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Table of Contents Alphabet Inc. and Google Inc.
24
• Headcount was 61,814 as of December 31, 2015.
Information about Segments
In conjunction with the Alphabet reorganization, in the fourth quarter of 2015, we implemented legal and operational
changes in how our Chief Operating Decision Maker (CODM) manages our businesses, including resource allocation
and performance assessment. Consequently, we have multiple operating segments, representing the individual
businesses that are run separately under the Alphabet structure.
Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify
as reportable segments; therefore, the operating segments are combined and disclosed below as Other Bets. All prior-
period amounts have been adjusted retrospectively to reflect the reportable segment change.
Our reported segments are described below:
• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Apps,
Cloud, Android, Chrome, Google Play as well as hardware products we sell, such as Chromecast,
Chromebooks and Nexus. Our technical infrastructure and newer efforts like Virtual Reality are also included
in Google.
• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material.
Other Bets includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X, and
other initiatives.
Please refer to Note 16 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report
on Form 10-K for further information.
Consolidated Results of Operations
The following table presents our operating results as a percentage of revenues for the periods presented:
Year Ended December 31,
2013(1)(2) 2014(1)(2) 2015
Consolidated Statements of Income Data:
Revenues 100.0% 100.0% 100.0%
Costs and expenses:
Cost of revenues 39.6 38.9 37.6
Research and development 12.9 14.9 16.3
Sales and marketing 11.8 12.3 12.1
General and administrative 8.0 8.9 8.2
Total costs and expenses 72.3% 75.0% 74.2%
Income from operations 27.7 25.0 25.8
Other income (expense), net 0.9 1.1 0.4
Income from continuing operations before income taxes 28.6 26.1 26.2
Provision for income taxes 4.9 5.5 4.4
Net income from continuing operations 23.7 20.6 21.8
Net income (loss) from discontinued operations (0.8) 0.8 0.0
Net income 22.9% 21.4% 21.8%
(1) Financial results of Motorola Home were included in net income (loss) from discontinued operations for the year ended
December 31, 2013. Financial results of Motorola Mobile were included in net income (loss) from discontinued operations for
the years ended December 31, 2013 and 2014.
(2) In the second quarter of 2015, we identified an incorrect classification of certain revenues between legal entities, and as a
consequence, we revised our income tax expense for periods beginning in 2008 through the first quarter of 2015. Please
refer to Note 1 and Note 17 of the Notes to Consolidated Financial Statements included in Part II of this Annual Report on
Form 10-K.