles, evolving industry standards, continual improvement in product price and performance characteristics, and price and feature sensitivity on the part of consumers and businesses. There can be no assurance we will be able to provide hardware that competes effectively.

We are also devoting significant resources to develop and deploy our enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. We are incurring costs to build and maintain infrastructure to support cloud computing services and hire talent, particularly to support and scale the Cloud salesforce. At the same time, our competitors are rapidly developing and deploying cloud-based services. Pricing and delivery models are competitive and evolving, and we may not attain sufficient scale and profitability to achieve our business objectives.

Within Other Bets, we are investing significantly in the areas of health, life sciences, and transportation, among others. These investment areas face intense competition from large experienced and well-funded competitors and our offerings may not be able to compete effectively or to operate at sufficient levels of profitability.

In addition, new and evolving products and services, including those that use artificial intelligence and machine learning, raise ethical, technological, legal, regulatory, and other challenges, which may negatively affect our brands and demand for our products and services. Because all of these new ventures are inherently risky, no assurance can be given that such strategies and offerings will be successful and will not harm our reputation, financial condition, and operating results.

Our revenue growth rate could decline over time, and we anticipate downward pressure on our operating margin in the future.

Our revenue growth rate could decline over time as a result of a number of factors, including increasing competition and the continued expansion of our business into a variety of new fields. Changes in device mix, geographic mix, ongoing product and policy changes, product mix, and property mix and an increasing competition for advertising may also affect our advertising revenue growth rate. We may also experience a decline in our revenue growth rate as our revenues increase to higher levels, if there is a decrease in the rate of adoption of our products, services, and technologies, or due to deceleration or decline in demand for devices used to access our services, among other factors. In addition, COVID-19 and its effects on the global economy has impacted and may continue to adversely impact our revenue growth rate (as discussed in greater detail in our COVID-19 risk factor under ‘General Risks’ below).

In addition to a decline in our revenue growth rate, we may also experience downward pressure on our operating margin resulting from a variety of factors, such as the continued expansion of our business into new fields, including products and services such as hardware, Google Cloud, Google Play, gaming, and subscription products, as well as significant investments in Other Bets, all of which may have margins lower than those we generate from advertising. We may also experience downward pressure on our operating margins from increasing competition and increased costs for many aspects of our business, including within advertising where changes such as device mix, property mix, and partner agreements can affect margin. The margin we earn on revenues generated from our Google Network Members could also decrease in the future if we pay a larger percentage of advertising fees to them. We may also pay increased TAC to our distribution partners as well as increased content acquisition costs to content providers. We may also face an increase in infrastructure costs, supporting businesses such as Search, Google Cloud, and YouTube. Many of our expenses are less variable in nature and may not correlate to changes in revenues.

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Due to these factors and the evolving nature of our business, our historical revenue growth rate and historical operating margin may not be indicative of our future performance.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services and brands as well as affect our ability to compete.

Our patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for us. Various events outside of our control pose a threat to our intellectual property rights, as well as to our products, services, and technologies. For example, effective intellectual property protection may not be available in every country in which our products and services are distributed or made available through the Internet. Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Although we seek to obtain patent protection for our innovations, it is possible we may not be able to protect some of these innovations. Moreover, we may not have adequate patent or copyright protection for certain innovations that later turn out to be important. Furthermore, there is always the possibility, despite our efforts, that the scope of the protection gained will be insufficient or that an issued patent may be deemed invalid or unenforceable.

We also seek to maintain certain intellectual property as trade secrets. The secrecy of such trade secrets and other sensitive information could be compromised, which could cause us to lose the competitive advantage resulting from these trade secrets. We also face risks associated with our trademarks. For example, there is a risk that the word “Google” could become so commonly used that it becomes synonymous with the word “search.” Some courts have ruled that "Google" is a protectable trademark, but it is possible that other courts, particularly those outside of the United States, may reach a different determination. If this happens, we could lose protection for this trademark, which could result in other people using the word “Google” to refer to their own products, thus diminishing our brand.

Any significant impairment of our intellectual property rights could harm our business and our ability to compete. Also, protecting our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results.

Our business depends on strong brands, and failing to maintain and enhance our brands would hurt our ability to expand our base of users, advertisers, customers, content providers, and other partners.

Our strong brands have significantly contributed to the success of our business. Maintaining and enhancing the brands within Google and Other Bets increases our ability to enter new categories and launch new and innovative products that better serve the needs of our users, advertisers, customers, content providers, and other partners. Our brands may be negatively affected by a number of factors, including, among others, reputational issues, third-party content shared on our platforms, data privacy and security issues and developments, and product or technical performance failures. For example, if we fail to appropriately respond to the sharing of misinformation or objectionable content on our services or objectionable practices by advertisers, or to otherwise adequately address user concerns, our users may lose confidence in our brands. Our brands may also be negatively affected by the use of our products or services to disseminate information that is deemed to be false or misleading.

Furthermore, failure to maintain and enhance equity in our brands may harm our business, financial condition, and operating results. Our success will depend largely on our ability to remain a technology leader and continue to provide high-quality, innovative products and services that are truly useful and play a valuable role in a range of settings.

We face a number of manufacturing and supply chain risks that, if not properly managed, could harm our financial condition, operating results, and prospects.

We face a number of risks related to manufacturing and supply chain management, which could affect our ability to supply both our products and our internet-based services.

We rely on other companies to manufacture many of our assemblies and finished products, to design certain of our components and parts, and to participate in the distribution of our products and services. Our business could be negatively affected if we are not able to engage these companies with the necessary capabilities or capacity on reasonable terms, or if those we engage fail to meet their obligations (whether due to financial difficulties or other reasons), or make adverse changes in the pricing or other material terms of our arrangements with them.

We may experience supply shortages and price increases driven by raw material, component or part availability, manufacturing capacity, labor shortages, industry allocations, tariffs, trade disputes and barriers, natural disasters or pandemics (including COVID-19), the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), and significant changes in the financial or business condition of

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our suppliers. We may experience shortages or other supply chain disruptions that could negatively affect our operations. In addition, some of the components we use in our technical infrastructure and products are available from only one or limited sources, and we may not be able to find replacement vendors on favorable terms in the event of a supply chain disruption. In addition, a significant supply interruption could delay critical data center upgrades or expansions and delay product availability.

We may enter into long term contracts for materials and products that commit us to significant terms and conditions. We may be liable for materials and products that are not consumed due to market acceptance, technological change, obsolescences, quality, product recalls, and warranty issues. For instance, because certain of our hardware supply contracts have volume-based pricing or minimum purchase requirements, if the volume of our hardware sales decreases or does not reach projected targets, we could face increased materials and manufacturing costs or other financial liabilities that could make our products more costly per unit to manufacture and negatively affect our financial results. Furthermore, certain of our competitors may negotiate more favorable contractual terms based on volume and other commitments that may provide them with competitive advantages and may affect our supply.

Our products and services may have quality issues resulting from design, manufacturing, or operations. Sometimes, these issues may be caused by components we purchase from other manufacturers or suppliers. If the quality of our products and services does not meet expectations or our products or services are defective, it could harm our reputation, financial condition, and operating results.

We require our suppliers and business partners to comply with laws and, where applicable, our company policies, such as the Google Supplier Code of Conduct, regarding workplace and employment practices, data security, environmental compliance and intellectual property licensing, but we do not control them or their practices. Violations of law or unethical business practices could result in supply chain disruptions, canceled orders, harm to key relationships, and damage to our reputation. Their failure to procure necessary license rights to intellectual property, could affect our ability to sell our products or services and expose us to litigation or financial claims.

Interruption, interference with, or failure of our information technology and communications systems could hurt our ability to effectively provide our products and services, which could harm our reputation, financial condition, and operating results. In addition, complications with the design or implementation of our new global enterprise resource planning system could harm our business and operations.

The availability of our products and services and fulfillment of our customer contracts depend on the continuing operation of our information technology and communications systems. Our systems are vulnerable to damage, interference, or interruption from terrorist attacks, natural disasters or pandemics (including COVID-19), the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), power loss, telecommunications failures, computer viruses, ransomware attacks, computer denial of service attacks, phishing schemes, or other attempts to harm or access our systems. Some of our data centers are located in areas with a high risk of major earthquakes or other natural disasters. Our data centers are also subject to break-ins, sabotage, and intentional acts of vandalism, and, in some cases, to potential disruptions resulting from problems experienced by facility operators. Some of our systems are not fully redundant, and disaster recovery planning cannot account for all eventualities.

The occurrence of a natural disaster or pandemic (including COVID-19), closure of a facility, or other unanticipated problems at, or impacting, our data centers could result in lengthy interruptions in our service. In addition, our products and services are highly technical and complex and may contain errors or vulnerabilities, which could result in interruptions in or failure of our services or systems.

In addition, we rely extensively on information systems and technology to manage our business and summarize operating results. We are in the process of a multi-year implementation of a new ERP system, which will replace much of our existing core financial systems. The ERP system is designed to accurately maintain our financial records, enhance the flow of financial information, improve data management, and provide timely information to our management team. We may not be able to successfully implement the ERP system without experiencing delays, increased costs, and other difficulties. Failure to successfully design and implement the new ERP system as planned could harm our business, financial condition, and operating results. Additionally, if we do not effectively implement the ERP system as planned or the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be negatively affected.

Our international operations expose us to additional risks that could harm our business, our financial condition, and operating results.

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Our international operations are significant to our revenues and net income, and we plan to continue to grow internationally. International revenues accounted for approximately 53% of our consolidated revenues in the nine months ended September 30, 2020. In addition to risks described elsewhere in this section, our international operations expose us to other risks, including the following:

•Restrictions on foreign ownership and investments, and stringent foreign exchange controls that might prevent us from repatriating cash earned in countries outside the U.S.

•Import and export requirements, tariffs, trade disputes and barriers, and customs classifications that may prevent us from offering products or providing services to a particular market, or that could limit our ability to source assemblies and finished products from a particular market, and may increase our operating costs.

•Longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud.

•Evolving foreign events, including Brexit, the United Kingdom's withdrawal from the European Union (EU). Brexit may adversely affect our revenues and could subject us to new regulatory costs and challenges (including the transfer of personal data between the EU and the United Kingdom), in addition to other adverse effects that we are unable to effectively anticipate.

•Anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act, and other local laws prohibiting certain payments to government officials, violations of which could result in civil and criminal penalties.

•Uncertainty regarding liability for services and content, including uncertainty as a result of local laws and lack of legal precedent.

•Different employee/employer relationships, existence of works councils and labor unions, and other challenges caused by distance, language, and cultural differences, making it harder to do business in certain jurisdictions.

Because we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars, we face exposure to fluctuations in foreign currency exchange rates. Although we hedge a portion of our international currency exposure, significant fluctuations in exchange rates between the U.S. dollar and foreign currencies may adversely affect our revenues and earnings. Hedging programs are also inherently risky and could expose us to additional risks that could harm our financial condition and operating results.

Risks Related to our Industry

People access the Internet through a variety of platforms and devices that continue to evolve with the advancement of technology and user preferences. If manufacturers and users do not widely adopt versions of our products and services developed for these new interfaces, our business could be harmed.

People access the Internet through a growing variety of devices such as desktop computers, mobile phones, smartphones, laptops and tablets, video game consoles, voice-activated speakers, wearables, automobiles, and television-streaming devices. Our products and services may be less popular on these new interfaces. Each manufacturer or distributor may establish unique technical standards for its devices, and our products and services may not be available on these devices as a result. Some manufacturers may also elect not to include our products on their devices. In addition, search queries are increasingly being undertaken via voice-activated speakers, apps, social media or other platforms, which could harm our business. It is hard to predict the challenges we may encounter in adapting our products and services and developing competitive new products and services. We expect to continue to devote significant resources to creating and supporting products and services across multiple platforms and devices. Failing to attract and retain a substantial number of new device manufacturers, suppliers, distributors, developers, and users, or failing to develop products and technologies that work well on new devices and platforms, could harm our business, financial condition, and operating results and ability to capture future business opportunities.

Data privacy and security concerns relating to our technology and our practices could damage our reputation, cause us to incur significant liability, and deter current and potential users or customers from using our products and services. Software bugs or defects, security breaches, and attacks on our systems could result in the improper disclosure and use of user data and interference with our users and customers’ ability to use our products and services, harming our business operations and reputation.

Concerns about our practices with regard to the collection, use, disclosure, or security of personal information or other data-privacy-related matters, even if unfounded, could harm our reputation, financial condition, and operating results. Our policies and practices may change over time as expectations regarding privacy and data change.

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Our products and services involve the storage and transmission of proprietary information, and bugs, theft, misuse, defects, vulnerabilities in our products and services, and security breaches expose us to a risk of loss of this information, improper use and disclosure of such information, litigation, and other potential liability. Systems and control failures, security breaches, failure to comply with our privacy policies, and/or inadvertent disclosure of user data could result in government and legal exposure, seriously harm our reputation and brand and, therefore, our business, and impair our ability to attract and retain users or customers. We expect to continue to expend significant resources to maintain security protections that shield against bugs, theft, misuse, or security vulnerabilities or breaches.

We experience cyber attacks and other attempts to gain unauthorized access to our systems on a regular basis. We may experience future security issues, whether due to employee error or malfeasance or system errors or vulnerabilities in our or other parties’ systems, which could result in significant legal and financial exposure. Government inquiries and enforcement actions, litigation, and adverse press coverage could harm our business. We may be unable to anticipate or detect attacks or vulnerabilities or implement adequate preventative measures. Attacks and security issues could also compromise trade secrets and other sensitive information, harming our business.

While we have dedicated significant resources to privacy and security incident response capabilities, including dedicated worldwide incident response teams, our response process, particularly during times of a natural disaster or pandemic (including COVID-19), may not be adequate, may fail to accurately assess the severity of an incident, may not respond quickly enough, or may fail to sufficiently remediate an incident. As a result, we may suffer significant legal, reputational, or financial exposure, which could harm our business, financial condition, and operating results.

Our ongoing investments in safety, security, and content review will likely continue to identify abuse of our platforms and misuse of user data.

In addition to our efforts to mitigate cyber attacks, we are making significant investments in safety, security, and content review efforts to combat misuse of our services and unauthorized access to user data by third parties, including investigations and review of platform applications that could access the information of users of our services. As a result of these efforts, we could discover incidents of unnecessary access to or misuse of user data or other undesirable activity by third parties. We may not discover all such incidents or activity, whether as a result of our data limitations, including our lack of visibility over our encrypted services, the scale of activity on our platform, or other factors, including factors outside of our control such as a natural disaster or pandemic (including COVID-19), and we may be notified of such incidents or activity via third parties. Such incidents and activities may include the use of user data or our systems in a manner inconsistent with our terms, contracts or policies, the existence of false or undesirable user accounts, election interference, improper ad purchases, activities that threaten people’s safety on- or offline, or instances of spamming, scraping, or spreading disinformation. We may also be unsuccessful in our efforts to enforce our policies or otherwise remediate any such incidents. Any of the foregoing developments may negatively affect user trust and engagement, harm our reputation and brands, require us to change our business practices in a manner adverse to our business, and adversely affect our business and financial results. Any such developments may also subject us to additional litigation and regulatory inquiries, which could result in monetary penalties and damages, divert management’s time and attention, and lead to enhanced regulatory oversight.

Problematic content, including low-quality user-generated content, web spam, content farms, and other violations of our guidelines could affect the quality of our services, which could damage our reputation and deter our current and potential users from using our products and services.

We, like others in the industry, face violations of our content guidelines, including sophisticated attempts by bad actors to manipulate our hosting and advertising systems to fraudulently generate revenues, or to otherwise generate traffic that does not represent genuine user interest or intent. While we invest significantly in efforts to promote high-quality and relevant results and to detect and prevent low-quality content and invalid traffic, we may be unable to adequately detect and prevent such abuses or promote high-quality content, particularly during times of a natural disaster or pandemic (including COVID-19).

Many websites violate or attempt to violate our guidelines, including by seeking to inappropriately rank higher in search results than our search engine's assessment of their relevance and utility would rank them. Such efforts (known as “web spam”) may affect the quality of content on our platforms and lead them to display false, misleading or undesirable content.

Although English-language web spam in our search results has been reduced, and web spam in most other languages is limited, we expect web spammers will continue to seek inappropriate ways to improve their rankings.

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We continuously combat web spam in our search results, including through indexing technology that makes it harder for spam-like, less useful web content to rank highly. We also continue to invest in and deploy proprietary technology to detect and prevent web spam from abusing our platforms.

We also face other challenges from low-quality and irrelevant content websites, including content farms, which are websites that generate large quantities of low-quality content to help them improve their search rankings. We are continually launching algorithmic changes focused on low-quality websites.

If we fail to either detect and prevent an increase in problematic content or effectively promote high-quality content, it could hurt our reputation for delivering relevant information or reduce use of our platforms, harming our financial condition or operating results. It may also subject us to litigation and regulatory inquiries, which could result in monetary penalties and damages, divert management’s time and attention, and lead to enhanced regulatory oversight.

Our business depends on continued and unimpeded access to the Internet by us and our users. Internet access providers may be able to restrict, block, degrade, or charge for access to certain of our products and services, which could lead to additional expenses and the loss of users and advertisers.

Our products and services depend on the ability of our users to access the Internet, and certain of our products require significant bandwidth to work effectively. Currently, this access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, and government-owned service providers. Some of these providers have taken, or have stated that they may take measures that could degrade, disrupt, or increase the cost of user access to certain of our products by restricting or prohibiting the use of their infrastructure to support or facilitate our offerings, by charging increased fees to us or our users to provide our offerings, or by providing our competitors preferential access. Some jurisdictions have adopted regulations prohibiting certain forms of discrimination by internet access providers; however, substantial uncertainty exists in the United States and elsewhere regarding such protections. For example, in 2018 the United States Federal Communications Commission repealed net neutrality rules, which could permit internet access providers to restrict, block, degrade, or charge for access to certain of our products and services. In addition, in some jurisdictions, our products and services have been subject to government-initiated restrictions or blockages. COVID-19 has also resulted in quarantines, shelter in place orders, and work from home directives, all of which have increased demands for internet access and may create access challenges. These could result in a loss of existing users, customers and advertisers, goodwill, and increased costs, and could impair our ability to attract new users, customers and advertisers, thereby harming our business.

Risks Related to Laws and Regulations

We are subject to increasing regulatory scrutiny as well as changes in public policies governing a wide range of topics that may negatively affect our business.

We and other companies in the technology industry are experiencing increased regulatory scrutiny. For instance, on October 20, 2020, the U.S. Department of Justice, joined by 11 state Attorneys General, filed an antitrust complaint against Google, alleging that Google violated U.S. antitrust laws relating to Search and Search advertising. Various other regulatory agencies, including competition, consumer protection, and privacy authorities, are reviewing our products and services. We continue to cooperate with these investigations. Prior, existing, and new investigations and regulatory actions have in the past and may in the future result in substantial fines and penalties, changes to our products and services, alterations to our business operations, and civil litigation, all of which could harm our business, reputation, financial condition, and operating results.

Changes in international and local social, political, economic, tax, and regulatory conditions or in laws and policies governing a wide range of topics may increase our cost of doing business, limit our ability to pursue certain business models or offer certain products or services, and cause us to change our business practices. Further, our investment in a variety of new fields, including the health industry and payment services, also raises a number of new regulatory issues. These factors could harm our business and operating results in material ways.

A variety of new and existing laws and/or interpretations could harm our business.

We are subject to numerous U.S. and foreign laws and regulations covering a wide variety of subject matters. New laws and regulations (or new interpretations or applications of existing laws and regulations in a manner inconsistent with our practices) may make our products and services less useful, limit our ability to pursue certain business models or offer certain products and services, require us to incur substantial costs, expose us to unanticipated civil or criminal liability, or cause us to change our business practices. These laws and regulations are evolving and involve matters central to our business, including, among others:

•Competition laws and regulations around the world.

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•Privacy laws, such as the California Consumer Privacy Act of 2018 and related regulations that came into effect in January of 2020, which gives new data privacy rights to California residents, and SB-327 in California, which regulates the security of data in connection with internet connected devices.

•Data protection laws passed by many states within the U.S. and by certain countries regarding notification to data subjects and/or regulators when there is a security breach of personal data.

•Copyright or similar laws around the world, including the EU Directive on Copyright in the Digital Single Market (EUCD) of April 17, 2019, which EU Member States must implement by June 7, 2021; and the proposed Code of Conduct drafted by the Australian Competition and Consumer Commission. These and similar laws that have been adopted or proposed introduce new constraining licensing regimes that could affect our ability to operate with respect to copyright protected works. The EUCD and similar laws could increase the liability of some content-sharing services with respect to content uploaded by their users. Some of these laws, as well as follow-on administrative or judicial actions, have also created or may create a new property right in news publications that limits the ability of some online services to interact with or present such content. They may also impose compensation negotiations with news agencies and publishers for the use of such content, which may result in payment obligations that significantly exceed the value that such content provides to Google and its users.

•Data localization laws, which generally mandate that certain types of data collected in a particular country be stored and/or processed within that country.

•Various U.S. and international laws that govern the distribution of certain materials to children and regulate the ability of online services to collect information from minors.

•Various laws with regard to content removal and disclosure obligations, such as the Network Enforcement Act in Germany, which may affect our businesses and operations and may subject us to significant fines if such laws are interpreted and applied in a manner inconsistent with our practices or when we may not proactively discover such content due to the scale of third-party content and the limitations of existing technologies. Other countries, including Singapore, Australia, and the United Kingdom, have implemented or are considering similar legislation imposing penalties for failure to remove certain types of content.

In addition, the applicability and scope of these laws, as interpreted by the courts, remain uncertain and could harm our business. For example:

•We rely on statutory safe harbors, as set forth in the Digital Millennium Copyright Act and Section 230 of the Communications Decency Act in the United States and the E-Commerce Directive in Europe, against liability for various linking, caching, and hosting activities. Any legislation or court rulings affecting these safe harbors may adversely affect us. There are legislative proposals in both the US and EU that could reduce our safe harbor protection.

•Court decisions such as the judgment of the Court of Justice of the European Union (CJEU) on May 13, 2014 on the ‘right to be forgotten,’ which allows individuals to demand that Google remove search results about them in certain instances, may limit the content we can show to our users and impose significant operational burdens.

The introduction of new businesses, products, services, and technologies, our activities in certain jurisdictions, or other actions we take may subject us to additional laws and regulations. The costs of compliance with these laws and regulations are high and are likely to increase in the future. Any failure on our part to comply with laws and regulations can result in negative publicity and diversion of management time and effort and may subject us to significant liabilities and other penalties.

We are subject to claims, suits, government investigations, and other proceedings that may harm our business, financial condition, and operating results.

We are subject to claims, suits, and government investigations involving competition, intellectual property, data privacy and security, consumer protection, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, and other matters. Due to our manufacturing and sale of an expanded suite of products, including hardware as well as Google Cloud offerings, we also are subject to a variety of claims including product warranty, product liability, and consumer protection claims related to product defects, among other litigation. We may also be subject to claims involving health and safety, hazardous materials usage, other environmental impacts, or service disruptions or failures.

Any of these types of legal proceedings can have an adverse effect on us because of legal costs, diversion of management resources, negative publicity and other factors. Determining reserves for our pending litigation is a

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complex, fact-intensive process that requires significant judgment. The resolution of one or more such proceedings has resulted in, and may in the future result in, additional substantial fines, penalties, injunctions, and other sanctions that could harm our business, financial condition, and operating results.

We may be subject to legal liability associated with providing online services or content.

Our products and services let users exchange information, advertise products and services, conduct business, and engage in various online activities. We also place advertisements displayed on other companies’ websites, and we offer third-party products, services, and/or content. The law relating to the liability of online service providers for others’ activities on their services is still somewhat unsettled both within the U.S. and internationally. Claims have been brought against us for defamation, negligence, breaches of contract, copyright and trademark infringement, unfair competition, unlawful activity, torts, fraud, or other legal theories based on the nature and content of information available on or via our services.

We may be subject to claims by virtue of our involvement in hosting, transmitting, marketing, branding, or providing access to content created by third parties. Defense of any such actions could be costly and involve significant time and attention of our management and other resources, may result in monetary liabilities or penalties, and may require us to change our business in an adverse manner.

Privacy and data protection regulations are complex and rapidly evolving areas. Adverse interpretations of these laws could harm our business, reputation, financial condition, and operating results.

Authorities around the world have adopted and are considering a number of legislative and regulatory proposals concerning data protection and limits on encryption of user data. Adverse legal rulings, legislation, or regulation could result in fines and orders requiring that we change our data practices, which could have an adverse effect on our ability to provide services, harming our business operations. Complying with these evolving laws could result in substantial costs and harm the quality of our products and services, negatively affecting our business, and may be particularly challenging during certain times, such as a natural disaster or pandemic (including COVID-19).

Recent legal developments in Europe have created compliance uncertainty regarding transfers of personal data from Europe to the United States. For example, the General Data Protection Regulation (GDPR) applies to all of our activities conducted from an establishment in the EU or related to products and services that we offer to EU users or customers, or the monitoring of their behavior in the EU. The GDPR creates a range of new compliance obligations.

Ensuring compliance with the GDPR is an ongoing commitment that involves substantial costs, and despite our efforts, governmental authorities or others have asserted and may continue to assert that our business practices fail to comply with its requirements. If our operations are found to violate GDPR requirements, we may incur substantial fines, have to change our business practices, and face reputational harm, any of which could have a material adverse effect on our business. In particular, serious breaches of the GDPR can result in administrative fines of up to 4% of annual worldwide revenues. Fines of up to 2% of annual worldwide revenues can be levied for other specified violations.

The EU-U.S. and the Swiss-U.S. Privacy Shield frameworks allow U.S. companies that self-certify to the U.S. Department of Commerce and publicly commit to comply with specified requirements to import personal data from the EU and Switzerland. Recently, the CJEU ruled that the EU-U.S. Privacy Shield is an invalid transfer mechanism, but upheld Standard Contractual Clauses as a valid transfer mechanism, provided they meet certain requirements. The validity of data transfer mechanisms remains subject to legal, regulatory, and political developments in both Europe and the U.S. The invalidation of the EU-U.S. Privacy Shield and potential invalidation of other data transfer mechanisms could have a significant adverse impact on our ability to process and transfer personal data outside of the EEA.

These developments create some uncertainty, and compliance obligations could cause us to incur costs or harm the operations of our products and services in ways that harm our business.

We face, and may continue to face intellectual property and other claims that could be costly to defend, result in significant damage awards or other costs (including indemnification awards), and limit our ability to use certain technologies in the future.

We, like other internet, technology and media companies, are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. In addition, patent-holding companies may frequently seek to generate income from patents they have obtained by bringing claims against us. As we have

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grown, the number of intellectual property claims against us has increased and may continue to increase as we develop new products, services, and technologies.

We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe the intellectual property rights of others. Other parties have also sought broad injunctive relief against us by filing claims in U.S. and international courts and the U.S. International Trade Commission (ITC) for exclusion and cease-and-desist orders, which could limit our ability to sell our products or services in the U.S. or elsewhere if our products or services or those of our customers or suppliers are found to infringe the intellectual property subject to the claims. Adverse results in any of these lawsuits may include awards of monetary damages, costly royalty or licensing agreements (if licenses are available at all), or orders preventing us from offering certain features, functionalities, products, or services. They may also cause us to change our business practices and require development of non-infringing products, services, or technologies, which could result in a loss of revenues for us and otherwise harm our business.

Many of our agreements with our customers and partners, including certain suppliers, require us to defend against certain intellectual property infringement claims and in some cases indemnify them for certain intellectual property infringement claims against them, which could result in increased costs for defending such claims or significant damages if there were an adverse ruling in any such claims. Such customers and partners may also 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. Moreover, intellectual property indemnities provided to us by our suppliers, when obtainable, may not cover all damages and losses suffered by us and our customers arising from intellectual property infringement claims. Furthermore, in connection with our divestitures, we have agreed, and may in the future agree, to provide indemnification for certain potential liabilities, including those associated with intellectual property claims.

Regardless of their merits, intellectual property claims are often time consuming and expensive to litigate or settle. To the extent such claims are successful, they may harm our business, including our product and service offerings, financial condition, or operating results.

Risks Related to Ownership of our Stock

We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our stock and could diminish our cash reserves.

We engage in share repurchases from time to time. In July 2019 the Board of Directors of Alphabet authorized the company to repurchase up to $25.0 billion of its Class C capital stock, which was completed during the third quarter of 2020. In July 2020, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $28.0 billion of its Class C capital stock. As of September 30, 2020, $25.5 billion remains available for repurchase. Our repurchase program does not have an expiration date and does not obligate Alphabet to repurchase any specific dollar amount or to acquire any specific number of shares. Our share repurchase program could affect the price of our stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our stock.

The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters.

Our Class B common stock has 10 votes per share, our Class A common stock has one vote per share, and our Class C capital stock has no voting rights. As of September 30, 2020, Larry Page and Sergey Brin beneficially owned approximately 85.2% of our outstanding Class B common stock, which represented approximately 51.5% of the voting power of our outstanding common stock. Through their stock ownership, Larry and Sergey have significant influence over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets, for the foreseeable future. In addition, because our Class C capital stock carries no voting rights (except as required by applicable law), the issuance of the Class C capital stock, including in future stock-based acquisition transactions and to fund employee equity incentive programs, could continue Larry and Sergey’s current relative voting power and their ability to elect all of our directors and to determine the outcome of most matters submitted to a vote of our stockholders. This concentrated control limits or severely restricts other stockholders’ ability to influence corporate matters and we may take actions that some of our stockholders do not view as beneficial, which could reduce the market price of our Class A common stock and our Class C capital stock.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.

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Provisions in Alphabet’s certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:

•Our certificate of incorporation provides for a tri-class capital stock structure. As a result of this structure, Larry and Sergey have significant influence over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets. This concentrated control could discourage others from initiating any potential merger, takeover, or other change of control transaction that other stockholders may view as beneficial. As noted above, the issuance of the Class C capital stock could have the effect of continuing the influence of Larry and Sergey.

•Our Board of Directors has the right to elect directors to fill a vacancy created by the expansion of the Board of Directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors.

•Our stockholders may not act by written consent. As a result, a holder, or holders, controlling a majority of our capital stock would not be able to take certain actions without holding a stockholders' meeting.

•Our certificate of incorporation prohibits cumulative voting in the election of directors. This limits the ability of minority stockholders to elect director candidates.

•Stockholders must provide advance notice to nominate individuals for election to the Board of Directors or to propose matters that can be acted upon at a stockholders’ meeting. These provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company.

•Our Board of Directors may issue, without stockholder approval, shares of undesignated preferred stock. The ability to issue undesignated preferred stock makes it possible for our Board of Directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.

As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware law, a corporation may not engage in a business combination with any holder of 15% or more of its outstanding voting stock unless the holder has held the stock for three years or, among other things, the Board of Directors has approved the transaction. Our Board of Directors could rely on Delaware law to prevent or delay an acquisition of us.

General Risks

The continuing impacts of COVID-19 are highly unpredictable and could be significant, and may have an adverse effect on our business, operations and our future financial performance.

In late 2019, COVID-19 emerged and by March 11, 2020 was declared a global pandemic by The World Health Organization. Governments and municipalities around the world instituted measures in an effort to control the spread of COVID-19, including quarantines, shelter-in-place orders, school closings, travel restrictions, and closure of non-essential businesses. Since the end of March, the macroeconomic impacts continue to be significant, evolving and unpredictable, exhibited by, among other things, a rise in unemployment, changes in consumer behavior, and market volatility.

The global health and economic implications of this pandemic have adversely impacted our business, operations and financial performance and could impact them significantly in the future. As a result of the scale of the ongoing pandemic and the speed at which the global community has been impacted, our quarterly revenue growth rate and expense as a percentage of our revenues differed from our historical rate, may differ significantly in future periods, and our future operating results may fall below expectations.

The future impact of the ongoing pandemic on our business, operations and future financial performance could include, but are not limited to:

•Significant decline in advertising revenues as advertiser spending slows due to an economic downturn. This decline in advertising revenues could persist through and beyond a recessionary period. In addition, we may experience a significant and prolonged shift in user behavior such as a shift in interests to less commercial topics.

•Significant decline in other revenues due to a decline in customer demand. For example, if consumer demand for electronics significantly declines, our hardware revenues could be significantly impacted.

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•Adverse impacts to our operating income, operating margin, net income, EPS and respective growth rates - particularly if expenses do not decrease across Alphabet at the same pace as revenue declines. Many of our expenses are less variable in nature and/or may not correlate to changes in revenues, including costs associated with our data centers and facilities as well as employee compensation. As such, we may not be able to decrease them significantly in the short-term, or we may choose not to significantly reduce them in an effort to remain focused on long-term outlook and investment opportunities.

•Significant decrease in our operating cash flows as a result of decreased advertiser spending and deterioration in the credit quality and liquidity of our customers, which could adversely affect our accounts receivable. Investing cash flows could decrease due to slowing spend on data center and facilities construction projects due to a slowing or stopping of construction or significant restrictions placed on construction.

•Significant supply chain constraints such that we cannot procure the servers and other technology infrastructure needed to deliver our services to our users and customers. Supply chain constraints could also affect our ability to procure the components needed to manufacture our hardware products, thereby affecting supply availability and timing of hardware launches. Increased pricing of these components could also affect infrastructure costs to deliver our services or costs of hardware products that we sell.

•Increased demand globally for bandwidth to support users who are at work and school remotely could result in reduction of quality or curtailment of services, such as bandwidth capping on YouTube.

•The rapid and broad-based shift to a remote working environment creates inherent productivity, connectivity, and oversight challenges. For example, governmental lockdowns, restrictions or new regulations could significantly impact the ability of our employees and vendors to work productively. Governmental restrictions have been globally inconsistent and it is not clear when a return to worksite locations or travel will be permitted or what restrictions will be in place in those environments. The extent and/or duration of ongoing workforce restrictions and limitations could impact our ability to enhance, develop and support existing products and services, detect and prevent spam and problematic content, hold product sales and marketing events, and generate new sales leads, among others. In addition, the changed environment under which we are operating could have an impact on our internal controls over financial reporting as well as our ability to meet a number of our compliance requirements in a timely or quality manner.

•Ongoing significant foreign exchange volatility could materially impact our revenues that are denominated in foreign currencies, our ability or strategy to hedge our foreign exchange exposure. Additionally, volatility in debt and equity markets could affect the values of our debt and equity holdings and the realized gains or losses on the disposition of those holdings.

Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations.

Our operating results may fluctuate as a result of a number of factors, many outside of our control.

As a result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our quarterly, year-to-date, and annual expenses as a percentage of our revenues may differ significantly from our historical rates. Our operating results in future quarters may fall below expectations. Any of these events could cause our stock price to fall. Each of the risk factors listed in this section in addition to the following factors may affect our operating results:

•Our ability to continue to attract and retain users and customers to our products and services.

•Our ability to attract user and/or customer adoption of, and generate significant revenues from, new products, services, and technologies in which we have invested considerable time and resources.

•Our ability to monetize traffic on Google properties and our Google Network Members' properties across various devices.

•Revenue fluctuations caused by changes in device mix, geographic mix, ongoing product and policy changes, product mix, and property mix.

•The amount of revenues and expenses generated and incurred in currencies other than U.S. dollars, and our ability to manage the resulting risk through our foreign exchange risk management program.

•The amount and timing of operating costs and expenses and capital expenditures related to the maintenance and expansion of our businesses, operations, and infrastructure.

•Our focus on long-term goals over short-term results.

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•The results of our acquisitions, divestitures, and our investments in risky projects, including new businesses, products, services, and technologies.

•Our ability to keep our products and services operational at a reasonable cost and without service interruptions.

•The seasonal fluctuations in internet usage, advertising spending, and underlying business trends such as traditional retail seasonality. Our rapid growth has tended to mask the cyclicality and seasonality of our business. As our growth rate has slowed, the cyclicality and seasonality in our business has become more pronounced and caused our operating results to fluctuate.

•Geopolitical events, including trade disputes.

•Changes in global business or macroeconomic conditions.

Because our businesses are changing and evolving, our historical operating results may not be useful to you in predicting our future operating results.

Acquisitions, joint ventures, investments, and divestitures could result in operating difficulties, dilution, and other consequences that may harm our business, financial condition, and operating results.

Acquisitions, joint ventures, investments and divestitures are important elements of our overall corporate strategy and use of capital, and these transactions could be material to our financial condition and operating results. We expect to continue to evaluate and enter into discussions regarding a wide array of such potential strategic transactions, which could create unforeseen operating difficulties and expenditures. Some of the areas where we face risks include:

•Diversion of management time and focus from operating our business to challenges related to acquisitions and other strategic transactions.

•Failure to successfully integrate and further develop the acquired business or technology.

•Implementation or remediation of controls, procedures, and policies at the acquired company.

•Integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing functions.

•Transition of operations, users, and customers onto our existing platforms.

•Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval that could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of a transaction.

•In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries.

•Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employees from the businesses we acquire.

•Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, data privacy and security issues, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities.

•Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders, or other third parties.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and other strategic transactions could cause us to fail to realize their anticipated benefits, incur unanticipated liabilities, and harm our business generally.

Our acquisitions and other strategic transactions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill and/or purchased long-lived assets, and restructuring charges, any of which could harm our financial condition or operating results. Also, the anticipated benefits or value of our acquisitions and other strategic transactions may not materialize. In connection with our divestitures, we have agreed, and may in the future agree, to provide indemnification for certain potential liabilities, which may harm our financial condition or operating results.

If we were to lose the services of key personnel, we may not be able to execute our business strategy.

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Our future success depends in large part upon the continued service of key members of our senior management team. For instance, Sundar Pichai is critical to the overall management of Alphabet and its subsidiaries and plays an important role in the development of our technology. He also plays a key role in maintaining our culture and setting our strategic direction. All of our executive officers and key employees are at-will employees, and we do not maintain any key-person life insurance policies. The loss of key personnel could seriously harm our business.

We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hire qualified personnel, or maintain our corporate culture, we may not be able to grow effectively.

Our performance largely depends on the talents and efforts of highly skilled individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees is intense, and certain of our competitors have directly targeted our employees. In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees. New executive orders and/or court decisions pertaining to immigration may also impact our ability to hire or retain some of our talent from overseas.

In addition, we believe that our corporate culture fosters innovation, creativity, and teamwork. As our organization grows and evolves, we may need to implement more complex organizational management structures or adapt our corporate culture and work environments to ever-changing circumstances, such as during times of a natural disaster or pandemic (including COVID-19), and these changes could impact our ability to compete effectively or have an adverse impact on our corporate culture.

In preparing our financial statements, we incorporate valuation methodologies that are subjective in nature and valuations may fluctuate over time.

We measure certain of our non-marketable equity and debt investments, certain other instruments including stock-based compensation awards settled in the stock of certain Other Bets, and certain assets and liabilities acquired in a business combination, at fair value on a nonrecurring basis. The determination of fair value involves use of appropriate valuation methods and certain unobservable inputs, require management judgment and estimation, and may change over time.

As it relates to our non-marketable investments, the market values can be negatively affected by liquidity, credit deterioration or losses, performance and financial results of the underlying companies, foreign exchange rates, changes in interest rates, including changes that may result from the implementation of new benchmark rates that replace LIBOR, the effect of new or changing regulations, the stock market in general, or other factors. The effect of COVID-19 on our impairment assessment for non-marketable investments requires significant judgment due to the uncertainty around the duration and severity of the impact.

We adjust the carrying value of our non-marketable equity investments to fair value for observable transactions of identical or similar investments of the same issuer or for impairments. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), which increases the volatility of our other income (expense).

As a result of these factors, the value or liquidity of our cash equivalents, as well as our marketable and non-marketable securities could decline and result in a material impairment, which could materially adversely affect our financial condition and operating results.

We could be subject to changes in tax rates, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities.

Our future income taxes could be negatively affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, the net gains and losses recognized by legal entities on certain hedges and related hedged intercompany and other transactions under our foreign exchange risk management program, changes in the valuation of our deferred tax assets or liabilities, the application of different provisions of tax laws or changes in tax laws, regulations, or accounting principles (including changes in the interpretation of existing laws), as well as certain discrete items.

In addition, we are subject to regular review and audit by both domestic and foreign tax authorities. As a result, we have received, and may in the future receive, assessments in multiple jurisdictions, including in Europe, on various tax-related assertions, such as transfer-pricing adjustments or permanent-establishment claims. Any adverse outcome of such a review or audit could have a negative effect on our operating results and financial

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condition and could require us to change our business practices in a manner adverse to our business. It may also subject us to additional litigation and regulatory inquiries, resulting in the diversion of management’s time and attention. In addition, the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment, and there are many transactions and calculations for which the ultimate tax determination is uncertain. Although we believe our estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made.

Furthermore, due to shifting economic and political conditions, tax policies, laws, or rates in various jurisdictions may be subject to significant changes in ways that impair our financial results. In particular, France, the United Kingdom, Italy, and other countries have enacted or are considering digital services taxes, which could lead to inconsistent and potentially overlapping international tax regimes. The Organization for Economic Cooperation and Development recently released proposals relating to its initiative for modernizing international tax rules, with the goal of having different countries implement a modernized and aligned international tax framework, but there can be no guarantee that this will occur.

In addition, in response to significant market volatility and disruptions to business operations resulting from the global spread of COVID-19, legislatures and taxing authorities in many jurisdictions in which we operate may propose changes to their tax rules. These changes could include modifications that have temporary effect, and more permanent changes. The impact of these potential new rules on us, our long-term tax planning, and our tax effective tax rate could be material.

The trading price for our Class A common stock and non-voting Class C capital stock may continue to be volatile.

The trading price of our stock has at times experienced substantial price volatility and may continue to be volatile. For example, from July 1, 2020 through September 30, 2020, the closing price of our Class A common stock ranged from $1,409.39 per share to $1,717.39 per share, and the closing price of our Class C capital stock ranged from $1,415.20 per share to $1,728.28 per share.

In addition to the factors discussed in this report, the trading price of our Class A common stock and Class C capital stock may fluctuate widely in response to various factors, many of which are beyond our control, including, among others:

•Quarterly variations in our operating results or those of our competitors.

•Announcements by us or our competitors of acquisitions, divestitures, investments, new products, significant contracts, commercial relationships, or capital commitments.

•Recommendations by securities analysts or changes in earnings estimates.

•Announcements about our earnings that are not in line with analyst expectations, the risk of which is enhanced because it is our policy not to give guidance on earnings.

•Announcements by our competitors of their earnings that are not in line with analyst expectations.

•Commentary by industry and market professionals about our products, strategies, and other matters affecting our business and results, regardless of its accuracy.

•The volume of shares of Class A common stock and Class C capital stock available for public sale.

•Sales of Class A common stock and Class C capital stock by us or by our stockholders (including sales by our directors, executive officers, and other employees).

•Short sales, hedging, and other derivative transactions on shares of our Class A common stock and Class C capital stock.

•The perceived values of Class A common stock and Class C capital stock relative to one another.

•Any share repurchase program.

In addition, the stock market in general, which can be affected by various factors, including overall economic and political conditions, and the market for technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.

These broad market and industry factors may harm the market price of our Class A common stock and our Class C capital stock, regardless of our actual operating performance.

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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table presents information with respect to Alphabet's repurchases of Class C capital stock during the quarter ended September 30, 2020.

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)
July 1 - 31	1,454	$	1,513.19	1,454	$	31,245
August 1 - 31	1,592	$	1,561.67	1,592	$	28,758
September 1 - 30	2,114	$	1,518.52	2,114	$	25,547
Total	5,160			5,160

(1)    In July 2019, the Board of Directors of Alphabet authorized the company to repurchase up to $25.0 billion of its Class C capital stock, which was completed during the third quarter of 2020. In July 2020, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $28.0 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 11 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.

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ITEM 6.EXHIBITS

Exhibit Number		Description	Incorporated by reference herein
			Form	Date
3.01		Alphabet Inc. Amended and Restated Bylaws	Current Report on Form 8-K/A (File No. 001-37580)	October 27, 2020
4.01		Indenture, dated February 12, 2016, between Alphabet Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee	Registration Statement on Form S-3 (File No. 333-209510)	February 12, 2016
4.02		Form of Global Note representing the Registrant’s 0.450% notes due 2025	Current Report on Form 8-K (File No. 001-37580)	August 5, 2020
4.03		Form of Global Note representing the Registrant’s 0.800% notes due 2027	Current Report on Form 8-K (File No. 001-37580)	August 5, 2020
4.04		Form of Global Note representing the Registrant’s 1.100% notes due 2030	Current Report on Form 8-K (File No. 001-37580)	August 5, 2020
4.05		Form of Global Note representing the Registrant’s 1.900% notes due 2040	Current Report on Form 8-K (File No. 001-37580)	August 5, 2020
4.06		Form of Global Note representing the Registrant’s 2.050% notes due 2050	Current Report on Form 8-K (File No. 001-37580)	August 5, 2020
4.07		Form of Global Note representing the Registrant’s 2.250% notes due 2060	Current Report on Form 8-K (File No. 001-37580)	August 5, 2020
31.01	*	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02	*	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01	‡	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1		Stipulation and Agreement of Settlement	Current Report on Form 8-K (File No. 001-37580)	September 25, 2020
101.INS	*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	*	Inline XBRL Taxonomy Extension Schema Document
101.CAL	*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

69

Table of Contents Alphabet Inc.

101.DEF	*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

__________________________ 

u	Indicates management compensatory plan, contract, or arrangement.
*	Filed herewith.
‡	Furnished herewith.

70

Table of Contents Alphabet Inc.

SIGNATURE

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

		ALPHABET INC.
October 29, 2020	By:	/s/    RUTH M. PORAT
		Ruth M. Porat
		Senior Vice President and Chief Financial Officer

		ALPHABET INC.
October 29, 2020	By:	/s/    AMIE THUENER O'TOOLE
		Amie Thuener O'Toole
		Vice President and Chief Accounting Officer

71

EX-31.01

Exhibit 31.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sundar Pichai, certify that:

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.

Date: October 29, 2020

/S/    SUNDAR PICHAI

Sundar Pichai

Chief Executive Officer
(Principal Executive Officer)

EX-31.02

Exhibit 31.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ruth Porat, certify that:

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.

Date: October 29, 2020

/S/    RUTH PORAT

Ruth Porat

Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

EX-32.01

Exhibit 32.01

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Sundar Pichai, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alphabet Inc. for the quarterly period ended September 30, 2020, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Alphabet Inc.

Date: October 29, 2020

By:	/S/    SUNDAR PICHAI
Name:	Sundar Pichai
Title:	Chief Executive Officer (Principal Executive Officer)

I, Ruth Porat, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alphabet Inc. for the quarterly period ended September 30, 2020, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Alphabet Inc.

Date: October 29, 2020

By:	/S/    RUTH PORAT
Name:	Ruth Porat
Title:	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

The foregoing certifications are not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), and are not to be incorporated by reference into any filing of Alphabet Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Oct. 22, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-37580
Entity Registrant Name	Alphabet Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	61-1767919
Entity Address, Address Line One	1600 Amphitheatre Parkway
Entity Address, City or Town	Mountain View
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94043
City Area Code	650
Local Phone Number	253-0000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001652044
Current Fiscal Year End Date	--12-31
Class A Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock, $0.001 par value
Trading Symbol	GOOGL
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		300,643,829
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		45,915,231
Class C Capital Stock
Document Information [Line Items]
Title of 12(b) Security	Class C Capital Stock, $0.001 par value
Trading Symbol	GOOG
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		329,867,212

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 20,129	$ 18,498
Marketable securities	112,467	101,177
Total cash, cash equivalents, and marketable securities	132,596	119,675
Accounts receivable, net	24,925	25,326
Income taxes receivable, net	588	2,166
Inventory	835	999
Other current assets	5,425	4,412
Total current assets	164,369	152,578
Non-marketable investments	14,656	13,078
Deferred income taxes	972	721
Property and equipment, net	81,636	73,646
Operating lease assets	11,946	10,941
Intangible assets, net	1,520	1,979
Goodwill	20,870	20,624
Other non-current assets	3,274	2,342
Total assets	299,243	275,909
Current liabilities:
Accounts payable	4,391	5,561
Accrued compensation and benefits	8,747	8,495
Accrued expenses and other current liabilities	25,631	23,067
Accrued revenue share	6,030	5,916
Deferred revenue	2,302	1,908
Income taxes payable, net	1,099	274
Total current liabilities	48,200	45,221
Long-term debt	13,902	4,554
Deferred revenue, non-current	454	358
Income taxes payable, non-current	8,616	9,885
Deferred income taxes	1,973	1,701
Operating lease liabilities	10,984	10,214
Other long-term liabilities	2,194	2,534
Total liabilities	86,323	74,467
Contingencies (Note 10)
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); 688,335 (Class A 299,828, Class B 46,441, Class C 342,066) and 677,724 (Class A 300,641, Class B 45,915, Class C 331,168) shares issued and outstanding	57,307	50,552
Accumulated other comprehensive income (loss)	46	(1,232)
Retained earnings	155,567	152,122
Total stockholders’ equity	212,920	201,442
Total liabilities and stockholders’ equity	$ 299,243	$ 275,909

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Stockholders’ equity:
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Convertible preferred stock, shares issued (in shares)	0	0
Convertible preferred stock, shares outstanding (in shares)	0	0
Common stock and capital stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	15,000,000,000	15,000,000,000
Common stock and capital stock, shares issued (in shares)	677,724,000	688,335,000
Common stock and capital stock, shares outstanding (in shares)	677,724,000	688,335,000
Class A Common Stock
Stockholders’ equity:
Common stock and capital stock, shares authorized (in shares)	9,000,000,000	9,000,000,000
Common stock and capital stock, shares issued (in shares)	300,641,000	299,828,000
Common stock and capital stock, shares outstanding (in shares)	300,641,000	299,828,000
Class B Common Stock
Stockholders’ equity:
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock and capital stock, shares issued (in shares)	45,915,000	46,441,000
Common stock and capital stock, shares outstanding (in shares)	45,915,000	46,441,000
Class C Capital Stock
Stockholders’ equity:
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock and capital stock, shares issued (in shares)	331,168,000	342,066,000
Common stock and capital stock, shares outstanding (in shares)	331,168,000	342,066,000

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenues	$ 46,173	$ 40,499	$ 125,629	$ 115,782
Costs and expenses:
Cost of revenues	21,117	17,568	58,652	50,876
Research and development	6,856	6,554	20,551	18,796
Sales and marketing	4,231	4,609	12,632	12,726
General and administrative	2,756	2,591	8,221	6,722
European Commission fines	0	0	0	1,697
Total costs and expenses	34,960	31,322	100,056	90,817
Income from operations	11,213	9,177	25,573	24,965
Other income (expense), net	2,146	(549)	3,820	3,956
Income before income taxes	13,359	8,628	29,393	28,921
Provision for income taxes	2,112	1,560	4,351	5,249
Net income	$ 11,247	$ 7,068	$ 25,042	$ 23,672
Basic net income per share of Class A and B common stock and Class C capital stock (in dollars per share)	$ 16.55	$ 10.20	$ 36.69	$ 34.12
Diluted net income per share of Class A and B common stock and Class C capital stock (in dollars per share)	$ 16.40	$ 10.12	$ 36.38	$ 33.83

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 11,247	$ 7,068	$ 25,042	$ 23,672
Other comprehensive income (loss):
Change in foreign currency translation adjustment	459	(408)	193	(326)
Available-for-sale investments:
Change in net unrealized gains (losses)	(19)	153	1,346	1,613
Less: reclassification adjustment for net (gains) losses included in net income	(73)	(39)	(391)	(107)
Net change, net of tax benefit (expense) of $(32), $27, $(223) and $(274)	(92)	114	955	1,506
Cash flow hedges:
Change in net unrealized gains (losses)	(48)	264	244	209
Less: reclassification adjustment for net (gains) losses included in net income	23	(75)	(114)	(249)
Net change, net of tax benefit (expense) of $(46), $8, $(23) and $(38)	(25)	189	130	(40)
Other comprehensive income (loss)	342	(105)	1,278	1,140
Comprehensive income	$ 11,589	$ 6,963	$ 26,320	$ 24,812

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Tax benefit (expense) related to available-for-sale investments	$ 27	$ (32)	$ (274)	$ (223)
Tax benefit (expense) related to cash flow hedges	$ 8	$ (46)	$ (38)	$ (23)

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Millions	Total	Cumulative Effect, Period of Adoption, Adjustment	Class A and Class B Common Stock, Class C Capital Stock and Additional Paid-In Capital	Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss) Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment
Beginning Balance (in shares) at Dec. 31, 2018			695,556
Beginning Balance at Dec. 31, 2018	$ 177,628	$ (34)	$ 45,049	$ (2,306)	$ (30)	$ 134,885	$ (4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common and capital stock issued (in shares)			5,931
Common and capital stock issued	122		$ 122
Stock-based compensation expense	8,215		8,215
Tax withholding related to vesting of restricted stock units and other	(3,636)		$ (3,636)
Repurchases of capital stock (in shares)			(10,581)
Repurchases of capital stock	(12,298)		$ (870)			(11,428)
Sale of interest in consolidated entities	160		$ 160
Net income	23,672					23,672
Other comprehensive income (loss)	1,140			1,140
Ending Balance (in shares) at Sep. 30, 2019			690,906
Ending Balance at Sep. 30, 2019	194,969		$ 49,040	(1,196)		147,125
Beginning Balance (in shares) at Jun. 30, 2019			694,050
Beginning Balance at Jun. 30, 2019	192,192		$ 47,937	(1,091)		145,346
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common and capital stock issued (in shares)			1,616
Common and capital stock issued	49		$ 49
Stock-based compensation expense	2,645		2,645
Tax withholding related to vesting of restricted stock units and other	(1,184)		$ (1,184)
Repurchases of capital stock (in shares)			(4,760)
Repurchases of capital stock	(5,696)		$ (407)			(5,289)
Net income	7,068					7,068
Other comprehensive income (loss)	(105)			(105)
Ending Balance (in shares) at Sep. 30, 2019			690,906
Ending Balance at Sep. 30, 2019	194,969		$ 49,040	(1,196)		147,125
Beginning Balance (in shares) at Dec. 31, 2019			688,335
Beginning Balance at Dec. 31, 2019	201,442		$ 50,552	(1,232)		152,122
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common and capital stock issued (in shares)			6,185
Common and capital stock issued	158		$ 158
Stock-based compensation expense	9,865		9,865
Tax withholding related to vesting of restricted stock units and other	(4,076)		$ (4,076)
Repurchases of capital stock (in shares)			(16,796)
Repurchases of capital stock	(23,245)		$ (1,648)			(21,597)
Sale of interest in consolidated entities	2,456		$ 2,456
Net income	25,042					25,042
Other comprehensive income (loss)	1,278			1,278
Ending Balance (in shares) at Sep. 30, 2020			677,724
Ending Balance at Sep. 30, 2020	212,920		$ 57,307	46		155,567
Beginning Balance (in shares) at Jun. 30, 2020			681,215
Beginning Balance at Jun. 30, 2020	207,322		$ 55,937	(296)		151,681
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common and capital stock issued (in shares)			1,669
Common and capital stock issued	15		$ 15
Stock-based compensation expense	3,230		3,230
Tax withholding related to vesting of restricted stock units and other	(1,339)		$ (1,339)
Repurchases of capital stock (in shares)			(5,160)
Repurchases of capital stock	(7,897)		$ (536)			(7,361)
Net income	11,247					11,247
Other comprehensive income (loss)	342			342
Ending Balance (in shares) at Sep. 30, 2020			677,724
Ending Balance at Sep. 30, 2020	$ 212,920		$ 57,307	$ 46		$ 155,567

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating activities
Net income	$ 25,042	$ 23,672
Adjustments:
Depreciation and impairment of property and equipment	9,366	7,774
Amortization and impairment of intangible assets	606	594
Stock-based compensation expense	9,768	8,149
Deferred income taxes	(280)	381
Gain on debt and equity securities, net	(3,055)	(2,399)
Other	875	(119)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(1,079)	25
Income taxes, net	469	210
Other assets	(592)	(787)
Accounts payable	(269)	(386)
Accrued expenses and other liabilities	891	2,927
Accrued revenue share	277	201
Deferred revenue	428	(149)
Net cash provided by operating activities	42,447	40,093
Investing activities
Purchases of property and equipment	(16,802)	(17,496)
Purchases of marketable securities	(104,932)	(80,968)
Maturities and sales of marketable securities	97,751	74,783
Purchases of non-marketable investments	(1,864)	(1,499)
Maturities and sales of non-marketable investments	598	297
Acquisitions, net of cash acquired, and purchases of intangible assets	(368)	(373)
Other investing activities	125	468
Net cash used in investing activities	(25,492)	(24,788)
Financing activities
Net payments related to stock-based award activities	(4,073)	(3,566)
Repurchases of capital stock	(23,245)	(12,298)
Proceeds from issuance of debt, net of costs	11,761	317
Repayments of debt	(2,043)	(538)
Proceeds from sale of interest in consolidated entities, net	2,462	202
Net cash used in financing activities	(15,138)	(15,883)
Effect of exchange rate changes on cash and cash equivalents	(186)	(91)
Net increase (decrease) in cash and cash equivalents	1,631	(669)
Cash and cash equivalents at beginning of period	18,498	16,701
Cash and cash equivalents at end of period	$ 20,129	$ 16,032

XML

Nature of Operations and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

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 Sheet as of September 30, 2020, the Consolidated Statements of Income for the three and nine months ended September 30, 2019 and 2020, the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2020, the Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2019 and 2020 and the Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2020 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 September 30, 2020, our results of operations for the three and nine months ended September 30, 2019 and 2020, and our cash flows for the nine months ended September 30, 2019 and 2020. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020.

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, 2019 filed with the SEC.

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 allowance for credit losses, fair values of financial instruments, non-marketable equity securities, 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.

As of September 30, 2020 the impact of COVID-19 continues to unfold and the extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; the uneven impact to certain industries; advances in testing, treatment and prevention; and the macroeconomic impact of government measures to contain the spread of the virus and related government stimulus measures. As a result, certain of our estimates and assumptions, including the allowance for credit losses for accounts receivable, the credit worthiness of customers entering into revenue arrangements, the valuation of non-marketable equity securities, including our impairment assessment, the fair values of our financial instruments, and income taxes, require increased judgment and carry a higher degree of variability and volatility that could result in material changes to our estimates in future periods.

Accounts Receivable

Our payment terms for accounts receivable 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 customers, we require payment before the products or services are delivered to the customer.

We maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the Consolidated Statements of Income. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, we consider historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. We also consider customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

For the nine months ended September 30, 2020, our assessment considered the impact of COVID-19 and estimates of expected credit and collectibility trends. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability and volatility that may have a material impact on our allowance for credit losses in future periods. The allowance for credit losses on accounts receivable was $275 million and $834 million as of December 31, 2019 and September 30, 2020, respectively.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("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 which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to certain 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 result in earlier recognition of credit losses. We adopted ASU 2016-13 using the modified retrospective approach as of January 1, 2020. The cumulative effect upon adoption was not material to our consolidated financial statements. See "Accounts Receivable" above as well as Note 3 for the effect on our consolidated financial statements.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation. Hedging gains (losses), which were previously included in Google revenues, are now reported separately as a component of total revenues for all periods presented. See Note 2 for further details.

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Revenues

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Disaggregated Revenues

The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Certain amounts in prior periods have been reclassified to conform with current period presentation.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Google Search & other	$	24,741	$	26,338	$	70,930	$	72,159
YouTube ads(1)	3,804		5,037		10,432		12,887
Google properties	28,545		31,375		81,362		85,046
Google Network Members' properties	5,251		5,720		15,515		15,679
Google advertising	33,796		37,095		96,877		100,725
Google Cloud	2,379		3,444		6,304		9,228
Google other(1)	4,050		5,478		11,750		15,037
Google revenues	40,225		46,017		114,931		124,990
Other Bets revenues	155		178		487		461
Hedging gains (losses)	119		(22)		364		178
Total revenues	$	40,499	$	46,173	$	115,782	$	125,629

(1)     YouTube non-advertising revenues are included in Google other revenues.

The following table presents our revenues disaggregated by geography, based on the addresses of our customers (in millions, unaudited):

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2019				2020				2019				2020
United States	$	18,711	46	%	$	21,442	47	%	$	53,106	46	%	$	58,311	47	%
EMEA(1)	12,565		31		13,924		30		36,546		32		38,132		30
APAC(1)	6,814		17		8,458		18		19,446		17		22,641		18
Other Americas(1)	2,290		6		2,371		5		6,320		5		6,367		5
Hedging gains (losses)	119		0		(22)		0		364		0		178		0
Total revenues	$	40,499	100	%	$	46,173	100	%	$	115,782	100	%	$	125,629	100	%

(1)    Regions represent Europe, the Middle East, and Africa ("EMEA"); Asia-Pacific ("APAC"); and Canada and Latin America ("Other Americas").

Deferred Revenues and Remaining Performance Obligations

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 nine months ended September 30, 2020 was primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $1.6 billion of revenues recognized that were included in the deferred revenue balance as of December 31, 2019.

Additionally, we have performance obligations associated with commitments in customer contracts, primarily related to Google Cloud, for future services that have not yet been recognized in revenue. This includes related deferred revenue currently recorded and amounts that will be invoiced in future periods. As of September 30, 2020, the amount not yet recognized in revenue from these commitments is $19.0 billion, which reflects our assessment of relevant contract terms and expectations of our customers’ intent and ability to utilize our services. This amount excludes contracts (i) 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. We expect to recognize approximately half over the next 24 months with the remaining thereafter. However, the amount and timing of revenue recognition is largely driven by customer utilization, which could impact our estimate of the remaining amount of commitments and when we expect to recognize such revenues.

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Financial Instruments

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Financial Instruments

Financial Instruments

Debt Securities

We classify and account for our marketable debt securities as available-for-sale and carry these securities at fair value.

We report the unrealized gains and losses, net of taxes, as a component of stockholders' equity, except for certain unrealized gains and losses recorded in other income (expense), net, described below.

For debt securities in an unrealized loss position, we determine whether a credit loss exists. The estimate of credit loss is determined by considering available information relevant to the collectibility of the security and information about past events, current conditions, and reasonable and supportable forecasts. The allowance for credit loss is recorded as a charge to other income (expense), net, not to exceed the amount of the unrealized loss. Any excess unrealized loss greater than the credit loss at a security level is recognized in accumulated other comprehensive income ("AOCI"). We assess expected credit losses at the end of each reporting period and adjust the allowance through other income (expense), net.

For certain debt securities we have elected the fair value option for which changes in fair value are recorded in other income (expense), net. The fair value option was elected for these securities to align with the unrealized gains and losses from related derivative contracts. Unrealized net gains related to debt securities still held where we have elected the fair value option were $45 million as of September 30, 2020. As of September 30, 2020 the fair value of these debt securities was $2.3 billion. Balances as of December 31, 2019 were not material.

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.

The following tables summarize our debt securities, for which we did not elect the fair value option, by significant investment categories as of December 31, 2019 and September 30, 2020 (in millions):

	As of December 31, 2019
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Level 2:
Time deposits(1)	$	2,294	$	0	$	0	$	2,294	$	2,294	$	0
Government bonds	55,033		434		(30)		55,437		4,518		50,919
Corporate debt securities	27,164		337		(3)		27,498		44		27,454
Mortgage-backed and asset-backed securities	19,453		96		(41)		19,508		0		19,508
Total	$	103,944	$	867	$	(74)	$	104,737	$	6,856	$	97,881

	As of September 30, 2020
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Level 2:
Time deposits(1)	$	2,009	$	0	$	0	$	2,009	$	2,009	$	0
Government bonds	59,073		1,023		(9)		60,087		1,264		58,823
Corporate debt securities	28,632		678		(20)		29,290		17		29,273
Mortgage-backed and asset-backed securities	17,149		381		(13)		17,517		0		17,517
Total	$	106,863	$	2,082	$	(42)	$	108,903	$	3,290	$	105,613

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

We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method. We recognized gross realized gains of $85 million and $127 million for the three months ended September 30, 2019 and 2020, respectively, and $250 million and $690 million for the nine months ended September 30, 2019 and 2020, respectively. We recognized gross realized losses of $36 million and $8 million for the three months ended September 30, 2019 and 2020, respectively, and $105 million and $135 million for the nine months ended September 30, 2019 and 2020, respectively. We reflect these gains and losses as a component of other income (expense), net.

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):

	As of September 30, 2020
Due in 1 year or less	$	21,943
Due in 1 year through 5 years	67,496
Due in 5 years through 10 years	5,237
Due after 10 years	13,204
Total	$	107,880

The following tables present fair values and gross unrealized losses recorded to AOCI as of December 31, 2019 and September 30, 2020, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2019
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	6,752	$	(20)	$	4,590	$	(10)	$	11,342	$	(30)
Corporate debt securities	1,665		(2)		978		(1)		2,643		(3)
Mortgage-backed and asset-backed securities	4,536		(13)		2,835		(28)		7,371		(41)
Total	$	12,953	$	(35)	$	8,403	$	(39)	$	21,356	$	(74)

	As of September 30, 2020
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(unaudited)
Government bonds	$	5,473	$	(9)	$	0	$	0	$	5,473	$	(9)
Corporate debt securities	5,764		(10)		0		0		5,764		(10)
Mortgage-backed and asset-backed securities	1,990		(8)		273		(5)		2,263		(13)
Total	$	13,227	$	(27)	$	273	$	(5)	$	13,500	$	(32)

For marketable debt securities, during the three months ended September 30, 2020, we increased the allowance for credit losses by $8 million. During the nine months ended September 30, 2020 we recognized an allowance for credit losses of $10 million and the ending allowance for credit losses was $10 million. See Note 7 for further details on other income (expense), net.

Equity Investments

The following discusses our marketable equity securities, non-marketable equity securities, gains and losses on marketable and non-marketable equity securities, as well as our equity securities accounted for under the equity method.

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. All gains and losses on marketable equity securities, realized and unrealized, are recognized in other income (expense), net.

Our non-marketable equity securities are investments in privately held companies without readily determinable market values. 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). We qualitatively assess whether indicators of impairment exist. Factors considered in our impairment assessment include the companies’ financial and liquidity position, access to capital resources, effects of COVID-19, and the time since the last adjustment to fair value, among others. If the assessment indicates that the investment is impaired, we estimate the fair value by using the best information available, which may include cash flow projections or other available market data.

All gains and losses, realized and unrealized, and impairments on non-marketable equity securities are recognized in other income (expense), net. Non-marketable equity securities that have been remeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities we hold. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.

Gains and losses on marketable and non-marketable equity securities

Gains and losses recorded in other income (expense), net, for our marketable and non-marketable equity securities are summarized below (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Net gain (loss) on equity securities sold during the period	$	(63)	$	(5)	$	381	$	426
Net unrealized gain (loss) on equity securities held as of the end of the period(1)	(1,465)		1,904		1,873		2,114
Total gain (loss) recognized in other income (expense), net	$	(1,528)	$	1,899	$	2,254	$	2,540

(1)Includes net unrealized gain related to non-marketable equity securities of $166 million and $1.2 billion for the three months ended September 30, 2019 and 2020, respectively. Includes a net unrealized gain of $1.4 billion and $357 million for the nine months ended September 30, 2019 and 2020, respectively.

In the table above, net gain (loss) on equity securities sold during the period reflects the difference between the sale proceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later. 

Cumulative net gains on equity securities sold during the period, which is summarized in the following table (in millions, unaudited), represents the total net gains (losses) recognized after the initial purchase date of the equity security. While these net gains may have been reflected in periods prior to the period of sale, we believe they are important supplemental information as they reflect the economic realized net gains on the securities sold during the period. Cumulative net gains are calculated as the difference between the sale price and the initial purchase price for the equity security sold during the period.

	Equity Securities Sold
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Total sale price	$	445	$	1,389	$	1,074	$	2,888
Total initial cost	133		1,146		460		1,831
Cumulative net gains	$	312	$	243	$	614	$	1,057

Carrying value of marketable and non-marketable equity securities

The carrying value is measured as the total initial cost plus the cumulative net gain (loss). The carrying values for our marketable and non-marketable equity securities are summarized below (in millions):

	As of December 31, 2019
	Marketable Securities		Non-Marketable Securities		Total
Total initial cost	$	1,935	$	8,297	$	10,232
Cumulative net gain(1)	1,361		3,056		4,417
Carrying value	$	3,296	$	11,353	$	14,649

(1)Non-marketable securities cumulative net gain is comprised of $3.5 billion unrealized gains and $445 million unrealized losses (including impairment).

	As of September 30, 2020
	Marketable Securities(2)		Non-Marketable Securities		Total
	(unaudited)
Total initial cost	$	2,438	$	9,615	$	12,053
Cumulative net gain(1)	2,596		3,304		5,900
Carrying value	$	5,034	$	12,919	$	17,953

(1)Non-marketable securities cumulative net gain is comprised of $5.1 billion unrealized gains and $1.8 billion unrealized losses (including impairment).

(2)The long-term portion of marketable equity securities of $447 million is included within other non-current assets.

Marketable equity securities

The following table summarizes marketable equity securities measured at fair value by significant investment categories as of December 31, 2019 and September 30, 2020 (in millions):

	As of December 31, 2019				As of September 30, 2020
	Cash and Cash Equivalents		Marketable Securities		Cash and Cash Equivalents		Marketable Securities
					(unaudited)
Level 1:
Money market funds	$	4,604	$	0	$	10,102	$	0
Marketable equity securities(1)(2)	0		3,046		0		4,626
	4,604		3,046		10,102		4,626
Level 2:
Mutual funds	0		250		0		408
Total	$	4,604	$	3,296	$	10,102	$	5,034

(1)The balance as of December 31, 2019 and September 30, 2020 includes investments that were reclassified from non-marketable equity securities following the initial public offering of the issuers.

(2)The long-term portion of marketable equity securities of $447 million is included within other non-current assets.

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 (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Unrealized gains	$	398	$	1,225	$	1,816	$	1,770
Unrealized losses (including impairment)	(232)		(27)		(370)		(1,413)
Total unrealized gain (loss) for non-marketable equity securities	$	166	$	1,198	$	1,446	$	357

During the three months ended September 30, 2020, included in the $12.9 billion of non-marketable equity securities, $5.2 billion were measured at fair value resulting in a net unrealized gain of $1.2 billion.

Equity securities accounted for under the Equity Method

Equity securities accounted for under the equity method had a carrying value of approximately $1.3 billion as of December 31, 2019 and September 30, 2020. Our share of gains and losses including impairment are included as a component of other income (expense), net, in the Consolidated Statements of Income. See Note 7 for further details on other income (expense), net.

Derivative Financial InstrumentsWe enter into derivative instruments to manage risks relating to our ongoing business operations. The primary risk managed with derivative instruments is foreign exchange risk. We use foreign currency contracts to reduce the risk that our cash flows, earnings, and investment in foreign subsidiaries will be adversely affected by foreign

currency exchange rate fluctuations. We also enter into derivative instruments to partially offset our exposure to other risks and enhance investment returns.

We recognize derivative instruments as either assets or liabilities in the Consolidated Balance Sheets at fair value and classify the derivatives primarily within Level 2 in the fair value hierarchy. We present our collar contracts (an option strategy comprised of a combination of purchased and written options) at net fair values where both the purchased and written options are with the same counterparty. For other derivative contracts, we present at gross fair values. We primarily record changes in the fair value 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.

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. Further, we enter into collateral security arrangements that provide for collateral to be received or pledged when the net fair value of certain financial instruments fluctuates from contractually established thresholds. Cash collateral received related to derivative instruments under our collateral security arrangements are included in other current assets with a corresponding liability. Cash and non-cash collateral pledged related to derivative instruments under our collateral security arrangements are included in other current assets.

Cash Flow Hedges

We designate foreign currency forward and option contracts (including collars) as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar. These contracts have maturities of 24 months or less.

Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and subsequently reclassified to revenue when the hedged item is recognized in earnings. We exclude the change in 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. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI are immediately reclassified to other income (expense), net.

As of September 30, 2020, the net accumulated gain on our foreign currency cash flow hedges before tax effect was $111 million, which is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We designate foreign currency forward contracts as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. Fair value hedge amounts included in the assessment of hedge effectiveness are recognized in other income (expense), net, along with the offsetting gains and losses of the related hedged items. We exclude changes in forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in other income (expense), net.

Net Investment Hedges

We designate foreign currency forward contracts as net investment hedges to hedge the foreign currency risks related to our investment in foreign subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI along with the foreign currency translation adjustment. We exclude changes in forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in other income (expense), net.

Other Derivatives

Other derivatives not designated as hedging instruments consist primarily 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. Gains and losses on these contracts, as well as the related costs, are recognized in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities.

We also use derivatives not designated as hedging instruments to manage risks relating to interest rates, equity and commodity prices, credit exposures and to enhance investment returns.

The gross notional amounts of our outstanding derivative instruments were as follows (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Derivatives Designated as Hedging Instruments:
Foreign exchange contracts
Cash flow hedges	$	13,207	$	7,388
Fair value hedges	$	455	$	476
Net investment hedges	$	9,318	$	9,812
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	$	43,497	$	38,367
Other contracts	$	117	$	1,999

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

		As of December 31, 2019
	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	$	91	$	253	$	344
Other contracts	Other current and non-current assets	0		1		1
Total		$	91	$	254	$	345
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	173	$	196	$	369
Other contracts	Accrued expenses and other liabilities, current and non-current	0		13		13
Total		$	173	$	209	$	382

		As of September 30, 2020
	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	$	291	$	189	$	480
Other contracts	Other current and non-current assets	$	0	$	13	$	13
Total		$	291	$	202	$	493
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	167	$	175	$	342
Other contracts	Accrued expenses and other liabilities, current and non-current	$	0	$	453	$	453
Total		$	167	$	628	$	795

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized in other comprehensive income ("OCI") are summarized below (in millions, unaudited):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	325	$	(37)	$	277	$	331
Amount excluded from the assessment of effectiveness	6		(23)		(13)		(20)
Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	328		(371)		309		(412)
Total	$	659	$	(431)	$	573	$	(101)

 The effect of derivative instruments on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income
	Three Months Ended
	September 30,
	2019				2020
	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	$	40,499	$	(549)	$	46,173	$	2,146
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	$	93	$	0	$	(28)	$	0
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	26		0		6		0
Gains (Losses) on Derivatives in Fair Value Hedging Relationship:
Foreign exchange contracts
Hedged items	0		(35)		0		14
Derivatives designated as hedging instruments	0		35		0		(14)
Amount excluded from the assessment of effectiveness	0		4		0		0
Gains (Losses) on Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		62		0		20
Gains (Losses) on Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	0		(233)		0		382
Other Contracts	0		0		0		(181)
Total gains (losses)	$	119	$	(167)	$	(22)	$	221

	Gains (Losses) Recognized in Income
	Nine Months Ended
	September 30,
	2019				2020
	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	$	115,782	$	3,956	$	125,629	$	3,820
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	$	306	$	0	$	138	$	0
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	58		0		40		0
Gains (Losses) on Derivatives in Fair Value Hedging Relationship:
Foreign exchange contracts
Hedged items	0		(26)		0		6
Derivatives designated as hedging instruments	0		26		0		(6)
Amount excluded from the assessment of effectiveness	0		24		0		2
Gains (Losses) on Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		173		0		131
Gains (Losses) on Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	0		(387)		0		542
Other Contracts	0		0		0		(420)
Total gains (losses)	$	364	$	(190)	$	178	$	255

Offsetting of Derivatives

The gross amounts of our derivative instruments subject to master netting arrangements with various counterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (in millions):

Offsetting of Assets

	As of December 31, 2019
							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	$	365	$	(21)	$	344	$	(88)	(1)	$	(234)	$	0	$	22
	As of September 30, 2020
							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	$	511	$	(18)	$	493	$	(315)	(1)	$	(121)	$	(1)	$	56

(1)The balances as of December 31, 2019 and September 30, 2020 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

Offsetting of Liabilities

	As of December 31, 2019
							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	$	390	$	(21)	$	369	$	(88)	(2)	$	0	$	0	$	281
	As of September 30, 2020
							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	$	813	$	(18)	$	795	$	(315)	(2)	$	0	$	(444)	$	36

(2)    The balances as of December 31, 2019 and September 30, 2020 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

LeasesWe have entered into operating and finance lease agreements primarily for data centers, land and offices throughout the world with lease periods expiring between 2020 and 2063.

Components of operating lease expense were as follows (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Operating lease cost	$	477	$	582	$	1,302	$	1,649
Variable lease cost	134		159		392		454
Total operating lease cost	$	611	$	741	$	1,694	$	2,103

Supplemental information related to operating leases is as follows (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Cash payments for operating leases	$	442	$	527	$	1,212	$	1,450
New operating lease assets obtained in exchange for operating lease liabilities	$	1,045	$	711	$	3,498	$	2,152

As of September 30, 2020, our operating leases had a weighted average remaining lease term of 9 years and a weighted average discount rate of 2.7%. Future lease payments under operating leases that have commenced as of September 30, 2020 were as follows (in millions, unaudited):

	Operating Leases
Remainder of 2020	$	446
2021	2,182
2022	2,048
2023	1,869
2024	1,616
Thereafter	6,775
Total future lease payments	14,936
Less imputed interest	(2,417)
Total lease liability balance	$	12,519

As of September 30, 2020, we have entered into leases that have not yet commenced with future lease payments of $7.5 billion, excluding purchase options, that are not yet recorded on our Consolidated Balance Sheets. These leases will commence between 2020 and 2026 with non-cancelable lease terms of 1 to 25 years.

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Variable Interest Entities (VIEs)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities (VIEs)

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, 2019 and September 30, 2020, assets that can only be used to settle obligations of these VIEs were $3.1 billion and $5.5 billion, respectively, and the liabilities for which creditors only have recourse to the VIEs were $1.2 billion and $2.3 billion, respectively.

Total noncontrolling interests, including redeemable noncontrolling interests, in our consolidated subsidiaries increased from $1.2 billion to $3.7 billion from December 31, 2019 to September 30, 2020, primarily due to external investments in Waymo. Net loss attributable to noncontrolling interests was not material for any period presented.

Waymo

Waymo is a self-driving technology development company with a mission to make it safe and easy for people and things to get where they're going. In the first half of 2020, Waymo completed its externally led investment round, bringing the total funding to $3.2 billion, which includes investment from Alphabet. No gain or loss was recognized.

The investments related to external parties were accounted for as equity transactions and resulted in recognition of noncontrolling interests.

Unconsolidated VIEs

Certain of our non-marketable investments, including certain renewable energy investments accounted for under the equity method and certain other investments in private companies, are VIEs. The renewable energy entities' activities involve power generation using renewable sources. Private companies that we invest in are primarily early stage companies.

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. Therefore, we do not consolidate these VIEs in our consolidated financial statements.

Our maximum exposure to these unconsolidated VIEs is generally based on the current carrying value of the investments and any future funding commitments. The carrying value and maximum exposure of these unconsolidated VIEs were not material as of December 31, 2019 and September 30, 2020.

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Debt

9 Months Ended

Sep. 30, 2020

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, 2019 and September 30, 2020.

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

Long-Term Debt

In August 2020, Alphabet issued $10.0 billion of fixed-rate senior unsecured notes in six tranches (collectively, “2020 Notes”): $1.0 billion due in 2025, $1.0 billion due in 2027, $2.25 billion due in 2030, $1.25 billion due in 2040, $2.5 billion due in 2050 and $2.0 billion due in 2060. The 2020 Notes had a weighted average duration of 21.5 years and weighted average coupon rate of 1.57%. Of the total issuance, $5.75 billion was designated as Sustainability Bonds, the net proceeds of which are used to fund environmentally and socially responsible projects in the following eight areas: energy efficiency, clean energy, green buildings, clean transportation, circular economy and design, affordable housing, commitment to racial equity, and support for small business and COVID-19 crisis response. The remaining net proceeds are used for general corporate purposes.

The total outstanding debt is summarized below (in millions, except percentages):

	Maturity	Coupon Rate	Effective Interest Rate	As of December 31, 2019		As of September 30, 2020
						(unaudited)
Debt
2011-2016 Notes Issuances	2021 - 2026	2.00% - 3.63%	2.23% - 3.73%	$	4,000	$	4,000
2020 Notes Issuance	2025 - 2060	0.45% - 2.25%	0.57% - 2.33%	—		10,000
Future finance lease payments, net(1)				711		1,196
Total debt				4,711		15,196
Unamortized discount and debt issuance costs				(42)		(173)
Less: Current portion of Notes(2)				—		(999)
Less: Current portion future finance lease payments, net(1)(2)				(115)		(122)
Total long-term debt				$	4,554	$	13,902

(1)Net of imputed interest.

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

The notes in the table above are comprised of fixed-rate senior unsecured obligations and generally rank equally with each other. We may redeem the notes at any time in whole or in part at specified redemption prices. The effective interest rates are based on proceeds received with interest payable semi-annually.

The total estimated fair value of the outstanding notes, including the current portion, was approximately $4.1 billion and $13.9 billion as of December 31, 2019 and September 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 September 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 September 30, 2020.

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Supplemental Financial Statement Information

9 Months Ended

Sep. 30, 2020

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, 2019		As of September 30, 2020
			(unaudited)
Land and buildings	$	39,865	$	46,787
Information technology assets	36,840		42,883
Construction in progress	21,036		23,115
Leasehold improvements	6,310		7,303
Furniture and fixtures	156		199
Property and equipment, gross	104,207		120,287
Less: accumulated depreciation	(30,561)		(38,651)
Property and equipment, net	$	73,646	$	81,636

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
European Commission fines(1)	$	9,405	$	9,921
Accrued customer liabilities	2,245		2,559
Accrued purchases of property and equipment	2,411		2,157
Current operating lease liabilities	1,199		1,535
Other accrued expenses and current liabilities	7,807		9,459
Accrued expenses and other current liabilities	$	23,067	$	25,631

(1)    Includes the effects of foreign exchange and interest. See Note 10 for further details.

Accumulated Other Comprehensive Income (Loss)

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

	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, 2018	$	(1,884)	$	(688)	$	266	$	(2,306)
Cumulative effect of accounting change	0		0		(30)		(30)
Other comprehensive income (loss) before reclassifications	(326)		1,613		222		1,509
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		(13)		(13)
Amounts reclassified from AOCI	0		(107)		(249)		(356)
Other comprehensive income (loss)	(326)		1,506		(40)		1,140
Balance as of September 30, 2019	$	(2,210)	$	818	$	196	$	(1,196)

	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, 2019	$	(2,003)	$	812	$	(41)	$	(1,232)
Other comprehensive income (loss) before reclassifications	193		1,346		264		1,803
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		(20)		(20)
Amounts reclassified from AOCI	0		(391)		(114)		(505)
Other comprehensive income (loss)	193		955		130		1,278
Balance as of September 30, 2020	$	(1,810)	$	1,767	$	89	$	46

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

		Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
AOCI Components	Location	2019		2020		2019		2020
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	49	$	93	$	145	$	496
	Benefit (provision) for income taxes	(10)		(20)		(38)		(105)
	Net of tax	39		73		107		391
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Revenue	93		(28)		306		138
Interest rate contracts	Other income (expense), net	1		1		4		4
	Benefit (provision) for income taxes	(19)		4		(61)		(28)
	Net of tax	75		(23)		249		114
Total amount reclassified, net of tax		$	114	$	50	$	356	$	505

Other Income (Expense), Net

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Interest income	$	631	$	460	$	1,806	$	1,479
Interest expense(1)	(23)		(48)		(83)		(82)
Foreign currency exchange gain (loss), net	41		(84)		63		(257)
Gain (loss) on debt securities, net	49		116		145		515
Gain (loss) on equity securities, net	(1,528)		1,899		2,254		2,540
Performance fees	227		(135)		(333)		(204)
Income (loss) and impairment from equity method investments, net	(14)		26		(70)		46
Other	68		(88)		174		(217)
Other income (expense), net	$	(549)	$	2,146	$	3,956	$	3,820

(1)Interest expense is net of interest capitalized of $46 million and $53 million for the three months ended September 30, 2019 and 2020, respectively, and $113 million and $162 million for the nine months ended September 30, 2019 and 2020, respectively.

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Acquisitions

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisitions

Acquisitions

During the nine months ended September 30, 2020, we completed acquisitions and purchases of intangible assets for total consideration of approximately $387 million, net of cash acquired. In aggregate, $139 million was attributed to intangible assets, $204 million to goodwill, and $44 million to net assets acquired. These acquisitions generally enhance the breadth and depth of our offerings and expand our expertise in engineering and other functional areas.

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

For all intangible assets acquired and purchased during the nine months ended September 30, 2020, patents and developed technology have a weighted-average useful life of 3.8 years, customer relationships have a weighted-average useful life of 4.8 years, and trade names and other have a weighted-average useful life of 5.0 years.

Pending Acquisition of Fitbit

In November 2019, we entered into an agreement to acquire Fitbit, a leading wearables brand, for $7.35 per share, representing a total purchase price of approximately $2.1 billion as of the date of the agreement.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2020

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 nine months ended September 30, 2020 were as follows (in millions, unaudited):

	Google		Other Bets		Total Consolidated
Balance as of December 31, 2019	$	19,921	$	703	$	20,624
Acquisitions	204		0		204
Foreign currency translation and other adjustments	46		(4)		42
Balance as of September 30, 2020	$	20,171	$	699	$	20,870

Other Intangible Assets

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

	As of December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	4,972	$	3,570	$	1,402
Customer relationships	254		30		224
Trade names and other	703		350		353
Total	$	5,929	$	3,950	$	1,979

	As of September 30, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(unaudited)
Patents and developed technology	$	4,612	$	3,552	$	1,060
Customer relationships	235		39		196
Trade names and other	700		436		264
Total	$	5,547	$	4,027	$	1,520

Amortization expense relating to purchased intangible assets was $188 million and $189 million for the three months ended September 30, 2019 and 2020, respectively, and $594 million and $587 million for the nine months ended September 30, 2019 and 2020, respectively.

As of September 30, 2020, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter was as follows (in millions, unaudited):

Remainder of 2020	$	181
2021	694
2022	354
2023	81
2024	57
Thereafter	153
Total	$	1,520

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Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Indemnifications

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

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

As of September 30, 2020, we did not have any material indemnification claims that were probable or reasonably possible.

Legal Matters

Antitrust Investigations

On November 30, 2010, the EC's Directorate General for Competition opened an investigation into various antitrust-related complaints against us.

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 €2.4 billion ($2.7 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 $2.7 billion for the fine in the second quarter of 2017.

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 €4.3 billion ($5.1 billion as of June 30, 2018) fine and directed the termination of the conduct at issue. On October 9, 2018, we appealed the EC decision. On October 29, 2018, we implemented changes to certain of our Android distribution practices. We recognized a charge of $5.1 billion for the fine in the second quarter of 2018.

On March 20, 2019, the EC announced its decision that certain contractual provisions in agreements that Google had with AdSense for Search partners infringed European competition law. The EC decision imposed a fine of €1.5 billion ($1.7 billion as of March 20, 2019) and directed actions related to AdSense for Search partners' agreements, which we implemented prior to the decision. On June 4, 2019, we appealed the EC decision. We recognized a charge of $1.7 billion for the fine in the first quarter of 2019.

While each EC decision is under appeal, we included the fines 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 fines.

From time to time we are subject to formal and informal inquiries and investigations by competition authorities in the United States, Europe, and other jurisdictions. For example, in August 2019, we began receiving civil investigative demands from the U.S. Department of Justice ("DOJ") requesting information and documents relating to our prior antitrust investigations and certain aspects of our business. On October 20, 2020, the DOJ and 11 state Attorneys General filed a lawsuit alleging that Google violated U.S. antitrust laws relating to Search and Search advertising. We believe this complaint is without merit and will defend ourselves vigorously. The DOJ and state Attorneys General continue their investigations into certain aspects of our business. We continue to cooperate with federal and state regulators in the United States, and other regulators around the world.

Patent and Intellectual Property Claims

We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe others' intellectual property rights. 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. As a result, we may have to change our business practices, and develop 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 in an ITC action can 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 against certain intellectual property infringement claims, 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. In addition, 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 for a rehearing at the Federal Circuit, and on August 28, 2018, the Federal Circuit denied the petition. On January 24, 2019, we filed a petition to the Supreme Court of the United States to review this case. On April 29, 2019, the Supreme Court requested the views of the Solicitor General regarding our petition. On September 27, 2019, the

Solicitor General recommended denying our petition, and we provided our response on October 16, 2019. On November 15, 2019, the Supreme Court granted our petition and made a decision to review the case. The Supreme Court heard oral arguments in our case on October 7, 2020. If the Supreme Court does not rule in our favor, the case will be remanded to the district court for further determination of the remaining issues in the case, including damages, if any. 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, intellectual property, privacy, tax and related compliance, 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 these outstanding matters include speculative, substantial or indeterminate monetary amounts. 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 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 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 not material and/or 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 14.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Share Repurchases

In July 2019, the Board of Directors of Alphabet authorized the company to repurchase up to $25.0 billion of its Class C capital stock, which was completed during the third quarter of 2020. In July 2020, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $28.0 billion of its Class C capital stock. As of September 30, 2020, $25.5 billion remains available for repurchase. 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 three and nine months ended September 30, 2020, we repurchased and subsequently retired 5.2 million and 16.8 million shares of Alphabet Class C capital stock for an aggregate amount of $7.9 billion and $23.2 billion, respectively.

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Net Income Per Share

9 Months Ended

Sep. 30, 2020

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):

	Three Months Ended September 30,
	2019						2020
	Class A		Class B		Class C		Class A		Class B		Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	3,059	$	475	$	3,534	$	4,973	$	763	$	5,511
Denominator
Number of shares used in per share computation	299,835		46,515		346,391		300,411		46,108		332,930
Basic net income per share	$	10.20	$	10.20	$	10.20	$	16.55	$	16.55	$	16.55
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	3,059	$	475	$	3,534	$	4,973	$	763	$	5,511
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	475		0		0		763		0		0
Reallocation of undistributed earnings	(24)		(4)		24		(53)		(7)		53
Allocation of undistributed earnings	$	3,510	$	471	$	3,558	$	5,683	$	756	$	5,564
Denominator
Number of shares used in basic computation	299,835		46,515		346,391		300,411		46,108		332,930
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	46,515		0		0		46,108		0		0
Restricted stock units and other contingently issuable shares	381		0		5,077		47		0		6,355
Number of shares used in per share computation	346,731		46,515		351,468		346,566		46,108		339,285
Diluted net income per share	$	10.12	$	10.12	$	10.12	$	16.40	$	16.40	$	16.40

	Nine Months Ended September 30,
	2019						2020
	Class A		Class B		Class C		Class A		Class B		Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	10,218	$	1,588	$	11,866	$	11,004	$	1,697	$	12,341
Denominator
Number of shares used in per share computation	299,493		46,549		347,818		299,934		46,266		336,361
Basic net income per share	$	34.12	$	34.12	$	34.12	$	36.69	$	36.69	$	36.69
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	10,218	$	1,588	$	11,866	$	11,004	$	1,697	$	12,341
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,588		0		0		1,697		0		0
Reallocation of undistributed earnings	(83)		(13)		83		(103)		(14)		103
Allocation of undistributed earnings	$	11,723	$	1,575	$	11,949	$	12,598	$	1,683	$	12,444
Denominator
Number of shares used in basic computation	299,493		46,549		347,818		299,934		46,266		336,361
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	46,549		0		0		46,266		0		0
Restricted stock units and other contingently issuable shares	448		0		5,369		105		0		5,715
Number of shares used in per share computation	346,490		46,549		353,187		346,305		46,266		342,076
Diluted net income per share	$	33.83	$	33.83	$	33.83	$	36.38	$	36.38	$	36.38

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.

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Compensation Plans

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Compensation Plans

Compensation Plans

Stock-Based Compensation

For the three months ended September 30, 2019 and 2020, total stock-based compensation ("SBC") expense was $2.8 billion and $3.3 billion, respectively, including amounts associated with awards we expect to settle in Alphabet stock of $2.6 billion and $3.1 billion, respectively. For the nine months ended September 30, 2019 and 2020, total SBC expense was $8.6 billion and $10.1 billion, respectively, including amounts associated with awards we expect to settle in Alphabet stock of $8.2 billion and $9.6 billion, respectively.

Stock-Based Award Activities

The following table summarizes the activities for our unvested restricted stock units ("RSUs") in Alphabet stock for the nine months ended September 30, 2020 (unaudited):

	Unvested Restricted Stock Units
	Number of Shares	Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2019	19,394,236	$	1,055.22
Granted	11,635,680	$	1,394.72
Vested	(8,437,980)	$	1,071.16
Forfeited/canceled	(951,715)	$	1,150.93
Unvested as of September 30, 2020	21,640,221	$	1,228.65

As of September 30, 2020, there was $24.6 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.6 years.

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Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate for the three months ended September 30, 2020 was lower than the U.S. federal statutory rate, primarily due to the Foreign-Derived Intangible Income tax benefit, the U.S. Research and Development Tax Credit, and stock-based compensation related tax benefits. Our effective tax rate is based on forecasted annual results which may fluctuate through the rest of the year, in particular due to COVID-19.

Our effective tax rate for the three months ended September 30, 2019 was lower than the U.S. federal statutory rate primarily due to foreign earnings taxed at lower rates and the U.S. Research and Development Tax Credit, partially offset by changes in unrecognized tax benefits.

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 $3.4 billion and $3.7 billion as of December 31, 2019 and September 30, 2020. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $2.3 billion and $2.5 billion as of December 31, 2019 and September 30, 2020. Although the timing of the resolution, settlement, and closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits will materially change in the next 12 months.

For information regarding non-income taxes, see Note 10.

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Information about Segments and Geographic Areas

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

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:

•Google – Google includes our main products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube. Our technical infrastructure is 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 and subscription-based products.

•Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes Access, Calico, CapitalG, GV, Verily, Waymo, and X, among others. Revenues from the Other Bets are derived primarily through the sale of internet services through Access as well as licensing and R&D services through Verily.

Starting in the quarter ending December 31, 2020 we will disclose Google Cloud as a separate segment.

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.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Revenues:
Google	$	40,225	$	46,017	$	114,931	$	124,990
Other Bets	155		178		487		461
Hedging gains (losses)	119		(22)		364		178
Total revenues	$	40,499	$	46,173	$	115,782	$	125,629

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Operating income (loss):
Google	$	10,746	$	12,589	$	30,214	$	29,431
Other Bets	(941)		(1,103)		(2,798)		(3,340)
Reconciling items(1)	(628)		(273)		(2,451)		(518)
Total income from operations	$	9,177	$	11,213	$	24,965	$	25,573

(1)    Reconciling items are generally comprised of corporate administrative costs, hedging gains (losses) and other miscellaneous items that are not allocated to individual segments. Reconciling items for the three and nine months ended September 30, 2019 include a charge from a legal settlement. Reconciling items for the nine months ended September 30, 2019 also include the EC fine for which we recognized a charge in the first quarter of 2019.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Capital expenditures:
Google	$	7,228	$	5,465	$	18,658	$	15,964
Other Bets	71		120		195		320
Reconciling items(2)	(567)		(179)		(1,357)		518
Total capital expenditures as presented on the Consolidated Statements of Cash Flows	$	6,732	$	5,406	$	17,496	$	16,802

(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.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Stock-based compensation:
Google	$	2,470	$	2,921	$	7,682	$	9,035
Other Bets	117		130		365		401
Reconciling items(3)	34		66		103		200
Total stock-based compensation(4)	$	2,621	$	3,117	$	8,150	$	9,636
Depreciation, amortization, and impairment:
Google	$	2,837	$	3,383	$	8,122	$	9,688
Other Bets	83		95		246		281
Reconciling items(3)	0		0		0		3
Total depreciation, amortization, and impairment	$	2,920	$	3,478	$	8,368	$	9,972

(3)    Reconciling items relate to corporate administrative and other 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.

The following table presents our long-lived assets by geographic area (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Long-lived assets:
United States	$	94,907	$	101,405
International	28,424		33,469
Total long-lived assets	$	123,331	$	134,874

For revenues by geography, see Note 2.

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

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.

Basis of Consolidation

Basis of ConsolidationThe 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

Unaudited Interim Financial Information

The Consolidated Balance Sheet as of September 30, 2020, the Consolidated Statements of Income for the three and nine months ended September 30, 2019 and 2020, the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2020, the Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2019 and 2020 and the Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2020 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 September 30, 2020, our results of operations for the three and nine months ended September 30, 2019 and 2020, and our cash flows for the nine months ended September 30, 2019 and 2020. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020.

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, 2019 filed with the SEC.

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 allowance for credit losses, fair values of financial instruments, non-marketable equity securities, 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.

As of September 30, 2020 the impact of COVID-19 continues to unfold and the extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; the uneven impact to certain industries; advances in testing, treatment and prevention; and the macroeconomic impact of government measures to contain the spread of the virus and related government stimulus measures. As a result, certain of our estimates and assumptions, including the allowance for credit losses for accounts receivable, the credit worthiness of customers entering into revenue arrangements, the valuation of non-marketable equity securities, including our impairment assessment, the fair values of our financial instruments, and income taxes, require increased judgment and carry a higher degree of variability and volatility that could result in material changes to our estimates in future periods.

Accounts Receivable

Accounts Receivable

Our payment terms for accounts receivable 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 customers, we require payment before the products or services are delivered to the customer.

We maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the Consolidated Statements of Income. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, we consider historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. We also consider customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. For the nine months ended September 30, 2020, our assessment considered the impact of COVID-19 and estimates of expected credit and collectibility trends. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability and volatility that may have a material impact on our allowance for credit losses in future periods.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("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 which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to certain 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 result in earlier recognition of credit losses. We adopted ASU 2016-13 using the modified retrospective approach as of January 1, 2020. The cumulative effect upon adoption was not material to our consolidated financial statements. See "Accounts Receivable" above as well as Note 3 for the effect on our consolidated financial statements.

Prior Period Reclassifications

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation. Hedging gains (losses), which were previously included in Google revenues, are now reported separately as a component of total revenues for all periods presented. See Note 2 for further details.

Deferred Revenues and Remaining Performance Obligations

Deferred Revenues and Remaining Performance ObligationsWe record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable.

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.

Fair Value of Financial Instruments

Debt Securities

We classify and account for our marketable debt securities as available-for-sale and carry these securities at fair value.

Equity Investments

The following discusses our marketable equity securities, non-marketable equity securities, gains and losses on marketable and non-marketable equity securities, as well as our equity securities accounted for under the equity method.

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. All gains and losses on marketable equity securities, realized and unrealized, are recognized in other income (expense), net.

Our non-marketable equity securities are investments in privately held companies without readily determinable market values. 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). We qualitatively assess whether indicators of impairment exist. Factors considered in our impairment assessment include the companies’ financial and liquidity position, access to capital resources, effects of COVID-19, and the time since the last adjustment to fair value, among others. If the assessment indicates that the investment is impaired, we estimate the fair value by using the best information available, which may include cash flow projections or other available market data.

All gains and losses, realized and unrealized, and impairments on non-marketable equity securities are recognized in other income (expense), net. Non-marketable equity securities that have been remeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities we hold. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.

Carrying value of marketable and non-marketable equity securitiesThe carrying value is measured as the total initial cost plus the cumulative net gain (loss).Our share of gains and losses including impairment are included as a component of other income (expense), net, in the Consolidated Statements of Income.

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.

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Revenues (Tables)

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue by revenue source

The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Certain amounts in prior periods have been reclassified to conform with current period presentation.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Google Search & other	$	24,741	$	26,338	$	70,930	$	72,159
YouTube ads(1)	3,804		5,037		10,432		12,887
Google properties	28,545		31,375		81,362		85,046
Google Network Members' properties	5,251		5,720		15,515		15,679
Google advertising	33,796		37,095		96,877		100,725
Google Cloud	2,379		3,444		6,304		9,228
Google other(1)	4,050		5,478		11,750		15,037
Google revenues	40,225		46,017		114,931		124,990
Other Bets revenues	155		178		487		461
Hedging gains (losses)	119		(22)		364		178
Total revenues	$	40,499	$	46,173	$	115,782	$	125,629

(1)     YouTube non-advertising revenues are included in Google other revenues.

Revenue by geographic location

The following table presents our revenues disaggregated by geography, based on the addresses of our customers (in millions, unaudited):

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2019				2020				2019				2020
United States	$	18,711	46	%	$	21,442	47	%	$	53,106	46	%	$	58,311	47	%
EMEA(1)	12,565		31		13,924		30		36,546		32		38,132		30
APAC(1)	6,814		17		8,458		18		19,446		17		22,641		18
Other Americas(1)	2,290		6		2,371		5		6,320		5		6,367		5
Hedging gains (losses)	119		0		(22)		0		364		0		178		0
Total revenues	$	40,499	100	%	$	46,173	100	%	$	115,782	100	%	$	125,629	100	%

(1)    Regions represent Europe, the Middle East, and Africa ("EMEA"); Asia-Pacific ("APAC"); and Canada and Latin America ("Other Americas").

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Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Available-for-sale debt securities

The following tables summarize our debt securities, for which we did not elect the fair value option, by significant investment categories as of December 31, 2019 and September 30, 2020 (in millions):

	As of December 31, 2019
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
Level 2:
Time deposits(1)	$	2,294	$	0	$	0	$	2,294	$	2,294	$	0
Government bonds	55,033		434		(30)		55,437		4,518		50,919
Corporate debt securities	27,164		337		(3)		27,498		44		27,454
Mortgage-backed and asset-backed securities	19,453		96		(41)		19,508		0		19,508
Total	$	103,944	$	867	$	(74)	$	104,737	$	6,856	$	97,881

	As of September 30, 2020
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Level 2:
Time deposits(1)	$	2,009	$	0	$	0	$	2,009	$	2,009	$	0
Government bonds	59,073		1,023		(9)		60,087		1,264		58,823
Corporate debt securities	28,632		678		(20)		29,290		17		29,273
Mortgage-backed and asset-backed securities	17,149		381		(13)		17,517		0		17,517
Total	$	106,863	$	2,082	$	(42)	$	108,903	$	3,290	$	105,613

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

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):

	As of September 30, 2020
Due in 1 year or less	$	21,943
Due in 1 year through 5 years	67,496
Due in 5 years through 10 years	5,237
Due after 10 years	13,204
Total	$	107,880

Schedule of unrealized loss on debt securities

The following tables present fair values and gross unrealized losses recorded to AOCI as of December 31, 2019 and September 30, 2020, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2019
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	6,752	$	(20)	$	4,590	$	(10)	$	11,342	$	(30)
Corporate debt securities	1,665		(2)		978		(1)		2,643		(3)
Mortgage-backed and asset-backed securities	4,536		(13)		2,835		(28)		7,371		(41)
Total	$	12,953	$	(35)	$	8,403	$	(39)	$	21,356	$	(74)

	As of September 30, 2020
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(unaudited)
Government bonds	$	5,473	$	(9)	$	0	$	0	$	5,473	$	(9)
Corporate debt securities	5,764		(10)		0		0		5,764		(10)
Mortgage-backed and asset-backed securities	1,990		(8)		273		(5)		2,263		(13)
Total	$	13,227	$	(27)	$	273	$	(5)	$	13,500	$	(32)

Gains and losses on equity securities

Gains and losses recorded in other income (expense), net, for our marketable and non-marketable equity securities are summarized below (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Net gain (loss) on equity securities sold during the period	$	(63)	$	(5)	$	381	$	426
Net unrealized gain (loss) on equity securities held as of the end of the period(1)	(1,465)		1,904		1,873		2,114
Total gain (loss) recognized in other income (expense), net	$	(1,528)	$	1,899	$	2,254	$	2,540

(1)Includes net unrealized gain related to non-marketable equity securities of $166 million and $1.2 billion for the three months ended September 30, 2019 and 2020, respectively. Includes a net unrealized gain of $1.4 billion and $357 million for the nine months ended September 30, 2019 and 2020, respectively.

Cumulative net gains on equity securities sold

	Equity Securities Sold
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Total sale price	$	445	$	1,389	$	1,074	$	2,888
Total initial cost	133		1,146		460		1,831
Cumulative net gains	$	312	$	243	$	614	$	1,057

Summary of unrealized gains and losses for marketable and non-marketable equity securities

The carrying values for our marketable and non-marketable equity securities are summarized below (in millions):

	As of December 31, 2019
	Marketable Securities		Non-Marketable Securities		Total
Total initial cost	$	1,935	$	8,297	$	10,232
Cumulative net gain(1)	1,361		3,056		4,417
Carrying value	$	3,296	$	11,353	$	14,649

(1)Non-marketable securities cumulative net gain is comprised of $3.5 billion unrealized gains and $445 million unrealized losses (including impairment).

	As of September 30, 2020
	Marketable Securities(2)		Non-Marketable Securities		Total
	(unaudited)
Total initial cost	$	2,438	$	9,615	$	12,053
Cumulative net gain(1)	2,596		3,304		5,900
Carrying value	$	5,034	$	12,919	$	17,953

(1)Non-marketable securities cumulative net gain is comprised of $5.1 billion unrealized gains and $1.8 billion unrealized losses (including impairment).

(2)The long-term portion of marketable equity securities of $447 million is included within other non-current assets.

Marketable equity securities

The following table summarizes marketable equity securities measured at fair value by significant investment categories as of December 31, 2019 and September 30, 2020 (in millions):

	As of December 31, 2019				As of September 30, 2020
	Cash and Cash Equivalents		Marketable Securities		Cash and Cash Equivalents		Marketable Securities
					(unaudited)
Level 1:
Money market funds	$	4,604	$	0	$	10,102	$	0
Marketable equity securities(1)(2)	0		3,046		0		4,626
	4,604		3,046		10,102		4,626
Level 2:
Mutual funds	0		250		0		408
Total	$	4,604	$	3,296	$	10,102	$	5,034

(1)The balance as of December 31, 2019 and September 30, 2020 includes investments that were reclassified from non-marketable equity securities following the initial public offering of the issuers.

(2)The long-term portion of marketable equity securities of $447 million is included within other non-current assets.

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 (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Unrealized gains	$	398	$	1,225	$	1,816	$	1,770
Unrealized losses (including impairment)	(232)		(27)		(370)		(1,413)
Total unrealized gain (loss) for non-marketable equity securities	$	166	$	1,198	$	1,446	$	357

Schedule of gross notional amounts of derivative instruments

The gross notional amounts of our outstanding derivative instruments were as follows (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Derivatives Designated as Hedging Instruments:
Foreign exchange contracts
Cash flow hedges	$	13,207	$	7,388
Fair value hedges	$	455	$	476
Net investment hedges	$	9,318	$	9,812
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	$	43,497	$	38,367
Other contracts	$	117	$	1,999

Schedule of derivative instruments

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

		As of December 31, 2019
	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	$	91	$	253	$	344
Other contracts	Other current and non-current assets	0		1		1
Total		$	91	$	254	$	345
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	173	$	196	$	369
Other contracts	Accrued expenses and other liabilities, current and non-current	0		13		13
Total		$	173	$	209	$	382

		As of September 30, 2020
	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	$	291	$	189	$	480
Other contracts	Other current and non-current assets	$	0	$	13	$	13
Total		$	291	$	202	$	493
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	167	$	175	$	342
Other contracts	Accrued expenses and other liabilities, current and non-current	$	0	$	453	$	453
Total		$	167	$	628	$	795

Schedule of gain (loss) on derivative instruments

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized in other comprehensive income ("OCI") are summarized below (in millions, unaudited):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	325	$	(37)	$	277	$	331
Amount excluded from the assessment of effectiveness	6		(23)		(13)		(20)
Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	328		(371)		309		(412)
Total	$	659	$	(431)	$	573	$	(101)

 The effect of derivative instruments on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income
	Three Months Ended
	September 30,
	2019				2020
	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	$	40,499	$	(549)	$	46,173	$	2,146
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	$	93	$	0	$	(28)	$	0
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	26		0		6		0
Gains (Losses) on Derivatives in Fair Value Hedging Relationship:
Foreign exchange contracts
Hedged items	0		(35)		0		14
Derivatives designated as hedging instruments	0		35		0		(14)
Amount excluded from the assessment of effectiveness	0		4		0		0
Gains (Losses) on Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		62		0		20
Gains (Losses) on Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	0		(233)		0		382
Other Contracts	0		0		0		(181)
Total gains (losses)	$	119	$	(167)	$	(22)	$	221

	Gains (Losses) Recognized in Income
	Nine Months Ended
	September 30,
	2019				2020
	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	$	115,782	$	3,956	$	125,629	$	3,820
Gains (Losses) on Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	$	306	$	0	$	138	$	0
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	58		0		40		0
Gains (Losses) on Derivatives in Fair Value Hedging Relationship:
Foreign exchange contracts
Hedged items	0		(26)		0		6
Derivatives designated as hedging instruments	0		26		0		(6)
Amount excluded from the assessment of effectiveness	0		24		0		2
Gains (Losses) on Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		173		0		131
Gains (Losses) on Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	0		(387)		0		542
Other Contracts	0		0		0		(420)
Total gains (losses)	$	364	$	(190)	$	178	$	255

Offsetting assets

Offsetting of Assets

	As of December 31, 2019
							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	$	365	$	(21)	$	344	$	(88)	(1)	$	(234)	$	0	$	22
	As of September 30, 2020
							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	$	511	$	(18)	$	493	$	(315)	(1)	$	(121)	$	(1)	$	56

(1)The balances as of December 31, 2019 and September 30, 2020 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

Offsetting liabilities

Offsetting of Liabilities

	As of December 31, 2019
							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	$	390	$	(21)	$	369	$	(88)	(2)	$	0	$	0	$	281
	As of September 30, 2020
							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	$	813	$	(18)	$	795	$	(315)	(2)	$	0	$	(444)	$	36

(2)    The balances as of December 31, 2019 and September 30, 2020 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Components of Operating Lease Expense

Components of operating lease expense were as follows (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Operating lease cost	$	477	$	582	$	1,302	$	1,649
Variable lease cost	134		159		392		454
Total operating lease cost	$	611	$	741	$	1,694	$	2,103

Supplemental information related to operating leases is as follows (in millions, unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Cash payments for operating leases	$	442	$	527	$	1,212	$	1,450
New operating lease assets obtained in exchange for operating lease liabilities	$	1,045	$	711	$	3,498	$	2,152

Future Minimum Operating Lease Payments

Future lease payments under operating leases that have commenced as of September 30, 2020 were as follows (in millions, unaudited):

	Operating Leases
Remainder of 2020	$	446
2021	2,182
2022	2,048
2023	1,869
2024	1,616
Thereafter	6,775
Total future lease payments	14,936
Less imputed interest	(2,417)
Total lease liability balance	$	12,519

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Debt (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of long-term debt

The total outstanding debt is summarized below (in millions, except percentages):

	Maturity	Coupon Rate	Effective Interest Rate	As of December 31, 2019		As of September 30, 2020
						(unaudited)
Debt
2011-2016 Notes Issuances	2021 - 2026	2.00% - 3.63%	2.23% - 3.73%	$	4,000	$	4,000
2020 Notes Issuance	2025 - 2060	0.45% - 2.25%	0.57% - 2.33%	—		10,000
Future finance lease payments, net(1)				711		1,196
Total debt				4,711		15,196
Unamortized discount and debt issuance costs				(42)		(173)
Less: Current portion of Notes(2)				—		(999)
Less: Current portion future finance lease payments, net(1)(2)				(115)		(122)
Total long-term debt				$	4,554	$	13,902

(1)Net of imputed interest.

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

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Supplemental Financial Statement Information (Tables)

9 Months Ended

Sep. 30, 2020

Balance Sheet Components Disclosure [Abstract]

Property and equipment, net

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

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Land and buildings	$	39,865	$	46,787
Information technology assets	36,840		42,883
Construction in progress	21,036		23,115
Leasehold improvements	6,310		7,303
Furniture and fixtures	156		199
Property and equipment, gross	104,207		120,287
Less: accumulated depreciation	(30,561)		(38,651)
Property and equipment, net	$	73,646	$	81,636

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
European Commission fines(1)	$	9,405	$	9,921
Accrued customer liabilities	2,245		2,559
Accrued purchases of property and equipment	2,411		2,157
Current operating lease liabilities	1,199		1,535
Other accrued expenses and current liabilities	7,807		9,459
Accrued expenses and other current liabilities	$	23,067	$	25,631

(1)    Includes the effects of foreign exchange and interest. See Note 10 for further details.

Components of accumulated other comprehensive income

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

	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, 2018	$	(1,884)	$	(688)	$	266	$	(2,306)
Cumulative effect of accounting change	0		0		(30)		(30)
Other comprehensive income (loss) before reclassifications	(326)		1,613		222		1,509
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		(13)		(13)
Amounts reclassified from AOCI	0		(107)		(249)		(356)
Other comprehensive income (loss)	(326)		1,506		(40)		1,140
Balance as of September 30, 2019	$	(2,210)	$	818	$	196	$	(1,196)

	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, 2019	$	(2,003)	$	812	$	(41)	$	(1,232)
Other comprehensive income (loss) before reclassifications	193		1,346		264		1,803
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		(20)		(20)
Amounts reclassified from AOCI	0		(391)		(114)		(505)
Other comprehensive income (loss)	193		955		130		1,278
Balance as of September 30, 2020	$	(1,810)	$	1,767	$	89	$	46

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):

		Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
AOCI Components	Location	2019		2020		2019		2020
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	49	$	93	$	145	$	496
	Benefit (provision) for income taxes	(10)		(20)		(38)		(105)
	Net of tax	39		73		107		391
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Revenue	93		(28)		306		138
Interest rate contracts	Other income (expense), net	1		1		4		4
	Benefit (provision) for income taxes	(19)		4		(61)		(28)
	Net of tax	75		(23)		249		114
Total amount reclassified, net of tax		$	114	$	50	$	356	$	505

Schedule of other income (expense), net

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Interest income	$	631	$	460	$	1,806	$	1,479
Interest expense(1)	(23)		(48)		(83)		(82)
Foreign currency exchange gain (loss), net	41		(84)		63		(257)
Gain (loss) on debt securities, net	49		116		145		515
Gain (loss) on equity securities, net	(1,528)		1,899		2,254		2,540
Performance fees	227		(135)		(333)		(204)
Income (loss) and impairment from equity method investments, net	(14)		26		(70)		46
Other	68		(88)		174		(217)
Other income (expense), net	$	(549)	$	2,146	$	3,956	$	3,820

(1)Interest expense is net of interest capitalized of $46 million and $53 million for the three months ended September 30, 2019 and 2020, respectively, and $113 million and $162 million for the nine months ended September 30, 2019 and 2020, respectively.

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying amount of goodwill

Changes in the carrying amount of goodwill for the nine months ended September 30, 2020 were as follows (in millions, unaudited):

	Google		Other Bets		Total Consolidated
Balance as of December 31, 2019	$	19,921	$	703	$	20,624
Acquisitions	204		0		204
Foreign currency translation and other adjustments	46		(4)		42
Balance as of September 30, 2020	$	20,171	$	699	$	20,870

Information regarding purchased intangible assets

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

	As of December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	4,972	$	3,570	$	1,402
Customer relationships	254		30		224
Trade names and other	703		350		353
Total	$	5,929	$	3,950	$	1,979

	As of September 30, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(unaudited)
Patents and developed technology	$	4,612	$	3,552	$	1,060
Customer relationships	235		39		196
Trade names and other	700		436		264
Total	$	5,547	$	4,027	$	1,520

Expected amortization expense related to purchased intangible assets

As of September 30, 2020, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter was as follows (in millions, unaudited):

Remainder of 2020	$	181
2021	694
2022	354
2023	81
2024	57
Thereafter	153
Total	$	1,520

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Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2020

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):

	Three Months Ended September 30,
	2019						2020
	Class A		Class B		Class C		Class A		Class B		Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	3,059	$	475	$	3,534	$	4,973	$	763	$	5,511
Denominator
Number of shares used in per share computation	299,835		46,515		346,391		300,411		46,108		332,930
Basic net income per share	$	10.20	$	10.20	$	10.20	$	16.55	$	16.55	$	16.55
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	3,059	$	475	$	3,534	$	4,973	$	763	$	5,511
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	475		0		0		763		0		0
Reallocation of undistributed earnings	(24)		(4)		24		(53)		(7)		53
Allocation of undistributed earnings	$	3,510	$	471	$	3,558	$	5,683	$	756	$	5,564
Denominator
Number of shares used in basic computation	299,835		46,515		346,391		300,411		46,108		332,930
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	46,515		0		0		46,108		0		0
Restricted stock units and other contingently issuable shares	381		0		5,077		47		0		6,355
Number of shares used in per share computation	346,731		46,515		351,468		346,566		46,108		339,285
Diluted net income per share	$	10.12	$	10.12	$	10.12	$	16.40	$	16.40	$	16.40

	Nine Months Ended September 30,
	2019						2020
	Class A		Class B		Class C		Class A		Class B		Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	10,218	$	1,588	$	11,866	$	11,004	$	1,697	$	12,341
Denominator
Number of shares used in per share computation	299,493		46,549		347,818		299,934		46,266		336,361
Basic net income per share	$	34.12	$	34.12	$	34.12	$	36.69	$	36.69	$	36.69
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	10,218	$	1,588	$	11,866	$	11,004	$	1,697	$	12,341
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	1,588		0		0		1,697		0		0
Reallocation of undistributed earnings	(83)		(13)		83		(103)		(14)		103
Allocation of undistributed earnings	$	11,723	$	1,575	$	11,949	$	12,598	$	1,683	$	12,444
Denominator
Number of shares used in basic computation	299,493		46,549		347,818		299,934		46,266		336,361
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	46,549		0		0		46,266		0		0
Restricted stock units and other contingently issuable shares	448		0		5,369		105		0		5,715
Number of shares used in per share computation	346,490		46,549		353,187		346,305		46,266		342,076
Diluted net income per share	$	33.83	$	33.83	$	33.83	$	36.38	$	36.38	$	36.38

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Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of restricted stock activity

The following table summarizes the activities for our unvested restricted stock units ("RSUs") in Alphabet stock for the nine months ended September 30, 2020 (unaudited):

	Unvested Restricted Stock Units
	Number of Shares	Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2019	19,394,236	$	1,055.22
Granted	11,635,680	$	1,394.72
Vested	(8,437,980)	$	1,071.16
Forfeited/canceled	(951,715)	$	1,150.93
Unvested as of September 30, 2020	21,640,221	$	1,228.65

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Information about Segments and Geographic Areas (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of segment information by segment

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Revenues:
Google	$	40,225	$	46,017	$	114,931	$	124,990
Other Bets	155		178		487		461
Hedging gains (losses)	119		(22)		364		178
Total revenues	$	40,499	$	46,173	$	115,782	$	125,629

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Operating income (loss):
Google	$	10,746	$	12,589	$	30,214	$	29,431
Other Bets	(941)		(1,103)		(2,798)		(3,340)
Reconciling items(1)	(628)		(273)		(2,451)		(518)
Total income from operations	$	9,177	$	11,213	$	24,965	$	25,573

(1)    Reconciling items are generally comprised of corporate administrative costs, hedging gains (losses) and other miscellaneous items that are not allocated to individual segments. Reconciling items for the three and nine months ended September 30, 2019 include a charge from a legal settlement. Reconciling items for the nine months ended September 30, 2019 also include the EC fine for which we recognized a charge in the first quarter of 2019.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Capital expenditures:
Google	$	7,228	$	5,465	$	18,658	$	15,964
Other Bets	71		120		195		320
Reconciling items(2)	(567)		(179)		(1,357)		518
Total capital expenditures as presented on the Consolidated Statements of Cash Flows	$	6,732	$	5,406	$	17,496	$	16,802

(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.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
Stock-based compensation:
Google	$	2,470	$	2,921	$	7,682	$	9,035
Other Bets	117		130		365		401
Reconciling items(3)	34		66		103		200
Total stock-based compensation(4)	$	2,621	$	3,117	$	8,150	$	9,636
Depreciation, amortization, and impairment:
Google	$	2,837	$	3,383	$	8,122	$	9,688
Other Bets	83		95		246		281
Reconciling items(3)	0		0		0		3
Total depreciation, amortization, and impairment	$	2,920	$	3,478	$	8,368	$	9,972

(3)    Reconciling items relate to corporate administrative and other 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.

Schedule of long-lived assets by geographic area

The following table presents our long-lived assets by geographic area (in millions):

	As of December 31, 2019		As of September 30, 2020
			(unaudited)
Long-lived assets:
United States	$	94,907	$	101,405
International	28,424		33,469
Total long-lived assets	$	123,331	$	134,874

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Nature of Operations and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Allowance for credit losses on accounts receivable	$ 834	$ 275

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Revenues (Revenue by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Revenue	$ 46,173	$ 40,499	$ 125,629	$ 115,782
Hedging gains (losses)	(22)	119	178	364
Google
Segment Reporting Information [Line Items]
Revenue	46,017	40,225	124,990	114,931
Google | Google Search & other
Segment Reporting Information [Line Items]
Revenue	26,338	24,741	72,159	70,930
Google | YouTube ads
Segment Reporting Information [Line Items]
Revenue	5,037	3,804	12,887	10,432
Google | Google properties
Segment Reporting Information [Line Items]
Revenue	31,375	28,545	85,046	81,362
Google | Google Network Members' properties
Segment Reporting Information [Line Items]
Revenue	5,720	5,251	15,679	15,515
Google | Google advertising
Segment Reporting Information [Line Items]
Revenue	37,095	33,796	100,725	96,877
Google | Google Cloud
Segment Reporting Information [Line Items]
Revenue	3,444	2,379	9,228	6,304
Google | Google other
Segment Reporting Information [Line Items]
Revenue	5,478	4,050	15,037	11,750
Other Bets
Segment Reporting Information [Line Items]
Revenue	$ 178	$ 155	$ 461	$ 487

XML

Revenues (Revenue by Geographic Location) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 46,173	$ 40,499	$ 125,629	$ 115,782
Hedging gains (losses)	(22)	119	178	364
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	21,442	18,711	58,311	53,106
EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	13,924	12,565	38,132	36,546
APAC
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	8,458	6,814	22,641	19,446
Other Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 2,371	$ 2,290	$ 6,367	$ 6,320
Geographic Concentration Risk | Revenue Benchmark
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of total revenue	100.00%	100.00%	100.00%	100.00%
Geographic Concentration Risk | Revenue Benchmark | United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of total revenue	47.00%	46.00%	47.00%	46.00%
Geographic Concentration Risk | Revenue Benchmark | EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of total revenue	30.00%	31.00%	30.00%	32.00%
Geographic Concentration Risk | Revenue Benchmark | APAC
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of total revenue	18.00%	17.00%	18.00%	17.00%
Geographic Concentration Risk | Revenue Benchmark | Other Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of total revenue	5.00%	6.00%	5.00%	5.00%

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Revenues (Narrative) (Details) $ in Billions	9 Months Ended
	Sep. 30, 2020 USD ($)
Revenue from Contract with Customer [Abstract]
Deferred revenue recognized during period	$ 1.6
Revenue not yet recognized	$ 19.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of revenue recognition	24 months
Expected timing of revenue recognition, percentage	50.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of revenue recognition
Expected timing of revenue recognition, percentage	50.00%

XML

Financial Instruments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Financial Instruments and Fair Value [Line Items]
Fair value of debt securities with fair value option elected	$ 2,300		$ 2,300
Gross realized gains on the sale of our marketable securities	127	$ 85	690	$ 250
Gross realized losses on the sale of our marketable securities	8	36	135	105
Credit losses recognized	8		10
Allowance for credit loss	10		10
Non-marketable equity securities	12,919		12,919		$ 11,353
Total unrealized gain (loss) for non-marketable equity securities	1,198	$ 166	357	$ 1,446
Equity method investments	1,300		1,300		$ 1,300
Foreign currency gain (loss) to be reclassified during next 12 months	111		111
Debt Securities
Financial Instruments and Fair Value [Line Items]
Net gain on debt securities with fair value option elected			$ 45
Cash flow hedges | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Foreign exchange option contracts, maximum maturities			24 months
Valuation, Market Approach
Financial Instruments and Fair Value [Line Items]
Non-marketable equity securities	$ 5,200		$ 5,200

XML

Financial Instruments (Debt Securities) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Cash and Cash Equivalents	$ 10,102	$ 4,604
Fair Value	107,880
Level 2
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Adjusted Cost	106,863	103,944
Gross Unrealized Gains	2,082	867
Gross Unrealized Losses	(42)	(74)
Fair Value	108,903	104,737
Cash and Cash Equivalents	3,290	6,856
Fair Value	105,613	97,881
Level 2 | Time deposits
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Adjusted Cost	2,009	2,294
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	2,009	2,294
Cash and Cash Equivalents	2,009	2,294
Fair Value	0	0
Level 2 | Government bonds
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Adjusted Cost	59,073	55,033
Gross Unrealized Gains	1,023	434
Gross Unrealized Losses	(9)	(30)
Fair Value	60,087	55,437
Cash and Cash Equivalents	1,264	4,518
Fair Value	58,823	50,919
Level 2 | Corporate debt securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Adjusted Cost	28,632	27,164
Gross Unrealized Gains	678	337
Gross Unrealized Losses	(20)	(3)
Fair Value	29,290	27,498
Cash and Cash Equivalents	17	44
Fair Value	29,273	27,454
Level 2 | Mortgage-backed and asset-backed securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Adjusted Cost	17,149	19,453
Gross Unrealized Gains	381	96
Gross Unrealized Losses	(13)	(41)
Fair Value	17,517	19,508
Cash and Cash Equivalents	0	0
Fair Value	$ 17,517	$ 19,508

XML

Financial Instruments (Contractual Maturity Date of Marketable Debt Securities) (Details) $ in Millions	Sep. 30, 2020 USD ($)
Fair Value Disclosures [Abstract]
Due in 1 year	$ 21,943
Due in 1 year through 5 years	67,496
Due in 5 years through 10 years	5,237
Due after 10 years	13,204
Total	$ 107,880

XML

Financial Instruments (Gross Unrealized Losses and Fair Values for Investments in Unrealized Loss Position) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	$ 13,227	$ 12,953
Less than 12 Months, Unrealized Loss	(27)	(35)
12 Months or Greater, Fair Value	273	8,403
12 Months or Greater, Unrealized Loss	(5)	(39)
Total Fair Value	13,500	21,356
Total Unrealized Loss	(32)	(74)
Government bonds
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	5,473	6,752
Less than 12 Months, Unrealized Loss	(9)	(20)
12 Months or Greater, Fair Value	0	4,590
12 Months or Greater, Unrealized Loss	0	(10)
Total Fair Value	5,473	11,342
Total Unrealized Loss	(9)	(30)
Corporate debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	5,764	1,665
Less than 12 Months, Unrealized Loss	(10)	(2)
12 Months or Greater, Fair Value	0	978
12 Months or Greater, Unrealized Loss	0	(1)
Total Fair Value	5,764	2,643
Total Unrealized Loss	(10)	(3)
Mortgage-backed and asset-backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	1,990	4,536
Less than 12 Months, Unrealized Loss	(8)	(13)
12 Months or Greater, Fair Value	273	2,835
12 Months or Greater, Unrealized Loss	(5)	(28)
Total Fair Value	2,263	7,371
Total Unrealized Loss	$ (13)	$ (41)

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Financial Instruments (Measurement Alternative Investments) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Gains and Losses on Marketable and Non-Marketable Equity Securities
Net gain (loss) on equity securities sold during the period	$ (5)	$ (63)	$ 426	$ 381
Net unrealized gain (loss) on equity securities held as of the end of the period	1,904	(1,465)	2,114	1,873
Total gain (loss) recognized in other income (expense), net	1,899	(1,528)	2,540	2,254
Total unrealized gain on non-marketable equity securities	$ 1,198	$ 166	$ 357	$ 1,446

XML

Financial Instruments (Carrying Amount of Equity Securities) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Debt and Equity Securities, FV-NI [Line Items]
Total sale price	$ 1,389	$ 445	$ 2,888	$ 1,074
Total initial cost	1,146	133	1,831	460
Cumulative net gains	243	$ 312	1,057	$ 614
Total initial cost, marketable securities	2,438		2,438		$ 1,935
Cumulative net gain, marketable securities	2,596		2,596		1,361
Carrying value, marketable securities	5,034		5,034		3,296
Total initial cost, non-marketable securities	9,615		9,615		8,297
Cumulative net gain, non-marketable securities	3,304		3,304		3,056
Carrying value, non-marketable securities	12,919		12,919		11,353
Total initial cost	12,053		12,053		10,232
Cumulative net gain	5,900		5,900		4,417
Carrying value	17,953		17,953		14,649
Cumulative net gain of non-marketable securities	5,100		5,100		3,500
Unrealized loss of non-marketable securities	1,800		1,800		$ 445
Other Noncurrent Assets
Debt and Equity Securities, FV-NI [Line Items]
Carrying value, marketable securities	$ 447		$ 447

XML

Financial Instruments (Marketable Equity Securities) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	$ 10,102	$ 4,604
Equity securities	5,034	3,296
Marketable Securities	5,034	3,296
Other Noncurrent Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	447
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	10,102	4,604
Equity securities	4,626	3,046
Marketable Securities	4,626	3,046
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	3,290	6,856
Money market funds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	10,102	4,604
Mutual funds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	$ 408	$ 250

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Financial Instruments (Non-Marketable Equity Securities) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Fair Value Disclosures [Abstract]
Unrealized gains	$ 1,225	$ 398	$ 1,770	$ 1,816
Unrealized losses (including impairment)	(27)	(232)	(1,413)	(370)
Total unrealized gain (loss) for non-marketable equity securities	$ 1,198	$ 166	$ 357	$ 1,446

XML

Financial Instruments (Derivative Notional Amounts) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Foreign exchange contracts | Derivatives Designated as Hedging Instruments: | Cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	$ 7,388	$ 13,207
Foreign exchange contracts | Derivatives Designated as Hedging Instruments: | Fair value hedges
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	476	455
Foreign exchange contracts | Derivatives Designated as Hedging Instruments: | Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	9,812	9,318
Foreign exchange contracts | Derivatives Not Designated as Hedging Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	38,367	43,497
Other contracts | Derivatives Not Designated as Hedging Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	$ 1,999	$ 117

XML

Financial Instruments (Fair Values of Outstanding Derivative Instruments) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Derivative Assets:
Derivative Assets	$ 511	$ 365
Derivative Liabilities:
Derivative Liabilities	813	390
Level 2
Derivative Assets:
Derivative Assets	493	345
Derivative Liabilities:
Derivative Liabilities	795	382
Level 2 | Other current and non-current assets
Derivative Assets:
Derivative Assets	480
Level 2 | Other current and non-current assets | Foreign exchange contracts
Derivative Assets:
Derivative Assets		344
Level 2 | Other current and non-current assets | Other contracts
Derivative Assets:
Derivative Assets	13	1
Level 2 | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities	342
Level 2 | Accrued expenses and other liabilities, current and non-current | Foreign exchange contracts
Derivative Liabilities:
Derivative Liabilities		369
Level 2 | Accrued expenses and other liabilities, current and non-current | Other contracts
Derivative Liabilities:
Derivative Liabilities	453	13
Fair Value of Derivatives Designated as Hedging Instruments | Level 2
Derivative Assets:
Derivative Assets	291	91
Derivative Liabilities:
Derivative Liabilities	167	173
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Other current and non-current assets
Derivative Assets:
Derivative Assets	291
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Other current and non-current assets | Foreign exchange contracts
Derivative Assets:
Derivative Assets		91
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Other current and non-current assets | Other contracts
Derivative Assets:
Derivative Assets	0	0
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities	167
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Accrued expenses and other liabilities, current and non-current | Foreign exchange contracts
Derivative Liabilities:
Derivative Liabilities		173
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Accrued expenses and other liabilities, current and non-current | Other contracts
Derivative Liabilities:
Derivative Liabilities	0	0
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2
Derivative Assets:
Derivative Assets	202	254
Derivative Liabilities:
Derivative Liabilities	628	209
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Other current and non-current assets
Derivative Assets:
Derivative Assets	189
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Other current and non-current assets | Foreign exchange contracts
Derivative Assets:
Derivative Assets		253
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Other current and non-current assets | Other contracts
Derivative Assets:
Derivative Assets	13	1
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities	175
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Accrued expenses and other liabilities, current and non-current | Foreign exchange contracts
Derivative Liabilities:
Derivative Liabilities		196
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Accrued expenses and other liabilities, current and non-current | Other contracts
Derivative Liabilities:
Derivative Liabilities	$ 453	$ 13

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Financial Instruments (Effect of Derivative Instruments on Income and Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Derivatives in Net Investment Hedging Relationship:
Revenues	$ 46,173	$ 40,499	$ 125,629	$ 115,782
Other income (expense), net	2,146	(549)	3,820	3,956
Revenues
Foreign exchange contracts
Total gains (losses)	(22)	119	178	364
Other income (expense), net
Foreign exchange contracts
Total gains (losses)	221	(167)	255	(190)
Foreign exchange contracts
Derivatives in Net Investment Hedging Relationship:
Total	(431)	659	(101)	573
Foreign exchange contracts | Revenues | Fair Value of Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts
Derivatives not designated as hedging instruments	0	0	0	0
Foreign exchange contracts | Other income (expense), net | Fair Value of Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts
Derivatives not designated as hedging instruments	382	(233)	542	(387)
Other derivatives | Revenues | Fair Value of Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts
Derivatives not designated as hedging instruments	0	0	0	0
Other derivatives | Other income (expense), net | Fair Value of Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts
Derivatives not designated as hedging instruments	(181)	0	(420)	0
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts
Derivatives in Cash Flow Hedging Relationship:
Amount included in the assessment of effectiveness	(37)	325	331	277
Amount excluded from the assessment of effectiveness	(23)	6	(20)	(13)
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Revenues
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	(28)	93	138	306
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	6	26	40	58
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Other income (expense), net
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income	0	0	0	0
Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach	0	0	0	0
Derivatives in Net Investment Hedging Relationship: | Foreign exchange contracts
Derivatives in Net Investment Hedging Relationship:
Amount included in the assessment of effectiveness	(371)	328	(412)	309
Derivatives in Net Investment Hedging Relationship: | Foreign exchange contracts | Revenues
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0	0	0	0
Derivatives in Net Investment Hedging Relationship: | Foreign exchange contracts | Other income (expense), net
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	20	62	131	173
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts | Revenues
Foreign exchange contracts
Hedged items	0	0	0	0
Derivatives designated as hedging instruments	0	0	0	0
Amount excluded from the assessment of effectiveness	0	0	0	0
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts | Other income (expense), net
Foreign exchange contracts
Hedged items	14	(35)	6	(26)
Derivatives designated as hedging instruments	(14)	35	(6)	26
Amount excluded from the assessment of effectiveness	$ 0	$ 4	$ 2	$ 24

XML

Financial Instruments (Offsetting of Financial Assets and Financial Liabilities) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Offsetting of Assets
Gross Amounts of Recognized Assets	$ 511	$ 365
Gross Amounts Offset in the Consolidated Balance Sheets	(18)	(21)
Net Presented in the Consolidated Balance Sheets	493	344
Financial Instruments	(315)	(88)
Cash Collateral Received	(121)	(234)
Non-Cash Collateral Received	(1)	0
Net Assets Exposed	56	22
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities	813	390
Gross Amounts Offset in the Consolidated Balance Sheets	(18)	(21)
Net Presented in the Consolidated Balance Sheets	795	369
Financial Instruments	(315)	(88)
Cash Collateral Pledged	0	0
Non-Cash Collateral Pledged	(444)	0
Net Liabilities	$ 36	$ 281

XML

Leases Components of Operating Lease Expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 582	$ 477	$ 1,649	$ 1,302
Variable lease cost	159	134	454	392
Total operating lease cost	$ 741	$ 611	$ 2,103	$ 1,694

XML

Leases Narrative (Details) $ in Billions	Sep. 30, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Weighted average remaining lease term	9 years
Weighted average discount rate	2.70%
Operating leases not yet commenced, future minimum lease payments	$ 7.5
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, non-cancelable lease term	1 year
Finance lease, non-cancelable lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, non-cancelable lease term	25 years
Finance lease, non-cancelable lease term	25 years

XML

Leases Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Cash payments for operating leases	$ 527	$ 442	$ 1,450	$ 1,212
New operating lease assets obtained in exchange for operating lease liabilities	$ 711	$ 1,045	$ 2,152	$ 3,498

XML

Leases Future Minimum Lease Payments (Details) $ in Millions	Sep. 30, 2020 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Remainder of 2020	$ 446
2021	2,182
2022	2,048
2023	1,869
2024	1,616
Thereafter	6,775
Total future lease payments	14,936
Less imputed interest	(2,417)
Total lease liability balance	$ 12,519

XML

Variable Interest Entities (VIEs) (Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Assets not available for use	$ 299,243		$ 275,909
Liabilities with no recourse	86,323		74,467
Noncontrolling interest	3,700		1,200
Variable Interest Entity, Primary Beneficiary | Waymo
Variable Interest Entity [Line Items]
Noncontrolling interest		$ 3,200
Variable Interest Entity, Primary Beneficiary | Nonrecourse
Variable Interest Entity [Line Items]
Liabilities with no recourse	2,300		1,200
Asset Pledged as Collateral | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Assets not available for use	$ 5,500		$ 3,100

XML

Debt (Narrative) (Details)	1 Months Ended
	Aug. 31, 2020 USD ($) Tranche	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Commercial paper		$ 0	$ 0
Estimated fair value of long-term debt		13,900,000,000	4,100,000,000
Unsecured debt | 2020 Notes Issuance
Debt Instrument [Line Items]
Debt instrument issued	$ 10,000,000,000.0
Number of tranches (in tranche) | Tranche	6
Debt Instrument, Term	21 years 6 months
Debt, Weighted Average Interest Rate	1.57%
Unsecured debt | 2020 Notes Issuance | Due in 2025
Debt Instrument [Line Items]
Debt instrument issued	$ 1,000,000,000.0
Unsecured debt | 2020 Notes Issuance | Due in 2027
Debt Instrument [Line Items]
Debt instrument issued	1,000,000,000.0
Unsecured debt | 2020 Notes Issuance | Due in 2030
Debt Instrument [Line Items]
Debt instrument issued	2,250,000,000
Unsecured debt | 2020 Notes Issuance | Due in 2040
Debt Instrument [Line Items]
Debt instrument issued	1,250,000,000
Unsecured debt | 2020 Notes Issuance | Due in 2050
Debt Instrument [Line Items]
Debt instrument issued	2,500,000,000
Unsecured debt | 2020 Notes Issuance | Due in 2060
Debt Instrument [Line Items]
Debt instrument issued	2,000,000,000.0
Sustainability Bonds | 2020 Notes Issuance
Debt Instrument [Line Items]
Debt instrument issued	$ 5,750,000,000
Commercial Paper
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit		5,000,000,000.0
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit		4,000,000,000.0
Line of credit drawn		$ 0	$ 0

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Debt (Long-Term Debt) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Debt
Future finance lease payments, net	$ 1,196	$ 711
Total debt	15,196	4,711
Unamortized discount and debt issuance costs	(173)	(42)
Less: Current portion of Notes	(999)	0
Less: Current portion of future finance lease payments, net	(122)	(115)
Long-term debt	13,902	4,554
2011-2016 Notes Issuances
Debt
Notes issuances	$ 4,000	4,000
2011-2016 Notes Issuances | Minimum
Debt
Coupon Rate	2.00%
Effective Interest Rate	2.23%
2011-2016 Notes Issuances | Maximum
Debt
Coupon Rate	3.63%
Effective Interest Rate	3.73%
2020 Notes Issuance
Debt
Notes issuances	$ 10,000	$ 0
2020 Notes Issuance | Minimum
Debt
Coupon Rate	0.45%
Effective Interest Rate	0.57%
2020 Notes Issuance | Maximum
Debt
Coupon Rate	2.25%
Effective Interest Rate	2.33%

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Supplemental Financial Statement Information (Property and Equipment) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 120,287	$ 104,207
Less: accumulated depreciation	(38,651)	(30,561)
Property and equipment, net	81,636	73,646
Land and buildings
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	46,787	39,865
Information technology assets
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	42,883	36,840
Construction in progress
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	23,115	21,036
Leasehold improvements
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	7,303	6,310
Furniture and fixtures
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 199	$ 156

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Supplemental Financial Statement Information (Accrued Expenses and Other Current Liabilities) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Balance Sheet Components Disclosure [Abstract]
European Commission fines	$ 9,921	$ 9,405
Accrued customer liabilities	2,559	2,245
Accrued purchases of property and equipment	2,157	2,411
Current operating lease liabilities	1,535	1,199
Other accrued expenses and current liabilities	9,459	7,807
Accrued expenses and other current liabilities	$ 25,631	$ 23,067

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Supplemental Financial Statement Information (Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Components of AOCI, net of tax
Beginning Balance	$ 201,442	$ 177,628
Other comprehensive income (loss) before reclassifications	1,803	1,509
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	(20)	(13)
Amounts reclassified from AOCI	(505)	(356)
Other comprehensive income (loss)	1,278	1,140
Ending Balance	212,920	194,969
Cumulative Effect, Period of Adoption, Adjustment
Components of AOCI, net of tax
Beginning Balance		(34)
Total
Components of AOCI, net of tax
Beginning Balance	(1,232)	(2,306)
Ending Balance	46	(1,196)
Total | Cumulative Effect, Period of Adoption, Adjustment
Components of AOCI, net of tax
Beginning Balance		(30)
Foreign Currency Translation Adjustments
Components of AOCI, net of tax
Beginning Balance	(2,003)	(1,884)
Other comprehensive income (loss) before reclassifications	193	(326)
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0	0
Amounts reclassified from AOCI	0	0
Other comprehensive income (loss)	193	(326)
Ending Balance	(1,810)	(2,210)
Foreign Currency Translation Adjustments | Cumulative Effect, Period of Adoption, Adjustment
Components of AOCI, net of tax
Beginning Balance		0
Unrealized Gains (Losses) on Available-for-Sale Investments
Components of AOCI, net of tax
Beginning Balance	812	(688)
Other comprehensive income (loss) before reclassifications	1,346	1,613
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0	0
Amounts reclassified from AOCI	(391)	(107)
Other comprehensive income (loss)	955	1,506
Ending Balance	1,767	818
Unrealized Gains (Losses) on Available-for-Sale Investments | Cumulative Effect, Period of Adoption, Adjustment
Components of AOCI, net of tax
Beginning Balance		0
Unrealized Gains (Losses) on Cash Flow Hedges
Components of AOCI, net of tax
Beginning Balance	(41)	266
Other comprehensive income (loss) before reclassifications	264	222
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	(20)	(13)
Amounts reclassified from AOCI	(114)	(249)
Other comprehensive income (loss)	130	(40)
Ending Balance	$ 89	196
Unrealized Gains (Losses) on Cash Flow Hedges | Cumulative Effect, Period of Adoption, Adjustment
Components of AOCI, net of tax
Beginning Balance		$ (30)

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Supplemental Financial Statement Information (Effects on Net Income of Amounts Reclassified from AOCI) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Revenue	$ 46,173	$ 40,499	$ 125,629	$ 115,782
Other income (expense), net	2,146	(549)	3,820	3,956
Benefit (provision) for income taxes	(2,112)	(1,560)	(4,351)	(5,249)
Net income	11,247	7,068	25,042	23,672
Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	50	114	505	356
Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income | Unrealized gains (losses) on available-for-sale investments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	93	49	496	145
Benefit (provision) for income taxes	(20)	(10)	(105)	(38)
Net income	73	39	391	107
Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income | Unrealized gains (losses) on cash flow hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Benefit (provision) for income taxes	4	(19)	(28)	(61)
Net income	(23)	75	114	249
Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income | Unrealized gains (losses) on cash flow hedges | Foreign exchange contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Revenue	(28)	93	138	306
Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income | Unrealized gains (losses) on cash flow hedges | Interest rate contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	$ 1	$ 1	$ 4	$ 4

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Supplemental Financial Statement Information (Schedule of Other Income (Expense), Net) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Balance Sheet Components Disclosure [Abstract]
Interest income	$ 460	$ 631	$ 1,479	$ 1,806
Interest expense	(48)	(23)	(82)	(83)
Foreign currency exchange losses, net	(84)	41	(257)	63
Gain (loss) on debt securities, net	116	49	515	145
Gain (loss) on equity securities, net	1,899	(1,528)	2,540	2,254
Performance fees	(135)	227	(204)	(333)
Income (loss) and impairment from equity method investments, net	26	(14)	46	(70)
Other	(88)	68	(217)	174
Other income (expense), net	2,146	(549)	3,820	3,956
Interest costs capitalized	$ 53	$ 46	$ 162	$ 113

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Acquisitions (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019	Nov. 30, 2019
Business Acquisition [Line Items]
Goodwill	$ 20,870	$ 20,624
Patents and developed technology
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life	3 years 9 months 18 days
Trade names and other
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life	5 years
Customer relationships
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life	4 years 9 months 18 days
Other acquisitions
Business Acquisition [Line Items]
Total consideration	$ 387
Acquired intangible assets	139
Goodwill	204
Net assets acquired	$ 44
Fitbit
Business Acquisition [Line Items]
Share price (in dollars per share)			$ 7.35
Purchase price			$ 2,100

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Goodwill and Other Intangible Assets (Goodwill Rollforward) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Changes in Carrying Amount of Goodwill
Balance as of December 31, 2019	$ 20,624
Acquisitions	204
Foreign currency translation and other adjustments	42
Balance as of September 30, 2020	20,870
Google
Changes in Carrying Amount of Goodwill
Balance as of December 31, 2019	19,921
Acquisitions	204
Foreign currency translation and other adjustments	46
Balance as of September 30, 2020	20,171
Other Bets
Changes in Carrying Amount of Goodwill
Balance as of December 31, 2019	703
Acquisitions	0
Foreign currency translation and other adjustments	(4)
Balance as of September 30, 2020	$ 699

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Goodwill and Other Intangible Assets (Acquisition-Related Intangible Assets that are being Amortized) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 5,547		$ 5,547		$ 5,929
Accumulated Amortization	4,027		4,027		3,950
Net Carrying Amount	1,520		1,520		1,979
Patents and developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,612		4,612		4,972
Accumulated Amortization	3,552		3,552		3,570
Net Carrying Amount	1,060		1,060		1,402
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	235		235		254
Accumulated Amortization	39		39		30
Net Carrying Amount	196		196		224
Trade names and other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	700		700		703
Accumulated Amortization	436		436		350
Net Carrying Amount	264		264		$ 353
Acquisition-related intangible assets
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization of acquisition-related intangible assets	$ 189	$ 188	$ 587	$ 594

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Goodwill and Other Intangible Assets (Expected Amortization Expense for Acquisition-Related Intangible Assets) (Details) $ in Millions	Sep. 30, 2020 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2020	$ 181
2021	694
2022	354
2023	81
2024	57
Thereafter	153
Total	$ 1,520

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Contingencies (Details) $ in Millions, € in Billions					3 Months Ended						9 Months Ended
	Mar. 20, 2019 USD ($)	Mar. 20, 2019 EUR (€)	Jun. 27, 2017 USD ($)	Jun. 27, 2017 EUR (€)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 EUR (€)	Jun. 30, 2017 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)
Loss Contingencies [Line Items]
European Commission fines					$ 0	$ 0					$ 0	$ 1,697
European Commission Antitrust Investigation
Loss Contingencies [Line Items]
European Commission fines	$ 1,700	€ 1.5	$ 2,700	€ 2.4			$ 1,700	$ 5,100	€ 4.3	$ 2,700

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Stockholders' Equity (Narrative) (Details) - USD ($) shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jul. 30, 2020	Jul. 31, 2019
Stockholders Equity Note [Line Items]
Repurchases of capital stock	$ 7,897,000,000	$ 5,696,000,000	$ 23,245,000,000	$ 12,298,000,000
Class C Capital Stock | Share Repurchase Program
Stockholders Equity Note [Line Items]
Authorized share repurchase amount					$ 28,000,000,000.0	$ 25,000,000,000.0
Remaining amount available for repurchase	$ 25,500,000,000		$ 25,500,000,000
Repurchases of capital stock (in shares)	5.2		16.8
Repurchases of capital stock			$ 23,200,000,000

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Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Denominator
Basic net income per share (in dollars per share)	$ 16.55	$ 10.20	$ 36.69	$ 34.12
Weighted-average effect of dilutive securities
Diluted net income per share (in dollars per share)	$ 16.40	$ 10.12	$ 36.38	$ 33.83
Class A Common Stock
Numerator
Allocation of undistributed earnings	$ 4,973	$ 3,059	$ 11,004	$ 10,218
Denominator
Number of shares used in basic computation (shares)	300,411	299,835	299,934	299,493
Basic net income per share (in dollars per share)	$ 16.55	$ 10.20	$ 36.69	$ 34.12
Numerator
Allocation of undistributed earnings for basic computation	$ 4,973	$ 3,059	$ 11,004	$ 10,218
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	763	475	1,697	1,588
Reallocation of undistributed earnings	(53)	(24)	(103)	(83)
Allocation of undistributed earnings	$ 5,683	$ 3,510	$ 12,598	$ 11,723
Denominator
Number of shares used in basic computation (shares)	300,411	299,835	299,934	299,493
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	46,108	46,515	46,266	46,549
Restricted stock units and other contingently issuable shares (shares)			105	448
Number of shares used in per share computation (shares)	346,566	346,731	346,305	346,490
Diluted net income per share (in dollars per share)	$ 16.40	$ 10.12	$ 36.38	$ 33.83
Class A Common Stock | Restricted stock units and other contingently issuable shares
Weighted-average effect of dilutive securities
Restricted stock units and other contingently issuable shares (shares)	47	381
Class B Common Stock
Numerator
Allocation of undistributed earnings	$ 763	$ 475	$ 1,697	$ 1,588
Denominator
Number of shares used in basic computation (shares)	46,108	46,515	46,266	46,549
Basic net income per share (in dollars per share)	$ 16.55	$ 10.20	$ 36.69	$ 34.12
Numerator
Allocation of undistributed earnings for basic computation	$ 763	$ 475	$ 1,697	$ 1,588
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0	0
Reallocation of undistributed earnings	(7)	(4)	(14)	(13)
Allocation of undistributed earnings	$ 756	$ 471	$ 1,683	$ 1,575
Denominator
Number of shares used in basic computation (shares)	46,108	46,515	46,266	46,549
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	0	0	0	0
Restricted stock units and other contingently issuable shares (shares)			0	0
Number of shares used in per share computation (shares)	46,108	46,515	46,266	46,549
Diluted net income per share (in dollars per share)	$ 16.40	$ 10.12	$ 36.38	$ 33.83
Class B Common Stock | Restricted stock units and other contingently issuable shares
Weighted-average effect of dilutive securities
Restricted stock units and other contingently issuable shares (shares)	0	0
Class C Capital Stock
Numerator
Allocation of undistributed earnings	$ 5,511	$ 3,534	$ 12,341	$ 11,866
Denominator
Number of shares used in basic computation (shares)	332,930	346,391	336,361	347,818
Basic net income per share (in dollars per share)	$ 16.55	$ 10.20	$ 36.69	$ 34.12
Numerator
Allocation of undistributed earnings for basic computation	$ 5,511	$ 3,534	$ 12,341	$ 11,866
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0	0
Reallocation of undistributed earnings	53	24	103	83
Allocation of undistributed earnings	$ 5,564	$ 3,558	$ 12,444	$ 11,949
Denominator
Number of shares used in basic computation (shares)	332,930	346,391	336,361	347,818
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	0	0	0	0
Restricted stock units and other contingently issuable shares (shares)			5,715	5,369
Number of shares used in per share computation (shares)	339,285	351,468	342,076	353,187
Diluted net income per share (in dollars per share)	$ 16.40	$ 10.12	$ 36.38	$ 33.83
Class C Capital Stock | Restricted stock units and other contingently issuable shares
Weighted-average effect of dilutive securities
Restricted stock units and other contingently issuable shares (shares)	6,355	5,077

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Compensation Plans (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 3,300	$ 2,800	$ 10,100	$ 8,600
Awards expected to be settled with stock	3,117	$ 2,621	9,636	$ 8,150
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 24,600		$ 24,600
Weighted average recognition period for unrecognized stock-based compensation expense			2 years 7 months 6 days

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Compensation Plans (Unvested Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Unvested restricted stock units - number of shares
Unvested at beginning of period (in shares) | shares	19,394,236
Granted (in shares) | shares	11,635,680
Vested (in shares) | shares	(8,437,980)
Forfeited/canceled (in shares) | shares	(951,715)
Unvested at end of period (in shares) | shares	21,640,221
Unvested restricted stock units - weighted-average grant-date fair value
Unvested at beginning of period (in dollars per share) | $ / shares	$ 1,055.22
Granted (in dollars per share) | $ / shares	1,394.72
Vested (in dollars per share) | $ / shares	1,071.16
Forfeited/canceled (in dollars per share) | $ / shares	1,150.93
Unvested at end of period (in dollars per share) | $ / shares	$ 1,228.65

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Income Taxes (Details) - USD ($) $ in Billions	Dec. 31, 2019	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Gross unrecognized tax benefits	$ 3.4	$ 3.7
Unrecognized tax benefits that would impact effective tax rate	$ 2.3	$ 2.5

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Information about Segments and Geographic Areas (Revenue by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Revenue	$ 46,173	$ 40,499	$ 125,629	$ 115,782
Hedging gains (losses)	(22)	119	178	364
Google
Segment Reporting Information [Line Items]
Revenue	46,017	40,225	124,990	114,931
Other Bets
Segment Reporting Information [Line Items]
Revenue	$ 178	$ 155	$ 461	$ 487

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Information about Segments and Geographic Areas (Operating Income (Loss) by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Segment operating income (loss)	$ 11,213	$ 9,177	$ 25,573	$ 24,965
Operating Segments | Google
Segment Reporting Information [Line Items]
Segment operating income (loss)	12,589	10,746	29,431	30,214
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Segment operating income (loss)	(1,103)	(941)	(3,340)	(2,798)
Reconciling items
Segment Reporting Information [Line Items]
Segment operating income (loss)	$ (273)	$ (628)	$ (518)	$ (2,451)

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Information about Segments and Geographic Areas (Capital Expenditures by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Capital expenditures	$ 5,406	$ 6,732	$ 16,802	$ 17,496
Operating Segments | Google
Segment Reporting Information [Line Items]
Capital expenditures	5,465	7,228	15,964	18,658
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Capital expenditures	120	71	320	195
Reconciling Items
Segment Reporting Information [Line Items]
Capital expenditures	$ (179)	$ (567)	$ 518	$ (1,357)

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Information about Segments and Geographic Areas (Stock-based Compensation and Depreciation, Amortization and Impairment by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Stock-based compensation expense	$ 3,117	$ 2,621	$ 9,636	$ 8,150
Depreciation, amortization and impairment	3,478	2,920	9,972	8,368
Operating Segments | Google
Segment Reporting Information [Line Items]
Stock-based compensation expense	2,921	2,470	9,035	7,682
Depreciation, amortization and impairment	3,383	2,837	9,688	8,122
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Stock-based compensation expense	130	117	401	365
Depreciation, amortization and impairment	95	83	281	246
Reconciling items
Segment Reporting Information [Line Items]
Stock-based compensation expense	66	34	200	103
Depreciation, amortization and impairment	$ 0	$ 0	$ 3	$ 0

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Information about Segments and Geographic Areas (Long-Lived Assets by Geographic Area) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 134,874	$ 123,331
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	101,405	94,907
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 33,469	$ 28,424