Alphabet Annual Report 2020

1 Alphabet Annual Report 2020 Form 10-K (NASDAQ:GOOG)Published: February 4th, 2020 PDF generated by UNITED STATESSECURITIES AND EXCHANGE COMMISSIONW ashington, 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, 2019OR TRANSITION Report PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to .Commission file number: 001-37580_____Alphabet Inc.(Exact name of registrant as specified in its charter)_____Delaware61-1767919(State or other jurisdiction of incorporation or organization)( Employer Identification No.)1600 Amphitheatre ParkwayMountain View, CA 94043(Address of principal executive offices, including zip code)(650) 253-000(Registrant's telephone number, including)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredClass A Common Stock, $ par valueGOOGLN asdaq Stock Market LLC (Nasdaq Global Select Market)Class C Capital Stock, $ par valueGOOGN asdaq Stock Market LLC (Nasdaq Global Select Market)Securities registered pursuant to Section 12(g) of the Act:Title of each classNone_____Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

2 Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. 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 thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 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( of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

3 Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerginggrowth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and "emerging growth company" in Rule 12b-2 of theExchange accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

4 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 28, 2019, the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing sale prices of such shares on the NasdaqGlobal Select Market on June 28, 2019) was approximately $ billion. For purposes of calculating the aggregate market value of shares held by non-affiliates, wehave assumed that all outstanding shares are held by non-affiliates, except for shares held by each of our executive officers, directors and 5% or greaterstockholders. In the case of 5% or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances which wouldindicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding common stock.

5 These assumptionsshould not be deemed to constitute an admission that all executive officers, directors and 5% or greater stockholders are, in fact, affiliates of our company, or thatthere are not other persons who may be deemed to be affiliates of our company. Further information concerning shareholdings of our officers, directors and principalstockholders is included or incorporated by reference in Part III, Item 12 of this Annual Report on Form of January 27, 2020, there were 299,895,185 shares of the registrant s Class A common stock outstanding, 46,411,073 shares of the registrant s Class B commonstock outstanding, and 340,979,832 shares of the registrant s Class C capital stock INCORPORATED BY REFERENCEP ortions of the registrant s Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report onForm 10-K to the extent stated herein.

6 Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant s fiscal yearended December 31, 10-KFor the Fiscal Year Ended December 31, 2019 TABLE OF CONTENTS PageNote About Forward-Looking Statements3 PART I Item Factors9 Item Staff Comments22 Item Proceedings22 Item Safety Disclosures22 PART II Item for Registrant s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities23 Item Financial Data26 Item s Discussion and Analysis of Financial Condition and Results of Operations27 Item and Qualitative Disclosures About Market Risk43 Item Statements and Supplementary Data46 Item in and Disagreements With Accountants on Accounting and Financial Disclosure90 Item and Procedures90 Item Information90 PART III Item , Executive Officers and Corporate Governance91 Item Compensation91 Item Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters91 Item Relationships and Related Transactions.

7 And Director Independence91 Item Accountant Fees and Services91 PART IV Item , Financial Statement Schedules92 Item 10-K Summary95 Signatures Alphabet ABOUT FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of statements include, among other things, statements regarding: the growth of our business and revenues and our expectations about the factors that influence our success and trends in our business; the potential for declines in our revenue growth rate and operating margin; our expectation that the shift from an offline to online world will continue to benefit our business; our expectation that the portion of our revenues that we derive from non-advertising revenues will continue to increase and may affect ourmargins; our expectation that our traffic acquisition costs (TAC) and the associated TAC rates will fluctuate, which could affect our overall margins; our expectation that our monetization trends will fluctuate, which could affect our revenues and margins; fluctuations in our revenue growth, as well as the change in paid clicks and cost-per-click on Google properties and the change in impressionsand cost-per-impression on Google Network Members properties, and various factors contributing to such fluctuations.

8 Our expectation that we will continue to periodically review, refine, and update our methodologies for monitoring, gathering, and counting thenumber of paid clicks on Google properties and impressions on Google Network Members properties; our expectation that our results will be affected by our performance in international markets as users in developing economies increasingly comeonline; our expectation that our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currencyexchange 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 for commitments in customer contracts with performance obligations, which could impact ourestimate of the remaining amount of commitments and when we expect to recognize revenue; fluctuations in our capital expenditures; our plans to continue to invest in new businesses, products, services and technologies, systems, land and buildings for data centers and offices,and infrastructure, to continue to hire aggressively and provide competitive compensation programs, as well as to continue to invest inacquisitions.

9 Our expectation that our cost of revenues, research and development (R&D) expenses, sales and marketing expenses, and general andadministrative expenses will increase in amount and may increase as a percentage of revenues 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 andmacroeconomic conditions, which are likely to cause fluctuations in our quarterly results; the sufficiency of our sources of funding; our potential exposure in connection with pending investigations, proceedings, and other contingencies; the sufficiency and timing of our proposed remedies in response to the European Commission's (EC) and others' decisions; our expectations regarding the timing, design and implementation of our new global enterprise resource planning (ERP) system; Alphabet Inc.

10 The expected timing and amount of Alphabet Inc.'s share repurchases; our long-term sustainability goals;as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements mayappear throughout this Report and other documents we file with the Securities and Exchange Commission (SEC), including without limitation, thefollowing sections: Item 1 "Business," Item 1A "Risk Factors," and 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.