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Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures
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The following table presents certain non-GAAP consolidated results before certain items (in millions, except share amounts which are reflected in thousands and per share amounts, unaudited):
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Three Months Ended March 31, 2015 Three Months Ended March 31, 2016
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GAAP
Actual
 Adjustments Non-GAAP Results GAAP
Actual
 Adjustments Non-GAAP Results
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Revenues $17,258 $17,258 $20,257 $20,257
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Cost of revenues 6,356 $160 (b) 6,196 7,648 $241 (b) 7,407
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Research and development 2,753 615 (b) 2,138 3,367 739 (b) 2,628
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Sales and marketing 2,065 205 (b) 1,860 2,387 242 (b) 2,145
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General and administrative 1,637 223 (b) 1,414 1,513 272 (b) 1,241
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Income from operations $4,447 $1,203 $5,650 $5,342 $1,494 $6,836
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Operating Margin (a) 25.8% 32.7% 26.4% 33.7%
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$1,203 (b) $1,494 (b)
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(257) (c) (453) (c)
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Net income 3,515 $946 4,461 4,207 $1,041 5,248
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Diluted net income per share for Class A and B common stock and Class C capital stock $5.10 $6.47 $6.02 $7.50
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Shares used in per share calculation - diluted 689,498 689,498 699,311 699,311
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(a) Operating margin is defined as income from operations divided by revenues.
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Non-GAAP operating margin is defined as non-GAAP income from operations divided by revenues.
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(b) To eliminate SBC expense, excluding expenses related to awards that will ultimately settle in cash.
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(c) To eliminate income tax effects related to SBC, which includes the incremental benefits recognized resulting from the adoption of new accounting guidance beginning in Q1 2016.
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Non-GAAP operating income and operating margin. We define non-GAAP operating income as income from operations excluding expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC expense, and as applicable, other special items so that Alphabet's management and investors can compare Alphabet's recurring core business operating results over multiple periods. For purposes of determining non-GAAP operating income, we define SBC as awards accounted for under FASB ASC Topic 718 that we expect to settle in stock. SBC expense does not include expenses related to awards that will ultimately settle in cash. Alphabet's management believes that providing a non-GAAP financial measure that excludes SBC expense allows investors to make meaningful comparisons between Alphabet's recurring core business operating results and those of other companies, as well as providing Alphabet's management with an important tool for financial and operational decision making and for evaluating Alphabet's own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC expense, that are recurring. SBC expense has been and will continue to be for the foreseeable future a significant recurring expense in Alphabet's business. Second, SBC is an important part of our employees' compensation. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.
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Non-GAAP net income and diluted EPS. We define non-GAAP net income as net income excluding SBC expense, net of the SBC related tax benefits, and, as applicable, other special items less the related tax effects. The tax effects of such items are calculated based on the tax deductible portion related to SBC and, as applicable, other special items, and applying the entity-specific, U.S. federal and blended state tax rates.  We define non-GAAP diluted EPS as non-GAAP net income divided by total weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that Alphabet uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP diluted EPS the SBC related tax benefits, and, as applicable, the tax effects of other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Alphabet's use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted EPS and evaluating non-GAAP net income and non-GAAP diluted EPS together with net income and diluted EPS calculated in accordance with GAAP.