FACEBOOK INC, 10-Q filed on 11/1/2013
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2013
Oct. 29, 2013
Class A Common Stock
Oct. 29, 2013
Class B Common Stock
Document Information
 
 
 
Document Type
10-Q 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Sep. 30, 2013 
 
 
Document Fiscal Year Focus
2013 
 
 
Document Fiscal Period Focus
Q3 
 
 
Trading Symbol
FB 
 
 
Entity Registrant Name
FACEBOOK INC 
 
 
Entity Central Index Key
0001326801 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Non-accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
1,874,048,211 
580,779,919 
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Current assets:
 
 
Cash and cash equivalents
$ 3,100 
$ 2,384 
Marketable securities
6,228 
7,242 
Accounts receivable, net of allowances for doubtful accounts of $31 and $22 as of September 30, 2013 and December 31, 2012, respectively
872 
719 
Income tax refundable
7 
451 
Prepaid expenses and other current assets
342 
471 
Total current assets
10,549 
11,267 
Property and equipment, net
2,685 
2,391 
Goodwill and intangible assets, net
1,609 
1,388 
Other assets
90 
57 
Total assets
14,933 
15,103 
Current liabilities:
 
 
Accounts payable
36 
65 
Platform partners payable
171 
169 
Accrued expenses and other current liabilities
453 
423 
Deferred revenue and deposits
36 
30 
Current portion of capital lease obligations
288 
365 
Total current liabilities
984 
1,052 
Capital lease obligations, less current portion
287 
491 
Long-term debt
0 
1,500 
Other liabilities
614 
305 
Total liabilities
1,885 
3,348 
Stockholders' equity:
 
 
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 1,869 million and 1,671 million shares issued and outstanding, including 6 million and 2 million outstanding shares subject to repurchase as of September 30, 2013 and December 31, 2012, respectively; 4,141 million Class B shares authorized, 584 million and 701 million shares issued and outstanding, including 7 million and 11 million outstanding shares subject to repurchase as of September 30, 2013 and December 31, 2012, respective
0 
0 
Additional paid-in capital
10,399 
10,094 
Accumulated other comprehensive income
13 
2 
Retained earnings
2,636 
1,659 
Total stockholders' equity
13,048 
11,755 
Total liabilities and stockholders' equity
$ 14,933 
$ 15,103 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Current assets:
 
 
Accounts receivable, allowances for doubtful accounts
$ 31 
$ 22 
Stockholders' equity:
 
 
Common stock, par value (in dollars per share)
$ 0.000006 
$ 0.000006 
Class A Common Stock
 
 
Stockholders' equity:
 
 
Common stock, shares authorized
5,000,000,000 
5,000,000,000 
Common stock, shares issued
1,869,000,000 
1,671,000,000 
Common stock, shares outstanding
1,869,000,000 
1,671,000,000 
Common stock, outstanding shares subject to repurchase
6,000,000 
2,000,000 
Class B Common Stock
 
 
Stockholders' equity:
 
 
Common stock, shares authorized
4,141,000,000 
4,141,000,000 
Common stock, shares issued
584,000,000 
701,000,000 
Common stock, shares outstanding
584,000,000 
701,000,000 
Common stock, outstanding shares subject to repurchase
7,000,000 
11,000,000 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Revenue
$ 2,016 
$ 1,262 
$ 5,286 
$ 3,504 
Costs and expenses:
 
 
 
 
Cost of revenue
507 
322 
1,384 
967 
Research and development
369 
244 
1,006 
1,102 
Marketing and sales
233 
168 
704 
703 
General and administrative
171 
151 
520 
717 
Total costs and expenses
1,280 
885 
3,614 
3,489 
Income from operations
736 
377 
1,672 
15 
Interest and other income (expense), net:
 
 
 
 
Interest expense
(21)
(11)
(50)
(35)
Other income, net
11 
6 
2 
9 
Income (loss) before provision for income taxes
726 
372 
1,624 
(11)
Provision for income taxes
301 
431 
647 
0 
Net income (loss)
425 
(59)
977 
(11)
Less: Net income attributable to participating securities
3 
0 
6 
0 
Net income (loss) attributable to Class A and Class B common stockholders
422 
(59)
971 
(11)
Earnings (loss) per share attributable to Class A and Class B common stockholders:
 
 
 
 
Basic (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.40 
$ (0.01)
Diluted (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.39 
$ (0.01)
Weighted average shares used to compute earnings (loss) per share attributable to Class A and Class B common stockholders:
 
 
 
 
Number of shares used for basic EPS computation (in shares)
2,430 
2,420 
2,408 
1,884 
Number of shares used for diluted EPS computation (in shares)
2,528 
2,420 
2,504 
1,884 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
239 
179 
633 
1,388 
Cost of revenue
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
12 
8 
31 
79 
Research and development
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
164 
114 
432 
719 
Marketing and sales
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
34 
28 
91 
279 
General and administrative
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
$ 29 
$ 29 
$ 79 
$ 311 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income (loss)
$ 425 
$ (59)
$ 977 
$ (11)
Other comprehensive income (loss):
 
 
 
 
Change in foreign currency translation adjustment
38 
21 
7 
(1)
Change in unrealized gain/loss on available-for-sale investments, net of tax
4 
2 
1 
1 
Change in unrealized gain/loss on derivative, net of tax
(1)
0 
3 
0 
Comprehensive income (loss)
$ 466 
$ (36)
$ 988 
$ (11)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Cash flows from operating activities
 
 
Net income (loss)
$ 977 
$ (11)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
Depreciation and amortization
737 
425 
Lease abandonment expense
108 
7 
Loss on disposal or write-off of equipment
39 
8 
Share-based compensation
633 
1,388 
Deferred income taxes
21 
(434)
Tax benefit from share-based award activity
277 
854 
Excess tax benefit from share-based award activity
(285)
(854)
Changes in assets and liabilities:
 
 
Accounts receivable
(145)
(90)
Income tax refundable
444 
(567)
Prepaid expenses and other current assets
(11)
24 
Other assets
(35)
0 
Accounts payable
(17)
20 
Platform partners payable
2 
(16)
Accrued expenses and other current liabilities
(105)
155 
Deferred revenue and deposits
6 
(5)
Other liabilities
345 
27 
Net cash provided by operating activities
2,991 
931 
Cash flows from investing activities
 
 
Purchases of property and equipment
(879)
(1,037)
Purchases of marketable securities
(4,364)
(8,590)
Sales of marketable securities
2,433 
571 
Maturities of marketable securities
2,954 
2,413 
Investments in non-marketable equity securities
(1)
(3)
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets
(237)
(911)
Change in restricted cash and deposits
4 
(2)
Net cash used in investing activities
(90)
(7,559)
Cash flows from financing activities
 
 
Net proceeds from issuance of common stock
0 
6,760 
Taxes paid related to net share settlement of equity awards
(706)
0 
Proceeds from exercise of stock options
20 
9 
Repayments of Long-term Debt
(1,500)
0 
Proceeds from sale and lease-back transactions
0 
205 
Principal payments on capital lease obligations
(291)
(231)
Excess tax benefit from share-based award activity
285 
854 
Net cash (used in) provided by financing activities
(2,192)
7,597 
Effect of exchange rate changes on cash and cash equivalents
7 
(3)
Net increase in cash and cash equivalents
716 
966 
Cash and cash equivalents at beginning of period
2,384 
1,512 
Cash and cash equivalents at end of period
3,100 
2,478 
Cash paid during the period for:
 
 
Interest
33 
30 
Income taxes
61 
184 
Cash received during the period for:
 
 
Income taxes
419 
0 
Non-cash investing and financing activities:
 
 
Fair value of shares issued related to acquisitions of businesses and other assets
77 
275 
Net Change in Accounts Payable Accrued Expenses And Other Current Liabilities
 
 
Non-cash investing and financing activities:
 
 
Property and equipment expenditures incurred but not yet paid
31 
(80)
Capital Lease Obligations
 
 
Non-cash investing and financing activities:
 
 
Property and equipment expenditures incurred but not yet paid
$ 11 
$ 251 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
The condensed consolidated balance sheet as of December 31, 2012 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.
The condensed consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2013.
There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 that have had a material impact on our condensed consolidated financial statements and related notes.
Use of Estimates
Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, collectability of accounts receivable, contingent liabilities, fair value of financial instruments, fair value of acquired intangible assets and goodwill, useful lives of intangible assets and property and equipment, and income taxes. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.
Reclassifications
We have reclassified certain prior period amounts within our condensed consolidated statements of cash flows to conform to our current year presentation.
Recently Issued and Adopted Accounting Pronouncement 

Comprehensive Income

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU 2013-02) which is effective prospectively for public companies for reporting periods beginning after December 15, 2012. This new accounting standard improves the reporting of reclassifications out of accumulated other comprehensive income (AOCI) by requiring an entity to report the effect of significant reclassifications out of AOCI on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. We adopted this new guidance on January 1, 2013 and the adoption did not have a material effect on our condensed consolidated financial statements.
Acquisitions
Acquisitions
Acquisitions
In the nine months ended September 30, 2013, we completed several business acquisitions for total consideration of $260 million, consisting of approximately $184 million in cash and 3 million vested shares of our Class A common stock which are not conditioned upon continuous employment. In addition, we issued approximately 6 million shares of Class A common stock in connection with such acquisitions, which are conditioned upon continuous employment. These shares have been excluded from purchase consideration and will be recognized over the required service period as share-based compensation expense.
These acquisitions were not material to our condensed consolidated financial statements, either individually or in the aggregate. Pro forma results of operations related to our acquisitions during the nine months ended September 30, 2013 have not been presented because they are not material to our condensed consolidated statements of operations, either individually or in the aggregate.
The following table summarizes the allocation of estimated fair values of the net assets acquired during the nine months ended September 30, 2013, including the related estimated useful lives, where applicable:
 
in millions
 
Estimated useful lives (in years)
Amortizable intangible assets:
 
 
 
Acquired technology
$
68

 
3 - 7
Tradename and other
26

 
2 - 10
Deferred tax liabilities
(9
)
 
 
Net assets acquired
$
85

 
 
Goodwill
175

 
 
Total fair value consideration
$
260

 
 

Goodwill generated from all business acquisitions completed during the nine months ended September 30, 2013 is primarily attributable to expected synergies from future growth and potential monetization opportunities and $66 million of this goodwill is deductible for tax purposes.
In the nine months ended September 30, 2013, we also acquired $58 million of patents and other intangible assets. Patents acquired during the nine months ended September 30, 2013 have estimated useful lives ranging from seven to 15 years from the dates of acquisition.
Earnings (Loss) per Share
Earnings (Loss) per Share
Earnings (Loss) per Share
We compute earnings (loss) per share (EPS) of Class A and Class B common stock using the two-class method required for participating securities. Prior to the date of our initial public offering (IPO) in May 2012, we considered all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. Immediately after the completion of our IPO, all outstanding shares of convertible preferred stock converted to Class B common stock. Additionally, we consider restricted stock awards to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares.
Undistributed earnings allocated to these participating securities are subtracted from net income in determining net income attributable to common stockholders. Net losses are not allocated to these participating securities. Basic EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding, adjusted for outstanding shares that are subject to repurchase.
For the calculation of diluted EPS, net income (loss) attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities, including awards under our equity compensation plans. In addition, the computation of the diluted EPS of Class A common stock assumes the conversion from Class B common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock. Diluted EPS attributable to common stockholders is computed by dividing the resulting net income (loss) attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

Restricted stock units (RSUs) granted prior to January 1, 2011 vest upon the satisfaction of both a service condition and a liquidity condition. The liquidity condition was satisfied six months following the completion of our IPO. Our IPO did not occur until May 2012. Therefore, subsequent to the completion of our IPO in May 2012, these RSUs were included in our basic and diluted EPS calculation. RSUs granted on or after January 1, 2011 (Post-2011 RSUs) are not subject to a liquidity condition in order to vest and are thus included in the calculation of diluted EPS.
We have excluded 15 million Post-2011 RSUs from the EPS calculation for the nine months ended September 30, 2013 because the impact would be anti-dilutive. Shares excluded from the calculation were not material for the three months ended September 30, 2013. For the three and nine months ended September 30, 2012 in which we reported a net loss, we did not allocate any loss to participating securities in the basic and diluted EPS computation. Additionally, we did not include employee stock options, unvested RSUs, and shares subject to repurchase in our calculation of diluted EPS for these periods because the impact of these awards would have been anti-dilutive.
Basic and diluted EPS are the same for each class of common stock because they are entitled to the same liquidation and dividend rights.
The numerators and denominators of the basic and diluted EPS computations for our common stock were calculated as follows (in millions, except per share amounts): 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
Basic EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
320

 
$
105

 
$
(19
)
 
$
(40
)
 
$
717

 
$
260

 
$
(3
)
 
$
(8
)
Less: Net income attributable to participating securities
2

 
1

 
—

 
—

 
4

 
2

 
—

 
—

Net income (loss) attributable to common stockholders
$
318

 
$
104

 
$
(19
)
 
$
(40
)
 
$
713

 
$
258

 
$
(3
)
 
$
(8
)
Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
1,833

 
611

 
794

 
1,632

 
1,773

 
649

 
431

 
1,457

Less: Shares subject to repurchase
6

 
8

 
1

 
5

 
5

 
9

 
1

 
3

Number of shares used for basic EPS computation
1,827

 
603

 
793

 
1,627

 
1,768

 
640

 
430

 
1,454

Basic EPS
$
0.17

 
$
0.17

 
$
(0.02
)
 
$
(0.02
)
 
$
0.40

 
$
0.40

 
$
(0.01
)
 
$
(0.01
)
Diluted EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
318

 
$
104

 
$
(19
)
 
$
(40
)
 
$
713

 
$
258

 
$
(3
)
 
$
(8
)
Reallocation of net income attributable to participating securities
3

 
—

 
—

 
—

 
6

 
—

 
—

 
—

Reallocation of net income (loss) as a result of conversion of Class B to Class A common stock
104

 
—

 
(40
)
 
—

 
258

 
—

 
(8
)
 
—

Reallocation of net income to Class B common stock
—

 
13

 
—

 
—

 
—

 
29

 
—

 
—

Net income (loss) attributable to common stockholders for diluted EPS
$
425

 
$
117

 
$
(59
)
 
$
(40
)
 
$
977

 
$
287

 
$
(11
)
 
$
(8
)
Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares used for basic EPS computation
1,827

 
603

 
793

 
1,627

 
1,768

 
640

 
430

 
1,454

Conversion of Class B to Class A common stock
603

 
—

 
1,627

 
—

 
640

 
—

 
1,454

 
—

Weighted average effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee stock options
59

 
59

 
—

 
—

 
69

 
69

 
—

 
—

RSUs
33

 
33

 
—

 
—

 
21

 
21

 
—

 
—

Shares subject to repurchase
6

 
6

 
—

 
—

 
6

 
6

 
—

 
—

Number of shares used for diluted EPS computation
2,528

 
701

 
2,420

 
1,627

 
2,504

 
736

 
1,884

 
1,454

Diluted EPS
$
0.17

 
$
0.17

 
$
(0.02
)
 
$
(0.02
)
 
$
0.39

 
$
0.39

 
$
(0.01
)
 
$
(0.01
)
Cash and Cash Equivalents, and Marketable Securities
Cash and Cash Equivalents, and Marketable Securities
Cash, Cash Equivalents and Marketable Securities
The following table sets forth the cash, cash equivalents and marketable securities (in millions):
 
September 30, 2013
 
December 31, 2012
Cash and cash equivalents:
 
 
 
Cash
$
898

 
$
1,513

Money market funds
2,202

 
871

Total cash and cash equivalents
3,100

 
2,384

Marketable securities:
 
 
 
U.S. government securities
4,157

 
5,165

U.S. government agency securities
2,071

 
2,077

Total marketable securities
6,228

 
7,242

Total cash, cash equivalents and marketable securities
$
9,328

 
$
9,626


The gross unrealized gains or losses on our marketable securities as of September 30, 2013 and December 31, 2012 were not significant. In addition, there were no securities in a continuous loss position for 12 months or longer as of September 30, 2013 and December 31, 2012.
The following table classifies our marketable securities by contractual maturities (in millions):  
 
September 30, 2013
Due in one year
$
3,272

Due in one to two years
2,956

Total
$
6,228

Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
Assets and liabilities measured at fair value on a recurring basis are summarized below (in millions): 
 
 
 
Fair Value Measurement at
Reporting Date Using
Description
September 30, 2013
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
2,202

 
$
2,202

 
$
—

 
$
—

Marketable securities:
 
 
 
 
 
 
 
U.S. government securities
4,157

 
4,157

 
—

 
—

U.S. government agency securities
2,071

 
2,071

 
—

 
—

Total cash equivalents and marketable securities
$
8,430

 
$
8,430

 
$
—

 
$
—

 
 
 
Fair Value Measurement at
Reporting Date Using
Description
December 31, 2012
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
871

 
$
871

 
$
—

 
$
—

Marketable securities:
 
 
 
 
 
 
 
U.S. government securities
5,165

 
5,165

 
—

 
—

U.S. government agency securities
2,077

 
2,077

 
—

 
—

Total cash equivalents and marketable securities
$
8,113

 
$
8,113

 
$
—

 
$
—

 
 
 
 
 
 
 
 
Other current liabilities:
 
 
 
 
 
 
 
Contingent consideration liability
$
4

 
$
—

 
$
—

 
$
4

 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
Derivative financial instrument
$
4

 
$
—

 
$
4

 
$
—


In August 2013, we settled our Level 3 contingent consideration liability and terminated our Level 2 derivative financial instrument related to our interest rate swap agreement. See Note 8 in these notes to the condensed consolidated financial statements for additional information on the termination of our interest swap agreement.
Property and Equipment
Property and Equipment
Property and Equipment
Property and equipment consisted of the following (in millions): 
 
September 30,
2013
 
December 31,
2012
Network equipment
$
2,245

 
$
1,912

Land
41

 
36

Buildings
975

 
594

Leasehold improvements
198

 
194

Computer software, office equipment and other
107

 
93

Construction in progress
255

 
444

Total
3,821

 
3,273

Less: Accumulated depreciation
(1,136
)
 
(882
)
Property and equipment, net
$
2,685

 
$
2,391


Construction in progress includes costs primarily related to the construction of data centers and equipment located in our data centers in Oregon, North Carolina, Iowa and Sweden and ongoing construction to expand our corporate headquarters in Menlo Park, California. Interest capitalized during the periods presented was not material.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the nine months ended September 30, 2013 are as follows (in millions): 
Balance as of December 31, 2012
$
587

Goodwill acquired
175

Balance as of September 30, 2013
$
762

Intangible assets consisted of the following (in millions):
 
 
 
September 30, 2013
 
December 31, 2012
 
Useful lives from date of acquisitions (in years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Amortizable intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired patents
3 - 18
 
$
739

 
$
(120
)
 
$
619

 
$
684

 
$
(53
)
 
$
631

Acquired technology
2 - 10
 
201

 
(55
)
 
146

 
133

 
(32
)
 
101

Tradename and other
2 - 10
 
123

 
(41
)
 
82

 
94

 
(25
)
 
69

Total
 
 
$
1,063

 
$
(216
)
 
$
847

 
$
911

 
$
(110
)
 
$
801


Amortization expense of intangible assets was $37 million and $106 million for the three and nine months ended September 30, 2013, respectively, and $31 million and $44 million for the three and nine months ended September 30, 2012, respectively.
As of September 30, 2013, estimated amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):
The remainder of 2013
$
37

2014
145

2015
136

2016
124

2017
106

2018
72

Thereafter
227

 
$
847

Long-term Debt
Long-term Debt
Long-term Debt
In August 2013, we fully repaid the $1.5 billion outstanding principal balance of our three-year unsecured term loan facility.
In connection with our termination of the unsecured term loan facility, we also terminated our $1.5 billion interest rate swap agreement which converted the one-month LIBOR rate on the corresponding notional amount of debt to a fixed interest rate to hedge our exposure to interest rate fluctuation. We have reclassified all amounts related to the interest rate swap in AOCI to interest expense. For the three and nine months ended September 30, 2013, the amount in AOCI reclassified to interest expense was not material. The realized gain as a result of the termination of our interest rate swap was also not material.
Concurrently, we also terminated our unsecured five-year revolving credit facility that allowed us to borrow up to $5 billion. We had not drawn down on this facility.
In August 2013, in connection with the termination of these facilities, we entered into a five-year senior unsecured revolving credit facility (2013 Revolving Credit Facility) that allows us to borrow up to $6.5 billion to fund working capital and general corporate purposes with interest payable on the borrowed amounts set at LIBOR plus 1.0%, as well as an annual commitment fee of 0.10% on the daily undrawn balance of the facility. We paid origination fees at closing of the 2013 Revolving Credit Facility, which fees are being amortized over the term of the facility. Any amounts outstanding under this facility will be due and payable on August 15, 2018. As of September 30, 2013, no amounts had been drawn down and we were in compliance with the covenants under this facility.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Leases
We entered into various capital lease arrangements to obtain property and equipment for our operations. Additionally, on occasion we purchased property and equipment for which we subsequently obtained capital financing under sale-leaseback transactions. These agreements are typically for three years, except for a building lease which is for 15 years, with interest rates ranging from 1% to 13%. The leases are secured by the underlying leased buildings and equipment. We also entered into various non-cancelable operating lease agreements for certain of our offices, equipment, land and data centers with original lease periods expiring between 2013 and 2027. We are committed to pay a portion of the related actual operating expenses under certain of these lease agreements. Certain of these arrangements have free rent periods and/or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis.
During the three and nine months ended September 30, 2013, we recognized lease abandonment expense of $43 million and $108 million, respectively, primarily due to exiting certain leased data centers resulting from the migration of operations to our own data centers. Lease abandonment expense for the same periods in 2012 was not material.
Operating lease expense was $28 million and $101 million for the three and nine months ended September 30, 2013, respectively, and $50 million and $151 million for the three and nine months ended September 30, 2012, respectively.
Contingencies
Beginning on May 22, 2012, multiple putative class actions, derivative actions, and individual actions were filed in state and federal courts in the United States and in other jurisdictions against us, our directors, and/or certain of our officers alleging violation of securities laws or breach of fiduciary duties in connection with our IPO and seeking unspecified damages. We believe these lawsuits are without merit, and we intend to continue to vigorously defend them. On October 4, 2012, on our motion, the vast majority of the cases in the United States, along with multiple cases filed against The NASDAQ OMX Group, Inc. and The Nasdaq Stock Market LLC (collectively referred to herein as NASDAQ) alleging technical and other trading-related errors by NASDAQ in connection with our IPO, were ordered centralized for coordinated or consolidated pre-trial proceedings in the United States District Court for the Southern District of New York. On February 13, 2013, the court granted our motion to dismiss four derivative actions against our directors and certain of our officers with leave to amend. On October 8, 2013, the court heard argument on our motion to dismiss the consolidated securities class action, as well as our motion to dismiss, and the plaintiffs' motion to remand to state court, certain other derivative actions. In addition, the events surrounding our IPO have become the subject of various government inquiries, and we are cooperating with those inquiries.
In the opinion of management, there was not at least a reasonable possibility that we may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies relating to the matters set forth above. However, the outcome of litigation is inherently uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against us in the same reporting period for amounts in excess of management's expectations, our condensed consolidated financial statements of a particular reporting period could be materially adversely affected.
We are also party to various legal proceedings and claims that arise in the ordinary course of business. Among these pending legal matters, one case is currently scheduled for trial in the near future. Rembrandt Social Media, LP v. Facebook, Inc., et al., is scheduled to begin trial on December 10, 2013, in the U.S. District Court for the Eastern District of Virginia. In the Rembrandt case, the plaintiff alleges that we infringe certain patents held by the plaintiff. The plaintiff is seeking significant monetary damages and equitable relief.

We believe the claims made by the plaintiff in the Rembrandt case are without merit, and we intend to defend ourselves vigorously. Because the outcome of litigation is inherently uncertain, we believe it is reasonably possible that we may incur a loss in connection with this matter. However, we do not believe such a loss is probable and we are unable to estimate a reasonable range of loss, if any, that could result were there to be an adverse final decision, and we therefore have not accrued a liability for this matter. If an unfavorable outcome were to occur in this case, it is possible that the impact could be material to our results of operations in the period(s) in which any such outcome becomes probable and estimable.
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
Share-based Compensation Plans
We maintain three share-based employee compensation plans: the 2012 Equity Incentive Plan (2012 Plan), the 2005 Stock Plan and the 2005 Officers' Stock Plan (collectively, Stock Plans). Our 2012 Plan serves as the successor to our 2005 Stock Plan and provides for the issuance of incentive and nonstatutory stock options, restricted stock awards, stock appreciation rights, RSUs, performance shares and stock bonuses to qualified employees, directors and consultants. The maximum term for stock options granted under the 2012 Plan may not exceed ten years from the date of grant. Our 2012 Plan will terminate ten years from the date of approval unless it is terminated earlier by our compensation committee. We have initially reserved 25,000,000 shares of our Class A common stock for issuance under our 2012 Plan, which amount increases on the first day of January of each of 2013 through 2022 based on a formula or as determined by the board of directors. Our board of directors elected not to increase the number of shares reserved for issuance in 2013. In addition, shares available for grant under the 2005 Stock Plan, which were reserved but not issued or subject to outstanding awards under the 2005 Stock Plan as of the effective date of our IPO, were added to the reserves of the 2012 Plan and shares that are withheld in connection with the net settlement of RSUs are also added to the reserves of the 2012 Plan.
In November 2005, we issued a nonstatutory stock option to our CEO to purchase 120,000,000 shares of our Class B common stock under the 2005 Officers' Stock Plan. As of September 30, 2013, the option had been partially exercised and the remaining option to purchase 60,000,000 shares is outstanding and fully vested. This option will expire on November 7, 2015. No options were available for future issuance under the 2005 Officers' Stock Plan.
The following table summarizes the stock option activity under the Stock Plans during the nine months ended September 30, 2013: 
 
Shares Subject to Options Outstanding
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(1)
 
(in thousands)
 
 
 
(in years)
 
(in millions)
Balance as of December 31, 2012
122,821

 
$
0.85

 
3.79
 
$
3,166

Stock options exercised
(38,293
)
 
0.54

 
 
 
 
Stock options forfeited/cancelled
(216
)
 
1.85

 
 
 
 
Balance as of September 30, 2013
84,312

 
$
0.99

 
2.89
 
$
4,152

Stock options vested and expected to vest as of September 30, 2013
84,287

 
$
0.99

 
2.89
 
$
4,151

Stock options exercisable as of September 30, 2013
78,593

 
$
0.37

 
2.62
 
$
3,920

(1)
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of our Class A common stock of $50.23 on September 30, 2013.
The aggregate intrinsic value of the options exercised was $586 million and $1.17 billion for the three and nine months ended September 30, 2013, respectively, and $10 million and $2.99 billion for the three and nine months ended September 30, 2012, respectively.
The following table summarizes the activities for our unvested RSUs for the nine months ended September 30, 2013:
 
Unvested RSUs
 
Number of Shares
 
Weighted Average Grant Date Fair Value
 
(in thousands)
 
 
Unvested at December 31, 2012
113,044

 
$
21.38

Granted
49,048

 
28.14

Vested
(39,523
)
 
16.37

Forfeited
(11,375
)
 
24.11

Unvested at September 30, 2013
111,194

 
$
25.87


As of September 30, 2013, there was $2.85 billion of unrecognized share-based compensation expense, of which $2.53 billion is related to RSUs and $320 million is related to restricted shares and stock options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately three years.
Income Taxes
Income Taxes
Income Taxes
Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter we update our estimate of the annual effective tax rate, and if our estimated annual tax rate changes, we make a cumulative adjustment in that quarter. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, are subject to significant volatility due to several factors, including our ability to accurately predict our income (loss) before provision for income taxes in multiple jurisdictions, including the portions of our share-based compensation that will not generate tax benefits, and the effects of acquisitions and the integration of those acquisitions. In addition, our effective tax rate can be more or less volatile based on the amount of income before provision for income taxes. For example, the effect of non-deductible share-based compensation expense on our effective tax rate is significantly greater when our income before provision for income taxes is lower.
Our effective tax rate has exceeded the U.S. statutory rate primarily because of the effect of non-deductible share-based compensation and losses arising outside the United States in jurisdictions where we do not receive a tax benefit. These losses were primarily due to the initial start-up costs incurred by our foreign subsidiaries to operate in certain foreign jurisdictions, including the costs incurred by those subsidiaries to license, develop, and use our intellectual property. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States, which will also be affected by our methodologies for valuing our intellectual property and intercompany transactions.
For the nine months ended September 30, 2013, the effect of the non-deductible share-based compensation expense and losses arising outside the United States in jurisdictions where we do not receive a tax benefit was largely offset by the recognition of a non-recurring tax benefit that we recorded in the first quarter of 2013 related to the reinstatement of the federal tax credit for research and development activities applicable to the year ended December 31, 2012.
We are subject to taxation in the United States and various other state and foreign jurisdictions. The material jurisdictions in which we are subject to potential examination include the United States and Ireland. We are under examination by the Internal Revenue Service (IRS) for our 2008, 2009 and 2010 tax years. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations, and we do not anticipate a significant impact to our gross unrecognized tax benefits within the next 12 months related to these years. Our 2011 and subsequent tax years remain subject to examination by the IRS and all tax years starting in 2008 remain subject to examination in Ireland. We remain subject to possible examinations or are undergoing audits in various other jurisdictions that are not anticipated to be material to our financial statements.
Our balances of gross unrecognized tax benefits were $751 million and $164 million as of September 30, 2013 and December 31, 2012, respectively. If the remaining balance of gross unrecognized tax benefits as of September 30, 2013 is realized in a future period, this would result in a tax benefit of $450 million within our provision of income taxes at such time. Our existing tax positions will continue to generate an increase in unrecognized tax benefits in future periods. 
Although the timing of the resolution, settlement, and closure of any audit is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years remaining that are subject to examination, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.
Geographical Information
Geographical Information
Geographical Information
Revenue by geography is based on the billing address of the marketer or Platform developer. The following tables set forth revenue and long-lived assets by geographic area (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
Revenue:
 
 
 
 
 
 
 
United States
$
940

 
$
665

 
$
2,438

 
$
1,789

Rest of the world (1)
1,076

 
597

 
2,848

 
1,715

Total revenue
$
2,016

 
$
1,262

 
$
5,286

 
$
3,504

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented
 
September 30,
2013
 
December 31,
2012
Long-lived assets:
 
 
 
United States
$
2,206

 
$
2,110

Sweden
395

 
220

Rest of the world (1)
84

 
61

Total long-lived assets
$
2,685

 
$
2,391

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total long-lived assets for any period presented
Summary of Significant Accounting Policies (Policies)
Basis of Presentation 
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
The condensed consolidated balance sheet as of December 31, 2012 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.
The condensed consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2013.
There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 that have had a material impact on our condensed consolidated financial statements and related notes.
Use of Estimates 
Use of Estimates
Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, collectability of accounts receivable, contingent liabilities, fair value of financial instruments, fair value of acquired intangible assets and goodwill, useful lives of intangible assets and property and equipment, and income taxes. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.
Reclassification 
Reclassifications
We have reclassified certain prior period amounts within our condensed consolidated statements of cash flows to conform to our current year presentation.
Recently Issued and Adopted Accounting Pronouncement 
Recently Issued and Adopted Accounting Pronouncement 

Comprehensive Income

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU 2013-02) which is effective prospectively for public companies for reporting periods beginning after December 15, 2012. This new accounting standard improves the reporting of reclassifications out of accumulated other comprehensive income (AOCI) by requiring an entity to report the effect of significant reclassifications out of AOCI on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. We adopted this new guidance on January 1, 2013 and the adoption did not have a material effect on our condensed consolidated financial statements.
Acquisitions (Tables)
Allocation of Estimated Fair Value of Assets Acquired and Liabilities Assumed
The following table summarizes the allocation of estimated fair values of the net assets acquired during the nine months ended September 30, 2013, including the related estimated useful lives, where applicable:
 
in millions
 
Estimated useful lives (in years)
Amortizable intangible assets:
 
 
 
Acquired technology
$
68

 
3 - 7
Tradename and other
26

 
2 - 10
Deferred tax liabilities
(9
)
 
 
Net assets acquired
$
85

 
 
Goodwill
175

 
 
Total fair value consideration
$
260

 
 
Earnings (Loss) per Share (Tables)
Numerators and Denominators of Basic and Diluted EPS Computations for Common Stock
The numerators and denominators of the basic and diluted EPS computations for our common stock were calculated as follows (in millions, except per share amounts): 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
Basic EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
320

 
$
105

 
$
(19
)
 
$
(40
)
 
$
717

 
$
260

 
$
(3
)
 
$
(8
)
Less: Net income attributable to participating securities
2

 
1

 
—

 
—

 
4

 
2

 
—

 
—

Net income (loss) attributable to common stockholders
$
318

 
$
104

 
$
(19
)
 
$
(40
)
 
$
713

 
$
258

 
$
(3
)
 
$
(8
)
Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
1,833

 
611

 
794

 
1,632

 
1,773

 
649

 
431

 
1,457

Less: Shares subject to repurchase
6

 
8

 
1

 
5

 
5

 
9

 
1

 
3

Number of shares used for basic EPS computation
1,827

 
603

 
793

 
1,627

 
1,768

 
640

 
430

 
1,454

Basic EPS
$
0.17

 
$
0.17

 
$
(0.02
)
 
$
(0.02
)
 
$
0.40

 
$
0.40

 
$
(0.01
)
 
$
(0.01
)
Diluted EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
318

 
$
104

 
$
(19
)
 
$
(40
)
 
$
713

 
$
258

 
$
(3
)
 
$
(8
)
Reallocation of net income attributable to participating securities
3

 
—

 
—

 
—

 
6

 
—

 
—

 
—

Reallocation of net income (loss) as a result of conversion of Class B to Class A common stock
104

 
—

 
(40
)
 
—

 
258

 
—

 
(8
)
 
—

Reallocation of net income to Class B common stock
—

 
13

 
—

 
—

 
—

 
29

 
—

 
—

Net income (loss) attributable to common stockholders for diluted EPS
$
425

 
$
117

 
$
(59
)
 
$
(40
)
 
$
977

 
$
287

 
$
(11
)
 
$
(8
)
Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares used for basic EPS computation
1,827

 
603

 
793

 
1,627

 
1,768

 
640

 
430

 
1,454

Conversion of Class B to Class A common stock
603

 
—

 
1,627

 
—

 
640

 
—

 
1,454

 
—

Weighted average effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee stock options
59

 
59

 
—

 
—

 
69

 
69

 
—

 
—

RSUs
33

 
33

 
—

 
—

 
21

 
21

 
—

 
—

Shares subject to repurchase
6

 
6

 
—

 
—

 
6

 
6

 
—

 
—

Number of shares used for diluted EPS computation
2,528

 
701

 
2,420

 
1,627

 
2,504

 
736

 
1,884

 
1,454

Diluted EPS
$
0.17

 
$
0.17

 
$
(0.02
)
 
$
(0.02
)
 
$
0.39

 
$
0.39

 
$
(0.01
)
 
$
(0.01
)
Cash and Cash Equivalents, and Marketable Securities (Tables)
Cash, Cash Equivalents and Marketable Securities 
The following table sets forth the cash, cash equivalents and marketable securities (in millions):
 
September 30, 2013
 
December 31, 2012
Cash and cash equivalents:
 
 
 
Cash
$
898

 
$
1,513

Money market funds
2,202

 
871

Total cash and cash equivalents
3,100

 
2,384

Marketable securities:
 
 
 
U.S. government securities
4,157

 
5,165

U.S. government agency securities
2,071

 
2,077

Total marketable securities
6,228

 
7,242

Total cash, cash equivalents and marketable securities
$
9,328

 
$
9,626

Marketable Securities by Contractual Maturities 
The following table classifies our marketable securities by contractual maturities (in millions):  
 
September 30, 2013
Due in one year
$
3,272

Due in one to two years
2,956

Total
$
6,228

Fair Value Measurements (Tables)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis are summarized below (in millions): 
 
 
 
Fair Value Measurement at
Reporting Date Using
Description
September 30, 2013
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
2,202

 
$
2,202

 
$
—

 
$
—

Marketable securities:
 
 
 
 
 
 
 
U.S. government securities
4,157

 
4,157

 
—

 
—

U.S. government agency securities
2,071

 
2,071

 
—

 
—

Total cash equivalents and marketable securities
$
8,430

 
$
8,430

 
$
—

 
$
—

 
 
 
Fair Value Measurement at
Reporting Date Using
Description
December 31, 2012
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
871

 
$
871

 
$
—

 
$
—

Marketable securities:
 
 
 
 
 
 
 
U.S. government securities
5,165

 
5,165

 
—

 
—

U.S. government agency securities
2,077

 
2,077

 
—

 
—

Total cash equivalents and marketable securities
$
8,113

 
$
8,113

 
$
—

 
$
—

 
 
 
 
 
 
 
 
Other current liabilities:
 
 
 
 
 
 
 
Contingent consideration liability
$
4

 
$
—

 
$
—

 
$
4

 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
Derivative financial instrument
$
4

 
$
—

 
$
4

 
$
—

Property and Equipment (Tables)
Property and equipment
Property and equipment consisted of the following (in millions): 
 
September 30,
2013
 
December 31,
2012
Network equipment
$
2,245

 
$
1,912

Land
41

 
36

Buildings
975

 
594

Leasehold improvements
198

 
194

Computer software, office equipment and other
107

 
93

Construction in progress
255

 
444

Total
3,821

 
3,273

Less: Accumulated depreciation
(1,136
)
 
(882
)
Property and equipment, net
$
2,685

 
$
2,391

Goodwill and Intangible Assets (Tables)
Changes in Carrying Amount of Goodwill 
The changes in the carrying amount of goodwill for the nine months ended September 30, 2013 are as follows (in millions): 
Balance as of December 31, 2012
$
587

Goodwill acquired
175

Balance as of September 30, 2013
$
762

Intangible Assets 
Intangible assets consisted of the following (in millions):
 
 
 
September 30, 2013
 
December 31, 2012
 
Useful lives from date of acquisitions (in years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Amortizable intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired patents
3 - 18
 
$
739

 
$
(120
)
 
$
619

 
$
684

 
$
(53
)
 
$
631

Acquired technology
2 - 10
 
201

 
(55
)
 
146

 
133

 
(32
)
 
101

Tradename and other
2 - 10
 
123

 
(41
)
 
82

 
94

 
(25
)
 
69

Total
 
 
$
1,063

 
$
(216
)
 
$
847

 
$
911

 
$
(110
)
 
$
801

Estimated Amortization Expense for Unamortized Acquired Intangible Assets 
As of September 30, 2013, estimated amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):
The remainder of 2013
$
37

2014
145

2015
136

2016
124

2017
106

2018
72

Thereafter
227

 
$
847

Stockholders' Equity (Tables)
Stock Option Activity under Stock Plans 
The following table summarizes the stock option activity under the Stock Plans during the nine months ended September 30, 2013: 
 
Shares Subject to Options Outstanding
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(1)
 
(in thousands)
 
 
 
(in years)
 
(in millions)
Balance as of December 31, 2012
122,821

 
$
0.85

 
3.79
 
$
3,166

Stock options exercised
(38,293
)
 
0.54

 
 
 
 
Stock options forfeited/cancelled
(216
)
 
1.85

 
 
 
 
Balance as of September 30, 2013
84,312

 
$
0.99

 
2.89
 
$
4,152

Stock options vested and expected to vest as of September 30, 2013
84,287

 
$
0.99

 
2.89
 
$
4,151

Stock options exercisable as of September 30, 2013
78,593

 
$
0.37

 
2.62
 
$
3,920

(1)
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of our Class A common stock of $50.23 on September 30, 2013.
Restricted Stock Units Award Activity 
The following table summarizes the activities for our unvested RSUs for the nine months ended September 30, 2013:
 
Unvested RSUs
 
Number of Shares
 
Weighted Average Grant Date Fair Value
 
(in thousands)
 
 
Unvested at December 31, 2012
113,044

 
$
21.38

Granted
49,048

 
28.14

Vested
(39,523
)
 
16.37

Forfeited
(11,375
)
 
24.11

Unvested at September 30, 2013
111,194

 
$
25.87

Geographical Information (Tables)
Revenue by Geographic Area
Revenue by geography is based on the billing address of the marketer or Platform developer. The following tables set forth revenue and long-lived assets by geographic area (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
Revenue:
 
 
 
 
 
 
 
United States
$
940

 
$
665

 
$
2,438

 
$
1,789

Rest of the world (1)
1,076

 
597

 
2,848

 
1,715

Total revenue
$
2,016

 
$
1,262

 
$
5,286

 
$
3,504

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented
 
September 30,
2013
 
December 31,
2012
Long-lived assets:
 
 
 
United States
$
2,206

 
$
2,110

Sweden
395

 
220

Rest of the world (1)
84

 
61

Total long-lived assets
$
2,685

 
$
2,391

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total long-lived assets for any period presented
Acquisitions (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Business Acquisition
 
Purchase price of acquisition
$ 260 
Cash paid for business acquisition
184 
Number of shares issued
3 
Number of shares issued, conditioned upon continuous employment
6 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Deferred tax liabilities
(9)
Net assets acquired
85 
Goodwill acquired
175 
Goodwill tax deductible amount
66 
Acquired technology
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Amortizable intangible assets
68 
Acquired technology |
Minimum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
2 years 
Acquired technology |
Maximum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
10 years 
Acquired technology |
Current period acquisition |
Minimum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
3 years 
Acquired technology |
Current period acquisition |
Maximum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
7 years 
Tradename and other
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Amortizable intangible assets
26 
Tradename and other |
Minimum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
2 years 
Tradename and other |
Maximum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
10 years 
Tradename and other |
Current period acquisition |
Minimum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
2 years 
Tradename and other |
Current period acquisition |
Maximum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
10 years 
Patents |
Minimum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
3 years 
Patents |
Maximum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
18 years 
Patents |
Current period acquisition |
Minimum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
7 years 
Patents |
Current period acquisition |
Maximum
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Useful lives from date of acquisitions
15 years 
Patents and Other Intangible Assets
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
Amount of acquired patents and other intangible assets
$ 58 
Earnings (Loss) per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Numerator
 
 
 
 
Net income (loss)
$ 425 
$ (59)
$ 977 
$ (11)
Less: Net income attributable to participating securities
3 
0 
6 
0 
Net income (loss) attributable to common stockholders
422 
(59)
971 
(11)
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
2,430 
2,420 
2,408 
1,884 
Basic EPS (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.40 
$ (0.01)
Numerator
 
 
 
 
Net income (loss) attributable to common stockholders
422 
(59)
971 
(11)
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
2,430 
2,420 
2,408 
1,884 
Number of shares used for diluted EPS computation (in shares)
2,528 
2,420 
2,504 
1,884 
Diluted EPS (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.39 
$ (0.01)
Class A Common Stock
 
 
 
 
Numerator
 
 
 
 
Net income (loss)
320 
(19)
717 
(3)
Less: Net income attributable to participating securities
2 
0 
4 
0 
Net income (loss) attributable to common stockholders
318 
(19)
713 
(3)
Denominator
 
 
 
 
Weighted average shares outstanding (in shares)
1,833 
794 
1,773 
431 
Less: Shares subject to repurchase (in shares)
6 
1 
5 
1 
Number of shares used for basic EPS computation (in shares)
1,827 
793 
1,768 
430 
Basic EPS (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.40 
$ (0.01)
Numerator
 
 
 
 
Net income (loss) attributable to common stockholders
318 
(19)
713 
(3)
Reallocation of net income attributable to participating securities
3 
0 
6 
0 
Reallocation of net income (loss) as a result of conversion of Class B to Class A common stock
104 
(40)
258 
(8)
Reallocation of net income to Class B common stock
0 
0 
0 
0 
Net income (loss) attributable to common stockholders for diluted EPS
425 
(59)
977 
(11)
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
1,827 
793 
1,768 
430 
Conversion of Class B to Class A common stock (in shares)
603 
1,627 
640 
1,454 
Shares subject to repurchase (in shares)
6 
0 
6 
0 
Number of shares used for diluted EPS computation (in shares)
2,528 
2,420 
2,504 
1,884 
Diluted EPS (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.39 
$ (0.01)
Class A Common Stock |
Restricted Stock Units (RSUs)
 
 
 
 
Denominator
 
 
 
 
Share based payment arrangements (in shares)
33 
0 
21 
0 
Class A Common Stock |
Employee Stock Options
 
 
 
 
Denominator
 
 
 
 
Share based payment arrangements (in shares)
59 
0 
69 
0 
Class B Common Stock
 
 
 
 
Numerator
 
 
 
 
Net income (loss)
105 
(40)
260 
(8)
Less: Net income attributable to participating securities
1 
0 
2 
0 
Net income (loss) attributable to common stockholders
104 
(40)
258 
(8)
Denominator
 
 
 
 
Weighted average shares outstanding (in shares)
611 
1,632 
649 
1,457 
Less: Shares subject to repurchase (in shares)
8 
5 
9 
3 
Number of shares used for basic EPS computation (in shares)
603 
1,627 
640 
1,454 
Basic EPS (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.40 
$ (0.01)
Numerator
 
 
 
 
Net income (loss) attributable to common stockholders
104 
(40)
258 
(8)
Reallocation of net income attributable to participating securities
0 
0 
0 
0 
Reallocation of net income (loss) as a result of conversion of Class B to Class A common stock
0 
0 
0 
0 
Reallocation of net income to Class B common stock
13 
0 
29 
0 
Net income (loss) attributable to common stockholders for diluted EPS
$ 117 
$ (40)
$ 287 
$ (8)
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
603 
1,627 
640 
1,454 
Conversion of Class B to Class A common stock (in shares)
0 
0 
0 
0 
Shares subject to repurchase (in shares)
6 
0 
6 
0 
Number of shares used for diluted EPS computation (in shares)
701 
1,627 
736 
1,454 
Diluted EPS (in dollars per share)
$ 0.17 
$ (0.02)
$ 0.39 
$ (0.01)
Class B Common Stock |
Restricted Stock Units (RSUs)
 
 
 
 
Denominator
 
 
 
 
Share based payment arrangements (in shares)
33 
0 
21 
0 
Class B Common Stock |
Employee Stock Options
 
 
 
 
Denominator
 
 
 
 
Share based payment arrangements (in shares)
59 
0 
69 
0 
Restricted Stock Units (RSUs)
 
 
 
 
Earnings Per Share, Basic, by Common Class, Including Two Class Method
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
 
 
15 
 
Cash and Cash Equivalents, and Marketable Securities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Dec. 31, 2011
Cash and cash equivalents:
 
 
 
 
Cash
$ 898 
$ 1,513 
 
 
Total cash and cash equivalents
3,100 
2,384 
2,478 
1,512 
Marketable securities:
 
 
 
 
Total marketable securities
6,228 
7,242 
 
 
Total cash, cash equivalents and marketable securities
9,328 
9,626 
 
 
Cash Equivalents
 
 
 
 
Cash and cash equivalents:
 
 
 
 
Money market funds
2,202 
871 
 
 
Marketable Securities
 
 
 
 
Marketable securities:
 
 
 
 
U.S. government securities
4,157 
5,165 
 
 
U.S. government agency securities
$ 2,071 
$ 2,077 
 
 
Cash, Cash Equivalents, and Marketable Securities - Contractual Maturities of Debt Securities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Cash and Cash Equivalents, and Marketable Securities [Abstract]
 
 
Due in one year
$ 3,272 
 
Due in one to two years
2,956 
 
Marketable securities
$ 6,228 
$ 7,242 
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring, USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Total cash equivalents and marketable securities
$ 8,430 
$ 8,113 
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Money Market Funds
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Cash equivalents
2,202 
871 
Quoted Prices in Active Markets for Identical Assets (Level 1) |
US Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
4,157 
5,165 
Quoted Prices in Active Markets for Identical Assets (Level 1) |
US Government Agency Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
2,071 
2,077 
Significant Other Observable Inputs (Level 2)
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Total cash equivalents and marketable securities
0 
0 
Derivative financial instrument
 
4 
Significant Other Observable Inputs (Level 2) |
Money Market Funds
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Cash equivalents
0 
0 
Significant Other Observable Inputs (Level 2) |
US Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
0 
0 
Significant Other Observable Inputs (Level 2) |
US Government Agency Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
0 
0 
Significant Unobservable Inputs (Level 3)
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Total cash equivalents and marketable securities
0 
0 
Contingent consideration liability
 
4 
Significant Unobservable Inputs (Level 3) |
Money Market Funds
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Cash equivalents
0 
0 
Significant Unobservable Inputs (Level 3) |
US Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
0 
0 
Significant Unobservable Inputs (Level 3) |
US Government Agency Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
0 
0 
Estimate of Fair Value, Fair Value Disclosure
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Total cash equivalents and marketable securities
8,430 
8,113 
Contingent consideration liability
 
4 
Derivative financial instrument
 
4 
Estimate of Fair Value, Fair Value Disclosure |
Money Market Funds
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Cash equivalents
2,202 
871 
Estimate of Fair Value, Fair Value Disclosure |
US Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
4,157 
5,165 
Estimate of Fair Value, Fair Value Disclosure |
US Government Agency Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
Marketable securities
$ 2,071 
$ 2,077 
Property and Equipment (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Property, Plant and Equipment
 
 
Property and equipment, gross
$ 3,821 
$ 3,273 
Less: accumulated depreciation
(1,136)
(882)
Property and equipment, net
2,685 
2,391 
Network equipment
 
 
Property, Plant and Equipment
 
 
Property and equipment, gross
2,245 
1,912 
Land
 
 
Property, Plant and Equipment
 
 
Property and equipment, gross
41 
36 
Buildings
 
 
Property, Plant and Equipment
 
 
Property and equipment, gross
975 
594 
Leasehold improvements
 
 
Property, Plant and Equipment
 
 
Property and equipment, gross
198 
194 
Computer software, office equipment and other
 
 
Property, Plant and Equipment
 
 
Property and equipment, gross
107 
93 
Construction in progress
 
 
Property, Plant and Equipment
 
 
Property and equipment, gross
$ 255 
$ 444 
Goodwill and Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Gross Carrying Amount
$ 1,063 
 
$ 1,063 
 
$ 911 
Accumulated Amortization
(216)
 
(216)
 
(110)
Net Carrying Amount
847 
 
847 
 
801 
Amortization expense
37 
31 
106 
44 
 
Goodwill
 
 
 
 
 
Goodwill beginning
 
 
587 
 
 
Goodwill acquired
 
 
175 
 
 
Goodwill ending
762 
 
762 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
 
 
 
The remainder of 2013
37 
 
37 
 
 
2014
145 
 
145 
 
 
2015
136 
 
136 
 
 
2016
124 
 
124 
 
 
2017
106 
 
106 
 
 
2018
72 
 
72 
 
 
Thereafter
227 
 
227 
 
 
Net Carrying Amount
847 
 
847 
 
801 
Acquired patents
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Gross Carrying Amount
739 
 
739 
 
684 
Accumulated Amortization
(120)
 
(120)
 
(53)
Net Carrying Amount
619 
 
619 
 
631 
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
 
 
 
Net Carrying Amount
619 
 
619 
 
631 
Acquired technology
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Gross Carrying Amount
201 
 
201 
 
133 
Accumulated Amortization
(55)
 
(55)
 
(32)
Net Carrying Amount
146 
 
146 
 
101 
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
 
 
 
Net Carrying Amount
146 
 
146 
 
101 
Tradename and other
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Gross Carrying Amount
123 
 
123 
 
94 
Accumulated Amortization
(41)
 
(41)
 
(25)
Net Carrying Amount
82 
 
82 
 
69 
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
 
 
 
Net Carrying Amount
$ 82 
 
$ 82 
 
$ 69 
Minimum |
Acquired patents
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Useful lives from date of acquisitions
 
 
3 years 
 
 
Minimum |
Acquired technology
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Useful lives from date of acquisitions
 
 
2 years 
 
 
Minimum |
Tradename and other
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Useful lives from date of acquisitions
 
 
2 years 
 
 
Maximum |
Acquired patents
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Useful lives from date of acquisitions
 
 
18 years 
 
 
Maximum |
Acquired technology
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Useful lives from date of acquisitions
 
 
10 years 
 
 
Maximum |
Tradename and other
 
 
 
 
 
Goodwill and Intangible Assets Disclosure
 
 
 
 
 
Useful lives from date of acquisitions
 
 
10 years 
 
 
Long-term Debt - Borrowings (Details) (USD $)
9 Months Ended 1 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Unsecured debt
Amended and Restated Term Loan
Sep. 30, 2013
Revolving Credit Facility
Unsecured Five Year Revolving Credit Facility 2012
Aug. 31, 2013
Revolving Credit Facility
Senior Unsecured Five Year Revolving Credit Facility Twenty Thirteen [Member] [Domain]
Debt Instrument
 
 
 
 
 
Repayments of long-term debt
$ 1,500,000,000 
$ 0 
$ 1,500,000,000 
 
 
Term loan facility, term period
 
 
3 years 
5 years 
5 years 
Line of credit facility, maximum borrowing capacity
 
 
 
5,000,000,000 
6,500,000,000.0 
Debt instrument, interest rate during period
 
 
 
 
LIBOR 
Basis spread on variable rate
 
 
 
 
1.00% 
Line of credit facility, unused capacity, commitment fee percentage
 
 
 
 
0.10% 
Line of credit facility, amount outstanding
$ 0 
 
 
 
 
Long-term Debt - Derivative (Details) (Interest Rate Swap, USD $)
9 Months Ended
Sep. 30, 2013
Derivative
 
Derivative, description of variable rate basis
one-month LIBOR 
Amended and Restated Term Loan |
Cash Flow Hedging
 
Derivative
 
Notional amount of interest rate derivatives
$ 1,500,000,000.0 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Leases [Abstract]
 
 
 
 
Capital lease agreement period
 
 
3 years 
 
Lease abandonment expense
$ 43 
 
$ 108 
$ 7 
Operating lease expense
$ 28 
$ 50 
$ 101 
$ 151 
Minimum
 
 
 
 
Leases [Abstract]
 
 
 
 
Interest rate
1.00% 
 
1.00% 
 
Expiration date of lease
 
 
2013 
 
Maximum
 
 
 
 
Leases [Abstract]
 
 
 
 
Interest rate
13.00% 
 
13.00% 
 
Expiration date of lease
 
 
2027 
 
Buildings
 
 
 
 
Leases [Abstract]
 
 
 
 
Capital lease agreement period
 
 
15 years 
 
Stockholders' Equity - Share-based Compensation Plans (Detail)
9 Months Ended 1 Months Ended
Sep. 30, 2013
plan
Sep. 30, 2013
2012 Plan
Sep. 30, 2013
2012 Plan
Minimum
Sep. 30, 2013
2012 Plan
Maximum
Nov. 30, 2005
2005 Officer's Stock Plan
Sep. 30, 2013
2005 Officer's Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
 
 
 
Share-based employee compensation plans, number
3 
 
 
 
 
 
Share-based compensation arrangement by share-based payment award, expiration period
 
10 years 
 
 
 
 
Share-based compensation arrangement by share-based payment award, expiration period for plan
 
10 years 
 
 
 
 
2012 equity incentive plan shares authorized
 
25,000,000 
 
 
 
 
Shares reserved for issuance increase date range
 
 
Jan. 01, 2013 
Jan. 01, 2022 
 
 
Non statutory stock option issued to CEO to purchase shares of Class B common stock
 
 
 
 
120,000,000 
 
Options exercisable and fully vested
 
 
 
 
 
60,000,000 
Stockholders' Equity - Stock Option Activity (Details) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Aggregate Intrinsic Value
 
 
Common stock, closing share price
$ 50.23 
 
Stock Option
 
 
Number of Shares
 
 
Beginning balance
122,821 
 
Stock options exercised
(38,293)
 
Stock options forfeited/cancelled
(216)
 
Ending balance
84,312 
122,821 
Stock options vested and expected to vest as of period end
84,287 
 
Stock options exercisable as of period end
78,593 
 
Weighted Average Exercise Price
 
 
Beginning Balance (in dollars per share)
$ 0.85 
 
Stock options exercised (in dollars per share)
$ 0.54 
 
Stock options forfeited/cancelled (in dollars per share)
$ 1.85 
 
Ending Balance (in dollars per share)
$ 0.99 
$ 0.85 
Stock options vested and expected to vest as of period end (in dollars per share)
$ 0.99 
 
Stock options exercisable as of period end (in dollars per share)
$ 0.37 
 
Weighted- Average Remaining Contractual Term
 
 
Weighted- Average Remaining Contractual Term
2 years 10 months 20 days 
3 years 9 months 15 days 
Stock options vested and expected to vest as of period end
2 years 10 months 20 days 
 
Stock options exercisable as of period end
2 years 7 months 12 days 
 
Aggregate Intrinsic Value
 
 
Aggregate Intrinsic Value
$ 4,152 1
$ 3,166 1
Stock options vested and expected to vest as of period end
4,151 1
 
Stock options exercisable as of period end
$ 3,920 1
 
Stockholders' Equity - Stock Options Additional Disclosures (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Equity [Abstract]
 
 
 
 
Aggregate intrinsic value of the options exercised
$ 586 
$ 10 
$ 1,170 
$ 2,990 
Stockholders' Equity - Restricted Stock Units (Details) (Restricted Stock Units (RSUs), USD $)
In Thousands, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Restricted Stock Units (RSUs)
 
Outstanding RSUs
 
Non-vested at beginning of period (in shares)
113,044 
Granted (in shares)
49,048 
Vested (in shares)
(39,523)
Forfeited (in shares)
(11,375)
Non-vested at end of period (in shares)
111,194 
Weighted Average Grant Date Fair Value
 
Non-vested at beginning of period
$ 21.38 
Granted
$ 28.14 
Vested
$ 16.37 
Forfeited
$ 24.11 
Non-vested at end of period
$ 25.87 
Stockholders' Equity - Additional Award Disclosures (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award
 
Future period share-based compensation expense
$ 2,850 
Future period share-based compensation expense period of recognition
3 years 
Restricted shares and stock options
 
Share-based Compensation Arrangement by Share-based Payment Award
 
Future period share-based compensation expense
320 
Restricted Stock Units (RSUs)
 
Share-based Compensation Arrangement by Share-based Payment Award
 
Future period share-based compensation expense
$ 2,530 
Income Taxes (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
Unrecognized tax benefits
$ 751 
$ 164 
Unrecognized tax benefits that would impact effective tax rate
$ 450 
 
Geographical Information - Revenue (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Revenue by Geographical Area
 
 
 
 
Revenue
$ 2,016 
$ 1,262 
$ 5,286 
$ 3,504 
United States
 
 
 
 
Revenue by Geographical Area
 
 
 
 
Revenue
940 
665 
2,438 
1,789 
Rest of the World
 
 
 
 
Revenue by Geographical Area
 
 
 
 
Revenue
$ 1,076 1
$ 597 1
$ 2,848 1
$ 1,715 1
Geographical Information - Long-Lived Assets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Long-Lived Assets by Geographical Area
 
 
Property and equipment, net
$ 2,685 
$ 2,391 
United States
 
 
Long-Lived Assets by Geographical Area
 
 
Property and equipment, net
2,206 
2,110 
SWEDEN
 
 
Long-Lived Assets by Geographical Area
 
 
Property and equipment, net
395 
220 
Rest of the World
 
 
Long-Lived Assets by Geographical Area
 
 
Property and equipment, net
$ 84 1
$ 61 1