10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________

(Mark One)

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

For the quarterly period ended June 30, 2016

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)

________________________________________________________________________________________

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  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ý    No  ¨

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

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer (Do not check if a smaller reporting company)	¨	Smaller reporting company	¨

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

As of July 28, 2016, there were 294,844,176 shares of Alphabet’s Class A common stock outstanding, 48,825,477 shares of Alphabet's Class B common stock outstanding, and 343,604,144 Alphabet's Class C capital stock outstanding.

Table of Contents Alphabet Inc.

Alphabet Inc.

Form 10-Q

For the Quarterly Period Ended June 30, 2016

TABLE OF CONTENTS

		Page No.
Note About Forward-Looking Statements		1
PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	2
	Consolidated Balance Sheets - December 31, 2015 and June 30, 2016	2
	Consolidated Statements of Income - Three and Six Months Ended June 30, 2015 and 2016	3
	Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2015 and 2016	4
	Consolidated Statements of Cash Flows - Six Months Ended June 30, 2015 and 2016	5
	Notes to Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4	Controls and Procedures	43
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	44
Item 1A	Risk Factors	44
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 6	Exhibits	44
	Signature	45
	Exhibit Index	46

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

• our plans to continue to invest in new businesses, products and technologies, systems, facilities, and infrastructure, to continue to hire aggressively and provide competitive compensation programs, as well as to continue to invest in acquisitions;

• seasonal fluctuations in internet usage and advertiser expenditures, traditional retail seasonality and macroeconomic conditions, which are likely to cause fluctuations in our quarterly results;

• the potential for declines in our revenue growth rate;

• our expectation that growth in advertising revenues from our websites will continue to exceed that from our Google Network Members' websites, which will have a positive impact on our operating margins;

• our expectation that we will continue to take steps to improve the relevance of the ads we deliver and to reduce the number of accidental clicks;

• fluctuations in the rate of change in revenue and revenue growth, as well as the rate of change in paid clicks and average cost-per-click and various factors contributing to such fluctuations;

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

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

• our expectation that our cost of revenues, research and development expenses, sales and marketing expenses, and general and administrative expenses will increase in dollars and may increase as a percentage of revenues;

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

• our expectation that our traffic acquisition costs will increase in the future;

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

• estimates of our future compensation expenses;

• fluctuations in our effective tax rate;

• the sufficiency of our sources of funding;

• our payment terms to certain advertisers, which may increase our working capital requirements;

• fluctuations in our capital expenditures;

• our expectations related to the new operating structure implemented in October 2015 pursuant to the holding company reorganization;

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, 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 I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2015, as updated by the Form 8-K filed with the SEC on May 3, 2016, and as 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 I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2015, as updated by the Form 8-K filed with the SEC on May 3, 2016, 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," "our 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)

	As of December 31, 2015			As of June 30, 2016
				(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	16,549		$	13,627
Marketable securities	56,517			64,833
Total cash, cash equivalents, and marketable securities (including securities loaned of $4,531 and $4,426)	73,066			78,460
Accounts receivable, net of allowance of $296 and $294	11,556			11,686
Receivable under reverse repurchase agreements	450			500
Income taxes receivable, net	1,903			576
Prepaid revenue share, expenses and other assets	3,139			3,016
Total current assets	90,114			94,238
Prepaid revenue share, expenses and other assets, non-current	3,181			3,275
Non-marketable investments	5,183			5,820
Deferred income taxes	251			253
Property and equipment, net	29,016			31,413
Intangible assets, net	3,847			3,452
Goodwill	15,869			15,841
Total assets	$	147,461		$	154,292
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,931		$	1,716
Short-term debt	3,225			2,219
Accrued compensation and benefits	3,539			3,409
Accrued expenses and other current liabilities	4,768			4,502
Accrued revenue share	2,329			2,345
Securities lending payable	2,428			2,065
Deferred revenue	788			900
Income taxes payable, net	302			185
Total current liabilities	19,310			17,341
Long-term debt	1,995			1,984
Deferred revenue, non-current	151			151
Income taxes payable, non-current	3,663			4,135
Deferred income taxes	189			651
Other long-term liabilities	1,822			2,151
Total liabilities	27,130			26,413
Commitments and contingencies (Note 9)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding	0			0
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 687,348 (Class A 292,297, Class B 50,295, Class C 344,756) and 686,778 (Class A 294,686, Class B 48,921, Class C 343,171) shares issued and outstanding	32,982			34,293
Accumulated other comprehensive loss	(1,874		)	(1,151		)
Retained earnings	89,223			94,737
Total stockholders’ equity	120,331			127,879
Total liabilities and stockholders’ equity	$	147,461		$	154,292

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
	(unaudited)
Revenues	$	17,727	$	21,500	$	34,985	$	41,757
Costs and expenses:
Cost of revenues	6,583		8,130		12,939		15,778
Research and development	2,789		3,363		5,542		6,730
Sales and marketing	2,080		2,415		4,145		4,802
General and administrative	1,450		1,624		3,087		3,137
Total costs and expenses	12,902		15,532		25,713		30,447
Income from operations	4,825		5,968		9,272		11,310
Other income (expense), net	131		151		288		(62		)
Income before income taxes	4,956		6,119		9,560		11,248
Provision for income taxes	1,025		1,242		2,114		2,164
Net income	$	3,931	$	4,877	$	7,446	$	9,084
Less: Adjustment Payment to Class C capital stockholders	522		0		522		0
Net income available to all stockholders	$	3,409	$	4,877	$	6,924	$	9,084
Basic net income per share of Class A and B common stock	$	4.99	$	7.11	$	10.15	$	13.23
Basic net income per share of Class C capital stock	$	6.51	$	7.11	$	11.68	$	13.23
Diluted net income per share of Class A and B common stock	$	4.93	$	7.00	$	10.03	$	13.01
Diluted net income per share of Class C capital stock	$	6.43	$	7.00	$	11.53	$	13.01

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Net income	$	3,931		$	4,877		$	7,446		$	9,084
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	218			(119		)	(705		)	37
Available-for-sale investments:
Change in net unrealized gains	(336		)	200			(115		)	556
Less: reclassification adjustment for net (gains) losses included in net income	(50		)	14			(77		)	183
Net change (net of tax effect of $92, $79, $31, and $198)	(386		)	214			(192		)	739
Cash flow hedges:
Change in net unrealized gains	(61		)	100			501			116
Less: reclassification adjustment for net gains included in net income	(329		)	(52		)	(560		)	(169		)
Net change (net of tax effect of $202, $28, $10, and $9)	(390		)	48			(59		)	(53		)
Other comprehensive (loss) income	(558		)	143			(956		)	723
Comprehensive income	$	3,373		$	5,020		$	6,490		$	9,807

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Six Months Ended
	June 30,
	2015			2016
	(unaudited)
Operating activities
Net income	$	7,446		$	9,084
Adjustments:
Depreciation and impairment of property and equipment	1,949			2,426
Amortization and impairment of intangible assets	462			435
Stock-based compensation expense	2,335			2,997
Deferred income taxes	(150		)	364
Loss on marketable and non-marketable investments, net	33			294
Other	116			91
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(69		)	(17		)
Income taxes, net	1,950			1,680
Prepaid revenue share, expenses and other assets	62			161
Accounts payable	(398		)	(221		)
Accrued expenses and other liabilities	237			(471		)
Accrued revenue share	(121		)	(48		)
Deferred revenue	(34		)	3
Net cash provided by operating activities	13,818			16,778
Investing activities
Purchases of property and equipment	(5,442		)	(4,551		)
Purchases of marketable securities	(33,126		)	(45,588		)
Maturities and sales of marketable securities	27,586			37,789
Purchases of non-marketable investments	(1,449		)	(583		)
Cash collateral related to securities lending	(84		)	(363		)
Investments in reverse repurchase agreements	250			(50		)
Acquisitions, net of cash acquired, and purchases of intangible assets	(142		)	(72		)
Net cash used in investing activities	(12,407		)	(13,418		)
Financing activities
Net payments related to stock-based award activities	(1,004		)	(1,610		)
Repurchases of capital stock	0			(3,693		)
Adjustment Payment to Class C capital stockholders	(47		)	0
Proceeds from issuance of debt, net of costs	6,698			5,753
Repayments of debt	(6,704		)	(6,801		)
Net cash used in financing activities	(1,057		)	(6,351		)
Effect of exchange rate changes on cash and cash equivalents	(248		)	69
Net increase (decrease) in cash and cash equivalents	106			(2,922		)
Cash and cash equivalents at beginning of period	18,347			16,549
Cash and cash equivalents at end of period	$	18,453		$	13,627
Supplemental disclosures of cash flow information
Cash paid (received) for income taxes	$	234		$	(24	)
Cash paid for interest	$	48		$	48

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

We were incorporated in the State of Delaware in August 2015. We generate revenues primarily by delivering relevant, cost-effective online advertising.

On October 2, 2015, we implemented a holding company reorganization in which Alphabet became the successor issuer to Google Inc. (Google) that was accounted for as a merger under common control. Alphabet has recognized the assets and liabilities of Google at carryover basis. The consolidated financial statements of Alphabet present comparative information for the prior periods on a combined basis, as if both Alphabet and Google were under common control for all periods presented.

Basis of Consolidation

The consolidated financial statements include the accounts of Alphabet Inc., our subsidiaries, as well as all variable interest entities in which we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

The accompanying Consolidated Balance Sheet as of June 30, 2016, the Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2016, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2016, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2016 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2016, our results of operations for the three and six months ended June 30, 2015 and 2016, and our cash flows for the six months ended June 30, 2015 and 2016. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on February 11, 2016 as updated by the Form 8-K filed with the SEC on May 3, 2016.

Use of Estimates

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

Fair Value of Financial Instruments

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

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

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

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

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

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

Recent Accounting Pronouncements

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

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

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) which amends the FASB Accounting Standards Codification and created Topic 842, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provides for enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

Note 2. Financial Instruments

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

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 31, 2015 and June 30, 2016 (in millions):

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

	As of June 30, 2016
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Cash	$	5,561	$	0	$	0		$	5,561	$	5,561	$	0
Level 1:
Money market and other funds	3,909		0		0			3,909		3,909		0
U.S. government notes	28,606		259		0			28,865		2,091		26,774
Marketable equity securities	163		47		0			210		0		210
	32,678		306		0			32,984		6,000		26,984
Level 2:
Time deposits(1)	230		0		0			230		228		2
Money market and other funds(2)	1,521		0		0			1,521		1,521		0
Mutual funds(4)	214		6		0			220		0		220
U.S. government agencies	3,360		6		0			3,366		250		3,116
Foreign government bonds	2,359		45		(5		)	2,399		0		2,399
Municipal securities	4,491		99		(3		)	4,587		61		4,526
Corporate debt securities	13,700		233		(68		)	13,865		6		13,859
Agency mortgage-backed securities	11,016		160		(5		)	11,171		0		11,171
Asset-backed securities	2,555		3		(2		)	2,556		0		2,556
	39,446		552		(83		)	39,915		2,066		37,849
Total	$	77,685	$	858	$	(83	)	$	78,460	$	13,627	$	64,833

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

⁽²⁾  The balances as of December 31, 2015 and June 30, 2016 were related to cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See section titled "Securities Lending Program" below for further discussion of this program.

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

⁽⁴⁾  The fair value option was elected for mutual funds with gains (losses) recognized in other income (expense), net.

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We determine realized gains or losses on the sale of marketable securities on a specific identification method. We recognized gross realized gains of $104 million and $181 million for the three and six months ended June 30, 2015 and $91 million and $159 million for the three and six months ended June 30, 2016. We recognized gross realized losses of $51 million and $96 million for the three and six months ended June 30, 2015 and $100 million and $335 million for the three and six months ended June 30, 2016. We reflect these gains and losses as a component of other income (expense), net in the accompanying Consolidated Statements of Income.

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

	As of June 30, 2016
Due in 1 year	$	7,302
Due in 1 year through 5 years	36,934
Due in 5 years through 10 years	8,374
Due after 10 years	11,793
Total	$	64,403

Impairment Considerations for Marketable Investments

The following tables present gross unrealized losses and fair values for those marketable investments that were in an unrealized loss position as of December 31, 2015 and June 30, 2016, 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, 2015
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	13,757	$	(48	)	$	0	$	0		$	13,757	$	(48	)
U.S. government agencies	864		(3		)	0		0			864		(3		)
Foreign government bonds	885		(18		)	36		(5		)	921		(23		)
Municipal securities	1,116		(3		)	41		(1		)	1,157		(4		)
Corporate debt securities	9,192		(202		)	784		(76		)	9,976		(278		)
Agency mortgage-backed securities	5,783		(34		)	721		(23		)	6,504		(57		)
Asset-backed securities	2,508		(7		)	386		(1		)	2,894		(8		)
Total	$	34,105	$	(315	)	$	1,968	$	(106	)	$	36,073	$	(421	)

	As of June 30, 2016
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(unaudited)
Foreign government bonds	$	302	$	(1	)	$	66	$	(4	)	$	368	$	(5	)
Municipal securities	301		(2		)	61		(1		)	362		(3		)
Corporate debt securities	1,841		(28		)	897		(40		)	2,738		(68		)
Agency mortgage-backed securities	660		(2		)	389		(3		)	1,049		(5		)
Asset-backed securities	0		0			298		(2		)	298		(2		)
Total	$	3,104	$	(33	)	$	1,711	$	(50	)	$	4,815	$	(83	)

During the three and six months ended June 30, 2015, we did not recognize any other-than-temporary impairment loss. During the three months ended June 30, 2016, we did not recognize any other-than-temporary impairment loss. During the six months ended June 30, 2016, we recognized $87 million of other-than-temporary impairment losses related to our marketable equity securities. Those losses are included in gains (losses) on marketable securities, net,

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as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. See Note 8 for further details on other income (expense), net.

Securities Lending Program

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

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

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

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

	As of June 30, 2016
	Remaining Contractual Maturity of the Agreements
Securities Lending Transactions	Overnight and Continuous		Up to 30 days		30 - 90 Days		Greater Than 90 Days		Total
	(unaudited)
U.S. government notes	$	969	$	82	$	0	$	102	$	1,153
U.S. government agencies	564		128		0		0		692
Corporate debt securities	220		0		0		0		220
Total	$	1,753	$	210	$	0	$	102	$	2,065
Gross amount of recognized liabilities for securities lending in offsetting disclosure									$	2,065
Amounts related to agreements not included in securities lending in offsetting disclosure									$	0

Derivative Financial Instruments

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

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

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. To further reduce credit risk, we enter into collateral security arrangements under which the counterparty is required to provide collateral when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We can take possession of the collateral in the event of counterparty default. As

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of December 31, 2015 and June 30, 2016, we received cash collateral related to the derivative instruments under our collateral security arrangements of $192 million and $150 million.

Cash Flow Hedges

We use options to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar and at times we use interest rate swaps to effectively lock interest rates on anticipated debt issuances. These transactions are designated as cash flow hedges. The notional principal of these contracts was approximately $16.4 billion and $10.4 billion as of December 31, 2015 and June 30, 2016, respectively. These contracts have maturities of 36 months or less.

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

As of June 30, 2016, the effective portion of our cash flow hedges before tax effect was $313 million, of which $255 million is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We use forward contracts designated as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. We exclude the difference between spot rates and forward rates for these forward contracts from the assessment of hedge effectiveness. The notional principal of these contracts was $1.8 billion and $1.9 billion as of December 31, 2015 and June 30, 2016, respectively.

We have used interest rate swaps designated as fair value hedges to hedge interest rate risk for certain fixed rate securities. The notional principal of these contracts was $295 million and $0 million as of December 31, 2015 and June 30, 2016, respectively.

Gains and losses on these forward contracts and interest rate swaps are recognized in other income (expense), net, along with the offsetting losses and gains of the related hedged items. Cash flows from these forward contracts and interest rate swaps are reported within investment activities in the Consolidated Statements of Cash Flows, consistent with the impact of the hedged items.

Other Derivatives

Other derivatives not designated as hedging instruments consist of forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts, as well as the related costs in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities. The notional principal of foreign exchange contracts outstanding was $7.5 billion and $6.4 billion as of December 31, 2015 and June 30, 2016, respectively.

We also use exchange-traded interest rate futures contracts and “To Be Announced” (TBA) forward purchase commitments of mortgage-backed assets to hedge interest rate risks on certain fixed income securities. The TBA contracts meet the definition of derivative instruments in cases where physical delivery of the assets is not taken at the earliest available delivery date. Our interest rate futures and TBA contracts (together interest rate contracts) are not designated as hedging instruments. We recognize gains and losses on these contracts, as well as the related costs, in other income (expense), net. The gains and losses are generally economically offset by unrealized gains and losses in the underlying available-for-sale securities, which are recorded as a component of AOCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are moved from AOCI into other income (expense), net. The total notional amounts of interest rate contracts outstanding were $50 million and $0 million as of December 31, 2015 and June 30, 2016, respectively.

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

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

		As of June 30, 2016
	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	Prepaid revenue share, expenses and other assets, current and non-current	$	412	$	6	$	418
Total		$	412	$	6	$	418
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	0	$	2	$	2
Total		$	0	$	2	$	2

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

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	2015			2016		2015		2016
Foreign exchange contracts	$	(120	)	$	155	$	716	$	188

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	Gains Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
Derivatives in Cash Flow Hedging Relationship	Income Statement Location	2015		2016		2015		2016
Foreign exchange contracts	Revenues	$	471	$	78	$	782	$	247
Interest rate contracts	Other income (expense), net	1		2		2		3
Total		$	472	$	80	$	784	$	250

	Gains (Losses) Recognized in Income on Derivatives (1) (Amount Excluded from  Effectiveness Testing and Ineffective Portion)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Cash Flow Hedging Relationship	Income Statement Location	2015			2016			2015			2016
Foreign exchange contracts	Other income (expense), net	$	(66	)	$	(120	)	$	(167	)	$	(259	)

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

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

	Gains (Losses) Recognized in Income on Derivatives(2)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Fair Value Hedging Relationship	Income Statement Location	2015			2016			2015			2016
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	(44	)	$	53		$	67		$	25
Hedged item	Other income (expense), net	42			(53		)	(71		)	(25		)
Total		$	(2	)	$	0		$	(4	)	$	0
Interest Rate Hedges:
Interest rate contracts	Other income (expense), net	$	1		$	2		$	(1	)	$	(3	)
Hedged item	Other income (expense), net	(1		)	(2		)	1			3
Total		$	0		$	0		$	0		$	0

⁽²⁾  Losses related to the amount excluded from effectiveness testing of the hedges were $2 million and $4 million for the three and six months ended June 30, 2015, respectively, and $0 million and $0 million for the three and six months ended June 30, 2016, respectively.

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

	Gains (Losses) Recognized in Income on Derivatives
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives Not Designated As Hedging Instruments	Income Statement Location	2015			2016			2015			2016
Foreign exchange contracts	Other income (expense), net	$	(66	)	$	(6	)	$	91		$	(80	)
Interest rate contracts	Other income (expense), net	4			(5		)	(3		)	(13		)
Total		$	(62	)	$	(11	)	$	88		$	(93	)

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Offsetting of Derivatives, Securities Lending and Reverse Repurchase Agreements

We present our derivatives, securities lending and reverse repurchase agreements at gross fair values in the Consolidated Balance Sheets. However, our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2015 and June 30, 2016, these offsetting arrangements were as follows (in millions):

Offsetting of Assets
	As of December 31, 2015
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	628	$	0	$	628		$	(13	)	(1)	$	(189	)	$	(214	)	$	212
Reverse repurchase agreements	1,590		0		1,590		(2)	0				0			(1,590		)	0
Total	$	2,218	$	0	$	2,218		$	(13	)		$	(189	)	$	(1,804	)	$	212
	As of June 30, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
	(unaudited)
Derivatives	$	418	$	0	$	418		$	(1	)	(1)	$	(118	)	$	(186	)	$	113
Reverse repurchase agreements	2,021		0		2,021		(2)	0				0			(2,021		)	0
Total	$	2,439	$	0	$	2,439		$	(1	)		$	(118	)	$	(2,207	)	$	113

⁽¹⁾  The balances as of December 31, 2015 and June 30, 2016 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

⁽²⁾  The balances as of December 31, 2015 and June 30, 2016 included $1,140 million and $1,521 million, respectively, recorded in cash and cash equivalents, and $450 million and $500 million, respectively, recorded in receivable under reverse repurchase agreements.

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Offsetting of Liabilities
	As of December 31, 2015
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	16	$	0	$	16	$	(13	)	(3)	$	(3	)	$	0		$	0
Securities lending agreements	2,428		0		2,428		0				0			(2,401		)	27
Total	$	2,444	$	0	$	2,444	$	(13	)		$	(3	)	$	(2,401	)	$	27
	As of June 30, 2016
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
	(unaudited)
Derivatives	$	2	$	0	$	2	$	(1	)	(3)	$	0		$	0		$	1
Securities lending agreements	2,065		0		2,065		0				0			(2,037		)	28
Total	$	2,067	$	0	$	2,067	$	(1	)		$	0		$	(2,037	)	$	29

⁽³⁾  The balances as of December 31, 2015 and June 30, 2016 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

Note 3. Non-Marketable Investments

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

Non-Marketable Equity Investments

Our non-marketable equity investments are investments we have made in privately-held companies accounted for under the equity or cost method and are not required to be consolidated under the variable interest or voting models. As of December 31, 2015 and June 30, 2016, investments accounted for under the equity method had a carrying value of approximately $1.6 billion and $1.7 billion, respectively. Our share of gains and losses in equity method investments was a net loss of approximately $59 million and $89 million for the three and six months ended June 30, 2015 and $43 million and $148 million for the three and six months ended June 30, 2016. We reflect these losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. As of December 31, 2015 and June 30, 2016, investments accounted for under the cost method had a carrying value of $2.6 billion and $3.0 billion, respectively, and a fair value of approximately $7.5 billion and $8.1 billion, respectively. The fair value of the cost method investments are primarily determined from data leveraging private-market transactions and are classified within Level 3 in the fair value hierarchy. We periodically review our non-marketable equity investments for impairment. No material impairments were recognized for the three and six months ended June 30, 2015 and 2016.

Certain renewable energy investments included in our non-marketable equity investments are variable interest entities (VIEs). Our involvement with investments in renewable energy relate to our equity investments in entities whose activities involve power generation. We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly impact the entity's economic performance such as setting operating budgets. Therefore, we do not consolidate these entities in our financial statements because we do not have the power to direct the activities of the VIE that most significantly impact the VIEs economic performance. We account for these investments under the equity method. The carrying value of our renewable energy investments accounted for under the equity method that are VIEs is $1.3 billion with the maximum exposure of $1.3 billion as of December 31, 2015 and $1.3 billion with the maximum exposure of $1.3 billion as of June 30, 2016, respectively.  The maximum exposure is based on current investments to date plus future funding commitments.  We have determined the single source of our exposure to these VIEs is our capital investment in these entities. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We

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also reconsider whether entities previously determined not to be VIEs have become VIEs and vice versa, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

Non-Marketable Debt Securities

Our non-marketable debt securities are primarily preferred stock that are redeemable at our option and convertible notes issued by private companies. The cost of these securities was $1.0 billion and $1.1 billion as of December 31, 2015 and June 30, 2016, respectively. These debt securities do not have readily determinable market values and are categorized accordingly as Level 3 in the fair value hierarchy. To estimate the fair value of these securities, we use a combination of valuation methodologies, including market and income approaches based on prior transaction prices; estimated timing, probability, and amount of cash flows; and illiquidity considerations. Financial information of private companies may not be available and consequently we will estimate the value based on the best available information at the measurement date. No material impairments were recognized for the three and six months ended June 30, 2015 and 2016.

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

	Six Months Ended
	June 30,
	2015		2016
Beginning balance	$	90	$	1,024
Total net gains or losses
Included in other comprehensive income	0		90
Purchases	908		76
Sales	0		(6		)
Settlements	0		(14		)
Ending balance	$	998	$	1,170

Note 4. Debt

Short-Term Debt

Google had a short-term debt financing program of up to $3.0 billion through the issuance of commercial paper and a $3.0 billion revolving credit facility as of December 31, 2015. In February 2016, we replaced Google's existing debt financing program with a new short-term debt financing program that allows us to issue up to $5.0 billion of commercial paper from time to time and to draw on a $4.0 billion revolving credit facility, which expires in February 2021. Net proceeds from these programs are used for general corporate purposes. As of December 31, 2015 and June 30, 2016, we had $2.0 billion of outstanding commercial paper recorded as short-term debt with weighted-average interest rates of 0.2% and 0.5%, respectively. The interest rate for the credit facility is determined based on a formula using certain market rates. No amounts were outstanding under the credit facility as of December 31, 2015 and June 30, 2016. The estimated fair value of the short-term debt approximated its carrying value as of December 31, 2015 and June 30, 2016.

In August 2013, we entered into a capital lease obligation on certain property which expires in 2028. We intend to exercise the option to purchase the property in the second half of 2016. The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value as of December 31, 2015 and June 30, 2016.

Long-Term Debt

Google issued $3.0 billion of unsecured senior notes in three tranches (collectively, the "2011 Notes") in May 2011, due in 2014, 2016, and 2021, as well as $1.0 billion of unsecured senior notes (the "2014 Notes") in February 2014 due 2024. The net proceeds from the issuance of the 2011 Notes were used to repay a portion of the outstanding commercial paper and for general corporate purposes. The net proceeds from the issuance of the 2014 Notes were used for the repayment of the portion of the principal amount of our 2011 Notes which matured on May 19, 2014 and for general corporate purposes. We repaid $1.0 billion of the 2011 Notes in May 2016.

In April 2016, we completed an exchange offer with eligible holders of Google’s 3.625% Notes due 2021 and 3.375% Notes due 2024 (collectively, the "Google Notes"). An aggregate principal amount of approximately $1.7 billion of the Google Notes was exchanged for approximately $1.7 billion of the notes of Alphabet with identical interest rate

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and maturity (the "Alphabet Notes"). Because the exchange was between a parent and the subsidiary company and for substantially identical notes, the change was treated as a debt modification for accounting purposes with no gains or losses recognized. The total outstanding long-term debt is summarized below (in millions):

	As of December 31, 2015			As of June 30, 2016
				(unaudited)
Short-Term Portion of Long-Term Debt
2.125% Notes due on May 19, 2016	$	1,000		$	0
Capital Lease Obligation	225			220
Total Short-Term Portion of Long-Term Debt	$	1,225		$	220
Long-Term Debt
3.625% Notes due on May 19, 2021	$	1,000		$	1,000
3.375% Notes due on February 25, 2024	1,000			1,000
Unamortized discount for the Notes above	(5		)	(16		)
Total Long-Term Debt(1)	$	1,995		$	1,984

⁽¹⁾  Includes portion of the Google Notes issued in 2011 and 2014 and the Alphabet Notes exchanged in 2016.

The effective interest yields of the outstanding Notes due in 2021 and 2024 were 3.734%, and 3.377%, respectively with interest payable semi-annually. The Alphabet Notes due in 2021 and 2024 rank equally with each other and are structurally subordinated to the Google Notes. We may redeem these Notes at any time in whole or in part at specified redemption prices. The total estimated fair value of all outstanding notes was approximately $3.1 billion as of December 31, 2015 and $2.2 billion as of June 30, 2016. 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.

Note 5. Balance Sheet Components

Property and Equipment

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

	As of December 31, 2015			As of June 30, 2016
				(unaudited)
Land and buildings	$	16,518		$	18,770
Information technology assets	13,645			14,511
Construction in progress	7,324			7,601
Leasehold improvements	2,576			2,938
Furniture and fixtures	83			84
Property and equipment, gross	40,146			43,904
Less: accumulated depreciation and amortization	(11,130		)	(12,491		)
Property and equipment, net	$	29,016		$	31,413

As of June 30, 2016, assets under capital lease with a cost basis of $484 million and assets held for sale of $515 million were included in property and equipment.

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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 on Cash Flow Hedges			Total
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27
Other comprehensive income (loss) before reclassifications	(705		)	(115		)	501			(319		)
Amounts reclassified from AOCI	0			(77		)	(560		)	(637		)
Other comprehensive income (loss)	(705		)	(192		)	(59		)	(956		)
Balance as of June 30, 2015	$	(1,685	)	$	229		$	527		$	(929	)

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)
Other comprehensive income (loss) before reclassifications	37			556			116			709
Amounts reclassified from AOCI	0			183			(169		)	14
Other comprehensive income (loss)	37			739			(53		)	723
Balance as of June 30, 2016	$	(2,010	)	$	653		$	206		$	(1,151	)

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

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Three Months Ended						Six Months Ended
		June 30,						June 30,
AOCI Components	Location	2015			2016			2015			2016
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	53		$	(14	)	$	85		$	(183	)
	Provision for income taxes	(3		)	0			(8		)	0
	Net of tax	$	50		$	(14	)	$	77		$	(183	)
Unrealized gains on cash flow hedges
Foreign exchange contracts	Revenue	$	471		$	78		$	782		$	247
Interest rate contracts	Other income (expense), net	1			2			2			3
	Provision for income taxes	(143		)	(28		)	(224		)	(81		)
	Net of tax	$	329		$	52		$	560		$	169
Total amount reclassified, net of tax		$	379		$	38		$	637		$	(14	)

Note 6. Calico

On September 18, 2013, we announced the formation of Calico, a life science company with a mission to harness advanced technologies to increase our understanding of the biology that controls lifespan. As of June 30, 2016, we have contributed $240 million to Calico in exchange for Calico convertible preferred units and have also committed to fund an additional $490 million on an as-needed basis.

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Calico is a VIE and its results of operations and statement of financial position are included in our consolidated financial statements as we have the power to direct the activities that most significantly impact its economic performance.

In September 2014, AbbVie Inc. (AbbVie) and Calico announced a research and development collaboration intended to help both companies discover, develop, and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. As of June 30, 2016, AbbVie has contributed $750 million to fund the collaboration pursuant to the agreement, which reflects its total commitment. As of June 30, 2016, Calico has contributed $250 million and committed up to an additional $500 million.

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

Note 7. Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2016 were as follows (in millions, unaudited):

	Google			Other Bets			Total Consolidated
Balance as of December 31, 2015	$	15,456		$	413		$	15,869
Acquisitions	10			1			11
Foreign currency translation and other adjustments	(32		)	(7		)	(39		)
Balance as of June 30, 2016	$	15,434		$	407		$	15,841

Other Intangible Assets

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

	As of December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Patents and developed technology	$	6,592	$	3,213	$	3,379
Customer relationships	1,343		1,201		142
Trade names and other	795		469		326
Total	$	8,730	$	4,883	$	3,847
	As of June 30, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
	(unaudited)
Patents and developed technology	$	6,597	$	3,568	$	3,029
Customer relationships	1,344		1,225		119
Trade names and other	805		501		304
Total	$	8,746	$	5,294	$	3,452

Amortization expense relating to our purchased intangible assets was $222 million and $461 million for the three and six months ended June 30, 2015 and $210 million and $426 million for the three and six months ended June 30, 2016.

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As of June 30, 2016, 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 2016	$	400
2017	736
2018	648
2019	538
2020	443
Thereafter	687
	$	3,452

Note 8. Other Income (Expense), Net

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Interest income	$	240		$	307		$	466		$	577
Interest expense	(26		)	(32		)	(52		)	(62		)
Foreign currency exchange losses, net	(99		)	(128		)	(161		)	(314		)
Gain (loss) on marketable securities, net	53			(9		)	85			(176		)
Loss on non-marketable investments, net	(70		)	(5		)	(118		)	(118		)
Other	33			18			68			31
Other income (expense), net	$	131		$	151		$	288		$	(62	)

Note 9. Contingencies

Legal Matters

Antitrust Investigations

On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an investigation into various antitrust-related complaints against us. On April 15, 2015, the EC issued a Statement of Objections (SO) regarding the display and ranking of shopping search results, to which we responded on August 27, 2015. On April 20, 2016, the EC issued an SO regarding certain Android distribution practices. On July 14, 2016, the EC issued a Supplementary SO regarding shopping search results and an SO regarding the syndication of AdSense for Search. We will respond to the SOs and Supplementary SO and will continue to cooperate with the EC.

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

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

Patent and Intellectual Property Claims

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

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importing many important products into the U.S. or necessitating workarounds that may limit certain features of our products.

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

Oracle America, Inc. (Oracle) brought a copyright lawsuit against Google in the Northern District of California, alleging that Google's Android 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 case is pending post-trial motions and any further appeals by Oracle. 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, government investigations, and other proceedings involving competition (such as the pending EC investigations described above), intellectual property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Such claims, suits, government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences.

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

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

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

Indirect Taxes

We are under audit by various domestic and foreign tax authorities with regards to indirect tax matters. The subject matter of indirect tax audits primarily arise from disputes on the tax treatment and tax rate applied to the sale of our products and services in these jurisdictions. We accrue indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. For certain matters, while the loss is reasonably possible, the loss or range of loss cannot be estimated. We believe these matters are without merit and 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 12.

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Note 10. 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 June 30,
	2015								2016
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings	1,440			260			1,709		2,086			350			2,441
Total	$	1,440		$	260		$	2,231	$	2,086		$	350		$	2,441
Denominator
Number of shares used in per share computation	288,723			52,114			342,780		293,564			49,228			343,427
Basic net income per share	$	4.99		$	4.99		$	6.51	$	7.11		$	7.11		$	7.11
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings for basic computation	$	1,440		$	260		$	1,709	$	2,086		$	350		$	2,441
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	260			0			0		350			0			0
Reallocation of undistributed earnings	(7		)	(3		)	7		(22		)	(6		)	22
Allocation of undistributed earnings	$	1,693		$	257		$	1,716	$	2,414		$	344		$	2,463
Denominator
Number of shares used in basic computation	288,723			52,114			342,780		293,564			49,228			343,427
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	52,114			0			0		49,228			0			0
Employee stock options	1,546			0			1,502		1,603			0			1,531
Restricted stock units and other contingently issuable shares	807			0			3,406		598			0			6,896
Number of shares used in per share computation	343,190			52,114			347,688		344,993			49,228			351,854
Diluted net income per share	$	4.93		$	4.93		$	6.43	$	7.00		$	7.00		$	7.00

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	Six Months Ended June 30,
	2015								2016
	(unaudited)
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings	2,921			533			3,470		3,880			656			4,548
Total	$	2,921		$	533		$	3,992	$	3,880		$	656		$	4,548
Denominator
Number of shares used in per share computation	287,800			52,480			341,986		293,415			49,584			343,870
Basic net income per share	$	10.15		$	10.15		$	11.68	$	13.23		$	13.23		$	13.23
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings for basic computation	$	2,921		$	533		$	3,470	$	3,880		$	656		$	4,548
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	533			0			0		656			0			0
Reallocation of undistributed earnings	(15		)	(7		)	15		(42		)	(11		)	42
Allocation of undistributed earnings	$	3,439		$	526		$	3,485	$	4,494		$	645		$	4,590
Denominator
Number of shares used in basic computation	287,800			52,480			341,986		293,415			49,584			343,870
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	52,480			0			0		49,584			0			0
Employee stock options	1,619			0			1,577		1,649			0			1,574
Restricted stock units and other contingently issuable shares	922			0			3,805		706			0			7,282
Number of shares used in per share computation	342,821			52,480			347,368		345,354			49,584			352,726
Diluted net income per share	$	10.03		$	10.03		$	11.53	$	13.01		$	13.01		$	13.01

In the three and six months ended June 30, 2015, the Class C Adjustment Payment was allocated to the numerator for calculating net income per share of Class C capital stock from net income available to all stockholders and the remaining undistributed earnings were allocated on a pro rata basis to Class A and Class B common stock and Class C capital stock based on the number of shares used in the per share computation for each class of stock. The weighted-average share impact of the Class C Adjustment Payment is included in the denominator of both basic and diluted net income per share computations for the three and six months ended June 30, 2015.

In the three and six months ended June 30, 2016, 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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Note 11. Stockholders’ Equity

Stock-Based Compensation

The following table presents our aggregate stock-based compensation (SBC) expense by type of costs and expenses per the Consolidated Statements of Income (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Cost of revenues	$	163	$	255	$	323	$	496
Research and development	583		746		1,198		1,491
Sales and marketing	196		238		401		480
General and administrative	190		271		413		543
Total stock-based compensation expense	$	1,132	$	1,510	$	2,335	$	3,010

SBC expense associated with awards expected to be ultimately settled in cash was $0 million for both the three and six months ended June 30, 2015, and $7 million and $13 million for the three and six months ended June 30, 2016, respectively. Awards which we expect to be ultimately settled in cash are classified as liabilities in our Consolidated Balance Sheets.

Beginning in Q1 2016, we account for forfeitures as they occur, rather than estimate expected forfeitures. The net cumulative effect of this change was recognized as a $133 million reduction to retained earnings as of January 1, 2016.

Stock-Based Award Activities

The following table summarizes the activities for our stock options for the six months ended June 30, 2016:

	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions) (1)
	(unaudited)
Balance as of December 31, 2015	4,898,983		$	221.31
Granted	0		N/A
Exercised	(496,891	)	$	191.01
Forfeited/canceled	(5,935	)	$	239.95
Balance as of June 30, 2016	4,396,157		$	224.68	3.1	$	2,081
Exercisable as of June 30, 2016	4,267,129		$	221.89	3.0	$	2,031

⁽¹⁾  The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $703.53 and $692.10 for our Class A common stock and Class C capital stock, respectively, on June 30, 2016.

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The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2016:

	Unvested Restricted Stock Units
	Number of Shares		Weighted- Average Grant-Date Fair Value
	(unaudited)
Unvested as of December 31, 2015	25,741,186		$	531.74
Granted	2,553,113		$	726.71
Vested	(6,004,585	)	$	496.45
Forfeited/canceled	(705,791	)	$	523.12
Unvested as of June 30, 2016	21,583,923		$	564.63

As of June 30, 2016, there was $11.0 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.5 years.

Share Repurchases

In October 2015, the board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock, commencing in the fourth quarter of 2015. In January 2016, the board of directors of Alphabet authorized the company to repurchase an additional amount of approximately 514 thousand shares. The repurchases were being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through the use of 10b5-1 plans. For the six months ended June 30, 2016, we repurchased and subsequently retired approximately 5.2 million shares of Alphabet Class C capital stock for an aggregate amount of approximately $3.7 billion. As of June 30, 2016, we completed all authorized share repurchases under our repurchase program.

Note 12. Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Our total gross unrecognized tax benefits were $4.2 billion and $4.4 billion as of December 31, 2015 and June 30, 2016. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $3.6 billion and $3.8 billion as of December 31, 2015 and June 30, 2016. Our existing tax positions will continue to generate an increase in liabilities for unrecognized tax benefits.

Our effective tax rate is lower than the U.S. statutory rate primarily because of more earnings realized in countries that have lower statutory tax rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States.

In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust the provision for income taxes in the period such resolution occurs. Although timing of the resolution and/or closure of audits is not certain, we do not believe it is reasonably possible that the unrecognized tax benefits will materially change in the next 12 months.

We have received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend against any and all such claims as presented. While we believe it is more likely than not that our tax position will be sustained, it is reasonably possible that we will have future obligations related to these matters.

For information regarding indirect taxes, see Note 9.

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Note 13. 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, these operating segments are combined and disclosed below as Other Bets.

Our reported segments are described below:

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

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

Revenue, cost of revenue, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our Chief Operating Decision Maker does not evaluate operating segments using asset information. Prior period segment information has been recast to conform to the current period segment presentation.

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Revenues:
Google	$	17,653	$	21,315	$	34,831	$	41,407
Other Bets	74		185		154		350
Total revenues	$	17,727	$	21,500	$	34,985	$	41,757

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Operating income (loss):
Google	$	5,608		$	6,994		$	10,777		$	13,243
Other Bets	(660		)	(859		)	(1,272		)	(1,637		)
Reconciling items(1)	(123		)	(167		)	(233		)	(296		)
Total income from operations	$	4,825		$	5,968		$	9,272		$	11,310

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2015		2016			2015		2016
Capital expenditures:
Google	$	2,060	$	2,056		$	4,741	$	4,095
Other Bets	232		280			386		557
Reconciling items(2)	223		(213		)	315		(101		)
Total capital expenditures as presented in Consolidated Statements of Cash Flows	$	2,515	$	2,123		$	5,442	$	4,551

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

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Stock-based compensation:
Google	$	996	$	1,320	$	2,054	$	2,642
Other Bets	105		150		219		289
Reconciling items(3)	31		33		62		66
Total stock based compensation(4)	$	1,132	$	1,503	$	2,335	$	2,997
Depreciation, amortization, and impairment:
Google	$	1,189	$	1,409	$	2,326	$	2,726
Other Bets	45		81		85		135
Total depreciation, amortization, and impairment as presented in Consolidated Statements of Cash Flows	$	1,234	$	1,490	$	2,411	$	2,861

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

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

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015(1)		2016		2015		2016
Revenues:
United States	$	8,048	$	10,035	$	15,769	$	19,416
United Kingdom	1,678		1,914		3,353		3,835
Rest of the world	8,001		9,551		15,863		18,506
Total revenues	$	17,727	$	21,500	$	34,985	$	41,757

	As of December 31, 2015		As of June 30, 2016
			(unaudited)
Long-lived assets:
United States	$	43,686	$	46,142
International	13,661		13,912
Total long-lived assets	$	57,347	$	60,054

Note 14. Subsequent Event

On August 2, 2016, we priced a registered public debt offering of $2.0 billion aggregate principal amount of 1.998% notes due 2026 (the "2026 Notes"). We expect to receive net proceeds of approximately $1,948 million from the sale of the 2026 Notes, after deducting offering discounts and estimated offering expenses, which we intend to use for general corporate purposes, including the repayment of outstanding commercial paper. We will not be subject to any financial covenants under the 2026 Notes. The offering is expected to close on August 9, 2016.

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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

Here are our key financial results for the three months ended June 30, 2016:

• Revenues of $21.5 billion and revenue growth of 21% year over year, constant currency revenue growth of 25% year over year.

• Google segment revenues of $21.3 billion with revenue growth of 21% year over year and Other Bets revenues of $0.2 billion.

• Revenues from the United States, the United Kingdom, and Rest of the world were $10.0 billion, $1.9 billion, and $9.6 billion, respectively.

• Cost of revenues was $8.1 billion, consisting of traffic acquisition costs of $4.0 billion and other cost of revenues of $4.1 billion. Traffic acquisition costs as a percentage of advertising revenues was 21%.

• Operating expenses (excluding cost of revenues) were $7.4 billion.

• Income from operations was $6.0 billion.

• Effective tax rate was 20%.

• Net income was $4.9 billion with diluted net income per share for Class A and B common stock and Class C capital stock of $7.00.

• Operating cash flow was $9.1 billion.

• Capital expenditures were $2.1 billion.

• Headcount increased to 66,575 as of June 30, 2016.

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, these operating segments are combined and disclosed below as Other Bets.

Our reported segments are described below:

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

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

Please refer to Note 13 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information about our segments. Prior period segment information has been recast to conform to the current period segment presentation.

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Consolidated Results of Operations

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
	(unaudited)
Consolidated Statements of Income Data:
Revenues	100	%	100	%	100	%	100	%
Costs and expenses:
Cost of revenues	37.1		37.8		37.0		37.8
Research and development	15.7		15.6		15.8		16.1
Sales and marketing	11.8		11.2		11.8		11.5
General and administrative	8.2		7.6		8.9		7.5
Total costs and expenses	72.8		72.2		73.5		72.9
Income from operations	27.2		27.8		26.5		27.1
Other income (expense), net	0.8		0.7		0.8		(0.2	)
Income before income taxes	28.0		28.5		27.3		26.9
Provision for income taxes	5.8		5.8		6.0		5.1
Net income	22.2	%	22.7	%	21.3	%	21.8	%

Consolidated Revenues

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
	(unaudited)
Google segment
Google websites	$	12,402	$	15,400	$	24,334	$	29,728
Google Network Members' websites	3,621		3,743		7,197		7,435
Google advertising revenues	16,023		19,143		31,531		37,163
Google other revenues	1,630		2,172		3,300		4,244
Google segment revenues	$	17,653	$	21,315	$	34,831	$	41,407
Other Bets
Other Bets revenues	$	74	$	185	$	154	$	350
Consolidated revenues	$	17,727	$	21,500	$	34,985	$	41,757

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Google segment

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Google segment revenues	$	17,653		$	21,315		$	34,831		$	41,407
Google segment revenues as a percentage of consolidated revenues	99.6		%	99.1		%	99.6		%	99.2		%
Aggregate paid clicks change				29		%				29		%
Aggregate cost-per-click change				(7		)%				(8		)%

Use of Monetization Metrics

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

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

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

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

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

• advertiser competition for keywords;

• changes in foreign currency exchange rates;

• seasonality;

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

• changes in advertising quality or formats;

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

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

• general economic conditions.

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

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Google websites

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Google websites	$	12,402		$	15,400		$	24,334		$29,728
Google websites as a percentage of Google segment revenues	70.3		%	72.2		%	69.9		%	71.8	%
Paid clicks change				37		%				38	%
Cost-per-click change				(9		)%				(10	)%

Google websites revenues consist primarily of:

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

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

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

Our Google websites revenues increased$2,998 million from the three months ended June 30, 2015 to the three months ended June 30, 2016 and increased$5,394 million from the six months ended June 30, 2015 to the six months ended June 30, 2016. Our Google websites revenues also increased as a percentage of Google segment revenues. Our Google websites revenue growth was primarily driven by increases in mobile search most notably due to the improvements in ad formats and delivery launched in Q3 2015. We also experienced growth in desktop and tablet search due to improvement in ad format, as well as growth in YouTube driven primarily by video advertising across TrueView and Google Preferred, partially offset by the general strengthening of the U.S. dollar compared to certain foreign currencies.

The number of paid clicks through our advertising programs increased due to growth in the adoption of YouTube engagement ads, improvements we have made in ad formats and delivery, and continued global expansion of our products, advertisers and user base across all platforms, particularly mobile. The positive impact on our revenues from paid clicks was partially offset by a decrease in the cost-per-click paid by our advertisers. The decrease in cost-per-click was primarily driven by continued growth in YouTube engagement ads where cost-per-click remains lower than on our other platforms, and also impacted by changes in device mix, property mix, product mix, geographic mix, and ongoing product changes, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

Google Network Members' websites

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Google Network Members' websites	$	3,621		$	3,743		$	7,197		$	7,435
Google Network Members' websites revenues as a percentage of Google segment revenues	20.5		%	17.6		%	20.7		%	18.0		%
Paid clicks change				0		%				1		%
Cost-per-click change				(8		)%				(8		)%

Google Network Members' websites revenues consist primarily of:

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

• AdExchange;

• AdMob; and

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• All DoubleClick-related revenues including DoubleClick Bid Manager revenues.

Our Google Network Members' websites revenues increased$122 million from the three months ended June 30, 2015 to the three months ended June 30, 2016 and increased$238 million from the six months ended June 30, 2015 to the six months ended June 30, 2016. The growth was primarily driven by strength in programmatic advertising buying, offset by our traditional network businesses and the general strengthening of the U.S. dollar compared to certain foreign currencies. The decrease in Network Members' websites revenues as a percentage of Google segment revenues is due to relatively slower growth of Network Members' websites revenues compared to that of Google websites revenues as well as Google other revenues.

The change in paid clicks and decrease in cost-per-click paid by our advertisers resulted from ongoing product and policy changes, changes in property and device mix, product mix, and geographic mix, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

Google other revenues

The following table presents our Google other revenues (in millions) for the periods presented:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Google other revenues	$	1,630		$	2,172		$	3,300		$	4,244
Google other revenues as a percentage of Google segment revenues	9.2		%	10.2		%	9.4		%	10.2		%

Google other revenues consist primarily of:

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

• Sales of certain hardware, such as Chromecast;

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

•Licensing-related revenue.

Our Google other revenues increased$542 million from the three months ended June 30, 2015 to the three months ended June 30, 2016 and increased$944 million from the six months ended June 30, 2015 to the six months ended June 30, 2016. Google other revenues increased as a percentage of Google segment revenues. These increases were primarily due tothe growth in revenues from cloud and apps offerings for enterprise as well as Google Play, primarily relating to apps (revenues which we recognize net of payout to developers). In addition, there was an increase in revenues from hardware sales.

Other Bets

The following table presents our Other Bets revenues (in millions) for the periods presented:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Other Bets revenues	$	74		$	185		$	154		$	350
Other Bets revenues as a percentage of consolidated revenues	0.4		%	0.9		%	0.4		%	0.8		%

Other Bets revenues consist primarily of:

• Sales of Nest branded hardware;

• Revenues from internet and TV services; and

• Revenues from licensing and R&D services.

Our Other Bets revenues increased$111 million from the three months ended June 30, 2015 to the three months ended June 30, 2016 and increased$196 million from the six months ended June 30, 2015 to the six months ended June 30, 2016. Our Other Bets revenues increased as a percentage of consolidated revenues. These increases were primarily driven by sales of Nest branded hardware and revenues from licensing and R&D services. In addition, there was an increase in revenues from internet and TV services.

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Due to the early stage of our Other Bets businesses and because our Other Bets revenues aggregates the revenues from a number of businesses operating in different industries, our Other Bets revenues may fluctuate for the remainder of 2016 and in future periods. Additionally, our Other Bets revenues may fluctuate due to one-time items.

Consolidated Revenues by Geography

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
	(unaudited)
United States	45	%	47	%	45	%	46	%
United Kingdom	10	%	9	%	10	%	9	%
Rest of the world	45	%	44	%	45	%	45	%

For the amounts of revenues by geography, please refer to Note 13 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 and Constant Currency Growth

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

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

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

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

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The following table presents our foreign exchange impact on United Kingdom revenues, Rest of the world revenues, and total consolidated revenues for the current period (in millions):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
United Kingdom revenues	$	1,678		$	1,914		$	3,353		$	3,835
Exclude: Foreign exchange impact on current year revenues using prior period rates	N/A			71			N/A			200
Exclude: Hedging (gains) recognized	(54		)	(37		)	(74		)	(79		)
Constant currency United Kingdom revenues	$	1,624		$	1,948		$	3,279		$	3,956
United Kingdom revenue growth rate				14		%				14		%
United Kingdom constant currency revenue growth rate				20		%				21		%
Rest of the world revenues	$	8,001		$	9,551		$	15,863		$	18,506
Exclude: Foreign exchange impact on current year revenues using prior period rates	N/A			42			N/A			675
Exclude: Hedging (gains) recognized	(417		)	(41		)	(708		)	(168		)
Constant currency Rest of the world revenues	$	7,584		$	9,552		$	15,155		$	19,013
Rest of the world revenue growth rate				19		%				17		%
Rest of the world constant currency revenue growth rate				26		%				25		%
United States revenues	$	8,048		$	10,035		$	15,769		$	19,416
United States revenue growth rate				25		%				23		%
Total consolidated revenues	$	17,727		$	21,500		$	34,985		$	41,757
Constant currency total consolidated revenues	$	17,256		$	21,535		$	34,203		$	42,385
Total consolidated revenue growth rate				21		%				19		%
Constant currency total consolidated revenue growth rate				25		%				24		%

For the three and six months ended June 30, 2016, our revenues from the United Kingdom were unfavorably impacted by changes in foreign currency exchange rates as the U.S. dollar strengthened relative to the British pound.

For the three months ended June 30, 2016 our revenues from the Rest of the world (excluding the United Kingdom) were unfavorably impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar strengthened relative to various currencies including the Brazilian Real, partially offset by the impact of the U.S. dollar weakening relative to the Euro and the Japanese Yen. For the six months ended June 30, 2016 our revenues from the Rest of the world (excluding the United Kingdom) were unfavorably impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar strengthened relative to the Euro and Brazilian Real, partially offset by the impact of the U.S. dollar weakening relative to the Japanese Yen.

Consolidated Costs and Expenses

Cost of Revenues

Cost of revenues consists primarily of traffic acquisition costs (TAC) which are the advertising revenues shared with our Google Network Members and amounts paid to our distribution partners. TAC paid to our distribution partners includes amounts paid to make available our access points and services. Our distribution partners include software developers, browser providers, mobile carriers, and original equipment manufacturers. TAC paid to our Google Network Members are the revenue share payments we make to those parties that allow us to place ads on their websites.

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

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

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

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

• Stock-based compensation expense;

• Inventory costs for hardware we sell; and

• Amortization of certain intangible assets.

The following tables present our cost of revenues as well as our traffic acquisition costs for the periods presented (in millions):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Traffic acquisition costs	$	3,377		$	3,975		$	6,722		$	7,763
Other cost of revenues	3,206			4,155			6,217			8,015
Total cost of revenues	$	6,583		$	8,130		$	12,939		$	15,778
Total cost of revenues as a percentage of revenues	37.1		%	37.8		%	37.0		%	37.8		%
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Traffic acquisition costs to distribution partners	$	945		$	1,352		$	1,858		$	2,569
Traffic acquisition costs to distribution partners as a percentage of Google websites revenues	7.6		%	8.8		%	7.6		%	8.6		%
Traffic acquisition costs to Google Network Members	$	2,432		$	2,623		$	4,864		$	5,194
Traffic acquisition costs to Google Network Members as a percentage of Google Network Members' websites revenues	67.2		%	70.1		%	67.6		%	69.9		%
Traffic acquisition costs	$	3,377		$	3,975		$	6,722		$	7,763
Traffic acquisition costs as a percentage of advertising revenues	21.1		%	20.8		%	21.3		%	20.9		%

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

Cost of revenues increased$1,547 million and increased as a percentage of revenues from the three months ended June 30, 2015 to the three months ended June 30, 2016 and increased$2,839 million from the six months ended June 30, 2015 to the six months ended June 30, 2016. These increases in dollar amounts were primarily driven by increases in traffic acquisition costs of $598 million and $1,041 million, respectively, resulting from more fees paid to our distribution partners and our Network Members driven primarily by an increase in advertising revenues.

The decrease in aggregate TAC as a percentage of advertising revenues was primarily a result of a shift of mix from Google Network Members' websites revenue to Google websites revenue. This was partially offset by the impact of the increase in mobile and programmatic advertising buying, which generally carry overall higher TAC. The increases in TAC to distribution partners as a percentage of Google websites revenues were primarily driven by a shift to mobile because more mobile searches are subject to TAC. The increases in TAC to Google Network Members as a percentage of Google Network Members' websites revenues were primarily driven by the shift in advertising buying from our traditional network business to programmatic advertising buying.

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The remaining increase in cost of revenues was due to increases in data center costs, content acquisition costs as a result of increased activities related to YouTube and digital content, and hardware inventory costs.

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

• The relative revenue growth rates of Google websites and our Google Network Members’ websites;

• Traffic acquisition costs paid to our distribution partners, which are affected by changes in:

◦ device mix between mobile, desktop, and tablet,

◦ partner mix,

◦ partner agreement terms such as revenue share arrangements, and

◦ the percentage of queries channeled through paid access points;

• Traffic acquisition costs paid to Google Network Members, which are affected by ongoing adoption of programmatic advertising buying and changes in partner agreement terms;

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

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

Research and Development

The following table presents our R&D expenses (in millions) for the periods presented:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Research and development expenses	$	2,789		$	3,363		$	5,542		$	6,730
Research and development expenses as a percentage of revenues	15.7		%	15.6		%	15.8		%	16.1		%

R&D expenses consist primarily of:

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

• Depreciation and equipment-related expenses; and

• Stock-based compensation expense.

R&D expenses increased$574 million and remained relatively flat as a percentage of revenues from the three months ended June 30, 2015 to the three months ended June 30, 2016. The increase was primarily due to an increase in labor and facilities-related costs of $218 million and an increase in stock-based compensation expense of $163 million, both largely as a result of a 16% increase in R&D headcount. In addition, there was an increase in depreciation and equipment-related expenses of $127 million and an increase in professional service fees of $66 million primarily due to additional expenses incurred for consulting, temporary services, and outsourced services.

R&D expenses increased$1,188 million and increased slightly as a percentage of revenues from the six months ended June 30, 2015 to the six months ended June 30, 2016. The increase was primarily due to an increase in labor and facilities-related costs of $560 million and an increase in stock-based compensation expense of $293 million, both largely as a result of a 14% increase in R&D headcount. In addition, there was an increase in depreciation and equipment-related expenses of $200 million and an increase in professional service fees of $129 million primarily due to additional expenses incurred for consulting, temporary services, and outsourced services.

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

Sales and Marketing

The following table presents our sales and marketing expenses (in millions) for the periods presented:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Sales and marketing expenses	$	2,080		$	2,415		$	4,145		$	4,802
Sales and marketing expenses as a percentage of revenues	11.8		%	11.2		%	11.8		%	11.5		%

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Sales and marketing expenses consist primarily of:

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

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

• Stock-based compensation expense.

Sales and marketing expenses increased$335 million and decreased as a percentage of revenues from the three months ended June 30, 2015 to the three months ended June 30, 2016. The increase in dollar amount was primarily due to an increase in labor and facilities-related costs of $136 million and an increase in stock-based compensation expense of $42 million, largely resulting from an 11% increase in sales and marketing headcount. There was also an increase in advertising and promotion expense of $98 million and an increase in professional service fees of $26 million due to additional expenses incurred for temporary services, consulting, and outsourced services.

Sales and marketing expenses increased$657 million and decreased slightly as a percentage of revenues from the six months ended June 30, 2015 to the six months ended June 30, 2016. The increase in dollar amount was primarily due to an increase in labor and facilities-related costs of $256 million and an increase in stock-based compensation expense of $79 million, largely resulting from a 10% increase in sales and marketing headcount. There was also an increase in advertising and promotion expense of $189 million and an increase in professional service fees of $57 million due to additional expenses incurred for temporary services, consulting, and outsourced services.

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

General and Administrative

The following table presents our general and administrative expenses (in millions) for the periods presented:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
General and administrative expenses	$	1,450		$	1,624		$	3,087		$	3,137
General and administrative expenses as a percentage of revenues	8.2		%	7.6		%	8.9		%	7.5		%

General and administrative expenses consist primarily of:

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

• Depreciation and equipment-related expenses;

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

• Amortization of certain intangible assets; and

• Stock-based compensation expense.

General and administrative expenses increased$174 million and decreased as a percentage of revenues from the three months ended June 30, 2015 to the three months ended June 30, 2016. The increase was primarily due to an increase in labor and facilities-related costs of $89 million and an increase in stock-based compensation expense of $81 million, largely resulting from a 13% increase in general and administrative headcount.

General and administrative expenses increased$50 million and decreased as a percentage of revenues from the six months ended June 30, 2015 to the six months ended June 30, 2016. The increase was primarily due to an increase in labor and facilities-related costs of $163 million and an increase in stock-based compensation expense of $130 million, largely resulting from a 14% increase in general and administrative headcount, as well as an increase in finance and other-related expenses of $88 million. This was largely offset by a decrease in professional services fees due to lower legal-related costs and a decrease in other miscellaneous expenses.

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

Stock-Based Compensation

The following table presents stock-based compensation expense for awards we expect to settle in equity (in millions) for the periods presented:

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	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Stock-based compensation	$	1,132		$	1,503		$	2,335		$	2,997
Stock-based compensation as a percentage of revenues	6.4		%	7.0		%	6.7		%	7.2		%

Stock-based compensation related to awards we expect to settle in equity increased$371 million and $662 million from the three and six months ended June 30, 2015 to the three and six months ended June 30, 2016, respectively. These increases were primarily driven by headcount growth.

We estimate stock-based compensation expense related to awards we expect to settle in equity to be approximately $5.6 billion in 2016 and $8.4 billion thereafter related to stock-based awards outstanding as of June 30, 2016. This estimate does not include expenses to be recognized related to stock-based awards granted after June 30, 2016.

Consolidated Other Income (Expense), Net

The following table presents other income (expense), net, (in millions) for the periods presented:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Other income (expense), net	$	131		$	151		$	288		$	(62	)
Other income (expense), net, as a percentage of revenues	0.8		%	0.7		%	0.8		%	(0.2		)%

Other income (expense), net, increased$20 million from the three months ended June 30, 2015 to the three months ended June 30, 2016. This increase was primarily related to an increase in interest income and reduced losses on non-marketable investments. These gains were partially offset by increased losses on marketable securities and increased losses from our foreign currency hedging program.

Other income (expense), net, decreased$350 million from the six months ended June 30, 2015 to the six months ended June 30, 2016. This decrease was primarily driven by increased losses on marketable securities and increased losses from our foreign currency hedging program, partially offset by an increase in interest income.

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

We expect that other income (expense), net, will fluctuate in dollar amount for the remainder of 2016 and future periods as it is largely driven by market dynamics.

Consolidated Provision for Income Taxes

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
	(unaudited)
Provision for income taxes	$	1,025		$	1,242		$	2,114		$	2,164
Effective tax rate	20.7		%	20.3		%	22.1		%	19.2		%

Our effective tax rate decreased from the three months ended June 30, 2015 to the three months ended June 30, 2016 primarily due to the recognition of excess tax benefits as a component of the provision for income taxes, partially offset by change in the full year forecast reflecting proportionately more earnings realized in countries with higher statutory tax rates and other items. Our provision for income taxes increased from the three months ended June 30, 2015 to the three months ended June 30, 2016 primarily due to an increase in taxable income year over year.

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Our effective tax rate decreased from the six months ended June 30, 2015 to the six months ended June 30, 2016 primarily due to the recognition of excess tax benefits as a component of the provision for income taxes, partially offset by other items. Our provision for income taxes increased from the six months ended June 30, 2015 to the six months ended June 30, 2016 primarily due to an increase in taxable income year over year.

Our effective tax rate could fluctuate significantly on a quarterly basis and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates. Our effective tax rate could also fluctuate due to 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, tax effects related to stock-based compensation, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.

Capital Resources and Liquidity

As of June 30, 2016, we had $78.5 billion of cash, cash equivalents, and marketable securities. Cash equivalents and marketable securities are comprised of time deposits, money market and other funds, including cash collateral received related to our securities lending program, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments, debt instruments issued by municipalities in the U.S., corporate debt securities, agency mortgage-backed securities, and asset-backed securities. From time to time, we may hold marketable equity securities obtained through acquisitions or strategic investments in private companies that subsequently go public.

As of June 30, 2016, $47.8 billion of the $78.5 billion of cash, cash equivalents, and marketable securities was held by our foreign subsidiaries. If these funds were needed for our operations in the U.S., we would be required to accrue and pay U.S. taxes to repatriate these funds. However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to repatriate them to fund our U.S. operations.

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. 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 June 30, 2016, we had $2.0 billion of commercial paper outstanding recorded as short-term debt, with a weighted-average interest rate of 0.5% that matures at various dates through September 2016. In conjunction with this program, we have a $4.0 billion revolving credit facility expiring in February 2021. The interest rate for the credit facility is determined based on a formula using certain market rates. As of June 30, 2016, no amounts were outstanding under the credit facility. 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 May 2011, Google issued $3.0 billion of unsecured senior notes (collectively, the "2011 Notes") in three equal tranches, due in 2014, 2016, and 2021. The net proceeds from the sale of the 2011 Notes were used to repay a portion of the outstanding commercial paper and for general corporate purposes. In February 2014, Google issued $1.0 billion of unsecured senior notes (the "2014 Notes") due in 2024, which was used to repay $1.0 billion of the first tranche of our 2011 Notes that matured in May 2014 and for general corporate purposes. In May 2016, we paid off our $1.0 billion of the 2011 Notes upon maturity. As of June 30, 2016, the outstanding notes had a total carrying value of $2.0 billion and a total estimated fair value of $2.2 billion. In April 2016, we completed an exchange offer with eligible holders of Google’s 2011 Notes due 2021 and 2014 Notes due 2024. An aggregate principal amount of approximately $1.7 billion of the Google Notes was exchanged for approximately $1.7 billion of the Alphabet Notes.

In August 2013, we entered into a capital lease obligation on certain property expiring in 2028. As of June 30, 2016, the outstanding balance was $220 million and we intend to exercise the option to purchase the property in the second half of 2016.

In October 2015, the board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock, commencing in the fourth quarter of 2015. In January 2016, the board of directors of Alphabet authorized the company to repurchase an additional amount of approximately 514 thousand shares. The repurchases were executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through the use of 10b5-1 plans. For the six months ended June 30, 2016, we repurchased and subsequently retired approximately 5.2 million shares of Alphabet Class C capital stock for an aggregate amount of approximately $3.7 billion. As of June 30, 2016, we completed all authorized share repurchases under our repurchase program.

For the six months ended June 30, 2015 and 2016, our cash flows were as follows (in millions):

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	Six Months Ended
	June 30,
	2015			2016
	(unaudited)
Net cash provided by operating activities	$	13,818		$	16,778
Net cash used in investing activities	(12,407		)	(13,418		)
Net cash used in financing activities	(1,057		)	(6,351		)

Cash Provided by Operating Activities

Our largest source of cash provided by our operations is advertising revenues generated by Google websites and Google Network Members' websites. Additionally, we generate cash through sales of apps and digital content, hardware products, licensing arrangements, and service fees received for cloud and apps and our Maps API.

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, other general corporate expenditures, and income taxes.

Net cash provided by operating activities increased from the six months ended June 30, 2015 to the six months ended June 30, 2016 primarily due to increased net income adjusted for non cash adjustments, partially offset by a net decrease in cash from changes in working capital.

Cash Used in Investing Activities

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

Cash used in investing activities increased from the six months ended June 30, 2015 to the six months ended June 30, 2016. This was primarily due to increases in purchases of marketable securities partially offset by increases in maturities and sales of marketable securities and decreases in purchases of property and equipment.

Cash Used in Financing Activities

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

Cash used in financing activities increased from the six months ended June 30, 2015 to the six months ended June 30, 2016 primarily driven by repurchases of capital stock, increases in repayments of debt, and an increase in net payments related to stock-based award activities.

Contractual Obligations

We had long-term taxes payable of $4.1 billion as of June 30, 2016 primarily related to uncertain tax positions. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes.

Critical Accounting Policies and Estimates

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

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Please see Note 1 of Part I, Item 1 of this Quarterly Report on Form 10-Q for the summary of significant accounting policies. In addition, please see Part I, Item 7, "Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2015, as updated by the Form 8-K filed with the SEC on May 3, 2016. 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, 2015, as updated by the Form 8-K filed with the SEC on May 3, 2016.

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, and our Proxy Statements 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. You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You can get information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

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, including SEC filings, investor events, press and earnings releases, and blogs. 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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks, including changes in currency exchange rates and interest rates.

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 US dollar. Our most significant currency exposures are the Euro, British Pound, and Japanese yen. We are a net receiver of foreign currencies and therefore benefit from a weakening of the U.S. dollar and are adversely affected by a strengthening of the U.S. dollar relative to the foreign currency.

We use foreign exchange option contracts to protect our forecasted U.S. dollar-equivalent earnings from adverse changes in foreign currency exchange rates. These hedging contracts reduce, but do not entirely eliminate the impact of adverse currency exchange rate movements. We designate these option contracts as cash flow hedges for accounting purposes.  The fair value of the option contract is separated into its intrinsic and time values. Changes in the time value are recorded in other income (expense), net. Changes in the intrinsic value are recorded as a component of AOCI and subsequently reclassified into revenues to offset the hedged exposures as they occur.

We considered the historical trends in currency exchange rates and determined that it was reasonably possible that changes in exchange rates of 20% for our foreign currency options could be experienced in the near term. If the U.S. dollar weakened by 20%, the amount recorded in AOCI before tax effect would have been approximately $208 million lower as of June 30, 2016, and the total amount of expense recorded as other income (expense), net, would have been approximately $112 million higher as of June 30, 2016. If the U.S. dollar strengthened by 20%, the amount recorded in accumulated AOCI before tax effect would have been approximately $1.7 billion higher as of June 30, 2016, and the total amount of expense recorded as other income (expense), net, would have been approximately $157 million higher as of June 30, 2016. The impact in AOCI would offset our hedged foreign currency denominated revenues as they occur.

In addition, 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 impact of 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.

We considered the historical trends in currency exchange rates and determined that it was reasonably possible that adverse changes in exchange rates of 20% for all currencies could be experienced in the near term. These changes would have resulted in an adverse impact on income before income taxes of approximately $115 million as of June 30, 2016. The adverse impact as of June 30, 2016 is after consideration of the offsetting effect of approximately $1.1 billion from foreign exchange contracts in place for the month of June 30, 2016. These reasonably possible adverse changes in exchange rates of 20% were applied to total monetary assets and liabilities denominated in currencies other than the local currencies at the balance sheet dates to compute the adverse impact these changes would have had on our income before income taxes in the near term.

Interest Rate Risk

Our investment strategy is to achieve a return that will allow us to preserve capital and maintain liquidity requirements. We invest primarily in U.S. government and its agency securities, money market and other funds, corporate debt securities, mortgage-backed securities, debt instruments issued by foreign governments, municipal securities, time deposits, and asset backed securities. 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 impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. We account for both fixed and variable rate securities at fair value with changes on gains and losses recorded in AOCI until the securities are sold. We use interest rate derivative contracts to hedge realized gains and losses on our securities. These derivative contracts are accounted for at fair value with changes in fair value recorded in other income (expense), net.

We considered the historical volatility of interest rates and determined that it was reasonably possible that an adverse change of 100 basis points could be experienced in the near term. A hypothetical 1.00% (100 basis points) increase in interest rates would have resulted in a decrease in the fair values of our marketable securities and interest rate derivative contracts of approximately $1.6 billion as of June 30, 2016.

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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 Securities Exchange Act of 1934, as amended (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 June 30, 2016, 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, 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

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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, please refer to Note 9 “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 those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2015, as updated by the Form 8-K filed with the SEC on May 3, 2016, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock. There have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2015, as updated by the Form 8-K filed with the SEC on May 3, 2016.

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 June 30, 2016.

Period	Total Number of Shares Purchased (in thousands) (1)	Average Price Paid per Share (3)		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) (2)
April 1 - 30, 2016	0	$	0	0	$	1,408
May 1 - 31, 2016	1,905	$	712.94	1,905	$	50
June 1 - 30, 2016	68	$	735.03	68	$	—
Total	1,973	$	713.99	1,973

⁽¹⁾  In October 2015, the board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock, commencing in the fourth quarter of 2015. In January 2016, the board of directors of Alphabet authorized the company to repurchase an additional amount of approximately 514 thousand shares. Refer to Note 11 in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to share repurchases.

⁽²⁾  The dollar value of the additional 514 thousand shares authorized in January 2016 and yet to be repurchased as of each month end was calculated using actual repurchases during the quarter ended June 30, 2016. As of June 30, 2016, we completed all authorized share repurchases under our repurchase program.

⁽³⁾  Average price paid per share includes costs associated with the repurchases.

ITEM 6. EXHIBITS

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

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SIGNATURE

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

		ALPHABET INC.
August 4, 2016	By:	/s/    RUTH PORAT
		Ruth Porat
		Senior Vice President and Chief Financial Officer
		(Principal financial officer and duly authorized signatory)

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EXHIBIT INDEX

Exhibit Number		Description	Incorporated by reference herein
			Form	Date
4.01		First Supplemental Indenture, dated April 27, 2016, between Alphabet Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee	Current Report on Form 8-K (File No. 001-37580)	April 27, 2016
4.02		Form of Alphabet Inc.’s 3.625% Notes due 2021 (included in Exhibit 4.01)
4.03		Form of Alphabet Inc.’s 3.375% Notes due 2024 (included in Exhibit 4.01)
10.01		Alphabet Inc. 2012 Stock Plan, as amended	Current Report on Form 8-K (File No. 001-37580)	June 10, 2016
10.02		Letter Agreement, dated June 22, 2016, between Roger W. Ferguson, Jr. and Alphabet Inc.	Current Form on Form 8-K (File No. 001-37580)	June 29, 2016
12	*	Computation of Earnings to Fixed Charge Ratios
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 Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

____________________ 

* Filed herewith.

‡ Furnished herewith.

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EX-12

Exhibit 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Year Ended December 31,										Six Months Ended June 30,
(In millions, except ratios)	2011		2012		2013		2014		2015		2016
Earnings:
Pre-tax income from continuing operations	$	12,326	$	14,469	$	15,899	$	17,259	$	19,651	$	11,248
Add:
Fixed charges	185		233		258		307		349		218
Pre-tax income from continuing operations plus fixed charges	$	12,511	$	14,702	$	16,157	$	17,566	$	20,000	$	11,466
Fixed charges:
Interest expense and amortization of capitalized expenses related to indebtedness	58		$	84	$	83	$	101	$	104	$	62
Estimated interest component included in rent expense	127		149		175		206		245		156
Total fixed charges	$	185	$	233	$	258	$	307	$	349	$	218
Ratio of earnings to fixed charges	68		63		63		57		57		53

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, Larry Page, 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: August 4, 2016

/S/    LARRY PAGE

Larry Page

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: August 4, 2016

/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, Larry Page, 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 endedJune 30, 2016, 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: August 4, 2016

By:	/S/    LARRY PAGE
Name:	Larry Page
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 endedJune 30, 2016, 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: August 4, 2016

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.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 28, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	GOOG, GOOGL
Entity Registrant Name	Alphabet Inc.
Entity Central Index Key	0001652044
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		294,844,176
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		48,825,477
Class C Capital Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		343,604,144

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 13,627	$ 16,549
Marketable securities	64,833	56,517
Total cash, cash equivalents, and marketable securities (including securities loaned of $4,531 and $4,426)	78,460	73,066
Accounts receivable, net of allowance of $296 and $294	11,686	11,556
Receivable under reverse repurchase agreements	500	450
Income taxes receivable, net	576	1,903
Prepaid revenue share, expenses and other assets	3,016	3,139
Total current assets	94,238	90,114
Prepaid revenue share, expenses and other assets, non-current	3,275	3,181
Non-marketable investments	5,820	5,183
Deferred income taxes	253	251
Property and equipment, net	31,413	29,016
Intangible assets, net	3,452	3,847
Goodwill	15,841	15,869
Total assets	154,292	147,461
Current liabilities:
Accounts payable	1,716	1,931
Short-term debt	2,219	3,225
Accrued compensation and benefits	3,409	3,539
Accrued expenses and other current liabilities	4,502	4,768
Accrued revenue share	2,345	2,329
Securities lending payable	2,065	2,428
Deferred revenue	900	788
Income taxes payable, net	185	302
Total current liabilities	17,341	19,310
Long-term debt	1,984	1,995
Deferred revenue, non-current	151	151
Income taxes payable, non-current	4,135	3,663
Deferred income taxes	651	189
Other long-term liabilities	2,151	1,822
Total liabilities	26,413	27,130
Commitments and contingencies
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); 687,348 (Class A 292,297, Class B 50,295, Class C 344,756) and 686,778 (Class A 294,686, Class B 48,921, Class C 343,171) shares issued and outstanding	34,293	32,982
Accumulated other comprehensive loss	(1,151)	(1,874)
Retained earnings	94,737	89,223
Total stockholders’ equity	127,879	120,331
Total liabilities and stockholders’ equity	$ 154,292	$ 147,461

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Total cash equivalents and marketable securities, securities loaned	$ 4,426	$ 4,531
Accounts receivable, allowance	$ 294	$ 296
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, 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, shares issued (in shares)	686,778,000	687,348,000
Common stock and capital, shares outstanding (in shares)	686,778,000	687,348,000
Class A Common Stock
Common stock and capital, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	9,000,000,000	9,000,000,000
Common stock and capital, shares issued (in shares)	294,686,000	292,297,000
Common stock and capital, shares outstanding (in shares)	294,686,000	292,297,000
Class B Common Stock
Common stock and capital, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock and capital, shares issued (in shares)	48,921,000	50,295,000
Common stock and capital, shares outstanding (in shares)	48,921,000	50,295,000
Class C Capital Stock
Common stock and capital, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock and capital, shares issued (in shares)	343,171,000	344,756,000
Common stock and capital, shares outstanding (in shares)	343,171,000	344,756,000

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Revenues	$ 21,500	$ 17,727	$ 41,757	$ 34,985
Costs and expenses:
Cost of revenues	8,130	6,583	15,778	12,939
Research and development	3,363	2,789	6,730	5,542
Sales and marketing	2,415	2,080	4,802	4,145
General and administrative	1,624	1,450	3,137	3,087
Total costs and expenses	15,532	12,902	30,447	25,713
Income from operations	5,968	4,825	11,310	9,272
Other income (expense), net	151	131	(62)	288
Income before income taxes	6,119	4,956	11,248	9,560
Provision for income taxes	1,242	1,025	2,164	2,114
Net income	4,877	3,931	9,084	7,446
Less: Adjustment Payment to Class C capital stockholders	0	522	0	522
Net income available to all stockholders	$ 4,877	$ 3,409	$ 9,084	$ 6,924
Common Class A and Common Class B
Costs and expenses:
Net income per share - basic (in dollars per share)	$ 7.11	$ 4.99	$ 13.23	$ 10.15
Net income per share - diluted (in dollars per share)	$ 7.00	$ 4.93	$ 13.01	$ 10.03
Class C Capital Stock
Costs and expenses:
Net income	$ 2,441	$ 2,231	$ 4,548	$ 3,992
Less: Adjustment Payment to Class C capital stockholders	$ 0	$ (522)	$ 0	$ (522)
Net income per share - basic (in dollars per share)	$ 7.11	$ 6.51	$ 13.23	$ 11.68
Net income per share - diluted (in dollars per share)	$ 7.00	$ 6.43	$ 13.01	$ 11.53

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 4,877	$ 3,931	$ 9,084	$ 7,446
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	(119)	218	37	(705)
Available-for-sale investments:
Change in net unrealized gains	200	(336)	556	(115)
Less: reclassification adjustment for net (gains) losses included in net income	14	(50)	183	(77)
Net change (net of tax effect of $92, $79, $31, and $198)	214	(386)	739	(192)
Cash flow hedges:
Change in net unrealized gains	100	(61)	116	501
Less: reclassification adjustment for net gains included in net income	(52)	(329)	(169)	(560)
Net change (net of tax effect of $202, $28, $10, and $9)	48	(390)	(53)	(59)
Other comprehensive (loss) income	143	(558)	723	(956)
Comprehensive income	$ 5,020	$ 3,373	$ 9,807	$ 6,490

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Tax effect related to available-for-sale investments	$ 79	$ (92)	$ 198	$ (31)
Tax effect related to cash flow hedges	$ 28	$ (202)	$ (9)	$ (10)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating activities
Net income	$ 9,084	$ 7,446
Adjustments:
Depreciation and impairment of property and equipment	2,426	1,949
Amortization and impairment of intangible assets	435	462
Stock-based compensation expense	2,997	2,335
Deferred income taxes	364	(150)
Loss on marketable and non-marketable investments, net	294	33
Other	91	116
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(17)	(69)
Income taxes, net	1,680	1,950
Prepaid revenue share, expenses and other assets	161	62
Accounts payable	(221)	(398)
Accrued expenses and other liabilities	(471)	237
Accrued revenue share	(48)	(121)
Deferred revenue	3	(34)
Net cash provided by operating activities	16,778	13,818
Investing activities
Purchases of property and equipment	(4,551)	(5,442)
Purchases of marketable securities	(45,588)	(33,126)
Maturities and sales of marketable securities	37,789	27,586
Purchases of non-marketable investments	(583)	(1,449)
Cash collateral related to securities lending	(363)	(84)
Investments in reverse repurchase agreements	(50)	250
Acquisitions, net of cash acquired, and purchases of intangible assets	(72)	(142)
Net cash used in investing activities	(13,418)	(12,407)
Financing activities
Net payments related to stock-based award activities	(1,610)	(1,004)
Repurchases of capital stock	(3,693)	0
Adjustment Payment to Class C capital stockholders	0	(47)
Proceeds from issuance of debt, net of costs	5,753	6,698
Repayments of debt	(6,801)	(6,704)
Net cash used in financing activities	(6,351)	(1,057)
Effect of exchange rate changes on cash and cash equivalents	69	(248)
Net increase (decrease) in cash and cash equivalents	(2,922)	106
Cash and cash equivalents at beginning of period	16,549	18,347
Cash and cash equivalents at end of period	13,627	18,453
Supplemental disclosures of cash flow information
Cash paid (received) for income taxes	(24)	234
Cash paid for interest	$ 48	$ 48

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Nature of Operations and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

We were incorporated in the State of Delaware in August 2015. We generate revenues primarily by delivering relevant, cost-effective online advertising.

On October 2, 2015, we implemented a holding company reorganization in which Alphabet became the successor issuer to Google Inc. (Google) that was accounted for as a merger under common control. Alphabet has recognized the assets and liabilities of Google at carryover basis. The consolidated financial statements of Alphabet present comparative information for the prior periods on a combined basis, as if both Alphabet and Google were under common control for all periods presented.

Basis of Consolidation

The consolidated financial statements include the accounts of Alphabet Inc., our subsidiaries, as well as all variable interest entities in which we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

The accompanying Consolidated Balance Sheet as of June 30, 2016, the Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2016, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2016, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2016 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2016, our results of operations for the three and six months ended June 30, 2015 and 2016, and our cash flows for the six months ended June 30, 2015 and 2016. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on February 11, 2016 as updated by the Form 8-K filed with the SEC on May 3, 2016.

Use of Estimates

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

Fair Value of Financial Instruments

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

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

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

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

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

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

Recent Accounting Pronouncements

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

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

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) which amends the FASB Accounting Standards Codification and created Topic 842, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provides for enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

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Financial Instruments

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Financial Instruments

Financial Instruments

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

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 31, 2015 and June 30, 2016 (in millions):

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

	As of June 30, 2016
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Cash	$	5,561	$	0	$	0		$	5,561	$	5,561	$	0
Level 1:
Money market and other funds	3,909		0		0			3,909		3,909		0
U.S. government notes	28,606		259		0			28,865		2,091		26,774
Marketable equity securities	163		47		0			210		0		210
	32,678		306		0			32,984		6,000		26,984
Level 2:
Time deposits(1)	230		0		0			230		228		2
Money market and other funds(2)	1,521		0		0			1,521		1,521		0
Mutual funds(4)	214		6		0			220		0		220
U.S. government agencies	3,360		6		0			3,366		250		3,116
Foreign government bonds	2,359		45		(5		)	2,399		0		2,399
Municipal securities	4,491		99		(3		)	4,587		61		4,526
Corporate debt securities	13,700		233		(68		)	13,865		6		13,859
Agency mortgage-backed securities	11,016		160		(5		)	11,171		0		11,171
Asset-backed securities	2,555		3		(2		)	2,556		0		2,556
	39,446		552		(83		)	39,915		2,066		37,849
Total	$	77,685	$	858	$	(83	)	$	78,460	$	13,627	$	64,833

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

⁽²⁾  The balances as of December 31, 2015 and June 30, 2016 were related to cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See section titled "Securities Lending Program" below for further discussion of this program.

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

⁽⁴⁾  The fair value option was elected for mutual funds with gains (losses) recognized in other income (expense), net.

We determine realized gains or losses on the sale of marketable securities on a specific identification method. We recognized gross realized gains of $104 million and $181 million for the three and six months ended June 30, 2015 and $91 million and $159 million for the three and six months ended June 30, 2016. We recognized gross realized losses of $51 million and $96 million for the three and six months ended June 30, 2015 and $100 million and $335 million for the three and six months ended June 30, 2016. We reflect these gains and losses as a component of other income (expense), net in the accompanying Consolidated Statements of Income.

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

	As of June 30, 2016
Due in 1 year	$	7,302
Due in 1 year through 5 years	36,934
Due in 5 years through 10 years	8,374
Due after 10 years	11,793
Total	$	64,403

Impairment Considerations for Marketable Investments

The following tables present gross unrealized losses and fair values for those marketable investments that were in an unrealized loss position as of December 31, 2015 and June 30, 2016, 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, 2015
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	13,757	$	(48	)	$	0	$	0		$	13,757	$	(48	)
U.S. government agencies	864		(3		)	0		0			864		(3		)
Foreign government bonds	885		(18		)	36		(5		)	921		(23		)
Municipal securities	1,116		(3		)	41		(1		)	1,157		(4		)
Corporate debt securities	9,192		(202		)	784		(76		)	9,976		(278		)
Agency mortgage-backed securities	5,783		(34		)	721		(23		)	6,504		(57		)
Asset-backed securities	2,508		(7		)	386		(1		)	2,894		(8		)
Total	$	34,105	$	(315	)	$	1,968	$	(106	)	$	36,073	$	(421	)

	As of June 30, 2016
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(unaudited)
Foreign government bonds	$	302	$	(1	)	$	66	$	(4	)	$	368	$	(5	)
Municipal securities	301		(2		)	61		(1		)	362		(3		)
Corporate debt securities	1,841		(28		)	897		(40		)	2,738		(68		)
Agency mortgage-backed securities	660		(2		)	389		(3		)	1,049		(5		)
Asset-backed securities	0		0			298		(2		)	298		(2		)
Total	$	3,104	$	(33	)	$	1,711	$	(50	)	$	4,815	$	(83	)

During the three and six months ended June 30, 2015, we did not recognize any other-than-temporary impairment loss. During the three months ended June 30, 2016, we did not recognize any other-than-temporary impairment loss. During the six months ended June 30, 2016, we recognized $87 million of other-than-temporary impairment losses related to our marketable equity securities. Those losses are included in gains (losses) on marketable securities, net, as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. See Note 8 for further details on other income (expense), net.

Securities Lending Program

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

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

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

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

	As of June 30, 2016
	Remaining Contractual Maturity of the Agreements
Securities Lending Transactions	Overnight and Continuous		Up to 30 days		30 - 90 Days		Greater Than 90 Days		Total
	(unaudited)
U.S. government notes	$	969	$	82	$	0	$	102	$	1,153
U.S. government agencies	564		128		0		0		692
Corporate debt securities	220		0		0		0		220
Total	$	1,753	$	210	$	0	$	102	$	2,065
Gross amount of recognized liabilities for securities lending in offsetting disclosure									$	2,065
Amounts related to agreements not included in securities lending in offsetting disclosure									$	0

Derivative Financial Instruments

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

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

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. To further reduce credit risk, we enter into collateral security arrangements under which the counterparty is required to provide collateral when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We can take possession of the collateral in the event of counterparty default. As of December 31, 2015 and June 30, 2016, we received cash collateral related to the derivative instruments under our collateral security arrangements of $192 million and $150 million.

Cash Flow Hedges

We use options to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar and at times we use interest rate swaps to effectively lock interest rates on anticipated debt issuances. These transactions are designated as cash flow hedges. The notional principal of these contracts was approximately $16.4 billion and $10.4 billion as of December 31, 2015 and June 30, 2016, respectively. These contracts have maturities of 36 months or less.

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

As of June 30, 2016, the effective portion of our cash flow hedges before tax effect was $313 million, of which $255 million is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We use forward contracts designated as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. We exclude the difference between spot rates and forward rates for these forward contracts from the assessment of hedge effectiveness. The notional principal of these contracts was $1.8 billion and $1.9 billion as of December 31, 2015 and June 30, 2016, respectively.

We have used interest rate swaps designated as fair value hedges to hedge interest rate risk for certain fixed rate securities. The notional principal of these contracts was $295 million and $0 million as of December 31, 2015 and June 30, 2016, respectively.

Gains and losses on these forward contracts and interest rate swaps are recognized in other income (expense), net, along with the offsetting losses and gains of the related hedged items. Cash flows from these forward contracts and interest rate swaps are reported within investment activities in the Consolidated Statements of Cash Flows, consistent with the impact of the hedged items.

Other Derivatives

Other derivatives not designated as hedging instruments consist of forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts, as well as the related costs in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities. The notional principal of foreign exchange contracts outstanding was $7.5 billion and $6.4 billion as of December 31, 2015 and June 30, 2016, respectively.

We also use exchange-traded interest rate futures contracts and “To Be Announced” (TBA) forward purchase commitments of mortgage-backed assets to hedge interest rate risks on certain fixed income securities. The TBA contracts meet the definition of derivative instruments in cases where physical delivery of the assets is not taken at the earliest available delivery date. Our interest rate futures and TBA contracts (together interest rate contracts) are not designated as hedging instruments. We recognize gains and losses on these contracts, as well as the related costs, in other income (expense), net. The gains and losses are generally economically offset by unrealized gains and losses in the underlying available-for-sale securities, which are recorded as a component of AOCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are moved from AOCI into other income (expense), net. The total notional amounts of interest rate contracts outstanding were $50 million and $0 million as of December 31, 2015 and June 30, 2016, respectively.

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

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

		As of June 30, 2016
	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	Prepaid revenue share, expenses and other assets, current and non-current	$	412	$	6	$	418
Total		$	412	$	6	$	418
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	0	$	2	$	2
Total		$	0	$	2	$	2

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

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	2015			2016		2015		2016
Foreign exchange contracts	$	(120	)	$	155	$	716	$	188

	Gains Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
Derivatives in Cash Flow Hedging Relationship	Income Statement Location	2015		2016		2015		2016
Foreign exchange contracts	Revenues	$	471	$	78	$	782	$	247
Interest rate contracts	Other income (expense), net	1		2		2		3
Total		$	472	$	80	$	784	$	250

	Gains (Losses) Recognized in Income on Derivatives (1) (Amount Excluded from  Effectiveness Testing and Ineffective Portion)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Cash Flow Hedging Relationship	Income Statement Location	2015			2016			2015			2016
Foreign exchange contracts	Other income (expense), net	$	(66	)	$	(120	)	$	(167	)	$	(259	)

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

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

	Gains (Losses) Recognized in Income on Derivatives(2)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Fair Value Hedging Relationship	Income Statement Location	2015			2016			2015			2016
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	(44	)	$	53		$	67		$	25
Hedged item	Other income (expense), net	42			(53		)	(71		)	(25		)
Total		$	(2	)	$	0		$	(4	)	$	0
Interest Rate Hedges:
Interest rate contracts	Other income (expense), net	$	1		$	2		$	(1	)	$	(3	)
Hedged item	Other income (expense), net	(1		)	(2		)	1			3
Total		$	0		$	0		$	0		$	0

⁽²⁾  Losses related to the amount excluded from effectiveness testing of the hedges were $2 million and $4 million for the three and six months ended June 30, 2015, respectively, and $0 million and $0 million for the three and six months ended June 30, 2016, respectively.

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

	Gains (Losses) Recognized in Income on Derivatives
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives Not Designated As Hedging Instruments	Income Statement Location	2015			2016			2015			2016
Foreign exchange contracts	Other income (expense), net	$	(66	)	$	(6	)	$	91		$	(80	)
Interest rate contracts	Other income (expense), net	4			(5		)	(3		)	(13		)
Total		$	(62	)	$	(11	)	$	88		$	(93	)

Offsetting of Derivatives, Securities Lending and Reverse Repurchase Agreements

We present our derivatives, securities lending and reverse repurchase agreements at gross fair values in the Consolidated Balance Sheets. However, our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2015 and June 30, 2016, these offsetting arrangements were as follows (in millions):

Offsetting of Assets
	As of December 31, 2015
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	628	$	0	$	628		$	(13	)	(1)	$	(189	)	$	(214	)	$	212
Reverse repurchase agreements	1,590		0		1,590		(2)	0				0			(1,590		)	0
Total	$	2,218	$	0	$	2,218		$	(13	)		$	(189	)	$	(1,804	)	$	212
	As of June 30, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
	(unaudited)
Derivatives	$	418	$	0	$	418		$	(1	)	(1)	$	(118	)	$	(186	)	$	113
Reverse repurchase agreements	2,021		0		2,021		(2)	0				0			(2,021		)	0
Total	$	2,439	$	0	$	2,439		$	(1	)		$	(118	)	$	(2,207	)	$	113

⁽¹⁾  The balances as of December 31, 2015 and June 30, 2016 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

⁽²⁾  The balances as of December 31, 2015 and June 30, 2016 included $1,140 million and $1,521 million, respectively, recorded in cash and cash equivalents, and $450 million and $500 million, respectively, recorded in receivable under reverse repurchase agreements.

Offsetting of Liabilities
	As of December 31, 2015
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	16	$	0	$	16	$	(13	)	(3)	$	(3	)	$	0		$	0
Securities lending agreements	2,428		0		2,428		0				0			(2,401		)	27
Total	$	2,444	$	0	$	2,444	$	(13	)		$	(3	)	$	(2,401	)	$	27
	As of June 30, 2016
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
	(unaudited)
Derivatives	$	2	$	0	$	2	$	(1	)	(3)	$	0		$	0		$	1
Securities lending agreements	2,065		0		2,065		0				0			(2,037		)	28
Total	$	2,067	$	0	$	2,067	$	(1	)		$	0		$	(2,037	)	$	29

⁽³⁾  The balances as of December 31, 2015 and June 30, 2016 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Non-Marketable Investments

6 Months Ended

Jun. 30, 2016

Investments, All Other Investments [Abstract]

Non-Marketable Investments

Non-Marketable Investments

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

Non-Marketable Equity Investments

Our non-marketable equity investments are investments we have made in privately-held companies accounted for under the equity or cost method and are not required to be consolidated under the variable interest or voting models. As of December 31, 2015 and June 30, 2016, investments accounted for under the equity method had a carrying value of approximately $1.6 billion and $1.7 billion, respectively. Our share of gains and losses in equity method investments was a net loss of approximately $59 million and $89 million for the three and six months ended June 30, 2015 and $43 million and $148 million for the three and six months ended June 30, 2016. We reflect these losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. As of December 31, 2015 and June 30, 2016, investments accounted for under the cost method had a carrying value of $2.6 billion and $3.0 billion, respectively, and a fair value of approximately $7.5 billion and $8.1 billion, respectively. The fair value of the cost method investments are primarily determined from data leveraging private-market transactions and are classified within Level 3 in the fair value hierarchy. We periodically review our non-marketable equity investments for impairment. No material impairments were recognized for the three and six months ended June 30, 2015 and 2016.

Certain renewable energy investments included in our non-marketable equity investments are variable interest entities (VIEs). Our involvement with investments in renewable energy relate to our equity investments in entities whose activities involve power generation. We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly impact the entity's economic performance such as setting operating budgets. Therefore, we do not consolidate these entities in our financial statements because we do not have the power to direct the activities of the VIE that most significantly impact the VIEs economic performance. We account for these investments under the equity method. The carrying value of our renewable energy investments accounted for under the equity method that are VIEs is $1.3 billion with the maximum exposure of $1.3 billion as of December 31, 2015 and $1.3 billion with the maximum exposure of $1.3 billion as of June 30, 2016, respectively.  The maximum exposure is based on current investments to date plus future funding commitments.  We have determined the single source of our exposure to these VIEs is our capital investment in these entities. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs and vice versa, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

Non-Marketable Debt Securities

Our non-marketable debt securities are primarily preferred stock that are redeemable at our option and convertible notes issued by private companies. The cost of these securities was $1.0 billion and $1.1 billion as of December 31, 2015 and June 30, 2016, respectively. These debt securities do not have readily determinable market values and are categorized accordingly as Level 3 in the fair value hierarchy. To estimate the fair value of these securities, we use a combination of valuation methodologies, including market and income approaches based on prior transaction prices; estimated timing, probability, and amount of cash flows; and illiquidity considerations. Financial information of private companies may not be available and consequently we will estimate the value based on the best available information at the measurement date. No material impairments were recognized for the three and six months ended June 30, 2015 and 2016.

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

	Six Months Ended
	June 30,
	2015		2016
Beginning balance	$	90	$	1,024
Total net gains or losses
Included in other comprehensive income	0		90
Purchases	908		76
Sales	0		(6		)
Settlements	0		(14		)
Ending balance	$	998	$	1,170

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Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt

Debt

Short-Term Debt

Google had a short-term debt financing program of up to $3.0 billion through the issuance of commercial paper and a $3.0 billion revolving credit facility as of December 31, 2015. In February 2016, we replaced Google's existing debt financing program with a new short-term debt financing program that allows us to issue up to $5.0 billion of commercial paper from time to time and to draw on a $4.0 billion revolving credit facility, which expires in February 2021. Net proceeds from these programs are used for general corporate purposes. As of December 31, 2015 and June 30, 2016, we had $2.0 billion of outstanding commercial paper recorded as short-term debt with weighted-average interest rates of 0.2% and 0.5%, respectively. The interest rate for the credit facility is determined based on a formula using certain market rates. No amounts were outstanding under the credit facility as of December 31, 2015 and June 30, 2016. The estimated fair value of the short-term debt approximated its carrying value as of December 31, 2015 and June 30, 2016.

In August 2013, we entered into a capital lease obligation on certain property which expires in 2028. We intend to exercise the option to purchase the property in the second half of 2016. The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value as of December 31, 2015 and June 30, 2016.

Long-Term Debt

Google issued $3.0 billion of unsecured senior notes in three tranches (collectively, the "2011 Notes") in May 2011, due in 2014, 2016, and 2021, as well as $1.0 billion of unsecured senior notes (the "2014 Notes") in February 2014 due 2024. The net proceeds from the issuance of the 2011 Notes were used to repay a portion of the outstanding commercial paper and for general corporate purposes. The net proceeds from the issuance of the 2014 Notes were used for the repayment of the portion of the principal amount of our 2011 Notes which matured on May 19, 2014 and for general corporate purposes. We repaid $1.0 billion of the 2011 Notes in May 2016.

In April 2016, we completed an exchange offer with eligible holders of Google’s 3.625% Notes due 2021 and 3.375% Notes due 2024 (collectively, the "Google Notes"). An aggregate principal amount of approximately $1.7 billion of the Google Notes was exchanged for approximately $1.7 billion of the notes of Alphabet with identical interest rate and maturity (the "Alphabet Notes"). Because the exchange was between a parent and the subsidiary company and for substantially identical notes, the change was treated as a debt modification for accounting purposes with no gains or losses recognized. The total outstanding long-term debt is summarized below (in millions):

	As of December 31, 2015			As of June 30, 2016
				(unaudited)
Short-Term Portion of Long-Term Debt
2.125% Notes due on May 19, 2016	$	1,000		$	0
Capital Lease Obligation	225			220
Total Short-Term Portion of Long-Term Debt	$	1,225		$	220
Long-Term Debt
3.625% Notes due on May 19, 2021	$	1,000		$	1,000
3.375% Notes due on February 25, 2024	1,000			1,000
Unamortized discount for the Notes above	(5		)	(16		)
Total Long-Term Debt(1)	$	1,995		$	1,984

⁽¹⁾  Includes portion of the Google Notes issued in 2011 and 2014 and the Alphabet Notes exchanged in 2016.

The effective interest yields of the outstanding Notes due in 2021 and 2024 were 3.734%, and 3.377%, respectively with interest payable semi-annually. The Alphabet Notes due in 2021 and 2024 rank equally with each other and are structurally subordinated to the Google Notes. We may redeem these Notes at any time in whole or in part at specified redemption prices. The total estimated fair value of all outstanding notes was approximately $3.1 billion as of December 31, 2015 and $2.2 billion as of June 30, 2016. 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.

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Balance Sheet Components

6 Months Ended

Jun. 30, 2016

Balance Sheet Components Disclosure [Abstract]

Balance Sheet Components

Balance Sheet Components

Property and Equipment

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

	As of December 31, 2015			As of June 30, 2016
				(unaudited)
Land and buildings	$	16,518		$	18,770
Information technology assets	13,645			14,511
Construction in progress	7,324			7,601
Leasehold improvements	2,576			2,938
Furniture and fixtures	83			84
Property and equipment, gross	40,146			43,904
Less: accumulated depreciation and amortization	(11,130		)	(12,491		)
Property and equipment, net	$	29,016		$	31,413

As of June 30, 2016, assets under capital lease with a cost basis of $484 million and assets held for sale of $515 million were included in property and equipment.

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 on Cash Flow Hedges			Total
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27
Other comprehensive income (loss) before reclassifications	(705		)	(115		)	501			(319		)
Amounts reclassified from AOCI	0			(77		)	(560		)	(637		)
Other comprehensive income (loss)	(705		)	(192		)	(59		)	(956		)
Balance as of June 30, 2015	$	(1,685	)	$	229		$	527		$	(929	)

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)
Other comprehensive income (loss) before reclassifications	37			556			116			709
Amounts reclassified from AOCI	0			183			(169		)	14
Other comprehensive income (loss)	37			739			(53		)	723
Balance as of June 30, 2016	$	(2,010	)	$	653		$	206		$	(1,151	)

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

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Three Months Ended						Six Months Ended
		June 30,						June 30,
AOCI Components	Location	2015			2016			2015			2016
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	53		$	(14	)	$	85		$	(183	)
	Provision for income taxes	(3		)	0			(8		)	0
	Net of tax	$	50		$	(14	)	$	77		$	(183	)
Unrealized gains on cash flow hedges
Foreign exchange contracts	Revenue	$	471		$	78		$	782		$	247
Interest rate contracts	Other income (expense), net	1			2			2			3
	Provision for income taxes	(143		)	(28		)	(224		)	(81		)
	Net of tax	$	329		$	52		$	560		$	169
Total amount reclassified, net of tax		$	379		$	38		$	637		$	(14	)

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Calico

6 Months Ended

Jun. 30, 2016

Research and Development [Abstract]

Calico

Calico

On September 18, 2013, we announced the formation of Calico, a life science company with a mission to harness advanced technologies to increase our understanding of the biology that controls lifespan. As of June 30, 2016, we have contributed $240 million to Calico in exchange for Calico convertible preferred units and have also committed to fund an additional $490 million on an as-needed basis.

Calico is a VIE and its results of operations and statement of financial position are included in our consolidated financial statements as we have the power to direct the activities that most significantly impact its economic performance.

In September 2014, AbbVie Inc. (AbbVie) and Calico announced a research and development collaboration intended to help both companies discover, develop, and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. As of June 30, 2016, AbbVie has contributed $750 million to fund the collaboration pursuant to the agreement, which reflects its total commitment. As of June 30, 2016, Calico has contributed $250 million and committed up to an additional $500 million.

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

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2016 were as follows (in millions, unaudited):

	Google			Other Bets			Total Consolidated
Balance as of December 31, 2015	$	15,456		$	413		$	15,869
Acquisitions	10			1			11
Foreign currency translation and other adjustments	(32		)	(7		)	(39		)
Balance as of June 30, 2016	$	15,434		$	407		$	15,841

Other Intangible Assets

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

	As of December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Patents and developed technology	$	6,592	$	3,213	$	3,379
Customer relationships	1,343		1,201		142
Trade names and other	795		469		326
Total	$	8,730	$	4,883	$	3,847
	As of June 30, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
	(unaudited)
Patents and developed technology	$	6,597	$	3,568	$	3,029
Customer relationships	1,344		1,225		119
Trade names and other	805		501		304
Total	$	8,746	$	5,294	$	3,452

Amortization expense relating to our purchased intangible assets was $222 million and $461 million for the three and six months ended June 30, 2015 and $210 million and $426 million for the three and six months ended June 30, 2016.

As of June 30, 2016, 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 2016	$	400
2017	736
2018	648
2019	538
2020	443
Thereafter	687
	$	3,452

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Other Income (Expense), Net

6 Months Ended

Jun. 30, 2016

Other Income and Expenses [Abstract]

Other Income (Expense), Net

Other Income (Expense), Net

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Interest income	$	240		$	307		$	466		$	577
Interest expense	(26		)	(32		)	(52		)	(62		)
Foreign currency exchange losses, net	(99		)	(128		)	(161		)	(314		)
Gain (loss) on marketable securities, net	53			(9		)	85			(176		)
Loss on non-marketable investments, net	(70		)	(5		)	(118		)	(118		)
Other	33			18			68			31
Other income (expense), net	$	131		$	151		$	288		$	(62	)

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Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Legal Matters

Antitrust Investigations

On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an investigation into various antitrust-related complaints against us. On April 15, 2015, the EC issued a Statement of Objections (SO) regarding the display and ranking of shopping search results, to which we responded on August 27, 2015. On April 20, 2016, the EC issued an SO regarding certain Android distribution practices. On July 14, 2016, the EC issued a Supplementary SO regarding shopping search results and an SO regarding the syndication of AdSense for Search. We will respond to the SOs and Supplementary SO and will continue to cooperate with the EC.

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

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

Patent and Intellectual Property Claims

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

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

Oracle America, Inc. (Oracle) brought a copyright lawsuit against Google in the Northern District of California, alleging that Google's Android 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 case is pending post-trial motions and any further appeals by Oracle. 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, government investigations, and other proceedings involving competition (such as the pending EC investigations described above), intellectual property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Such claims, suits, government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences.

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

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

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

Indirect Taxes

We are under audit by various domestic and foreign tax authorities with regards to indirect tax matters. The subject matter of indirect tax audits primarily arise from disputes on the tax treatment and tax rate applied to the sale of our products and services in these jurisdictions. We accrue indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. For certain matters, while the loss is reasonably possible, the loss or range of loss cannot be estimated. We believe these matters are without merit and 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 12.

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Net Income Per Share

6 Months Ended

Jun. 30, 2016

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 June 30,
	2015								2016
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings	1,440			260			1,709		2,086			350			2,441
Total	$	1,440		$	260		$	2,231	$	2,086		$	350		$	2,441
Denominator
Number of shares used in per share computation	288,723			52,114			342,780		293,564			49,228			343,427
Basic net income per share	$	4.99		$	4.99		$	6.51	$	7.11		$	7.11		$	7.11
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings for basic computation	$	1,440		$	260		$	1,709	$	2,086		$	350		$	2,441
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	260			0			0		350			0			0
Reallocation of undistributed earnings	(7		)	(3		)	7		(22		)	(6		)	22
Allocation of undistributed earnings	$	1,693		$	257		$	1,716	$	2,414		$	344		$	2,463
Denominator
Number of shares used in basic computation	288,723			52,114			342,780		293,564			49,228			343,427
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	52,114			0			0		49,228			0			0
Employee stock options	1,546			0			1,502		1,603			0			1,531
Restricted stock units and other contingently issuable shares	807			0			3,406		598			0			6,896
Number of shares used in per share computation	343,190			52,114			347,688		344,993			49,228			351,854
Diluted net income per share	$	4.93		$	4.93		$	6.43	$	7.00		$	7.00		$	7.00

	Six Months Ended June 30,
	2015								2016
	(unaudited)
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings	2,921			533			3,470		3,880			656			4,548
Total	$	2,921		$	533		$	3,992	$	3,880		$	656		$	4,548
Denominator
Number of shares used in per share computation	287,800			52,480			341,986		293,415			49,584			343,870
Basic net income per share	$	10.15		$	10.15		$	11.68	$	13.23		$	13.23		$	13.23
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings for basic computation	$	2,921		$	533		$	3,470	$	3,880		$	656		$	4,548
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	533			0			0		656			0			0
Reallocation of undistributed earnings	(15		)	(7		)	15		(42		)	(11		)	42
Allocation of undistributed earnings	$	3,439		$	526		$	3,485	$	4,494		$	645		$	4,590
Denominator
Number of shares used in basic computation	287,800			52,480			341,986		293,415			49,584			343,870
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	52,480			0			0		49,584			0			0
Employee stock options	1,619			0			1,577		1,649			0			1,574
Restricted stock units and other contingently issuable shares	922			0			3,805		706			0			7,282
Number of shares used in per share computation	342,821			52,480			347,368		345,354			49,584			352,726
Diluted net income per share	$	10.03		$	10.03		$	11.53	$	13.01		$	13.01		$	13.01

In the three and six months ended June 30, 2015, the Class C Adjustment Payment was allocated to the numerator for calculating net income per share of Class C capital stock from net income available to all stockholders and the remaining undistributed earnings were allocated on a pro rata basis to Class A and Class B common stock and Class C capital stock based on the number of shares used in the per share computation for each class of stock. The weighted-average share impact of the Class C Adjustment Payment is included in the denominator of both basic and diluted net income per share computations for the three and six months ended June 30, 2015.

In the three and six months ended June 30, 2016, 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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Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stock-Based Compensation

The following table presents our aggregate stock-based compensation (SBC) expense by type of costs and expenses per the Consolidated Statements of Income (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Cost of revenues	$	163	$	255	$	323	$	496
Research and development	583		746		1,198		1,491
Sales and marketing	196		238		401		480
General and administrative	190		271		413		543
Total stock-based compensation expense	$	1,132	$	1,510	$	2,335	$	3,010

SBC expense associated with awards expected to be ultimately settled in cash was $0 million for both the three and six months ended June 30, 2015, and $7 million and $13 million for the three and six months ended June 30, 2016, respectively. Awards which we expect to be ultimately settled in cash are classified as liabilities in our Consolidated Balance Sheets.

Beginning in Q1 2016, we account for forfeitures as they occur, rather than estimate expected forfeitures. The net cumulative effect of this change was recognized as a $133 million reduction to retained earnings as of January 1, 2016.

Stock-Based Award Activities

The following table summarizes the activities for our stock options for the six months ended June 30, 2016:

	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions) (1)
	(unaudited)
Balance as of December 31, 2015	4,898,983		$	221.31
Granted	0		N/A
Exercised	(496,891	)	$	191.01
Forfeited/canceled	(5,935	)	$	239.95
Balance as of June 30, 2016	4,396,157		$	224.68	3.1	$	2,081
Exercisable as of June 30, 2016	4,267,129		$	221.89	3.0	$	2,031

⁽¹⁾  The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $703.53 and $692.10 for our Class A common stock and Class C capital stock, respectively, on June 30, 2016.

The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2016:

	Unvested Restricted Stock Units
	Number of Shares		Weighted- Average Grant-Date Fair Value
	(unaudited)
Unvested as of December 31, 2015	25,741,186		$	531.74
Granted	2,553,113		$	726.71
Vested	(6,004,585	)	$	496.45
Forfeited/canceled	(705,791	)	$	523.12
Unvested as of June 30, 2016	21,583,923		$	564.63

As of June 30, 2016, there was $11.0 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.5 years.

Share Repurchases

In October 2015, the board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock, commencing in the fourth quarter of 2015. In January 2016, the board of directors of Alphabet authorized the company to repurchase an additional amount of approximately 514 thousand shares. The repurchases were being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through the use of 10b5-1 plans. For the six months ended June 30, 2016, we repurchased and subsequently retired approximately 5.2 million shares of Alphabet Class C capital stock for an aggregate amount of approximately $3.7 billion. As of June 30, 2016, we completed all authorized share repurchases under our repurchase program.

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Our total gross unrecognized tax benefits were $4.2 billion and $4.4 billion as of December 31, 2015 and June 30, 2016. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $3.6 billion and $3.8 billion as of December 31, 2015 and June 30, 2016. Our existing tax positions will continue to generate an increase in liabilities for unrecognized tax benefits.

Our effective tax rate is lower than the U.S. statutory rate primarily because of more earnings realized in countries that have lower statutory tax rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States.

In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust the provision for income taxes in the period such resolution occurs. Although timing of the resolution and/or closure of audits is not certain, we do not believe it is reasonably possible that the unrecognized tax benefits will materially change in the next 12 months.

We have received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend against any and all such claims as presented. While we believe it is more likely than not that our tax position will be sustained, it is reasonably possible that we will have future obligations related to these matters.

For information regarding indirect taxes, see Note 9.

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Information about Segments and Geographic Areas

6 Months Ended

Jun. 30, 2016

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, these operating segments are combined and disclosed below as Other Bets.

Our reported segments are described below:

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

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

Revenue, cost of revenue, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our Chief Operating Decision Maker does not evaluate operating segments using asset information. Prior period segment information has been recast to conform to the current period segment presentation.

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Revenues:
Google	$	17,653	$	21,315	$	34,831	$	41,407
Other Bets	74		185		154		350
Total revenues	$	17,727	$	21,500	$	34,985	$	41,757

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Operating income (loss):
Google	$	5,608		$	6,994		$	10,777		$	13,243
Other Bets	(660		)	(859		)	(1,272		)	(1,637		)
Reconciling items(1)	(123		)	(167		)	(233		)	(296		)
Total income from operations	$	4,825		$	5,968		$	9,272		$	11,310

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2015		2016			2015		2016
Capital expenditures:
Google	$	2,060	$	2,056		$	4,741	$	4,095
Other Bets	232		280			386		557
Reconciling items(2)	223		(213		)	315		(101		)
Total capital expenditures as presented in Consolidated Statements of Cash Flows	$	2,515	$	2,123		$	5,442	$	4,551

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

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Stock-based compensation:
Google	$	996	$	1,320	$	2,054	$	2,642
Other Bets	105		150		219		289
Reconciling items(3)	31		33		62		66
Total stock based compensation(4)	$	1,132	$	1,503	$	2,335	$	2,997
Depreciation, amortization, and impairment:
Google	$	1,189	$	1,409	$	2,326	$	2,726
Other Bets	45		81		85		135
Total depreciation, amortization, and impairment as presented in Consolidated Statements of Cash Flows	$	1,234	$	1,490	$	2,411	$	2,861

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

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

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015(1)		2016		2015		2016
Revenues:
United States	$	8,048	$	10,035	$	15,769	$	19,416
United Kingdom	1,678		1,914		3,353		3,835
Rest of the world	8,001		9,551		15,863		18,506
Total revenues	$	17,727	$	21,500	$	34,985	$	41,757

	As of December 31, 2015		As of June 30, 2016
			(unaudited)
Long-lived assets:
United States	$	43,686	$	46,142
International	13,661		13,912
Total long-lived assets	$	57,347	$	60,054

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Subsequent Event

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Event

On August 2, 2016, we priced a registered public debt offering of $2.0 billion aggregate principal amount of 1.998% notes due 2026 (the "2026 Notes"). We expect to receive net proceeds of approximately $1,948 million from the sale of the 2026 Notes, after deducting offering discounts and estimated offering expenses, which we intend to use for general corporate purposes, including the repayment of outstanding commercial paper. We will not be subject to any financial covenants under the 2026 Notes. The offering is expected to close on August 9, 2016.

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

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Nature of Operations

We were incorporated in the State of Delaware in August 2015. We generate revenues primarily by delivering relevant, cost-effective online advertising.

Basis of Consolidation

Basis of Consolidation

The consolidated financial statements include the accounts of Alphabet Inc., our subsidiaries, as well as all variable interest entities in which we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The accompanying Consolidated Balance Sheet as of June 30, 2016, the Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2016, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2016, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2016 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2016, our results of operations for the three and six months ended June 30, 2015 and 2016, and our cash flows for the six months ended June 30, 2015 and 2016. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on February 11, 2016 as updated by the Form 8-K filed with the SEC on May 3, 2016.

Use of Estimates

Use of Estimates

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

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

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

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

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

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

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

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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

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

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) which amends the FASB Accounting Standards Codification and created Topic 842, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provides for enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. We are currently in the process of evaluating the impact of the adoption of this standard on our consolidated financial statements.

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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of cash and short-term investments

The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 31, 2015 and June 30, 2016 (in millions):

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

	As of June 30, 2016
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Cash	$	5,561	$	0	$	0		$	5,561	$	5,561	$	0
Level 1:
Money market and other funds	3,909		0		0			3,909		3,909		0
U.S. government notes	28,606		259		0			28,865		2,091		26,774
Marketable equity securities	163		47		0			210		0		210
	32,678		306		0			32,984		6,000		26,984
Level 2:
Time deposits(1)	230		0		0			230		228		2
Money market and other funds(2)	1,521		0		0			1,521		1,521		0
Mutual funds(4)	214		6		0			220		0		220
U.S. government agencies	3,360		6		0			3,366		250		3,116
Foreign government bonds	2,359		45		(5		)	2,399		0		2,399
Municipal securities	4,491		99		(3		)	4,587		61		4,526
Corporate debt securities	13,700		233		(68		)	13,865		6		13,859
Agency mortgage-backed securities	11,016		160		(5		)	11,171		0		11,171
Asset-backed securities	2,555		3		(2		)	2,556		0		2,556
	39,446		552		(83		)	39,915		2,066		37,849
Total	$	77,685	$	858	$	(83	)	$	78,460	$	13,627	$	64,833

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

⁽²⁾  The balances as of December 31, 2015 and June 30, 2016 were related to cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See section titled "Securities Lending Program" below for further discussion of this program.

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

⁽⁴⁾  The fair value option was elected for mutual funds with gains (losses) recognized in other income (expense), net.

Investments by maturity date

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

	As of June 30, 2016
Due in 1 year	$	7,302
Due in 1 year through 5 years	36,934
Due in 5 years through 10 years	8,374
Due after 10 years	11,793
Total	$	64,403

Schedule of unrealized loss on investments

The following tables present gross unrealized losses and fair values for those marketable investments that were in an unrealized loss position as of December 31, 2015 and June 30, 2016, 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, 2015
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	13,757	$	(48	)	$	0	$	0		$	13,757	$	(48	)
U.S. government agencies	864		(3		)	0		0			864		(3		)
Foreign government bonds	885		(18		)	36		(5		)	921		(23		)
Municipal securities	1,116		(3		)	41		(1		)	1,157		(4		)
Corporate debt securities	9,192		(202		)	784		(76		)	9,976		(278		)
Agency mortgage-backed securities	5,783		(34		)	721		(23		)	6,504		(57		)
Asset-backed securities	2,508		(7		)	386		(1		)	2,894		(8		)
Total	$	34,105	$	(315	)	$	1,968	$	(106	)	$	36,073	$	(421	)

	As of June 30, 2016
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(unaudited)
Foreign government bonds	$	302	$	(1	)	$	66	$	(4	)	$	368	$	(5	)
Municipal securities	301		(2		)	61		(1		)	362		(3		)
Corporate debt securities	1,841		(28		)	897		(40		)	2,738		(68		)
Agency mortgage-backed securities	660		(2		)	389		(3		)	1,049		(5		)
Asset-backed securities	0		0			298		(2		)	298		(2		)
Total	$	3,104	$	(33	)	$	1,711	$	(50	)	$	4,815	$	(83	)

Schedule of repurchase agreements

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

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

	As of June 30, 2016
	Remaining Contractual Maturity of the Agreements
Securities Lending Transactions	Overnight and Continuous		Up to 30 days		30 - 90 Days		Greater Than 90 Days		Total
	(unaudited)
U.S. government notes	$	969	$	82	$	0	$	102	$	1,153
U.S. government agencies	564		128		0		0		692
Corporate debt securities	220		0		0		0		220
Total	$	1,753	$	210	$	0	$	102	$	2,065
Gross amount of recognized liabilities for securities lending in offsetting disclosure									$	2,065
Amounts related to agreements not included in securities lending in offsetting disclosure									$	0

Schedule of derivative instruments

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

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

		As of June 30, 2016
	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	Prepaid revenue share, expenses and other assets, current and non-current	$	412	$	6	$	418
Total		$	412	$	6	$	418
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	0	$	2	$	2
Total		$	0	$	2	$	2

Schedule of gain (loss) on derivative instruments

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

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	2015			2016		2015		2016
Foreign exchange contracts	$	(120	)	$	155	$	716	$	188

	Gains Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
Derivatives in Cash Flow Hedging Relationship	Income Statement Location	2015		2016		2015		2016
Foreign exchange contracts	Revenues	$	471	$	78	$	782	$	247
Interest rate contracts	Other income (expense), net	1		2		2		3
Total		$	472	$	80	$	784	$	250

	Gains (Losses) Recognized in Income on Derivatives (1) (Amount Excluded from  Effectiveness Testing and Ineffective Portion)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Cash Flow Hedging Relationship	Income Statement Location	2015			2016			2015			2016
Foreign exchange contracts	Other income (expense), net	$	(66	)	$	(120	)	$	(167	)	$	(259	)

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

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

	Gains (Losses) Recognized in Income on Derivatives(2)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Fair Value Hedging Relationship	Income Statement Location	2015			2016			2015			2016
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	(44	)	$	53		$	67		$	25
Hedged item	Other income (expense), net	42			(53		)	(71		)	(25		)
Total		$	(2	)	$	0		$	(4	)	$	0
Interest Rate Hedges:
Interest rate contracts	Other income (expense), net	$	1		$	2		$	(1	)	$	(3	)
Hedged item	Other income (expense), net	(1		)	(2		)	1			3
Total		$	0		$	0		$	0		$	0

⁽²⁾  Losses related to the amount excluded from effectiveness testing of the hedges were $2 million and $4 million for the three and six months ended June 30, 2015, respectively, and $0 million and $0 million for the three and six months ended June 30, 2016, respectively.

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

	Gains (Losses) Recognized in Income on Derivatives
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives Not Designated As Hedging Instruments	Income Statement Location	2015			2016			2015			2016
Foreign exchange contracts	Other income (expense), net	$	(66	)	$	(6	)	$	91		$	(80	)
Interest rate contracts	Other income (expense), net	4			(5		)	(3		)	(13		)
Total		$	(62	)	$	(11	)	$	88		$	(93	)

Offsetting assets

As of December 31, 2015 and June 30, 2016, these offsetting arrangements were as follows (in millions):

Offsetting of Assets
	As of December 31, 2015
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	628	$	0	$	628		$	(13	)	(1)	$	(189	)	$	(214	)	$	212
Reverse repurchase agreements	1,590		0		1,590		(2)	0				0			(1,590		)	0
Total	$	2,218	$	0	$	2,218		$	(13	)		$	(189	)	$	(1,804	)	$	212
	As of June 30, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets			Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
	(unaudited)
Derivatives	$	418	$	0	$	418		$	(1	)	(1)	$	(118	)	$	(186	)	$	113
Reverse repurchase agreements	2,021		0		2,021		(2)	0				0			(2,021		)	0
Total	$	2,439	$	0	$	2,439		$	(1	)		$	(118	)	$	(2,207	)	$	113

⁽¹⁾  The balances as of December 31, 2015 and June 30, 2016 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

⁽²⁾  The balances as of December 31, 2015 and June 30, 2016 included $1,140 million and $1,521 million, respectively, recorded in cash and cash equivalents, and $450 million and $500 million, respectively, recorded in receivable under reverse repurchase agreements.

Offsetting liabilities

Offsetting of Liabilities
	As of December 31, 2015
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
Derivatives	$	16	$	0	$	16	$	(13	)	(3)	$	(3	)	$	0		$	0
Securities lending agreements	2,428		0		2,428		0				0			(2,401		)	27
Total	$	2,444	$	0	$	2,444	$	(13	)		$	(3	)	$	(2,401	)	$	27
	As of June 30, 2016
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged			Non-Cash Collateral Pledged			Net Liabilities
	(unaudited)
Derivatives	$	2	$	0	$	2	$	(1	)	(3)	$	0		$	0		$	1
Securities lending agreements	2,065		0		2,065		0				0			(2,037		)	28
Total	$	2,067	$	0	$	2,067	$	(1	)		$	0		$	(2,037	)	$	29

⁽³⁾  The balances as of December 31, 2015 and June 30, 2016 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Non-Marketable Investments (Tables)

6 Months Ended

Jun. 30, 2016

Investments, All Other Investments [Abstract]

Investment in other assets

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

	Six Months Ended
	June 30,
	2015		2016
Beginning balance	$	90	$	1,024
Total net gains or losses
Included in other comprehensive income	0		90
Purchases	908		76
Sales	0		(6		)
Settlements	0		(14		)
Ending balance	$	998	$	1,170

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Debt (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The total outstanding long-term debt is summarized below (in millions):

	As of December 31, 2015			As of June 30, 2016
				(unaudited)
Short-Term Portion of Long-Term Debt
2.125% Notes due on May 19, 2016	$	1,000		$	0
Capital Lease Obligation	225			220
Total Short-Term Portion of Long-Term Debt	$	1,225		$	220
Long-Term Debt
3.625% Notes due on May 19, 2021	$	1,000		$	1,000
3.375% Notes due on February 25, 2024	1,000			1,000
Unamortized discount for the Notes above	(5		)	(16		)
Total Long-Term Debt(1)	$	1,995		$	1,984

⁽¹⁾  Includes portion of the Google Notes issued in 2011 and 2014 and the Alphabet Notes exchanged in 2016.

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Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2016

Balance Sheet Components Disclosure [Abstract]

Property and Equipment

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

	As of December 31, 2015			As of June 30, 2016
				(unaudited)
Land and buildings	$	16,518		$	18,770
Information technology assets	13,645			14,511
Construction in progress	7,324			7,601
Leasehold improvements	2,576			2,938
Furniture and fixtures	83			84
Property and equipment, gross	40,146			43,904
Less: accumulated depreciation and amortization	(11,130		)	(12,491		)
Property and equipment, net	$	29,016		$	31,413

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 on Cash Flow Hedges			Total
Balance as of December 31, 2014	$	(980	)	$	421		$	586		$	27
Other comprehensive income (loss) before reclassifications	(705		)	(115		)	501			(319		)
Amounts reclassified from AOCI	0			(77		)	(560		)	(637		)
Other comprehensive income (loss)	(705		)	(192		)	(59		)	(956		)
Balance as of June 30, 2015	$	(1,685	)	$	229		$	527		$	(929	)

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains on Cash Flow Hedges			Total
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)
Other comprehensive income (loss) before reclassifications	37			556			116			709
Amounts reclassified from AOCI	0			183			(169		)	14
Other comprehensive income (loss)	37			739			(53		)	723
Balance as of June 30, 2016	$	(2,010	)	$	653		$	206		$	(1,151	)

Schedule of Effects on Net Income of Amounts Reclassified from Accumulated OCI

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

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Three Months Ended						Six Months Ended
		June 30,						June 30,
AOCI Components	Location	2015			2016			2015			2016
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	53		$	(14	)	$	85		$	(183	)
	Provision for income taxes	(3		)	0			(8		)	0
	Net of tax	$	50		$	(14	)	$	77		$	(183	)
Unrealized gains on cash flow hedges
Foreign exchange contracts	Revenue	$	471		$	78		$	782		$	247
Interest rate contracts	Other income (expense), net	1			2			2			3
	Provision for income taxes	(143		)	(28		)	(224		)	(81		)
	Net of tax	$	329		$	52		$	560		$	169
Total amount reclassified, net of tax		$	379		$	38		$	637		$	(14	)

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2016 were as follows (in millions, unaudited):

	Google			Other Bets			Total Consolidated
Balance as of December 31, 2015	$	15,456		$	413		$	15,869
Acquisitions	10			1			11
Foreign currency translation and other adjustments	(32		)	(7		)	(39		)
Balance as of June 30, 2016	$	15,434		$	407		$	15,841

Schedule of finite-lived intangible assets

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

	As of December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Patents and developed technology	$	6,592	$	3,213	$	3,379
Customer relationships	1,343		1,201		142
Trade names and other	795		469		326
Total	$	8,730	$	4,883	$	3,847
	As of June 30, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
	(unaudited)
Patents and developed technology	$	6,597	$	3,568	$	3,029
Customer relationships	1,344		1,225		119
Trade names and other	805		501		304
Total	$	8,746	$	5,294	$	3,452

Schedule of future amortization expense

As of June 30, 2016, 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 2016	$	400
2017	736
2018	648
2019	538
2020	443
Thereafter	687
	$	3,452

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Other Income (Expense), Net (Tables)

6 Months Ended

Jun. 30, 2016

Other Income and Expenses [Abstract]

Schedule of other income (expense)

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Interest income	$	240		$	307		$	466		$	577
Interest expense	(26		)	(32		)	(52		)	(62		)
Foreign currency exchange losses, net	(99		)	(128		)	(161		)	(314		)
Gain (loss) on marketable securities, net	53			(9		)	85			(176		)
Loss on non-marketable investments, net	(70		)	(5		)	(118		)	(118		)
Other	33			18			68			31
Other income (expense), net	$	131		$	151		$	288		$	(62	)

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Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2016

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 June 30,
	2015								2016
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings	1,440			260			1,709		2,086			350			2,441
Total	$	1,440		$	260		$	2,231	$	2,086		$	350		$	2,441
Denominator
Number of shares used in per share computation	288,723			52,114			342,780		293,564			49,228			343,427
Basic net income per share	$	4.99		$	4.99		$	6.51	$	7.11		$	7.11		$	7.11
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings for basic computation	$	1,440		$	260		$	1,709	$	2,086		$	350		$	2,441
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	260			0			0		350			0			0
Reallocation of undistributed earnings	(7		)	(3		)	7		(22		)	(6		)	22
Allocation of undistributed earnings	$	1,693		$	257		$	1,716	$	2,414		$	344		$	2,463
Denominator
Number of shares used in basic computation	288,723			52,114			342,780		293,564			49,228			343,427
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	52,114			0			0		49,228			0			0
Employee stock options	1,546			0			1,502		1,603			0			1,531
Restricted stock units and other contingently issuable shares	807			0			3,406		598			0			6,896
Number of shares used in per share computation	343,190			52,114			347,688		344,993			49,228			351,854
Diluted net income per share	$	4.93		$	4.93		$	6.43	$	7.00		$	7.00		$	7.00

	Six Months Ended June 30,
	2015								2016
	(unaudited)
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings	2,921			533			3,470		3,880			656			4,548
Total	$	2,921		$	533		$	3,992	$	3,880		$	656		$	4,548
Denominator
Number of shares used in per share computation	287,800			52,480			341,986		293,415			49,584			343,870
Basic net income per share	$	10.15		$	10.15		$	11.68	$	13.23		$	13.23		$	13.23
Diluted net income per share:
Numerator
Adjustment Payment to Class C capital stockholders	$	0		$	0		$	522	$	0		$	0		$	0
Allocation of undistributed earnings for basic computation	$	2,921		$	533		$	3,470	$	3,880		$	656		$	4,548
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	533			0			0		656			0			0
Reallocation of undistributed earnings	(15		)	(7		)	15		(42		)	(11		)	42
Allocation of undistributed earnings	$	3,439		$	526		$	3,485	$	4,494		$	645		$	4,590
Denominator
Number of shares used in basic computation	287,800			52,480			341,986		293,415			49,584			343,870
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	52,480			0			0		49,584			0			0
Employee stock options	1,619			0			1,577		1,649			0			1,574
Restricted stock units and other contingently issuable shares	922			0			3,805		706			0			7,282
Number of shares used in per share computation	342,821			52,480			347,368		345,354			49,584			352,726
Diluted net income per share	$	10.03		$	10.03		$	11.53	$	13.01		$	13.01		$	13.01

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Schedule of allocated share-based compensation expense

The following table presents our aggregate stock-based compensation (SBC) expense by type of costs and expenses per the Consolidated Statements of Income (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Cost of revenues	$	163	$	255	$	323	$	496
Research and development	583		746		1,198		1,491
Sales and marketing	196		238		401		480
General and administrative	190		271		413		543
Total stock-based compensation expense	$	1,132	$	1,510	$	2,335	$	3,010

Schedule of stock option activity

The following table summarizes the activities for our stock options for the six months ended June 30, 2016:

	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions) (1)
	(unaudited)
Balance as of December 31, 2015	4,898,983		$	221.31
Granted	0		N/A
Exercised	(496,891	)	$	191.01
Forfeited/canceled	(5,935	)	$	239.95
Balance as of June 30, 2016	4,396,157		$	224.68	3.1	$	2,081
Exercisable as of June 30, 2016	4,267,129		$	221.89	3.0	$	2,031

⁽¹⁾  The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $703.53 and $692.10 for our Class A common stock and Class C capital stock, respectively, on June 30, 2016.

Schedule of restricted stock activity

The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2016:

	Unvested Restricted Stock Units
	Number of Shares		Weighted- Average Grant-Date Fair Value
	(unaudited)
Unvested as of December 31, 2015	25,741,186		$	531.74
Granted	2,553,113		$	726.71
Vested	(6,004,585	)	$	496.45
Forfeited/canceled	(705,791	)	$	523.12
Unvested as of June 30, 2016	21,583,923		$	564.63

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Information about Segments and Geographic Areas (Tables)

6 Months Ended

Jun. 30, 2016

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				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Revenues:
Google	$	17,653	$	21,315	$	34,831	$	41,407
Other Bets	74		185		154		350
Total revenues	$	17,727	$	21,500	$	34,985	$	41,757

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Operating income (loss):
Google	$	5,608		$	6,994		$	10,777		$	13,243
Other Bets	(660		)	(859		)	(1,272		)	(1,637		)
Reconciling items(1)	(123		)	(167		)	(233		)	(296		)
Total income from operations	$	4,825		$	5,968		$	9,272		$	11,310

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2015		2016			2015		2016
Capital expenditures:
Google	$	2,060	$	2,056		$	4,741	$	4,095
Other Bets	232		280			386		557
Reconciling items(2)	223		(213		)	315		(101		)
Total capital expenditures as presented in Consolidated Statements of Cash Flows	$	2,515	$	2,123		$	5,442	$	4,551

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

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Stock-based compensation:
Google	$	996	$	1,320	$	2,054	$	2,642
Other Bets	105		150		219		289
Reconciling items(3)	31		33		62		66
Total stock based compensation(4)	$	1,132	$	1,503	$	2,335	$	2,997
Depreciation, amortization, and impairment:
Google	$	1,189	$	1,409	$	2,326	$	2,726
Other Bets	45		81		85		135
Total depreciation, amortization, and impairment as presented in Consolidated Statements of Cash Flows	$	1,234	$	1,490	$	2,411	$	2,861

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

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

Revenue by geographic area

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015(1)		2016		2015		2016
Revenues:
United States	$	8,048	$	10,035	$	15,769	$	19,416
United Kingdom	1,678		1,914		3,353		3,835
Rest of the world	8,001		9,551		15,863		18,506
Total revenues	$	17,727	$	21,500	$	34,985	$	41,757

Schedule of long-lived assets by geographic area

	As of December 31, 2015		As of June 30, 2016
			(unaudited)
Long-lived assets:
United States	$	43,686	$	46,142
International	13,661		13,912
Total long-lived assets	$	57,347	$	60,054

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Financial Instruments (Cash, Cash Equivalents and Marketable Securities Measured at Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses, and Fair Value By Significant Investment Category) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	$ 77,685	$ 73,141
Gross Unrealized Gains	858	346
Gross Unrealized Losses	(83)	(421)
Fair Value	78,460	73,066
Cash and Cash Equivalents	13,627	16,549	$ 18,453	$ 18,347
Marketable Securities	64,833	56,517
Cash
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	5,561	7,380
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	5,561	7,380
Cash and Cash Equivalents	5,561	7,380
Marketable Securities	0	0
Level 1
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	32,678	27,237
Gross Unrealized Gains	306	182
Gross Unrealized Losses	0	(48)
Fair Value	32,984	27,371
Cash and Cash Equivalents	6,000	5,881
Marketable Securities	26,984	21,490
Level 1 | Money market and other funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	3,909	5,623
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	3,909	5,623
Cash and Cash Equivalents	3,909	5,623
Marketable Securities	0	0
Level 1 | U.S. government notes
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	28,606	20,922
Gross Unrealized Gains	259	27
Gross Unrealized Losses	0	(48)
Fair Value	28,865	20,901
Cash and Cash Equivalents	2,091	258
Marketable Securities	26,774	20,643
Level 1 | Marketable equity securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	163	692
Gross Unrealized Gains	47	155
Gross Unrealized Losses	0	0
Fair Value	210	847
Cash and Cash Equivalents	0	0
Marketable Securities	210	847
Level 2
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	39,446	38,524
Gross Unrealized Gains	552	164
Gross Unrealized Losses	(83)	(373)
Fair Value	39,915	38,315
Cash and Cash Equivalents	2,066	3,288
Marketable Securities	37,849	35,027
Level 2 | Money market and other funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	1,521	1,140
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	1,521	1,140
Cash and Cash Equivalents	1,521	1,140
Marketable Securities	0	0
Level 2 | Time deposits
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	230	3,223
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	230	3,223
Cash and Cash Equivalents	228	2,012
Marketable Securities	2	1,211
Level 2 | Mutual funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	214
Gross Unrealized Gains	6
Gross Unrealized Losses	0
Fair Value	220
Cash and Cash Equivalents	0
Marketable Securities	220
Level 2 | Fixed-income bond funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost		219
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Fair Value		219
Cash and Cash Equivalents		0
Marketable Securities		219
Level 2 | U.S. government agencies
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	3,360	1,367
Gross Unrealized Gains	6	2
Gross Unrealized Losses	0	(3)
Fair Value	3,366	1,366
Cash and Cash Equivalents	250	0
Marketable Securities	3,116	1,366
Level 2 | Foreign government bonds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	2,359	2,242
Gross Unrealized Gains	45	14
Gross Unrealized Losses	(5)	(23)
Fair Value	2,399	2,233
Cash and Cash Equivalents	0	0
Marketable Securities	2,399	2,233
Level 2 | Municipal securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	4,491	3,812
Gross Unrealized Gains	99	47
Gross Unrealized Losses	(3)	(4)
Fair Value	4,587	3,855
Cash and Cash Equivalents	61	0
Marketable Securities	4,526	3,855
Level 2 | Corporate debt securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	13,700	13,809
Gross Unrealized Gains	233	53
Gross Unrealized Losses	(68)	(278)
Fair Value	13,865	13,584
Cash and Cash Equivalents	6	136
Marketable Securities	13,859	13,448
Level 2 | Agency mortgage-backed securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	11,016	9,680
Gross Unrealized Gains	160	48
Gross Unrealized Losses	(5)	(57)
Fair Value	11,171	9,671
Cash and Cash Equivalents	0	0
Marketable Securities	11,171	9,671
Level 2 | Asset-backed securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	2,555	3,032
Gross Unrealized Gains	3	0
Gross Unrealized Losses	(2)	(8)
Fair Value	2,556	3,024
Cash and Cash Equivalents	0	0
Marketable Securities	$ 2,556	$ 3,024

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Financial Instruments (Contractual Maturity Date of Marketable Debt Securities) (Details) $ in Millions	Jun. 30, 2016 USD ($)
Fair Value Disclosures [Abstract]
Due in 1 year	$ 7,302
Due in 1 year through 5 years	36,934
Due in 5 years through 10 years	8,374
Due after 10 years	11,793
Total	$ 64,403

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Financial Instruments (Gross Unrealized Losses and Fair Values for Investments in Unrealized Loss Position) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	$ 3,104	$ 34,105
Less than 12 Months, Unrealized Loss	(33)	(315)
12 Months or Greater, Fair Value	1,711	1,968
12 Months or Greater, Unrealized Loss	(50)	(106)
Total Fair Value	4,815	36,073
Total Unrealized Loss	(83)	(421)
U.S. government notes
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value		13,757
Less than 12 Months, Unrealized Loss		(48)
12 Months or Greater, Fair Value		0
12 Months or Greater, Unrealized Loss		0
Total Fair Value		13,757
Total Unrealized Loss		(48)
U.S. government agencies
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value		864
Less than 12 Months, Unrealized Loss		(3)
12 Months or Greater, Fair Value		0
12 Months or Greater, Unrealized Loss		0
Total Fair Value		864
Total Unrealized Loss		(3)
Foreign government bonds
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	302	885
Less than 12 Months, Unrealized Loss	(1)	(18)
12 Months or Greater, Fair Value	66	36
12 Months or Greater, Unrealized Loss	(4)	(5)
Total Fair Value	368	921
Total Unrealized Loss	(5)	(23)
Municipal securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	301	1,116
Less than 12 Months, Unrealized Loss	(2)	(3)
12 Months or Greater, Fair Value	61	41
12 Months or Greater, Unrealized Loss	(1)	(1)
Total Fair Value	362	1,157
Total Unrealized Loss	(3)	(4)
Corporate debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	1,841	9,192
Less than 12 Months, Unrealized Loss	(28)	(202)
12 Months or Greater, Fair Value	897	784
12 Months or Greater, Unrealized Loss	(40)	(76)
Total Fair Value	2,738	9,976
Total Unrealized Loss	(68)	(278)
Agency mortgage-backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	660	5,783
Less than 12 Months, Unrealized Loss	(2)	(34)
12 Months or Greater, Fair Value	389	721
12 Months or Greater, Unrealized Loss	(3)	(23)
Total Fair Value	1,049	6,504
Total Unrealized Loss	(5)	(57)
Asset-backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	0	2,508
Less than 12 Months, Unrealized Loss	0	(7)
12 Months or Greater, Fair Value	298	386
12 Months or Greater, Unrealized Loss	(2)	(1)
Total Fair Value	298	2,894
Total Unrealized Loss	$ (2)	$ (8)

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Financial Instruments (Securities Lending Program) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Assets Sold under Agreements to Repurchase [Line Items]
Total	$ 2,065	$ 2,428
Gross amount of recognized liabilities for securities lending in offsetting disclosure	2,065	2,428
Amounts related to agreements not included in securities lending in offsetting disclosure	0	0
Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	1,753	2,014
Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	210	108
30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0	0
Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	102	306
U.S. government notes
Assets Sold under Agreements to Repurchase [Line Items]
Total	1,153	1,659
U.S. government notes | Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	969	1,322
U.S. government notes | Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	82	31
U.S. government notes | 30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0	0
U.S. government notes | Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	102	306
U.S. government agencies
Assets Sold under Agreements to Repurchase [Line Items]
Total	692	581
U.S. government agencies | Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	564	504
U.S. government agencies | Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	128	77
U.S. government agencies | 30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0	0
U.S. government agencies | Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0	0
Corporate debt securities
Assets Sold under Agreements to Repurchase [Line Items]
Total	220	188
Corporate debt securities | Overnight and Continuous
Assets Sold under Agreements to Repurchase [Line Items]
Total	220	188
Corporate debt securities | Up to 30 days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0	0
Corporate debt securities | 30 - 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	0	0
Corporate debt securities | Greater Than 90 Days
Assets Sold under Agreements to Repurchase [Line Items]
Total	$ 0	$ 0

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Financial Instruments (Fair Values of Outstanding Derivative Instruments) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Derivative Assets:
Derivative Assets	$ 418	$ 628
Derivative Liabilities:
Derivative Liabilities	2	16
Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative Assets	418	628
Level 2 | Foreign exchange contracts | Accrued expenses and other current liabilities
Derivative Liabilities:
Derivative Liabilities	2	14
Level 2 | Interest rate contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities		2
Fair Value of Derivatives Designated as Hedging Instruments
Derivative Assets:
Derivative Assets	412	626
Derivative Liabilities:
Derivative Liabilities	0	3
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative Assets	412	626
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Accrued expenses and other current liabilities
Derivative Liabilities:
Derivative Liabilities	0	1
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Interest rate contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities		2
Derivatives Not Designated as Hedging Instruments
Derivative Assets:
Derivative Assets	6	2
Derivative Liabilities:
Derivative Liabilities	2	13
Derivatives Not Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative Assets	6	2
Derivatives Not Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Accrued expenses and other current liabilities
Derivative Liabilities:
Derivative Liabilities	$ 2	13
Derivatives Not Designated as Hedging Instruments | Level 2 | Interest rate contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities		$ 0

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Financial Instruments (Effect of Derivative Instruments on Income and Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivatives in Cash Flow Hedging Relationship
Derivative Instruments, Gain (Loss) [Line Items]
Gains Reclassified from AOCI into Income (Effective Portion)	$ 80	$ 472	$ 250	$ 784
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)	155	(120)	188	716
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Revenues
Derivative Instruments, Gain (Loss) [Line Items]
Gains Reclassified from AOCI into Income (Effective Portion)	78	471	247	782
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Interest and other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing and Ineffective Portion)	(120)	(66)	(259)	(167)
Derivatives in Cash Flow Hedging Relationship | Interest rate contracts | Interest and other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Gains Reclassified from AOCI into Income (Effective Portion)	2	1	3	2
Derivatives in Fair Value Hedging Relationship | Interest and other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Losses related to the amount excluded from effectiveness testing of the hedges	0	2	0	4
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total	0	(2)	0	(4)
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts | Interest and other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts	53	(44)	25	67
Hedged item	(53)	42	(25)	(71)
Derivatives in Fair Value Hedging Relationship | Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total	0	0	0	0
Derivatives in Fair Value Hedging Relationship | Interest rate contracts | Interest and other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts	2	1	(3)	(1)
Hedged item	(2)	(1)	3	1
Derivatives Not Designated as Hedging Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives	(11)	(62)	(93)	88
Derivatives Not Designated as Hedging Instruments | Foreign exchange contracts | Interest and other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives	(6)	(66)	(80)	91
Derivatives Not Designated as Hedging Instruments | Interest rate contracts | Interest and other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives	$ (5)	$ 4	$ (13)	$ (3)

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Financial Instruments (Offsetting of Financial Assets and Financial Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Derivative Assets [Abstract]
Gross Amounts of Recognized Assets	$ 418	$ 628
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	418	628
Financial Instruments	(1)	(13)
Cash Collateral Received	(118)	(189)
Non-Cash Collateral Received	(186)	(214)
Net Assets Exposed	113	212
Offsetting Securities Purchased under Agreements to Resell and Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	2,021	1,590
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2,021	1,590
Financial Instruments	0	0
Cash Collateral Received	0	0
Non-Cash Collateral Received	(2,021)	(1,590)
Net Assets Exposed	0	0
Offsetting Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	2,439	2,218
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2,439	2,218
Financial Instruments	(1)	(13)
Cash Collateral Received	(118)	(189)
Non-Cash Collateral Received	(2,207)	(1,804)
Net Assets Exposed	113	212
Offsetting Derivative Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	2	16
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2	16
Financial Instruments	(1)	(13)
Cash Collateral Pledged	0	(3)
Non-Cash Collateral Pledged	0	0
Net Liabilities	1	0
Offsetting Securities Loaned [Abstract]
Gross Amounts of Recognized Liabilities	2,065	2,428
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2,065	2,428
Financial Instruments	0	0
Cash Collateral Pledged	0	0
Non-Cash Collateral Pledged	(2,037)	(2,401)
Net Liabilities	28	27
Offsetting Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned [Abstract]
Gross Amounts of Recognized Liabilities	2,067	2,444
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Presented in the Consolidated Balance Sheets	2,067	2,444
Financial Instruments	(1)	(13)
Cash Collateral Pledged	0	(3)
Non-Cash Collateral Pledged	(2,037)	(2,401)
Net Liabilities	29	27
Cash and cash equivalents
Offsetting Securities Purchased under Agreements to Resell and Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	1,521	1,140
Receivable under reverse repurchase agreements
Offsetting Securities Purchased under Agreements to Resell and Securities Borrowed [Abstract]
Gross Amounts of Recognized Assets	$ 500	$ 450

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Financial Instruments (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Financial Instruments and Fair Value [Line Items]
Gross realized gains on the sale of our marketable securities	$ 91,000,000	$ 104,000,000	$ 159,000,000	$ 181,000,000
Gross realized losses on the sale of our marketable securities	100,000,000	51,000,000	335,000,000	96,000,000
Other-than-temporary impairment losses recognized	0	$ 0	87,000,000	$ 0
Cash collateral received from derivative financial instruments	150,000,000		150,000,000		$ 192,000,000
Effective portion of our cash flow hedges before tax effect	313,000,000		313,000,000
Foreign currency gain (loss) to be reclassified during next 12 months	255,000,000		255,000,000
Interest rate contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	0		0		50,000,000
Cash Flow Hedging Relationship | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	10,400,000,000		$ 10,400,000,000		16,400,000,000
Foreign exchange option contracts, maximum maturities			36 months
Derivatives in Fair Value Hedging Relationship | Interest rate contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	0		$ 0		295,000,000
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	1,900,000,000		1,900,000,000		1,800,000,000
Derivatives Not Designated as Hedging Instruments | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	$ 6,400,000,000		$ 6,400,000,000		$ 7,500,000,000

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Non-Marketable Investments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investments, All Other Investments [Abstract]
Equity method investments	$ 1,700		$ 1,700		$ 1,600
Loss on equity method investments	43	$ 59	148	$ 89
Cost method investments	3,000		3,000		2,600
Fair value of cost method investments	8,100		8,100		7,500
Variable Interest Entity [Line Items]
Cost of non-marketable debt securities	1,100		1,100		1,000
VIE, Not Primary Beneficiary, Aggregated Disclosure
Variable Interest Entity [Line Items]
Net assets of VIE	1,300		1,300		1,300
Maximum loss exposure	$ 1,300		$ 1,300		$ 1,300

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Non-Marketable Investments (Rollforward of Other Marketable Investments) (Details) - Non-Marketable Debt Securities - Level 3 - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Other Investments Not Readily Marketable [Roll Forward]
Beginning balance	$ 1,024	$ 90
Included in other comprehensive income	90	0
Purchases	76	908
Sales	(6)	0
Settlements	(14)	0
Ending balance	$ 1,170	$ 998

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Debt (Long-Term Debt) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Apr. 30, 2016	Dec. 31, 2015
Short-Term Portion of Long-Term Debt
Capital Lease Obligation	$ 220		$ 225
Total Short-Term Portion of Long-Term Debt	220		1,225
Long-Term Debt
Unamortized discount for the Notes above	(16)		(5)
Total Long-Term Debt	1,984		1,995
2.125% Notes due on May 19, 2016
Short-Term Portion of Long-Term Debt
Long-term debt, current portion	$ 0		1,000
Long-Term Debt
Long-term debt, interest rate	2.125%
3.625% Notes due on May 19, 2021
Long-Term Debt
Long-Term Debt	$ 1,000		1,000
Long-term debt, interest rate		3.625%
3.375% Notes due on February 25, 2024
Long-Term Debt
Long-Term Debt	$ 1,000		$ 1,000
Long-term debt, interest rate		3.375%

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Debt (Narrative) (Details)	1 Months Ended		6 Months Ended
	May 31, 2016 USD ($)	Apr. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Feb. 29, 2016 USD ($)	Dec. 31, 2015 USD ($)	Feb. 28, 2014 USD ($)	May 31, 2011 USD ($) Loan
Debt Instrument [Line Items]
Outstanding balance of commercial paper			$ 2,000,000,000			$ 2,000,000,000
Weighted average yield for commercial paper outstanding			0.50%			0.20%
Debt instrument issued		$ 1,700,000,000
Repayments of debt			$ 6,801,000,000	$ 6,704,000,000
Gain (loss) on modification of debt		$ 0
Estimated fair value of long-term debt			$ 2,200,000,000			$ 3,100,000,000
3.625% Notes due on May 19, 2021
Debt Instrument [Line Items]
Long-term debt, interest rate		3.625%
Effective interest rate			3.734%
3.375% Notes due on February 25, 2024
Debt Instrument [Line Items]
Long-term debt, interest rate		3.375%
Effective interest rate			3.377%
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
Google | 3.625% Notes due on May 19, 2021
Debt Instrument [Line Items]
Long-term debt, interest rate		3.625%
Google | 3.375% Notes due on February 25, 2024
Debt Instrument [Line Items]
Long-term debt, interest rate		3.375%
Google | Unsecured Senior Notes 3.375% due on February 2024 and Unsecured Senior Notes 3.625% Due May 2021
Debt Instrument [Line Items]
Debt subject to exchange		$ 1,700,000,000
Google | Unsecured debt | 2011 Notes
Debt Instrument [Line Items]
Debt instrument issued								$ 3,000,000,000.0
Number of unsecured senior notes tranches | Loan								3
Repayments of debt	$ 1,000,000,000
Google | Unsecured debt | 2014 Notes
Debt Instrument [Line Items]
Debt instrument issued							$ 1,000,000,000.0
Google | Commercial Paper
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit						3,000,000,000.0
Google | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit						$ 3,000,000,000.0

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Balance Sheet Components (Property and Equipment) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 43,904	$ 40,146
Less: accumulated depreciation and amortization	(12,491)	(11,130)
Property and equipment, net	31,413	29,016
Land and buildings
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	18,770	16,518
Information technology assets
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	14,511	13,645
Construction in progress
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	7,601	7,324
Leasehold improvements
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	2,938	2,576
Furniture and fixtures
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	84	$ 83
Property, Plant and Equipment
Property, Plant and Equipment, Net [Abstract]
Cost basis of property and equipment under capital lease	484
Assets held for sale included in property and equipment	$ 515

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Balance Sheet Components (Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 120,331
Other comprehensive income (loss) before reclassifications	709	$ (319)
Amounts reclassified from AOCI	14	(637)
Other comprehensive income (loss)	723	(956)
Ending Balance	127,879
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(2,047)	(980)
Other comprehensive income (loss) before reclassifications	37	(705)
Amounts reclassified from AOCI	0	0
Other comprehensive income (loss)	37	(705)
Ending Balance	(2,010)	(1,685)
Unrealized Gains (Losses) on Available-for-Sale Investments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(86)	421
Other comprehensive income (loss) before reclassifications	556	(115)
Amounts reclassified from AOCI	183	(77)
Other comprehensive income (loss)	739	(192)
Ending Balance	653	229
Unrealized Gains on Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	259	586
Other comprehensive income (loss) before reclassifications	116	501
Amounts reclassified from AOCI	(169)	(560)
Other comprehensive income (loss)	(53)	(59)
Ending Balance	206	527
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(1,874)	27
Ending Balance	$ (1,151)	$ (929)

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Balance Sheet Components (Effects on Net Income of Amounts Reclassified from AOCI) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Revenue	$ 21,500	$ 17,727	$ 41,757	$ 34,985
Other income (expense), net	151	131	(62)	288
Provision for income taxes	(1,242)	(1,025)	(2,164)	(2,114)
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	38	379	(14)	637
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains (losses) on available-for-sale investments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	(14)	53	(183)	85
Provision for income taxes	0	(3)	0	(8)
Net income	(14)	50	(183)	77
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains on cash flow hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	52	329	169	560
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains on cash flow hedges | Foreign exchange contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Revenue	78	471	247	782
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains on cash flow hedges | Interest rate contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	2	1	3	2
Provision for income taxes	$ (28)	$ (143)	$ (81)	$ (224)

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Calico (Narrative) (Details) $ in Millions	33 Months Ended
	Jun. 30, 2016 USD ($)
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Payments to acquire interest in joint venture	$ 240
Commitment to Invest
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research commitments	490
Research and development arrangement | Calico
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research commitments	500
Accumulated payments for research and development commitment	250
Research and development arrangement | AbbVie Inc
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Accumulated payments for research and development commitment	$ 750

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Goodwill and Other Intangible Assets (Changes in Carrying Amount of Goodwill) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Roll Forward]
Balance as of December 31, 2015	$ 15,869
Acquisitions	11
Foreign currency translation and other adjustments	(39)
Balance as of June 30, 2016	15,841
Google
Goodwill [Roll Forward]
Balance as of December 31, 2015	15,456
Acquisitions	10
Foreign currency translation and other adjustments	(32)
Balance as of June 30, 2016	15,434
Other Bets
Goodwill [Roll Forward]
Balance as of December 31, 2015	413
Acquisitions	1
Foreign currency translation and other adjustments	(7)
Balance as of June 30, 2016	$ 407

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Goodwill and Other Intangible Assets (Acquisition-Related Intangible Assets that are being Amortized) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 8,746		$ 8,746		$ 8,730
Accumulated Amortization	5,294		5,294		4,883
Net Carrying Amount	3,452		3,452		3,847
Patents and developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	6,597		6,597		6,592
Accumulated Amortization	3,568		3,568		3,213
Net Carrying Amount	3,029		3,029		3,379
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,344		1,344		1,343
Accumulated Amortization	1,225		1,225		1,201
Net Carrying Amount	119		119		142
Trade names and other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	805		805		795
Accumulated Amortization	501		501		469
Net Carrying Amount	304		304		$ 326
Acquisition-related intangible assets
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization of acquisition-related intangible assets	$ 210	$ 222	$ 426	$ 461

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Goodwill and Other Intangible Assets (Expected Amortization Expense for Acquisition-Related Intangible Assets) (Details) $ in Millions	Jun. 30, 2016 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2016	$ 400
2017	736
2018	648
2019	538
2020	443
Thereafter	687
Net Carrying Value	$ 3,452

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Other Income (Expense), Net (Schedule of Interest and Other Income) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Other Income and Expenses [Abstract]
Interest income	$ 307	$ 240	$ 577	$ 466
Interest expense	(32)	(26)	(62)	(52)
Foreign currency exchange losses, net	(128)	(99)	(314)	(161)
Gain (loss) on marketable securities, net	(9)	53	(176)	85
Loss on non-marketable investments, net	(5)	(70)	(118)	(118)
Other	18	33	31	68
Other income (expense), net	$ 151	$ 131	$ (62)	$ 288

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Net Income Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator
Adjustment Payment to Class C capital stockholders	$ 0	$ (522)	$ 0	$ (522)
Net income	4,877	3,931	9,084	7,446
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	0	(522)	0	(522)
Class A Common Stock
Numerator
Adjustment Payment to Class C capital stockholders	0	0	0	0
Allocation of undistributed earnings	2,086	1,440	3,880	2,921
Net income	$ 2,086	$ 1,440	$ 3,880	$ 2,921
Denominator
Number of shares used in basic computation (shares)	293,564	288,723	293,415	287,800
Net income per share - basic (in dollars per share)	$ 7.11	$ 4.99	$ 13.23	$ 10.15
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$ 0	$ 0	$ 0	$ 0
Allocation of undistributed earnings	2,086	1,440	3,880	2,921
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	350	260	656	533
Reallocation of undistributed earnings	(22)	(7)	(42)	(15)
Allocation of undistributed earnings	$ 2,414	$ 1,693	$ 4,494	$ 3,439
Denominator
Number of shares used in basic computation (shares)	293,564	288,723	293,415	287,800
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	49,228	52,114	49,584	52,480
Employee stock options (shares)	1,603	1,546	1,649	1,619
Restricted stock units and other contingently issuable shares (shares)	598	807	706	922
Number of shares used in per share computation (shares)	344,993	343,190	345,354	342,821
Net income per share - diluted (in dollars per share)	$ 7.00	$ 4.93	$ 13.01	$ 10.03
Class B Common Stock
Numerator
Adjustment Payment to Class C capital stockholders	$ 0	$ 0	$ 0	$ 0
Allocation of undistributed earnings	350	260	656	533
Net income	$ 350	$ 260	$ 656	$ 533
Denominator
Number of shares used in basic computation (shares)	49,228	52,114	49,584	52,480
Net income per share - basic (in dollars per share)	$ 7.11	$ 4.99	$ 13.23	$ 10.15
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$ 0	$ 0	$ 0	$ 0
Allocation of undistributed earnings	350	260	656	533
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0	0
Reallocation of undistributed earnings	(6)	(3)	(11)	(7)
Allocation of undistributed earnings	$ 344	$ 257	$ 645	$ 526
Denominator
Number of shares used in basic computation (shares)	49,228	52,114	49,584	52,480
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	0	0	0	0
Employee stock options (shares)	0	0	0	0
Restricted stock units and other contingently issuable shares (shares)	0	0	0	0
Number of shares used in per share computation (shares)	49,228	52,114	49,584	52,480
Net income per share - diluted (in dollars per share)	$ 7.00	$ 4.93	$ 13.01	$ 10.03
Class C Capital Stock
Numerator
Adjustment Payment to Class C capital stockholders	$ 0	$ 522	$ 0	$ 522
Allocation of undistributed earnings	2,441	1,709	4,548	3,470
Net income	$ 2,441	$ 2,231	$ 4,548	$ 3,992
Denominator
Number of shares used in basic computation (shares)	343,427	342,780	343,870	341,986
Net income per share - basic (in dollars per share)	$ 7.11	$ 6.51	$ 13.23	$ 11.68
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$ 0	$ 522	$ 0	$ 522
Allocation of undistributed earnings	2,441	1,709	4,548	3,470
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0	0
Reallocation of undistributed earnings	22	7	42	15
Allocation of undistributed earnings	$ 2,463	$ 1,716	$ 4,590	$ 3,485
Denominator
Number of shares used in basic computation (shares)	343,427	342,780	343,870	341,986
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	0	0	0	0
Employee stock options (shares)	1,531	1,502	1,574	1,577
Restricted stock units and other contingently issuable shares (shares)	6,896	3,406	7,282	3,805
Number of shares used in per share computation (shares)	351,854	347,688	352,726	347,368
Net income per share - diluted (in dollars per share)	$ 7.00	$ 6.43	$ 13.01	$ 11.53

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Stockholders' Equity (Share Based Compensation Allocation) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 1,510	$ 1,132	$ 3,010	$ 2,335
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	255	163	496	323
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	746	583	1,491	1,198
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	238	196	480	401
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 271	$ 190	$ 543	$ 413

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Stockholders' Equity (Stock Option Activity) (Details) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares
Options Outstanding - Number of Shares
Balance at December 31 (in shares) | shares	4,898,983
Granted (in shares) | shares	0
Exercised (in shares) | shares	(496,891)
Forfeited/canceled (in shares) | shares	(5,935)
Balance at June 30 (in shares) | shares	4,396,157
Exercisable as of June 30 (in shares) | shares	4,267,129
Options Outstanding - Weighted-Average Exercise Price
Balance at December 31 (in dollars per share)	$ 221.31
Exercised (in dollars per share)	191.01
Forfeited/canceled (in dollars per share)	239.95
Balance at June 30 (in dollars per share)	224.68
Exercisable as of June 30 (in dollars per share)	$ 221.89
Options Outstanding - Weighted-Average Remaining Contractual Term
Balance as of June 30	3 years 1 month
Exercisable as of June 30	3 years
Options Outstanding - Average Intrinsic Value
Balance as of June 30 | $	$ 2,081
Exercisable as of June 30 | $	$ 2,031
Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing stock price (in dollars per share)	$ 703.53
Class C Capital Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing stock price (in dollars per share)	$ 692.10

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Stockholders' Equity (Unvested Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Unvested restricted stock units - number of shares
Unvested at December 31 (in shares) | shares	25,741,186
Granted (in shares) | shares	2,553,113
Vested (in shares) | shares	(6,004,585)
Forfeited/canceled (in shares) | shares	(705,791)
Unvested at June 30 (in shares) | shares	21,583,923
Unvested restricted stock units - weighted-average grant-date fair value
Unvested at December 31 (in dollars per share) | $ / shares	$ 531.74
Granted (in dollars per share) | $ / shares	726.71
Vested (in dollars per share) | $ / shares	496.45
Forfeited/canceled (in dollars per share) | $ / shares	523.12
Unvested at June 30 (in dollars per share) | $ / shares	$ 564.63

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Stockholders' Equity (Narrative) (Details) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jan. 31, 2016	Jan. 01, 2016	Oct. 31, 2015
Stockholders Equity Note [Line Items]
Awards settled with cash	$ 7,000,000	$ 0	$ 13,000,000	$ 0
Restricted Stock Units (RSUs)
Stockholders Equity Note [Line Items]
Unrecognized compensation cost	$ 11,000,000,000		$ 11,000,000,000
Weighted average recognition period for unrecognized stock-based compensation expense			2 years 6 months
January 2016 Share Repurchase Authorization
Stockholders Equity Note [Line Items]
Additional shares authorized to repurchase (in shares)					514
Class C Capital Stock | October 2015 Share Repurchase Program
Stockholders Equity Note [Line Items]
Authorized share repurchase amount							$ 5,099,019,513.59
Repurchases of capital stock (in shares)			5,200
Repurchases of capital stock			$ 3,700,000,000
Accounting Standards Update 2016-09
Stockholders Equity Note [Line Items]
Cumulative adjustment for new accounting pronouncement						$ 133,000,000

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Income Taxes (Narrative) (Details) - USD ($) $ in Billions	Jun. 30, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Total unrecognized tax benefits	$ 4.4	$ 4.2
Total unrecognized tax benefits that, if recognized, would affect our effective tax rate	$ 3.8	$ 3.6

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Information about Segments and Geographic Areas (Revenue by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Revenues	$ 21,500	$ 17,727	$ 41,757	$ 34,985
Google
Segment Reporting Information [Line Items]
Revenues	21,315	17,653	41,407	34,831
Other Bets
Segment Reporting Information [Line Items]
Revenues	$ 185	$ 74	$ 350	$ 154

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Information about Segments and Geographic Areas (Operating Income/Loss by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Segment operating income / (loss)	$ 5,968	$ 4,825	$ 11,310	$ 9,272
Operating Segments | Google
Segment Reporting Information [Line Items]
Segment operating income / (loss)	6,994	5,608	13,243	10,777
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Segment operating income / (loss)	(859)	(660)	(1,637)	(1,272)
Reconciling items
Segment Reporting Information [Line Items]
Segment operating income / (loss)	$ (167)	$ (123)	$ (296)	$ (233)

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Information about Segments and Geographic Areas (Capital Expenditures by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Capital expenditures	$ 2,123	$ 2,515	$ 4,551	$ 5,442
Operating Segments | Google
Segment Reporting Information [Line Items]
Capital expenditures	2,056	2,060	4,095	4,741
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Capital expenditures	280	232	557	386
Reconciling items
Segment Reporting Information [Line Items]
Capital expenditures	$ (213)	$ 223	$ (101)	$ 315

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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		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Stock-based compensation	$ 1,503	$ 1,132	$ 2,997	$ 2,335
Depreciation, amortization and impairment	1,490	1,234	2,861	2,411
Operating Segments | Google
Segment Reporting Information [Line Items]
Stock-based compensation	1,320	996	2,642	2,054
Depreciation, amortization and impairment	1,409	1,189	2,726	2,326
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Stock-based compensation	150	105	289	219
Depreciation, amortization and impairment	81	45	135	85
Reconciling items
Segment Reporting Information [Line Items]
Stock-based compensation	$ 33	$ 31	$ 66	$ 62

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Information about Segments and Geographic Areas (Revenues by Geographic Area) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 21,500	$ 17,727	$ 41,757	$ 34,985
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	10,035	8,048	19,416	15,769
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	1,914	1,678	3,835	3,353
Rest of the world
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 9,551	$ 8,001	$ 18,506	$ 15,863

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Information about Segments and Geographic Areas (Long-Lived Assets by Geographic Area) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 60,054	$ 57,347
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	46,142	43,686
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 13,912	$ 13,661

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Subsequent Event (Details) - USD ($)	Aug. 09, 2016	Aug. 02, 2016	Apr. 30, 2016
Subsequent Event [Line Items]
Aggregate principal amount of debt issuance			$ 1,700,000,000
2026 Notes | Subsequent Event
Subsequent Event [Line Items]
Aggregate principal amount of debt issuance		$ 2,000,000,000.0
Long-term debt, interest rate		1.998%
Forecast | 2026 Notes | Subsequent Event
Subsequent Event [Line Items]
Proceeds from sale of Notes	$ 1,948,000,000