Document and Entity Information

3 Months Ended

Mar. 31, 2016

Apr. 25, 2016

Class A Common Stock

Apr. 25, 2016

Class B Common Stock

Entity Information

Document Type

10-Q

Amendment Flag

false

Document Period End Date

Mar. 31, 2016

Document Fiscal Year Focus

2016

Document Fiscal Period Focus

Q1

Trading Symbol

FB

Entity Registrant Name

FACEBOOK INC

Entity Central Index Key

0001326801

Current Fiscal Year End Date

--12-31

Entity Filer Category

Large Accelerated Filer

Entity Common Stock, Shares Outstanding

2,311,865,096

548,439,425

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2016

Dec. 31, 2015

Current assets:

Cash and cash equivalents

$ 6,456

$ 4,907

Marketable securities

14,165

13,527

Accounts receivable, net of allowances for doubtful accounts of $63 and $68 as of March 31, 2016 and December 31, 2015, respectively

2,348

2,559

Prepaid expenses and other current assets

843

659

Total current assets

23,812

21,652

Property and equipment, net

6,467

5,687

Intangible assets, net

3,067

3,246

Goodwill

18,029

18,026

Other assets

700

796

Total assets

52,075

49,407

Current liabilities:

Accounts payable

149

196

Partners payable

216

217

Accrued expenses and other current liabilities

1,389

1,449

Deferred revenue and deposits

55

56

Current portion of capital lease obligations

0

7

Total current liabilities

1,809

1,925

Capital lease obligations, less current portion

0

107

Other liabilities

3,116

3,157

Total liabilities

4,925

5,189

Stockholders' equity:

Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,311 million and 2,293 million shares issued and outstanding, including 7 million and 8 million outstanding shares subject to repurchase, as of March 31, 2016 and December 31, 2015, respectively; 4,141 million Class B shares authorized, 549 million and 552 million shares issued and outstanding, including 3 million outstanding shares subject to repurchase, as of March 31, 2016 and December 31, 2015

0

Additional paid-in capital

36,129

34,886

Accumulated other comprehensive loss

(276)

(455)

Retained earnings

11,297

9,787

Total stockholders' equity

47,150

44,218

Total liabilities and stockholders' equity

$ 52,075

$ 49,407

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $)

In Millions, except Per Share data, unless otherwise specified

Mar. 31, 2016

Dec. 31, 2015

Current assets:

Accounts receivable, allowances for doubtful accounts

$ 63

$ 68

Stockholders' equity:

Common stock, par value (in dollars per share)

$ 0.000006

Class A Common Stock

Stockholders' equity:

Common stock, shares authorized

5,000

Common stock, shares issued

2,311

2,293

Common stock, shares outstanding

2,311

2,293

Common stock, outstanding shares subject to repurchase

7

8

Class B Common Stock

Stockholders' equity:

Common stock, shares authorized

4,141

Common stock, shares issued

549

552

Common stock, shares outstanding

549

552

Common stock, outstanding shares subject to repurchase

3

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Revenue

$ 5,382

$ 3,543

Costs and expenses:

Cost of revenue

838

654

Research and development

1,343

1,062

Marketing and sales

826

620

General and administrative

366

274

Total costs and expenses

3,373

2,610

Income from operations

2,009

933

Interest and other income/(expense), net

56

(1)

Income before provision for income taxes

2,065

932

Provision for income taxes

555

420

Net income

1,510

512

Less: Net income attributable to participating securities

5

3

Net income attributable to Class A and Class B common stockholders

1,505

509

Earnings per share attributable to Class A and Class B common stockholders:

Basic (in dollars per share)

$ 0.53

$ 0.18

Diluted (in dollars per share)

$ 0.52

$ 0.18

Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders:

Basic (in shares)

2,843

2,784

Diluted (in shares)

2,888

2,836

Share-based compensation expense included in costs and expenses:

Share-based compensation expense

747

703

Cost of revenue

Share-based compensation expense included in costs and expenses:

Share-based compensation expense

22

17

Research and development

Share-based compensation expense included in costs and expenses:

Share-based compensation expense

586

566

Marketing and sales

Share-based compensation expense included in costs and expenses:

Share-based compensation expense

82

72

General and administrative

Share-based compensation expense included in costs and expenses:

Share-based compensation expense

$ 57

$ 48

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Statement of Comprehensive Income [Abstract]

Net income

$ 1,510

$ 512

Other comprehensive income (loss):

Change in foreign currency translation adjustment, net of tax

137

(223)

Change in unrealized gain/loss on available-for-sale investments and other, net of tax

42

4

Comprehensive income

$ 1,689

$ 293

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Cash flows from operating activities

Net income

$ 1,510

$ 512

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

552

457

Share-based compensation

747

694

Deferred income taxes

(65)

(223)

Tax benefit from share-based award activity

494

423

Excess tax benefit from share-based award activity

(494)

(423)

Other

13

6

Changes in assets and liabilities:

Accounts receivable

267

84

Prepaid expenses and other current assets

(106)

(43)

Other assets

15

(32)

Accounts payable

2

(15)

Partners payable

(3)

(13)

Accrued expenses and other current liabilities

(16)

134

Deferred revenue and deposits

(2)

(10)

Other liabilities

69

149

Net cash provided by operating activities

2,983

1,700

Cash flows from investing activities

Purchases of property and equipment

(1,132)

(502)

Purchases of marketable securities

(3,126)

(3,055)

Sales of marketable securities

2,013

608

Maturities of marketable securities

537

339

Acquisitions of businesses, net of cash acquired, and purchases of intangible assets

(1)

(257)

Change in restricted cash and deposits

33

23

Net cash used in investing activities

(1,676)

(2,844)

Cash flows from financing activities

Principal payments on capital lease and other financing obligations

(312)

(47)

Excess tax benefit from share-based award activity

494

423

Other financing activities, net

2

(5)

Net cash provided by financing activities

184

371

Effect of exchange rate changes on cash and cash equivalents

58

(123)

Net increase (decrease) in cash and cash equivalents

1,549

(896)

Cash and cash equivalents at beginning of period

4,907

4,315

Cash and cash equivalents at end of period

6,456

3,419

Cash paid during the period for:

Interest

11

3

Income taxes, net

170

119

Non-cash investing and financing activities:

Net change in accounts payable, accrued expenses and other current liabilities, and other liabilities related to property and equipment additions

52

186

Promissory note payable issued in connection with an acquisition

$ 0

$ 198

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, 2015.

The condensed consolidated balance sheet as of December 31, 2015 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, 2016.

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, 2015 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.

Recent Accounting Pronouncement

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. This guidance will be effective for us in the first quarter of 2019 on a modified retrospective basis and early adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. This guidance will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) to simplify the accounting for share-based payment transactions, including the income tax consequences, an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance will be effective for us in the first quarter of 2017, and early adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

Earnings per Share

We compute earnings per share (EPS) of Class A and Class B common stock using the two-class method required for participating securities. 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 participating securities are subtracted from net income in determining net income attributable to common stockholders. Basic EPS is computed by dividing net income 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 attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities, including awards under our equity compensation plans and inducement awards under separate non-plan restricted stock unit (RSU) award agreements. In addition, the computation of the diluted EPS of Class A common stock assumes the conversion of our Class B common stock to Class A 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 attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

Basic and dilutive securities in our basic and diluted EPS calculation for the three months ended March 31, 2016 and 2015 do not include contingent earn-out shares. Issuance of these earn-out shares is dependent upon the completion of certain milestones. These milestones have not been met as of March 31, 2016 and accordingly, these shares have been excluded from the effect of basic and dilutive securities.

The RSUs excluded from the EPS calculation because the impact would be anti-dilutive, were not material for the three months ended March 31, 2016. There were no RSUs excluded from the EPS calculation for the three months ended March 31, 2015.

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 are calculated as follows (in millions, except per share amounts):



	Three Months Ended March 31,
	2016				2015
	Class A		Class B		Class A		Class B
Basic EPS:
Numerator
Net income	$	1,219	$	291	$	410	$	102
Less: Net income attributable to participating securities	4		1		2		1
Net income attributable to common stockholders	$	1,215	$	290	$	408	$	101
Denominator
Weighted average shares outstanding	2,303		550		2,241		561
Less: Shares subject to repurchase	7		3		12		6
Number of shares used for basic EPS computation	2,296		547		2,229		555
Basic EPS	$	0.53	$	0.53	$	0.18	$	0.18
Diluted EPS:
Numerator
Net income attributable to common stockholders	$	1,215	$	290	$	408	$	101
Reallocation of net income attributable to participating securities	5		—		3		—
Reallocation of net income as a result of conversion of Class B to Class A common stock	290		—		101		—
Reallocation of net income to Class B common stock	—		2		—		3
Net income attributable to common stockholders for diluted EPS	$	1,510	$	292	$	512	$	104
Denominator
Number of shares used for basic EPS computation	2,296		547		2,229		555
Conversion of Class B to Class A common stock	547		—		555		—
Weighted average effect of dilutive securities:
Employee stock options	5		5		9		9
RSUs	35		5		37		11
Shares subject to repurchase	5		1		6		3
Number of shares used for diluted EPS computation	2,888		558		2,836		578
Diluted EPS	$	0.52	$	0.52	$	0.18	$	0.18

Cash and Cash Equivalents, and Marketable Securities

The following table sets forth the cash and cash equivalents, and marketable securities (in millions):



	March 31, 2016		December 31, 2015
Cash and cash equivalents:
Cash	$	2,004	$	1,703
Money market funds	4,452		2,409
U.S. government securities	—		597
U.S. government agency securities	—		145
Corporate debt securities	—		53
Total cash and cash equivalents	6,456		4,907
Marketable securities:
U.S. government securities	5,183		5,948
U.S. government agency securities	4,815		4,475
Corporate debt securities	4,167		3,104
Total marketable securities	14,165		13,527
Total cash and cash equivalents, and marketable securities	$	20,621	$	18,434

The gross unrealized gains or losses on our marketable securities as of March 31, 2016 and December 31, 2015 were not significant. In addition, the gross unrealized losses that had been in a continuous loss position for 12 months or longer were not significant as of March 31, 2016 and December 31, 2015. As of March 31, 2016, we considered the decreases in market value on our marketable securities to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired.

The following table classifies our marketable securities by contractual maturities (in millions):



	March 31, 2016
Due in one year	$	4,920
Due in one to three years	9,245
Total	$	14,165

Fair Value Measurement

The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy (in millions):



			Fair Value Measurement at Reporting Date Using
Description	March 31, 2016		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	$	4,452	$	4,452	$	—	$	—
Marketable securities:
U.S. government securities	5,183		5,183		—		—
U.S. government agency securities	4,815		4,815		—		—
Corporate debt securities	4,167		—		4,167		—
Total cash equivalents and marketable securities	$	18,617	$	14,450	$	4,167	$	—

Other liabilities:
Contingent consideration liability	$	285	$	—	$	—	$	285



			Fair Value Measurement at Reporting Date Using
Description	December 31, 2015		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	$	2,409	$	2,409	$	—	$	—
U.S. government securities	597		597		—		—
U.S. government agency securities	145		145		—		—
Corporate debt securities	53		—		53		—
Marketable securities:
U.S. government securities	5,948		5,948		—		—
U.S. government agency securities	4,475		4,475		—		—
Corporate debt securities	3,104		—		3,104		—
Total cash equivalents and marketable securities	$	16,731	$	13,574	$	3,157	$	—

Other liabilities:
Contingent consideration liability	$	260	$	—	$	—	$	260

We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value.

We classify our contingent consideration liability in connection with an acquisition in 2014 within Level 3 as factors used to develop the estimated fair value are unobservable inputs that are not supported by market activity. We estimate the fair value of our contingent consideration liability based on the present value of probability-weighted future cash flows related to the contingent earn-out criteria and the fair value of our common stock on each reporting date. Changes in the fair value of the contingent consideration liability subsequent to the acquisition date, such as changes in the probability assessment and the fair value of our common stock, are recognized in earnings in the period when the change in the estimated fair value occurs. During the three months ended March 31, 2016, we recognized an increase in the fair value of our contingent liability of $25 million, in research and development expense in our condensed consolidated statements of income, primarily due to an increase in the fair value of our common stock.

Property and Equipment

Property and equipment consists of the following (in millions):



	March 31, 2016			December 31, 2015
Land	$	683		$	596
Buildings	2,551			2,273
Leasehold improvements	310			447
Network equipment	4,106			3,633
Computer software, office equipment and other	276			248
Construction in progress	887			622
Total	8,813			7,819
Less: Accumulated depreciation	(2,346		)	(2,132		)
Property and equipment, net	$	6,467		$	5,687

Construction in progress includes costs primarily related to construction of data centers and office buildings, and network equipment infrastructure to support our data centers around the world. No interest was capitalized during the three months ended March 31, 2016 and 2015.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the three months ended March 31, 2016 are as follows (in millions):



Balance as of December 31, 2015	$	18,026
Effect of currency translation adjustment	3
Balance as of March 31, 2016	$	18,029

Intangible assets consist of the following (in millions):



		March 31, 2016							December 31, 2015
	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Finite-lived intangible assets:
Acquired users	5.5	$	2,056	$	(456	)	$	1,600	$	2,056	$	(382	)	$	1,674
Acquired technology	3.0	892		(354		)	538		831		(310		)	521
Acquired patents	6.4	785		(356		)	429		785		(333		)	452
Trade names	3.8	629		(193		)	436		629		(163		)	466
Other	3.5	162		(98		)	64		162		(89		)	73
Total finite-lived intangible assets	4.9	$	4,524	$	(1,457	)	$	3,067	$	4,463	$	(1,277	)	$	3,186

Indefinite-lived intangible assets:
In-process research and development (IPR&D)		$	—	$	—		$	—	$	60	$	—		$	60

Total intangible assets		$	4,524	$	(1,457	)	$	3,067	$	4,523	$	(1,277	)	$	3,246

As of March 31, 2016, we completed the IPR&D. As such, we reclassified the indefinite-lived intangible asset to acquired technology and began amortizing the balance over its estimated useful life.

Amortization expense of intangible assets was $180 million and $179 million for the three months ended March 31, 2016 and 2015, respectively.

As of March 31, 2016, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):



The remainder of 2016	$	558
2017	683
2018	606
2019	517
2020	357
Thereafter	346
Total	$	3,067

Long-term Debt

In August 2013, 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 March 31, 2016, no amounts had been drawn down and we were in compliance with the covenants under this facility.

Commitments and Contingencies

Commitments

Leases

We have entered into various non-cancelable operating lease agreements for certain of our offices, equipment, land, and data centers with original lease periods expiring between 2016 and 2032. 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 or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis. Operating lease expense was $59 million and $39 million for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, we fully repaid all of our capital lease obligations.

Contingencies

Legal Matters

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 initial public offering (IPO) and seeking unspecified damages. We believe these lawsuits are without merit, and we intend to continue to vigorously defend them. 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 U.S. District Court for the Southern District of New York. In a series of rulings in 2013 and 2014, the court denied our motion to dismiss the consolidated securities class action and granted our motions to dismiss the derivative actions against our directors and certain of our officers. On July 24, 2015, the court of appeals affirmed the dismissal of the derivative actions. On December 11, 2015, the court granted plaintiffs' motion for class certification in the consolidated securities action. In addition, the events surrounding our IPO became the subject of various state and federal government inquiries. In May 2014, the Securities and Exchange Commission (SEC) notified us that it had terminated its inquiry and that no enforcement action had been recommended by the SEC.

We are also party to various legal proceedings and claims that arise in the ordinary course of business. With respect to our outstanding legal matters, we believe that the amount or estimable range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period, could be materially adversely affected.

Stockholders' Equity

Share-based Compensation Plans

We maintain two share-based employee compensation plans: the 2012 Equity Incentive Plan (2012 Plan) and the 2005 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. Outstanding awards under the 2005 Stock Plan continue to be subject to the terms and conditions of the 2005 Stock Plan.

We initially reserved 25 million shares of our Class A common stock for issuance under our 2012 Plan. The number of shares reserved for issuance under our 2012 Plan increases automatically on the first day of January of each of 2013 through 2022 by a number of shares of Class A common stock equal to the lesser of (i) 2.5% of the total outstanding shares of our Class A common stock as of the immediately preceding December 31st or (ii) a number of shares determined by our board of directors. Our board of directors elected not to increase the number of shares reserved for issuance in 2016. In addition, shares available for grant under the 2005 Stock Plan, which were reserved but not issued, forfeited, or repurchased at their original issue price, 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. 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 board of directors or a committee thereof.

The following table summarizes the activities of stock option awards under the Stock Plans for the three months ended March 31, 2016:



	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, 2015	8,443		$	7.10
Stock options exercised	(501	)	3.63
Balance as of March 31, 2016	7,942		$	7.32	3.5	$	848
Stock options vested and expected to vest as of March 31, 2016	7,941		$	7.32	3.5	$	848
Stock options exercisable as of March 31, 2016	5,984		$	5.54	3.2	$	650


(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock, as reported on the NASDAQ Global Select Market, of $114.10 on March 31, 2016.

The following table summarizes the activities for our unvested RSUs for the three months ended March 31, 2016:



	Unvested RSUs⁽¹⁾
	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested at December 31, 2015	116,409		$	65.95
Granted	20,498		110.03
Vested	(14,238	)	57.78
Forfeited	(1,053	)	64.67
Unvested at March 31, 2016	121,616		$	74.34


(1)	Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements.

The fair value as of the respective vesting dates of RSUs that vested during the three months ended March 31, 2016 and 2015 was $1.45 billion and $814 million, respectively.

As of March 31, 2016, there was $8.67 billion of unrecognized share-based compensation expense, of which $8.19 billion is related to RSUs and $478 million is related to restricted shares, shares with performance conditions related to our contingent consideration, and stock options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately three years.

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.

Our effective tax rate is lower than the United States statutory rate primarily because of income in jurisdictions with tax rates lower than the United States. 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.

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 through 2013 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 2014 and future years remain open to examination by the IRS. Our 2011 and future years remain open to examination in Ireland.

Our gross unrecognized tax benefits were $3.07 billion and $3.02 billion as of March 31, 2016 and December 31, 2015, respectively. If the gross unrecognized tax benefits as of March 31, 2016 were realized in a subsequent period, this would result in a tax benefit of $2.41 billion within our provision of income taxes at such time. Our existing tax positions will continue to generate an increase in unrecognized tax benefits in subsequent periods.

Although the timing of the resolution, settlement, and closure of any audits 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

Revenue by geography is based on the billing address of the marketer or developer. The following tables set forth revenue and property and equipment, net by geographic area (in millions):



	Three Months Ended March 31,
	2016		2015
Revenue:
United States	$	2,509	$	1,652
Rest of the world ⁽¹⁾	2,873		1,891
Total revenue	$	5,382	$	3,543


(1)	No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented.



	March 31, 2016		December 31, 2015
Property and equipment, net:
United States	$	5,082	$	4,498
Sweden	764		713
Rest of the world	621		476
Total property and equipment, net	$	6,467	$	5,687

Subsequent Event

In April 2016, our board of directors approved amendments to our restated certificate of incorporation that would, among other things, create a new class of non-voting capital stock (Class C capital stock). The amendments are reflected in a proposed amended and restated certificate of incorporation (New Certificate) filed with our preliminary proxy statement on April 27, 2016, the adoption of which is subject to the approval of our stockholders at our 2016 Annual Meeting of Stockholders to be held on June 20, 2016. Assuming the adoption of the New Certificate is approved, our board of directors intends to issue two shares of the Class C capital stock as a one-time stock dividend for each share of Class A and Class B common stock outstanding as of a record date to be determined by our board of directors. For accounting purposes, we expect this transaction will be treated as a stock split in the form of a dividend. The Class C capital stock will have no voting rights, except as provided in our New Certificate or required by applicable law. Except for voting rights, shares of Class C capital stock will have the same rights and powers, rank equally (including as to dividends and distributions, mergers or similar business combinations, and upon any liquidation, dissolution or winding up of the corporation), share ratably and be identical in all respects and as to all matters to the shares of Class A and Class B common stock, except as expressly provided in the New Certificate.

Summary of Significant Accounting Policies (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, 2015.

The condensed consolidated balance sheet as of December 31, 2015 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, 2016.

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, 2015 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.

New Accounting Pronouncement

Recent Accounting Pronouncement

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. This guidance will be effective for us in the first quarter of 2019 on a modified retrospective basis and early adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. This guidance will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) to simplify the accounting for share-based payment transactions, including the income tax consequences, an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance will be effective for us in the first quarter of 2017, and early adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

Earnings 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 are calculated as follows (in millions, except per share amounts):



	Three Months Ended March 31,
	2016				2015
	Class A		Class B		Class A		Class B
Basic EPS:
Numerator
Net income	$	1,219	$	291	$	410	$	102
Less: Net income attributable to participating securities	4		1		2		1
Net income attributable to common stockholders	$	1,215	$	290	$	408	$	101
Denominator
Weighted average shares outstanding	2,303		550		2,241		561
Less: Shares subject to repurchase	7		3		12		6
Number of shares used for basic EPS computation	2,296		547		2,229		555
Basic EPS	$	0.53	$	0.53	$	0.18	$	0.18
Diluted EPS:
Numerator
Net income attributable to common stockholders	$	1,215	$	290	$	408	$	101
Reallocation of net income attributable to participating securities	5		—		3		—
Reallocation of net income as a result of conversion of Class B to Class A common stock	290		—		101		—
Reallocation of net income to Class B common stock	—		2		—		3
Net income attributable to common stockholders for diluted EPS	$	1,510	$	292	$	512	$	104
Denominator
Number of shares used for basic EPS computation	2,296		547		2,229		555
Conversion of Class B to Class A common stock	547		—		555		—
Weighted average effect of dilutive securities:
Employee stock options	5		5		9		9
RSUs	35		5		37		11
Shares subject to repurchase	5		1		6		3
Number of shares used for diluted EPS computation	2,888		558		2,836		578
Diluted EPS	$	0.52	$	0.52	$	0.18	$	0.18

Cash and Cash Equivalents, and Marketable Securities (Tables)

Cash and Cash Equivalents, and Marketable Securities

The following table sets forth the cash and cash equivalents, and marketable securities (in millions):



	March 31, 2016		December 31, 2015
Cash and cash equivalents:
Cash	$	2,004	$	1,703
Money market funds	4,452		2,409
U.S. government securities	—		597
U.S. government agency securities	—		145
Corporate debt securities	—		53
Total cash and cash equivalents	6,456		4,907
Marketable securities:
U.S. government securities	5,183		5,948
U.S. government agency securities	4,815		4,475
Corporate debt securities	4,167		3,104
Total marketable securities	14,165		13,527
Total cash and cash equivalents, and marketable securities	$	20,621	$	18,434

Marketable Securities by Contractual Maturities

The following table classifies our marketable securities by contractual maturities (in millions):



	March 31, 2016
Due in one year	$	4,920
Due in one to three years	9,245
Total	$	14,165

Fair Value Measurement (Tables)

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy (in millions):



			Fair Value Measurement at Reporting Date Using
Description	March 31, 2016		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	$	4,452	$	4,452	$	—	$	—
Marketable securities:
U.S. government securities	5,183		5,183		—		—
U.S. government agency securities	4,815		4,815		—		—
Corporate debt securities	4,167		—		4,167		—
Total cash equivalents and marketable securities	$	18,617	$	14,450	$	4,167	$	—

Other liabilities:
Contingent consideration liability	$	285	$	—	$	—	$	285



			Fair Value Measurement at Reporting Date Using
Description	December 31, 2015		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	$	2,409	$	2,409	$	—	$	—
U.S. government securities	597		597		—		—
U.S. government agency securities	145		145		—		—
Corporate debt securities	53		—		53		—
Marketable securities:
U.S. government securities	5,948		5,948		—		—
U.S. government agency securities	4,475		4,475		—		—
Corporate debt securities	3,104		—		3,104		—
Total cash equivalents and marketable securities	$	16,731	$	13,574	$	3,157	$	—

Other liabilities:
Contingent consideration liability	$	260	$	—	$	—	$	260

Property and Equipment (Tables)

Property and Equipment

Property and equipment consists of the following (in millions):



	March 31, 2016			December 31, 2015
Land	$	683		$	596
Buildings	2,551			2,273
Leasehold improvements	310			447
Network equipment	4,106			3,633
Computer software, office equipment and other	276			248
Construction in progress	887			622
Total	8,813			7,819
Less: Accumulated depreciation	(2,346		)	(2,132		)
Property and equipment, net	$	6,467		$	5,687

Goodwill and Intangible Assets (Tables)

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2016 are as follows (in millions):



Balance as of December 31, 2015	$	18,026
Effect of currency translation adjustment	3
Balance as of March 31, 2016	$	18,029

Schedule of Finite-Lived Intangible Assets

Intangible assets consist of the following (in millions):



		March 31, 2016							December 31, 2015
	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Finite-lived intangible assets:
Acquired users	5.5	$	2,056	$	(456	)	$	1,600	$	2,056	$	(382	)	$	1,674
Acquired technology	3.0	892		(354		)	538		831		(310		)	521
Acquired patents	6.4	785		(356		)	429		785		(333		)	452
Trade names	3.8	629		(193		)	436		629		(163		)	466
Other	3.5	162		(98		)	64		162		(89		)	73
Total finite-lived intangible assets	4.9	$	4,524	$	(1,457	)	$	3,067	$	4,463	$	(1,277	)	$	3,186

Indefinite-lived intangible assets:
In-process research and development (IPR&D)		$	—	$	—		$	—	$	60	$	—		$	60

Total intangible assets		$	4,524	$	(1,457	)	$	3,067	$	4,523	$	(1,277	)	$	3,246

Schedule of Indefinite-Lived Intangible Assets

Intangible assets consist of the following (in millions):



		March 31, 2016							December 31, 2015
	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Finite-lived intangible assets:
Acquired users	5.5	$	2,056	$	(456	)	$	1,600	$	2,056	$	(382	)	$	1,674
Acquired technology	3.0	892		(354		)	538		831		(310		)	521
Acquired patents	6.4	785		(356		)	429		785		(333		)	452
Trade names	3.8	629		(193		)	436		629		(163		)	466
Other	3.5	162		(98		)	64		162		(89		)	73
Total finite-lived intangible assets	4.9	$	4,524	$	(1,457	)	$	3,067	$	4,463	$	(1,277	)	$	3,186

Indefinite-lived intangible assets:
In-process research and development (IPR&D)		$	—	$	—		$	—	$	60	$	—		$	60

Total intangible assets		$	4,524	$	(1,457	)	$	3,067	$	4,523	$	(1,277	)	$	3,246

Estimated Amortization Expense for Unamortized Acquired Intangible Assets

As of March 31, 2016, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):



The remainder of 2016	$	558
2017	683
2018	606
2019	517
2020	357
Thereafter	346
Total	$	3,067

Stockholders' Equity (Tables)

Stock Option Activity under Stock Plans

The following table summarizes the activities of stock option awards under the Stock Plans for the three months ended March 31, 2016:



	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, 2015	8,443		$	7.10
Stock options exercised	(501	)	3.63
Balance as of March 31, 2016	7,942		$	7.32	3.5	$	848
Stock options vested and expected to vest as of March 31, 2016	7,941		$	7.32	3.5	$	848
Stock options exercisable as of March 31, 2016	5,984		$	5.54	3.2	$	650


(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock, as reported on the NASDAQ Global Select Market, of $114.10 on March 31, 2016.

Restricted Stock Units Award Activity

The following table summarizes the activities for our unvested RSUs for the three months ended March 31, 2016:



	Unvested RSUs⁽¹⁾
	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested at December 31, 2015	116,409		$	65.95
Granted	20,498		110.03
Vested	(14,238	)	57.78
Forfeited	(1,053	)	64.67
Unvested at March 31, 2016	121,616		$	74.34


(1)	Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements.

Geographical Information (Tables)

Revenue and Property and Equipment by Geographic Area

Revenue by geography is based on the billing address of the marketer or developer. The following tables set forth revenue and property and equipment, net by geographic area (in millions):



	Three Months Ended March 31,
	2016		2015
Revenue:
United States	$	2,509	$	1,652
Rest of the world ⁽¹⁾	2,873		1,891
Total revenue	$	5,382	$	3,543


(1)	No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented.



	March 31, 2016		December 31, 2015
Property and equipment, net:
United States	$	5,082	$	4,498
Sweden	764		713
Rest of the world	621		476
Total property and equipment, net	$	6,467	$	5,687

Earnings per Share Antidilutive Securities (Details) (Restricted Stock Units (RSUs))

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Restricted Stock Units (RSUs)

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount

0

Earnings per Share (Details) (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Numerator

Net income

$ 1,510

$ 512

Less: Net income attributable to participating securities

5

3

Net income attributable to common stockholders

1,505

509

Denominator

Number of shares used for basic EPS computation (in shares)

2,843

2,784

Basic EPS (in dollars per share)

$ 0.53

$ 0.18

Numerator

Net income attributable to common stockholders

1,505

509

Denominator

Number of shares used for basic EPS computation (in shares)

2,843

2,784

Number of shares used for diluted EPS computation (in shares)

2,888

2,836

Diluted EPS (in dollars per share)

$ 0.52

$ 0.18

Class A Common Stock

Numerator

Net income

1,219

410

Less: Net income attributable to participating securities

4

2

Net income attributable to common stockholders

1,215

408

Denominator

Weighted average shares outstanding (in shares)

2,303

2,241

Less: Shares subject to repurchase (in shares)

7

12

Number of shares used for basic EPS computation (in shares)

2,296

2,229

Basic EPS (in dollars per share)

$ 0.53

$ 0.18

Numerator

Net income attributable to common stockholders

1,215

408

Reallocation of net income attributable to participating securities

5

3

Reallocation of net income as a result of conversion of Class B to Class A common stock

290

101

Reallocation of net income to Class B common stock

0

Net income attributable to common stockholders for diluted EPS

1,510

512

Denominator

Number of shares used for basic EPS computation (in shares)

2,296

2,229

Conversion of Class B to Class A common stock (in shares)

547

555

Shares subject to repurchase (in shares)

5

6

Number of shares used for diluted EPS computation (in shares)

2,888

2,836

Diluted EPS (in dollars per share)

$ 0.52

$ 0.18

Class A Common Stock |
Employee Stock Options

Denominator

Share based payment arrangements (in shares)

5

9

Class A Common Stock |
Restricted Stock Units (RSUs)

Denominator

Share based payment arrangements (in shares)

35

37

Class B Common Stock

Numerator

Net income

291

102

Less: Net income attributable to participating securities

1

Net income attributable to common stockholders

290

101

Denominator

Weighted average shares outstanding (in shares)

550

561

Less: Shares subject to repurchase (in shares)

3

6

Number of shares used for basic EPS computation (in shares)

547

555

Basic EPS (in dollars per share)

$ 0.53

$ 0.18

Numerator

Net income attributable to common stockholders

290

101

Reallocation of net income attributable to participating securities

0

Reallocation of net income as a result of conversion of Class B to Class A common stock

0

Reallocation of net income to Class B common stock

2

3

Net income attributable to common stockholders for diluted EPS

$ 292

$ 104

Denominator

Number of shares used for basic EPS computation (in shares)

547

555

Conversion of Class B to Class A common stock (in shares)

0

Shares subject to repurchase (in shares)

1

3

Number of shares used for diluted EPS computation (in shares)

558

578

Diluted EPS (in dollars per share)

$ 0.52

$ 0.18

Class B Common Stock |
Employee Stock Options

Denominator

Share based payment arrangements (in shares)

5

9

Class B Common Stock |
Restricted Stock Units (RSUs)

Denominator

Share based payment arrangements (in shares)

5

11

Cash and Cash Equivalents, and Marketable Securities (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2016

Dec. 31, 2015

Mar. 31, 2015

Dec. 31, 2014

Cash and Cash Equivalents, and Marketable Securities

Cash and cash equivalents

$ 6,456

$ 4,907

$ 3,419

$ 4,315

Marketable securities

14,165

13,527

Total cash and cash equivalents, and marketable securities

20,621

18,434

U.S. government securities

Cash and Cash Equivalents, and Marketable Securities

Marketable securities

5,183

5,948

U.S. government agency securities

Cash and Cash Equivalents, and Marketable Securities

Marketable securities

4,815

4,475

Corporate debt securities

Cash and Cash Equivalents, and Marketable Securities

Marketable securities

4,167

3,104

Cash

Cash and Cash Equivalents, and Marketable Securities

Cash and cash equivalents

2,004

1,703

Money market funds

Cash and Cash Equivalents, and Marketable Securities

Cash and cash equivalents

4,452

2,409

U.S. government securities

Cash and Cash Equivalents, and Marketable Securities

Cash and cash equivalents

0

597

U.S. government agency securities

Cash and Cash Equivalents, and Marketable Securities

Cash and cash equivalents

0

145

Corporate debt securities

Cash and Cash Equivalents, and Marketable Securities

Cash and cash equivalents

$ 0

$ 53

Cash and Cash Equivalents, and Marketable Securities - Contractual Maturities of Debt Securities (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2016

Dec. 31, 2015

Cash and Cash Equivalents, and Marketable Securities [Abstract]

Due in one year

$ 4,920

Due in one to three years

9,245

Total marketable securities

$ 14,165

$ 13,527

Fair Value Measurement (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Dec. 31, 2015

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

$ 14,165

$ 13,527

Change in fair value of contingent consideration liability

25

U.S. government securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

5,183

5,948

U.S. government agency securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

4,815

4,475

Corporate debt securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

4,167

3,104

Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Total cash equivalents and marketable securities

18,617

16,731

Contingent consideration liability

285

260

Fair Value, Measurements, Recurring |
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

14,450

13,574

Contingent consideration liability

0

Fair Value, Measurements, Recurring |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Total cash equivalents and marketable securities

4,167

3,157

Contingent consideration liability

0

Fair Value, Measurements, Recurring |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Total cash equivalents and marketable securities

0

Contingent consideration liability

285

260

Fair Value, Measurements, Recurring |
U.S. government securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

5,183

5,948

Fair Value, Measurements, Recurring |
U.S. government securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

5,183

5,948

Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

0

Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

0

Fair Value, Measurements, Recurring |
U.S. government agency securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

4,815

4,475

Fair Value, Measurements, Recurring |
U.S. government agency securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

4,815

4,475

Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

0

Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

0

Fair Value, Measurements, Recurring |
Corporate debt securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

4,167

3,104

Fair Value, Measurements, Recurring |
Corporate debt securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

0

Fair Value, Measurements, Recurring |
Corporate debt securities |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

4,167

3,104

Fair Value, Measurements, Recurring |
Corporate debt securities |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Marketable securities

0

Fair Value, Measurements, Recurring |
Money market funds

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

4,452

2,409

Fair Value, Measurements, Recurring |
Money market funds |
Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

4,452

2,409

Fair Value, Measurements, Recurring |
Money market funds |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

0

Fair Value, Measurements, Recurring |
Money market funds |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

0

Fair Value, Measurements, Recurring |
U.S. government securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

597

Fair Value, Measurements, Recurring |
U.S. government securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

597

Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

0

Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

0

Fair Value, Measurements, Recurring |
U.S. government agency securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

145

Fair Value, Measurements, Recurring |
U.S. government agency securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

145

Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

0

Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

0

Fair Value, Measurements, Recurring |
Corporate debt securities

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

53

Fair Value, Measurements, Recurring |
Corporate debt securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

0

Fair Value, Measurements, Recurring |
Corporate debt securities |
Significant Other Observable Inputs (Level 2)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

53

Fair Value, Measurements, Recurring |
Corporate debt securities |
Significant Unobservable Inputs (Level 3)

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Cash equivalents

$ 0

Property and Equipment (Detail) (USD $)

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Dec. 31, 2015

Property, Plant and Equipment

Property and equipment, gross

$ 8,813,000,000

$ 7,819,000,000

Less: Accumulated depreciation

(2,346,000,000)

(2,132,000,000)

Property and equipment, net

6,467,000,000

5,687,000,000

Interest costs capitalized

0

Land

Property, Plant and Equipment

Property and equipment, gross

683,000,000

596,000,000

Buildings

Property, Plant and Equipment

Property and equipment, gross

2,551,000,000

2,273,000,000

Leasehold improvements

Property, Plant and Equipment

Property and equipment, gross

310,000,000

447,000,000

Network equipment

Property, Plant and Equipment

Property and equipment, gross

4,106,000,000

3,633,000,000

Computer software, office equipment and other

Property, Plant and Equipment

Property and equipment, gross

276,000,000

248,000,000

Construction in progress

Property, Plant and Equipment

Property and equipment, gross

$ 887,000,000

$ 622,000,000

Goodwill and Intangible Assets - Change in Carrying Amount (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Goodwill

Goodwill beginning

$ 18,026

Effect of currency translation adjustment

3

Goodwill ending

$ 18,029

Goodwill and Intangible Assets - Intangible Assets (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Total intangible assets, gross

$ 4,524

$ 4,523

Total intangible assets, net

3,067

3,246

Amortization expense

180

179

Finite-Lived Intangible Assets [Line Items]

Weighted Average Remaining Useful Life (in years)

4 years 10 months 23 days

Gross Carrying Amount

4,524

4,463

Accumulated Amortization

(1,457)

(1,277)

Net Carrying Amount

3,067

3,186

In-process research and development (IPR&D)

Indefinite-lived Intangible Assets [Line Items]

Indefinite-lived intangible assets

0

60

Acquired users

Finite-Lived Intangible Assets [Line Items]

Weighted Average Remaining Useful Life (in years)

5 years 6 months 0 days

Gross Carrying Amount

2,056

Accumulated Amortization

(456)

(382)

Net Carrying Amount

1,600

1,674

Acquired technology

Finite-Lived Intangible Assets [Line Items]

Weighted Average Remaining Useful Life (in years)

3 years

Gross Carrying Amount

892

831

Accumulated Amortization

(354)

(310)

Net Carrying Amount

538

521

Acquired patents

Finite-Lived Intangible Assets [Line Items]

Weighted Average Remaining Useful Life (in years)

6 years 4 months 24 days

Gross Carrying Amount

785

Accumulated Amortization

(356)

(333)

Net Carrying Amount

429

452

Trade names

Finite-Lived Intangible Assets [Line Items]

Weighted Average Remaining Useful Life (in years)

3 years 9 months 17 days

Gross Carrying Amount

629

Accumulated Amortization

(193)

(163)

Net Carrying Amount

436

466

Other

Finite-Lived Intangible Assets [Line Items]

Weighted Average Remaining Useful Life (in years)

3 years 6 months

Gross Carrying Amount

162

Accumulated Amortization

(98)

(89)

Net Carrying Amount

$ 64

$ 73

Goodwill and Intangible Assets - Estimated Amortization Expense (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2016

Dec. 31, 2015

Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]

The remainder of 2016

$ 558

2017

683

2018

606

2019

517

2020

357

Thereafter

346

Net Carrying Amount

$ 3,067

$ 3,186

Long-term Debt (Details) (Revolving Credit Facility, 2013 Revolving Credit Facility, USD $)

1 Months Ended

Aug. 31, 2013

Mar. 31, 2016

Revolving Credit Facility |
2013 Revolving Credit Facility

Debt Instrument

Term loan facility, term period (in years)

5 years

Line of credit facility, maximum borrowing capacity

$ 6,500,000,000.0

Debt instrument, interest rate basis during period

LIBOR

Basis spread on variable rate (percent)

1.00%

Line of credit facility, unused capacity, commitment fee percentage

0.10%

Line of credit facility, amount outstanding

$ 0

Commitments and Contingencies (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Leases [Abstract]

Operating lease expense

$ 59

$ 39

Minimum

Leases [Abstract]

Lease expiration year

2016

Maximum

Leases [Abstract]

Lease expiration year

2032

Stockholders' Equity - Share-based Compensation Plans (Detail)

3 Months Ended

Mar. 31, 2016

Share-based Compensation Arrangement by Share-based Payment Award

Share-based employee compensation plans, number

2

2012 Plan

Share-based Compensation Arrangement by Share-based Payment Award

2012 equity incentive plan shares authorized

25,000,000

Shares reserved for issuance increase percentage

2.50%

Share-based compensation arrangement by share-based payment award, expiration period (in years)

10 years

Share-based compensation arrangement by share-based payment award, expiration period for plan (in years)

10 years

2012 Plan |
Minimum

Share-based Compensation Arrangement by Share-based Payment Award

Shares reserved for issuance increase date range

Jan. 01, 2013

2012 Plan |
Maximum

Share-based Compensation Arrangement by Share-based Payment Award

Shares reserved for issuance increase date range

Jan. 01, 2022

Stockholders' Equity - Stock Option Activity (Details) (USD $)

In Millions, except Share data in Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Class A Common Stock

Aggregate Intrinsic Value

Common stock, closing share price (in usd per share)

$ 114.10

Employee Stock Options

Number of Shares

Beginning balance (in shares)

8,443

Stock options exercised (in shares)

(501)

Ending balance (in shares)

7,942

Stock options vested and expected to vest as of period end (in shares)

7,941

Stock options exercisable as of period end (in shares)

5,984

Weighted Average Exercise Price

Beginning balance (in dollars per share)

$ 7.10

Stock options exercised (in dollars per share)

$ 3.63

Ending balance (in dollars per share)

$ 7.32

Stock options vested and expected to vest as of period end (in dollars per share)

$ 7.32

Stock options exercisable as of period end (in dollars per share)

$ 5.54

Weighted Average Remaining Contractual Term

Balance at period end (in years)

3 years 6 months

Stock options vested and expected to vest as of period end (in years)

3 years 6 months

Stock options exercisable as of period end (in years)

3 years 2 months 12 days

Aggregate Intrinsic Value

Balance at period end

$ 848 ¹

Stock options vested and expected to vest as of period end

848 ¹

Stock options exercisable as of period end

$ 650 ¹

[1] The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock, as reported on the NASDAQ Global Select Market, of $114.10 on March 31, 2016.

Stockholders' Equity - Restricted Stock Units (Details) (Restricted Stock Units (RSUs), USD $)

In Millions, except Share data in Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Restricted Stock Units (RSUs)

Number of Shares

Unvested at beginning of period (in shares)

116,409 ¹

Granted (in shares)

20,498

Vested (in shares)

(14,238)

Forfeited (in shares)

(1,053)

Unvested at end of period (in shares)

121,616 ¹

Weighted Average Grant Date Fair Value

Unvested at beginning of period (in dollars per share)

$ 65.95

Granted (in dollars per share)

$ 110.03

Vested (in dollars per share)

$ 57.78

Forfeited (in dollars per share)

$ 64.67

Unvested at end of period (in dollars per share)

$ 74.34

Fair value of vested RSUs

$ 1,450

$ 814

[1] Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements.

Stockholders' Equity - Additional Award Disclosures (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Share-based Compensation Arrangement by Share-based Payment Award

Future period share-based compensation expense

$ 8,670

Future period share-based compensation expense period of recognition (in years)

3 years

Restricted Stock Units (RSUs)

Share-based Compensation Arrangement by Share-based Payment Award

Future period share-based compensation expense

8,190

Other Awards

Share-based Compensation Arrangement by Share-based Payment Award

Future period share-based compensation expense

$ 478

Income Tax (Details) (USD $)

In Billions, unless otherwise specified

Mar. 31, 2016

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Unrecognized tax benefits

$ 3.07

$ 3.02

Unrecognized tax benefits that would impact effective tax rate

$ 2.41

Geographical Information - Revenue (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

Revenue by Geographical Area

Revenue

$ 5,382

$ 3,543

United States

Revenue by Geographical Area

Revenue

2,509

1,652

Rest of the World

Revenue by Geographical Area

Revenue

$ 2,873 ¹

$ 1,891 ¹

[1] No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented.

Geographical Information - Property and Equipment, Net (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2016

Dec. 31, 2015

Long-Lived Assets By Geographical Area

Property and equipment, net

$ 6,467

$ 5,687

United States

Long-Lived Assets By Geographical Area

Property and equipment, net

5,082

4,498

Sweden

Long-Lived Assets By Geographical Area

Property and equipment, net

764

713

Rest of the World

Long-Lived Assets By Geographical Area

Property and equipment, net

$ 621

$ 476

Subsequent Event (Details) (Subsequent Event)

0 Months Ended

Apr. 27, 2016

Subsequent Event

Subsequent Event [Line Items]

Stock dividend, number of shares of Class C capital stock each shareholder of Class A and Class B common stock will receive for every share they hold

2