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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________________________
FORM 10-Q
________________________________________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number: 001-37580
________________________________________________________________________________________
Alphabet Inc.
(Exact name of registrant as specified in its charter)
________________________________________________________________________________________
Delaware61-1767919
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
1600 Amphitheatre Parkway
Mountain View, CA 94043
(Address of principal executive offices, including zip code)
(650) 253-0000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.001 par valueGOOGLNasdaq Stock Market LLC
(Nasdaq Global Select Market)
Class C Capital Stock, $0.001 par valueGOOGNasdaq Stock Market LLC
(Nasdaq Global Select Market)
________________________________________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      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 that the 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 smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large 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 revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
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 April 21, 2020, there were 300,050,444 shares of Alphabet’s Class A common stock outstanding, 46,407,491 shares of Alphabet's Class B common stock outstanding, and 336,162,278 shares of Alphabet's Class C capital stock outstanding.

i

Alphabet Inc.
Alphabet Inc.
Form 10-Q
For the Quarterly Period Ended March 31, 2020
TABLE OF CONTENTS
  Page No.
Item 1
Item 2
Item 3
Item 4
Item 1
Item 1A
Item 2
Item 5
Item 6

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Alphabet Inc.
Note About Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding:
the effect of the novel coronavirus pandemic ("COVID-19") on our business, operations, and financial results, including the effect of governmental lockdowns, restrictions and new regulations on our operations and processes;
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 our margins;
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 impressions and cost-per-impression on Google Network Members’ properties, and various factors contributing to such fluctuations;
our expectation that we will continue to periodically review, refine, and update our methodologies for monitoring, gathering, and counting the number 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 come online;
our expectation that our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currency exchange rates;
the expected variability of 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 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 and buildings for data centers and offices, and infrastructure, as well as to continue to invest in acquisitions;
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 will increase in amount and may increase as a percentage 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 and macroeconomic conditions (including developments and volatility arising from COVID-19), 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;
1

Alphabet Inc.
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;
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 may appear throughout this report and other documents we file with the Securities and Exchange Commission ("SEC"), including without limitation, the following sections: Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q, as may be updated in our subsequent Quarterly Reports on Form 10-Q. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "may," "could," "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed in Part II, Item 1A, "Risk Factors" and those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
As used herein, "Alphabet," "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 with any of these companies.

2

Alphabet Inc.
PART I. FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
Alphabet Inc.
CONSOLIDATED BALANCE SHEETS
(in millions, except share amounts which are reflected in thousands, and par value per share amounts)
As of
December 31, 2019
As of
March 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents$18,498  $19,644  
Marketable securities101,177  97,585  
Total cash, cash equivalents, and marketable securities119,675  117,229  
Accounts receivable, net25,326  21,825  
Income taxes receivable, net2,166  1,910  
Inventory999  889  
Other current assets4,412  5,165  
Total current assets152,578  147,018  
Non-marketable investments13,078  12,367  
Deferred income taxes721  730  
Property and equipment, net73,646  76,747  
Operating lease assets10,941  11,219  
Intangible assets, net1,979  1,840  
Goodwill20,624  20,734  
Other non-current assets2,342  2,748  
Total assets$275,909  $273,403  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$5,561  $4,099  
Accrued compensation and benefits8,495  5,656  
Accrued expenses and other current liabilities23,067  22,601  
Accrued revenue share5,916  4,982  
Deferred revenue1,908  1,938  
Income taxes payable, net274  913  
Total current liabilities45,221  40,189  
Long-term debt4,554  5,016  
Deferred revenue, non-current358  350  
Income taxes payable, non-current9,885  9,207  
Deferred income taxes1,701  2,079  
Operating lease liabilities10,214  10,476  
Other long-term liabilities2,534  2,427  
Total liabilities74,467  69,744  
Commitments and Contingencies (Note 10)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding
0  0  
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 688,335 (Class A 299,828, Class B 46,441, Class C 342,066) and 683,972 (Class A 300,047, Class B 46,407, Class C 337,518) shares issued and outstanding
50,552  53,688  
Accumulated other comprehensive loss(1,232) (1,097) 
Retained earnings152,122  151,068  
Total stockholders’ equity201,442  203,659  
Total liabilities and stockholders’ equity$275,909  $273,403  
See accompanying notes.
3

Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts; unaudited)
Three Months Ended
March 31,
20192020
Revenues$36,339  $41,159  
Costs and expenses:
Cost of revenues16,012  18,982  
Research and development6,029  6,820  
Sales and marketing3,905  4,500  
General and administrative2,088  2,880  
European Commission fines1,697  0  
Total costs and expenses29,731  33,182  
Income from operations6,608  7,977  
Other income (expense), net1,538  (220) 
Income before income taxes 8,146  7,757  
Provision for income taxes1,489  921  
Net income$6,657  $6,836  
Basic net income per share of Class A and B common stock and Class C capital stock$9.58  $9.96  
Diluted net income per share of Class A and B common stock and Class C capital stock$9.50  $9.87  
See accompanying notes.
4

Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions; unaudited)
Three Months Ended
 March 31,
 20192020
Net income$6,657  $6,836  
Other comprehensive income:
Change in foreign currency translation adjustment(36) (550) 
Available-for-sale investments:
Change in net unrealized gains (losses)719  498  
Less: reclassification adjustment for net (gains) losses included in net income7  (169) 
Net change (net of tax effect of $88 and $81)
726  329  
Cash flow hedges:
Change in net unrealized gains (losses)(30) 378  
Less: reclassification adjustment for net (gains) losses included in net income(104) (22) 
Net change (net of tax effect of $1 and $81)
(134) 356  
Other comprehensive income556  135  
Comprehensive income$7,213  $6,971  
See accompanying notes.
5

Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except share amounts which are reflected in thousands; unaudited)
 Three Months Ended March 31, 2019
 Class A and Class B
Common Stock, Class C Capital Stock and
Additional Paid-In Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
Stockholders’
Equity
 Shares    Amount    
Balance as of December 31, 2018695,556  $45,049  $(2,306) $134,885  $177,628  
Cumulative effect of accounting change  (30) (4) (34) 
Common and capital stock issued1,912  39    39  
Stock-based compensation expense 2,788    2,788  
Tax withholding related to vesting of restricted stock units and other (1,184)   (1,184) 
Repurchases of capital stock(2,686) (207)  (2,818) (3,025) 
Sale of interest in consolidated entities 47    47  
Net income   6,657  6,657  
Other comprehensive income (loss)  556   556  
Balance as of March 31, 2019694,782  $46,532  $(1,780) $138,720  $183,472  

 Three Months Ended March 31, 2020
 Class A and Class B
Common Stock, Class C Capital Stock and
Additional Paid-In Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
Stockholders’
Equity
 Shares    Amount    
Balance as of December 31, 2019688,335  $50,552  $(1,232) $152,122  $201,442  
Common and capital stock issued2,125  106    106  
Stock-based compensation expense 3,222    3,222  
Tax withholding related to vesting of restricted stock units and other (1,179)   (1,179) 
Repurchases of capital stock(6,488) (606)  (7,890) (8,496) 
Sale of interest in consolidated entities 1,593    1,593  
Net income   6,836  6,836  
Other comprehensive income (loss)  135   135  
Balance as of March 31, 2020683,972  $53,688  $(1,097) $151,068  $203,659  
See accompanying notes.


6

Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
Three Months Ended
March 31,
20192020
Operating activities
Net income$6,657  $6,836  
Adjustments:
Depreciation and impairment of property and equipment2,416  2,899  
Amortization and impairment of intangible assets197  209  
Stock-based compensation expense2,769  3,191  
Deferred income taxes(73) 175  
(Gain) loss on debt and equity securities, net(1,081) 802  
Other22  297  
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable1,172  2,602  
Income taxes, net1,068  (245) 
Other assets(265) (115) 
Accounts payable(425) (835) 
Accrued expenses and other liabilities(229) (3,531) 
Accrued revenue share(147) (871) 
Deferred revenue(81) 37  
Net cash provided by operating activities12,000  11,451  
Investing activities
Purchases of property and equipment(4,638) (6,005) 
Purchases of marketable securities(20,883) (37,563) 
Maturities and sales of marketable securities21,006  41,811  
Purchases of non-marketable investments(907) (572) 
Maturities and sales of non-marketable investments99  260  
Acquisitions, net of cash acquired, and purchases of intangible assets(99) (190) 
Other investing activities34  412  
Net cash used in investing activities(5,388) (1,847) 
Financing activities
Net payments related to stock-based award activities(1,175) (1,241) 
Repurchases of capital stock(3,025) (8,496) 
Proceeds from issuance of debt, net of costs315  1,898  
Repayments of debt(345) (1,947) 
Proceeds from sale of interest in consolidated entities47  1,600  
Net cash used in financing activities(4,183) (8,186) 
Effect of exchange rate changes on cash and cash equivalents18  (272) 
Net increase in cash and cash equivalents2,447  1,146  
Cash and cash equivalents at beginning of period16,701  18,498  
Cash and cash equivalents at end of period$19,148  $19,644  
See accompanying notes.
7

Alphabet Inc.
Alphabet Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
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.
We generate revenues primarily by delivering relevant, cost-effective online advertising.
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.
Unaudited Interim Financial Information
The Consolidated Balance Sheet as of March 31, 2020, the Consolidated Statements of Income for the three months ended March 31, 2019 and 2020, the Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2020, the Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2019 and 2020 and the Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2020 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of March 31, 2020, our results of operations for the three months ended March 31, 2019 and 2020, and our cash flows for the three months ended March 31, 2019 and 2020. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020.
These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC.
Use of Estimates
Preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
As of March 31, 2020, the impact of the outbreak of COVID-19 continues to unfold. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods.
Accounts Receivable
Our payment terms for accounts receivable vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customers, we require payment before the products or services are delivered to the customer.
8

Alphabet Inc.
We maintain an allowance for credit losses for expected uncollectible 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 Statements of 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 and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.
For the three months ended March 31, 2020, our assessment considered business and market disruptions caused by COVID-19 and estimates of expected emerging credit and collectibility trends. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict causing variability and volatility that may have a material impact on our allowance for credit losses in future periods. The allowance for credit losses on accounts receivable was $275 million and $717 million as of December 31, 2019 and March 31, 2020, respectively.
Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-13 ("ASU 2016-13") "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to certain available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes result in earlier recognition of credit losses. We adopted ASU 2016-13 using the modified retrospective approach as of January 1, 2020. The cumulative effect upon adoption was not material to our consolidated financial statements. See Note 3 for the effect on our consolidated financial statements for the three months ended March 31, 2020.
Prior Period Reclassifications
Certain amounts in prior periods have been reclassified to conform with current period presentation. Hedging gains (losses), which were previously included in Google revenues, are now reported separately as a component of total revenues for all periods presented. See Note 2 for further details.
Note 2. Revenues
Disaggregated Revenues
The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Certain amounts in prior periods have been reclassified to conform with current period presentation.
Three Months Ended
March 31,
20192020
Google Search & other$22,547  $24,502  
YouTube ads(1)
3,025  4,038  
Google properties25,572  28,540  
Google Network Members' properties5,015  5,223  
Google advertising30,587  33,763  
Google Cloud1,825  2,777  
Google other(1)
3,620  4,435  
Google revenues36,032  40,975  
Other Bets revenues170  135  
Hedging gains (losses)137  49  
Total revenues$36,339  $41,159  
(1)  YouTube non-advertising revenues are included in Google other revenues.
9

Alphabet Inc.
The following table presents our revenues disaggregated by geography, based on the addresses of our customers (in millions, unaudited):
 Three Months Ended
March 31,
 20192020
United States$16,532  45 %$18,870  46 %
EMEA(1)
11,668  33  12,845  31  
APAC(1)
6,096  17  7,238  18  
Other Americas(1)
1,906  5  2,157  5  
Hedging gains (losses)137   49   
Total revenues$36,339  100 %$41,159  100 %
(1) Regions represent Europe, the Middle East, and Africa ("EMEA"); Asia-Pacific ("APAC"); and Canada and Latin America ("Other Americas").
Deferred Revenues
We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. The increase in the deferred revenue balance for the three months ended March 31, 2020 was primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $1.0 billion of revenues recognized that were included in the deferred revenue balance as of December 31, 2019.
Additionally, we have performance obligations associated with commitments in customer contracts, primarily related to Google Cloud, for future services that have not yet been recognized in revenue. This includes related deferred revenue currently recorded and amounts that will be invoiced in future periods. As of March 31, 2020, the amount not yet recognized in revenue from these commitments is $12.8 billion, which reflects our assessment of relevant contract terms and expectations of our customers’ intent and ability to utilize our services. This amount excludes contracts (i) with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. We expect to recognize approximately half over the next 24 months with the remaining thereafter. However, the amount and timing of revenue recognition is largely driven by customer utilization, which could impact our estimate of the remaining amount of commitments and when we expect to recognize such revenues.
Note 3. Financial Instruments
Debt Securities
We classify and account for our marketable debt securities as available-for-sale and carry these securities at fair value.
We report the unrealized gains and losses, net of taxes, as a component of stockholders' equity, except for certain unrealized gains and losses recorded in other income (expense), net, described below.
For debt securities in an unrealized loss position, we determine whether a credit loss exists. The estimate of credit loss is determined by considering available information relevant to the collectibility of the security and information about past events, current conditions, and reasonable and supportable forecasts. The allowance for credit loss is recorded as a charge to other income (expense), net, not to exceed the amount of the unrealized loss. Any excess unrealized loss greater than the credit loss at a security level is recognized in accumulated other comprehensive income ("AOCI"). We assess expected credit losses at the end of each reporting period and adjust the allowance through other income (expense), net.
For certain debt securities we have elected the fair value option for which changes in fair value are recorded in other income (expense), net. The fair value option was elected for these securities to align with the unrealized gains and losses from related derivative contracts. Unrealized net loss related to debt securities still held where we have elected the fair value option was $9 million for the period ended March 31, 2020. As of March 31, 2020 the fair value was $1.9 billion. Balances prior to the period ended March 31, 2020 were not material.
We classify our marketable debt securities within Level 2 in the fair value hierarchy because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value.
10

Alphabet Inc.
The following tables summarize our debt securities, for which we did not elect the fair value option, by significant investment categories as of December 31, 2019 and March 31, 2020 (in millions):
 As of December 31, 2019
 Adjusted
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Cash and Cash
Equivalents
Marketable
Securities
Level 2:
Time deposits(1)
$2,294  $0  $0  $2,294  $2,294  $0  
Government bonds55,033  434  (30) 55,437  4,518  50,919  
Corporate debt securities27,164  337  (3) 27,498  44  27,454  
Mortgage-backed and asset-backed securities19,453  96  (41) 19,508  0  19,508  
Total$103,944  $867  $(74) $104,737  $6,856  $97,881  

 As of March 31, 2020
 Adjusted
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Cash and Cash
Equivalents
Marketable
Securities
(unaudited)
Level 2:
Time deposits(1)
$2,195  $0  $0  $2,195  $2,195  $0  
Government bonds50,350  1,162  (50) 51,462  3,668  47,794  
Corporate debt securities26,545  154  (360) 26,339  13  26,326  
Mortgage-backed and asset-backed securities18,576  287  (91) 18,772  0  18,772  
Total$97,666  $1,603  $(501) $98,768  $5,876  $92,892  
(1)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 $46 million and $257 million for the three months ended March 31, 2019 and 2020, respectively. We recognized gross realized losses of $48 million and $39 million for the three months ended March 31, 2019 and 2020, respectively. We reflect these gains and losses as a component of other income (expense), net.
The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions, unaudited):
As of
March 31, 2020
Due in 1 year$24,209  
Due in 1 year through 5 years54,662  
Due in 5 years through 10 years3,080  
Due after 10 years12,820  
Total$94,771  
11

Alphabet Inc.
The following tables present fair values and gross unrealized losses recorded to AOCI as of December 31, 2019 and March 31, 2020, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):
 As of December 31, 2019
 Less than 12 Months12 Months or GreaterTotal
 Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
Government bonds$6,752  $(20) $4,590  $(10) $11,342  $(30) 
Corporate debt securities1,665  (2) 978  (1) 2,643  (3) 
Mortgage-backed and asset-backed securities4,536  (13) 2,835  (28) 7,371  (41) 
Total$12,953  $(35) $8,403  $(39) $21,356  $(74) 

 As of March 31, 2020
 Less than 12 Months12 Months or GreaterTotal
 Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
(unaudited)
Government bonds$4,168  $(50) $79  $0  $4,247  $(50) 
Corporate debt securities15,561  (232) 113  (1) 15,674  (233) 
Mortgage-backed and asset-backed securities4,796  (85) 326  (6) 5,122