UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549___________________________________________FORM 10-K___________________________________________(Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto.

Commission file number: 001-37580___________________________________________

Alphabet Inc.
(Exact name of registrant as specified in its charter)___________________________________________

Delaware61-1767919(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

1600 Amphitheatre Parkway
Mountain View, CA 94043(Address of principal executive offices, including zip code)(650) 253-0000(Registrant's telephone number, including area code)

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

None___________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☒ No ☐Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of theAct. Yes ☐ No ☒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 suchreports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit such files). Yes ☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smallerreporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smallerreporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer
Emerging growth company

☒
☐
☐

☐
☐

Accelerated filer
Smaller reporting company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of theeffectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by
the registered public accounting firm that prepared or issued its audit report. ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐

No ☒

As of June 30, 2021, the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing saleprices of such shares on the Nasdaq Global Select Market on June 30, 2021) was approximately $1,451.1 billion. For purposes ofcalculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares are held by
non-affiliates, except for shares held by each of our executive officers, directors and 5% or greater stockholders. In the case of 5%
or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances which
would indicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding
common stock. These assumptions should not be deemed to constitute an admission that all executive officers, directors and 5% orgreater stockholders are, in fact, affiliates of our company, or that there are not other persons who may be deemed to be affiliates ofour company. Further information concerning shareholdings of our officers, directors and principal stockholders is included orincorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.
As of January 25, 2022, there were 300,754,904 shares of the registrant’s Class A common stock outstanding, 44,576,938 shares of
the registrant’s Class B common stock outstanding, and 315,639,479 shares of the registrant’s Class C capital stock outstanding.
___________________________________________

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the 2022 Annual Meeting of Stockholders are incorporated herein by reference inPart III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities andExchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2021.

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Alphabet Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2021
TABLE OF CONTENTS
Page

Note About Forward-Looking Statements

3PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

4
10
24
24
24
24

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

25

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

88
88
88

Exhibits, Financial Statement Schedules
Form 10-K Summary

89
92

PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16.
Signatures

2

27
28
42
45
86
86
86
87

88
88

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NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These include, among other things, statements regarding:•the ongoing effect of the novel coronavirus pandemic ("COVID-19"), including its macroeconomic effects on
our business, operations, and financial results;•

the growth of our business and revenues and our expectations about the factors that influence our successand trends in our business;•fluctuations in our revenue growth rate and operating margin and various factors contributing to such
fluctuations;•

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

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

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

our expectation that our monetization trends will fluctuate, which could affect our revenues and margins;•fluctuations in our revenue growth, as well as the change in paid clicks and cost-per-click and the change in
impressions and cost-per-impression, and various factors contributing to such fluctuations;•

our expectation that we will continue to periodically review, refine, and update our methodologies formonitoring, gathering, and counting the number of paid clicks and impressions;•

our expectation that our results will be affected by our performance in international markets as users indeveloping economies increasingly come online;•

our expectation that our foreign exchange risk management program will not fully offset our net exposure tofluctuations in foreign currency exchange rates;•

the expected variability of gains and losses related to hedging activities under our foreign exchange risk
management program;•the amount and timing of revenue recognition from customer contracts with commitments for performanceobligations, including our estimate of the remaining amount of commitments and when we expect to recognize
revenue;•fluctuations in our capital expenditures;•

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

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

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

estimates of our future compensation expenses;•

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

fluctuations in our effective tax rate;•seasonal fluctuations in internet usage and advertiser expenditures, underlying business trends such as
traditional retail seasonality, which are likely to cause fluctuations in our quarterly results;•

the sufficiency of our sources of funding;•our potential exposure in connection with new and pending investigations, proceedings, and othercontingencies;

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•

the sufficiency and timing of our proposed remedies in response to decisions from the European Commission(EC) and other regulators and governmental entities;•

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

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

our long-term sustainability and diversity goals;

as well as other statements regarding our future operations, financial condition and prospects, and business strategies.
Forward-looking statements may appear throughout this report and other documents we file with the Securities andExchange Commission (SEC), including without limitation, the following sections: Part I, Item 1 "Business;" Part I, Item
1A "Risk Factors;" and Part II, Item 7 "Management’s Discussion and Analysis of Financial Condition and Results ofOperations." 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 andassumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially fromthose 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 Annual Report on Form 10-K, and in particular, the risks discussed in Part
I, Item 1A, "Risk Factors" of this report 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 suchforward-looking statements.
As used herein, "Alphabet," "the company," "we," "us," "our," and similar terms include Alphabet Inc. and its
subsidiaries, unless the context indicates otherwise.
"Alphabet," "Google," and other trademarks of ours appearing in this report are our property. This report contains
additional trade names and trademarks of other companies. We do not intend our use or display of other companies'
trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship withany of these companies.
PART IITEM 1.

BUSINESS

Overview
As our founders Larry and Sergey wrote in the original founders' letter, "Google is not a conventional company.
We do not intend to become one." That unconventional spirit has been a driving force throughout our history, inspiring
us to tackle big problems and invest in moonshots like artificial intelligence (AI) research and quantum computing. We
continue this work under the leadership of Sundar Pichai, who has served as CEO of Google since 2015 and as CEO
of Alphabet since 2019.
Alphabet is a collection of businesses — the largest of which is Google. We report Google in two segments,
Google Services and Google Cloud; we also report all non-Google businesses collectively as Other Bets. Other Bets
include earlier stage technologies that are further afield from our core Google business. We take a long-term view andmanage the portfolio of Other Bets with the discipline and rigor needed to deliver long-term returns. Alphabet's
structure is about helping each of our businesses prosper through strong leaders and independence.
Access and technology for everyone
The Internet is one of the world’s most powerful equalizers; it propels ideas, people and businesses large andsmall. Our mission to organize the world’s information and make it universally accessible and useful is as relevant
today as it was when we were founded in 1998. Since then, we have evolved from a company that helps people findanswers to a company that also helps people get things done.
We are focused on building an even more helpful Google for everyone, and we aspire to give everyone the tools
they need to increase their knowledge, health, happiness, and success. Every year, there are trillions of searches on
Google, and 15% of the searches we see every day are new. We continue to invest deeply in AI and othertechnologies to ensure the most helpful search experience possible. YouTube provides people with entertainment,
information, and opportunities to learn something new. And Google Assistant offers the best way to get things done
seamlessly across different devices, providing intelligent help throughout a person's day, no matter where they are.
We are continually innovating and building new product features that will help our users, partners, customers, andcommunities. We have invested more than $100 billion in R&D over the last five years. In addition, with the onset of4

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the pandemic, we have focused in particular on features that help people in their daily lives and that support
businesses working to serve their customers. For example, we have added live busyness trends in Google Maps that
help users instantly spot when a neighborhood or part of town is near or at its busiest. We have also helped
businesses navigate uncertainty during an uneven economic recovery, and we have worked to address the complex
challenge of distributing critical information about COVID-19 vaccines to billions of people around the world.
Importantly, we have made authoritative content a key focus area across both Google Search and YouTube to help
users find trusted public health information.
Other Bets also remain focused on innovation through technology that can positively affect people's lives. For
instance, Waymo is working toward our goal of making transportation safer and easier for everyone and Verily isdeveloping tools and platforms to improve health outcomes.
Moonshots
Many companies get comfortable doing what they have always done, making only incremental changes. This
incrementalism leads to irrelevance over time, especially in technology, where change tends to be revolutionary, notevolutionary. People thought we were crazy when we acquired YouTube and Android and when we launched Chrome,
but those efforts have matured into major platforms for digital video and mobile devices and a safer, popular browser.
We continue to look toward the future and to invest for the long term within each of our segments. As we said in theoriginal founders' letter, we will not shy away from high-risk, high-reward projects that we believe in, as they are thekey to our long-term success.
The power of AI
Across the company, investments in AI and machine learning are increasingly driving many of our latest
innovations and have enabled us to build products that are smarter and more helpful. For example, in May of 2021, we
introduced Multitask Unified Model — or MUM — which has the potential to transform how Google helps with complex
tasks. MUM is trained across 75 different languages, which means that it can learn from sources written in one
language and help bring that information to people in another. It is also multimodal, so it understands information
across text and images and, in the future, can expand to more modalities like video and audio. We are currently
experimenting with MUM’s capabilities to make searching more natural and intuitive and even enable entirely new
ways to search.
DeepMind also made a significant AI-powered breakthrough, solving a 50-year-old protein folding challenge,
which will help the world better understand one of life’s fundamental building blocks, and will enable researchers totackle new and difficult problems, from fighting diseases to environmental sustainability. DeepMind has since shared its
new AlphaFold protein structure database, which doubled the number of high-accuracy human protein structures
available to researchers.
GoogleFor reporting purposes, Google comprises two segments: Google Services and Google Cloud.
Google Services
Serving our users
We have always been a company committed to building helpful products that can improve the lives of millions ofpeople. Our product innovations have made our services widely used, and our brand one of the most recognized in theworld. Google Services' core products and platforms include ads, Android, Chrome, hardware, Gmail, Google Drive,
Google Maps, Google Photos, Google Play, Search, and YouTube, each with broad and growing adoption by users
around the world.
Our products and services have come a long way since the company was founded more than two decades ago.
Rather than the ten blue links in our early search results, users can now get direct answers to their questions using
their computer, mobile device, or their own voice, making it quicker, easier and more natural to find what they arelooking for.
This drive to make information more accessible and helpful has led us over the years to improve the discovery
and creation of digital content both on the web and through platforms like Google Play and YouTube. With thecontinued adoption of mobile, people are consuming more digital content by watching more videos, playing moregames, listening to more music, reading more books, and using more apps than ever before. Working with content
creators and partners, we continue to build new ways for people around the world to find great digital content.
Fueling all of these great digital experiences are extraordinary platforms and hardware. That is why we continue
to invest in platforms like our Android mobile operating system, Chrome browser, and Chrome operating system, as
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well as growing our family of hardware devices. We see tremendous potential for devices to be helpful and makepeople's lives easier by combining the best of our AI, software and hardware. This potential is reflected in our latest
generation of hardware products such as Pixel 5a 5G and Pixel 6 phones, the Fitbit Charge 5, Chromecast with
Google TV, and the new Google Nest Cams and Nest Doorbell. Creating products that people rely on every day is ajourney that we are investing in for the long run.
The key to building helpful products for users is our commitment to privacy, security, and user choice. We protectuser privacy and security with products that are secure by default and private by design, and that keep users in controlof their data. Our privacy-preserving technologies safeguard individual privacy and enhance data protection. As theInternet evolves, so does our approach to privacy and security. We continue to enhance our anti-malware features in
Chrome and drive improvements such as auto-delete controls that automatically delete web and app searches after 18
months. And we continue to keep users and their passwords safe through advances like our built-in password
manager.
How we make money
We have built world-class advertising technologies for advertisers, agencies, and publishers to power their digitalmarketing businesses. Our advertising solutions help millions of companies grow their businesses through our wide
range of products across devices and formats, and we aim to ensure positive user experiences by serving the right ads
at the right time and by building deep partnerships with brands and agencies.
Google Services generates revenues primarily by delivering both performance and brand advertising that appears
on Google Search & other properties, YouTube and Google Network partners' properties ("Google Network
properties"). We continue to invest in both performance and brand advertising and seek to improve the measurability ofadvertising so advertisers understand the effectiveness of their campaigns.
•

Performance advertising creates and delivers relevant ads that users will click on, leading to direct
engagement with advertisers. Performance advertising lets our advertisers connect with users while driving
measurable results. Our ads tools allow performance advertisers to create simple text-based ads.

•

Brand advertising helps enhance users' awareness of and affinity for advertisers' products and services,
through videos, text, images, and other interactive ads that run across various devices. We help brandadvertisers deliver digital videos and other types of ads to specific audiences for their brand-building marketing
campaigns.

We have allocated substantial resources to stopping bad advertising practices and protecting users on the web.
We focus on creating the best advertising experiences for our users and advertisers in many ways, including filtering
out invalid traffic, removing billions of bad ads from our systems every year, and closely monitoring the sites, apps, andvideos where ads appear and blocklisting them when necessary to ensure that ads do not fund bad content.
We continue to look to the future and are making long-term investments that we expect to grow revenues beyond
advertising, including revenues from Google Play, hardware, and YouTube non-advertising.
•Google Play generates revenues from sales of apps and in-app purchases and digital content sold in the
Google Play store.

•

Hardware generates revenues from sales of Fitbit wearable devices, Google Nest home products, Pixel
phones, and other devices.

•

YouTube non-advertising generates revenues from YouTube Premium and YouTube TV subscriptions andother services.

Google Cloud
Google was a company built in the cloud. We continue to invest in infrastructure, security, data management,
analytics, and AI. We see significant opportunity in helping businesses utilize these strengths with features like data
migration, modern development environments, and machine learning tools to provide enterprise-ready cloud services,
including Google Cloud Platform and Google Workspace. Google Cloud Platform enables developers to build, test, anddeploy applications on its highly scalable and reliable infrastructure. Google Workspace collaboration tools — which
include apps like Gmail, Docs, Drive, Calendar, Meet and more — are designed with real-time collaboration andmachine intelligence to help people work smarter. Because more and more of today’s digital experiences are being
built in the cloud, Google Cloud products help businesses of all sizes take advantage of the latest technology
advances to operate more efficiently.
•

Google Cloud Platform generates revenues from infrastructure, platform and other services.

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Google Workspace generates revenues from cloud-based collaboration tools for enterprises, such as Gmail,Docs, Drive, Calendar and Meet.

Our cloud services are generally provided on either a consumption or subscription basis and may have contract
terms longer than a year.
Other Bets
Across Alphabet, we are also using technology to try to solve big problems that affect a wide variety of industries.
Alphabet’s investment in the portfolio of Other Bets includes emerging businesses at various stages of development,
ranging from those in the R&D phase to those that are in the beginning stages of commercialization, and our goal is forthem to become thriving, successful businesses in the medium to long term. While these early-stage businesses
naturally come with considerable uncertainty, some of them are already generating revenue and making important
strides in their industries. Revenues from Other Bets are generated primarily from the sale of health technology andinternet services.
Other Bets operate as independent companies and some of them have their own boards with independent
members and outside investors. We are investing in the portfolio of Other Bets and being very deliberate about thefocus, scale, and pace of investments.
Competition
Our business is characterized by rapid change as well as new and disruptive technologies. We face formidable
competition in every aspect of our business, including from:•

General purpose search engines and information services, such as Baidu, Microsoft's Bing, Naver, Seznam,
Yahoo, and Yandex.

•

Vertical search engines and e-commerce providers, such as Amazon and eBay (e-commerce), Booking's
Kayak (travel queries), Microsoft's LinkedIn (job queries), and WebMD (health queries). Some users will
navigate directly to such content, websites, and apps rather than go through Google.

•

Social networks offered by ByteDance, Meta, Snap, and Twitter. Some users increasingly rely on social
networks for product or service referrals, rather than seeking information through traditional search engines.

•

Other online advertising platforms and networks, such as Amazon, AppNexus, Criteo, and Meta, that compete
for advertisers that use Google Ads, our primary auction-based advertising platform.

•

Other forms of advertising, such as billboards, magazines, newspapers, radio, and television. Our advertisers
typically advertise in multiple media, both online and offline.

•

Companies that design, manufacture, and market consumer hardware products, including businesses thathave developed proprietary platforms, such as Amazon, Apple, and Microsoft.

•

Digital assistant providers, such as Amazon and Apple.

•

Providers of enterprise cloud services, such as Alibaba, Amazon, Microsoft, and Salesforce.

•

Providers of digital video services, such as Amazon, Apple, AT&T, ByteDance, Disney, Hulu, Meta, and Netflix.

•

Other digital content and application platform providers, such as Amazon and Apple.

•

Providers of workspace connectivity and productivity products, such as Meta, Microsoft, Salesforce, andZoom.

Competing successfully depends heavily on our ability to develop and distribute innovative products andtechnologies to the marketplace across our businesses. Specifically, for advertising, competing successfully depends
on attracting and retaining:•users, for whom other products and services are literally one click away, largely on the basis of the relevanceof our advertising, as well as the general usefulness, security, and availability of our products and services;•

advertisers, primarily based on our ability to generate sales leads, and ultimately customers, and to deliver
their advertisements in an efficient and effective manner across a variety of distribution channels; and•content providers, primarily based on the quality of our advertiser base, our ability to help these partners
generate revenues from advertising, and the terms of our agreements with them.
For additional information about competition, see Risk Factors in Item 1A of this Annual Report on Form 10-K.

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Ongoing Commitment to Sustainability
We believe that every business has the opportunity and obligation to protect our planet. Sustainability is one of
our core values at Google, and we strive to build sustainability into everything we do. We have been a leader onsustainability and climate change since Google’s founding over 20 years ago. These are some of our key
achievements over the past two decades:•

In 2007, we became the first major company to be carbon neutral for our operations.

•

In 2017, we became the first major company to match 100% of our annual electricity use with renewableenergy, which we have achieved for four consecutive years.

•

In 2020, we issued $5.75 billion in sustainability bonds—the largest sustainability or green bond issuance byany company in history at the time. The net proceeds from the issuance are used to fund environmentally andsocially responsible projects in the following eight areas: energy efficiency, clean energy, green buildings,
clean transportation, circular economy and design, affordable housing, commitment to racial equity, andsupport for small businesses and COVID-19 crisis response. As of December 31, 2020, we have allocated$3.47 billion of the net proceeds, as outlined in our Sustainability Bond Impact Report published in 2021.

•

Also in 2020, we compensated for our legacy carbon footprint, making Google the first major company to becarbon neutral for its entire operating history.

Our sustainability strategy is focused on three key pillars: accelerating the transition to carbon-free energy and acircular economy, empowering everyone with technology, and benefiting the people and places where we operate.
To accelerate the transition to a carbon-free economy, in 2020, we launched our third decade of climate action,
and we are now working toward a new set of ambitious goals. By 2030, we aim to:•achieve net-zero emissions across all of our operations and value chain;•become the first major company to run on carbon-free energy 24 hours a day, seven days a week, 365 days a
year;

•

enable 5 gigawatts of new carbon-free energy through investments in our key manufacturing regions; and•help more than 500 cities and local governments reduce an aggregate of 1 gigaton of carbon emissions
annually.

To accelerate the transition to a circular economy, we are working to maximize the reuse of finite resources
across our operations, products, and supply chains and to enable others to do the same. We are also working toempower everyone with technology by committing to help 1 billion people make more sustainable choices by the endof 2022 through our core products.
To benefit the people and places where we operate, we have set goals to replenish more water than we consume
by 2030 and to support water security in communities where we operate. We will focus on three areas: enhancing ourstewardship of water resources across Google office campuses and data centers; replenishing our water use andimproving watershed health and ecosystems in water-stressed communities; and sharing technology and tools that
help everyone predict, prevent, and recover from water stress.
We remain steadfast in our commitment to sustainability, and we will continue to lead and encourage others tojoin us in improving the health of our planet. We are proud of what we have achieved so far, and we are energized tohelp move the world closer to a more sustainable and carbon-free future for all.
More information on our approach to sustainability can be found in our annual sustainability reports, including
Google’s Environmental Report and Alphabet’s 2021 Sustainability Bond Impact Report, which outlines the allocationof our net proceeds from our sustainability bonds. The contents of our sustainability reports are not incorporated byreference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. For additional
information about risks and uncertainties applicable to our commitments to attain certain sustainability goals, see Risk
Factors in Item 1A of this Annual Report on Form 10-K.
Culture and Workforce
We are a company of curious, talented, and passionate people. We embrace collaboration and creativity, andencourage the iteration of ideas to address complex challenges in technology and society.
Our people are critical for our continued success, so we work hard to create an environment where employees
can have fulfilling careers, and be happy, healthy, and productive. We offer industry-leading benefits and programs totake care of the diverse needs of our employees and their families, including opportunities for career growth and8Table of Contents

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development, resources to support their financial health, and access to excellent healthcare choices. Our competitivecompensation programs help us to attract and retain top candidates, and we will continue to invest in recruiting
talented people to technical and non-technical roles, and rewarding them well. We provide a variety of high quality
training and support to our managers to build and strengthen their capabilities-–ranging from courses for new
managers, to learning resources that help them provide feedback and manage performance, to coaching andindividual support.
At Alphabet, we are committed to making diversity, equity, and inclusion part of everything we do and to growing aworkforce that is representative of the users we serve. More information on Google’s approach to diversity can befound in our annual diversity reports, available publicly at diversity.google. The contents of our diversity reports are notincorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the
SEC.
As of December 31, 2021, Alphabet had 156,500 employees. We have work councils and statutory employee
representation obligations in certain countries, and we are committed to supporting protected labor rights, maintaining
an open culture and listening to all employees. Supporting healthy and open dialogue is central to how we work, andwe communicate information about the company through multiple internal channels to our employees.
When necessary, we contract with businesses around the world to provide specialized services where we do nothave appropriate in-house expertise or resources, often in fields that require specialized training like cafe operations,content moderation, customer support, and physical security. We also contract with temporary staffing agencies when
we need to cover short-term leaves, when we have spikes in business needs, or when we need to quickly incubate
special projects. We choose our partners and staffing agencies carefully, and review their compliance with Google’s
Supplier Code of Conduct. We continually make improvements to promote a respectful and positive working
environment for everyone — employees, vendors, and temporary staff alike.
Government Regulation
We are subject to numerous United States (U.S.) federal, state, and foreign laws and regulations covering a wide
variety of subject matters. Like other companies in the technology industry, we face heightened scrutiny from both U.S.
and foreign governments with respect to our compliance with laws and regulations. Many of these laws and regulations
are evolving and their applicability and scope, as interpreted by the courts, remain uncertain.
Our compliance with these laws and regulations may be onerous and could, individually or in the aggregate,increase our cost of doing business, make our products and services less useful, limit our ability to pursue certain
business models, cause us to change our business practices, affect our competitive position relative to our peers, and/or otherwise have an adverse effect on our business, reputation, financial condition, and operating results.
For additional information about government regulation applicable to our business, see Risk Factors in Item 1A,
Trends in Our Business and Financial Effect in Part II, Item 7, and Legal Matters in Note 10 of the Notes toConsolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Intellectual Property
We rely on various intellectual property laws, confidentiality procedures and contractual provisions to protect our
proprietary technology and our brand. We have registered, and applied for the registration of, U.S. and international
trademarks, service marks, domain names and copyrights. We have also filed patent applications in the U.S. andforeign countries covering certain of our technology, and acquired patent assets to supplement our portfolio. We havelicensed in the past, and expect that we may license in the future, certain of our rights to other parties. For additional
information, see Risk Factors in Item 1A of this Annual Report on Form 10-K.
Available Information
Our website is located at www.abc.xyz, and our investor relations website is located at www.abc.xyz/investor. Our
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our Proxy
Statements, and any amendments to these reports, are available through our investor relations website, free of charge,
after we file them with the SEC. We also provide a link to the section of the SEC's website at www.sec.gov that has allof the reports that we file or furnish with the SEC.
We webcast via our investor relations website our earnings calls and certain events we participate in or host withmembers of the investment community. Our investor relations website also provides notifications of news orannouncements regarding our financial performance and other items that may be material or of interest to ourinvestors, including SEC filings, investor events, press and earnings releases, and blogs. We also share Google news
and product updates on Google's Keyword blog at https://www.blog.google/, that may be material or of interest to ourinvestors. Further, corporate governance information, including our certificate of incorporation, bylaws, governance9

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guidelines, board committee charters, and code of conduct, is also available on our investor relations website under
the heading "Other." The contents of our websites are not incorporated by reference into this Annual Report on Form
10-K or in any other report or document we file with the SEC, and any references to our websites are intended to beinactive textual references only.
ITEM 1A.

RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, including but not limited tothose described below, which could harm our business, reputation, financial condition, and operating results, and affectthe trading price of our Class A and Class C stock.
Risks Specific to our Company
We generate a significant portion of our revenues from advertising, and reduced spending by advertisers,a loss of partners, or new and existing technologies that block ads online and/or affect our ability tocustomize ads could harm our business.
We generated more than 80% of total revenues from the display of ads online in 2021. Many of our advertisers,
companies that distribute our products and services, digital publishers, and content providers can terminate theircontracts with us at any time. These partners may not continue to do business with us if we do not create more value(such as increased numbers of users or customers, new sales leads, increased brand awareness, or more effective
monetization) than their available alternatives. Changes to our advertising policies and data privacy practices, as well
as changes to other companies’ advertising and/or data privacy practices have in the past, and may in the future, affectthe advertising that we are able to provide, which could harm our business. In addition, technologies have beendeveloped that make customized ads more difficult or that block the display of ads altogether and some providers of
online services have integrated technologies that could potentially impair the availability and functionality of third-party
digital advertising. Failing to provide superior value or deliver advertisements effectively and competitively could harm
our reputation, financial condition, and operating results.
In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgetingand buying patterns. Adverse macroeconomic conditions have affected, and may in the future affect, the demand foradvertising, resulting in fluctuations in the amounts our advertisers spend on advertising, which could harm ourfinancial condition and operating results.
We face intense competition. If we do not continue to innovate and provide products and services thatare useful to users, customers, and other partners, we may not remain competitive, which could harm ourbusiness and operating results.
Our business environment is rapidly evolving and intensely competitive. Our businesses face changing
technologies, shifting user needs, and frequent introductions of rival products and services. To compete successfully,
we must accurately anticipate technology developments and deliver innovative, relevant and useful products, services,and technologies in a timely manner. As our businesses evolve, the competitive pressure to innovate will encompass awider range of products and services. We must continue to invest significant resources in R&D, including throughacquisitions, in order to enhance our technology and new and existing products and services.
We have many competitors in different industries. Our current and potential domestic and international
competitors range from large and established companies to emerging start-ups. Some competitors have longer
operating histories and well established relationships in various sectors. They can use their experience and resourcesin ways that could affect our competitive position, including by making acquisitions, continuing to invest heavily in R&D
and in talent, aggressively initiating intellectual property claims (whether or not meritorious), and continuing to compete
aggressively for users, advertisers, customers, and content providers. Further, discrepancies in enforcement of existinglaws may enable our lesser known competitors to aggressively interpret those laws without commensurate scrutiny,
thereby affording them competitive advantages. Our competitors may also be able to innovate and provide products
and services faster than we can or may foresee the need for products and services before us.
Our operating results may also suffer if our products and services are not responsive to the needs of our users,
advertisers, publishers, customers, and content providers. As technologies continue to develop, our competitors may
be able to offer experiences that are, or that are seen to be, substantially similar to or better than ours. This may force
us to compete in different ways and expend significant resources in order to remain competitive. If our competitors are
more successful than we are in providing compelling products and services or in attracting and retaining users,
advertisers, publishers, customers, and content providers, our operating results could be harmed.
Our ongoing investment in new businesses, products, services, and technologies is inherently risky, andcould divert management attention and harm our financial condition and operating results.

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We have invested and expect to continue to invest in new businesses, products, services, and technologies. The
investments that we are making across Google Services, Google Cloud, and Other Bets reflect our ongoing efforts toinnovate and provide products and services that are useful to users, advertisers, publishers, customers, and content
providers. Our investments in Google Services, Google Cloud, and Other Bets span a wide range of industries beyond
online advertising. Such investments ultimately may not be commercially viable or may not result in an adequate returnof capital and, in pursuing new strategies, we may incur unanticipated liabilities. These endeavors may involve
significant risks and uncertainties, including diversion of resources and management attention from current operations
and, with respect to Other Bets, the use of alternative investment, governance, or compensation structures that may
fail to adequately align incentives across the company or otherwise accomplish their objectives.
Within Google Services, we continue to invest heavily in hardware, including our smartphones, home devices,and wearables, which is a highly competitive market with frequent introduction of new products and services, rapid
adoption of technological advancements by competitors, short product life cycles, evolving industry standards,
continual improvement in product price and performance characteristics, and price and feature sensitivity on the part ofconsumers and businesses. There can be no assurance we will be able to provide hardware that competes effectively.
Within Google Cloud, we devote significant resources to develop and deploy our enterprise-ready cloud services,
including Google Cloud Platform and Google Workspace. We are incurring costs to build and maintain infrastructure to
support cloud computing services and hire talent, particularly to support and scale our salesforce. At the same time,
our competitors are rapidly developing and deploying cloud-based services. Pricing and delivery models arecompetitive and evolving, and we may not attain sufficient scale and profitability to achieve our business objectives.
Within Other Bets, we are investing significantly in the areas of health, life sciences, and transportation, among
others. These investment areas face intense competition from large, experienced, and well-funded competitors and ourofferings may not be able to compete effectively or to operate at sufficient levels of profitability.
In addition, new and evolving products and services, including those that use AI and machine learning, raise
ethical, technological, legal, regulatory, and other challenges, which may negatively affect our brands and demand forour products and services. Because all of these new ventures are inherently risky, no assurance can be given thatsuch strategies and offerings will be successful and will not harm our reputation, financial condition, and operating
results.
Our revenue growth rate could decline over time, and we anticipate downward pressure on our operating
margin in the future.
Our revenue growth rate could decline over time as a result of a number of factors, including increasing
competition. Changes in device mix, geographic mix, ongoing product and policy changes, product mix, and property
mix and an increasing competition for advertising may also affect our advertising revenue growth rate. We may also
experience a decline in our revenue growth rate as our revenues increase to higher levels, if there is a decrease in therate of adoption of our products, services, and technologies, or due to deceleration or decline in demand for devices
used to access our services, among other factors.
In addition, we may also experience downward pressure on our operating margin resulting from a variety offactors, such as the continued expansion of our business into new fields, including products and services such as
hardware, Google Cloud, and subscription products, as well as significant investments in Other Bets, all of which may
have margins lower than those we generate from advertising. We may also experience downward pressure on ouroperating margins from increasing regulations, increasing competition, and increased costs for many aspects of ourbusiness. Due to these factors and the evolving nature of our business, our historical revenue growth rate andhistorical operating margin may not be indicative of our future performance. For additional information, see Trends in
Our Business and Financial Effect in Part II, Item 7 of this Annual Report on Form 10-K.
Our intellectual property rights are valuable, and any inability to protect them could reduce the value ofour products, services, and brands as well as affect our ability to compete.
Our patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for
us. Various events outside of our control pose a threat to our intellectual property rights, as well as to our products,
services, and technologies. For example, effective intellectual property protection may not be available in every country
in which our products and services are distributed or made available through the Internet. Also, the efforts we havetaken to protect our proprietary rights may not be sufficient or effective. Although we seek to obtain patent protection
for our innovations, it is possible we may not be able to protect some of these innovations. Moreover, we may not haveadequate patent or copyright protection for certain innovations that later turn out to be important. There is always thepossibility that the scope of the protection gained will be insufficient or that an issued patent may be deemed invalid or
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We also seek to maintain certain intellectual property as trade secrets. The secrecy of such trade secrets andother sensitive information could be compromised, which could cause us to lose the competitive advantage resulting
from these trade secrets. We also face risks associated with our trademarks. For example, there is a risk that the word
“Google” could become so commonly used that it becomes synonymous with the word “search.” Some courts haveruled that "Google" is a protectable trademark, but it is possible that other courts, particularly those outside of the U.S.,
may reach a different determination. If this happens, we could lose protection for this trademark, which could result inother people using the word “Google” to refer to their own products, thus diminishing our brand.
Any significant impairment of our intellectual property rights could harm our business and our ability to compete.
Also, protecting our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of
our intellectual property could make it more expensive to do business and harm our operating results.
Our business depends on strong brands, and failing to maintain and enhance our brands would hurt ourability to expand our base of users, advertisers, customers, content providers, and other partners.
Our strong brands have significantly contributed to the success of our business. Maintaining and enhancing thebrands within Google Services, Google Cloud, and Other Bets increases our ability to enter new categories and launch
new and innovative products and services that better serve the needs of our users, advertisers, customers, content
providers, and other partners. Our brands have been, and may in the future be, negatively affected by a number offactors, including, among others, reputational issues, third-party content shared on our platforms, data privacy andsecurity issues and developments, and product or technical performance failures. For example, if we fail to respond
appropriately to the sharing of misinformation or objectionable content on our services and/or products or objectionable
practices by advertisers, or otherwise to adequately address user concerns, our users may lose confidence in ourbrands.
Furthermore, failure to maintain and enhance equity in our brands may harm our business, financial condition,and operating results. Our success will depend largely on our ability to remain a technology leader and continue toprovide high-quality, trustworthy, innovative products and services that are truly useful and play a valuable role in arange of settings.
We face a number of manufacturing and supply chain risks that could harm our financial condition,
operating results, and prospects.
We face a number of risks related to manufacturing and supply chain management, which could affect our ability
to supply both our products and our internet-based services.
We rely on other companies to manufacture many of our finished products; to design certain of our components
and parts; to participate in the distribution of our products and services; and to design, manufacture, or assemble
certain components and parts in our technical infrastructure. Our business could be negatively affected if we are notable to engage these companies with the necessary capabilities or capacity on reasonable terms, or if those weengage fail to meet their obligations (whether due to financial difficulties or other reasons), or make adverse changes
in the pricing or other material terms of our arrangements with them.
We have experienced and/or may in the future experience supply shortages and/or price increases that could
negatively affect our operations, driven by raw material, component or part availability, manufacturing capacity, labor
shortages, industry allocations, logistics capacity, tariffs, trade disputes and barriers, natural disasters or pandemics,
the effects of climate change (such as sea level rise, drought, flooding, heat waves, wildfires and resultant air quality
effects and power shutoffs associated with wildfire prevention, and increased storm severity), and significant changes
in the financial or business condition of our suppliers. In addition, some of the components we use in our technicalinfrastructure and products are available from only one or limited sources, and we may not be able to find replacement
vendors on favorable terms in the event of a supply chain disruption. In addition, a significant supply interruption that
affects us or our vendors could delay critical data center upgrades or expansions and delay product availability.
We may enter into long-term contracts for materials and products that commit us to significant terms andconditions. We may be liable for materials and products that are not consumed due to market acceptance,technological change, obsolescences, quality, product recalls, and warranty issues. For instance, because certain of
our hardware supply contracts have volume-based pricing or minimum purchase requirements, if the volume of ourhardware sales decreases or does not reach projected targets, we could face increased materials and manufacturingcosts or other financial liabilities that could make our products more costly per unit to manufacture and negatively
affect our financial results. Furthermore, certain of our competitors may negotiate more favorable contractual terms
based on volume and other commitments that may provide them with competitive advantages and may affect our
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Our products and services have had, and in the future may have, quality issues resulting from design,
manufacturing, or operations. Sometimes, these issues may be caused by components we purchase from othermanufacturers or suppliers. If the quality of our products and services does not meet expectations or our products orservices are defective, it could harm our reputation, financial condition, and operating results.
We require our suppliers and business partners to comply with laws and, where applicable, our company policies,
such as the Google Supplier Code of Conduct, regarding workplace and employment practices, data security,environmental compliance, and intellectual property licensing, but we do not control them or their practices. Violationsof law or unethical business practices could result in supply chain disruptions, canceled orders, harm to key
relationships, and damage to our reputation. Their failure to procure necessary license rights to intellectual property
could affect our ability to sell our products or services and expose us to litigation or financial claims.
Interruption to, interference with, or failure of our complex information technology and communications
systems could hurt our ability to effectively provide our products and services, which could harm our
reputation, financial condition, and operating results. In addition, problems with the design or implementationof our new global enterprise resource planning system could harm our business and operations.
The availability of our products and services and fulfillment of our customer contracts depend on the continuing
operation of our information technology and communications systems. Our systems are vulnerable to damage,interference, or interruption from modifications or upgrades, terrorist attacks, natural disasters or pandemics, theeffects of climate change (such as sea level rise, drought, flooding, heat waves, wildfires and resultant air quality
effects and power shutoffs associated with wildfire prevention, and increased storm severity), power loss,
telecommunications failures, computer viruses, ransomware attacks, computer denial of service attacks, phishing
schemes, or other attempts to harm or access our systems. Some of our data centers are located in areas with a highrisk of major earthquakes or other natural disasters. Our data centers are also subject to break-ins, sabotage, andintentional acts of vandalism, and, in some cases, to potential disruptions resulting from problems experienced byfacility operators. Some of our systems are not fully redundant, and disaster recovery planning cannot account for all
eventualities. The occurrence of a natural disaster or pandemic, closure of a facility, or other unanticipated problems
affecting our data centers could result in lengthy interruptions in our service. In addition, our products and services arehighly technical and complex and have contained in the past, and may contain in the future, errors or vulnerabilities,
which could result in interruptions in or failure of our services or systems.
In addition, we rely extensively on information systems and technology to manage our business and summarize
operating results. We are in the process of a multi-year implementation of a new ERP system, which is designed toaccurately maintain our financial records, enhance the flow of financial information, improve data management, andprovide timely information to our management team. As the phased implementation continues, we may experience
delays, increased costs, and other difficulties. Failure to successfully design and implement the ERP system asplanned could harm our business, financial condition, and operating results. Additionally, if we do not effectively
implement the ERP system as planned or the ERP system does not operate as intended, the effectiveness of ourinternal control over financial reporting could be negatively affected.
Our international operations expose us to additional risks that could harm our business, our financial
condition, and operating results.
Our international operations are significant to our revenues and net income, and we plan to continue to growinternationally. International revenues accounted for approximately 54% of our consolidated revenues in 2021. In
addition to risks described elsewhere in this section, our international operations expose us to other risks, including thefollowing:•

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

import and export requirements, tariffs and other market access barriers that may prevent or impede us fromoffering products or providing services to a particular market, or that could limit our ability to source assemblies
and finished products from a particular market, and may increase our operating costs;•

longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud;•an evolving foreign policy landscape that may adversely affect our revenues and could subject us to new
regulatory costs and challenges (including the transfer of personal data between the EU and the United
Kingdom and new customer requirements), in addition to other adverse effects that we are unable to effectively
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•

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

uncertainty regarding liability for services and content, including uncertainty as a result of local laws and lack oflegal precedent; and•different employee/employer relationships, existence of works councils and labor unions, and other challenges
caused by distance, language, and cultural differences, making it harder to do business in certain jurisdictions.

Because we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars,
we have faced, and will continue to face, exposure to fluctuations in foreign currency exchange rates. Although wehedge a portion of our international currency exposure, significant fluctuations in exchange rates between the U.S.
dollar and foreign currencies may adversely affect our revenues and earnings. Hedging programs are also inherently
risky and could expose us to additional risks that could harm our financial condition and operating results.
Risks Related to our Industry
People access the Internet through a variety of platforms and devices that continue to evolve with theadvancement of technology and user preferences. If manufacturers and users do not widely adopt versions ofour products and services developed for these interfaces, our business could be harmed.
People access the Internet through a growing variety of devices such as desktop computers, mobile phones,
smartphones, laptops and tablets, video game consoles, voice-activated speakers, wearables, automobiles, andtelevision-streaming devices. Our products and services may be less popular on some interfaces. Each manufacturer
or distributor may establish unique technical standards for its devices, and our products and services may not be
available or may only be available with limited functionality for our users or our advertisers on these devices as aresult. Some manufacturers may also elect not to include our products on their devices. In addition, search queries are
increasingly being undertaken via voice-activated speakers, apps, social media or other platforms, which could harm
our business. It is hard to predict the challenges we may encounter in adapting our products and services anddeveloping competitive new products and services. We expect to continue to devote significant resources to creating
and supporting products and services across multiple platforms and devices. Failing to attract and retain a substantial
number of new device manufacturers, suppliers, distributors, developers, and users, or failing to develop products andtechnologies that work well on new devices and platforms, could harm our business, financial condition, and operating
results and ability to capture future business opportunities.
Data privacy and security concerns relating to our technology and our practices could damage our
reputation, cause us to incur significant liability, and deter current and potential users or customers fromusing our products and services. Software bugs or defects, security breaches, and attacks on our systems
could result in the improper disclosure and use of user data and interference with our users’ and customers’ability to use our products and services, harming our business operations and reputation.
Concerns about, including the adequacy of, our practices with regard to the collection, use, governance,
disclosure, or security of personal information or other data-privacy-related matters, even if unfounded, could harm our
reputation, financial condition, and operating results. Our policies and practices may change over time as expectations
and regulations regarding privacy and data change.
Our products and services involve the storage, handling, and transmission of proprietary and other sensitive
information. Software bugs, theft, misuse, defects, vulnerabilities in our products and services, and security breaches
expose us to a risk of loss or improper use and disclosure of such information, which could result in litigation and otherpotential liability, including regulatory fines and penalties, as well as reputational harm. Additionally, our products
incorporate highly technical and complex technologies, and thus our technologies and software have contained, andare likely in the future to contain, undetected errors, bugs, or vulnerabilities. We have in the past discovered, and may
in the future discover, some errors in our software code only after we have released the code. Systems and control
failures, security breaches, failure to comply with our privacy policies, and/or inadvertent disclosure of user data could
result in government and legal exposure, seriously harm our reputation, brand, and business, and impair our ability to
attract and retain users or customers. Such incidents have occurred in the past and may continue to occur due to thescale and nature of our products and services. While there is no guarantee that such incidents will not cause significant
damage, we expect to continue to expend significant resources to maintain security protections that limit the effect ofbugs, theft, misuse, and security vulnerabilities or breaches.
We experience cyber attacks and other attempts to gain unauthorized access to our systems on a regular basis.
Cyber attacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periodsof time. We have seen, and will continue to see, industry-wide vulnerabilities, such as the Log4j vulnerability reported
in December 2021, which could affect our or other parties’ systems. We expect to continue to experience such
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incidents or vulnerabilities in the future. Our efforts to address undesirable activity on our platform may also increase
the risk of retaliatory attack. We may experience future security issues, whether due to employee error or malfeasanceor system errors or vulnerabilities in our or other parties’ systems. While we may not determine some of these issues tobe material at the time they occur and may remedy them quickly, there is no guarantee that these issues will not
ultimately result in significant legal, financial, and reputational harm, including government inquiries and enforcement
actions, litigation, and negative publicity. Because the techniques used to obtain unauthorized access to, disable ordegrade service provided by or otherwise sabotage systems change frequently and often are recognized only after
being launched against a target, even taking all reasonable precautions, including those required by law, we have been
unable in the past and may continue to be unable to anticipate or detect attacks or vulnerabilities or implement
adequate preventative measures.
Further, if any partners with whom we share user or other customer information fail to implement adequate datasecurity practices or fail to comply with our terms and policies or otherwise suffer a network or other security breach,
our users’ information may be improperly accessed, used, or disclosed. If an actual or perceived breach of our or ourbusiness partners’ or service providers’ security occurs, the market perception of the effectiveness of our security
measures would be harmed, we could lose users and customers, our trade secrets or those of our business partners
may be compromised, and we may be exposed to significant legal and financial risks, including legal claims (which
may include class-action litigation) and regulatory action, fines, and penalties. Any of the foregoing consequences
could have a material and adverse effect on our business, reputation, and results of operations.
While we have dedicated significant resources to privacy and security incident response capabilities, including
dedicated worldwide incident response teams, our response process, particularly during times of a natural disaster or
pandemic, may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough toprevent or limit harm, or may fail to sufficiently remediate an incident. As a result, we may suffer significant legal,
reputational, or financial exposure, which could harm our business, financial condition, and operating results.
For additional information, see also our risk factor on privacy and data protection regulations under ‘Risks Related
to Laws and Regulations’ below.
Our ongoing investments in safety, security, and content review will likely continue to identify abuse of
our platforms and misuse of user data.
In addition to our efforts to prevent and mitigate cyber attacks, we are making significant investments in safety,
security, and review efforts to combat misuse of our services and unauthorized access to user data by third parties,
including investigation and review of platform applications that could access the information of users of our services.
As a result of these efforts, we have in the past discovered, and may in the future discover, incidents of unnecessary
access to or misuse of user data or other undesirable activity by third parties. However, we may not have discovered,and may in the future not discover, all such incidents or activity, whether as a result of our data limitations, including
our lack of visibility over our encrypted services, the scale of activity on our platform, or other factors, including factors
outside of our control such as a natural disaster or pandemic, and we may learn of such incidents or activity via third
parties. Such incidents and activities may include the use of user data or our systems in a manner inconsistent with ourterms, contracts or policies, the existence of false or undesirable user accounts, election interference, improper adpurchases, activities that threaten people’s safety on- or off-line, or instances of spamming, scraping, or spreading
disinformation. While we may not determine some of these incidents to be material at the time they occurred and wemay remedy them quickly, there is no guarantee that these issues will not ultimately result in significant legal, financial,
and reputational harm, including government inquiries and enforcement actions, litigation, and negative publicity.
We may also be unsuccessful in our efforts to enforce our policies or otherwise prevent or remediate any such
incidents. Any of the foregoing developments may negatively affect user trust and engagement, harm our reputation
and brands, require us to change our business practices in ways that harm our business operations and adversely
affect our business and financial results. Any such developments may also subject us to additional litigation andregulatory inquiries, which could result in monetary penalties and damages, divert management’s time and attention,and lead to enhanced regulatory oversight.
Problematic content on our platforms, including low-quality user-generated content, web spam, content
farms, and other violations of our guidelines could affect the quality of our services, which could damage our
reputation and deter our current and potential users from using our products and services.
We, like others in the industry, face violations of our content guidelines across our platforms, including
sophisticated attempts by bad actors to manipulate our hosting and advertising systems to fraudulently generate
revenues, or to otherwise generate traffic that does not represent genuine user interest or intent. While we invest
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invalid traffic, we have been unable and may continue to be unable to adequately detect and prevent all such abusesor promote uniformly high-quality content.
Many websites violate or attempt to violate our guidelines, including by seeking to inappropriately rank higher insearch results than our search engine's assessment of their relevance and utility would rank them. Such efforts haveaffected, and may continue to affect, the quality of content on our platforms and lead them to display false, misleading,or undesirable content. Although English-language web spam in our search results has been reduced, and web spamin most other languages is limited, we expect web spammers will continue to seek inappropriate ways to improve theirrankings. We continuously combat web spam in our search results, including through indexing technology that makes it
harder for spam-like, less useful web content to rank highly. We also continue to invest in and deploy proprietary
technology to detect and prevent web spam on our platforms. We also face other challenges from low-quality andirrelevant content websites, including content farms, which are websites that generate large quantities of low-quality
content to help them improve their search rankings. We are continually launching algorithmic changes designed todetect and prevent abuse from low-quality websites. We also face other challenges on our platforms, including
violations of our content guidelines involving incidents such as attempted election interference, activities that threaten
the safety and/or well-being of our users on- or off-line, and the spreading of misinformation or disinformation.
If we fail to either detect and prevent an increase in problematic content or effectively promote high-quality
content, it could hurt our reputation for delivering relevant information or reduce use of our platforms, harming ourfinancial condition or operating results. It may also subject us to litigation and regulatory action, which could result inmonetary penalties and damages and divert management’s time and attention.
Our business depends on continued and unimpeded access to the Internet by us and our users. Internet
access providers may be able to restrict, block, degrade, or charge for access to certain of our products andservices, which could lead to additional expenses and the loss of users and advertisers.
Our products and services depend on the ability of our users to access the Internet, and certain of our products
require significant bandwidth to work effectively. Currently, this access is provided by companies that have significant
market power in the broadband and internet access marketplace, including incumbent telephone companies, cable
companies, mobile communications companies, and government-owned service providers. Some of these providers
have taken, or have stated that they may take measures that could degrade, disrupt, or increase the cost of user
access to certain of our products by restricting or prohibiting the use of their infrastructure to support or facilitate ourofferings, by charging increased fees to us or our users to provide our offerings, or by providing our competitors
preferential access. Some jurisdictions have adopted regulations prohibiting certain forms of discrimination by internet
access providers; however, substantial uncertainty exists in the U.S. and elsewhere regarding such protections. For
example, in 2018 the U.S. Federal Communications Commission repealed net neutrality rules, which could permit
internet access providers to restrict, block, degrade, or charge for access to certain of our products and services. In
addition, in some jurisdictions, our products and services have been subject to government-initiated restrictions or
blockages. These could harm existing key relationships, including with our users, customers, advertisers, and/or
content providers, and impair our ability to attract new ones; damage our reputation; and increase costs, thereby
negatively affecting our business.
Risks Related to Laws, Regulations, and Policies
We face increased regulatory scrutiny as well as changes in regulatory conditions, laws, and policies
governing a wide range of topics that may negatively affect our business.
We and other companies in the technology industry face increased regulatory scrutiny, enforcement action, andother proceedings. For instance, the U.S. Department of Justice, joined by a number of state Attorneys General, filed
an antitrust complaint against Google on October 20, 2020, alleging that Google violated U.S. antitrust laws relating to
Search and Search advertising. Similarly, on December 16, 2020, a number of state Attorneys General filed an
antitrust complaint against Google in the U.S. District Court for the Eastern District of Texas, alleging that Google
violated U.S. antitrust laws as well as state deceptive trade laws relating to its advertising technology. Various otherregulatory agencies in the U.S. and around the world, including competition enforcers, consumer protection agencies,
data protection authorities, grand juries, inter-agency consultative groups, and a range of other governmental bodies
have and continue to review and in some cases challenge our products and services and their compliance with laws
and regulations around the world. We continue to cooperate with these investigations and defend litigation whereappropriate. Various laws, regulations, investigations, enforcement lawsuits, and regulatory actions have in the past,and may in the future, result in substantial fines and penalties, injunctive relief, ongoing auditing and monitoring
obligations, changes to our products and services, alterations to our business models and operations, and collaterallitigation, all of which could harm our business, reputation, financial condition, and operating results.

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Changes in international and local social, political, economic, tax, and regulatory conditions or in laws and policies
have in the past, and may in the future, increase our cost of doing business and limit our ability to pursue certain
business models, offer products or services in certain jurisdictions, or cause us to change our business practices. We
have in the past had to alter or stop offering certain products and services as a result of laws or regulations that madethem unfeasible, and new laws or regulations could result in our having to terminate, alter, or withdraw products andservices in the future. Additional costs of doing business, new limitations, or changes to our business model orpractices could harm our business, reputation, financial condition, and operating results.
We are subject to regulations, laws, and policies that govern a wide range of topics, including those related tomatters beyond our core products and services. For instance, new regulations, laws, policies, and international
accords relating to environmental and social matters, including sustainability, climate change, human capital, anddiversity, are being developed and formalized in Europe, the U.S., and elsewhere, which may entail specific, targetdriven frameworks and/or disclosure requirements. We have implemented robust environmental and social programs,
adopted reporting frameworks and principles, and announced a number of goals and initiatives, including those related
to environmental sustainability and diversity. The implementation of these goals and initiatives may requireconsiderable investments, and our goals, with all of their contingencies, dependencies, and in certain cases, relianceon third-party verification and/or performance, are complex and ambitious, and we cannot guarantee that we willachieve them.
Additionally, there can be no assurance that our current programs, reporting frameworks, and principles will be incompliance with any new environmental and social laws and regulations that may be promulgated in the U.S. andelsewhere, and the costs of changing any of our current practices to comply with any new legal and regulatory
requirements in the U.S. and elsewhere may be substantial. Furthermore, industry and market practices may further
develop to become even more robust than what is required under any new laws and regulations, and we may have to
expend significant efforts and resources to keep up with market trends and stay competitive among our peers.
A variety of new and existing laws and/or interpretations could harm our business.
We are subject to numerous U.S. and foreign laws and regulations covering a wide variety of subject matters.
New laws and regulations, or new interpretations or applications of existing laws and regulations in a mannerinconsistent with our practices, have made, and may continue to make, our products and services less useful, limit ourability to pursue certain business models or offer certain products and services in certain jurisdictions, require us toincur substantial costs, expose us to civil or criminal liability, or cause us to change our business practices. These laws
and regulations are evolving and involve matters central to our business, including, among others:•

Laws and regulations around the world focused on large technology platforms, including the Digital Markets
Act in the European Union and proposed antitrust legislation on self-preferencing and mergers andacquisitions in the U.S., which may limit certain business practices, and in some cases, create the risk ofsignificant penalties.

•

Privacy laws, such as the GDPR, CCPA, CPRA, Virginia CDPA, and ColoPA (as defined and discussed further
below).

•

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

•

Consumer protection laws, including EU’s New Deal for Consumers, which could result in monetary penalties
and create a range of new compliance obligations.

•

New laws further restricting the collection, processing and/or sharing of advertising-related data. Copyright orsimilar laws around the world, including the EU Directive on Copyright in the Digital Single Market (EUCD) andEU member state transpositions. These and similar laws that have been adopted or proposed introduce newlicensing regimes that could affect our ability to operate. The EUCD and similar laws could also increase theliability of some content-sharing services with respect to content uploaded by their users. Some of these laws,
as well as follow-on administrative or judicial actions, have also created or may create a new property right innews publications that limits the ability of some online services to link to, interact with, or present such content.
They may also require individual or collective compensation negotiations with news agencies and publishers
for the use of such content, which may result in payment obligations that significantly exceed the value thatsuch content provides to Google and its users, potentially harming our services, commercial operations, andbusiness results.

•

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

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•

Various U.S. and international laws that govern the distribution of certain materials to children and regulate theability of online services to collect information from minors, including the Children’s Online Privacy Protection
Act of 1998 and the United Kingdom’s Age-Appropriate Design Code.

•

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

•

Various legislative, litigation, and regulatory activity regarding our Google Play billing policies and businessmodel, which could result in monetary penalties, damages and/or prohibition.

•

Various legislative and regulatory activity requiring disclosure of information about the operation of our services
and algorithms, which may make it easier for websites to artificially promote low-quality, deceptive, or harmful
content on services like Google Search and YouTube, potentially harming the quality of our services.

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

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

•

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

The introduction of new businesses, products, services, and technologies, our activities in certain jurisdictions, orother actions we take have subjected us, and will likely continue to subject us, to additional laws and regulations. Ourinvestment in a variety of new fields, such as healthcare and payment services, has expanded, and will continue toexpand, the scope of regulations that apply to our business. The costs of compliance with these laws and regulations
are high and are likely to increase in the future. Any failure on our part to comply with laws and regulations can result innegative publicity and diversion of management time and effort and may subject us to significant liabilities and otherpenalties.
We are subject to claims, suits, government investigations, other proceedings, and consent decrees that
may harm our business, financial condition, and operating results.
We are subject to claims, suits, government investigations, other proceedings, and consent decrees involving
competition, intellectual property, data privacy and security, consumer protection, tax, labor and employment,commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using
our platforms, and other matters. Due to our manufacturing and sale of an expanded suite of products and services,
including hardware as well as Google Cloud offerings, we also are subject to a variety of claims including productwarranty, product liability, and consumer protection claims related to product defects, among other litigation. We may
also be subject to claims involving health and safety, hazardous materials usage, other environmental effects, orservice disruptions or failures.
Any of these types of legal proceedings can have an adverse effect on us because of legal costs, diversion ofmanagement resources, negative publicity and other factors. Determining reserves for our pending litigation is acomplex, fact-intensive process that requires significant judgment. The resolution of one or more such proceedings has
resulted in, and may in the future result in, additional substantial fines, penalties, injunctions, and other sanctions that
could harm our business, financial condition, and operating results.
We may be subject to legal liability associated with providing online services or content.
Our products and services let users exchange information, advertise products and services, conduct business,and engage in various online activities. We also place advertisements displayed on other companies’ websites, and weoffer third-party products, services, and/or content. The law relating to the liability of online service providers for others’
activities on their services is still somewhat unsettled around the world. Claims have been brought against us, and we18

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expect will continue to be brought against us, for defamation, negligence, breaches of contract, copyright andtrademark infringement, unfair competition, unlawful activity, torts, fraud, or other legal theories based on the natureand content of information available on or via our services.
We may be subject to claims by virtue of our involvement in hosting, transmitting, marketing, branding, orproviding access to content created by third parties. Defense of such actions could be costly and involve significant
time and attention of our management and other resources, may result in monetary liabilities or penalties, and may
require us to change our business in an adverse manner.
Privacy and data protection regulations are complex and rapidly evolving areas. Any failure or alleged
failure to comply with these laws could harm our business, reputation, financial condition, and operating
results.
Authorities around the world have adopted and are considering a number of legislative and regulatory proposals
concerning data protection and limits on encryption of user data. Adverse legal rulings, legislation, or regulation haveresulted in, and may continue to result in, fines and orders requiring that we change our data practices, which could
have an adverse effect on our ability to provide services, harming our business operations. Complying with theseevolving laws could result in substantial costs and harm the quality of our products and services, negatively affecting
our business, and may be particularly challenging during certain times, such as a natural disaster or pandemic.
Amongst others, we are and will be subject to the following laws and regulations:•

The General Data Protection Regulation (GDPR), which applies to all of our activities conducted from anestablishment in the EU or related to products and services that we offer to EU users or customers, or themonitoring of their behavior in the EU. Ensuring compliance with the range of obligations created by the GDPR
is an ongoing commitment that involves substantial costs. Despite our efforts, governmental authorities orothers have asserted and may continue to assert that our business practices fail to comply with its
requirements. If our operations are found to violate the GDPR requirements, we may incur substantial fines,
have to change our business practices, and face reputational harm, any of which could have an adverse effecton our business. Serious breaches of the GDPR can result in administrative fines of up to 4% of annual
worldwide revenues. Fines of up to 2% of annual worldwide revenues can be levied for other specified
violations.

•

Various state privacy laws, such as the California Consumer Privacy Act of 2018 (CCPA), which came into
effect in January of 2020; the California Privacy Rights Act (CPRA), which will go into effect in 2023; theVirginia Consumer Data Protection Act (Virginia CDPA), which will go into effect in 2023; and the Colorado
Privacy Act (ColoPA), which will go into effect in 2023; all of which give new data privacy rights to theirrespective residents (including, in California, a private right of action in the event of a data breach resulting
from our failure to implement and maintain reasonable security procedures and practices) and impose
significant obligations on controllers and processors of consumer data.

•

SB-327 in California, which regulates the security of data in connection with internet connected devices.

Further, we are subject to evolving laws and regulations that dictate whether, how, and under what circumstances
we can transfer, process and/or receive personal data. The EU-U.S. and the Swiss-U.S. Privacy Shield frameworks
that previously allowed U.S. companies that self-certify to the U.S. Department of Commerce and publicly commit tocomply with specified requirements to import personal data from the EU and Switzerland have been invalidated by the
CJEU. The CJEU upheld Standard Contractual Clauses (SCCs) as a valid transfer mechanism, provided they meetcertain requirements. On June 4, 2021, the European Commission published new SCCs for this purpose, and we may
have to adapt our existing contractual arrangements to meet these new requirements. The validity of data transfer
mechanisms remains subject to legal, regulatory, and political developments in both Europe and the U.S., such as
recent recommendations from the European Data Protection Board, decisions from supervisory authorities, recent
proposals for reform of the data transfer mechanisms for transfers of personal data outside the United Kingdom, andpotential invalidation of other data transfer mechanisms, which, together with increased enforcement action fromsupervisory authorities in relation to cross-border transfers of personal data, could have a significant adverse effect on
our ability to process and transfer personal data outside of the European Economic Area and/or the United Kingdom.
These laws and regulations are evolving and subject to interpretation, including developments which create someuncertainty, and compliance obligations could cause us to incur costs or harm the operations of our products andservices in ways that harm our business. For example, in the EU, several supervisory authorities have issued new
guidance concerning the ePrivacy Directive’s requirements regarding the use of cookies and similar technologies,
including limitations on the use of data across messaging products and specific requirements for enabling users toaccept or reject cookies, and have in some cases brought (and may seek to bring in the future) enforcement action in
relation to those requirements. In the U.S., certain types of cookies may be deemed sales of personal information
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within the CCPA and other state laws, such that certain disclosure requirements and limitations apply to the use ofsuch cookies. In addition, some countries are considering or have passed legislation implementing data protection
requirements or requiring local storage and processing of data that could increase the cost and complexity of delivering
our services and carries the potential of service interruptions in those countries.
We face, and may continue to face, intellectual property and other claims that could be costly to defend,
result in significant damage awards or other costs (including indemnification awards), and limit our ability touse certain technologies in the future.
We, like other internet, technology and media companies, are frequently subject to litigation based on allegationsof infringement or other violations of intellectual property rights. In addition, patent-holding companies may frequently
seek to generate income from patents they have obtained by bringing claims against us. As we have grown, thenumber of intellectual property claims against us has increased and may continue to increase as we develop new
products, services, and technologies.
We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming thatcertain of our products, services, and technologies infringe the intellectual property rights of others. Other parties havealso sought broad injunctive relief against us by filing claims in U.S. and international courts and the U.S. International
Trade Commission (ITC) for exclusion and cease-and-desist orders, which could limit our ability to sell our products orservices in the U.S. or elsewhere if our products or services or those of our customers or suppliers are found to infringe
the intellectual property subject to the claims. Adverse results in any of these lawsuits may include awards of monetarydamages, costly royalty or licensing agreements (if licenses are available at all), or orders preventing us from offeringcertain features, functionalities, products, or services. They may also cause us to change our business practices andrequire development of non-infringing products, services, or technologies, which could result in a loss of revenues for
us and otherwise harm our business.
Many of our agreements with our customers and partners, including certain suppliers, require us to defend
against certain intellectual property infringement claims and in some cases indemnify them for certain intellectual
property infringement claims against them, which could result in increased costs for defending such claims orsignificant damages if there were an adverse ruling in any such claims. Such customers and partners may also
discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could
result in loss of revenues and adversely affect our business. Moreover, intellectual property indemnities provided to us
by our suppliers, when obtainable, may not cover all damages and losses suffered by us and our customers arisingfrom intellectual property infringement claims. Furthermore, in connection with our divestitures, we have agreed, andmay in the future agree, to provide indemnification for certain potential liabilities, including those associated withintellectual property claims. Regardless of their merits, intellectual property claims are often time consuming andexpensive to litigate or settle. To the extent such claims are successful, they may harm our business, including our
product and service offerings, financial condition, or operating results.
Risks Related to Ownership of our Stock
We cannot guarantee that any share repurchase program will be fully consummated or will enhance longterm stockholder value, and share repurchases could increase the volatility of our stock prices and could
diminish our cash reserves.
We engage in share repurchases of our Class A and Class C stock from time to time in accordance withauthorizations from the Board of Directors of Alphabet. Our repurchase program does not have an expiration date anddoes not obligate Alphabet to repurchase any specific dollar amount or to acquire any specific number of shares.
Further, our share repurchases could affect our share trading prices, increase their volatility, reduce our cash reserves
and may be suspended or terminated at any time, which may result in a decrease in the trading prices of our stock.
The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters.
Our Class B stock has 10 votes per share, our Class A stock has one vote per share, and our Class C stock has
no voting rights. As of December 31, 2021, Larry Page and Sergey Brin beneficially owned approximately 85.9% of ouroutstanding Class B stock, which represented approximately 51.4% of the voting power of our outstanding common
stock. Through their stock ownership, Larry and Sergey have significant influence over all matters requiring
stockholder approval, including the election of directors and significant corporate transactions, such as a merger orother sale of our company or our assets, for the foreseeable future. In addition, because our Class C stock carries novoting rights (except as required by applicable law), the issuance of the Class C stock, including in future stock-based
acquisition transactions and to fund employee equity incentive programs, could continue Larry and Sergey’s current
relative voting power and their ability to elect all of our directors and to determine the outcome of most matterssubmitted to a vote of our stockholders. The share repurchases made pursuant to our repurchase program may also

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affect Larry and Sergey’s relative voting power. This concentrated control limits or severely restricts other stockholders’ability to influence corporate matters and we may take actions that some of our stockholders do not view as beneficial,which could reduce the market price of our Class A stock and our Class C stock.
Provisions in our charter documents and under Delaware law could discourage a takeover thatstockholders may consider favorable.
Provisions in Alphabet’s certificate of incorporation and bylaws may have the effect of delaying or preventing achange of control or changes in our management. These provisions include the following:•

Our certificate of incorporation provides for a tri-class capital stock structure. As a result of this structure, Larry
and Sergey have significant influence over all matters requiring stockholder approval. This concentrated
control could discourage others from initiating any potential merger, takeover, or other change of control
transaction that other stockholders may view as beneficial.

•

Our Board of Directors has the right to elect directors to fill a vacancy created by the expansion of the Board of
Directors or the resignation, death, or removal of a director.

•

Our stockholders may not act by written consent, which makes it difficult to take certain actions without holding
a stockholders' meeting.

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

•

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

•

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

As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware
law, a corporation may not engage in a business combination with any holder of 15% or more of its outstanding voting
stock unless the holder has held the stock for three years or, among other things, the Board of Directors has approved
the transaction. Our Board of Directors could rely on Delaware law to prevent or delay an acquisition of us.
General Risks
The continuing effects of COVID-19 are highly unpredictable and could be significant, and may have an
adverse effect on our business, operations and our future financial performance.
Since COVID-19 was declared a global pandemic by the World Health Organization, our business, operations
and financial performance have been, and may continue to be, affected by the macroeconomic impacts resulting fromthe efforts to control the spread of COVID-19. As a result of the scale of the ongoing pandemic, including the
introduction of new variants of COVID-19 and vaccination and other efforts to control the spread, our revenue growthrate and expenses as a percentage of our revenues in future periods may differ significantly from our historical rates,and our future operating results may fall below expectations. Additionally, we may experience a significant andprolonged shift in user behavior such as a shift in interests to less commercial topics.
As a result of the pandemic, our workforce shifted to operating in a primarily remote working environment, which
continues to create inherent productivity, connectivity, and oversight challenges. The effects of the ongoing pandemic
are dynamic and uneven. As we prepare to return our workforce in more locations back to the office, we may
experience increased costs and/or disruption as we experiment with hybrid work models, in addition to potential effects
on our ability to operate effectively and maintain our corporate culture.
Our operating results may fluctuate, which makes our results difficult to predict and could cause ourresults to fall short of expectations.
Our operating results have fluctuated, and may in the future fluctuate, as a result of a number of factors, manyoutside of our control, including the cyclicality and seasonality in our business and geopolitical events. As a result,comparing our operating results (including our expenses as a percentage of our revenues) on a period-to-period basis
may not be meaningful, and our past results should not be relied on as an indication of our future performance.
Consequently, our operating results in future quarters may fall below expectations.

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

diversion of management time and focus from operating our business to challenges related to acquisitions andother strategic transactions;•failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions
placed upon approval that could, among other things, delay or prevent us from completing a transaction, orotherwise restrict our ability to realize the expected financial or strategic goals of a transaction;•

failure to successfully integrate and further develop the acquired business or technology;•

implementation or remediation of controls, procedures, and policies at the acquired company;•

integration of the acquired company’s accounting, human resource (including cultural integration and retentionof employees), and other administrative systems, and coordination of product, engineering, and sales andmarketing functions;•transition of operations, users, and customers onto our existing platforms;•

in the case of foreign acquisitions, the need to integrate operations across different cultures and languages
and to address the particular economic, currency, political, and regulatory risks associated with specificcountries;•

liability for activities of the acquired company before the acquisition, including patent and trademark
infringement claims, data privacy and security issues, violations of laws, commercial disputes, tax liabilities,
warranty claims, product liabilities, and other known and unknown liabilities; and•litigation or other claims in connection with the acquired company, including claims from terminatedemployees, customers, former stockholders, or other third parties.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions
and other strategic transactions could cause us to fail to realize their anticipated benefits, incur unanticipated liabilities,
and harm our business generally.
Our acquisitions and other strategic transactions could also result in dilutive issuances of our equity securities, theincurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill and/or purchased longlived assets, and restructuring charges, any of which could harm our financial condition or operating results. Also, theanticipated benefits or value of our acquisitions and other strategic transactions may not materialize. In connection with
our divestitures, we have agreed, and may in the future agree, to provide indemnification for certain potential liabilities,
which may harm our financial condition or operating results.
If we were to lose the services of key personnel, we may not be able to execute our business strategy.
Our future success depends in large part upon the continued service of key members of our senior management
team. For instance, Sundar Pichai is critical to the overall management of Alphabet and its subsidiaries and plays animportant role in the development of our technology, maintaining our culture, and setting our strategic direction. All of
our executive officers and key employees are at-will employees, and we do not maintain any key-person life insurance
policies. The loss of key personnel could seriously harm our business.
We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hirequalified personnel, or maintain our corporate culture, we may not be able to grow effectively.
Our performance largely depends on the talents and efforts of highly skilled individuals. Our ability to compete
effectively and our future success depends on our continuing to identify, hire, develop, motivate, and retain highly
skilled personnel for all areas of our organization. Competition in our industry for qualified employees is intense, andcertain of our competitors have directly targeted our employees. In addition, our compensation arrangements, such as
our equity award programs, may not always be successful in attracting new employees and retaining and motivating
our existing employees. Restrictive immigration policy and regulatory changes may also affect our ability to hire,mobilize, or retain some of our global talent.

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In addition, we believe that our corporate culture fosters innovation, creativity, and teamwork. As our organization
grows and evolves, we may need to implement more complex organizational management structures or adapt our
corporate culture and work environments to ever-changing circumstances, such as during times of a natural disaster or
pandemic, and these changes could affect our ability to compete effectively or have an adverse effect on our corporate
culture.
We are exposed to fluctuations in the fair values of our investments and, in some instances, our financial
statements incorporate valuation methodologies that are subjective in nature resulting in fluctuations overtime.
The fair value of our investments may in the future be, and certain investments have been in the past, negatively
affected by liquidity, credit deterioration or losses, performance and financial results of the underlying entities, foreignexchange rates, changes in interest rates, including changes that may result from the implementation of new
benchmark rates, the effect of new or changing regulations, the stock market in general, or other factors.
We measure certain of our non-marketable equity and debt securities, certain other instruments including stockbased compensation awards settled in the stock of certain Other Bets, and certain assets and liabilities acquired in abusiness combination, at fair value on a nonrecurring basis. The determination of fair value involves use of appropriate
valuation methods and certain unobservable inputs, requires management judgment and estimation, and may changeover time. We adjust the carrying value of our non-marketable equity securities to fair value for observable transactionsof identical or similar investments of the same issuer or for impairments. All gains and losses on non-marketable equity
securities, are recognized in other income (expense), which increases the volatility of our other income (expense). The
unrealized gains and losses we record from fair value remeasurements of our non-marketable equity securities in any
particular period may differ significantly from the gains or losses we ultimately experience on such investments.
As a result of these factors, the value or liquidity of our cash equivalents, as well as our marketable and nonmarketable securities could decline and result in a material impairment, which could adversely affect our financial
condition and operating results.
We could be subject to changes in tax rates, the adoption of new U.S. or international tax legislation, or
exposure to additional tax liabilities.
Our future income taxes could be negatively affected by earnings being lower than anticipated in jurisdictions thathave lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, the net
gains and losses recognized by legal entities on certain hedges and related hedged intercompany and othertransactions under our foreign exchange risk management program, decreases in our stock price for shares paid as
employee compensation, changes in the valuation of our deferred tax assets or liabilities, the application of different
provisions of tax laws or changes in tax laws, regulations, or accounting principles (including changes in theinterpretation of existing laws), as well as certain discrete items.
In addition, we are subject to regular review and audit by both domestic and foreign tax authorities. As a result,
we have received, and may in the future receive, assessments in multiple jurisdictions, including in Europe, on various
tax-related assertions, such as transfer-pricing adjustments or permanent-establishment claims. Any adverse outcomeof such a review or audit could have a negative effect on our operating results and financial condition and could require
us to change our business practices in a manner adverse to our business. It may also subject us to additional litigation
and regulatory inquiries, resulting in the diversion of management’s time and attention. In addition, the determination of
our worldwide provision for income taxes and other tax liabilities requires significant judgment, and there are manytransactions and calculations for which the ultimate tax determination is uncertain. Although we believe our estimates
are reasonable, the ultimate tax outcome may differ from the amounts recorded in our financial statements and may
affect our financial results in the period or periods for which such determination is made.
Furthermore, due to shifting economic and political conditions, tax policies, laws, or rates in various jurisdictions
may be subject to significant changes in ways that impair our financial results. Various jurisdictions around the world
have enacted or are considering digital services taxes, which could lead to inconsistent and potentially overlapping
international tax regimes. The Organization for Economic Cooperation and Development (OECD) continues toadvance proposals relating to its initiative for modernizing international tax rules, with the goal of having different
countries implement a modernized and aligned international tax framework, but there can be no guarantee that this will
occur.
In addition, in response to significant market volatility and disruptions to business operations resulting from theglobal spread of COVID-19, legislatures and taxing authorities in many jurisdictions in which we operate may proposechanges to their tax rules. These changes could include modifications that have temporary effect, and more permanent

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changes. The effect of these potential new rules on us, our long-term tax planning, and our effective tax rate could bematerial.
The trading price for our Class A stock and non-voting Class C stock may continue to be volatile.
The trading price of our stock has at times experienced substantial price volatility and may continue to be volatile.
In addition to the factors discussed in this report, the trading price of our Class A stock and Class C stock havefluctuated, and may continue to fluctuate widely, in response to various factors, many of which are beyond our control,
including, among others, the activities of our peers and changes in broader economic and political conditions aroundthe world. These broad market and industry factors may harm the market price of our Class A stock and our Class C
stock, regardless of our actual operating performance.
ITEM 1B.

UNRESOLVED STAFF COMMENTS

Not applicable.
ITEM 2.

PROPERTIESOur headquarters are located in Mountain View, California. We also own and lease office and building space inthe surrounding areas near our headquarters. In addition, we own and lease office/building space and R&D sitesaround the world, primarily in North America, Europe, South America, and Asia. We own and operate data centers in
the U.S., Europe, South America, and Asia. We believe our existing facilities, both owned and leased, are in goodcondition and suitable for the conduct of our business.
ITEM 3.

LEGAL PROCEEDINGSFor a description of our material pending legal proceedings, see Legal Matters in Note 10 of the Notes toConsolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which isincorporated herein by reference.
ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

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PART IIITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIESAs of October 2, 2015, Alphabet Inc. became the successor issuer of Google Inc. pursuant to Rule 12g-3(a) under
the Exchange Act. Our Class A common stock has been listed on the Nasdaq Global Select Market under the symbol“GOOG” since August 19, 2004 and under the symbol "GOOGL" since April 3, 2014. Prior to August 19, 2004, there
was no public market for our stock. Our Class B common stock is neither listed nor traded. Our Class C capital stock
has been listed on the Nasdaq Global Select Market under the symbol “GOOG” since April 3, 2014.
Holders of Record
As of December 31, 2021, there were approximately 4,907 and 1,733 stockholders of record of our Class A
common stock and Class C capital stock, respectively. Because many of our shares of Class A common stock andClass C capital stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate
the total number of stockholders represented by these record holders. As of December 31, 2021, there wereapproximately 64 stockholders of record of our Class B common stock.
Dividend Policy
We have never declared or paid any cash dividend on our common or capital stock. The primary use of capital
continues to be to invest for the long-term growth of the business. We regularly evaluate our cash and capital structure,including the size, pace, and form of capital return to stockholders.
Issuer Purchases of Equity Securities
The following table presents information with respect to Alphabet's repurchases of Class A common stock andClass C capital stock during the quarter ended December 31, 2021:

PeriodOctober 1 - 31
November 1 - 30
December 1 - 31
Total
(1)

(2)

Total Number ofClass A Shares
Purchased(in thousands) (1)

126
289
250
665

Total Number ofClass C Shares
Purchased(in thousands) (1)Average Price
Paid perClass A Share(2)

Average Price
Paid perClass C Share(2)

1,445 $ 2,812.76 $ 2,794.72
1,393 $ 2,943.97 $ 2,956.73
1,169 $ 2,880.79 $ 2,898.56
4,007

Total Number of
SharesPurchased as
Part of Publicly
Announced
Programs(in thousands) (1)Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under theProgram(in millions)

1,571 $
1,682 $
1,419 $
4,672

26,45021,47917,371

The repurchases are being executed from time to time, subject to general business and market conditions and otherinvestment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1
plans. The repurchase program does not have an expiration date. See Note 11 of the Notes to Consolidated Financial
Statements included in Item 8 of this Annual Report on Form 10-K for additional information related to share repurchases.
Average price paid per share includes costs associated with the repurchases.

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Stock Performance Graphs
The graph below matches Alphabet Inc. Class A's cumulative 5-year total stockholder return on common stockwith the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet
Composite index. The graph tracks the performance of a $100 investment in our common stock and in each index(with the reinvestment of all dividends) from December 31, 2016 to December 31, 2021. The returns shown are basedon historical results and are not intended to suggest future performance.
COMPARISON OF CUMULATIVE 5-YEAR TOTAL RETURN*
ALPHABET INC. CLASS A COMMON STOCK
Among Alphabet Inc., the S&P 500 Index, the
NASDAQ Composite Index, and the RDG Internet Composite Index
$400
$350
$300
$250
$200
$150
$100
$50

12
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Alphabet Inc. Class A
RDG Internet Composite

S&P 500

NASDAQ Composite*$100 invested on December 31, 2016 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
©

Copyright 2022 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

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The graph below matches Alphabet Inc. Class C's cumulative 5-year total stockholder return on capital stock withthe cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite
index. The graph tracks the performance of a $100 investment in our Class C capital stock and in each index (with thereinvestment of all dividends) from December 31, 2016 to December 31, 2021. The returns shown are based on
historical results and are not intended to suggest future performance.
COMPARISON OF CUMULATIVE 5-YEAR TOTAL RETURN*
ALPHABET INC. CLASS C CAPITAL STOCK
Among Alphabet Inc., the S&P 500 Index, the
NASDAQ Composite Index, and the RDG Internet Composite Index
$400
$350
$300
$250
$200
$150
$100
$50

Alphabet Inc. Class C
RDG Internet Composite

S&P 500

NASDAQ Composite*$100 invested on December 31, 2016 in stock or in index, including reinvestment of dividends. Fiscal year ending December 31.
©

Copyright 2022 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

ITEM 6.

[Reserved]

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ITEM 7.

Alphabet Inc.

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“Note about Forward-Looking Statements,” Part I, Item 1 "Business," Part I, Item 1A "Risk Factors," and ourconsolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.
We have omitted discussion of 2019 results where it would be redundant to the discussion previously included in
Item 7 of our 2020 Annual Report on Form 10-K.
Understanding Alphabet’s Financial Results
Alphabet is a collection of businesses — the largest of which is Google. We report Google in two segments,
Google Services and Google Cloud; we also report all non-Google businesses collectively as Other Bets. Other Bets
include earlier stage technologies that are further afield from our core Google business. For further details on our
segments, see Part I, Item 1 “Business” and Note 15 of the Notes to Consolidated Financial Statements included in
Item 8 of this Annual Report on Form 10-K.
Trends in Our Business and Financial Effect
The following long-term trends have contributed to the results of our consolidated operations, and we anticipate
that they will continue to affect our future results:•

Users' behaviors and advertising continue to shift online as the digital economy evolves.

The continuing shift from an offline to online world has contributed to the growth of our business since inception,
contributing to revenue growth, and we expect that this online shift will continue to benefit our business.
• Users are increasingly using diverse devices and modalities to access our products and services, andour advertising revenues are increasingly coming from new formats.
Our users are accessing the Internet via diverse devices and modalities, such as smartphones, wearables andsmart home devices, and want to be able to be connected no matter where they are or what they are doing. We arefocused on expanding our products and services to stay in front of these trends in order to maintain and grow ourbusiness.
We are increasingly generating advertising revenues from different channels, including mobile, and newer
advertising formats. The margins on advertising revenues from these channels and newer products have generally
been lower than those from traditional desktop search. Additionally, as the market for a particular device type ormodality matures, our revenues may be affected. For example, growth in the global smartphone market has slowed
due to various factors, including increased market saturation in developed countries, which can affect our mobile
advertising revenue growth rates.
We expect TAC paid to our distribution partners and Google Network partners to increase as our revenues grow
and TAC as a percentage of our advertising revenues ("TAC rate") to be affected by changes in device mix; geographic
mix; partner mix; partner agreement terms; the percentage of queries channeled through paid access points; productmix; the relative revenue growth rates of advertising revenues from different channels; and revenue share terms.
We expect these trends to continue to affect our revenue growth rates and put pressure on our margins.
• As online advertising evolves, we continue to expand our product offerings, which may affect ourmonetization.
As interactions between users and advertisers change, and as online user behavior evolves, we continue toexpand and evolve our product offerings to serve these changing needs. Over time, we expect our monetization trends
to fluctuate. For example, we have seen an increase in revenues from ads on YouTube and Google Play, whichmonetize at a lower rate than our traditional search ads.
• As users in developing economies increasingly come online, our revenues from international markets
continue to increase and movements in foreign exchange rates affect such revenues.
The shift to online, as well as the advent of the multi-device world, has brought opportunities outside of the U.S.,
including in emerging markets, such as India. We continue to invest heavily and develop localized versions of our
products and advertising programs relevant to our users in these markets. This has led to a trend of increased
revenues from emerging markets. We expect that our results will continue to be affected by our performance in thesemarkets, particularly as low-cost mobile devices become more available. This trend could affect our revenues asdeveloping markets initially monetize at a lower rate than more mature markets.

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International revenues represent a significant portion of our revenues and are subject to fluctuations in foreign
currency exchange rates relative to the U.S. dollar. While we have a foreign exchange risk management program
designed to reduce our exposure to these fluctuations, this program does not fully offset their effect on our revenues
and earnings.
• The portion of revenues that we derive from non-advertising revenues is increasing and may adversely
affect margins.
Non-advertising revenues have grown over time. We expect this trend to continue as we focus on expanding ourofferings through products and services like Google Cloud, Google Play, hardware products, and YouTube
subscriptions. We currently derive non-advertising revenues primarily from sales of apps and in-app purchases, digitalcontent products, and hardware; and licensing and service fees, including fees received for Google Cloud services andsubscription and other services. A number of Other Bets initiatives are in their initial development stages, and as such,revenues from these businesses could be volatile. In addition, the margins on these revenues vary significantly andmay be lower than the margins on our advertising revenues.
• As we continue to serve our users and expand our businesses, we will invest heavily in operating andcapital expenditures.
We continue to make significant R&D investments in areas of strategic focus across Google Services, Google
Cloud and Other Bets. We also expect to continue to invest in land and buildings for data centers and offices, andinformation technology assets, which includes servers and network equipment, to support the long-term growth of ourbusiness. In addition, acquisitions and strategic investments contribute to the breadth and depth of our offerings,
expand our expertise in engineering and other functional areas, and build strong partnerships around strategic
initiatives. For example, in January 2021 we closed the acquisition of Fitbit, Inc. for $2.1 billion, which is expected tohelp spur innovation in wearable devices.
• We face continuing changes in regulatory conditions, laws, and public policies, which could affect ourbusiness practices and financial results.
Changes in social, political, economic, tax, and regulatory conditions or in laws and policies governing a wide
range of topics and related legal matters have resulted in fines and caused us to change our business practices. As
these global trends continue, our cost of doing business may increase, and our ability to pursue certain businessmodels or offer certain products or services may be limited. Examples include the antitrust complaints filed by the U.S.
Department of Justice and a number of state Attorneys General, the Digital Markets Act in Europe, and various
legislative proposals in the U.S. focused on large technology platforms.
•

Our employees are critical to our success and we expect to continue investing in them.

Our employees are among our best assets and are critical for our continued success. We expect to continue
hiring talented employees around the globe and to provide competitive compensation programs. For additional
information see Culture and Workforce in Part I, Item 1 “Business.”
Seasonality and other
Our advertising revenues are affected by seasonal fluctuations in internet usage, advertising expenditures, andunderlying business trends, such as traditional retail seasonality. Additionally, our non-advertising revenues, including
those generated from Google Cloud, Google Play, hardware, and YouTube, may be affected by fluctuations driven bychanges in pricing, digital content releases, fee structures, new product and service launches, other market dynamics,
as well as seasonality.
Revenues and Monetization Metrics
Google Services
Google Services revenues consist of revenues generated from advertising (“Google advertising”) as well as
revenues from other sources (“Google other revenues”).
Google Advertising
Google advertising revenues are comprised of the following:•

Google Search & other, which includes revenues generated on Google search properties (including revenues
from traffic generated by search distribution partners who use Google.com as their default search in browsers,
toolbars, etc.), and other Google owned and operated properties like Gmail, Google Maps, and Google Play;•

YouTube ads, which includes revenues generated on YouTube properties; and29

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Alphabet Inc.

Google Network, which includes revenues generated on Google Network properties participating in AdMob,
AdSense, and Google Ad Manager.

We use certain metrics to track how well traffic across various properties is monetized as it relates to ouradvertising revenues: paid clicks and cost-per-click pertain to traffic on Google Search & other properties, while
impressions and cost-per-impressions pertain to traffic on our Network partners’ properties.
Paid clicks represent engagement by users and include clicks on advertisements by end-users on Google searchproperties and other Google owned and operated properties including Gmail, Google Maps, and Google Play. Costper-click is defined as click-driven revenues divided by our total number of paid clicks and represents the averageamount we charge advertisers for each engagement by users.
Impressions include impressions displayed to users on Google Network properties participating primarily in
AdMob, AdSense, and Google Ad Manager. Cost-per-impression is defined as impression-based and click-based
revenues divided by our total number of impressions, and represents the average amount we charge advertisers foreach impression displayed to users.
As our business evolves, we periodically review, refine, and update our methodologies for monitoring, gathering,and counting the number of paid clicks and the number of impressions, and for identifying the revenues generated by
the corresponding click and impression activity.
Our advertising revenue growth, as well as the change in paid clicks and cost-per-click on Google Search & otherproperties and the change in impressions and cost-per-impression on Google Network properties and the correlation
between these items, have been affected and may continue to be affected by various factors, including:•advertiser competition for keywords;•

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

changes in device mix;•changes in foreign currency exchange rates;•

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

general economic conditions, including the effect of COVID-19;•

seasonality; and•traffic growth in emerging markets compared to more mature markets and across various advertising verticals
and channels.
Google Other
Google other revenues are comprised of the following:•

Google Play, which includes sales of apps and in-app purchases and digital content sold in the Google Play
store;•

Devices and Services, which includes sales of hardware, including Fitbit wearable devices, Google Nest home
products, and Pixel phones;•

YouTube non-advertising, which includes YouTube Premium and YouTube TV subscriptions; and•other products and services.
Google Cloud
Google Cloud revenues are comprised of the following:•

Google Cloud Platform, which includes fees for infrastructure, platform, and other services;•

Google Workspace, which includes fees for cloud-based collaboration tools for enterprises, such as Gmail,Docs, Drive, Calendar and Meet; and•other enterprise services.
Other Bets
Revenues from Other Bets are generated primarily from the sale of health technology and internet services.

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For further details on how we recognize revenue, see Note 1 of the Notes to Consolidated Financial Statements
included in Item 8 of this Annual Report on Form 10-K.
Costs and Expenses
Our cost structure has two components: cost of revenues and operating expenses. Our operating expenses
include costs related to R&D, sales and marketing, and general and administrative functions. Certain of these
expenses, including those associated with the operation of our technical infrastructure as well as components of ouroperating expenses, are generally less variable in nature and may not correlate to the changes in revenue.
Cost of Revenues
Cost of revenues is comprised of TAC and other costs of revenues.
••

TAC includes:◦

Amounts paid to our distribution partners who make available our search access points and services.
Our distribution partners include browser providers, mobile carriers, original equipment manufacturers,
and software developers.

◦

Amounts paid to Google Network partners primarily for ads displayed on their properties.

Other cost of revenues includes:◦

Content acquisition costs, which are payments to content providers from whom we license video andother content for distribution on YouTube and Google Play (we pay fees to these content providers
based on revenues generated or a flat fee).

◦

Expenses associated with our data centers (including bandwidth, compensation expenses,
depreciation, energy, and other equipment costs) as well as other operations costs (such as content
review as well as customer and product support costs).

◦

Inventory and other costs related to the hardware we sell.

The cost of revenues as a percentage of revenues generated from ads placed on Google Network properties are
significantly higher than the cost of revenues as a percentage of revenues generated from ads placed on Google
Search & other properties, because most of the advertiser revenues from ads served on Google Network properties
are paid as TAC to our Google Network partners.
Operating Expenses
Operating expenses are generally incurred during our normal course of business, which we categorize as either
R&D, sales and marketing, or general and administrative.
The main components of our R&D expenses are:•compensation expenses for engineering and technical employees responsible for R&D related to our existingand new products and services;•

depreciation; and•professional services fees primarily related to consulting and outsourcing services.
The main components of our sales and marketing expenses are:•compensation expenses for employees engaged in sales and marketing, sales support, and certain customer
service functions; and•spending relating to our advertising and promotional activities in support of our products and services.
The main components of our general and administrative expenses are:•compensation expenses for employees in finance, human resources, information technology, legal, and otheradministrative support functions;•

expenses related to legal matters, including fines and settlements; and•professional services fees, including audit, consulting, outside legal, and outsourcing services.

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Other Income (Expense), Net
Other income (expense), net primarily consists of interest income (expense), the effect of foreign currency
exchange gains (losses), net gains (losses) and impairment on our marketable and non-marketable securities,
performance fees, and income (loss) and impairment from our equity method investments.
For additional details, including how we account for our investments and factors that can drive fluctuations in thevalue of our investments, see Note 1 and Note 3 of the Notes to Consolidated Financial Statements included in Part II,
Item 8 of this Annual Report on Form 10-K as well as Item 7A, “Quantitative and Qualitative Disclosures About Market
Risk”.
Provision for Income Taxes
Provision for income taxes represents the estimated amount of federal, state, and foreign income taxes incurredin the U.S. and the many jurisdictions in which we operate. The provision includes the effect of reserve provisions andchanges to reserves that are considered appropriate as well as the related net interest and penalties.
For additional details, including a reconciliation of the U.S. federal statutory rate to our effective tax rate, see Note
14 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Executive Overview
The following table summarizes consolidated financial results for the years ended December 31, 2020 and 2021
unless otherwise specified (in millions, except for per share information and percentages):Year Ended December 31,
2020

2021

Consolidated revenues
Change in consolidated constant currency revenues$ 182,527$ 257,637$

75,11041 %39 %Cost of revenues
Operating expenses$ 84,732$ 56,571$ 110,939$ 67,984$$

26,207
11,41331 %20 %Operating income
Operating margin$ 41,224$ 78,714
$
23 %
31 %

37,49091 %8%Other income (expense), net

$

6,858

$ 12,020

$

5,162

75 %

Net Income
Diluted EPS$ 40,269$ 58.61$ 76,033$ 112.20$$

35,764
53.59

89 %
91 %

21,19916 %Number of Employees

135,301

156,500$ Change% Change•

Revenues were $257.6 billion, an increase of 41%. The increase in revenues was primarily driven by Google
Services and Google Cloud. The adverse effect of COVID-19 on 2020 advertising revenues also contributed to
the year-over-year growth.

•

Cost of revenues was $110.9 billion, an increase of 31%, primarily driven by increases in TAC and content
acquisition costs. An overall increase in data centers and other operations costs was partially offset by areduction in depreciation expense due to the change in the estimated useful life of our servers and certain
network equipment.

•

Operating expenses were $68.0 billion, an increase of 20%, primarily driven by headcount growth, increases inadvertising and promotional expenses and charges related to legal matters.

Other information:•

Operating cash flow was $91.7 billion, primarily driven by revenues generated from our advertising products.

•

Share repurchases were $50.3 billion, an increase of 62%. See Note 11 of the Notes to Consolidated Financial
Statements included in Item 8 of this Annual Report on Form 10-K for further information.

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•

Capital expenditures, which primarily reflected investments in technical infrastructure, were $24.6 billion.

•

In January 2021, we updated the useful lives of certain of our servers and network equipment, resulting in a
reduction in depreciation expense of $2.6 billion recorded primarily in cost of revenues and R&D. See Note 1of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for
further information.

•

Our acquisition of Fitbit closed in early January 2021, and the related revenues are included in Google other.
See Note 8 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on
Form 10-K for further information.

•

On February 1, 2022, the Company announced that the Board of Directors had approved and declared a 20for-one stock split in the form of a one-time special stock dividend on each share of the Company’s Class A,
Class B, and Class C stock. See Note 11 of the Notes to Consolidated Financial Statements included in Item 8of this Annual Report on Form 10-K for additional information.

The Effect of COVID-19 on our Financial Results
We began to observe the effect of COVID-19 on our financial results in March 2020 when, despite an increase inusers' search activity, our advertising revenues declined compared to the prior year. This was due to a shift of user
search activity to less commercial topics and reduced spending by our advertisers. For the quarter ended June 30,
2020 our advertising revenues declined due to the continued effects of COVID-19 and the related reductions in global
economic activity, but we observed a gradual return in user search activity to more commercial topics. This wasfollowed by increased spending by our advertisers, which continued throughout the second half of 2020. Additionally,
over the course of 2020, we experienced variability in our margins as many of our expenses are less variable in nature
and/or may not correlate to changes in revenues. Market volatility contributed to fluctuations in the valuation of ourequity investments. Further, our assessment of the credit deterioration of our customers due to changes in themacroeconomic environment during the period was reflected in our allowance for credit losses for accounts receivable.
Throughout 2021 we remained focused on innovating and investing in the services we offer to consumers andbusinesses to support our long-term growth. The impact of COVID-19 on 2020 financial results affected year-over-year
growth trends. The COVID-19 pandemic continues to evolve, be unpredictable and affect our business and financial
results. Our past results may not be indicative of our future performance, and historical trends in our financial results
may differ materially.
Financial Results
Revenues
The following table presents revenues by type (in millions):
Year Ended December 31,
2020

Google Search & other
YouTube ads
Google Network$

Google advertising
Google other
Google Services total
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues$

104,062
19,77223,090146,924
21,711
168,635
13,059657
176
182,527

2021

$

$

148,951
28,84531,701
209,497
28,032
237,529
19,206753
149
257,637

Google Services
Google advertising revenues
Google Search & other
Google Search & other revenues increased $44.9 billion from 2020 to 2021. The overall growth was driven byinterrelated factors including increases in search queries resulting from growth in user adoption and usage, primarily

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on mobile devices, growth in advertiser spending, and improvements we have made in ad formats and delivery. The
adverse effect of COVID-19 on 2020 revenues also contributed to the year-over-year increase.
YouTube ads
YouTube ads revenues increased $9.1 billion from 2020 to 2021. Growth was driven by our direct response andbrand advertising products. Growth for our direct response advertising products was primarily driven by increased
advertiser spending as well as improvements to ad formats and delivery. Growth for our brand advertising products
was primarily driven by increased spending by our advertisers and the adverse effect of COVID-19 on 2020 revenues.
Google Network
Google Network revenues increased $8.6 billion from 2020 to 2021. The growth was primarily driven by strength
in AdMob, Google Ad Manager, and AdSense. The adverse effect of COVID-19 on 2020 revenues also contributed to
the year-over-year increase.
Monetization Metrics
Paid clicks and cost-per-click
The following table presents changes in paid clicks and cost-per-click (expressed as a percentage) from 2020 to
2021:
Year Ended
December 31,
2021

Paid clicks change
Cost-per-click change

23 %
15 %

Paid clicks increased from 2020 to 2021 driven by a number of interrelated factors, including an increase in
search queries resulting from growth in user adoption and usage, primarily on mobile devices; an increase in clicks
relating to ads on Google Play; growth in advertiser spending; and improvements we have made in ad formats anddelivery. The adverse effect of COVID-19 on 2020 paid clicks also contributed to the increase.
The increase in cost-per-click from 2020 to 2021 was driven by a number of interrelated factors including changes
in device mix, geographic mix, growth in advertiser spending, ongoing product changes, and property mix, as well as
the adverse effect of COVID-19 in 2020.
Impressions and cost-per-impression
The following table presents changes in impressions and cost-per-impression (expressed as a percentage) from2020 to 2021:
Year Ended
December 31,
2021

Impressions change
Cost-per-impression change

2%
35 %

Impressions increased from 2020 to 2021 primarily driven by growth in AdMob, partially offset by a decline in
impressions related to AdSense. The increase in cost-per-impression was primarily driven by the adverse effect of
COVID-19 in 2020 as well as the effect of interrelated factors including ongoing product and policy changes andimprovements we have made in ad formats and delivery, changes in device mix, geographic mix, product mix, andproperty mix.
Google other revenues
Google other revenues increased $6.3 billion from 2020 to 2021. The growth was primarily driven by YouTube
non-advertising and hardware, followed by Google Play. Growth for YouTube non-advertising was primarily due to anincrease in paid subscribers. Growth in hardware reflects the inclusion of Fitbit revenues, as the acquisition closed in
January 2021, and an increase in phone sales. Growth for Google Play was primarily driven by sales of apps and inapp purchases.

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Google Cloud
Google Cloud revenues increased $6.1 billion from 2020 to 2021. The growth was primarily driven by GCP
followed by Google Workspace offerings. Google Cloud's infrastructure and platform services were the largest driversof growth in GCP.
Revenues by Geography
The following table presents revenues by geography as a percentage of revenues, determined based on theaddresses of our customers:
Year Ended December 31,
2021

2020

United States
EMEA
APAC
Other Americas

47 %
30 %
18 %
5%

46 %
31 %
18 %
5%

For further details on revenues by geography, see Note 2 of the Notes to Consolidated Financial Statements
included in Item 8 of this Annual Report on Form 10-K.
Use of Constant Currency Revenues and Constant Currency Revenue Percentage Change
The effect of currency exchange rates on our business is an important factor in understanding period to period
comparisons. We use non-GAAP constant currency revenues and non-GAAP percentage change in constant currency
revenues for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We
believe the presentation of results on a constant currency basis in addition to U.S. Generally Accepted Accounting
Principles (GAAP) results helps improve the ability to understand our performance because it excludes the effects offoreign currency volatility that are not indicative of our core operating results.
Constant currency information compares results between periods as if exchange rates had remained constantperiod over period. We define constant currency revenues as total revenues excluding the effect of foreign exchange
rate movements and hedging activities, and use it to determine the constant currency revenue percentage change on a
year-on-year basis. Constant currency revenues are calculated by translating current period revenues using prior year
comparable period exchange rates, as well as excluding any hedging effects realized in the current period.
Constant currency revenue percentage change is calculated by determining the change in current period
revenues over prior year comparable period revenues where current period foreign currency revenues are translatedusing prior year comparable period exchange rates and hedging effects are excluded from revenues of both periods.
These results should be considered in addition to, not as a substitute for, results reported in accordance with
GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measuresused by other companies and are not a measure of performance presented in accordance with GAAP.

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The following table presents the foreign exchange effect on international revenues and total revenues (in millions,
except percentages):Year Ended December 31,
2020

EMEA revenues
EMEA constant currency revenues

$

2021

55,370$% Change from
Prior Year79,10776,32143 %38 %APAC revenues
APAC constant currency revenues

32,55046,12345,66642 %40 %Other Americas revenues
Other Americas constant currency revenues

9,417

14,404
14,31753 %52 %United States revenues

85,014

117,854

39 %Hedging gains (losses)
Total revenues
Revenues, excluding hedging effectExchange rate effectTotal constant currency revenues

$
$

176
182,527
182,351$$$149
257,637
257,488(3,330)254,158

41 %

39 %

EMEA revenue growth from 2020 to 2021 was favorably affected by foreign currency exchange rates, primarily
due to the U.S. dollar weakening relative to the Euro and British pound.
APAC revenue growth from 2020 to 2021 was favorably affected by foreign currency exchange rates, primarily
due to the U.S. dollar weakening relative to the Australian dollar, partially offset by the U.S. dollar strengthening relative
to the Japanese yen.
Other Americas growth change from 2020 to 2021 was favorably affected by changes in foreign currency
exchange rates, primarily due to the U.S. dollar weakening relative to the Canadian dollar, partially offset by the U.S.
dollar strengthening relative to the Argentine peso and the Brazilian real.
Costs and Expenses
Cost of Revenues
The following tables present cost of revenues, including TAC (in millions, except percentages):Year Ended December 31,

TAC
Other cost of revenues
Total cost of revenues
Total cost of revenues as a percentage of revenues

$
$

2020

2021

32,778$51,95484,732$46.4 %

45,56665,373110,93943.1 %

Cost of revenues increased $26.2 billion from 2020 to 2021. The increase was due to an increase in other cost ofrevenues and TAC of $13.4 billion and $12.8 billion, respectively.
The increase in TAC from 2020 to 2021 was due to an increase in TAC paid to distribution partners and to Google
Network partners, primarily driven by growth in revenues subject to TAC. The TAC rate decreased from 22.3% to21.8% from 2020 to 2021 primarily due to a revenue mix shift from Google Network properties to Google Search &other properties. The TAC rate on Google Search & other properties revenues and the TAC rate on Google Network
revenues were both substantially consistent from 2020 to 2021.
The increase in other cost of revenues from 2020 to 2021 was driven by increases in content acquisition costs
primarily for YouTube, data center and other operations costs, and hardware costs. The increase in data center and36

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other operations costs was partially offset by a reduction in depreciation expense due to the change in the estimateduseful life of our servers and certain network equipment beginning in the first quarter of 2021.
Research and Development
The following table presents R&D expenses (in millions, except percentages):Year Ended December 31,

Research and development expenses
Research and development expenses as a percentage of revenues

$

2020

2021

27,573$15.1 %

31,562
12.3 %

R&D expenses increased $4.0 billion from 2020 to 2021. The increase was primarily due to an increase incompensation expenses of $3.5 billion, largely resulting from an 11% increase in headcount, and an increase inprofessional service fees of $516 million. This increase was partially offset by a reduction in depreciation expense of$450 million including the effect of our change in the estimated useful life of our servers and certain network
equipment.
Sales and Marketing
The following table presents sales and marketing expenses (in millions, except percentages):Year Ended December 31,

Sales and marketing expenses
Sales and marketing expenses as a percentage of revenues

$

2020

2021

17,946$
9.8 %

22,912
8.9 %Sales and marketing expenses increased $5.0 billion from 2020 to 2021, primarily driven by an increase inadvertising and promotional activities of $2.5 billion and an increase in compensation expenses of $2.2 billion. The
increase in advertising and promotional activities was driven by both increased spending in the current period and areduction in spending in 2020 due to COVID-19. The increase in compensation expenses was largely due to a 14%
increase in headcount.
General and Administrative
The following table presents general and administrative expenses (in millions, except percentages):Year Ended December 31,

General and administrative expenses
General and administrative expenses as a percentage of revenues

$

2020

2021

11,052$
6.1 %13,5105.2 %General and administrative expenses increased $2.5 billion from 2020 to 2021. The increase was primarily driven
by a $1.7 billion increase in charges relating to legal matters and a $664 million increase in compensation expenses,
largely resulting from a 14% increase in headcount. These increases were partially offset by a reduction in expense of$808 million related to a decline in allowance for credit losses for accounts receivable, as 2020 reflected a higher
allowance related to the economic effect of COVID-19.

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Segment Profitability
The following table presents segment operating income (loss) (in millions).
Year Ended December 31,
2020

Operating income (loss):
Google Services
Google Cloud
Other Bets
Corporate costs, unallocated(1)Total income from operations
(1)

$

$

2021

54,606 $(5,607)(4,476)(3,299)41,224 $91,855(3,099)(5,281)(4,761)78,714

Unallocated corporate costs primarily include corporate initiatives, corporate shared costs, such as finance and legal, including
certain fines and settlements, as well as costs associated with certain shared R&D activities. Additionally, hedging gains(losses) related to revenue are included in corporate costs.

Google Services
Google services operating income increased $37.2 billion from 2020 to 2021. The increase was due to growth inrevenues partially offset by increases in TAC, content acquisition costs, compensation expenses, advertising andpromotional expenses, and charges related to certain legal matters. The increase in expenses was partially offset by areduction in costs driven by the change in the estimated useful life of our servers and certain network equipment. The
effect of COVID-19 on 2020 results affected the year-over-year increase in operating income.
Google Cloud
Google Cloud operating loss decreased $2.5 billion from 2020 to 2021. The decrease in operating loss wasprimarily driven by growth in revenues, partially offset by an increase in expenses, primarily driven by compensation
expenses. The increase in expenses was partially offset by a reduction in costs driven by the change in the estimateduseful life of our servers and certain network equipment.
Other Bets
Other Bets operating loss increased $805 million from 2020 to 2021. The increase in operating loss was primarily
driven by increases in compensation expenses, including an increase in valuation-based compensation charges during
the second quarter of 2021.
Other Income (Expense), Net
The following table presents other income (expense), net, (in millions):
Year Ended December 31,
2020

Other income (expense), net

$

2021

6,858

$

12,020

Other income (expense), net, increased $5.2 billion from 2020 to 2021. The increase was primarily driven byincreases in net unrealized gains recognized for our marketable and non-marketable equity securities of $6.9 billion,
partially offset by an increase in accrued performance fees related to certain investments of $1.3 billion.
See Note 3 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form
10-K for further information.
Provision for Income Taxes
The following table presents provision for income taxes (in millions, except for effective tax rate):
Year Ended December 31,
2020

Provision for income taxes
Effective tax rate

$

7,813
$
16.2 %

2021

14,701
16.2 %The provision for income taxes increased from 2020 to 2021, primarily due to an increase in pre-tax earnings,
including in countries that have higher statutory rates, partially offset by an increase in the stock-based compensation
related tax benefit, and the U.S. federal Foreign-Derived Intangible Income tax deduction benefit. Our effective tax rate38

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was substantially consistent from 2020 to 2021. See Note 14 of the Notes to Consolidated Financial Statements
included in Item 8 of this Annual Report on Form 10-K for further information.
Financial Condition
Cash, Cash Equivalents, and Marketable Securities
As of December 31, 2021, we had $139.6 billion in cash, cash equivalents, and short-term marketable securities.
Cash equivalents and marketable securities are comprised of time deposits, money market funds, highly liquid
government bonds, corporate debt securities, mortgage-backed and asset-backed securities, and marketable equity
securities.
Sources, Uses of Cash and Related Trends
Our principal sources of liquidity are cash, cash equivalents, and marketable securities, as well as the cash flowthat we generate from operations. The primary use of capital continues to be to invest for the long-term growth of thebusiness. We regularly evaluate our cash and capital structure, including the size, pace and form of capital return tostockholders.
The following table presents our cash flows (in millions):
Year Ended December 31,
2020

Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities$$$

65,124 $(32,773) $(24,408) $2021

91,652(35,523)(61,362)

Cash Provided by Operating Activities
Our largest source of cash provided by operations are advertising revenues generated by Google Search & otherproperties, Google Network properties, and YouTube ads. Additionally, we generate cash through sales of apps and inapp purchases, digital content products, and hardware; and licensing and service fees including fees received for
Google Cloud offerings and subscription-based products.
Our primary uses of cash from operating activities include payments to distribution and Google Network partners,
for compensation and related costs, and for content acquisition costs. In addition, uses of cash from operating activities
include hardware inventory costs, income taxes, and other general corporate expenditures.
Net cash provided by operating activities increased from 2020 to 2021 primarily due to the net effect of anincrease in cash received from revenues and cash paid for cost of revenues and operating expenses, and changes inoperating assets and liabilities.
Cash Used in Investing Activities
Cash provided by investing activities consists primarily of maturities and sales of our investments in marketable
and non-marketable securities. Cash used in investing activities consists primarily of purchases of marketable andnon-marketable securities, purchases of property and equipment, and payments for acquisitions.
Net cash used in investing activities increased from 2020 to 2021 primarily due to a decrease in maturities andsales of marketable securities, an increase in purchases of property and equipment, offset by a decrease in purchasesof non-marketable securities.
Cash Used in Financing Activities
Cash provided by financing activities consists primarily of proceeds from issuance of debt and proceeds from thesale of interest in consolidated entities. Cash used in financing activities consists primarily of repurchases of common
and capital stock, net payments related to stock-based award activities, and repayments of debt.
Net cash used in financing activities increased from 2020 to 2021 primarily due to repayment of debt and anincrease in cash payments for repurchases of common and capital stock.
Liquidity and Material Cash Requirements
We expect existing cash, cash equivalents, short-term marketable securities, cash flows from operations andfinancing activities to continue to be sufficient to fund our operating activities and cash commitments for investing andfinancing activities for at least the next 12 months and thereafter for the foreseeable future.

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Capital Expenditures and Leases
We make investments in land and buildings for data centers and offices and information technology assets
through purchases of property and equipment and lease arrangements to provide capacity for the growth of ourservices and products.
Capital Expenditures
Our capital investments in property and equipment consist primarily of the following major categories:•

technical infrastructure, which consists of our investments in servers and network equipment for computing,storage and networking requirements for ongoing business activities, including machine learning (collectively
referred to as our information technology assets) and data center land and building construction; and•office facilities, ground up development projects and related building improvements.

Construction in progress consists primarily of technical infrastructure and office facilities which have not yet beenplaced in service for our intended use. The time frame from date of purchase to placement in service of these assets
may extend from months to years. For example, our data center construction projects are generally multi-year projects
with multiple phases, where we acquire qualified land and buildings, construct buildings, and secure and install
information technology assets.
During the years ended December 31, 2020 and 2021, we spent $22.3 billion and $24.6 billion on capital
expenditures, respectively. Depreciation of our property and equipment commences when the deployment of such
assets are completed and are ready for our intended use. Land is not depreciated. For the years ended December 31,
2020 and 2021, our depreciation and impairment expenses on property and equipment were $12.9 billion and $11.6
billion, respectively.
LeasesFor the years ended December 31, 2020 and 2021, we recognized total operating lease assets of $2.8 billion and$3.0 billion, respectively. As of December 31, 2021, the amount of total future lease payments under operating leases,
which had a weighted average remaining lease term of 8 years, was $15.5 billion, of which $2.5 billion is short-term. As
of December 31, 2021, we have entered into leases that have not yet commenced with future short-term and long-termlease payments of $606 million and $5.2 billion, excluding purchase options, that are not yet recorded on our
Consolidated Balance Sheets. These leases will commence between 2022 and 2026 with non-cancelable lease termsof 1 to 25 years.
For the years ended December 31, 2020 and 2021, our operating lease expenses (including variable lease costs)
were $2.9 billion and $3.4 billion, respectively. Finance lease costs were not material for the years ended December
31, 2020 and 2021. See Note 4 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual
Report on Form 10-K for further information on leases.
Financing
We have a short-term debt financing program of up to $10.0 billion through the issuance of commercial paper,
which increased from $5.0 billion in September 2021. Net proceeds from this program are used for general corporate
purposes. As of December 31, 2021, we had no commercial paper outstanding.
As of December 31, 2021, we had $10.0 billion of revolving credit facilities with no amounts outstanding. In April
2021, we terminated the existing revolving credit facilities, which were scheduled to expire in July 2023, and enteredinto two new revolving credit facilities in the amounts of $4.0 billion and $6.0 billion, which will expire in April 2022 andApril 2026, respectively. The interest rates for the new credit facilities are determined based on a formula using certain
market rates, as well as our progress toward the achievement of certain sustainability goals. No amounts have beenborrowed under the new credit facilities.
As of December 31, 2021, we have senior unsecured notes outstanding with a total carrying value of $12.8 billion
with short-term and long-term future interest payments of $231 million and $4.0 billion, respectively. See Note 6 of theNotes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further
information on our debt.
Share Repurchase Program
In April 2021, the Board of Directors of Alphabet authorized the company to repurchase up to $50.0 billion of its
Class C stock. In July 2021, the Alphabet board approved an amendment to the April 2021 authorization, permitting thecompany to repurchase both Class A and Class C shares in a manner deemed in the best interest of the company andits stockholders, taking into account the economic cost and prevailing market conditions, including the relative trading40

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prices and volumes of the Class A and Class C shares. In accordance with the authorizations of the Board of Directorsof Alphabet, during 2021 we repurchased and subsequently retired 20.3 million aggregate shares for $50.3 billion. Of
the aggregate amount repurchased and subsequently retired, 1.2 million shares were Class A stock repurchased for$3.4 billion. As of December 31, 2021, $17.4 billion remains available for Class A and Class C share repurchases
under the amended authorization. The repurchases are being executed from time to time, subject to general businessand market conditions and other investment opportunities, through open market purchases or privately negotiatedtransactions, including through Rule 10b5-1 plans. The repurchase program does not have an expiration date. See
Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
European Commission Fines
In 2017, 2018 and 2019, the EC announced decisions that certain actions taken by Google infringed European
competition law and imposed fines of €2.4 billion ($2.7 billion as of June 27, 2017), €4.3 billion ($5.1 billion as ofJune 30, 2018), and €1.5 billion ($1.7 billion as of March 20, 2019), respectively. While each EC decision is underappeal, we included the fines in accrued expenses and other current liabilities on our Consolidated Balance Sheets as
we provided bank guarantees (in lieu of a cash payment) for the fines.
Taxes
As of December 31, 2021, we had short-term and long-term income taxes payable of $784 million and $5.7 billion
related to a one-time transition tax payable incurred as a result of the U.S. Tax Cuts and Jobs Act ("Tax Act"). As
permitted by the Tax Act, we will pay the transition tax in annual interest-free installments through 2025. We also havetaxes payable of $3.5 billion primarily related to uncertain tax positions as of December 31, 2021.
Purchase Commitments
We regularly enter into significant non-cancelable contractual obligations primarily related to data center
operations and build-outs, information technology assets, office buildings, purchases of inventory, and network
capacity arrangements. As of December 31, 2021, such purchase commitments, which do not qualify for recognition on
our Consolidated Balance Sheets, amount to $13.7 billion, of which $11.9 billion is short-term. These amounts
represent the non-cancelable portion of agreements or the minimum cancellation fee. For those agreements withvariable terms, we do not estimate the non-cancelable obligation beyond any minimum quantities and/or pricing as ofDecember 31, 2021.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to makeestimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of
uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have amaterial effect on our financial condition or results of operations. Accordingly, actual results could differ materially fromour estimates. 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 have reviewed our criticalaccounting estimates with the audit and compliance committee of our Board of Directors.
See Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form
10-K for a summary of significant accounting policies and the effect on our financial statements.
Fair Value Measurements of Non-Marketable Equity Securities
We measure certain financial instruments at fair value on a nonrecurring basis, consisting primarily of our nonmarketable equity securities. These investments are accounted for under the measurement alternative and aremeasured at cost, less impairment, subject to upward and downward adjustments resulting from observable pricechanges for identical or similar investments of the same issuer. These adjustments require quantitative assessments ofthe fair value of our securities, which may require the use of unobservable inputs. Pricing adjustments are determinedby using various valuation methodologies and involve the use of estimates using the best information available, which
may include cash flow projections or other available market data.
Non-marketable equity securities are also evaluated for impairment, based on qualitative factors including thecompanies' financial and liquidity position and access to capital resources, among others. When indicators of
impairment exist, we prepare quantitative measurements of the fair value of our equity investments using a market
approach or an income approach, which requires judgment and the use of unobservable inputs, including discountrates, investee revenues and costs, and comparable market data of private and public companies, among others.
When our assessment indicates that an impairment exists, we write down the investment to its fair value.

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We also have compensation arrangements with payouts based on realized returns from certain investments, i.e.
performance fees. We recognize compensation expense based on the estimated payouts, which may result in expense
recognized before investment returns are realized, and may require the use of unobservable inputs.
Property and Equipment
We assess the reasonableness of the useful lives of our property and equipment periodically as well as whenother changes occur, such as when there are changes to ongoing business operations, changes in the planned use
and utilization of assets, or technological advancements, that could indicate a change in the period over which we
expect to benefit from the assets.
Income Taxes
We are subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in evaluating
our uncertain tax positions and determining our provision for income taxes.
Recording an uncertain tax position involves various qualitative considerations, including evaluation ofcomparable and resolved tax exposures, applicability of tax laws, and likelihood of settlement. We evaluate uncertain
tax positions periodically, considering changes in facts and circumstances, such as new regulations or recent judicial
opinions, as well as the status of audit activities by taxing authorities. Although we believe we have adequately
reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not
be different. To the extent that the final tax outcome of these matters is different than the amounts recorded, suchdifferences will affect the provision for income taxes and the effective tax rate in the period in which such determination
is made.
The provision for income taxes includes the effect of reserve provisions and changes to reserves that areconsidered appropriate as well as the related net interest and penalties. In addition, we are subject to the continuous
examination of our income tax returns by the Internal Revenue Services (IRS) and other tax authorities which may
assert assessments against us. We regularly assess the likelihood of adverse outcomes resulting from these
examinations and assessments to determine the adequacy of our provision for income taxes.
Loss Contingencies
We are regularly subject to claims, suits, regulatory and government investigations, and other proceedings
involving competition, intellectual property, privacy, tax and related compliance, labor and employment, commercial
disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms,
personal injury consumer protection, and other matters. Certain of these 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 andthe loss or range of loss can be estimated, we disclose the possible loss in Note 10 of the Notes to Consolidated
Financial Statements included in Item 8 of this Annual Report on Form 10-K.
We evaluate, on a regular basis, developments in our legal matters that could affect the amount of liability thathas been previously accrued, and the matters and related reasonably possible losses disclosed, and makeadjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both thelikelihood and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there
may be an exposure to loss in excess of the amount recorded, and such amounts could be material.
Change in Accounting Estimate
In January 2021, we completed an assessment of the useful lives of our servers and certain network equipment.
In doing so, we determined we should adjust the estimated useful life. This change in accounting estimate was
effective beginning fiscal year 2021 and is detailed further in Note 1 of the Notes to Consolidated Financial Statements
included in Item 8 of this Annual Report on Form 10-K.
ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to financial market risks, including changes in foreign currency exchange rates, interest rates,and equity investment risks.
Foreign Currency Exchange Risk
We transact business globally in multiple currencies. International revenues, as well as costs and expenses
denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the
U.S. dollar. Principal currencies hedged included the Australian dollar, British pound, Canadian dollar, Euro, andJapanese yen. For the purpose of analyzing foreign currency exchange risk, we considered the historical trends in42

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foreign currency exchange rates and determined that it was reasonably possible that adverse changes in exchange
rates of 10% could be experienced in the near term.
We use foreign exchange forward contracts to offset the foreign exchange risk on assets and liabilities
denominated in currencies other than the functional currency of the subsidiary. These forward contracts reduce, but do
not entirely eliminate, the effect of foreign currency exchange rate movements on our assets and liabilities. The foreign
currency gains and losses on these assets and liabilities are recorded in other income (expense), net, which are offset
by the gains and losses on the forward contracts.
If an adverse 10% foreign currency exchange rate change was applied to total monetary assets, liabilities, andcommitments denominated in currencies other than the functional currencies at the balance sheet date, it would haveresulted in an adverse effect on income before income taxes of approximately $497 million and $285 million as ofDecember 31, 2020 and 2021, respectively, after consideration of the effect of foreign exchange contracts in place forthe years ended December 31, 2020 and 2021.
We use foreign currency forwards and option contracts, including collars (an option strategy comprised of a
combination of purchased and written options) to protect forecasted U.S. dollar-equivalent earnings from changes inforeign currency exchange rates. When the U.S. dollar strengthens, gains from foreign currency options and forwards
reduce the foreign currency losses related to our earnings. When the U.S. dollar weakens, losses from foreign
currency collars and forwards offset the foreign currency gains related to our earnings. These hedging contracts
reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements. We designate thesecontracts as cash flow hedges for accounting purposes. We reflect the gains or losses of foreign currency spot ratechanges as a component of AOCI and subsequently reclassify them into revenues to offset the hedged exposures as
they occur.
If the U.S. dollar weakened by 10% as of December 31, 2020 and 2021, the amount recorded in AOCI related to
our foreign exchange contracts before tax effect would have been approximately $912 million and $1.3 billion lower asof December 31, 2020 and 2021, respectively. The change in the value recorded in AOCI would be expected to offset a
corresponding foreign currency change in forecasted hedged revenues when recognized.
We use foreign exchange forward contracts designated as net investment hedges to hedge the foreign currency
risks related to investment in foreign subsidiaries. These forward contracts serve to offset the foreign currencytranslation risk from our foreign operations.
If the U.S. dollar weakened by 10%, the amount recorded in cumulative translation adjustment (CTA) within AOCI
related to our net investment hedge would have been approximately $1.0 billion lower as of both December 31, 2020
and 2021. The change in value recorded in CTA would be expected to offset a corresponding foreign currencytranslation gain or loss from our investment in foreign subsidiaries.
Interest Rate Risk
Our Corporate Treasury investment strategy is to achieve a return that will allow us to preserve capital andmaintain liquidity. We invest primarily in debt securities, including those of the U.S. government and its agencies,
corporate debt securities, mortgage-backed securities, money market and other funds, municipal securities, time
deposits, asset backed securities, and debt instruments issued by foreign governments. By policy, we limit the amountof credit exposure to any one issuer. Our investments in both fixed rate and floating rate interest earning securities
carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely affected due to arise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall.
Unrealized gains or losses on our marketable debt securities are primarily due to interest rate fluctuations as compared
to interest rates at the time of purchase. For certain fixed and variable rate debt securities, we have elected the fairvalue option for which changes in fair value are recorded in other income (expense), net. We measure securities forwhich we have not elected the fair value option at fair value with gains and losses recorded in AOCI until the securities
are sold, less any expected credit losses.
We use value-at-risk (VaR) analysis to determine the potential effect of fluctuations in interest rates on the valueof our marketable debt security portfolio. The VaR is the expected loss in fair value, for a given confidence interval, for
our investment portfolio due to adverse movements in interest rates. We use a variance/covariance VaR model with
95% confidence interval. The estimated one-day loss in fair value of marketable debt securities as of December 31,
2020 and 2021 are shown below (in millions):
12-Month Average
As of December 31,

As of December 31,
2020

Risk Category - Interest Rate

$

43

2021

144

$

2020

139

$

2021

145

$

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Actual future gains and losses associated with our marketable debt security portfolio may differ materially from thesensitivity analyses performed as of December 31, 2020 and 2021 due to the inherent limitations associated withpredicting the timing and amount of changes in interest rates and our actual exposures and positions. VaR analysis is
not intended to represent actual losses but is used as a risk estimation.
Equity Investment Risk
Our marketable and non-marketable equity securities are subject to a wide variety of market-related risks that
could substantially reduce or increase the fair value of our holdings.
Our marketable equity securities are publicly traded stocks or funds and our non-marketable equity securities areinvestments in privately held companies, some of which are in the startup or development stages.
We record marketable equity securities not accounted for under the equity method at fair value based on readily
determinable market values, of which publicly traded stocks and mutual funds are subject to market price volatility, andrepresent $5.9 billion and $7.8 billion of our investments as of December 31, 2020 and 2021, respectively. A
hypothetical adverse price change of 10% on our December 31, 2021 balance, which could be experienced in the nearterm, would decrease the fair value of marketable equity securities by $780 million. From time to time, we may enter
into derivatives to hedge the market price risk on certain of our marketable equity securities.
Our non-marketable equity securities not accounted for under the equity method are adjusted to fair value forobservable transactions for identical or similar investments of the same issuer or impairment (referred to as themeasurement alternative). The fair value measured at the time of the observable transaction is not necessarily anindication of the current fair value as of the balance sheet date. These investments, especially those that are in theearly stages, are inherently risky because the technologies or products these companies have under development are
typically in the early phases and may never materialize, and they may experience a decline in financial condition,
which could result in a loss of a substantial part of our investment in these companies. The success of our investment
in any private company is also typically dependent on the likelihood of our ability to realize appreciation in the value ofinvestments through liquidity events such as public offerings, acquisitions, private sales or other market events. As of
December 31, 2020 and 2021, the carrying value of our non-marketable equity securities, which were accounted forunder the measurement alternative, was $18.9 billion and $27.6 billion, respectively. Valuations of our equity
investments in private companies are inherently more complex due to the lack of readily available market data.
Volatility in the global economic climate and financial markets could result in a significant impairment charge relating toour non-marketable equity securities. Changes in valuation of non-marketable equity securities may not directly
correlate with changes in valuation of marketable equity securities. Additionally, observable transactions at lower
valuations could result in significant losses on our non-marketable equity securities. The effect of COVID-19 on our
impairment assessment requires significant judgment due to the uncertainty around the duration and severity of theeffect.
The carrying values of our equity method investments, which totaled approximately $1.4 billion and $1.5 billion asof December 31, 2020 and 2021, respectively, generally do not fluctuate based on market price changes. However,these investments could be impaired if the carrying value exceeds the fair value and is not expected to recover.
For further information about our equity investments, see Note 1 and Note 3 of the Notes to Consolidated
Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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Alphabet Inc.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Alphabet Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Financial Statements:
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

45

46
49
50
51
52
53
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Alphabet Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Alphabet Inc. (the Company) as of December 31,
2020 and 2021, the related consolidated statements of income, comprehensive income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 2021, and the related notes and financial
statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of theCompany at December 31, 2020 and 2021, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (UnitedStates) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission (2013 framework), and our report dated February 1, 2022 expressed an unqualified opinion
thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our
audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates toaccounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion
on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Loss Contingencies
Description of
the Matter

How WeAddressed the
Matter in Our
Audit

The Company is regularly subject to claims, suits, regulatory and government investigations, andother proceedings involving competition, intellectual property, privacy, tax and related compliance,labor and employment, commercial disputes, content generated by its users, goods and services
offered by advertisers or publishers using their platforms, personal injury, consumer protection, andother matters. As described in Note 10 to the consolidated financial statements “Contingencies”
such claims, suits, regulatory and government investigations, and other proceedings could result inadverse consequences.
Significant judgment is required to determine both the likelihood, and the estimated amount, of aloss related to such matters. Auditing management’s accounting for and disclosure of loss
contingencies from these matters involved challenging and subjective auditor judgment inassessing the Company’s evaluation of the probability of a loss, and the estimated amount or
range of loss.
We tested relevant controls over the identified risks associated with management’s accounting forand disclosure of these matters. This included controls over management’s assessment of theprobability of incurrence of a loss and whether the loss or range of loss was reasonably estimableand the development of related disclosures.
Our audit procedures included gaining an understanding of previous rulings issued by regulatorsand the status of ongoing lawsuits, reviewing letters addressing the matters from internal andexternal legal counsel, meeting with internal legal counsel to discuss the allegations, and obtaining
a representation letter from management on these matters. We also evaluated the Company’s
disclosures in relation to these matters.

/s/ Ernst & Young LLP
We have served as the Company's auditor since 1999.
San Jose, California
February 1, 2022

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Alphabet Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Alphabet Inc.
Opinion on Internal Control over Financial Reporting
We have audited Alphabet Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission (2013 framework), (the COSO criteria). In our opinion, Alphabet Inc. (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, basedon the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (UnitedStates) (PCAOB), the 2021 consolidated financial statements of the Company and our report dated February 1, 2022
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether effective internal control over financial reporting wasmaintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that amaterial weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizationsof management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Ernst & Young LLP
San Jose, California
February 1, 2022

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Alphabet Inc.
CONSOLIDATED BALANCE SHEETS(In millions, except share amounts which are reflected in thousands, and par value per share amounts)
As of December 31,
2020

AssetsCurrent assets:
Cash and cash equivalents
Marketable securities
Total cash, cash equivalents, and marketable securities
Accounts receivable, net
Income taxes receivable, net
Inventory
Other current assets
Total current assets
Non-marketable securities
Deferred income taxes
Property and equipment, net
Operating lease assets
Intangible assets, net
Goodwill
Other non-current assets
Total assets
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Accrued compensation and benefits
Accrued expenses and other current liabilities
Accrued revenue share
Deferred revenue
Income taxes payable, net
Total current liabilities
Long-term debt
Deferred revenue, non-current
Income taxes payable, non-current
Deferred income taxes
Operating lease liabilities
Other long-term liabilities
Total liabilities
Contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.001 par value per share, 100,000 shares authorized; no sharesissued and outstanding

$

$

$

Class A and Class B common stock, and Class C capital stock and additional paid-in
capital, $0.001 par value per share: 15,000,000 shares authorized (Class A
9,000,000, Class B 3,000,000, Class C 3,000,000); 675,222 (Class A 300,730, Class
B 45,843, Class C 328,649) and 662,121 (Class A 300,737, Class B 44,665, Class C
316,719) shares issued and outstanding
Accumulated other comprehensive income (loss)
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity$

See accompanying notes.

49

2021

26,465110,229
136,694
30,930
454
728
5,490
174,296
20,703
1,084
84,74912,211
1,445
21,175
3,953
319,616$

5,589
11,08628,631
7,500
2,543
1,485
56,834
13,932
481
8,849
3,561
11,146
2,269
97,072$$

20,945
118,704
139,649
39,304
966
1,170
7,054
188,143
29,5491,284
97,59912,9591,417
22,956
5,361
359,268

6,037
13,88931,236
8,996
3,288
808
64,254
14,817
535
9,176
5,257
11,3892,205
107,6330058,510633
163,401
222,544
319,616

61,774(1,623)
191,484
251,635
359,268$

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Alphabet Inc.

Alphabet Inc.
CONSOLIDATED STATEMENTS OF INCOME(In millions, except per share amounts)
Year Ended December 31,
2019

Revenues
Costs and expenses:
Cost of revenues
Research and development
Sales and marketing
General and administrative
European Commission fines
Total costs and expenses
Income from operations
Other income (expense), net
Income before income taxes
Provision for income taxes
Net income$

161,857$

Basic net income per share of Class A and B common stock and Class C
capital stock$
Diluted net income per share of Class A and B common stock and Class C
capital stock$
See accompanying notes.

50

2020

$

182,527

71,89626,01818,464
9,551
1,697
127,626
34,231
5,394
39,625
5,282
34,3432021$

257,637$

84,732
27,573
17,946
11,0520141,303
41,224
6,858
48,082
7,813
40,269$110,939
31,562
22,912
13,5100178,923
78,714
12,02090,734
14,701
76,033

49.59

$

59.15

$

113.88

49.16

$

58.61

$

112.20Table of Contents

Alphabet Inc.

Alphabet Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In millions)Year Ended December 31,
2019

Net income$
Other comprehensive income (loss):
Change in foreign currency translation adjustment
Available-for-sale investments:
Change in net unrealized gains (losses)
Less: reclassification adjustment for net (gains) losses included in
net income
Net change, net of income tax benefit (expense) of $(221), $(230),
and $394
Cash flow hedges:
Change in net unrealized gains (losses)
Less: reclassification adjustment for net (gains) losses included in
net income
Net change, net of income tax benefit (expense) of $42, $11, and$(122)
Other comprehensive income (loss)
Comprehensive income$
See accompanying notes.

51

2020

34,343$2021

40,269$76,033

(119)

1,139

(1,442)

1,611

1,313

(1,312)

(111)

(513)

(64)

1,500

800

(1,376)

22

42

716

(299)

(116)

(154)

(277)
1,104
35,447 $

(74)
1,865
42,134 $562(2,256)73,777

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Alphabet Inc.

Alphabet Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY(In millions, except share amounts which are reflected in thousands)
Class A and Class B
Common Stock, Class C
Capital Stock andAdditional Paid-In Capital
SharesBalance as of December 31, 2018
Cumulative effect of accounting change
Common and capital stock issued
Stock-based compensation expense
Income tax withholding related tovesting of restricted stock units andother
Repurchases of capital stock
Sale of interest in consolidated entities
Net income
Other comprehensive income (loss)
Balance as of December 31, 2019
Common and capital stock issued
Stock-based compensation expense
Income tax withholding related tovesting of restricted stock units andother
Repurchases of capital stock
Sale of interest in consolidated entities
Net income
Other comprehensive income (loss)
Balance as of December 31, 2020
Common and capital stock issued
Stock-based compensation expense
Income tax withholding related tovesting of restricted stock units andother
Repurchases of common and capital
stock
Sale of interest in consolidated entities
Net income
Other comprehensive income (loss)
Balance as of December 31, 2021

Amount695,556
0
8,120
0

$

45,0490
202
10,890

Accumulated
Other
Comprehensive
Income (Loss)

$

Total
Stockholders’EquityRetained
Earnings(2,306) $(30)
00134,885 $(4)00177,628(34)
202
10,8900(15,341)000688,335
8,398
0(4,455)(1,294)160
0050,552
168
13,123

0
0
0
0
1,104
(1,232)00

0(17,102)0
34,3430152,12200(4,455)(18,396)
160
34,343
1,104
201,442168
13,123

0(21,511)000675,2227,225
0(5,969)(2,159)2,795
0
058,51012
15,539

0
0
0
0
1,865
633
0
0

0
(28,990)040,2690
163,40100(5,969)(31,149)
2,795
40,2691,865
222,54412
15,5390(10,273)00(10,273)(20,326)00
0662,121 $(2,324)310
0061,774 $See accompanying notes.

52

0
0
0
(2,256)(1,623) $(47,950)076,033
0
191,484 $(50,274)
310
76,033(2,256)
251,635

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Alphabet Inc.

Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)Year Ended December 31,
2019

Operating activities
Net income
Adjustments:
Depreciation and impairment of property and equipment
Amortization and impairment of intangible assets
Stock-based compensation expense
Deferred income taxes
Gain on debt and equity securities, net
Other
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable
Income taxes, net
Other assets
Accounts payable
Accrued expenses and other liabilities
Accrued revenue share
Deferred revenue
Net cash provided by operating activities
Investing activities
Purchases of property and equipment
Purchases of marketable securities
Maturities and sales of marketable securities
Purchases of non-marketable securities
Maturities and sales of non-marketable securities
Acquisitions, net of cash acquired, and purchases of intangible assets
Other investing activities
Net cash used in investing activities
Financing activities
Net payments related to stock-based award activities
Repurchases of common and capital stock
Proceeds from issuance of debt, net of costs
Repayments of debt
Proceeds from sale of interest in consolidated entities, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental disclosures of cash flow information
Cash paid for income taxes, net of refunds
See accompanying notes.

53$

34,3432020$

40,2692021$

76,033

10,856925
10,794173(2,798)(592)

12,905792
12,991
1,390(6,317)
1,267

11,555886
15,376
1,808(12,270)(213)(4,340)(3,128)
(621)
428
7,170
1,273
37
54,520(6,524)
1,209(1,330)
694
5,504
1,639
635
65,124(9,095)(625)(1,846)
283
7,304
1,682
774
91,652(23,548)(100,315)
97,825(1,932)405(2,515)589(29,491)(22,281)(136,576)
132,906(7,175)
1,023
(738)
68
(32,773)(24,640)(135,196)
128,294(2,838)934(2,618)541(35,523)(4,765)(5,720)(10,162)$(18,396)
317
(585)
220
(23,209)(23)
1,797
16,701
18,498 $(31,149)
11,761(2,100)2,800(24,408)
24
7,967
18,49826,465 $(50,274)
20,199(21,435)
310(61,362)(287)(5,520)26,46520,945

$

8,203

4,990

13,412$$

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Alphabet Inc.

Alphabet Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1.

Summary of Significant Accounting Policies

Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August
2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. ("Alphabet") became
the successor issuer to Google.
Basis of Consolidation
The consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated
under the variable interest and voting models. All intercompany balances and transactions have been eliminated.
Use of Estimates
Preparation of consolidated financial statements in conformity with GAAP requires us to make estimates andassumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes.
Actual results could differ materially from these estimates due to uncertainties, including the effects of COVID-19. On
an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses; fair values offinancial instruments, intangible assets, and goodwill; useful lives of intangible assets and property and equipment;
income taxes; and contingent liabilities, among others. We base our estimates on assumptions, both historical andforward looking, that are believed to be reasonable, and the results of which form the basis for making judgments
about the carrying values of assets and liabilities.
In January 2021, we completed an assessment of the useful lives of our servers and network equipment andadjusted the estimated useful life of our servers from three years to four years and the estimated useful life of certain
network equipment from three years to five years. This change in accounting estimate was effective beginning in fiscal
year 2021. Based on the carrying value of servers and certain network equipment as of December 31, 2020 and thoseacquired during the year ended December 31, 2021, the effect of this change in estimate was a reduction in
depreciation expense of $2.6 billion and an increase in net income of $2.0 billion, or $3.02 per basic share and $2.98
per diluted share, for the year ended December 31, 2021.
Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred to our customers, andthe collectibility of an amount that we expect in exchange for those goods or services is probable. Sales and othersimilar taxes are excluded from revenues.
Advertising Revenues
We generate advertising revenues primarily by delivering advertising on:•

Google Search and other properties, including revenues from traffic generated by search distribution partners
who use Google.com as their default search in browsers, toolbars, etc. and other Google owned and operated
properties like Gmail, Google Maps, and Google Play;•

YouTube properties; and•Google Network properties, including revenues from Google Network properties participating in AdMob,
AdSense, and Google Ad Manager.

Our customers generally purchase advertising inventory through Google Ads, Google Ad Manager, and Google
Marketing Platform, among others.
We offer advertising by delivering both performance and brand advertising. We recognize revenues for
performance advertising when a user engages with the advertisement, such as a click, a view, or a purchase. For
brand advertising, we recognize revenues when the ad is displayed, or a user views the ad.
For ads placed on Google Network properties, we evaluate whether we are the principal (i.e., report revenues ona gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placedon Google Network properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues,
and amounts paid to Google Network partners are recorded as cost of revenues. Where we are the principal, we
control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability tomonetize the advertising inventory before it is transferred to our customers and is further supported by us being
primarily responsible to our customers and having a level of discretion in establishing pricing.

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Google Cloud Revenues
Google Cloud revenues consist of revenues from:•

Google Cloud Platform, which includes fees for infrastructure, platform, and other services;•

Google Workspace, which includes fees for cloud-based collaboration tools for enterprises, such as Gmail,Docs, Drive, Calendar, and Meet; and•other enterprise services.

Our cloud services are generally provided on either a consumption or subscription basis and may have contract
terms longer than a year. Revenues related to cloud services provided on a consumption basis are recognized when
the customer utilizes the services, based on the quantity of services consumed. Revenues related to cloud services
provided on a subscription basis are recognized ratably over the contract term as the customer receives andconsumes the benefits of the cloud services.
Google Other Revenues
Google other revenues consist of revenues from:•

Google Play, which includes sales of apps and in-app purchases and digital content sold in the Google Play
store;•

hardware, which includes sales of Fitbit wearable devices, Google Nest home products, and Pixel phones;•

YouTube non-advertising, which includes YouTube Premium and YouTube TV subscriptions; and•other products and services.

As it relates to Google other revenues, the most significant judgment is determining whether we are the principal
or agent for app sales and in-app purchases through the Google Play store. We report revenues from thesetransactions on a net basis because our performance obligation is to facilitate a transaction between app developers
and end users, for which we earn a service fee.
Arrangements with Multiple Performance Obligations
Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate
revenues to each performance obligation based on its relative standalone selling price. We generally determine
standalone selling prices based on the prices charged to customers or using expected cost plus margin.
Customer Incentives and Credits
Certain customers receive cash-based incentives or credits, which are accounted for as variable consideration.
We estimate these amounts based on the expected amount to be provided to customers and reduce revenues. We
believe that there will not be significant changes to our estimates of variable consideration.
Sales Commissions
We expense sales commissions when incurred and when the amortization period (the period of the expected
benefit) is one year or less. We recognize an asset for certain sales commissions if we expect the period of benefit ofthese costs to exceed one year and recognize the expense over the amortization period. These costs are recorded
within sales and marketing expenses.
Cost of Revenues
Cost of revenues consists of TAC and other costs of revenues.
••

TAC includes:◦

Amounts paid to our distribution partners who make available our search access points and services.
Our distribution partners include browser providers, mobile carriers, original equipment manufacturers,
and software developers.

◦

Amounts paid to Google Network partners primarily for ads displayed on their properties.

Other cost of revenues includes:◦

Content acquisition costs, which are payments to content providers from whom we license video andother content for distribution on YouTube and Google Play (we pay fees to these content providers
based on revenues generated or a flat fee).

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◦

Expenses associated with our data centers (including bandwidth, compensation expenses,
depreciation, energy, and other equipment costs) as well as other operations costs (such as content
review as well as customer and product support costs).

◦

Inventory and other costs related to the hardware we sell.

Software Development Costs
We expense software development costs, including costs to develop software products or the software
component of products to be sold, leased, or marketed to external users, before technological feasibility is reached.
Technological feasibility is typically reached shortly before the release of such products. As a result, development costs
that meet the criteria for capitalization were not material for the periods presented.
Software development costs also include costs to develop software to be used solely to meet internal needs andcloud based applications used to deliver our services. We capitalize development costs related to these software
applications once the preliminary project stage is complete and it is probable that the project will be completed and thesoftware will be used to perform the function intended. Costs capitalized for developing such software applications
were not material for the periods presented.
Stock-based Compensation
Stock-based compensation primarily consists of Alphabet restricted stock units (RSUs). RSUs are equity
classified and measured at the fair market value of the underlying stock at the grant date. We recognize RSU expense
using the straight-line attribution method over the requisite service period and account for forfeitures as they occur.
For RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be
paid by us on behalf of our employees. As a result, fewer shares are issued than the number of RSUs outstanding, andthe income tax withholding is recorded as a reduction to additional paid-in capital.
Additionally, stock-based compensation also includes other stock-based awards, such as performance stock units(PSUs) that include market conditions and awards that may be settled in cash or the stock of certain Other Bets. PSUs
and certain Other Bet awards are equity classified and expense is recognized over the requisite service period. Certain
Other Bet awards are liability classified and remeasured at fair value through settlement. The fair value of Other Bet
awards is based on the equity valuation of the respective Other Bet.
Advertising and Promotional Expenses
We expense advertising and promotional costs in the period in which they are incurred. For the years ended
December 31, 2019, 2020 and 2021, advertising and promotional expenses totaled approximately $6.8 billion, $5.4
billion, and $7.9 billion, respectively.
Performance Fees
Performance fees refer to compensation arrangements with payouts based on realized returns from certain
investments. We recognize compensation expense based on the estimated payouts, which may result in expense
recognized before investment returns are realized, and may require the use of unobservable inputs. Performance fees
are recorded as a component of other income (expense), net.
Fair Value Measurements
Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer aliability in an orderly transaction between market participants. As such, fair value is a market-based measurement thatis determined based on assumptions that market participants would use in pricing an asset or a liability. Assets andliabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy basedon the observability of the inputs available in the market used to measure fair value:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active
markets.
Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for
identical or similar instruments in markets that are not active, and model-based valuation techniques for which all
significant inputs are observable in the market or can be derived from observable market data. Where applicable,
these models project future cash flows and discount the future amounts to a present value using market-based
observable inputs including interest rate curves, foreign exchange rates, and credit ratings.
Level 3 - Unobservable inputs that are supported by little or no market activities.

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The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use ofunobservable inputs when measuring fair value.
Our financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents,
marketable securities, derivative financial instruments, and certain non-marketable debt securities. Our financial assets
measured at fair value on a nonrecurring basis include non-marketable equity securities. Other financial assets andliabilities are carried at cost with fair value disclosed, if required.
We measure certain other instruments, including stock-based compensation awards settled in the stock of certain
Other Bets, and certain assets and liabilities acquired in a business combination, also at fair value on a nonrecurring
basis. The determination of fair value involves the use of appropriate valuation methods and relevant inputs into
valuation models.
Financial Instruments
Our financial instruments include cash, cash equivalents, marketable and non-marketable securities, derivative
financial instruments and accounts receivable.
Credit Risks
We are subject to credit risk from cash equivalents, marketable securities, derivative financial instruments,
including foreign exchange contracts, and accounts receivable. We manage our credit risk exposure through timely
assessment of our counterparty creditworthiness, credit limits and use of collateral management. Foreign exchange
contracts are transacted with various financial institutions with high credit standing. Accounts receivable are typicallyunsecured and are derived from revenues earned from customers located around the world. We manage our credit risk
exposure by performing ongoing evaluations to determine customer credit and we limit the amount of credit we extend.
We generally do not require collateral from our customers.
Cash Equivalents
We invest excess cash primarily in government bonds, corporate debt securities, mortgage-backed and assetbacked securities, time deposits, and money market funds.
Marketable Securities
We classify all marketable debt securities that have stated maturities of three months or less from the date ofpurchase as cash equivalents and those with stated maturities of greater than three months as marketable securities
on our Consolidated Balance Sheets. We determine the appropriate classification of our investments in marketabledebt securities at the time of purchase and reevaluate such designation at each balance sheet date. We haveclassified and accounted for our marketable debt securities as available-for-sale. After consideration of our risk versus
reward objectives, as well as our liquidity requirements, we may sell these debt securities prior to their statedmaturities. As we view these securities as available to support current operations, we classify highly liquid securities
with maturities beyond 12 months as current assets under the caption marketable securities on the Consolidated
Balance Sheets. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as acomponent of stockholders’ equity, except for the changes in allowance for expected credit losses, which are recordedin other income (expense), net. For certain marketable debt securities we have elected the fair value option, for whichchanges in fair value are recorded in other income (expense), net. We determine any realized gains or losses on thesale of marketable debt securities on a specific identification method, and we record such gains and losses as acomponent of other income (expense), net.
Our investments in marketable equity securities are measured at fair value with the related gains and losses,
including unrealized, recognized in other income (expense), net. We classify our marketable equity securities subject
to long-term lock-up restrictions beyond twelve months as other non-current assets on the Consolidated Balance
Sheets.
Non-Marketable Securities
We account for non-marketable equity securities through which we exercise significant influence but do not havecontrol over the investee under the equity method. Our non-marketable equity securities not accounted for under theequity method are primarily accounted for under the measurement alternative. Under the measurement alternative, thecarrying value is measured at cost, less any impairment, plus or minus changes resulting from observable pricechanges in orderly transactions for identical or similar investments of the same issuer. Adjustments are determinedprimarily based on a market approach as of the transaction date and are recorded as a component of other income(expense), net.
Non-marketable debt securities are classified as available-for-sale securities.
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Non-marketable securities that do not have stated contractual maturity dates are classified as other non-current
assets on the Consolidated Balance Sheets.
Derivative Financial Instruments
See Note 3 for the accounting policy pertaining to derivative financial instruments.
Accounts Receivable
Our payment terms for accounts receivable vary by the types and locations of our customers and the products orservices offered. The term between invoicing and when payment is due is not significant. For certain products orservices and customers, we require payment before the products or services are delivered to the customer.
We maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts
receivable, and changes in such are classified as general and administrative expense in the Consolidated Statementsof Income. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics
exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In
determining the amount of the allowance for credit losses, we consider historical collectibility based on past due status
and make judgments about the creditworthiness of customers based on ongoing credit evaluations. We also consider
customer-specific information, current market conditions (such as the effects caused by COVID-19), and reasonable
and supportable forecasts of future economic conditions.
The allowance for credit losses on accounts receivable was $789 million and $550 million as of December 31,
2020 and 2021, respectively.
Other
Our financial instruments also include debt and equity investments in companies with which we also havecommercial arrangements. For these transactions, judgment is required to assess the substance of the arrangements,
such as the market value of similar transactions or the fair value of the investment based on stand-alone transactions,and whether the agreements should be accounted for as separate transactions under the applicable GAAP.
Impairment of Investments
We periodically review our debt and non-marketable equity securities for impairment.
For debt securities in an unrealized loss position, we determine whether a credit loss exists. The credit loss isestimated by considering available information relevant to the collectibility of the security and information about past
events, current conditions, and reasonable and supportable forecasts. Any credit loss is recorded as a charge to otherincome (expense), net, not to exceed the amount of the unrealized loss. Unrealized losses other than the credit loss
are recognized in accumulated other comprehensive income (AOCI). If we have an intent to sell, or if it is more likely
than not that we will be required to sell a debt security in an unrealized loss position before recovery of its amortizedcost basis, we will write down the security to its fair value and record the corresponding charge as a component ofother income (expense), net.
For non-marketable equity securities, including equity method investments, we consider whether impairment
indicators exist by evaluating the companies' financial and liquidity position and access to capital resources, among
other indicators. If the assessment indicates that the investment is impaired, we write down the investment to its fairvalue by recording the corresponding charge as a component of other income (expense), net. We prepare quantitative
measurements of the fair value of our equity investments using a market approach or an income approach.
Inventory
Inventory consists primarily of finished goods and is stated at the lower of cost and net realizable value. Cost iscomputed using the first-in, first-out method.
Variable Interest Entities
We determine at the inception of each arrangement whether an entity in which we have made an investment or inwhich we have other variable interests is considered a variable interest entity (VIE). We consolidate VIEs when we are
the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct activities that mostsignificantly affect the economic performance of the VIE and have the obligation to absorb the majority of their losses
or benefits. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a
VIE in accordance with applicable GAAP.
Periodically, we assess whether any changes in our interest or relationship with the entity affect our determinationof whether the entity is a VIE and, if so, whether we are the primary beneficiary.

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Property and Equipment
Property and equipment includes the following categories: land and buildings, information technology assets,
construction in progress, leasehold improvements, and furniture and fixtures. Land and buildings include land, offices,
data centers, and related building improvements. Information technology assets include servers and network
equipment. We account for property and equipment at cost less accumulated depreciation. We compute depreciation
using the straight-line method over the estimated useful lives of the assets, which we regularly evaluate. We
depreciate buildings over periods of seven to 25 years. We depreciate information technology assets generally overperiods of four to five years (generally, four years for servers and five years for network equipment).
We depreciate leasehold improvements over the shorter of the remaining lease term or the estimated useful livesof the assets. Construction in progress is the construction or development of property and equipment that have not yet
been placed in service for our intended use. Depreciation for equipment, buildings, and leasehold improvementscommences once they are ready for our intended use. Land is not depreciated.
LeasesWe determine if an arrangement is a lease at inception. Our lease agreements generally contain lease and nonlease components. Payments under our lease arrangements are primarily fixed. Non-lease components primarily
include payments for maintenance and utilities. We combine fixed payments for non-lease components with lease
payments and account for them together as a single lease component which increases the amount of our lease assets
and liabilities.
Certain lease agreements contain variable payments, which are expensed as incurred and not included in thelease assets and liabilities. These amounts include payments affected by the Consumer Price Index, payments
contingent on wind or solar production for power purchase arrangements, and payments for maintenance and utilities.
Lease assets and liabilities are recognized at the present value of the future lease payments at the leasecommencement date. The interest rate used to determine the present value of the future lease payments is ourincremental borrowing rate, because the interest rate implicit in our leases is not readily determinable. Our incremental
borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments,
and in economic environments where the leased asset is located. Our lease terms include periods under options toextend or terminate the lease when it is reasonably certain that we will exercise that option. We generally use thebase, non-cancelable, lease term when determining the lease assets and liabilities. Lease assets also include any
prepaid lease payments and lease incentives.
Operating lease assets and liabilities are included on our Consolidated Balance Sheet. The current portion of ouroperating lease liabilities is included in accrued expenses and other current liabilities, and the long-term portion is
included in operating lease liabilities. Finance lease assets are included in property and equipment, net. Finance leaseliabilities are included in accrued expenses and other current liabilities or long-term debt.
Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the leaseterm.
Long-Lived Assets, Goodwill and Other Acquired Intangible Assets
We review property and equipment and intangible assets, excluding goodwill, for impairment when events orchanges in circumstances indicate the carrying amount may not be recoverable. The evaluation is performed at thelowest level of identifiable cash flows independent of other assets. We measure recoverability of these assets bycomparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected
to generate. If the carrying value of the assets or asset group is not recoverable, the impairment recognized ismeasured as the amount by which the carrying value exceeds its fair value. Impairments were not material for theperiods presented.
We allocate goodwill to reporting units based on the expected benefit from the business combination. We
evaluate our reporting units periodically, as well as when changes in our operating segments occur. For changes inreporting units, we reassign goodwill using a relative fair value allocation approach. We test our goodwill for
impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be
impaired. Goodwill impairments were not material for the periods presented.
Intangible assets with definite lives are amortized over their estimated useful lives on a straight-line basis
generally over periods ranging from one to twelve years.

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Income Taxes
We account for income taxes using the asset and liability method, under which we recognize the amount of taxes
payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of
events that have been recognized in our financial statements or tax returns. We measure current and deferred tax
assets and liabilities based on provisions of enacted tax law. We evaluate the realization of our deferred tax assets
based on all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more
likely than not that they will not be realized.
We recognize the financial statement effects of a tax position when it is more likely than not that, based ontechnical merits, the position will be sustained upon examination. The tax benefits of the position recognized in thefinancial statements are then measured based on the largest amount of benefit that is greater than 50% likely to berealized upon settlement with a taxing authority. In addition, we recognize interest and penalties related tounrecognized tax benefits as a component of the income tax provision.
Business Combinations
We include the results of operations of the businesses that we acquire as of the acquisition date. We allocate thepurchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values.
The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Foreign Currency
We translate the financial statements of our international subsidiaries to U.S. dollars using month-end exchange
rates for assets and liabilities, and average rates for the annual period derived from month-end exchange rates forrevenues, costs, and expenses. We record translation gains and losses in AOCI as a component of stockholders’equity. We reflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction
currency to functional currency as a component of foreign currency exchange gain (loss) in other income (expense),net.
Prior Period Reclassifications
Certain amounts in prior periods have been reclassified to conform with current period presentation.
Note 2.

Revenues

Revenue Recognition
The following table presents revenues disaggregated by type (in millions):
Year Ended December 31,
2019

Google Search & other
YouTube ads
Google Network$

Google advertising
Google other
Google Services total
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues$

98,115
15,14921,547
134,811
17,014
151,825
8,918
659
455
161,857

2020

$

$

104,062
19,77223,090146,924
21,711
168,635
13,059657
176
182,527

2021

$

$

148,951
28,84531,701
209,497
28,032
237,529
19,206753
149
257,637

No individual customer or groups of affiliated customers represented more than 10% of our revenues in 2019,2020, or 2021.

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The following table presents revenues disaggregated by geography, based on the addresses of our customers (inmillions):
Year Ended December 31,

United States
EMEA(1)
APAC(1)Other Americas(1)Hedging gains (losses)
Total revenues
(1)

2019

2020

2021

74,84350,64526,9288,986
455$ 161,857

46 % $ 85,014
31
55,37017
32,550
6
9,417
0
176
100 % $ 182,527

47 % $ 117,854
30
79,107
18
46,123
5
14,4040149
100 % $ 257,637

$

46 %
31
18
5
0
100 %

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

Revenue Backlog and Deferred Revenues
As of December 31, 2021 we had $51.0 billion of remaining performance obligations (“revenue backlog”),
primarily related to Google Cloud, and expect to recognize approximately half of this amount as revenues over the next
24 months with the remaining thereafter. Our revenue backlog represents commitments in customer contracts for
future services that have not yet been recognized as revenues. The amount and timing of revenue recognition forthese commitments is largely driven by when our customers utilize services and our ability to deliver in accordancewith relevant contract terms, which could affect our estimate of revenue backlog and when we expect to recognize
such as revenues. Revenue backlog includes related deferred revenue currently recorded as well as amounts that will
be invoiced in future periods, and excludes contracts with an original expected term of one year or less and cancellable
contracts.
We record deferred revenues when cash payments are received or due in advance of our performance, including
amounts which are refundable. Deferred revenues primarily relate to Google Cloud and Google other. Total deferred
revenue as of December 31, 2020 was $3.0 billion, of which $2.3 billion was recognized as revenues for the year
ending December 31, 2021.
Note 3.

Financial Instruments

Debt Securities
We classify our marketable debt securities, which are accounted for as available-for-sale within Level 2 in the fairvalue hierarchy, because we use quoted market prices to the extent available or alternative pricing sources andmodels utilizing market observable inputs to determine fair value.
For certain marketable debt securities, we have elected the fair value option for which changes in fair value arerecorded in other income (expense), net. The fair value option was elected for these securities to align with theunrealized gains and losses from related derivative contracts. Unrealized net gains (losses) related to debt securities
still held where we have elected the fair value option were $87 million and $(35) million as of December 31, 2020 and
December 31, 2021, respectively. As of December 31, 2020 and December 31, 2021, the fair value of these debt
securities was $2.0 billion and $4.7 billion, respectively.

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The following tables summarize debt securities, for which we did not elect the fair value option, by significant
investment categories as of December 31, 2020 and 2021 (in millions):
As of December 31, 2020

Level 2:Time deposits(1)Government bonds
Corporate debt securities
Mortgage-backed and asset-backed securities
Total

Adjusted
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

$

$

$

3,564
55,156
31,521
16,767$107,008

$

0
793
704
364
1,861

Fair
Value

0 $ 3,564(9)
55,940(2)
32,223(7)
17,124(18) $108,851$

Cash andCash
Equivalents

Marketable
Securities

$

$

$

3,564
2,527
8
0
6,099

0
53,41332,215
17,124$102,752

As of December 31, 2021

Level 2:Time deposits(1)Government bonds
Corporate debt securities
Mortgage-backed and asset-backed securities
Total
(1)

Adjusted
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

$

$

$

5,133
53,28835,605
18,829$112,855

$

0
258
194
96
548

Fair
Value

0 $ 5,133(238)
53,308(223)
35,576(112)
18,813(573) $112,830$

Cash andCash
Equivalents

Marketable
Securities

$

$

$

5,133
5
12
0
5,150

0
53,30335,564
18,813$107,680

The majority of our time deposits are domestic deposits.

We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification
method. We recognized gross realized gains of $292 million, $899 million, and $432 million for the years ended
December 31, 2019, 2020, and 2021, respectively. We recognized gross realized losses of $143 million, $184 million,
and $329 million for the years ended December 31, 2019, 2020, and 2021, respectively. We reflect these gains andlosses as a component of other income (expense), net.
The following table summarizes the estimated fair value of investments in marketable debt securities by statedcontractual maturity dates (in millions):
As of
December 31, 2021

Due in 1 year or lessDue in 1 year through 5 years
Due in 5 years through 10 years
Due after 10 years
Total

$

16,192
78,625
4,675
12,864112,356$

The following tables present fair values and gross unrealized losses recorded to AOCI as of December 31, 2020
and 2021, aggregated by investment category and the length of time that individual securities have been in acontinuous loss position (in millions):
As of December 31, 2020
12 Months or Greater

Less than 12 Months
Fair Value

Government bonds

$

5,516

Corporate debt securities
Mortgage-backed and asset-backed
securities
Total
$

1,999
929
8,444

Unrealized
Loss

$

$

Fair Value

(9) $

3

(1)

0

(5)
(15) $

242
245

62

Total

Unrealized
Loss

$

$

0

Fair Value

$

5,519

0

1,999

(2)
(2) $

1,171
8,689

Unrealized
Loss

$

(9)
(1)

$

(7)
(17)

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Less than 12 Months
Fair Value

Government bonds$
Corporate debt securities
Mortgage-backed and asset-backed
securities
Total$

32,84322,737
11,502
67,082

Unrealized
Loss

$

$

As of December 31, 2021
12 Months or Greater
Fair Value(236) $
(152)

71
303

(106)
(494) $

248
622

Total

Unrealized
Loss

$

$

Fair Value

(2) $
(5)

32,91423,040(6)(13) $

11,75067,704

Unrealized
Loss

$

(238)
(157)
(112)
(507)

$

During the years ended December 31, 2020 and 2021, we did not recognize significant credit losses and theending allowance for credit losses was immaterial. See Note 7 for further details on other income (expense), net.
Equity Investments
The following discusses our marketable equity securities, non-marketable equity securities, gains and losses onmarketable and non-marketable equity securities, as well as our equity securities accounted for under the equity
method.
Our marketable equity securities are publicly traded stocks or funds measured at fair value and classified within
Level 1 and 2 in the fair value hierarchy because we use quoted prices for identical assets in active markets or inputs
that are based upon quoted prices for similar instruments in active markets.
Our non-marketable equity securities are investments in privately held companies without readily determinable
market values. The carrying value of our non-marketable equity securities is adjusted to fair value upon observabletransactions for identical or similar investments of the same issuer or impairment (referred to as the measurement
alternative). Non-marketable equity securities that have been remeasured during the period based on observabletransactions are classified within Level 2 or Level 3 in the fair value hierarchy because we estimate the value based on
valuation methods which may include a combination of the observable transaction price at the transaction date andother unobservable inputs including volatility, rights, and obligations of the securities we hold. The fair value of nonmarketable equity securities that have been remeasured due to impairment are classified within Level 3.
Gains and losses on marketable and non-marketable equity securities
Gains and losses reflected in other income (expense), net, for marketable and non-marketable equity securities
are summarized below (in millions):
Year Ended December 31,
2020

Net gain (loss) on equity securities sold during the period$

Unrealized gain (loss) on equity securities held as of the end of the period
Total gain (loss) recognized in other income (expense), net

$

1,339
4,253
5,592

2021

$
$

1,196
11,184
12,380In the table above, net gain (loss) on equity securities sold during the period reflects the difference between thesale proceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if
later.
Cumulative net gains (losses) on equity securities sold during the period, which is summarized in the following
table (in millions), represents the total net gains (losses) recognized after the initial purchase date of the equity
security. While these net gains may have been reflected in periods prior to the period of sale, we believe they areimportant supplemental information as they reflect the economic net gains recognized on the securities sold during theperiod. Cumulative net gains are calculated as the difference between the sale price and the initial purchase price forthe equity security sold during the period.

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Equity Securities Sold During the Year
Ended December 31,
2020

Total sale priceTotal initial cost
Cumulative net gains(1)
(1)

$
$

4,767
2,674
2,093

2021

$

5,604
1,206
4,398

$

Cumulative net gains excludes cumulative losses of $738 million resulting from our equity derivatives, which hedged thechanges in fair value of certain marketable equity securities sold during the year ended December 31, 2021. The associatedderivative liabilities arising from these losses were settled against our holdings of the underlying equity securities.

Carrying value of marketable and non-marketable equity securities
The carrying value is measured as the total initial cost plus the cumulative net gain (loss). The carrying values formarketable and non-marketable equity securities are summarized below (in millions):
As of December 31, 2020

Total initial cost
Cumulative net gain (loss)(1)
Carrying value(2)
(1)

(2)

Marketable Equity
Securities

Non-Marketable
Equity Securities

$

2,227
3,631

$

14,616
4,277$

16,843
7,908

$

5,858

$

18,893$24,751

Total

Non-marketable equity securities cumulative net gain (loss) is comprised of $6.1 billion gains and $1.9 billion losses (including
impairment).
The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $429 million is included
within other non-current assets.
As of December 31, 2021

Total initial cost
Cumulative net gain (loss)(1)
Carrying value(2)
(1)

(2)

Marketable Equity
Securities

Non-Marketable
Equity Securities

$

$

$

4,211
3,587
7,798

$

15,135
12,436
27,571

Total$$

19,346
16,02335,369Non-marketable equity securities cumulative net gain (loss) is comprised of $14.1 billion gains and $1.7 billion losses(including impairment).
The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $1.4 billion is included within
other non-current assets.

Marketable equity securities
The following table summarizes marketable equity securities measured at fair value by significant investment
categories as of December 31, 2020 and 2021 (in millions):
As of December 31, 2020
Cash and Cash
Equivalents

Level 1:
Money market funds
Marketable equity securities(1)(2)
Level 2:
Mutual funds
Total
(1)

(2)

$

$

12,210012,210012,210

As of December 31, 2021

Marketable Equity
Securities

$

$

0
5,470
5,470
388
5,858

Cash and Cash
Equivalents

$

$

7,499
0
7,499
0
7,499

Marketable Equity
Securities

$

$

0
7,447
7,447
351
7,798

The balance as of December 31, 2020 and 2021 includes investments that were reclassified from non-marketable equity
securities following the commencement of public market trading of the issuers or acquisition by public entities (certain
investments are subject to short-term lock-up restrictions).
As of December 31, 2020 and 2021, the long-term portion of marketable equity securities (subject to long-term lock-up
restrictions) of $429 million and $1.4 billion, respectively, is included within other non-current assets.

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Non-marketable equity securities
The following is a summary of unrealized gains and losses recorded in other income (expense), net, which areincluded as adjustments to the carrying value of non-marketable equity securities held as of the end of the period (inmillions):
Year Ended December 31,
2020

Unrealized gains on non-marketable equity securities
Unrealized losses on non-marketable equity securities (including impairment)
Total unrealized gain (loss) recognized on non-marketable equity securities$$

3,020 $
(1,489)1,531 $

2021

9,971
(122)
9,849

During the year ended December 31, 2021, included in the $27.6 billion of non-marketable equity securities held
as of the end of the period, $18.6 billion were measured at fair value resulting in a net unrealized gain of $9.8 billion.
Equity securities accounted for under the Equity Method
As of December 31, 2020 and 2021, equity securities accounted for under the equity method had a carrying valueof approximately $1.4 billion and $1.5 billion, respectively. Our share of gains and losses, including impairments, areincluded as a component of other income (expense), net, in the Consolidated Statements of Income. See Note 7 forfurther details on other income (expense), net.
Derivative Financial Instruments
We enter into derivative instruments to manage risks relating to our ongoing business operations. The primaryrisk managed with derivative instruments is foreign exchange risk. We use foreign currency contracts to reduce the riskthat our cash flows, earnings, and investment in foreign subsidiaries will be adversely affected by foreign currency
exchange rate fluctuations. We also enter into derivative instruments to partially offset our exposure to other risks andenhance investment returns.
We recognize derivative instruments as either assets or liabilities in the Consolidated Balance Sheets at fairvalue and classify the derivatives primarily within Level 2 in the fair value hierarchy. We present our collar contracts (anoption strategy comprised of a combination of purchased and written options) at net fair values where both thepurchased and written options are with the same counterparty. For other derivative contracts, we present at gross fairvalues. We primarily record changes in the fair value in the Consolidated Statements of Income as either other income(expense), net, or revenues, or in the Consolidated Balance Sheets in AOCI, as discussed below.
We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions
with the same counterparty. Further, we enter into collateral security arrangements that provide for collateral to bereceived or pledged when the net fair value of certain financial instruments fluctuates from contractually establishedthresholds. Cash collateral received related to derivative instruments under our collateral security arrangements areincluded in other current assets with a corresponding liability. Cash and non-cash collateral pledged related toderivative instruments under our collateral security arrangements are included in other current assets.
Cash Flow Hedges
We designate foreign currency forward and option contracts (including collars) as cash flow hedges to hedge
certain forecasted revenue transactions denominated in currencies other than the U.S. dollar. These contracts havematurities of 24 months or less.
Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI andsubsequently reclassified to revenue when the hedged item is recognized in earnings. We exclude the change inforward points and time value from our assessment of hedge effectiveness. The initial value of the excluded
component is amortized on a straight-line basis over the life of the hedging instrument and recognized in revenues.
The difference between fair value changes of the excluded component and the amount amortized to revenues isrecorded in AOCI. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI
are reclassified to other income (expense), net in the period of de-designation.
As of December 31, 2021, the net accumulated gain on our foreign currency cash flow hedges before tax effect
was $518 million, which is expected to be reclassified from AOCI into earnings within the next 12 months.
Fair Value Hedges
We designate foreign currency forward contracts as fair value hedges to hedge foreign currency risks for ourinvestments denominated in currencies other than the U.S. dollar. Fair value hedge amounts included in the65Table of Contents

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assessment of hedge effectiveness are recognized in other income (expense), net, along with the offsetting gains andlosses of the related hedged items. We exclude changes in forward points from the assessment of hedge effectivenessand recognize changes in the excluded component in other income (expense), net.
Net Investment Hedges
We designate foreign currency forward contracts as net investment hedges to hedge the foreign currency risks
related to our investment in foreign subsidiaries. Net investment hedge amounts included in the assessment of hedge
effectiveness are recognized in AOCI along with the foreign currency translation adjustment. We exclude changes inforward points from the assessment of hedge effectiveness and recognize changes in the excluded component in otherincome (expense), net.
Other Derivatives
Other derivatives not designated as hedging instruments consist primarily of foreign currency forward contracts
that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies
other than the functional currency of a subsidiary. Gains and losses on these contracts, as well as the related costs,
are recognized in other income (expense), net, along with the foreign currency gains and losses on monetary assets
and liabilities.
We also use derivatives not designated as hedging instruments to manage risks relating to interest rates,
commodity prices, credit exposures and to enhance investment returns. Additionally, from time to time, we enter into
derivatives to hedge the market price risk on certain of our marketable equity securities. Gains (losses) arising fromthese derivatives are reflected within the "other" component of other income (expense), net and the offsetting
recognized gains (losses) on the marketable equity securities are reflected within the gain (loss) on equity securities,
net component of other income (expense), net. See Note 7 for further details on other income (expense), net.
The gross notional amounts of outstanding derivative instruments were as follows (in millions):
As of December 31,
2020

2021

Derivatives Designated as Hedging Instruments:
Foreign exchange contracts
Cash flow hedges
Fair value hedges
Net investment hedges
Derivatives Not Designated as Hedging Instruments:$$$

10,187
1,569
9,965

$
$
$

16,362
2,556
10,159Foreign exchange contracts
Other contracts$$

39,861
2,399$$

41,031
4,275

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The fair values of outstanding derivative instruments were as follows (in millions):
As of December 31, 2020

Balance Sheet Location

Derivative Assets:
Level 2:Foreign exchange contracts
Other contracts
Total
Derivative Liabilities:
Level 2:Foreign exchange contracts
Other contracts

Other current and noncurrent assets
Other current and noncurrent assets

Accrued expenses andother liabilities, current
and non-current

Fair Value of
Derivatives
Designated as
Hedging Instruments

Fair Value of
Derivatives Not
Designated as
Hedging Instruments

$

33

$

316

$

349

$

0
33

$

16
332

$

16
365

$

395

$

185

$

580

$

0
395

$

942
1,127

$

942
1,522

Accrued expenses andother liabilities, current
and non-current

Total

Total Fair
Value

As of December 31, 2021

Balance Sheet Location

Derivative Assets:
Level 2:Foreign exchange contracts
Other contracts
Total
Derivative Liabilities:
Level 2:Foreign exchange contracts
Other contracts
Total

Other current and noncurrent assets
Other current and noncurrent assets

Accrued expenses andother liabilities, current
and non-current

Fair Value of
Derivatives
Designated as
Hedging Instruments

Fair Value of
Derivatives Not
Designated as
Hedging Instruments

$

867

$

42

$

0
867

$

8

$

0
8

Accrued expenses andother liabilities, current
and non-current

67

Total Fair
Value

$

909

$

52
94

$

52
961

$

452

$

460

$

121
573

$

121
581

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Alphabet Inc.

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized inother comprehensive income (OCI) were summarized below (in millions):
Gains (Losses) Recognized in OCI
on Derivatives Before Tax EffectYear Ended December 31,
2019

2020

2021

Derivatives in Cash Flow Hedging Relationship:

Foreign exchange contracts
Amount included in the assessment of effectiveness$38

Amount excluded from the assessment of effectiveness

$

102

$

806

(14)

(37)

48

131
155

(851)
(786) $

754
1,608

Derivatives in Net Investment Hedging Relationship:

Foreign exchange contracts
Amount included in the assessment of effectiveness
Total

$

$

The effect of derivative instruments on income was summarized below (in millions):
Gains (Losses) Recognized in Income
Year Ended December 31,
2019

Revenues

2020

Other
income(expense),net

Total amounts presented in the Consolidated Statements ofIncome in which the effects of cash flow and fair value hedges
are recorded$161,857 $ 5,394

Revenues

2021

Other
income(expense),
net

Revenues

Other
income(expense),
net$182,527 $ 6,858$257,637 $ 12,020$$

Gains (Losses) on Derivatives in Cash Flow Hedging
Relationship:
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI toincome$Amount excluded from the assessment of effectivenessrecognized in earnings based on an amortization
approach

367

$

0

144

$

0

165

$

0

88

0

33

0

(16)

0

Hedged items

0

(19)

0

18

0

(95)

Derivatives designated as hedging instruments

0

19

0

(18)

0

95

0

25

0

4

0

8

0

243

0

151

0

82

Foreign exchange contracts

0

(413)

0

718

0

(860)

Other Contracts

0

0

0

(906)

0

101

(145) $

177

Gains (Losses) on Derivatives in Fair Value Hedging
Relationship:
Foreign exchange contracts

Amount excluded from the assessment of effectiveness
Gains (Losses) on Derivatives in Net Investment Hedging
Relationship:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness
Gains (Losses) on Derivatives Not Designated as Hedging
Instruments:

Total gains (losses)

$

68

455

$

$

(33) $

149

$

(669)

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Alphabet Inc.

Offsetting of Derivatives
The gross amounts of derivative instruments subject to master netting arrangements with various
counterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (inmillions):
Offsetting of Assets
As of December 31, 2020
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but Have Legal Rights to Offset

Derivatives

Gross
Amounts ofRecognized
AssetsGrossAmounts
Offset in theConsolidated
Balance
Sheets$$397

Net Presented
in theConsolidated
Balance
Sheets(32) $365

Cash
Collateral
Received

Financial
Instruments$(295) (1) $Non-CashCollateral
Received(16) $

0

Net Assets
Exposed$54

As of December 31, 2021
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but Have Legal Rights to Offset

Derivatives
(1)

Gross
Amounts ofRecognized
AssetsGrossAmounts
Offset in theConsolidated
Balance
Sheets$$999

Net Presented
in theConsolidated
Balance
Sheets(38) $

961

Cash
Collateral
Received

Financial
Instruments$(434) (1) $Non-CashCollateral
Received(394) $Net Assets
Exposed(12) $

121

The balances as of December 31, 2020 and 2021 were related to derivative liabilities which are allowed to be net settled
against derivative assets in accordance with our master netting agreements.

Offsetting of Liabilities
As of December 31, 2020
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but Have Legal Rights to Offset

Gross
Amounts ofRecognizedLiabilities

Derivatives

$

1,554

Gross
Amounts
Offset in theConsolidated
Balance
Sheets$Net Presented
in theConsolidated
Balance
Sheets(32) $

1,522

Cash
Collateral
PledgedFinancial
Instruments

$

(295)

(2)

$

Non-CashCollateral
Pledged(1) $Net Liabilities(943) $

283

As of December 31, 2021
Gross Amounts Not Offset in the Consolidated
Balance Sheets, but Have Legal Rights to Offset

Gross
Amounts ofRecognizedLiabilities

Derivatives
(2)

$

619

Gross
Amounts
Offset in theConsolidated
Balance
Sheets$Net Presented
in theConsolidated
Balance
Sheets(38) $

581

Cash
Collateral
PledgedFinancial
Instruments

$

(434)

(2)

$

Non-CashCollateral
Pledged(4) $Net Liabilities(110) $

33

The balances as of December 31, 2020 and 2021 were related to derivative assets which are allowed to be net settled against
derivative liabilities in accordance with our master netting agreements.

Note 4.

LeasesWe have entered into operating lease agreements primarily for data centers, land and offices throughout theworld with lease periods expiring between 2022 and 2063.
Components of operating lease expense were as follows (in millions):
Year Ended December 31,
2020

Operating lease cost
Variable lease cost
Total operating lease cost

$
$

69

2021

2,267 $
619
2,886 $

2,699
726
3,425

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Alphabet Inc.

Supplemental information related to operating leases was as follows (in millions):
Year Ended December 31,
2020

Cash payments for operating leases
New operating lease assets obtained in exchange for operating lease liabilities

$
$

2021

2,004 $
2,765 $

2,489
2,951

As of December 31, 2021, our operating leases had a weighted average remaining lease term of 8 years and aweighted average discount rate of 2.3%. Future lease payments under operating leases as of December 31, 2021
were as follows (in millions):
2022
2023
2024
2025
2026
Thereafter
Total future lease payments
Less imputed interest
Total lease liability balance

$

$

2,539
2,527
2,226
1,815
1,401
4,948
15,456(1,878)
13,578

As of December 31, 2021, we have entered into leases that have not yet commenced with short-term and longterm future lease payments of $606 million and $5.2 billion, excluding purchase options, that are not yet recorded on
our Consolidated Balance Sheets. These leases will commence between 2022 and 2026 with non-cancelable leaseterms of 1 to 25 years.
Note 5.

Variable Interest Entities

Consolidated VIEs
We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results ofoperations and financial position of these VIEs are included in our consolidated financial statements.
For certain consolidated VIEs, their assets are not available to us and their creditors do not have recourse to us.
As of December 31, 2020 and 2021, assets that can only be used to settle obligations of these VIEs were $5.7 billion
and $6.0 billion, respectively, and the liabilities for which creditors only have recourse to the VIEs were $2.3 billion and$2.5 billion, respectively.
Total noncontrolling interests (NCI), including redeemable noncontrolling interests (RNCI), in our consolidated
subsidiaries was $3.9 billion and $4.3 billion as of December 31, 2020 and 2021, respectively. NCI and RNCI are
included within additional paid-in capital. Net loss attributable to noncontrolling interests was not material for any period
presented and is included within the "other" component of other income (expense), net. See Note 7 for further details
on other income (expense), net.
Waymo
In June 2021, Waymo, a self-driving technology development company and a consolidated VIE, completed aninvestment round of $2.5 billion, the majority of which represented investment from Alphabet. The investments fromexternal parties were accounted for as equity transactions and resulted in recognition of noncontrolling interests.
Unconsolidated VIEs
We have investments in VIEs in which we are not the primary beneficiary. These VIEs include private companies
that are primarily early stage companies and certain renewable energy entities in which activities involve power
generation using renewable sources.
We have determined that the governance structures of these entities do not allow us to direct the activities thatwould significantly affect their economic performance. Therefore, we are not the primary beneficiary, and the results ofoperations and financial position of these VIEs are not included in our consolidated financial statements. We accountfor these investments as non-marketable equity securities or equity method investments.
The maximum exposure of these unconsolidated VIEs is generally based on the current carrying value of theinvestments and any future funding commitments. We have determined that the single source of our exposure to these70

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VIEs is our capital investments in them. The carrying value, and maximum exposure of these unconsolidated VIEs
were $1.7 billion and $1.9 billion, respectively, as of December 31, 2020 and $2.7 billion and $2.9 billion, respectively,
as of December 31, 2021.
Note 6.

Debt

Short-Term Debt
We have a debt financing program of up to $10.0 billion through the issuance of commercial paper, which
increased from $5.0 billion in September 2021. Net proceeds from this program are used for general corporate
purposes. We had no commercial paper outstanding as of December 31, 2020 and 2021.
Our short-term debt balance also includes the current portion of certain long-term debt.
Long-Term Debt
Total outstanding debt is summarized below (in millions, except percentages):

Coupon Rate

Effective
Interest Rate

2024 - 2060 0.45% - 3.38%

0.57% - 3.38%

Maturity

Debt
2011-2020 Notes Issuances
Future finance lease payments, net(1)Total debt
Unamortized discount and debt
issuance costs
Less: Current portion of Notes(2)Less: Current portion future financelease payments, net(1)(2)
Total long-term debt

As of December 31,
2020

$

$

2021

14,0001,201
15,201$

13,0002,086
15,086

(169)
(999)

(156)
—

(101)
13,932 $(113)
14,817(1)

Net of imputed interest.

(2)

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

The notes in the table above are comprised of fixed-rate senior unsecured obligations and generally rank equallywith each other. We may redeem the notes at any time in whole or in part at specified redemption prices. The effective
interest rates are based on proceeds received with interest payable semi-annually.
The total estimated fair value of the outstanding notes, including the current portion, was approximately $14.0
billion and $12.4 billion as of December 31, 2020 and December 31, 2021, respectively. The fair value was determinedbased on observable market prices of identical instruments in less active markets and is categorized accordingly as
Level 2 in the fair value hierarchy.
As of December 31, 2021, the aggregate future principal payments for long-term debt, including finance leaseliabilities, for each of the next five years and thereafter were as follows (in millions):
2022
2023
2024
2025
2026
Thereafter
Total

$

$

187
146
1,159
1,162
2,165
10,621
15,440Credit Facility
As of December 31, 2021, we have $10.0 billion of revolving credit facilities. No amounts were outstanding under
the credit facilities as of December 31, 2020 and 2021.

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In April 2021, we terminated the existing $4.0 billion revolving credit facilities, which were scheduled to expire in
July 2023, and entered into two new revolving credit facilities in the amounts of $4.0 billion and $6.0 billion, which will
expire in April 2022 and April 2026, respectively. The interest rates for the new credit facilities are determined based ona formula using certain market rates, as well as our progress toward the achievement of certain sustainability goals. No
amounts have been borrowed under the new credit facilities.
Note 7.

Supplemental Financial Statement Information

Property and Equipment, Net
Property and equipment, net, consisted of the following (in millions):
As of December 31,
2020

Land and buildings
Information technology assets
Construction in progress
Leasehold improvements
Furniture and fixtures
Property and equipment, gross
Less: accumulated depreciation
Property and equipment, net

$

2021

49,732 $45,90623,111
7,516
197
126,462(41,713)84,749 $$58,88155,60623,1719,146
208
147,012(49,414)
97,599Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in millions):
As of December 31,
2020
(1)

European Commission fines$

Payables to brokers for unsettled investment trades
Accrued customer liabilities
Accrued purchases of property and equipment
Current operating lease liabilities
Other accrued expenses and current liabilities
Accrued expenses and other current liabilities(1)$

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

72

10,409
754
3,118
2,197
1,694
10,45928,631

2021

$

$

9,799
397
3,505
2,415
2,189
12,931
31,236

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Alphabet Inc.

Accumulated Other Comprehensive Income (Loss)
Components of AOCI, net of income tax, were as follows (in millions):
Foreign Currency
Translation
Adjustments

Balance as of December 31, 2018
Cumulative effect of accounting change
Other comprehensive income (loss) before
reclassifications
Amounts excluded from the assessment ofhedge effectiveness recorded in AOCI
Amounts reclassified from AOCIOther comprehensive income (loss)
Balance as of December 31, 2019
Other comprehensive income (loss) before
reclassifications
Amounts excluded from the assessment ofhedge effectiveness recorded in AOCI
Amounts reclassified from AOCIOther comprehensive income (loss)
Balance as of December 31, 2020
Other comprehensive income (loss) before
reclassifications
Amounts excluded from the assessment ofhedge effectiveness recorded in AOCI
Amounts reclassified from AOCIOther comprehensive income (loss)
Balance as of December 31, 2021$$

Unrealized Gains(Losses) on
Available-for-Sale
Investments(1,884) $0

Unrealized
Gains (Losses)
on Cash Flow
HedgesTotal(688) $
0

266 $
(30)

(2,306)
(30)

(119)

1,611

36

1,528

0
0
(119)
(2,003)

0
(111)
1,500
812

(14)
(299)
(277)
(41)

(14)
(410)
1,104
(1,232)

1,139

1,313

79

2,531

0
0
1,139
(864)

0
(513)
800
1,612

(37)
(116)
(74)
(115)

(37)
(629)
1,865
633

(1,442)(1,312)668(2,086)00(1,442)(2,306) $0(64)(1,376)
236 $

48
(154)
562
447 $

48
(218)
(2,256)(1,623)The effects on net income of amounts reclassified from AOCI were as follows (in millions):
Gains (Losses) Reclassified from AOCI to theConsolidated Statements of Income
Year Ended December 31,
AOCI Components

Location

Unrealized gains (losses) on available-for-sale investments
Other income (expense), net
Benefit (provision) for income
taxes
Net of income tax
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts
Revenue
Interest rate contracts
Other income (expense), net
Benefit (provision) for income
taxes
Net of income tax
Total amount reclassified, net of income tax

2019

$

$

73

2020

149

$

2021

650

$

82

(38)
111

(137)
513

(18)
64

367
6

144
6

165
6

(74)
299

(34)
116

(17)
154

410

$

629

$

218

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Alphabet Inc.

Other Income (Expense), Net
Components of other income (expense), net, were as follows (in millions):
Year Ended December 31,
2019

Interest income
Interest expense(1)Foreign currency exchange gain (loss), net (2)Gain (loss) on debt securities, net
Gain (loss) on equity securities, net
Performance fees
Income (loss) and impairment from equity method investments, net
Other(3)Other income (expense), net
(1)

(2)

(3)

$

$

2,427 $
(100)
103
149
2,649
(326)
390
102
5,394 $

2020

1,865 $
(135)
(344)
725
5,592
(609)
401
(637)
6,858 $

2021

1,499
(346)
(240)
(110)
12,380(1,908)334
411
12,020Interest expense is net of interest capitalized of $167 million, $218 million, and $163 million for the years ended December 31,
2019, 2020, and 2021, respectively.
Our foreign currency exchange gain (loss), net, is primarily related to the forward points for our foreign currency hedging
contracts and foreign exchange transaction gains and losses from the conversion of the transaction currency to the functional
currency, offset by the foreign currency hedging contracts' losses and gains.
During the year ended December 31, 2020, we entered into derivatives that hedged the changes in fair value of certain
marketable equity securities, which resulted in losses of $902 million and gains of $92 million for the years ended
December 31, 2020 and 2021, respectively. The offsetting recognized gains and losses on the marketable equity securities arereflected in Gain (loss) on equity securities, net.

Note 8.

Acquisitions

FitbitIn January 2021, we closed the acquisition of Fitbit, a leading wearables brand for $2.1 billion. The addition of
Fitbit to Google Services is expected to help spur innovation in wearable devices. The assets acquired and liabilities
assumed were recorded at fair value. The purchase price excludes post acquisition compensation arrangements. The
purchase price was attributed to $440 million cash acquired, $590 million of intangible assets, $1.2 billion of goodwill
and $92 million of net liabilities assumed. Goodwill was recorded in the Google Services segment and primarily
attributable to synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax
purposes.
Other Acquisitions
During the year ended December 31, 2021, we completed other acquisitions and purchases of intangible assets
for total consideration of approximately $885 million, net of cash acquired, of which the total amount of goodwill
expected to be deductible for tax purposes is approximately $118 million. Pro forma results of operations for theseacquisitions have not been presented because they are not material to our consolidated results of operations, either
individually or in the aggregate.

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Note 9.

Alphabet Inc.

Goodwill and Other Intangible Assets

Goodwill
Changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2021 were as follows (inmillions):
GoogleServices

GoogleBalance as of December 31, 2019
Acquisitions
Foreign currency translation and otheradjustments
Allocation in the fourth quarter of 2020(1)Balance as of December 31, 2020
Acquisitions
Foreign currency translation and otheradjustments
Balance as of December 31, 2021
(1)$

19,921 $204
46(20,171)
0
0

$

0
0 $

Google Cloud

0 $53

Other Bets

0 $
189

703
0

Total

$

20,624446

56
18,40818,517
1,325

5
1,763
1,957
382

(2)
0
701
103

105
0
21,1751,810(16)
19,826 $(2)2,337 $

(11)
793 $

(29)
22,956

Represents reallocation of goodwill as a result of our change in segments in the fourth quarter of 2020. See Note 15 for further
details.

Other Intangible Assets
Information regarding purchased intangible assets was as follows (in millions):
As of December 31, 2020
Gross
Carrying
AmountPatents and developed technology
Customer relationships
Trade names and otherTotal definite-lived intangible assets
Indefinite-lived intangible assets
Total intangible assets

$

$

Net
Carrying
AmountAccumulated
Amortization

4,639
266
624
5,529
75
5,604

$

$

3,649
49
461
4,159
0
4,159

$

990
217
163
1,370
75
1,445

$

As of December 31, 2021
Gross
Carrying
AmountPatents and developed technology
Customer relationships
Trade names and otherTotal definite-lived intangible assets
Indefinite-lived intangible assets
Total intangible assets

$

$

4,786
506
534
5,826
138
5,964

Net
Carrying
Value

Accumulated
Amortization

$

$

4,112
140
295
4,547
0
4,547

$

$

674
366
239
1,279
138
1,417

Patents and developed technology, customer relationships, and trade names and other have weighted-averageremaining useful lives of 0.7 years, 3.5 years, and 4.5 years, respectively.
For all intangible assets acquired and purchased during the year ended December 31, 2021, patents anddeveloped technology have a weighted-average useful life of 4.1 years, customer relationships have a weightedaverage useful life of 4.3 years, and trade names and other have a weighted-average useful life of 9.9 years.
Amortization expense relating to purchased intangible assets was $795 million, $774 million, and $875 million forthe years ended December 31, 2019, 2020, and 2021, respectively.

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As of December 31, 2021, expected amortization expense relating to purchased intangible assets for each of thenext five years and thereafter was as follows (in millions):
2022
2023
2024
2025
2026
Thereafter$$
Note 10.

537
255
226
98
61
102
1,279

Contingencies

Indemnifications
In the normal course of business, including to facilitate transactions in our services and products and corporate
activities, we indemnify certain parties, including advertisers, Google Network partners, customers of Google Cloudofferings, lessors and service providers with respect to certain matters. We have agreed to hold certain parties
harmless against losses arising from a breach of representations or covenants, or out of intellectual property
infringement or other claims made against certain parties. Several of these agreements limit the time within which anindemnification claim can be made and the amount of the claim. In addition, we have entered into indemnificationagreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.
It is not possible to make a reasonable estimate of the maximum potential amount under these indemnificationagreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have alimited history of prior indemnification claims, and the payments we have made under such agreements have not had amaterial adverse effect on our results of operations, cash flows, or financial position. However, to the extent that valid
indemnification claims arise in the future, future payments by us could be significant and could have a material adverse
effect on our results of operations or cash flows in a particular period.
As of December 31, 2021, we did not have any material indemnification claims that were probable or reasonably
possible.
Legal Matters
Antitrust Investigations
On November 30, 2010, the EC's Directorate General for Competition opened an investigation into various
antitrust-related complaints against us.
On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display andranking of shopping search results and ads infringed European competition law. The EC decision imposed a €2.4
billion ($2.7 billion as of June 27, 2017) fine. On September 11, 2017, we appealed the EC decision to the General
Court, and on September 27, 2017, we implemented product changes to bring shopping ads into compliance with the
EC's decision. We recognized a charge of $2.7 billion for the fine in the second quarter of 2017. On November 10,
2021, the General Court rejected our appeal, and we subsequently filed an appeal with the European Court of Justiceon January 20, 2022.
On July 18, 2018, the EC announced its decision that certain provisions in Google’s Android-related distributionagreements infringed European competition law. The EC decision imposed a €4.3 billion ($5.1 billion as of June 30,2018) fine and directed the termination of the conduct at issue. On October 9, 2018, we appealed the EC decision. On
October 29, 2018, we implemented changes to certain of our Android distribution practices. We recognized a charge of$5.1 billion for the fine in the second quarter of 2018.
On March 20, 2019, the EC announced its decision that certain contractual provisions in agreements that Google
had with AdSense for Search partners infringed European competition law. The EC decision imposed a fine of €1.5
billion ($1.7 billion as of March 20, 2019) and directed actions related to AdSense for Search partners' agreements,
which we implemented prior to the decision. On June 4, 2019, we appealed the EC decision. We recognized a chargeof $1.7 billion for the fine in the first quarter of 2019.
While each EC decision is under appeal, we included the fines in accrued expenses and other current liabilities
on our Consolidated Balance Sheets as we provided bank guarantees (in lieu of a cash payment) for the fines.

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From time to time we are subject to formal and informal inquiries and investigations on competition matters by
regulatory authorities in the U.S., Europe, and other jurisdictions. In August 2019, we began receiving civil investigative
demands from the U.S. Department of Justice (DOJ) requesting information and documents relating to our priorantitrust investigations and certain aspects of our business. The DOJ and a number of state Attorneys General filed alawsuit on October 20, 2020 alleging that Google violated U.S. antitrust laws relating to Search and Search advertising.
Separately, on December 16, 2020, a number of state Attorneys General filed an antitrust complaint against Google in
the U.S. District Court for the Eastern District of Texas, alleging that Google violated U.S. antitrust laws as well as state
deceptive trade laws relating to its advertising technology. On June 22, 2021, the EC opened a formal investigation into
Google's advertising technology business practices. On July 7, 2021, a number of state Attorneys General filed an
antitrust complaint against us in the U.S. District Court for the Northern District of California, alleging that Google’s
operation of Android and Google Play violated U.S. antitrust laws and state antitrust and consumer protection laws. We
believe these complaints are without merit and will defend ourselves vigorously. The DOJ and state Attorneys Generalcontinue their investigations into certain aspects of our business. We continue to cooperate with federal and state
regulators in the U.S., the EC and other regulators around the world.
Patent and Intellectual Property Claims
We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming thatcertain of our products, services, and technologies infringe others' intellectual property rights. Adverse results in theselawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders
preventing us from offering certain features, functionalities, products, or services. As a result, we may have to change
our business practices and develop non-infringing products or technologies, which could result in a loss of revenues for
us and otherwise harm our business. In addition, the U.S. International Trade Commission (ITC) has increasingly
become an important forum to litigate intellectual property disputes because an ultimate loss in an ITC action can
result in a prohibition on importing infringing products into the U.S. Because the U.S. is an important market, aprohibition on importation could have an adverse effect on us, including preventing us from importing many important
products into the U.S. or necessitating workarounds that may limit certain features of our products.
Furthermore, many of our agreements with our customers and partners require us to indemnify them against
certain intellectual property infringement claims, which would increase our costs as a result of defending such claims,
and may require that we pay significant damages if there were an adverse ruling in any such claims. In addition, ourcustomers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions
or otherwise, which could result in loss of revenues and adversely affect our business.
In 2010, Oracle America, Inc. (Oracle) brought a copyright lawsuit against Google in the Northern District ofCalifornia, alleging that Google's Android operating system infringes Oracle's copyrights related to certain Javaapplication programming interfaces (Java APIs). After trial, final judgment was entered by the district court in favor of
Google on June 8, 2016, and the court decided post-trial motions in favor of Google. Oracle appealed and on March
27, 2018, the Federal Circuit Court of Appeals reversed and remanded the case for a trial on damages. On May 29,
2018, we filed a petition for a rehearing at the Federal Circuit, and on August 28, 2018, the Federal Circuit denied thepetition. On January 24, 2019, we filed a petition to the U.S. Supreme Court to review the case. On April 29, 2019, theSupreme Court requested the views of the Solicitor General regarding our petition. On September 27, 2019, theSolicitor General recommended denying our petition, and we provided our response on October 16, 2019. On
November 15, 2019, the Supreme Court granted our petition and made a decision to review the case. The Supreme
Court heard oral arguments in our case on October 7, 2020. On April 5, 2021, the Supreme Court reversed the Federal
Circuit's ruling and found that Google’s use of the Java APIs was a fair use as a matter of law. The Supreme Court
remanded the case to the Federal Circuit for further proceedings in conformity with the Supreme Court opinion. On
May 14, 2021, the Federal Circuit entered an order affirming the district court’s final judgment in favor of Google. On
June 21, 2021, the Federal Circuit issued a mandate returning the case to the district court, and the case is now
concluded.
Other
We are also regularly subject to claims, suits, regulatory and government investigations, other proceedings, andconsent decrees involving competition, intellectual property, privacy, tax and related compliance, labor andemployment, 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. For example, we have anumber of privacy investigations and suits ongoing in multiple jurisdictions. Such claims, suits, regulatory andgovernment investigations, other proceedings, and consent decrees could result in substantial fines and penalties,
injunctive relief, ongoing auditing and monitoring obligations, changes to our products and services, alterations to ourbusiness models and operations, and collateral related civil litigation or other adverse consequences, all of which could
harm our business, reputation, financial condition, and operating results.

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Certain of these outstanding matters include speculative, substantial or indeterminate monetary amounts. We
record a liability when we believe that it is probable that a loss has been incurred, and the amount can be reasonably
estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we
disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect the amount ofliability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and makeadjustments as appropriate. Significant judgment is required to determine both the likelihood of there being and theestimated amount of a loss related to such matters.
With respect to our outstanding matters, based on our current knowledge, we believe that the amount or range ofreasonably possible loss will not, either individually or in aggregate, have a material adverse effect on our business,consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently
unpredictable and subject to significant uncertainties.
We expense legal fees in the period in which they are incurred.
Non-Income Taxes
We are under audit by various domestic and foreign tax authorities with regards to non-income tax matters. The
subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to thesale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue
non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities whena loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range ofloss can be estimated, we disclose the reasonably possible loss. Due to the inherent complexity and uncertainty ofthese matters and judicial process in certain jurisdictions, the final outcome may be materially different from our
expectations.
For information regarding income tax contingencies, see Note 14.
Note 11.

Stockholders' Equity

Preferred Stock
Our Board of Directors has authorized 100 million shares of preferred stock, $0.001 par value, issuable in series.
As of December 31, 2020 and 2021, no shares were issued or outstanding.
Class A and Class B Common Stock and Class C Capital Stock
Our Board of Directors has authorized three classes of stock, Class A and Class B common stock, and Class C
capital stock. The rights of the holders of each class of our common and capital stock are identical, except with respect
to voting. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stockis entitled to 10 votes per share. Class C capital stock has no voting rights, except as required by applicable law.
Shares of Class B common stock may be converted at any time at the option of the stockholder and automaticallyconvert upon sale or transfer to Class A common stock.
Share Repurchases
In April 2021, the Board of Directors of Alphabet authorized the company to repurchase up to $50.0 billion of its
Class C stock. In July 2021, the Alphabet board approved an amendment to the April 2021 authorization, permitting thecompany to repurchase both Class A and Class C shares in a manner deemed in the best interest of the company andits stockholders, taking into account the economic cost and prevailing market conditions, including the relative trading
prices and volumes of the Class A and Class C shares. As of December 31, 2021, $17.4 billion remains available forClass A and Class C share repurchases under the amended authorization.
In accordance with the authorizations of the Board of Directors of Alphabet, during the years ended December 31,
2020 and 2021, we repurchased and subsequently retired 21.5 million and 20.3 million aggregate shares for $31.1
billion and $50.3 billion, respectively. Of the aggregate amount repurchased and subsequently retired during 2021, 1.2
million shares were Class A stock for $3.4 billion.
Stock Split Effected in Form of Stock Dividend (“Stock Split”)
On February 1, 2022, the Company announced that the Board of Directors had approved and declared a 20-forone stock split in the form of a one-time special stock dividend on each share of the Company’s Class A, Class B, andClass C stock. The Stock Split is subject to stockholder approval of an amendment to the Company’s Amended andRestated Certificate of Incorporation to increase the number of authorized shares of Class A, Class B, and Class C
stock to accommodate the Stock Split.

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If approval is obtained, each of the Company’s stockholders of record at the close of business on July 1, 2022
(the “Record Date”), will receive, after the close of business on July 15, 2022, a dividend of 19 additional shares of thesame class of stock for every share held by such stockholder as of the Record Date.
Note 12.

Net Income Per Share

We compute net income per share of Class A, Class B, and Class C stock using the two-class method. Basic net
income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net
income per share is computed using the weighted-average number of shares and the effect of potentially dilutive
securities outstanding during the period. Potentially dilutive securities consist of restricted stock units and othercontingently issuable shares. The dilutive effect of outstanding restricted stock units and other contingently issuable
shares is reflected in diluted earnings per share by application of the treasury stock method. The computation of thediluted net income per share of Class A stock assumes the conversion of Class B stock, while the diluted net income
per share of Class B stock does not assume the conversion of those shares.
The rights, including the liquidation and dividend rights, of the holders of our Class A, Class B, and Class C stock
are identical, except with respect to voting. Furthermore, there are a number of safeguards built into our certificate ofincorporation, as well as Delaware law, which preclude our Board of Directors from declaring or paying unequal per
share dividends on our Class A, Class B, and Class C stock. Specifically, Delaware law provides that amendments toour certificate of incorporation which would have the effect of adversely altering the rights, powers, or preferences of agiven class of stock must be approved by the class of stock adversely affected by the proposed amendment. In
addition, our certificate of incorporation provides that before any such amendment may be put to a stockholder vote, it
must be approved by the unanimous consent of our Board of Directors. As a result, the undistributed earnings for eachyear are allocated based on the contractual participation rights of the Class A, Class B, and Class C stock as if theearnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed
earnings are allocated on a proportionate basis.
In the years ended December 31, 2019, 2020 and 2021, the net income per share amounts are the same forClass A, Class B, and Class C 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.
The following tables set forth the computation of basic and diluted net income per share of Class A, Class B, andClass C stock (in millions, except share amounts which are reflected in thousands and per share amounts):
Year Ended December 31,
2019
Class AClass BClass C

Basic net income per share:
Numerator
Allocation of undistributed earnings$

14,846

$

2,307

$

17,190Denominator
Number of shares used in per share computation

299,402

Basic net income per share

46,527

346,667

$

49.59

$

49.59

$

49.59

$

14,846

$

2,307

$

17,190

Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation
Reallocation of undistributed earnings as a result of conversion of Class B to Class A
shares

2,307

0

0

Reallocation of undistributed earnings

(126)

(20)

126

Allocation of undistributed earnings$

17,027

$

2,287

$

17,316

Denominator
Number of shares used in basic computation

299,40246,527

346,667

46,527

0

0

413

0

5,547

Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A shares outstanding
Restricted stock units and other contingently issuable shares
Number of shares used in per share computation

346,342

Diluted net income per share

$

79

49.16

46,527$49.16

352,214$49.16

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Alphabet Inc.
Year Ended December 31,
2020
Class AClass BClass C

Basic net income per share:
Numerator
Allocation of undistributed earnings$

17,733

$

2,732

$

19,804

Denominator
Number of shares used in per share computation

299,815

Basic net income per share

46,182334,819

$

59.15

$

59.15

$

59.15

$

17,733

$

2,732

$

19,804

Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation
Reallocation of undistributed earnings as a result of conversion of Class B to Class A
shares

2,732

0

0

Reallocation of undistributed earnings

(180)

(25)

180

Allocation of undistributed earnings$

20,285

$

2,707

$

19,984

Denominator
Number of shares used in basic computation

299,815

46,182334,819

46,182

0

0

87

0

6,125

Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A shares outstanding
Restricted stock units and other contingently issuable shares
Number of shares used in per share computation

346,084

Diluted net income per share

$

58.61

46,182$58.61

340,944$

58.61

Year Ended December 31,
2021
Class AClass BClass C

Basic net income per share:
Numerator
Allocation of undistributed earnings$

34,200

$

5,174

$

36,659Denominator
Number of shares used in per share computation

300,310

Basic net income per share

45,430321,910$113.88$113.88$113.88$34,200

$

5,174

$

36,659Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation
Reallocation of undistributed earnings as a result of conversion of Class B to Class A
shares5,174Reallocation of undistributed earnings

0

(581)

Allocation of undistributed earnings$

38,793

0

(77)
$

5,097

581
$

37,240Denominator
Number of shares used in basic computation

300,31045,430321,91045,43000Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A shares outstanding
Restricted stock units and other contingently issuable shares
Number of shares used in per share computation
Diluted net income per share

$

80

15

0

10,009345,755

45,430331,919112.20$112.20$112.20Table of Contents

Note 13.

Alphabet Inc.

Compensation Plans

Stock Plans
Our stock plans include the Alphabet Amended and Restated 2012 Stock Plan, the Alphabet 2021 Stock Plan
and Other Bet stock-based plans. Under our stock plans, RSUs and other types of awards may be granted. An RSU
award is an agreement to issue shares of our Class C stock at the time the award vests. RSUs generally vest over four
years contingent upon employment on the vesting date.
As of December 31, 2021, there were 37,479,707 shares of Class C stock reserved for future issuance under theAlphabet 2021 Stock Plan.
Stock-Based Compensation
For the years ended December 31, 2019, 2020, and 2021, total stock-based compensation expense was $11.7
billion, $13.4 billion, and $15.7 billion, including amounts associated with awards we expect to settle in Alphabet stockof $10.8 billion, $12.8 billion, and $15.0 billion, respectively.
For the years ended December 31, 2019, 2020, and 2021, we recognized tax benefits on total stock-based
compensation expense, which are reflected in the provision for income taxes in the Consolidated Statements ofIncome, of $1.8 billion, $2.7 billion, and $3.1 billion, respectively.
For the years ended December 31, 2019, 2020, and 2021, tax benefit realized related to awards vested or
exercised during the period was $2.2 billion, $3.6 billion, and $5.9 billion, respectively. These amounts do not include
the indirect effects of stock-based awards, which primarily relate to the R&D tax credit.
Stock-Based Award Activities
The following table summarizes the activities for unvested Alphabet RSUs for the year ended December 31,
2021:
Unvested Restricted Stock Units
WeightedAverage
Grant-Date
Fair Value

Number of
SharesUnvested as of December 31, 2020

19,288,793
10,582,700(11,209,486)(1,767,294)
16,894,713

Granted
VestedForfeited/canceled
Unvested as of December 31, 2021

$
$
$
$
$

1,262.13
1,949.16
1,345.98
1,425.48
1,626.13

The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2019 and2020 was $1,092.36 and $1,407.97, respectively. Total fair value of RSUs, as of their respective vesting dates, during
the years ended December 31, 2019, 2020, and 2021 were $15.2 billion, $17.8 billion, and $28.8 billion, respectively.
As of December 31, 2021, there was $25.8 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.
401(k) Plans
We have two 401(k) Savings Plans that qualify as deferred salary arrangements under Section 401(k) of theInternal Revenue Code. Under these 401(k) Plans, matching contributions are based upon the amount of theemployees’ contributions subject to certain limitations. We recognized expense of approximately $724 million, $855
million, and $916 million for the years ended December 31, 2019, 2020, and 2021, respectively.
Note 14.

Income Taxes

Income from continuing operations before income taxes consisted of the following (in millions):
Year Ended December 31,
2019

Domestic operations
Foreign operations
Total

$
$

81

16,42623,19939,625

2020$$

37,576
10,50648,0822021$$

77,016
13,71890,734

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Alphabet Inc.

Provision for income taxes consisted of the following (in millions):
Year Ended December 31,
2019

Current:
Federal and state
Foreign
Total
Deferred:Federal and state
Foreign
Total
Provision for income taxes

$

$

2020

2,424
2,713
5,137

$

286
(141)
145
5,282 $

4,789
1,687
6,476

2021

$

10,126
2,692
12,818

1,552
(215)
1,337
7,813 $

2,018
(135)
1,883
14,701

The reconciliation of federal statutory income tax rate to our effective income tax rate was as follows:Year Ended December 31,
2019

U.S. federal statutory tax rate
Foreign income taxed at different rates
Foreign-derived intangible income deduction
Stock-based compensation expense
Federal research credit
Deferred tax asset valuation allowance
State and local income taxes
Effective tax rate

21.0 %
(4.9)
(0.7)
(0.7)
(2.5)
0.0
1.1
13.3 %

2020

21.0 %
(0.3)
(3.0)
(1.7)
(2.3)
1.4
1.1
16.2 %

2021

21.0 %
0.2
(2.5)
(2.5)
(1.6)
0.6
1.0
16.2 %

Our effective tax rate for 2019 was affected significantly by earnings realized in foreign jurisdictions with statutory
tax rates lower than the federal statutory tax rate because substantially all of the income from foreign operations wasearned by an Irish subsidiary. As of December 31, 2019, we have simplified our corporate legal entity structure andnow license intellectual property from the U.S. that was previously licensed from Bermuda resulting in an increase in
the portion of our income earned in the U.S.
On July 27, 2015, the U.S. Tax Court, in an opinion in Altera Corp. v. Commissioner, invalidated the portion of theTreasury regulations issued under IRC Section 482 requiring related-party participants in a cost sharing arrangement
to share stock-based compensation costs. The U.S. Tax Court issued the final decision on December 28, 2015. As aresult of that decision, we recorded a tax benefit related to the anticipated reimbursement of cost share payment forpreviously shared stock-based compensation costs.
On June 7, 2019, the U.S. Court of Appeals for the Ninth Circuit overturned the 2015 Tax Court decision in Altera
Corp. v. Commissioner, and upheld the portion of the Treasury regulations issued under IRC Section 482 requiring
related-party participants in a cost sharing arrangement to share stock-based compensation costs. As a result of theNinth Circuit court decision, our cumulative net tax benefit of $418 million related to previously shared stock-based
compensation costs was reversed in the year ended December 31, 2019.
In 2020, there was an increase in valuation allowance for net deferred tax assets that are not likely to be realized
relating to certain of our Other Bets.

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Deferred Income Taxes
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant componentsof our deferred tax assets and liabilities were as follows (in millions):
As of December 31,
2020

Deferred tax assets:
Accrued employee benefits
Accruals and reserves not currently deductible
Tax credits
Net operating losses
Operating leases
Intangible assets
Other
Total deferred tax assets
Valuation allowance
Total deferred tax assets net of valuation allowance
Deferred tax liabilities:
Property and equipment, net
Net investment gains
Operating leases
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)

$

$

2021

580 $
1,049
3,723
1,085
2,620
1,525
981
11,563(4,823)
6,740

549
1,816
5,179
1,790
2,503
2,034
925
14,796(7,129)7,667(3,382)(1,901)(2,354)(1,580)(9,217)(2,477) $(5,237)(3,229)(2,228)(946)(11,640)(3,973)As of December 31, 2021, our federal, state, and foreign net operating loss carryforwards for income tax
purposes were approximately $5.6 billion, $4.6 billion, and $1.7 billion respectively. If not utilized, the federal net
operating loss carryforwards will begin to expire in 2023, foreign net operating loss carryforwards will begin to expire in
2025 and the state net operating loss carryforwards will begin to expire in 2028. It is more likely than not that certain
net operating loss carryforwards will not be realized; therefore, we have recorded a valuation allowance against them.
The net operating loss carryforwards are subject to various annual limitations under the tax laws of the different
jurisdictions.
As of December 31, 2021, our California R&D carryforwards for income tax purposes were approximately $5.0
billion that can be carried over indefinitely. We believe the state tax credit is not likely to be realized.
As of December 31, 2021, our investment tax credit carryforwards for state income tax purposes wereapproximately $700 million and will begin to expire in 2025. We use the flow-through method of accounting forinvestment tax credits. We believe this tax credit is not likely to be realized.
As of December 31, 2021, we maintained a valuation allowance with respect to California deferred tax assets,certain federal net operating losses, certain state tax credits, net deferred tax assets relating to certain Other Bets, andcertain foreign net operating losses that we believe are not likely to be realized. We continue to reassess the remaining
valuation allowance quarterly, and if future evidence allows for a partial or full release of the valuation allowance, a tax
benefit will be recorded accordingly.

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Uncertain Tax Positions
The following table summarizes the activity related to our gross unrecognized tax benefits (in millions):
Year Ended December 31,
2019

Beginning gross unrecognized tax benefits
Increases related to prior year tax positions
Decreases related to prior year tax positions
Decreases related to settlement with tax authorities
Increases related to current year tax positions
Ending gross unrecognized tax benefits$$

4,652 $
938
(143)
(2,886)816
3,377 $

2020

3,377 $
372
(557)
(45)
690
3,837 $

2021

3,837
529
(263)
(329)
1,384
5,158

The total amount of gross unrecognized tax benefits was $3.4 billion, $3.8 billion, and $5.2 billion as ofDecember 31, 2019, 2020, and 2021, respectively, of which $2.3 billion, $2.6 billion, and $3.7 billion, if recognized,
would affect our effective tax rate, respectively.
As of December 31, 2020 and 2021, we accrued $222 million and $270 million in interest and penalties inprovision for income taxes, respectively.
We file income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. Our two
major tax jurisdictions are the U.S. federal and Ireland. We are subject to the continuous examination of our income tax
returns by the IRS and other tax authorities. The IRS is currently examining our 2016 through 2018 tax returns. We
have also received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments orpermanent establishment. We continue to defend any and all such claims as presented.
The tax years 2014 through 2020 remain subject to examination by the appropriate governmental agencies for
Irish tax purposes. There are other ongoing audits in various other jurisdictions that are not material to our financial
statements.
We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine theadequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax
authorities and the effect, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.
We believe that an adequate provision has been made for any adjustments that may result from tax examinations.
However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits areresolved in a manner not consistent with management's expectations, we could be required to adjust our provision forincome taxes in the period such resolution occurs. Although the timing of resolution, settlement, and closure of audits
is not certain, it is reasonably possible that our unrecognized tax benefits from certain U.S. federal, state and non U.S.
tax positions could decrease by approximately $2.0 billion in the next 12 months. Positions that may be resolved
include various U.S. and non-U.S. matters.
Note 15.

Information about Segments and Geographic Areas

We report our segment results as Google Services, Google Cloud, and Other Bets:•

Google Services includes products and services such as ads, Android, Chrome, hardware, Google Maps,
Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising; sales ofapps and in-app purchases, digital content products, and hardware; and fees received for subscription-based
products such as YouTube Premium and YouTube TV.

•

Google Cloud includes Google’s infrastructure and platform services, collaboration tools, and other services forenterprise customers. Google Cloud generates revenues from fees received for Google Cloud Platform
services, Google Workspace collaboration tools and other enterprise services.

•

Other Bets is a combination of multiple operating segments that are not individually material. Revenues from
Other Bets are generated primarily from the sale of health technology and internet services.

Revenues, certain costs, such as costs associated with content and traffic acquisition, certain engineering
activities, and hardware, as well as certain operating expenses are directly attributable to our segments. Due to theintegrated nature of Alphabet, other costs and expenses, such as technical infrastructure and office facilities, aremanaged centrally at a consolidated level. The associated costs, including depreciation and impairment, are allocatedto operating segments as a service cost generally based on usage or headcount.

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Unallocated corporate costs primarily include corporate initiatives, corporate shared costs, such as finance andlegal, including certain fines and settlements, as well as costs associated with certain shared R&D activities.
Additionally, hedging gains (losses) related to revenue are included in corporate costs.
Our operating segments are not evaluated using asset information.
Information about segments during the periods presented were as follows (in millions). For comparative purposes,
amounts in prior periods have been recast:Year Ended December 31,
2019

Revenues:
Google Services
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues
Operating income (loss):
Google Services
Google Cloud
Other Bets
Corporate costs, unallocated(1)Total income from operations
(1)

$

$
$

$

2020

151,825
8,918
659
455
161,857$$

48,999 $(4,645)(4,824)(5,299)34,231 $2021

168,635
13,059657
176
182,527$$

237,529
19,206753
149
257,637

54,606 $(5,607)(4,476)(3,299)41,224 $91,855(3,099)(5,281)(4,761)78,714

Corporate costs, unallocated includes a fine and legal settlement totaling $2.3 billion for the year ended December 31, 2019.

For revenues by geography, see Note 2.
The following table presents long-lived assets by geographic area, which includes property and equipment, net
and operating lease assets (in millions):
As of December 31,
2020

Long-lived assets:
United States
International
Total long-lived assets

$
$

85

69,31527,64596,9602021$$

80,20730,351
110,558

Table of Contents

ITEM 9.

Alphabet Inc.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE

None.
ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated theeffectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of theend of the period covered by this Annual Report on Form 10-K.
Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of December 31,
2021, our disclosure controls and procedures are designed at a reasonable assurance level and are effective toprovide 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
We rely extensively on information systems to manage our business and summarize and report operating results.
In 2019, we began a multi-year implementation of a new global ERP system, which will replace much of our existingcore financial systems. The ERP system is designed to accurately maintain our financial records, enhance the flow offinancial information, improve data management and provide timely information to our management team. The
implementation is expected to continue in phases over the next few years. We completed the implementation of certainof our subledgers, which included changes to our processes, procedures and internal controls over financial reporting
during the second quarter of 2021. There have been no changes in our internal control over financial reporting that
occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting. However, as the phased implementation of the new ERP
system continues, we will change our processes and procedures, which in turn, could result in changes to our internal
control over financial reporting. As such changes occur, we will evaluate quarterly whether such changes materiallyaffect our internal control over financial reporting.
As a result of COVID-19, our global workforce continued to operate primarily in a work from home environment for
the quarter ended December 31, 2021. While we continue to evolve our work model in response to the uneven effectsof the ongoing pandemic around the world, we believe that our internal controls over financial reporting continue to beeffective. We have continued to re-evaluate and refine our financial reporting process to provide reasonable assurance
that we could report our financial results accurately and in a timely manner.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) of the Exchange Act. Our management conducted an evaluation of theeffectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Based on this evaluation, management concluded that our internal control over financial reporting was effective as ofDecember 31, 2021. Management reviewed the results of its assessment with our Audit and Compliance Committee.
The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Ernst &Young LLP, an independent registered public accounting firm, as stated in its report which is included in Item 8 of thisAnnual Report on Form 10-K.
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 thedesired 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.
ITEM 9B.

OTHER INFORMATION

None.

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ITEM 9C.

Alphabet Inc.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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Alphabet Inc.

PART IIIITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item will be included under the caption “Directors, Executive Officers, andCorporate Governance” in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC
within 120 days of the fiscal year ended December 31, 2021 (2022 Proxy Statement) and is incorporated herein byreference. The information required by this item regarding delinquent filers pursuant to Item 405 of Regulation S-K will
be included under the caption “Delinquent Section 16(a) Reports” in the 2022 Proxy Statement and is incorporated
herein by reference.
ITEM 11.

EXECUTIVE COMPENSATION

The information required by this item will be included under the captions “Director Compensation,” “Executive
Compensation” and “Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board
Matters—Compensation Committee Interlocks and Insider Participation” in the 2022 Proxy Statement and isincorporated herein by reference.
ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS

The information required by this item will be included under the captions “Common Stock Ownership of Certain
Beneficial Owners and Management” and “Equity Compensation Plan Information” in the 2022 Proxy Statement and isincorporated herein by reference.
ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be included under the captions “Certain Relationships and Related
Transactions” and “Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board
Matters—Director Independence” in the 2022 Proxy Statement and is incorporated herein by reference.
ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be included under the caption “Independent Registered Public
Accounting Firm” in the 2022 Proxy Statement and is incorporated herein by reference.

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Alphabet Inc.

PART IVITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

We have filed the following documents as part of this Annual Report on Form 10-K:
1. Consolidated Financial Statements
46

Reports of Independent Registered Public Accounting Firm
Financial Statements:
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

49
50
51
52
53
54

2. Financial Statement Schedules
Schedule II: Valuation and Qualifying Accounts
The table below details the activity of the allowance for credit losses and sales credits for the years ended
December 31, 2019, 2020 and 2021 (in millions):
Balance at
Beginning of Year

Year ended December 31, 2019Year ended December 31, 2020
Year ended December 31, 2021
Note:

$
$
$

729
753
1,344

Additions

$
$
$

1,481
2,013
2,092

Usage

$
$
$

Balance at
End of Year

(1,457) $(1,422) $(2,047) $

753
1,344
1,389

Additions to the allowance for credit losses are charged to expense. Additions to the allowance for sales credits are charged against
revenues.

All other schedules have been omitted because they are not required, not applicable, or the required information
is otherwise included.
3. Exhibits
Incorporated by reference herein

Exhibit
NumberDescription

Form

Date

2.01

Agreement and Plan of Merger, dated
October 2, 2015, by and among Google Inc.,the Registrant and Maple Technologies Inc.

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

3.01

Amended and Restated Certificate ofIncorporation of the Registrant, dated
October 2, 2015

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

3.02

4.02

Specimen Class C Capital Stock certificate

4.03

Alphabet Inc. Deferred Compensation Plan

4.04

Transfer Restriction Agreement, dated
October 2, 2015, between the Registrant and
Larry Page and certain of his affiliates

Current Report on Form 8-K/A(File No. 001-37580)
Current Report on Form 8-K(File No. 001-37580)
Current Report on Form 8-K(File No. 001-37580)
Current Report on Form 8-K(File No. 001-37580)
Current Report on Form 8-K(File No. 001-37580)

October 27, 2020

4.01

Amended and Restated Bylaws of theRegistrant, dated October 21, 2020
Specimen Class A Common Stock certificate

4.05

Transfer Restriction Agreement, dated
October 2, 2015, between the Registrant andSergey Brin and certain of his affiliates

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

4.06

*

Joinder Agreement, dated December 31,
2021, among the Registrant, Sergey Brin andcertain of his affiliates
89

October 2, 2015
October 2, 2015
October 2, 2015
October 2, 2015

Table of Contents

Alphabet Inc.
Incorporated by reference herein

Exhibit
NumberDescription

Form

Date

4.07

Transfer Restriction Agreement, dated
October 2, 2015, between the Registrant andEric E. Schmidt and certain of its affiliates

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

4.08

Current Report on Form 8-K(File No. 001-37580)
Registration Statement on
Form S-3(File No. 333-209510)

October 2, 2015

4.09

Class C Undertaking, dated October 2, 2015,
executed by the Registrant
Indenture, dated February 12, 2016, between
the Registrant and The Bank of New York
Mellon Trust Company, N.A., as Trustee

4.10

Registrant Registration Rights Agreement
dated December 14, 2015

Registration Statement on
Form S-3(File No. 333-209518)

February 12, 2016

4.11

First Supplemental Indenture, dated April 27,
2016, between the Registrant and The Bankof New York Mellon Trust Company, N.A., astrusteeForm of the Registrant’s 3.375% Notes due
2024 (included in Exhibit 4.11)
Form of the Registrant’s 1.998% Note due
2026
Form of Global Note representing theRegistrant’s 0.450% notes due 2025
Form of Global Note representing theRegistrant’s 0.800% notes due 2027
Form of Global Note representing theRegistrant’s 1.100% notes due 2030
Form of Global Note representing theRegistrant’s 1.900% notes due 2040
Form of Global Note representing theRegistrant’s 2.050% notes due 2050
Form of Global Note representing theRegistrant’s 2.250% notes due 2060
Description of Registrant’s Securities
Form of Indemnification Agreement enteredinto between the Registrant, its affiliates andits directors and officers

Current Report on Form 8-K(File No. 001-37580)

April 27, 2016

Current Report on Form 8-K(File No. 001-37580)
Current Report on Form 8-K(File No. 001-37580)

August 9, 2016

Current Report on Form 8-K(File No. 001-37580)

August 5, 2020

Current Report on Form 8-K(File No. 001-37580)

August 5, 2020

Current Report on Form 8-K(File No. 001-37580)

August 5, 2020

Current Report on Form 8-K(File No. 001-37580)

August 5, 2020

Current Report on Form 8-K(File No. 001-37580)

August 5, 2020

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
*

February 12, 2016

August 5, 2020

4.20
10.01

u

10.02

u

Compensation Plan Agreement, dated
October 2, 2015, between Google Inc. andthe Registrant

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

10.03

u

Director Arrangements Agreement, dated
October 2, 2015, between Google Inc. andthe Registrant

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

10.04

u

Alphabet Inc. Deferred Compensation Plan

October 2, 2015

10.05

u

Google Inc. 2004 Stock Plan, as amended

10.05.1

u10.05.2

u10.05.3uGoogle Inc. 2004 Stock Plan - Form of
Google Stock Option Agreement
Google Inc. 2004 Stock Plan - Form of
Google Restricted Stock Unit Agreement
Google Inc. 2004 Stock Plan - Amendment toStock Option Agreements

Current Report on Form 8-K(File No. 001-37580)
Current Report on Form 8-K(File No. 000-50726)
Annual Report on Form 10-K
(File No. 000-50726)
Annual Report on Form 10-K
(File No. 000-50726)
Registration Statement on
Form S-3(File No. 333-142243)

10.06

u

Current Report on Form 8-K(File No. 001-37580)

June 5, 2020

Alphabet Inc. Amended and Restated 2012
Stock Plan

90

June 7, 2011
March 30, 2005
March 30, 2005
April 20, 2007

Table of Contents

Alphabet Inc.
Incorporated by reference herein

Exhibit
NumberDescription

Form

Date

Alphabet Inc. Amended and Restated 2012
Stock Plan - Form of Alphabet Restricted
Stock Unit Agreement

Annual Report on Form 10-K
(File No. 001-37580)

February 4, 2020u

Alphabet Inc. Amended and Restated 2012
Stock Plan - Performance Stock Unit
Agreement

Annual Report on Form 10-K
(File No. 001-37580)

February 4, 2020

10.07

u

Alphabet Inc. 2021 Stock Plan

June 4, 2021

10.07.1uAlphabet Inc. 2021 Stock Plan - Form ofAlphabet Restricted Stock Unit Agreement

Current Report on Form 8-K(file No. 001-37580)
Quarterly Report on Form 10Q (file No. 001-37580)

10.07.2u* Alphabet Inc. 2021 Stock Plan - Form ofAlphabet 2022 Non-CEO Performance Stock
Unit Agreement

10.08
14.01

u

* Alphabet Inc. Company Bonus Plan
Code of Conduct of the Registrant as
amended on September 21, 2017

Annual Report on Form 10-K
(File No. 001-37580)

February 6, 2018

21.01
23.01

*
*

24.01

*

31.01

*

31.02

*

32.01

‡

101.INS*

101.SCH*

101.CAL*

101.DEF*

101.LAB*

101.PRE*

10.06.1

u10.06.2

104

Subsidiaries of the Registrant
Consent of Independent Registered Public
Accounting Firm
Power of Attorney (incorporated by reference
to the signature page of this Annual Reporton Form 10-K)
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 of2002
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 of2002
Certifications of Chief Executive Officer andChief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002
Inline XBRL Instance Document - theinstance document does not appear in theInteractive Data File because its XBRL tags
are embedded within the Inline XBRL
document
Inline XBRL Taxonomy Extension Schema
Document
Inline XBRL Taxonomy Extension Calculation
Linkbase Document
Inline XBRL Taxonomy Extension Definition
Linkbase Document
Inline XBRL Taxonomy Extension Label
Linkbase Document
Inline XBRL Taxonomy Extension
Presentation Linkbase Document
Cover Page Interactive Data File (embedded
within the Inline XBRL document andcontained in Exhibit 101)

91

July 28, 2021

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Alphabet Inc.

_________________uIndicates management compensatory plan, contract, or arrangement.

*‡

Filed herewith.
Furnished herewith.

ITEM 16.

FORM 10-K SUMMARY

None.

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Alphabet Inc.

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 1, 2022
ALPHABET INC.
/S/
By:

SUNDAR PICHAI
Sundar Pichai

Chief Executive Officer(Principal Executive Officer of the Registrant)

POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Sundar Pichai and Ruth M. Porat, jointly and severally, his or her attorney-in-fact, with the power ofsubstitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K andto file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has beensigned below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

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Alphabet Inc.
Signature/S/

SUNDAR PICHAI

Title

Date

Chief Executive Officer and Director (Principal
Executive Officer)

February 1, 2022

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

February 1, 2022

Vice President and Chief Accounting Officer(Principal Accounting Officer)

February 1, 2022

Director

February 1, 2022

Co-Founder and Director

February 1, 2022

Director

February 1, 2022

Director

February 1, 2022

Director, Chair

February 1, 2022

Director

February 1, 2022

Director

February 1, 2022

Co-Founder and Director

February 1, 2022

Director

February 1, 2022

Director

February 1, 2022

Sundar Pichai/S/

RUTH M. PORAT
Ruth M. Porat/S/

AMIE THUENER O'TOOLE
Amie Thuener O'Toole/S/

FRANCES H. ARNOLDFrances H. Arnold/S/

SERGEY BRIN
Sergey Brin/S/

L. JOHN DOERR
L. John Doerr/S/ROGER W. FERGUSON, JR.
Roger W. Ferguson, Jr.

/S/

JOHN L. HENNESSY
John L. Hennessy/S/

ANN MATHERAnn Mather/S/

ALAN R. MULALLY
Alan R. Mulally/S/

LARRY PAGE
Larry Page/S/

K. RAM SHRIRAM
K. Ram Shriram/S/

Robin L. Washington
Robin L. Washington

94