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.