Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2014 | Jan. 27, 2015 | |
Document Information | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | FB | ||
Entity Registrant Name | FACEBOOK INC | ||
Entity Central Index Key | 1326801 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $143,589,386,032 | ||
Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Class A Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 2,236,333,833 | ||
Class B Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 562,677,981 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $4,315 | $3,323 |
Marketable securities | 6,884 | 8,126 |
Accounts receivable, net of allowances for doubtful accounts of $39 and $38 as of December 31, 2014 and December 31, 2013, respectively | 1,678 | 1,109 |
Prepaid expenses and other current assets | 793 | 512 |
Total current assets | 13,670 | 13,070 |
Property and equipment, net | 3,967 | 2,882 |
Intangible assets, net | 3,929 | 883 |
Goodwill | 17,981 | 839 |
Other assets | 637 | 221 |
Total assets | 40,184 | 17,895 |
Current liabilities: | ||
Accounts payable | 176 | 87 |
Partners payable | 202 | 181 |
Accrued expenses and other current liabilities | 866 | 555 |
Deferred revenue and deposits | 66 | 38 |
Current portion of capital lease obligations | 114 | 239 |
Total current liabilities | 1,424 | 1,100 |
Capital lease obligations, less current portion | 119 | 237 |
Other liabilities | 2,545 | 1,088 |
Total liabilities | 4,088 | 2,425 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,234 million and 1,970 million shares issued and outstanding, including 13 million and 6 million outstanding shares subject to repurchase, as of December 31, 2014 and December 31, 2013, respectively; 4,141 million Class B shares authorized, 563 million and 577 million shares issued and outstanding, including 6 million outstanding shares subject to repurchase, as of December 31, 2014 and December 31, 2013, respectively | 0 | 0 |
Additional paid-in capital | 30,225 | 12,297 |
Accumulated other comprehensive (loss) income | -228 | 14 |
Retained earnings | 6,099 | 3,159 |
Total stockholders' equity | 36,096 | 15,470 |
Total liabilities and stockholders' equity | $40,184 | $17,895 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Current assets: | ||
Accounts receivable, allowances for doubtful accounts | $39 | $38 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $0.00 | |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, shares, issued | 2,234,113,007 | 1,970,000,000 |
Common stock, shares, outstanding | 2,234,113,007 | 1,970,000,000 |
Common stock, outstanding shares subject to repurchase | 13,000,000 | 6,000,000 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $0.00 | |
Common stock, shares authorized | 4,141,000,000 | 4,141,000,000 |
Common stock, shares, issued | 562,792,201 | 577,000,000 |
Common stock, shares, outstanding | 562,792,201 | 577,000,000 |
Common stock, outstanding shares subject to repurchase | 6,000,000 | 6,000,000 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue | $12,466 | $7,872 | $5,089 |
Costs and expenses: | |||
Cost of revenue | 2,153 | 1,875 | 1,364 |
Research and development | 2,666 | 1,415 | 1,399 |
Marketing and sales | 1,680 | 997 | 896 |
General and administrative | 973 | 781 | 892 |
Total costs and expenses | 7,472 | 5,068 | 4,551 |
Income from operations | 4,994 | 2,804 | 538 |
Interest and other income/(expense), net | -84 | -50 | -44 |
Income before provision for income taxes | 4,910 | 2,754 | 494 |
Provision for income taxes | 1,970 | 1,254 | 441 |
Net income | 2,940 | 1,500 | 53 |
Less: Net income attributable to participating securities | 15 | 9 | 21 |
Net income attributable to Class A and Class B common stockholders | 2,925 | 1,491 | 32 |
Earnings per share attributable to Class A and Class B common stockholders: | |||
Basic (in dollars per share) | $1.12 | $0.62 | $0.02 |
Diluted (in dollars per share) | $1.10 | $0.60 | $0.01 |
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: | |||
Basic (in shares) | 2,614 | 2,420 | 2,006 |
Diluted (in shares) | 2,664 | 2,517 | 2,166 |
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | 1,837 | 906 | 1,572 |
Cost of revenue | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | 62 | 42 | 88 |
Research and development | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | 1,328 | 604 | 843 |
Marketing and sales | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | 249 | 133 | 306 |
General and administrative | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | $198 | $127 | $335 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $2,940 | $1,500 | $53 |
Other comprehensive income (loss): | |||
Change in foreign currency translation adjustment | -239 | 11 | 9 |
Change in unrealized gain/loss on available-for-sale investments, net of tax | -3 | -1 | 1 |
Change in unrealized gain/loss on derivative, net of tax | 0 | 2 | -2 |
Comprehensive income | $2,698 | $1,512 | $61 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Convertible Preferred Stock | Convertible Preferred Stock | Class A and Class B Common Stock | Class A and Class B Common Stock | Additional Paid-In Capital | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Stockholders' Equity | Total Stockholders' Equity |
In Millions, except Share data, unless otherwise specified | Series A - E Preferred Stock | Series A - E Preferred Stock | Series A - E Preferred Stock | Series A - E Preferred Stock | |||||||
Common stock, value, outstanding beginning at Dec. 31, 2011 | $0 | ||||||||||
Convertible preferred stock, value, outstanding beginning at Dec. 31, 2011 | 615 | ||||||||||
Total Stockholders' Equity, beginning at Dec. 31, 2011 | 2,684 | -6 | 1,606 | 4,899 | |||||||
Convertible preferred stock, shares, outstanding beginning at Dec. 31, 2011 | 543,000,000 | ||||||||||
Common stock, shares outstanding beginning at Dec. 31, 2011 | 1,330,000,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock, shares | 180,000,000 | ||||||||||
Issuance of common stock, net of issuance costs, value | 0 | 6,760 | 6,760 | ||||||||
Issuance of common stock for cash upon exercise of stock options, shares | 135,000,000 | ||||||||||
Issuance of common stock for cash upon exercise of stock options, value | 0 | 17 | 17 | ||||||||
Issuance of common stock related to nonemployees for past services, shares | 0 | ||||||||||
Issuance of common stock related to nonemployees for past services, value | 0 | 1 | 1 | ||||||||
Issuance of common stock related to acquisitions, shares | 26,000,000 | ||||||||||
Issuance of common stock related to acquisitions, value | 0 | 274 | 274 | ||||||||
Issuance of common stock for settlement of restricted stock units (RSUs) | 279,000,000 | 0 | |||||||||
Shares withheld related to net share settlement, shares | -123,000,000 | ||||||||||
Shares withheld related to net share settlement, value | -2,862 | -2,862 | |||||||||
Conversion of stock into common stock | -543,000,000 | ||||||||||
Conversion of stock, amount converted | -615 | ||||||||||
Conversion of stock, shares | 545,000,000 | ||||||||||
Conversion of stock, value | 0 | 615 | 0 | ||||||||
Share-based compensation, related to employee share-based awards | 1,572 | 1,572 | |||||||||
Tax benefit from share-based award activity | 1,033 | 1,033 | |||||||||
Other comprehensive income | 8 | 8 | |||||||||
Net income | 53 | 53 | 53 | ||||||||
Common stock, value, outstanding ending at Dec. 31, 2012 | 0 | ||||||||||
Convertible preferred stock, value, outstanding ending at Dec. 31, 2012 | 0 | ||||||||||
Total Stockholders' Equity, ending at Dec. 31, 2012 | 10,094 | 2 | 1,659 | 11,755 | |||||||
Convertible preferred stock, shares, outstanding ending at Dec. 31, 2012 | 0 | ||||||||||
Common stock, shares outstanding ending at Dec. 31, 2012 | 2,372,000,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock, shares | 27,000,000 | ||||||||||
Issuance of common stock, net of issuance costs, value | 0 | 1,478 | 1,478 | ||||||||
Issuance of common stock for cash upon exercise of stock options, shares | 101,000,000 | ||||||||||
Issuance of common stock for cash upon exercise of stock options, value | 0 | 26 | 26 | ||||||||
Issuance of common stock related to nonemployees for past services, shares | 0 | ||||||||||
Issuance of common stock related to nonemployees for past services, value | 0 | 3 | 3 | ||||||||
Issuance of common stock related to acquisitions, shares | 9,000,000 | ||||||||||
Issuance of common stock related to acquisitions, value | 0 | 77 | 77 | ||||||||
Issuance of common stock for settlement of restricted stock units (RSUs) | 65,000,000 | 0 | |||||||||
Shares withheld related to net share settlement, shares | -27,000,000 | ||||||||||
Shares withheld related to net share settlement, value | -889 | -889 | |||||||||
Share-based compensation, related to employee share-based awards | 906 | 906 | |||||||||
Tax benefit from share-based award activity | 602 | 602 | |||||||||
Other comprehensive income | 12 | 12 | |||||||||
Net income | 1,500 | 1,500 | 1,500 | ||||||||
Common stock, value, outstanding ending at Dec. 31, 2013 | 0 | ||||||||||
Convertible preferred stock, value, outstanding ending at Dec. 31, 2013 | 0 | ||||||||||
Total Stockholders' Equity, ending at Dec. 31, 2013 | 15,470 | 12,297 | 14 | 3,159 | 15,470 | ||||||
Convertible preferred stock, shares, outstanding ending at Dec. 31, 2013 | 0 | ||||||||||
Common stock, shares outstanding ending at Dec. 31, 2013 | 2,547,000,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock for cash upon exercise of stock options, shares | 9,000,000 | ||||||||||
Issuance of common stock for cash upon exercise of stock options, value | 0 | 18 | 18 | ||||||||
Issuance of common stock related to acquisitions, shares | 201,000,000 | ||||||||||
Issuance of common stock related to acquisitions, value | 0 | 14,344 | 14,344 | ||||||||
Issuance of common stock for settlement of restricted stock units (RSUs) | 41,000,000 | 0 | |||||||||
Shares withheld related to net share settlement, shares | -1,000,000 | ||||||||||
Shares withheld related to net share settlement, value | -73 | -73 | |||||||||
Share-based compensation, related to employee share-based awards | 1,786 | 1,786 | |||||||||
Tax benefit from share-based award activity | 1,853 | 1,853 | |||||||||
Other comprehensive income | -242 | -242 | |||||||||
Net income | 2,940 | 2,940 | 2,940 | ||||||||
Common stock, value, outstanding ending at Dec. 31, 2014 | 0 | ||||||||||
Convertible preferred stock, value, outstanding ending at Dec. 31, 2014 | 0 | ||||||||||
Total Stockholders' Equity, ending at Dec. 31, 2014 | $36,096 | $30,225 | ($228) | $6,099 | $36,096 | ||||||
Convertible preferred stock, shares, outstanding ending at Dec. 31, 2014 | 0 | ||||||||||
Common stock, shares outstanding ending at Dec. 31, 2014 | 2,797,000,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net income | $2,940 | $1,500 | $53 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,243 | 1,011 | 649 |
Lease abandonment | -31 | 117 | 8 |
Share-based compensation | 1,786 | 906 | 1,572 |
Deferred income taxes | -210 | -37 | -186 |
Tax benefit from share-based award activity | 1,853 | 602 | 1,033 |
Excess tax benefit from share-based award activity | -1,869 | -609 | -1,033 |
Other | 7 | 56 | 15 |
Changes in assets and liabilities: | |||
Accounts receivable | -610 | -378 | -170 |
Prepaid expenses and other current assets | -123 | 355 | -465 |
Other assets | -216 | -142 | 2 |
Accounts payable | 31 | 26 | 1 |
Partners payable | -28 | 12 | -2 |
Accrued expenses and other current liabilities | 328 | -38 | 152 |
Deferred revenue and deposits | 10 | 8 | -60 |
Other liabilities | 346 | 833 | 43 |
Net cash provided by operating activities | 5,457 | 4,222 | 1,612 |
Cash flows from investing activities | |||
Purchases of property and equipment | -1,831 | -1,362 | -1,235 |
Purchases of marketable securities | -9,104 | -7,433 | -10,307 |
Sales of marketable securities | 8,438 | 2,988 | 2,100 |
Maturities of marketable securities | 1,909 | 3,563 | 3,333 |
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets | -4,975 | -368 | -911 |
Change in restricted cash and deposits | -348 | -11 | -2 |
Other investing activities, net | -2 | -1 | -2 |
Net cash used in investing activities | -5,913 | -2,624 | -7,024 |
Cash flows from financing activities | |||
Net proceeds from issuance of common stock | 0 | 1,478 | 6,760 |
Taxes paid related to net share settlement | -73 | -889 | -2,862 |
Proceeds from exercise of stock options | 18 | 26 | 17 |
Proceeds from long-term debt, net of issuance cost | 0 | 0 | 1,496 |
Repayment of long-term debt | 0 | -1,500 | 0 |
Proceeds from sale and lease-back transactions | 0 | 0 | 205 |
Principal payments on capital lease obligations | -243 | -391 | -366 |
Excess tax benefit from share-based award activity | 1,869 | 609 | 1,033 |
Net cash provided by (used in) financing activities | 1,571 | -667 | 6,283 |
Effect of exchange rate changes on cash and cash equivalents | -123 | 8 | 1 |
Net increase in cash and cash equivalents | 992 | 939 | 872 |
Cash and cash equivalents at beginning of period | 3,323 | 2,384 | 1,512 |
Cash and cash equivalents at end of period | 4,315 | 3,323 | 2,384 |
Cash paid during the period for: | |||
Interest | 14 | 38 | 38 |
Income taxes | 184 | 82 | 184 |
Cash received during the period for: | |||
Income taxes | 6 | 421 | 131 |
Non-cash investing and financing activities: | |||
Fair value of shares issued related to acquisitions of businesses | 14,344 | 77 | 274 |
Net change in accounts payable and accrued expenses and other current liabilities | |||
Non-cash investing and financing activities: | |||
Property and equipment incurred but not yet paid | 91 | 53 | -40 |
Property and equipment acquired under capital leases | |||
Non-cash investing and financing activities: | |||
Property and equipment incurred but not yet paid | $0 | $11 | $340 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |||||||||||
Organization and Description of Business | ||||||||||||
Facebook was incorporated in Delaware in July 2004. Our mission is to give people the power to share and make the world more open and connected. We build products that support our mission by creating value for people, marketers, and developers. We generate substantially all of our revenue from advertising and from fees associated with our Payments infrastructure that enables users to purchase virtual and digital goods from developers. | ||||||||||||
Basis of Presentation | ||||||||||||
We prepared the consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. | ||||||||||||
Use of Estimates | ||||||||||||
Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the 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. | ||||||||||||
Revenue Recognition | ||||||||||||
We generate substantially all of our revenue from advertising and payment processing fees. We recognize revenue once all of the following criteria have been met: | ||||||||||||
• | persuasive evidence of an arrangement exists; | |||||||||||
• | delivery of our obligations to our customer has occurred; | |||||||||||
• | the price is fixed or determinable; and | |||||||||||
• | collectability of the related receivable is reasonably assured. | |||||||||||
Revenue for the years ended December 31, 2014, 2013, and 2012 consists of the following (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Advertising | $ | 11,492 | $ | 6,986 | $ | 4,279 | ||||||
Payments and other fees | 974 | 886 | 810 | |||||||||
Total revenue | $ | 12,466 | $ | 7,872 | $ | 5,089 | ||||||
Advertising | ||||||||||||
Advertising revenue is generated by displaying ad products on the Facebook properties, including our mobile applications, and third-party affiliated websites or mobile applications. The arrangements are evidenced by either online acceptance of terms and conditions or contracts that stipulate the types of advertising to be delivered, the timing and the pricing. Marketers pay for ad products either directly or through their relationships with advertising agencies, based on the number of clicks made by our users, the number of actions taken by our users, or the number of impressions delivered. The typical term of an advertising arrangement is approximately 30 days with billing generally occurring after the delivery of the advertisement. | ||||||||||||
We recognize revenue from the delivery of click-based ads in the period in which a user clicks on the content, and action-based ads in the period in which a user takes the action the marketer contracted for. We recognize revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. | ||||||||||||
Payments and Other Fees | ||||||||||||
We enable Payments from people to purchase virtual and digital goods from our developers. People can transact and make payments on the Facebook website by using debit cards and credit cards, PayPal, mobile phone payments, gift cards, or other methods. | ||||||||||||
When a person engages in a payment transaction for the purchase of a virtual or digital good from a developer, we remit to the developer an amount that is based on the total amount of the transaction less the processing fee that we charge the developer. The price of the purchase is an amount that is solely determined by the developer. Our revenue is the net amount of the transaction, representing our processing fee for the service performed. We record revenue on a net basis as we do not consider ourselves to be the principal in the sale of the virtual or digital good to the person. Additionally, we record all Payments revenue at the time of the purchase of the related virtual goods, net of estimated refunds or chargebacks | ||||||||||||
Other fees, which includes our ad serving and measurement products and the delivery of virtual reality platform devices, were not material in all periods presented in our financial statements. | ||||||||||||
Revenue is recognized net of applicable sales and other taxes. | ||||||||||||
Cost of Revenue | ||||||||||||
Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products. These include expenses related to the operation of our data centers such as facility and server equipment depreciation, facility and server equipment rent expense, energy and bandwidth costs, support and maintenance costs, and salaries, benefits, and share-based compensation for employees on our operations teams. Cost of revenue also includes credit card and other transaction fees related to processing customer transactions, amortization of intangible assets, and cost of virtual reality platform device inventory sold. | ||||||||||||
Share-based Compensation | ||||||||||||
We account for share-based employee compensation plans under the fair value recognition and measurement provisions of GAAP. Those provisions require all share-based payments to employees, including grants of stock options and restricted stock units (RSUs), to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis in our consolidated statements of income over the period during which the employee is required to perform service in exchange for the award. The majority of our awards are earned over a service period of four to five years. | ||||||||||||
Share-based compensation expense is recorded net of estimated forfeitures in our consolidated statements of income and as such, only those share-based awards that we expect to vest are recorded. We estimate the forfeiture rate based on historical forfeitures of equity awards and adjust the rate to reflect changes in facts and circumstances, if any. We will revise our estimated forfeiture rate if actual forfeitures differ from our initial estimates. | ||||||||||||
We have historically issued unvested restricted shares to employee stockholders of certain acquired companies. As these awards are generally subject to continued post-acquisition employment, we have accounted for them as post-acquisition share-based compensation expense. We recognize compensation expense equal to the grant date fair value of the common stock on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. | ||||||||||||
During the years ended December 31, 2014, 2013, and 2012, we realized tax benefits from share-based award activity of $1.85 billion, $602 million, and $1.03 billion, respectively. These amounts reflect the extent that the total reduction to our income tax liability from share-based award activity was greater than the amount of the deferred tax assets that we had previously recorded in anticipation of these benefits. These amounts are the aggregate of the individual transactions in which the reduction to our income tax liability was greater than the deferred tax assets that we recorded, reduced by any individual transactions in which the reduction to our income tax liability was less than the deferred tax assets that were recorded. These net amounts were recorded as an adjustment to stockholders' equity in each period, as an increase to cash flows from operating activities, and were not recognized in our consolidated statements of income. | ||||||||||||
In addition, we reported excess tax benefits that decreased our cash flows from operating activities and increased our cash flows from financing activities for the years ended December 31, 2014, 2013, and 2012, by $1.87 billion, $609 million, and $1.03 billion, respectively. The amounts of these excess tax benefits reflect the total of the individual transactions in which the reduction to our income tax liability was greater than the deferred tax assets that were recorded, but were not reduced by any of the individual transactions in which the reduction to our income tax liability was less than the deferred tax assets that were recorded. | ||||||||||||
Income Taxes | ||||||||||||
We recognize income taxes under the asset and liability method. We recognize deferred income tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to apply to taxable income for the years in which differences are expected to reverse. We recognize the effect on deferred income taxes of a change in tax rates in income in the period that includes the enactment date. | ||||||||||||
We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. | ||||||||||||
We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. We make adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The provision for income taxes includes the effects of any reserves that are considered appropriate, as well as the related net interest and penalties. | ||||||||||||
Advertising Expense | ||||||||||||
Advertising costs are expensed when incurred and are included in marketing and sales expenses in the accompanying consolidated statements of income. We incurred advertising expenses of $135 million, $117 million, and $67 million for the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||
Cash and Cash Equivalents, and Marketable Securities | ||||||||||||
Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds with maturities of 90 days or less from the date of purchase. | ||||||||||||
We hold investments in marketable securities, consisting of U.S. government securities, U.S. government agency securities, and corporate debt securities. We classify our marketable securities as available-for-sale investments in our current assets because they represent investments of cash available for current operations. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive (loss) income in stockholders' equity. Unrealized losses are charged against interest and other income/(expense), net when a decline in fair value is determined to be other-than-temporary. We have not recorded any such impairment charge in the periods presented. We determine realized gains or losses on sale of marketable securities on a specific identification method, and record such gains or losses as interest and other income/(expense), net. | ||||||||||||
We classify certain restricted cash balances within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions. | ||||||||||||
Fair Value of Financial Instruments | ||||||||||||
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: | ||||||||||||
Level 1-Quoted prices in active markets for identical assets or liabilities. | ||||||||||||
Level 2-Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||
Level 3-Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability. | ||||||||||||
Our valuation techniques used to measure the fair value of money market funds and marketable debt securities were derived from quoted market prices or alternative pricing sources and models utilizing market observable inputs. Our valuation technique used to measure the fair value of our contingent consideration liability was 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. | ||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||||||||||
Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. We make estimates for the allowance for doubtful accounts based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect customers' ability to pay. | ||||||||||||
Property and Equipment | ||||||||||||
Property and equipment, which includes amounts recorded under capital leases, are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the remaining lease term, in the case of a capital lease, whichever is shorter. | ||||||||||||
The estimated useful lives of property and equipment are described below: | ||||||||||||
Property and Equipment | Useful Life | |||||||||||
Network equipment | Three to five years | |||||||||||
Buildings | Four to 20 years | |||||||||||
Computer software, office equipment and other | Three to five years | |||||||||||
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term | |||||||||||
Land and assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for their intended use. | ||||||||||||
The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in income from operations. | ||||||||||||
Lease Obligations | ||||||||||||
We lease office space, data centers, and equipment under non-cancelable capital and operating leases with various expiration dates through 2030. Certain of the operating lease agreements contain rent holidays, rent escalation provisions, and purchase options. Rent holidays and rent escalation provisions are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease inception. | ||||||||||||
Loss Contingencies | ||||||||||||
We are involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. We review these provisions at least quarterly and adjust these provisions accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. | ||||||||||||
Business Combinations | ||||||||||||
We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. | ||||||||||||
Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets | ||||||||||||
We evaluate the recoverability of property and equipment and finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. We have not recorded any significant impairment charge during the years presented. | ||||||||||||
We review goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment under Accounting Standards Update (ASU) No. 2011-08, Goodwill and Other (Topic 350): Testing Goodwill for Impairment, issued by the Financial Accounting Standards Board (FASB). If we determine that it is more likely than not that its fair value is less than its carrying amount, then the two-step goodwill impairment test is performed. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further step is required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the goodwill carrying amount over the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. As of December 31, 2014, no impairment of goodwill has been identified. | ||||||||||||
Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The estimated remaining useful lives for intangible assets range from less than one year to 15 years. Acquired indefinite-lived intangible assets related to our in-process research and development (IPR&D) are capitalized and subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, we will make a separate determination of useful life of the acquired indefinite-lived intangible assets and the related amortization will be recorded as an expense over the estimated useful life of the specific projects. | ||||||||||||
In addition to the recoverability assessment, we routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. | ||||||||||||
Deferred Revenue and Deposits | ||||||||||||
Deferred revenue consists of billings in advance of revenue recognition. Deposits relate to unused balances held on behalf of our users. Once this balance is utilized by a user, approximately 70% of this amount would then be payable to the developer and the balance would be recognized as revenue. | ||||||||||||
Deferred revenue and deposits consists of the following (in millions): | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred revenue | $ | 38 | $ | 13 | ||||||||
Deposits | 28 | 25 | ||||||||||
Total deferred revenue and deposits | $ | 66 | $ | 38 | ||||||||
Foreign Currency | ||||||||||||
Generally the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenue, costs, and expenses. Translation gains and losses are recorded in accumulated other comprehensive (loss) income as a component of stockholders' equity. As of December 31, 2014 and 2013, we had a cumulative translation loss of $227 million and a cumulative translation gain of $12 million, respectively. Net losses resulting from foreign exchange transactions were $87 million, $14 million, and $9 million for the years ended December 31, 2014, 2013, and 2012, respectively. These losses were recorded as interest and other income/(expense), net on our consolidated statements of income. | ||||||||||||
Credit Risk and Concentration | ||||||||||||
Financial instruments owned by the company that are potentially subject to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, marketable securities, and accounts receivable. Cash equivalents consist of short-term money market funds, which are managed by reputable financial institutions. Marketable securities consist of investments in U.S. government securities, U.S. government agency securities, and corporate debt securities. Our investment policy limits investment instruments to U.S. government securities, U.S. government agency securities, and corporate debt securities with the main objective of preserving capital and maintaining liquidity. | ||||||||||||
Accounts receivable are typically unsecured and are derived from revenue earned from customers across different industries and countries. We generated 45%, 46%, and 51% of our revenue for the years ended December 31, 2014, 2013, and 2012, respectively, from marketers and developers based in the United States, with the majority of revenue outside of the United States coming from customers located in western Europe, Brazil, Canada, and Australia. | ||||||||||||
We perform ongoing credit evaluations of our customers, and generally do not require collateral. We maintain an allowance for estimated credit losses. During the years ended December 31, 2014, 2013, and 2012, our bad debt expenses were $19 million, $21 million, and $9 million, respectively. In the event that accounts receivable collection cycles deteriorate, our operating results and financial position could be adversely affected. | ||||||||||||
No customer represented 10% or more of total revenue during the years ended December 31, 2014, 2013, and 2012. | ||||||||||||
Segments | ||||||||||||
Our chief operating decision-maker is our Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, we have determined that we have a single reportable segment and operating unit structure. | ||||||||||||
Recently Issued and Adopted Accounting Pronouncement | ||||||||||||
In May 2014, the Financial Accounting Standards Board issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for us in the first quarter of 2017. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. |
Acquisitions
Acquisitions | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||
Acquisitions | Acquisitions | |||||||||||||||||
In October 2014, we completed our acquisition of WhatsApp Inc. (WhatsApp), a privately-held cross-platform mobile messaging company that is expected to provide us with strategic advantages in the mobile ecosystem and expand our mobile messaging offerings. Pursuant to the merger agreement, we issued approximately 178 million shares of our Class A common stock and paid $4.59 billion in cash. We also granted 46 million RSUs to WhatsApp employees which are recognized as share-based compensation expense over the employees' required service periods. | ||||||||||||||||||
Upon acquisition, WhatsApp became our wholly-owned subsidiary. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. | ||||||||||||||||||
The following table summarizes the components of the preliminary purchase consideration transferred based on the closing price of $77.56 per share of our common stock as of the acquisition date (in millions): | ||||||||||||||||||
Cash | $ | 4,589 | ||||||||||||||||
Common stock | 13,787 | |||||||||||||||||
Less: post-acquisition share-based compensation and other compensation expense | (1,067 | ) | ||||||||||||||||
Less: cash and promissory notes acquired on acquisition date | (116 | ) | ||||||||||||||||
Purchase consideration | $ | 17,193 | ||||||||||||||||
Of the $1.07 billion of share-based compensation and other compensation expense excluded from the purchase consideration above, $188 million was accounted for as share-based compensation expense, of which approximately $50 million was settled in cash, at closing, as a result of the vesting provisions of WhatsApp employee awards on the acquisition date. The remaining $879 million (approximately 8.5 million shares of Class A common stock and $219 million in cash) is subject to continuous employment and will be recognized as share-based compensation and other compensation expense over the required service period of up to three years. | ||||||||||||||||||
The following unaudited pro forma information presents the combined results of operations as if the acquisition had been completed on January 1, 2013, the beginning of the comparable prior annual reporting period. The unaudited pro forma results include: (i) amortization associated with preliminary estimates for the acquired intangible assets; (ii) recognition of the post-acquisition share-based compensation and other compensation expense; (iii) share-based compensation expense related to the 46 million RSUs granted to WhatsApp employees; and (iv) the associated tax impact on these unaudited pro forma adjustments. | ||||||||||||||||||
The unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies or the effect of the incremental costs incurred in integrating the two companies. Accordingly, these unaudited pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations (in millions): | ||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Revenue | $ | 12,487 | $ | 7,882 | ||||||||||||||
Net income | $ | 1,757 | $ | 65 | ||||||||||||||
The unaudited pro forma combined net income for the year ended December 31, 2013 includes a non-recurring pro forma adjustment of $188 million of share-based compensation expense recognized at closing as a result of the vesting provisions of WhatsApp employee awards on the acquisition date. | ||||||||||||||||||
The tax withholdings related to the WhatsApp vested merger consideration were funded by net share settlement. The amount remitted to the tax authorities for the employees' tax obligation to the tax authorities was reflected as a financing activity within our consolidated statements of cash flows. | ||||||||||||||||||
Oculus | ||||||||||||||||||
In July 2014, we completed our acquisition of Oculus VR, Inc. (Oculus), a privately-held company developing virtual reality technology that is expected to expand our platform. Pursuant to the merger agreement, we issued 23 million shares of our Class B common stock and paid $400 million in cash. Furthermore, up to an additional three million shares of our Class B common stock and $60 million in cash will be payable contingent upon the completion of certain milestones. We determined the acquisition-date fair value of the contingent consideration liability, based on the likelihood of payment related to the contingent earn-out clauses, as part of the consideration transferred. For contingent consideration to be settled in common stock, we use the fair value of the shares as of the acquisition date, which is remeasured on each reporting date until settlement. See Note 5 “Fair Value Measurements" for subsequent measurements of this contingent liability. The earn-out portion that would be payable to employee equityholders is subject to continuous employment through the applicable payment dates and as such has been excluded from purchase consideration transferred and accounted for as share-based compensation and other compensation expense. | ||||||||||||||||||
We have accounted for this acquisition as a business combination. This method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date and that in-process research and development (IPR&D) be recorded at fair value on the balance sheet regardless of the likelihood of success of the related product or technology. | ||||||||||||||||||
The following table summarizes the components of the preliminary purchase consideration transferred based on the closing price of our common stock as of the acquisition date (in millions): | ||||||||||||||||||
Cash | $ | 400 | ||||||||||||||||
Common stock | 1,601 | |||||||||||||||||
Less: post-acquisition share-based compensation and other compensation expense | (297 | ) | ||||||||||||||||
Less: cash acquired on acquisition date | (20 | ) | ||||||||||||||||
Total purchase consideration, excluding contingent consideration | $ | 1,684 | ||||||||||||||||
Contingent consideration | 169 | |||||||||||||||||
Purchase consideration | $ | 1,853 | ||||||||||||||||
Of the $297 million of share-based compensation and other compensation expense excluded from the purchase consideration above, approximately $13 million was recognized as share-based compensation at closing as a result of the vesting provisions of employee replacement awards on the acquisition date. The remaining $284 million is subject to continuous employment and will be recognized as share-based compensation and other compensation expense over the required service period of four years. | ||||||||||||||||||
Other acquisitions | ||||||||||||||||||
During the year ended December 31, 2014, we also completed several other business acquisitions for total consideration of $485 million. These acquisitions were not material to our consolidated financial statements either individually or in the aggregate. | ||||||||||||||||||
We have included the financial results of WhatsApp, Oculus and the other business acquisitions, which are not material, in our consolidated financial statements from their respective dates of acquisition. Pro forma results of operations related to our acquisitions, other than WhatsApp, during the year ended December 31, 2014 have not been presented because they are not material to our consolidated statements of income, either individually or in the aggregate. | ||||||||||||||||||
The fair value of assets acquired and liabilities assumed from our acquisition of WhatsApp and Oculus was based on a preliminary valuation and our estimates and assumptions are subject to change within the measurement period. The primary areas of the purchase price that are not yet finalized are related to income taxes and residual goodwill. Measurement period adjustments that we determine to be material will be applied retrospectively to the period of acquisition in our consolidated financial statements and, depending on the nature of the adjustments, other periods subsequent to the period of acquisition could also be affected. | ||||||||||||||||||
The following table summarizes the allocation of estimated fair values of the net assets acquired during the year ended December 31, 2014, including the related estimated useful lives, where applicable: | ||||||||||||||||||
Oculus | Other | |||||||||||||||||
(in millions) | Useful lives (in years) | (in millions) | Useful lives (in years) | (in millions) | Useful lives (in years) | |||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||
Acquired users | $ | 2,026 | 7 | $ | — | $ | — | |||||||||||
Trade names | 448 | 5 | 113 | 7 | 26 | 5 | ||||||||||||
Acquired technology | 288 | 5 | 235 | 5 | 68 | 5-Mar | ||||||||||||
Other | 21 | 2 | 19 | 2 | 61 | 5 | ||||||||||||
IPR&D | — | 60 | — | |||||||||||||||
(Liabilities assumed) assets acquired | (33 | ) | — | 103 | ||||||||||||||
Deferred tax liabilities | (899 | ) | (107 | ) | (48 | ) | ||||||||||||
Net assets acquired | $ | 1,851 | $ | 320 | $ | 210 | ||||||||||||
Goodwill | 15,342 | 1,533 | 275 | |||||||||||||||
Total fair value consideration | $ | 17,193 | $ | 1,853 | $ | 485 | ||||||||||||
IPR&D intangible assets represent the value assigned to acquired research and development projects that, as of the acquisition date had not established technological feasibility and had no alternative future use. The IPR&D intangible assets are capitalized and accounted for as indefinite-lived intangible assets and are subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project and launch of the product, we will make a separate determination of useful life of the IPR&D intangible assets and the related amortization will be recorded as an expense over the estimated useful life of the specific projects. | ||||||||||||||||||
Goodwill generated from the WhatsApp acquisition is primarily attributable to expected synergies from future growth, from potential monetization opportunities, from strategic advantages provided in the mobile ecosystem, and from expansion of our mobile messaging offerings. Goodwill generated from all other business acquisitions completed during the year ended December 31, 2014 is primarily attributable to expected synergies from future growth, from potential monetization opportunities and, also for Oculus, as a potential to expand our platform. All goodwill generated during this period is not deductible for tax purposes. |
Earnings_per_Share
Earnings per Share | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||
Earnings per Share | 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. 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 year ended December 31, 2014 do not include contingent earn-out shares resulting from our acquisition of Oculus. Issuance of these earn-out shares is dependent upon the completion of certain milestones. These milestones were not met as of December 31, 2014 and accordingly, these shares are excluded from the effect of basic and dilutive securities. | ||||||||||||||||||||||||
We have also excluded 14 million, 1 million, and 15 million RSUs for the years ended December 31, 2014, 2013, and 2012, respectively, because the impact would be 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 are calculated as follows (in millions, except per share amounts): | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Class | Class | Class | Class | Class | Class | |||||||||||||||||||
A | B | A | B | A | B | |||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income | $ | 2,308 | $ | 632 | $ | 1,114 | $ | 386 | $ | 18 | $ | 35 | ||||||||||||
Less: Net income attributable to participating securities | 12 | 3 | 7 | 2 | 7 | 14 | ||||||||||||||||||
Net income attributable to common stockholders | $ | 2,296 | $ | 629 | $ | 1,107 | $ | 384 | $ | 11 | $ | 21 | ||||||||||||
Denominator | ||||||||||||||||||||||||
Weighted average shares outstanding | 2,059 | 568 | 1,803 | 631 | 668 | 1,344 | ||||||||||||||||||
Less: Shares subject to repurchase | 6 | 7 | 5 | 9 | 1 | 5 | ||||||||||||||||||
Number of shares used for basic EPS computation | 2,053 | 561 | 1,798 | 622 | 667 | 1,339 | ||||||||||||||||||
Basic EPS | $ | 1.12 | $ | 1.12 | $ | 0.62 | $ | 0.62 | $ | 0.02 | $ | 0.02 | ||||||||||||
Diluted EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to common stockholders | $ | 2,296 | $ | 629 | $ | 1,107 | $ | 384 | $ | 11 | $ | 21 | ||||||||||||
Reallocation of net income attributable to participating securities | 15 | — | 9 | — | — | — | ||||||||||||||||||
Reallocation of net income as a result of conversion of Class B to Class A common stock | 629 | — | 384 | — | 21 | — | ||||||||||||||||||
Reallocation of net income to Class B common stock | — | 23 | — | 39 | — | 1 | ||||||||||||||||||
Net income attributable to common stockholders for diluted EPS | $ | 2,940 | $ | 652 | $ | 1,500 | $ | 423 | $ | 32 | $ | 22 | ||||||||||||
Denominator | ||||||||||||||||||||||||
Number of shares used for basic EPS computation | 2,053 | 561 | 1,798 | 622 | 667 | 1,339 | ||||||||||||||||||
Conversion of Class B to Class A common stock | 561 | — | 622 | — | 1,339 | — | ||||||||||||||||||
Weighted average effect of dilutive securities: | ||||||||||||||||||||||||
Employee stock options | 13 | 13 | 65 | 65 | 134 | 134 | ||||||||||||||||||
RSUs | 30 | 13 | 25 | 15 | 23 | 23 | ||||||||||||||||||
Shares subject to repurchase | 7 | 4 | 7 | 7 | 3 | 3 | ||||||||||||||||||
Number of shares used for diluted EPS computation | 2,664 | 591 | 2,517 | 709 | 2,166 | 1,499 | ||||||||||||||||||
Diluted EPS | $ | 1.1 | $ | 1.1 | $ | 0.6 | $ | 0.6 | $ | 0.01 | $ | 0.01 | ||||||||||||
Cash_and_Cash_Equivalents_and_
Cash and Cash Equivalents, and Marketable Securities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and Cash Equivalents, and Marketable Securities [Abstract] | ||||||||
Cash and Cash Equivalents, and Marketable Securities | Cash and Cash Equivalents, and Marketable Securities | |||||||
The following table sets forth the cash, cash equivalents, and marketable securities (in millions): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Cash and cash equivalents: | ||||||||
Cash | $ | 2,162 | $ | 1,044 | ||||
Money market funds | 2,153 | 2,279 | ||||||
Total cash and cash equivalents | 4,315 | 3,323 | ||||||
Marketable securities: | ||||||||
U.S. government securities | 2,830 | 5,687 | ||||||
U.S. government agency securities | 2,710 | 2,439 | ||||||
Corporate debt securities | 1,344 | — | ||||||
Total marketable securities | 6,884 | 8,126 | ||||||
Total cash, cash equivalents and marketable securities | $ | 11,199 | $ | 11,449 | ||||
The gross unrealized gains or losses on our marketable securities as of December 31, 2014 and 2013 were not significant. In addition, there were no securities in a continuous loss position for 12 months or longer as of December 31, 2014 and 2013. | ||||||||
The following table classifies our marketable securities by contractual maturities (in millions): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Due in one year | $ | 3,422 | $ | 4,704 | ||||
Due in one to two years | 3,462 | 3,422 | ||||||
Total | $ | 6,884 | $ | 8,126 | ||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | 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 | December 31, | Quoted | Significant | Significant | |||||||||||||
2014 | Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | |||||||||||||||
Markets for | Inputs | (Level 3) | |||||||||||||||
Identical | (Level 2) | ||||||||||||||||
Assets | |||||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 2,153 | $ | 2,153 | $ | — | $ | — | |||||||||
Marketable securities: | |||||||||||||||||
U.S. government securities | 2,830 | 2,830 | — | — | |||||||||||||
U.S. government agency securities | 2,710 | 2,710 | — | — | |||||||||||||
Corporate debt securities | 1,344 | — | 1,344 | — | |||||||||||||
Total cash equivalents and marketable securities | $ | 9,037 | $ | 7,693 | $ | 1,344 | $ | — | |||||||||
Other liabilities: | |||||||||||||||||
Contingent consideration liability | $ | 191 | $ | — | $ | — | $ | 191 | |||||||||
Fair Value Measurement at | |||||||||||||||||
Reporting Date Using | |||||||||||||||||
Description | December 31, | Quoted | Significant | Significant | |||||||||||||
2013 | Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | |||||||||||||||
Markets for | Inputs | (Level 3 | |||||||||||||||
Identical | (Level 2) | ||||||||||||||||
Assets | |||||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 2,279 | $ | 2,279 | $ | — | $ | — | |||||||||
Marketable securities: | |||||||||||||||||
U.S. government securities | 5,687 | 5,687 | — | — | |||||||||||||
U.S. government agency securities | 2,439 | 2,439 | — | — | |||||||||||||
Total cash equivalents and marketable securities | $ | 10,405 | $ | 10,405 | $ | — | $ | — | |||||||||
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 our acquisition of Oculus 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. Our fair value estimate of this liability was $169 million at the date of acquisition and 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 year ended December 31, 2014, we recognized a $22 million change in the fair value of our contingent consideration liability in research and development expense in our consolidated statements of income primarily due to the change in the fair value of our common stock. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property and Equipment | Property and Equipment | |||||||
Property and equipment consists of the following (in millions): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Land | $ | 153 | $ | 45 | ||||
Buildings | 1,420 | 1,071 | ||||||
Leasehold improvements | 304 | 203 | ||||||
Network equipment | 3,020 | 2,351 | ||||||
Computer software, office equipment and other | 149 | 95 | ||||||
Construction in progress | 738 | 377 | ||||||
Total | 5,784 | 4,142 | ||||||
Less: Accumulated depreciation | (1,817 | ) | (1,260 | ) | ||||
Property and equipment, net | $ | 3,967 | $ | 2,882 | ||||
Depreciation expense on property and equipment was $923 million, $857 million, and $566 million during 2014, 2013, and 2012, respectively. | ||||||||
Property and equipment at December 31, 2014 and 2013 includes $700 million and $976 million, respectively, acquired under capital lease agreements of which the majority is included in network equipment. Accumulated depreciation of property and equipment acquired under these capital leases was $425 million and $527 million at December 31, 2014 and 2013, respectively. | ||||||||
Construction in progress includes costs primarily related to the expansion of our corporate headquarters in Menlo Park, California, construction of data centers, and network equipment infrastructure to support our data centers around the world. No interest was capitalized during the year ended December 31, 2014. Interest capitalized during the years ended December 31, 2013 and 2012 was not material. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||||||||||||||||||||||||
The changes in carrying amount of goodwill for the years ended December 31, 2014 and 2013 are as follows (in millions): | ||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 587 | ||||||||||||||||||||||||
Goodwill acquired | 252 | |||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 839 | ||||||||||||||||||||||||
Goodwill acquired | 17,150 | |||||||||||||||||||||||||
Effect of currency translation adjustment | (8 | ) | ||||||||||||||||||||||||
Balance as of December 31, 2014 | $ | 17,981 | ||||||||||||||||||||||||
Intangible assets consist of the following (in millions): | ||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Useful lives from date of acquisitions (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||||
Acquired users | 7-Mar | $ | 2,056 | $ | (85 | ) | $ | 1,971 | $ | 30 | $ | (6 | ) | $ | 24 | |||||||||||
Acquired technology | 10-Feb | 813 | (144 | ) | 669 | 227 | (65 | ) | 162 | |||||||||||||||||
Acquired patents | 18-Feb | 773 | (239 | ) | 534 | 773 | (142 | ) | 631 | |||||||||||||||||
Trade names | 7-Feb | 632 | (46 | ) | 586 | 45 | (8 | ) | 37 | |||||||||||||||||
Other | 10-Feb | 164 | (55 | ) | 109 | 63 | (34 | ) | 29 | |||||||||||||||||
Total finite-lived intangible assets | $ | 4,438 | $ | (569 | ) | $ | 3,869 | $ | 1,138 | $ | (255 | ) | $ | 883 | ||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||||
IPR&D | $ | 60 | $ | — | $ | 60 | $ | — | $ | — | $ | — | ||||||||||||||
Total intangible assets | $ | 4,498 | $ | (569 | ) | $ | 3,929 | $ | 1,138 | $ | (255 | ) | $ | 883 | ||||||||||||
Amortization expense of intangible assets for the years ended December 31, 2014, 2013, and 2012 was $319 million, $145 million, and $78 million, respectively. | ||||||||||||||||||||||||||
As of December 31, 2014, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions): | ||||||||||||||||||||||||||
2015 | $ | 710 | ||||||||||||||||||||||||
2016 | 691 | |||||||||||||||||||||||||
2017 | 648 | |||||||||||||||||||||||||
2018 | 600 | |||||||||||||||||||||||||
2019 | 518 | |||||||||||||||||||||||||
Thereafter | 702 | |||||||||||||||||||||||||
Total | $ | 3,869 | ||||||||||||||||||||||||
Liabilities
Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
Liabilities | Liabilities | |||||||
The components of accrued expenses and other current liabilities are as follows (in millions): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accrued compensation and benefits | $ | 322 | $ | 196 | ||||
Accrued property and equipment | 164 | 87 | ||||||
Other current liabilities | 380 | 272 | ||||||
Accrued expenses and other current liabilities | $ | 866 | $ | 555 | ||||
The components of other liabilities are as follows (in millions): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Income tax payable | $ | 1,190 | $ | 886 | ||||
Deferred tax liabilities | 987 | 47 | ||||||
Other liabilities | 368 | 155 | ||||||
Other liabilities | $ | 2,545 | $ | 1,088 | ||||
Longterm_Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 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 December 31, 2014, no amounts had been drawn down and we were in compliance with the covenants under this facility. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Commitments and Contingencies | Commitments and Contingencies | |||||||
Commitments | ||||||||
Leases | ||||||||
We entered into various capital lease arrangements to obtain property and equipment for our operations. Additionally, on occasion we have purchased property and equipment for which we have subsequently obtained capital financing under sale-leaseback transactions. These agreements are typically for three years, except for a building lease which are for 15 years, with interest rates ranging from 1% to 13%. The leases are secured by the underlying leased buildings, leasehold improvements, and equipment. We have 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 2015 and 2030. 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. | ||||||||
The following is a schedule, by years, of the future minimum lease payments required under non-cancelable capital and operating leases as of December 31, 2014 (in millions): | ||||||||
Capital | Operating | |||||||
Leases | Leases | |||||||
2015 | $ | 124 | $ | 155 | ||||
2016 | 20 | 161 | ||||||
2017 | 15 | 158 | ||||||
2018 | 16 | 143 | ||||||
2019 | 16 | 125 | ||||||
Thereafter | 112 | 359 | ||||||
Total minimum lease payments | $ | 303 | $ | 1,101 | ||||
Less: amount representing interest and taxes | (70 | ) | ||||||
Less: current portion of the present value of minimum lease payments | (114 | ) | ||||||
Capital lease obligations, net of current portion | $ | 119 | ||||||
Operating lease expenses totaled $125 million, $130 million, and $196 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||
Other contractual commitments | ||||||||
We also have $1.03 billion of non-cancelable contractual commitments as of December 31, 2014, primarily related to network infrastructure for our data center operations and, to a lesser extent, construction of our data center sites. The majority of these commitments are due within five years. | ||||||||
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. The plaintiffs in four of these derivative actions have filed notices of appeal. On December 23, 2014, the plaintiffs in the consolidated securities class action filed their motion for class certification. 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. | ||||||||
Indemnifications | ||||||||
In the normal course of business, to facilitate transactions of services and products, we have agreed to indemnify certain parties with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers, directors, and certain employees, and our certificate of incorporation and bylaws contain similar indemnification obligations. | ||||||||
It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these agreements have not had a material impact on our consolidated financial position, results of operations or cash flows. In our opinion, as of December 31, 2014, there was not at least a reasonable possibility we had incurred a material loss with respect to indemnification of such parties. We have not recorded any liability for costs related to indemnification through December 31, 2014. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Equity [Abstract] | ||||||||||||||||
Stockholders' Equity | Stockholders' Equity | |||||||||||||||
Initial Public Offering | ||||||||||||||||
In May 2012, we completed our IPO in which we issued and sold 180,000,000 shares of Class A common stock at a public offering price of $38.00 per share and the selling stockholders sold 241,233,615 shares of Class A common stock. We did not receive any proceeds from the sale of shares by the selling stockholders. The total net proceeds received from the IPO were $6.76 billion after deducting underwriting discounts and commissions of $75 million and other offering expenses of approximately $7 million. | ||||||||||||||||
Follow-on Offering | ||||||||||||||||
In December 2013, we completed a follow-on offering in which we issued and sold 27,004,761 shares of Class A common stock at a public offering price of $55.05 per share and the selling stockholders sold 42,995,239 shares of Class A common stock. We did not receive any proceeds from the sale of shares by the selling stockholders. The total net proceeds received from the follow-on offering were $1.48 billion after deducting underwriting discounts and commissions of $7 million and other offering expenses of approximately $1 million. | ||||||||||||||||
Common Stock | ||||||||||||||||
Our certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. As of December 31, 2014, we are authorized to issue 5,000,000,000 shares of Class A common stock and 4,141,000,000 shares of Class B common stock, each with a par value of $0.000006 per share. Holders of our Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by our board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of December 31, 2014, we did not declare any dividends and our credit facility contains restrictions on our ability to pay dividends. The holder of each share of Class A common stock is entitled to one vote, while the holder of each share of Class B common stock is entitled to ten votes. Shares of our Class B common stock are convertible into an equivalent number of shares of our Class A common stock and generally convert into shares of our Class A common stock upon transfer. Class A common stock and Class B common stock are referred to as common stock throughout the notes to these financial statements, unless otherwise noted. | ||||||||||||||||
As of December 31, 2014, there were 2,234,113,007 shares and 562,792,201 shares of Class A common stock and Class B common stock, respectively, issued and outstanding. | ||||||||||||||||
Share-based Compensation Plans | ||||||||||||||||
We maintain two share-based employee compensation plans: the 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 25,000,000 shares of our Class A common stock for issuance under our 2012 Plan. The number of shares reserved for issuance under our 2012 Plan will increase 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 common stock as of the immediately preceding December 31st or (ii) a number of shares determined by the board of directors. Our board of directors elected not to increase the number of shares reserved for issuance in 2014 and 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 January 2014, we began requiring that employees sell a portion of the shares that they receive upon the vesting of RSUs in order to cover any required withholding taxes, rather than our previous approach of net share settlement. 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. | ||||||||||||||||
In connection with our acquisition of WhatsApp in October 2014, we granted inducement awards covering an aggregate of 37,475,271 RSUs to the WhatsApp founders. These awards are excluded from the Stock Plans and are subject to the terms, restrictions, and conditions of a separate non-plan RSU award agreement. In addition, these awards are earned over a service period of four years. | ||||||||||||||||
In February 2014, we terminated our 2005 Officers' Stock Plan as the only outstanding option issued under this plan had been exercised in full. | ||||||||||||||||
The following table summarizes stock option award activities under the Stock Plans for the year ended December 31, 2014: | ||||||||||||||||
Shares Subject to Options Outstanding | ||||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||
Shares | Average | Average | Intrinsic | |||||||||||||
Exercise | Remaining | Value(1) | ||||||||||||||
Price | Contractual | |||||||||||||||
Term | ||||||||||||||||
(in thousands) | (in years) | (in millions) | ||||||||||||||
Balance as of December 31, 2013 | 22,102 | $ | 3.56 | |||||||||||||
Stock options exercised | (9,118 | ) | 1.82 | |||||||||||||
Balance as of December 31, 2014 | 12,984 | $ | 4.78 | 3.79 | $ | 951 | ||||||||||
Stock options vested and expected to vest as of December 31, 2014 | 12,980 | $ | 4.78 | 3.79 | $ | 951 | ||||||||||
Stock options exercisable as of December 31, 2014 | 9,850 | $ | 2.49 | 3.2 | $ | 744 | ||||||||||
-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 $78.02 on December 31, 2014. | |||||||||||||||
There were no options granted, forfeited, or canceled for the years ended December 31, 2014. The aggregate intrinsic value of the options exercised in the years ended December 31, 2014, 2013, and 2012 was $624 million, $4.58 billion, and $4.23 billion, respectively. The total grant date fair value of stock options vested during the years ended December 31, 2014, 2013, and 2012 was $7 million, $7 million, and $5 million, respectively. | ||||||||||||||||
The following table summarizes additional information regarding outstanding and exercisable options under the Stock Plans at December 31, 2014: | ||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | |||||||||||
Price (Range) | Shares | Average | Average | Shares | Average | |||||||||||
Remaining | Exercise | Exercise | ||||||||||||||
Contractual | Price | Price | ||||||||||||||
Term | ||||||||||||||||
(in thousands) | (in years) | (in thousands) | ||||||||||||||
$0.06 | 191 | 0.99 | $ | 0.06 | 191 | $ | 0.06 | |||||||||
0.10 - 0.18 | 1,784 | 1.44 | 0.1 | 1,784 | 0.1 | |||||||||||
0.29 - 0.33 | 3,509 | 2.29 | 0.3 | 3,509 | 0.3 | |||||||||||
1.85 | 1,605 | 4.03 | 1.85 | 1,605 | 1.85 | |||||||||||
2.95 | 1,195 | 4.63 | 2.95 | 1,195 | 2.95 | |||||||||||
10.39 | 3,500 | 5.56 | 10.39 | 1,458 | 10.39 | |||||||||||
15 | 1,200 | 5.8 | 15 | 108 | 15 | |||||||||||
12,984 | 3.79 | $ | 4.78 | 9,850 | $ | 2.49 | ||||||||||
The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2014: | ||||||||||||||||
Unvested RSUs | ||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||||
(in thousands) | ||||||||||||||||
Unvested at December 31, 2013 | 103,971 | $ | 27.3 | |||||||||||||
Granted | 84,606 | 74.03 | ||||||||||||||
Vested | (41,233 | ) | 25.76 | |||||||||||||
Forfeited | (9,289 | ) | 34.8 | |||||||||||||
Unvested at December 31, 2014 | 138,055 | $ | 55.89 | |||||||||||||
The fair value as of the respective vesting dates of RSUs during the years ended December 31, 2014, 2013, and 2012 was $2.77 billion, $1.55 billion, and $1.99 billion, respectively. | ||||||||||||||||
The majority of our RSUs that were settled during the year ended December 31, 2014 were settled on a gross basis. We require that employees sell a portion of the shares that they receive upon the vesting of RSUs in order to cover any required minimum withholding taxes. However, during the year ended December 31, 2013 and 2012, the majority of RSUs were net share settled. Under net settlement procedures, upon each settlement date, RSUs were withheld to cover the required withholding tax, which is based on the value of the RSU on the settlement date as determined by the closing price of our common stock on the trading day immediately preceding the applicable settlement date. The remaining amounts are delivered to the recipient as shares of our common stock. The amount remitted to the tax authorities for the employees' tax obligation to the tax authorities was reflected as a financing activity within our consolidated statements of cash flows. These shares withheld by us as a result of the net settlement of RSUs are no longer considered issued and outstanding, thereby reducing our shares outstanding used to calculate earnings per share. These shares were returned to the reserves and are available for future issuance under the 2012 Plan. | ||||||||||||||||
As of December 31, 2014, there was $7.96 billion of unrecognized share-based compensation expense, of which $6.96 billion is related to RSUs, and $999 million is related to restricted shares, shares with performance conditions related to our contingent consideration liability, and stock options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately three years. |
Interest_and_other_incomeexpen
Interest and other income/(expense), net | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Nonoperating Income (Expense) [Abstract] | ||||||||||||
Interest and other income/(expense), net | Interest and other income/(expense), net | |||||||||||
The following table presents the detail of interest and other income/(expense), net, for the periods presented (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Interest expense | $ | (23 | ) | $ | (56 | ) | $ | (51 | ) | |||
Interest income | 27 | 19 | 14 | |||||||||
Foreign currency exchange losses, net | (87 | ) | (14 | ) | (9 | ) | ||||||
Other | (1 | ) | 1 | 2 | ||||||||
Interest and other income/(expense), net | $ | (84 | ) | $ | (50 | ) | $ | (44 | ) |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
The components of income before provision for income taxes for the years ended December 31, 2014, 2013, and 2012 are as follows (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Domestic | $ | 4,918 | $ | 3,197 | $ | 1,062 | ||||||
Foreign | (8 | ) | (443 | ) | (568 | ) | ||||||
Income before provision for income taxes | $ | 4,910 | $ | 2,754 | $ | 494 | ||||||
The provision for income taxes consisted of the following (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 1,999 | $ | 1,154 | $ | 559 | ||||||
State | 130 | 69 | 45 | |||||||||
Foreign | 96 | 68 | 22 | |||||||||
Total current tax expense | 2,225 | 1,291 | 626 | |||||||||
Deferred: | ||||||||||||
Federal | (240 | ) | (28 | ) | (172 | ) | ||||||
State | (14 | ) | (7 | ) | (6 | ) | ||||||
Foreign | (1 | ) | (2 | ) | (7 | ) | ||||||
Total deferred tax benefit | (255 | ) | (37 | ) | (185 | ) | ||||||
Provision for income taxes | $ | 1,970 | $ | 1,254 | $ | 441 | ||||||
A reconciliation of the U.S. federal statutory income tax rate of 35.0% to our effective tax rate is as follows (in percentages): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | ||||||
State income taxes, net of federal benefit | 1.4 | 1.6 | 6.2 | |||||||||
Research tax credits | (1.1 | ) | (4.7 | ) | — | |||||||
Share-based compensation | 6.5 | 5.2 | 19.2 | |||||||||
Effect of non-U.S. operations | (3.6 | ) | 6.8 | 26.9 | ||||||||
Other | 1.9 | 1.6 | 2 | |||||||||
Effective tax rate | 40.1 | % | 45.5 | % | 89.3 | % | ||||||
Excess tax benefits associated with stock option exercises and other equity awards are credited to stockholders' equity. The income tax benefits resulting from stock awards that were credited to stockholders' equity were $1.85 billion, $602 million and $1.03 billion for the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||
Our deferred tax assets (liabilities) are as follows (in millions): | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets: | ||||||||||||
Net operating loss carryforward | $ | 130 | $ | 6 | ||||||||
Tax credit carryforward | 190 | 164 | ||||||||||
Share-based compensation | 225 | 120 | ||||||||||
Accrued expenses and other liabilities | 136 | 141 | ||||||||||
Other | 21 | 5 | ||||||||||
Total deferred tax assets | 702 | 436 | ||||||||||
Less: valuation allowance | (101 | ) | (82 | ) | ||||||||
Deferred tax assets, net of valuation allowance | 601 | 354 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Depreciation and amortization | (101 | ) | (68 | ) | ||||||||
Purchased intangible assets | (1,190 | ) | (90 | ) | ||||||||
Deferred foreign taxes | — | (43 | ) | |||||||||
Total deferred tax liabilities | (1,291 | ) | (201 | ) | ||||||||
Net deferred tax (liabilities) assets | $ | (690 | ) | $ | 153 | |||||||
The valuation allowance was approximately $101 million and $82 million as of December 31, 2014 and 2013, respectively, related to state tax credits that we do not believe will ultimately be realized. | ||||||||||||
As of December 31, 2014, the U.S. federal and state net operating loss carryforwards were approximately $4.53 billion and $4.46 billion, which will begin to expire in 2028 and 2021, respectively, if not utilized. If realized, the impact of the net operating loss carryforwards will be recognized as a benefit of approximately $1.47 billion through additional paid in capital. We have federal and state tax credit carryforwards of $800 million and $753 million, respectively, which will begin to expire in 2032. | ||||||||||||
Utilization of our net operating loss and tax credit carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of the net operating loss and tax credit carryforwards before their utilization. The events that may cause ownership changes include, but are not limited to, a cumulative stock ownership change of greater than 50% over a three-year period. | ||||||||||||
Our net foreign pretax losses include jurisdictions with both pretax earnings and pretax losses. Our consolidated financial statements provide taxes for all related tax liabilities that would arise upon repatriation of earnings in the foreign jurisdictions where we do not intend to indefinitely reinvest those earnings outside the United States, and the amount of taxes provided for has been insignificant. | ||||||||||||
The following table reflects changes in the gross unrecognized tax benefits (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Gross unrecognized tax benefits-beginning of period | $ | 1,316 | $ | 164 | $ | 63 | ||||||
Increases related to prior year tax positions | 24 | 425 | 13 | |||||||||
Decreases related to prior year tax positions | — | (13 | ) | (16 | ) | |||||||
Increases related to current year tax positions | 346 | 740 | 104 | |||||||||
Decreases related to settlements of prior year tax positions | (4 | ) | — | — | ||||||||
Gross unrecognized tax benefits-end of period | $ | 1,682 | $ | 1,316 | $ | 164 | ||||||
During all years presented, we recognized interest and penalties related to unrecognized tax benefits within the provision for income taxes on the consolidated statements of income. The amount of interest and penalties accrued as of December 31, 2014 and 2013 was not material. | ||||||||||||
If the balance of gross unrecognized tax benefits of $1.68 billion as of December 31, 2014 was realized in a future period, this would result in a tax benefit of $1.16 billion within our provision of income taxes at such time. | ||||||||||||
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 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 through 2014 tax years remain subject to examination by the IRS and all tax years starting in 2008 remain subject to examination in Ireland. | ||||||||||||
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
Geographical Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segments, Geographical Areas [Abstract] | ||||||||||||
Geographical Information | Geographical Information | |||||||||||
Revenue by geography is based on the billing address of the advertiser or developer. The following table sets forth revenue and property and equipment, net by geographic area (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 5,649 | $ | 3,613 | $ | 2,578 | ||||||
Rest of the world(1) | 6,817 | 4,259 | 2,511 | |||||||||
Total revenue | $ | 12,466 | $ | 7,872 | $ | 5,089 | ||||||
-1 | No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Property and equipment, net: | ||||||||||||
United States | $ | 3,256 | $ | 2,368 | ||||||||
Sweden | 514 | 415 | ||||||||||
Rest of the world | 197 | 99 | ||||||||||
Total property and equipment, net | $ | 3,967 | $ | 2,882 | ||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Basis of Presentation | Basis of Presentation | |||||||||||
We prepared the consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. | ||||||||||||
Use of Estimates | Use of Estimates | |||||||||||
Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the 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. | ||||||||||||
Revenue Recognition | Revenue Recognition | |||||||||||
We generate substantially all of our revenue from advertising and payment processing fees. We recognize revenue once all of the following criteria have been met: | ||||||||||||
• | persuasive evidence of an arrangement exists; | |||||||||||
• | delivery of our obligations to our customer has occurred; | |||||||||||
• | the price is fixed or determinable; and | |||||||||||
• | collectability of the related receivable is reasonably assured. | |||||||||||
Revenue for the years ended December 31, 2014, 2013, and 2012 consists of the following (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Advertising | $ | 11,492 | $ | 6,986 | $ | 4,279 | ||||||
Payments and other fees | 974 | 886 | 810 | |||||||||
Total revenue | $ | 12,466 | $ | 7,872 | $ | 5,089 | ||||||
Advertising | ||||||||||||
Advertising revenue is generated by displaying ad products on the Facebook properties, including our mobile applications, and third-party affiliated websites or mobile applications. The arrangements are evidenced by either online acceptance of terms and conditions or contracts that stipulate the types of advertising to be delivered, the timing and the pricing. Marketers pay for ad products either directly or through their relationships with advertising agencies, based on the number of clicks made by our users, the number of actions taken by our users, or the number of impressions delivered. The typical term of an advertising arrangement is approximately 30 days with billing generally occurring after the delivery of the advertisement. | ||||||||||||
We recognize revenue from the delivery of click-based ads in the period in which a user clicks on the content, and action-based ads in the period in which a user takes the action the marketer contracted for. We recognize revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. | ||||||||||||
Payments and Other Fees | ||||||||||||
We enable Payments from people to purchase virtual and digital goods from our developers. People can transact and make payments on the Facebook website by using debit cards and credit cards, PayPal, mobile phone payments, gift cards, or other methods. | ||||||||||||
When a person engages in a payment transaction for the purchase of a virtual or digital good from a developer, we remit to the developer an amount that is based on the total amount of the transaction less the processing fee that we charge the developer. The price of the purchase is an amount that is solely determined by the developer. Our revenue is the net amount of the transaction, representing our processing fee for the service performed. We record revenue on a net basis as we do not consider ourselves to be the principal in the sale of the virtual or digital good to the person. Additionally, we record all Payments revenue at the time of the purchase of the related virtual goods, net of estimated refunds or chargebacks | ||||||||||||
Other fees, which includes our ad serving and measurement products and the delivery of virtual reality platform devices, were not material in all periods presented in our financial statements. | ||||||||||||
Revenue is recognized net of applicable sales and other taxes. | ||||||||||||
Cost of Revenue | Cost of Revenue | |||||||||||
Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products. These include expenses related to the operation of our data centers such as facility and server equipment depreciation, facility and server equipment rent expense, energy and bandwidth costs, support and maintenance costs, and salaries, benefits, and share-based compensation for employees on our operations teams. Cost of revenue also includes credit card and other transaction fees related to processing customer transactions, amortization of intangible assets, and cost of virtual reality platform device inventory sold. | ||||||||||||
Share-based Compensation | Share-based Compensation | |||||||||||
We account for share-based employee compensation plans under the fair value recognition and measurement provisions of GAAP. Those provisions require all share-based payments to employees, including grants of stock options and restricted stock units (RSUs), to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis in our consolidated statements of income over the period during which the employee is required to perform service in exchange for the award. The majority of our awards are earned over a service period of four to five years. | ||||||||||||
Share-based compensation expense is recorded net of estimated forfeitures in our consolidated statements of income and as such, only those share-based awards that we expect to vest are recorded. We estimate the forfeiture rate based on historical forfeitures of equity awards and adjust the rate to reflect changes in facts and circumstances, if any. We will revise our estimated forfeiture rate if actual forfeitures differ from our initial estimates. | ||||||||||||
We have historically issued unvested restricted shares to employee stockholders of certain acquired companies. As these awards are generally subject to continued post-acquisition employment, we have accounted for them as post-acquisition share-based compensation expense. We recognize compensation expense equal to the grant date fair value of the common stock on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. | ||||||||||||
During the years ended December 31, 2014, 2013, and 2012, we realized tax benefits from share-based award activity of $1.85 billion, $602 million, and $1.03 billion, respectively. These amounts reflect the extent that the total reduction to our income tax liability from share-based award activity was greater than the amount of the deferred tax assets that we had previously recorded in anticipation of these benefits. These amounts are the aggregate of the individual transactions in which the reduction to our income tax liability was greater than the deferred tax assets that we recorded, reduced by any individual transactions in which the reduction to our income tax liability was less than the deferred tax assets that were recorded. These net amounts were recorded as an adjustment to stockholders' equity in each period, as an increase to cash flows from operating activities, and were not recognized in our consolidated statements of income. | ||||||||||||
In addition, we reported excess tax benefits that decreased our cash flows from operating activities and increased our cash flows from financing activities for the years ended December 31, 2014, 2013, and 2012, by $1.87 billion, $609 million, and $1.03 billion, respectively. The amounts of these excess tax benefits reflect the total of the individual transactions in which the reduction to our income tax liability was greater than the deferred tax assets that were recorded, but were not reduced by any of the individual transactions in which the reduction to our income tax liability was less than the deferred tax assets that were recorded. | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
We recognize income taxes under the asset and liability method. We recognize deferred income tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to apply to taxable income for the years in which differences are expected to reverse. We recognize the effect on deferred income taxes of a change in tax rates in income in the period that includes the enactment date. | ||||||||||||
We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. | ||||||||||||
We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. We make adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The provision for income taxes includes the effects of any reserves that are considered appropriate, as well as the related net interest and penalties. | ||||||||||||
Advertising Expense | Advertising Expense | |||||||||||
Advertising costs are expensed when incurred and are included in marketing and sales expenses in the accompanying consolidated statements of income. We incurred advertising expenses of $135 million, $117 million, and $67 million for the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||
Cash and Cash Equivalents, and Marketable Securities | Cash and Cash Equivalents, and Marketable Securities | |||||||||||
Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds with maturities of 90 days or less from the date of purchase. | ||||||||||||
We hold investments in marketable securities, consisting of U.S. government securities, U.S. government agency securities, and corporate debt securities. We classify our marketable securities as available-for-sale investments in our current assets because they represent investments of cash available for current operations. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive (loss) income in stockholders' equity. Unrealized losses are charged against interest and other income/(expense), net when a decline in fair value is determined to be other-than-temporary. We have not recorded any such impairment charge in the periods presented. We determine realized gains or losses on sale of marketable securities on a specific identification method, and record such gains or losses as interest and other income/(expense), net. | ||||||||||||
We classify certain restricted cash balances within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions. | ||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||||||||||
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: | ||||||||||||
Level 1-Quoted prices in active markets for identical assets or liabilities. | ||||||||||||
Level 2-Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||
Level 3-Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability. | ||||||||||||
Our valuation techniques used to measure the fair value of money market funds and marketable debt securities were derived from quoted market prices or alternative pricing sources and models utilizing market observable inputs. Our valuation technique used to measure the fair value of our contingent consideration liability was 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. | ||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | |||||||||||
Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. We make estimates for the allowance for doubtful accounts based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect customers' ability to pay. | ||||||||||||
Property and Equipment | Property and Equipment | |||||||||||
Property and equipment, which includes amounts recorded under capital leases, are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the remaining lease term, in the case of a capital lease, whichever is shorter. | ||||||||||||
The estimated useful lives of property and equipment are described below: | ||||||||||||
Property and Equipment | Useful Life | |||||||||||
Network equipment | Three to five years | |||||||||||
Buildings | Four to 20 years | |||||||||||
Computer software, office equipment and other | Three to five years | |||||||||||
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term | |||||||||||
Land and assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for their intended use. | ||||||||||||
The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in income from operations. | ||||||||||||
Lease Obligations | Lease Obligations | |||||||||||
We lease office space, data centers, and equipment under non-cancelable capital and operating leases with various expiration dates through 2030. Certain of the operating lease agreements contain rent holidays, rent escalation provisions, and purchase options. Rent holidays and rent escalation provisions are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease inception. | ||||||||||||
Loss Contingencies | Loss Contingencies | |||||||||||
We are involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. We review these provisions at least quarterly and adjust these provisions accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. | ||||||||||||
Business Combinations | Business Combinations | |||||||||||
We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. | ||||||||||||
Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets | Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets | |||||||||||
We evaluate the recoverability of property and equipment and finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. We have not recorded any significant impairment charge during the years presented. | ||||||||||||
We review goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment under Accounting Standards Update (ASU) No. 2011-08, Goodwill and Other (Topic 350): Testing Goodwill for Impairment, issued by the Financial Accounting Standards Board (FASB). If we determine that it is more likely than not that its fair value is less than its carrying amount, then the two-step goodwill impairment test is performed. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further step is required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the goodwill carrying amount over the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. As of December 31, 2014, no impairment of goodwill has been identified. | ||||||||||||
Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The estimated remaining useful lives for intangible assets range from less than one year to 15 years. Acquired indefinite-lived intangible assets related to our in-process research and development (IPR&D) are capitalized and subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, we will make a separate determination of useful life of the acquired indefinite-lived intangible assets and the related amortization will be recorded as an expense over the estimated useful life of the specific projects. | ||||||||||||
In addition to the recoverability assessment, we routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. | ||||||||||||
Deferred Revenue and Deposits | Deferred Revenue and Deposits | |||||||||||
Deferred revenue consists of billings in advance of revenue recognition. Deposits relate to unused balances held on behalf of our users. Once this balance is utilized by a user, approximately 70% of this amount would then be payable to the developer and the balance would be recognized as revenue. | ||||||||||||
Deferred revenue and deposits consists of the following (in millions): | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred revenue | $ | 38 | $ | 13 | ||||||||
Deposits | 28 | 25 | ||||||||||
Total deferred revenue and deposits | $ | 66 | $ | 38 | ||||||||
Foreign Currency | Foreign Currency | |||||||||||
Generally the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenue, costs, and expenses. Translation gains and losses are recorded in accumulated other comprehensive (loss) income as a component of stockholders' equity. As of December 31, 2014 and 2013, we had a cumulative translation loss of $227 million and a cumulative translation gain of $12 million, respectively. Net losses resulting from foreign exchange transactions were $87 million, $14 million, and $9 million for the years ended December 31, 2014, 2013, and 2012, respectively. These losses were recorded as interest and other income/(expense), net on our consolidated statements of income. | ||||||||||||
Credit Risk and Concentration | Credit Risk and Concentration | |||||||||||
Financial instruments owned by the company that are potentially subject to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, marketable securities, and accounts receivable. Cash equivalents consist of short-term money market funds, which are managed by reputable financial institutions. Marketable securities consist of investments in U.S. government securities, U.S. government agency securities, and corporate debt securities. Our investment policy limits investment instruments to U.S. government securities, U.S. government agency securities, and corporate debt securities with the main objective of preserving capital and maintaining liquidity. | ||||||||||||
Accounts receivable are typically unsecured and are derived from revenue earned from customers across different industries and countries. We generated 45%, 46%, and 51% of our revenue for the years ended December 31, 2014, 2013, and 2012, respectively, from marketers and developers based in the United States, with the majority of revenue outside of the United States coming from customers located in western Europe, Brazil, Canada, and Australia. | ||||||||||||
We perform ongoing credit evaluations of our customers, and generally do not require collateral. We maintain an allowance for estimated credit losses. During the years ended December 31, 2014, 2013, and 2012, our bad debt expenses were $19 million, $21 million, and $9 million, respectively. In the event that accounts receivable collection cycles deteriorate, our operating results and financial position could be adversely affected. | ||||||||||||
No customer represented 10% or more of total revenue during the years ended December 31, 2014, 2013, and 2012. | ||||||||||||
Segments | Segments | |||||||||||
Our chief operating decision-maker is our Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, we have determined that we have a single reportable segment and operating unit structure. | ||||||||||||
Recently Issued and Adopted Accounting Pronouncement | Recently Issued and Adopted Accounting Pronouncement | |||||||||||
In May 2014, the Financial Accounting Standards Board issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for us in the first quarter of 2017. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Revenue by type | Revenue for the years ended December 31, 2014, 2013, and 2012 consists of the following (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Advertising | $ | 11,492 | $ | 6,986 | $ | 4,279 | ||||||
Payments and other fees | 974 | 886 | 810 | |||||||||
Total revenue | $ | 12,466 | $ | 7,872 | $ | 5,089 | ||||||
Estimated useful lives of property and equipment | The estimated useful lives of property and equipment are described below: | |||||||||||
Property and Equipment | Useful Life | |||||||||||
Network equipment | Three to five years | |||||||||||
Buildings | Four to 20 years | |||||||||||
Computer software, office equipment and other | Three to five years | |||||||||||
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term | |||||||||||
Deferred revenue and deposits | Deferred revenue and deposits consists of the following (in millions): | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred revenue | $ | 38 | $ | 13 | ||||||||
Deposits | 28 | 25 | ||||||||||
Total deferred revenue and deposits | $ | 66 | $ | 38 | ||||||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Schedule of Business Acquisitions, Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of estimated fair values of the net assets acquired during the year ended December 31, 2014, including the related estimated useful lives, where applicable: | |||||||||||||||||
Oculus | Other | |||||||||||||||||
(in millions) | Useful lives (in years) | (in millions) | Useful lives (in years) | (in millions) | Useful lives (in years) | |||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||
Acquired users | $ | 2,026 | 7 | $ | — | $ | — | |||||||||||
Trade names | 448 | 5 | 113 | 7 | 26 | 5 | ||||||||||||
Acquired technology | 288 | 5 | 235 | 5 | 68 | 5-Mar | ||||||||||||
Other | 21 | 2 | 19 | 2 | 61 | 5 | ||||||||||||
IPR&D | — | 60 | — | |||||||||||||||
(Liabilities assumed) assets acquired | (33 | ) | — | 103 | ||||||||||||||
Deferred tax liabilities | (899 | ) | (107 | ) | (48 | ) | ||||||||||||
Net assets acquired | $ | 1,851 | $ | 320 | $ | 210 | ||||||||||||
Goodwill | 15,342 | 1,533 | 275 | |||||||||||||||
Total fair value consideration | $ | 17,193 | $ | 1,853 | $ | 485 | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Schedule of the Components of Consideration Transferred | The following table summarizes the components of the preliminary purchase consideration transferred based on the closing price of $77.56 per share of our common stock as of the acquisition date (in millions): | |||||||||||||||||
Cash | $ | 4,589 | ||||||||||||||||
Common stock | 13,787 | |||||||||||||||||
Less: post-acquisition share-based compensation and other compensation expense | (1,067 | ) | ||||||||||||||||
Less: cash and promissory notes acquired on acquisition date | (116 | ) | ||||||||||||||||
Purchase consideration | $ | 17,193 | ||||||||||||||||
Business Acquisition, Pro Forma Information | Accordingly, these unaudited pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations (in millions): | |||||||||||||||||
Year Ended December 31, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Revenue | $ | 12,487 | $ | 7,882 | ||||||||||||||
Net income | $ | 1,757 | $ | 65 | ||||||||||||||
Oculus | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Schedule of the Components of Consideration Transferred | The following table summarizes the components of the preliminary purchase consideration transferred based on the closing price of our common stock as of the acquisition date (in millions): | |||||||||||||||||
Cash | $ | 400 | ||||||||||||||||
Common stock | 1,601 | |||||||||||||||||
Less: post-acquisition share-based compensation and other compensation expense | (297 | ) | ||||||||||||||||
Less: cash acquired on acquisition date | (20 | ) | ||||||||||||||||
Total purchase consideration, excluding contingent consideration | $ | 1,684 | ||||||||||||||||
Contingent consideration | 169 | |||||||||||||||||
Purchase consideration | $ | 1,853 | ||||||||||||||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||
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): | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Class | Class | Class | Class | Class | Class | |||||||||||||||||||
A | B | A | B | A | B | |||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income | $ | 2,308 | $ | 632 | $ | 1,114 | $ | 386 | $ | 18 | $ | 35 | ||||||||||||
Less: Net income attributable to participating securities | 12 | 3 | 7 | 2 | 7 | 14 | ||||||||||||||||||
Net income attributable to common stockholders | $ | 2,296 | $ | 629 | $ | 1,107 | $ | 384 | $ | 11 | $ | 21 | ||||||||||||
Denominator | ||||||||||||||||||||||||
Weighted average shares outstanding | 2,059 | 568 | 1,803 | 631 | 668 | 1,344 | ||||||||||||||||||
Less: Shares subject to repurchase | 6 | 7 | 5 | 9 | 1 | 5 | ||||||||||||||||||
Number of shares used for basic EPS computation | 2,053 | 561 | 1,798 | 622 | 667 | 1,339 | ||||||||||||||||||
Basic EPS | $ | 1.12 | $ | 1.12 | $ | 0.62 | $ | 0.62 | $ | 0.02 | $ | 0.02 | ||||||||||||
Diluted EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to common stockholders | $ | 2,296 | $ | 629 | $ | 1,107 | $ | 384 | $ | 11 | $ | 21 | ||||||||||||
Reallocation of net income attributable to participating securities | 15 | — | 9 | — | — | — | ||||||||||||||||||
Reallocation of net income as a result of conversion of Class B to Class A common stock | 629 | — | 384 | — | 21 | — | ||||||||||||||||||
Reallocation of net income to Class B common stock | — | 23 | — | 39 | — | 1 | ||||||||||||||||||
Net income attributable to common stockholders for diluted EPS | $ | 2,940 | $ | 652 | $ | 1,500 | $ | 423 | $ | 32 | $ | 22 | ||||||||||||
Denominator | ||||||||||||||||||||||||
Number of shares used for basic EPS computation | 2,053 | 561 | 1,798 | 622 | 667 | 1,339 | ||||||||||||||||||
Conversion of Class B to Class A common stock | 561 | — | 622 | — | 1,339 | — | ||||||||||||||||||
Weighted average effect of dilutive securities: | ||||||||||||||||||||||||
Employee stock options | 13 | 13 | 65 | 65 | 134 | 134 | ||||||||||||||||||
RSUs | 30 | 13 | 25 | 15 | 23 | 23 | ||||||||||||||||||
Shares subject to repurchase | 7 | 4 | 7 | 7 | 3 | 3 | ||||||||||||||||||
Number of shares used for diluted EPS computation | 2,664 | 591 | 2,517 | 709 | 2,166 | 1,499 | ||||||||||||||||||
Diluted EPS | $ | 1.1 | $ | 1.1 | $ | 0.6 | $ | 0.6 | $ | 0.01 | $ | 0.01 | ||||||||||||
Cash_and_Cash_Equivalents_and_1
Cash and Cash Equivalents, and Marketable Securities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and Cash Equivalents, and Marketable Securities [Abstract] | ||||||||
Cash, Cash Equivalents and Marketable Securities | The following table sets forth the cash, cash equivalents, and marketable securities (in millions): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Cash and cash equivalents: | ||||||||
Cash | $ | 2,162 | $ | 1,044 | ||||
Money market funds | 2,153 | 2,279 | ||||||
Total cash and cash equivalents | 4,315 | 3,323 | ||||||
Marketable securities: | ||||||||
U.S. government securities | 2,830 | 5,687 | ||||||
U.S. government agency securities | 2,710 | 2,439 | ||||||
Corporate debt securities | 1,344 | — | ||||||
Total marketable securities | 6,884 | 8,126 | ||||||
Total cash, cash equivalents and marketable securities | $ | 11,199 | $ | 11,449 | ||||
Marketable Securities by Contractual Maturities | The following table classifies our marketable securities by contractual maturities (in millions): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Due in one year | $ | 3,422 | $ | 4,704 | ||||
Due in one to two years | 3,462 | 3,422 | ||||||
Total | $ | 6,884 | $ | 8,126 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
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 | December 31, | Quoted | Significant | Significant | |||||||||||||
2014 | Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | |||||||||||||||
Markets for | Inputs | (Level 3) | |||||||||||||||
Identical | (Level 2) | ||||||||||||||||
Assets | |||||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 2,153 | $ | 2,153 | $ | — | $ | — | |||||||||
Marketable securities: | |||||||||||||||||
U.S. government securities | 2,830 | 2,830 | — | — | |||||||||||||
U.S. government agency securities | 2,710 | 2,710 | — | — | |||||||||||||
Corporate debt securities | 1,344 | — | 1,344 | — | |||||||||||||
Total cash equivalents and marketable securities | $ | 9,037 | $ | 7,693 | $ | 1,344 | $ | — | |||||||||
Other liabilities: | |||||||||||||||||
Contingent consideration liability | $ | 191 | $ | — | $ | — | $ | 191 | |||||||||
Fair Value Measurement at | |||||||||||||||||
Reporting Date Using | |||||||||||||||||
Description | December 31, | Quoted | Significant | Significant | |||||||||||||
2013 | Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | |||||||||||||||
Markets for | Inputs | (Level 3 | |||||||||||||||
Identical | (Level 2) | ||||||||||||||||
Assets | |||||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 2,279 | $ | 2,279 | $ | — | $ | — | |||||||||
Marketable securities: | |||||||||||||||||
U.S. government securities | 5,687 | 5,687 | — | — | |||||||||||||
U.S. government agency securities | 2,439 | 2,439 | — | — | |||||||||||||
Total cash equivalents and marketable securities | $ | 10,405 | $ | 10,405 | $ | — | $ | — | |||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property and equipment | Property and equipment consists of the following (in millions): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Land | $ | 153 | $ | 45 | ||||
Buildings | 1,420 | 1,071 | ||||||
Leasehold improvements | 304 | 203 | ||||||
Network equipment | 3,020 | 2,351 | ||||||
Computer software, office equipment and other | 149 | 95 | ||||||
Construction in progress | 738 | 377 | ||||||
Total | 5,784 | 4,142 | ||||||
Less: Accumulated depreciation | (1,817 | ) | (1,260 | ) | ||||
Property and equipment, net | $ | 3,967 | $ | 2,882 | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | The changes in carrying amount of goodwill for the years ended December 31, 2014 and 2013 are as follows (in millions): | |||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 587 | ||||||||||||||||||||||||
Goodwill acquired | 252 | |||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 839 | ||||||||||||||||||||||||
Goodwill acquired | 17,150 | |||||||||||||||||||||||||
Effect of currency translation adjustment | (8 | ) | ||||||||||||||||||||||||
Balance as of December 31, 2014 | $ | 17,981 | ||||||||||||||||||||||||
Intangible Assets | Intangible assets consist of the following (in millions): | |||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Useful lives from date of acquisitions (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||||
Acquired users | 7-Mar | $ | 2,056 | $ | (85 | ) | $ | 1,971 | $ | 30 | $ | (6 | ) | $ | 24 | |||||||||||
Acquired technology | 10-Feb | 813 | (144 | ) | 669 | 227 | (65 | ) | 162 | |||||||||||||||||
Acquired patents | 18-Feb | 773 | (239 | ) | 534 | 773 | (142 | ) | 631 | |||||||||||||||||
Trade names | 7-Feb | 632 | (46 | ) | 586 | 45 | (8 | ) | 37 | |||||||||||||||||
Other | 10-Feb | 164 | (55 | ) | 109 | 63 | (34 | ) | 29 | |||||||||||||||||
Total finite-lived intangible assets | $ | 4,438 | $ | (569 | ) | $ | 3,869 | $ | 1,138 | $ | (255 | ) | $ | 883 | ||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||||
IPR&D | $ | 60 | $ | — | $ | 60 | $ | — | $ | — | $ | — | ||||||||||||||
Total intangible assets | $ | 4,498 | $ | (569 | ) | $ | 3,929 | $ | 1,138 | $ | (255 | ) | $ | 883 | ||||||||||||
Estimated Amortization Expense for Unamortized Acquired Intangible Assets | As of December 31, 2014, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions): | |||||||||||||||||||||||||
2015 | $ | 710 | ||||||||||||||||||||||||
2016 | 691 | |||||||||||||||||||||||||
2017 | 648 | |||||||||||||||||||||||||
2018 | 600 | |||||||||||||||||||||||||
2019 | 518 | |||||||||||||||||||||||||
Thereafter | 702 | |||||||||||||||||||||||||
Total | $ | 3,869 | ||||||||||||||||||||||||
Liabilities_Tables
Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
Schedule of Accrued Expenses and Other Current Liabilities | The components of accrued expenses and other current liabilities are as follows (in millions): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accrued compensation and benefits | $ | 322 | $ | 196 | ||||
Accrued property and equipment | 164 | 87 | ||||||
Other current liabilities | 380 | 272 | ||||||
Accrued expenses and other current liabilities | $ | 866 | $ | 555 | ||||
Other Liabilities | The components of other liabilities are as follows (in millions): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Income tax payable | $ | 1,190 | $ | 886 | ||||
Deferred tax liabilities | 987 | 47 | ||||||
Other liabilities | 368 | 155 | ||||||
Other liabilities | $ | 2,545 | $ | 1,088 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Schedule of Future Minimum Lease Payments for Capital and Operating Leases | The following is a schedule, by years, of the future minimum lease payments required under non-cancelable capital and operating leases as of December 31, 2014 (in millions): | |||||||
Capital | Operating | |||||||
Leases | Leases | |||||||
2015 | $ | 124 | $ | 155 | ||||
2016 | 20 | 161 | ||||||
2017 | 15 | 158 | ||||||
2018 | 16 | 143 | ||||||
2019 | 16 | 125 | ||||||
Thereafter | 112 | 359 | ||||||
Total minimum lease payments | $ | 303 | $ | 1,101 | ||||
Less: amount representing interest and taxes | (70 | ) | ||||||
Less: current portion of the present value of minimum lease payments | (114 | ) | ||||||
Capital lease obligations, net of current portion | $ | 119 | ||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Equity [Abstract] | ||||||||||||||||
Stock Option Activity under Stock Plans | The following table summarizes stock option award activities under the Stock Plans for the year ended December 31, 2014: | |||||||||||||||
Shares Subject to Options Outstanding | ||||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||
Shares | Average | Average | Intrinsic | |||||||||||||
Exercise | Remaining | Value(1) | ||||||||||||||
Price | Contractual | |||||||||||||||
Term | ||||||||||||||||
(in thousands) | (in years) | (in millions) | ||||||||||||||
Balance as of December 31, 2013 | 22,102 | $ | 3.56 | |||||||||||||
Stock options exercised | (9,118 | ) | 1.82 | |||||||||||||
Balance as of December 31, 2014 | 12,984 | $ | 4.78 | 3.79 | $ | 951 | ||||||||||
Stock options vested and expected to vest as of December 31, 2014 | 12,980 | $ | 4.78 | 3.79 | $ | 951 | ||||||||||
Stock options exercisable as of December 31, 2014 | 9,850 | $ | 2.49 | 3.2 | $ | 744 | ||||||||||
-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 $78.02 on December 31, 2014. | |||||||||||||||
Outstanding and Exercisable Options Under Stock Plans | The following table summarizes additional information regarding outstanding and exercisable options under the Stock Plans at December 31, 2014: | |||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | |||||||||||
Price (Range) | Shares | Average | Average | Shares | Average | |||||||||||
Remaining | Exercise | Exercise | ||||||||||||||
Contractual | Price | Price | ||||||||||||||
Term | ||||||||||||||||
(in thousands) | (in years) | (in thousands) | ||||||||||||||
$0.06 | 191 | 0.99 | $ | 0.06 | 191 | $ | 0.06 | |||||||||
0.10 - 0.18 | 1,784 | 1.44 | 0.1 | 1,784 | 0.1 | |||||||||||
0.29 - 0.33 | 3,509 | 2.29 | 0.3 | 3,509 | 0.3 | |||||||||||
1.85 | 1,605 | 4.03 | 1.85 | 1,605 | 1.85 | |||||||||||
2.95 | 1,195 | 4.63 | 2.95 | 1,195 | 2.95 | |||||||||||
10.39 | 3,500 | 5.56 | 10.39 | 1,458 | 10.39 | |||||||||||
15 | 1,200 | 5.8 | 15 | 108 | 15 | |||||||||||
12,984 | 3.79 | $ | 4.78 | 9,850 | $ | 2.49 | ||||||||||
Restricted Stock Units Award Activity | The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2014: | |||||||||||||||
Unvested RSUs | ||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||||
(in thousands) | ||||||||||||||||
Unvested at December 31, 2013 | 103,971 | $ | 27.3 | |||||||||||||
Granted | 84,606 | 74.03 | ||||||||||||||
Vested | (41,233 | ) | 25.76 | |||||||||||||
Forfeited | (9,289 | ) | 34.8 | |||||||||||||
Unvested at December 31, 2014 | 138,055 | $ | 55.89 | |||||||||||||
Interest_and_Other_Income_Expe
Interest and Other Income (Expense), Net (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Nonoperating Income (Expense) [Abstract] | ||||||||||||
Schedule of Interest and Other Income (Expense), Net | The following table presents the detail of interest and other income/(expense), net, for the periods presented (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Interest expense | $ | (23 | ) | $ | (56 | ) | $ | (51 | ) | |||
Interest income | 27 | 19 | 14 | |||||||||
Foreign currency exchange losses, net | (87 | ) | (14 | ) | (9 | ) | ||||||
Other | (1 | ) | 1 | 2 | ||||||||
Interest and other income/(expense), net | $ | (84 | ) | $ | (50 | ) | $ | (44 | ) |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of Income Before Provision for Income Taxes | The components of income before provision for income taxes for the years ended December 31, 2014, 2013, and 2012 are as follows (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Domestic | $ | 4,918 | $ | 3,197 | $ | 1,062 | ||||||
Foreign | (8 | ) | (443 | ) | (568 | ) | ||||||
Income before provision for income taxes | $ | 4,910 | $ | 2,754 | $ | 494 | ||||||
Schedule of Provision for Income Taxes | The provision for income taxes consisted of the following (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 1,999 | $ | 1,154 | $ | 559 | ||||||
State | 130 | 69 | 45 | |||||||||
Foreign | 96 | 68 | 22 | |||||||||
Total current tax expense | 2,225 | 1,291 | 626 | |||||||||
Deferred: | ||||||||||||
Federal | (240 | ) | (28 | ) | (172 | ) | ||||||
State | (14 | ) | (7 | ) | (6 | ) | ||||||
Foreign | (1 | ) | (2 | ) | (7 | ) | ||||||
Total deferred tax benefit | (255 | ) | (37 | ) | (185 | ) | ||||||
Provision for income taxes | $ | 1,970 | $ | 1,254 | $ | 441 | ||||||
Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Tax Rate | A reconciliation of the U.S. federal statutory income tax rate of 35.0% to our effective tax rate is as follows (in percentages): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | ||||||
State income taxes, net of federal benefit | 1.4 | 1.6 | 6.2 | |||||||||
Research tax credits | (1.1 | ) | (4.7 | ) | — | |||||||
Share-based compensation | 6.5 | 5.2 | 19.2 | |||||||||
Effect of non-U.S. operations | (3.6 | ) | 6.8 | 26.9 | ||||||||
Other | 1.9 | 1.6 | 2 | |||||||||
Effective tax rate | 40.1 | % | 45.5 | % | 89.3 | % | ||||||
Schedule of Deferred Tax Assets and Liabilities | Our deferred tax assets (liabilities) are as follows (in millions): | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets: | ||||||||||||
Net operating loss carryforward | $ | 130 | $ | 6 | ||||||||
Tax credit carryforward | 190 | 164 | ||||||||||
Share-based compensation | 225 | 120 | ||||||||||
Accrued expenses and other liabilities | 136 | 141 | ||||||||||
Other | 21 | 5 | ||||||||||
Total deferred tax assets | 702 | 436 | ||||||||||
Less: valuation allowance | (101 | ) | (82 | ) | ||||||||
Deferred tax assets, net of valuation allowance | 601 | 354 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Depreciation and amortization | (101 | ) | (68 | ) | ||||||||
Purchased intangible assets | (1,190 | ) | (90 | ) | ||||||||
Deferred foreign taxes | — | (43 | ) | |||||||||
Total deferred tax liabilities | (1,291 | ) | (201 | ) | ||||||||
Net deferred tax (liabilities) assets | $ | (690 | ) | $ | 153 | |||||||
Schedule of Gross Unrecognized Tax Benefits Roll Forward | The following table reflects changes in the gross unrecognized tax benefits (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Gross unrecognized tax benefits-beginning of period | $ | 1,316 | $ | 164 | $ | 63 | ||||||
Increases related to prior year tax positions | 24 | 425 | 13 | |||||||||
Decreases related to prior year tax positions | — | (13 | ) | (16 | ) | |||||||
Increases related to current year tax positions | 346 | 740 | 104 | |||||||||
Decreases related to settlements of prior year tax positions | (4 | ) | — | — | ||||||||
Gross unrecognized tax benefits-end of period | $ | 1,682 | $ | 1,316 | $ | 164 | ||||||
Geographical_Information_Table
Geographical Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segments, Geographical Areas [Abstract] | ||||||||||||
Revenue and Property and Equipment by Geographic Area | Revenue by geography is based on the billing address of the advertiser or developer. The following table sets forth revenue and property and equipment, net by geographic area (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 5,649 | $ | 3,613 | $ | 2,578 | ||||||
Rest of the world(1) | 6,817 | 4,259 | 2,511 | |||||||||
Total revenue | $ | 12,466 | $ | 7,872 | $ | 5,089 | ||||||
-1 | No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Property and equipment, net: | ||||||||||||
United States | $ | 3,256 | $ | 2,368 | ||||||||
Sweden | 514 | 415 | ||||||||||
Rest of the world | 197 | 99 | ||||||||||
Total property and equipment, net | $ | 3,967 | $ | 2,882 | ||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Revenue Recognition (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Advertising | $11,492 | $6,986 | $4,279 |
Payments and other fees | 974 | 886 | 810 |
Total revenue | $12,466 | $7,872 | $5,089 |
Payment Transaction Claim, Term | 30 days |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Share-based Compensation (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Tax benefit from share-based award activity | $1,853 | $602 | $1,033 |
Excess tax benefit from share-based award activity | $1,869 | $609 | $1,033 |
Min | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Service period | 4 years | ||
Max | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Service period | 5 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Property & Equipment and Lease Obligations (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Network equipment | Min | |
Property, Plant and Equipment | |
Useful life of property and equipment | 3 years |
Network equipment | Max | |
Property, Plant and Equipment | |
Useful life of property and equipment | 5 years |
Buildings | Min | |
Property, Plant and Equipment | |
Useful life of property and equipment | 4 years |
Buildings | Max | |
Property, Plant and Equipment | |
Useful life of property and equipment | 20 years |
Computer software, office equipment and other | Min | |
Property, Plant and Equipment | |
Useful life of property and equipment | 3 years |
Computer software, office equipment and other | Max | |
Property, Plant and Equipment | |
Useful life of property and equipment | 5 years |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Intangible Assets (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Intangible Assets | |
Goodwill, Impairment Loss | $0 |
Remaining amortization period | 1 year |
Max | |
Intangible Assets | |
Remaining amortization period | 15 years |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies - Other Policies (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Advertising expense | $135 | $117 | $67 |
Deferred Revenue & Deposits [Abstract] | |||
Deferred Revenue, rate payable to developer upon utilization of virtual currency | 70.00% | ||
Deferred revenue | 38 | 13 | |
Deposits | 28 | 25 | |
Total deferred revenue and deposits | $66 | $38 | |
Max | |||
Operating Leased Assets [Line Items] | |||
Lease expiration year | 2030 |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies - Foreign Currency (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Foreign Currency [Abstract] | |||
Cumulative translation gain (loss) | ($227) | $12 | |
Foreign currency exchange losses, net | ($87) | ($14) | ($9) |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies - Credit Risk and Concentration (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Concentration Risk | |||
Provision for Doubtful Accounts | $19 | $21 | $9 |
Major customer percentage | 10.00% | 10.00% | 10.00% |
Geographic concentration risk | Sales revenue | United States | |||
Concentration Risk | |||
Concentration risk percentage | 45.00% | 46.00% | 51.00% |
Customer concentration risk | |||
Concentration Risk | |||
Number of major customer | 0 | 0 | 0 |
Acquisitions_WhatsApp_Details
Acquisitions - WhatsApp (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Oct. 31, 2014 | Dec. 31, 2013 | Dec. 23, 2013 | 17-May-12 | Oct. 06, 2014 |
Class A Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Share price | 78.02 | $55.05 | $38 | |||
Restricted Stock Units (RSUs) | ||||||
Business Acquisition [Line Items] | ||||||
RSUs issued | 84,606,000 | |||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $4,589 | |||||
Share price | $77.56 | |||||
Consideration transferred | ||||||
Cash | 4,589 | |||||
Common stock | 13,787 | |||||
Less: post-acquisition share-based compensation and other compensation expense | -1,067 | |||||
Less: cash and promissory notes acquired on acquisition date | -116 | |||||
Purchase consideration | 17,193 | |||||
Post-acquisition share-based compensation and other compensation expense | 1,067 | |||||
Share-based compensation recognized | 188 | |||||
Cash used to settle share-based compensation | 50 | |||||
Deferred compensation arrangement to be recognized | 879 | |||||
Deferred compensation, Shares issued | 8,500,000 | |||||
Deferred compensation, Cash award | 219 | |||||
Deferred compensation, Requisite service period | 3 years | |||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Revenue | 12,487 | 7,882 | ||||
Net income | 1,757 | $65 | ||||
WhatsApp | Class A Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares issued | 178,000,000 | |||||
WhatsApp | Restricted Stock Units (RSUs) | ||||||
Business Acquisition [Line Items] | ||||||
RSUs issued | 46,000,000 |
Acquisitions_Acquisitions_Ocul
Acquisitions Acquisitions - Oculus (Details) (USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Jul. 31, 2014 |
Business Acquisition [Line Items] | |
Contingent consideration liability | $169 |
Consideration transferred | |
Contingent consideration liability | 169 |
Oculus | |
Business Acquisition [Line Items] | |
Payments to acquire business | 400 |
Contingent consideration liability | 169 |
Consideration transferred | |
Cash | 400 |
Common stock | 1,601 |
Less: post-acquisition share-based compensation and other compensation expense | -297 |
Less: cash acquired on acquisition date | -20 |
Total purchase consideration, excluding contingent consideration | 1,684 |
Contingent consideration liability | 169 |
Purchase consideration | 1,853 |
Post-acquisition share-based compensation and other compensation expense | 297 |
Share-based compensation recognized | 13 |
Deferred compensation arrangement to be recognized | 284 |
Deferred compensation, Requisite service period | 4 years |
Oculus | Class B Common Stock | |
Business Acquisition [Line Items] | |
Business Acquisitions Contingent Liabilities, Number of Shares Issuable | 3 |
Oculus | Cash | |
Business Acquisition [Line Items] | |
Contingent consideration liability | 60 |
Consideration transferred | |
Contingent consideration liability | $60 |
Oculus | Class B Common Stock | |
Business Acquisition [Line Items] | |
Number of shares issued | 23 |
Acquisitions_Acquisitions_Othe
Acquisitions Acquisitions - Other (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Oct. 31, 2014 | Jul. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $17,981 | $839 | $587 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
(Liabilities assumed) assets acquired | -33 | ||||
Deferred tax liabilities | -899 | ||||
Net assets acquired | 1,851 | ||||
Goodwill | 15,342 | ||||
Total fair value consideration | 17,193 | ||||
WhatsApp | Acquired users | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 2,026 | ||||
Finite-lived intangible assets - Useful life | 7 years | ||||
WhatsApp | Tradename | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 448 | ||||
Finite-lived intangible assets - Useful life | 5 years | ||||
WhatsApp | Acquired technology | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 288 | ||||
Finite-lived intangible assets - Useful life | 5 years | ||||
WhatsApp | Other intangible assets | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 21 | ||||
Finite-lived intangible assets - Useful life | 2 years | ||||
WhatsApp | IPR&D | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 0 | ||||
Oculus | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
(Liabilities assumed) assets acquired | 0 | ||||
Deferred tax liabilities | -107 | ||||
Net assets acquired | 320 | ||||
Goodwill | 1,533 | ||||
Total fair value consideration | 1,684 | ||||
Total fair value consideration | 1,853 | ||||
Oculus | Acquired users | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 0 | ||||
Oculus | Tradename | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 113 | ||||
Finite-lived intangible assets - Useful life | 7 years | ||||
Oculus | Acquired technology | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 235 | ||||
Finite-lived intangible assets - Useful life | 5 years | ||||
Oculus | Other intangible assets | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 19 | ||||
Finite-lived intangible assets - Useful life | 2 years | ||||
Oculus | IPR&D | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 60 | ||||
Other | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
(Liabilities assumed) assets acquired | 103 | ||||
Deferred tax liabilities | -48 | ||||
Net assets acquired | 210 | ||||
Goodwill | 275 | ||||
Total fair value consideration | 485 | ||||
Other | Acquired users | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 0 | ||||
Other | Tradename | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 26 | ||||
Finite-lived intangible assets - Useful life | 5 years | ||||
Other | Acquired technology | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 68 | ||||
Other | Other intangible assets | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | 61 | ||||
Finite-lived intangible assets - Useful life | 5 years | ||||
Other | IPR&D | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | $0 | ||||
Other | Min | Acquired technology | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets - Useful life | 3 years | ||||
Other | Max | Acquired technology | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets - Useful life | 5 years |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator | |||
Net income | $2,940 | $1,500 | $53 |
Less: Net income attributable to participating securities | 15 | 9 | 21 |
Net income attributable to common stockholders | 2,925 | 1,491 | 32 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 2,614 | 2,420 | 2,006 |
Basic EPS (in dollars per share) | $1.12 | $0.62 | $0.02 |
Numerator | |||
Net income attributable to common stockholders | 2,925 | 1,491 | 32 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 2,614 | 2,420 | 2,006 |
Number of shares used for diluted EPS computation (in shares) | 2,664 | 2,517 | 2,166 |
Diluted EPS (in dollars per share) | $1.10 | $0.60 | $0.01 |
Class A Common Stock | |||
Numerator | |||
Net income | 2,308 | 1,114 | 18 |
Less: Net income attributable to participating securities | 12 | 7 | 7 |
Net income attributable to common stockholders | 2,296 | 1,107 | 11 |
Denominator | |||
Weighted average shares outstanding (in shares) | 2,059 | 1,803 | 668 |
Less: Shares subject to repurchase (in shares) | 6 | 5 | 1 |
Number of shares used for basic EPS computation (in shares) | 2,053 | 1,798 | 667 |
Basic EPS (in dollars per share) | $1.12 | $0.62 | $0.02 |
Numerator | |||
Net income attributable to common stockholders | 2,296 | 1,107 | 11 |
Reallocation of net income attributable to participating securities | 15 | 9 | 0 |
Reallocation of net income as a result of conversion of Class B to Class A common stock | 629 | 384 | 21 |
Reallocation of net income to Class B common stock | 0 | 0 | 0 |
Net income attributable to common stockholders for diluted EPS | 2,940 | 1,500 | 32 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 2,053 | 1,798 | 667 |
Conversion of Class B to Class A common stock (in shares) | 561 | 622 | 1,339 |
Shares subject to repurchase (in shares) | 7 | 7 | 3 |
Number of shares used for diluted EPS computation (in shares) | 2,664 | 2,517 | 2,166 |
Diluted EPS (in dollars per share) | $1.10 | $0.60 | $0.01 |
Class A Common Stock | Employee Stock Option | |||
Denominator | |||
Share based payment arrangements (in shares) | 13 | 65 | 134 |
Class A Common Stock | Restricted Stock Units (RSUs) | |||
Denominator | |||
Share based payment arrangements (in shares) | 30 | 25 | 23 |
Class B Common Stock | |||
Numerator | |||
Net income | 632 | 386 | 35 |
Less: Net income attributable to participating securities | 3 | 2 | 14 |
Net income attributable to common stockholders | 629 | 384 | 21 |
Denominator | |||
Weighted average shares outstanding (in shares) | 568 | 631 | 1,344 |
Less: Shares subject to repurchase (in shares) | 7 | 9 | 5 |
Number of shares used for basic EPS computation (in shares) | 561 | 622 | 1,339 |
Basic EPS (in dollars per share) | $1.12 | $0.62 | $0.02 |
Numerator | |||
Net income attributable to common stockholders | 629 | 384 | 21 |
Reallocation of net income attributable to participating securities | 0 | 0 | 0 |
Reallocation of net income as a result of conversion of Class B to Class A common stock | 0 | 0 | 0 |
Reallocation of net income to Class B common stock | 23 | 39 | 1 |
Net income attributable to common stockholders for diluted EPS | $652 | $423 | $22 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 561 | 622 | 1,339 |
Conversion of Class B to Class A common stock (in shares) | 0 | 0 | 0 |
Shares subject to repurchase (in shares) | 4 | 7 | 3 |
Number of shares used for diluted EPS computation (in shares) | 591 | 709 | 1,499 |
Diluted EPS (in dollars per share) | $1.10 | $0.60 | $0.01 |
Class B Common Stock | Employee Stock Option | |||
Denominator | |||
Share based payment arrangements (in shares) | 13 | 65 | 134 |
Class B Common Stock | Restricted Stock Units (RSUs) | |||
Denominator | |||
Share based payment arrangements (in shares) | 13 | 15 | 23 |
Restricted Stock Units (RSUs) | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 14 | 1 | 15 |
Cash_Cash_Equivalents_and_Mark
Cash, Cash Equivalents and Marketable Securities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | security | security | ||
Cash, Cash Equivalents and Marketable Securities | ||||
Cash | $2,162 | $1,044 | ||
Money market funds | 2,153 | 2,279 | ||
Total cash and cash equivalents | 4,315 | 3,323 | 2,384 | 1,512 |
Marketable securities | 6,884 | 8,126 | ||
Total cash, cash equivalents and marketable securities | 11,199 | 11,449 | ||
Number of positions in a continuous loss position for 12 months or longer | 0 | 0 | ||
U.S. government securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Marketable securities | 2,830 | 5,687 | ||
U.S. government agency securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Marketable securities | 2,710 | 2,439 | ||
Corporate debt securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Marketable securities | $1,344 | $0 |
Cash_and_Cash_Equivalents_and_2
Cash and Cash Equivalents, and Marketable Securities - Contractual Maturities of Debt Securities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Cash and Cash Equivalents, and Marketable Securities [Abstract] | ||
Due in one year | $3,422 | $4,704 |
Due in one to two years | 3,462 | 3,422 |
Total Marketable securities | $6,884 | $8,126 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Jul. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | $6,884 | $8,126 | |
Contingent consideration liability | 169 | ||
Change in value of contingent consideration liability | 22 | ||
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Total cash equivalents and marketable securities | 9,037 | 10,405 | |
Contingent consideration liability | 191 | ||
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 | 7,693 | 10,405 | |
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 | 1,344 | 0 | |
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 | 0 | |
Contingent consideration liability | 191 | ||
U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 2,830 | 5,687 | |
U.S. government securities | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 2,830 | 5,687 | |
U.S. government securities | 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 | |||
Marketable securities | 2,830 | 5,687 | |
U.S. government securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 0 | 0 | |
U.S. government securities | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 0 | 0 | |
U.S. government agency securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 2,710 | 2,439 | |
U.S. government agency securities | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 2,710 | 2,439 | |
U.S. government agency securities | 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 | |||
Marketable securities | 2,710 | 2,439 | |
U.S. government agency securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 0 | 0 | |
U.S. government agency securities | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 0 | 0 | |
Corporate debt securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 1,344 | 0 | |
Corporate debt securities | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 1,344 | ||
Corporate debt securities | 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 | |||
Marketable securities | 0 | ||
Corporate debt securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 1,344 | ||
Corporate debt securities | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Marketable securities | 0 | ||
Money market funds | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Cash equivalents | 2,153 | 2,279 | |
Money market funds | 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 | |||
Cash equivalents | 2,153 | 2,279 | |
Money market funds | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Cash equivalents | 0 | 0 | |
Money market funds | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Cash equivalents | $0 | $0 |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment | |||
Property and equipment, gross | $5,784,000,000 | $4,142,000,000 | |
Less: Accumulated depreciation | -1,817,000,000 | -1,260,000,000 | |
Property and equipment, net | 3,967,000,000 | 2,882,000,000 | |
Depreciation expense | 923,000,000 | 857,000,000 | 566,000,000 |
Assets acquired under capital lease agreements | 700,000,000 | 976,000,000 | |
Accumulated depreciation of property and equipment acquired under capital leases | 425,000,000 | 527,000,000 | |
Interest costs capitalized | 0 | ||
Land | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 153,000,000 | 45,000,000 | |
Buildings | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 1,420,000,000 | 1,071,000,000 | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 304,000,000 | 203,000,000 | |
Network equipment | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 3,020,000,000 | 2,351,000,000 | |
Computer software, office equipment and other | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 149,000,000 | 95,000,000 | |
Construction in progress | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $738,000,000 | $377,000,000 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets Goodwill (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ||
Goodwill beginning | $839 | $587 |
Goodwill acquired | 17,150 | 252 |
Effect of currency translation adjustment | -8 | |
Goodwill ending | $17,981 | $839 |
Intangible_Assets_Detail
Intangible Assets (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | $4,438 | $1,138 | |
Accumulated Amortization | -569 | -255 | |
Net Carrying Amount | 3,869 | 883 | |
Indefinite-lived intangible assets | 60 | 0 | |
Total intangible assets, Gross | 4,498 | 1,138 | |
Total intangible assets, Net | 3,929 | 883 | |
Amortization expense | 319 | 145 | 78 |
Acquired users | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 2,056 | 30 | |
Accumulated Amortization | -85 | -6 | |
Net Carrying Amount | 1,971 | 24 | |
Acquired technology | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 813 | 227 | |
Accumulated Amortization | -144 | -65 | |
Net Carrying Amount | 669 | 162 | |
Acquired patents | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 773 | 773 | |
Accumulated Amortization | -239 | -142 | |
Net Carrying Amount | 534 | 631 | |
Tradename | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 632 | 45 | |
Accumulated Amortization | -46 | -8 | |
Net Carrying Amount | 586 | 37 | |
Other intangible assets | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 164 | 63 | |
Accumulated Amortization | -55 | -34 | |
Net Carrying Amount | $109 | $29 | |
Min | Acquired users | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 3 years | ||
Min | Acquired technology | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 2 years | ||
Min | Acquired patents | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 2 years | ||
Min | Tradename | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 2 years | ||
Min | Other intangible assets | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 2 years | ||
Max | Acquired users | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 7 years | ||
Max | Acquired technology | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 10 years | ||
Max | Acquired patents | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 18 years | ||
Max | Tradename | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 7 years | ||
Max | Other intangible assets | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Finite-lived intangible asset, Useful life | 10 years |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets Amortization Expense (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2015 | $710 | |
2016 | 691 | |
2017 | 648 | |
2018 | 600 | |
2019 | 518 | |
Thereafter | 702 | |
Net Carrying Amount | $3,869 | $883 |
Liabilities_Details
Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accrued Liabilities and Other Current Liabilities [Abstract] | ||
Accrued compensation and benefits | $322 | $196 |
Accrued property and equipment | 164 | 87 |
Other current liabilities | 380 | 272 |
Accrued expenses and other current liabilities | 866 | 555 |
Other Liabilities [Abstract] | ||
Income tax payable | 1,190 | 886 |
Deferred Tax Liabilities | 987 | 47 |
Other liabilities | 368 | 155 |
Other liabilities | $2,545 | $1,088 |
Longterm_Debt_Borrowings_Detai
Long-term Debt - Borrowings (Details) (Revolving Credit Facility, 2013 Revolving Credit Facility, USD $) | 1 Months Ended | |
Aug. 31, 2013 | Dec. 31, 2014 | |
Revolving Credit Facility | 2013 Revolving Credit Facility | ||
Debt Instrument | ||
Term loan facility, term period | 5 years | |
Line of credit facility, maximum borrowing capacity | $6,500,000,000 | |
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 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Leases [Abstract] | |||
Capital lease agreement period | 3 years | ||
Capital Leases, Future Minimum Payments Due | |||
2015 | $124,000,000 | ||
2016 | 20,000,000 | ||
2017 | 15,000,000 | ||
2018 | 16,000,000 | ||
2019 | 16,000,000 | ||
Thereafter | 112,000,000 | ||
Total minimum lease payments | 303,000,000 | ||
Less: amount representing interest and taxes | -70,000,000 | ||
Less: current portion of the present value of minimum lease payments | -114,000,000 | -239,000,000 | |
Capital lease obligations, less current portion | 119,000,000 | 237,000,000 | |
Operating Leases, Future Minimum Payments Due | |||
2015 | 155,000,000 | ||
2016 | 161,000,000 | ||
2017 | 158,000,000 | ||
2018 | 143,000,000 | ||
2019 | 125,000,000 | ||
Thereafter | 359,000,000 | ||
Total minimum lease payments | 1,101,000,000 | ||
Operating lease expense | 125,000,000 | 130,000,000 | 196,000,000 |
Other contractual commitments | |||
Other contractual commitments | $1,030,000,000 | ||
Contractual Obligation, Period | 5 years | ||
Min | |||
Leases [Abstract] | |||
Interest rate | 1.00% | ||
Lease expiration year | 2015 | ||
Max | |||
Leases [Abstract] | |||
Interest rate | 13.00% | ||
Lease expiration year | 2030 | ||
Buildings | |||
Leases [Abstract] | |||
Capital lease agreement period | 15 years |
Stockholders_Equity_Initial_Pu
Stockholders' Equity - Initial Public Offering (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | 31-May-12 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 23, 2013 | 17-May-12 |
Class of Stock | |||||||
Net proceeds from issuance of common stock | $1,480 | $6,760 | $0 | $1,478 | $6,760 | ||
Underwriting discounts and commissions | 7 | 75 | |||||
Other offering costs | $1 | $7 | |||||
Class A Common Stock | |||||||
Class of Stock | |||||||
Issuance of common stock, shares | 27,004,761 | 180,000,000 | |||||
Share price | $78.02 | $55.05 | $38 | ||||
Sale of stock, sold by stockholders | 42,995,239 | 241,233,615 |
Stockholders_Equity_Followon_O
Stockholders' Equity - Follow-on Offering (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | 31-May-12 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 23, 2013 | 17-May-12 |
Class of Stock | |||||||
Net proceeds from issuance of common stock | $1,480 | $6,760 | $0 | $1,478 | $6,760 | ||
Underwriting discounts and commissions | 7 | 75 | |||||
Other offering costs | $1 | $7 | |||||
Class A Common Stock | |||||||
Class of Stock | |||||||
Issuance of common stock, shares | 27,004,761 | 180,000,000 | |||||
Share price | $78.02 | $55.05 | $38 | ||||
Sale of stock, sold by stockholders | 42,995,239 | 241,233,615 |
Stockholders_Equity_Common_Sto
Stockholders' Equity - Common Stock (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Class of Stock | ||
Common stock, par value | $0.00 | $0.00 |
Class A Common Stock | ||
Class of Stock | ||
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, par value | $0.00 | |
Common stock, number of votes by class | 1 | |
Common stock, shares, issued | 2,234,113,007 | 1,970,000,000 |
Common stock, shares, outstanding | 2,234,113,007 | 1,970,000,000 |
Class B Common Stock | ||
Class of Stock | ||
Common stock, shares authorized | 4,141,000,000 | 4,141,000,000 |
Common stock, par value | $0.00 | |
Common stock, number of votes by class | 10 | |
Common stock, shares, issued | 562,792,201 | 577,000,000 |
Common stock, shares, outstanding | 562,792,201 | 577,000,000 |
Stockholders_Equity_Sharebased
Stockholders' Equity - Share-based Compensation Plans (Detail) | 1 Months Ended | 12 Months Ended |
Oct. 31, 2014 | Dec. 31, 2014 | |
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 | Min | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Shares reserved for issuance increase date range | 1-Jan-13 | |
2012 Plan | Max | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Shares reserved for issuance increase date range | 1-Jan-22 | |
Inducement awards | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Granted (in shares) | 37,475,271 | |
Deferred compensation, Requisite service period | 4 years |
Stockholders_Equity_Stock_Opti
Stockholders' Equity - Stock Option Award Activity (Details) (USD $) | 12 Months Ended | ||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 23, 2013 | 17-May-12 |
Number of Shares | |||||
Ending balance (in shares) | 12,984,000 | ||||
Aggregate Intrinsic Value | |||||
Aggregate intrinsic value of the options exercised | $624 | $4,580 | $4,230 | ||
Total grant date fair value of stock options vested | 7 | 7 | 5 | ||
Employee Stock Option | |||||
Number of Shares | |||||
Beginning balance (in shares) | 22,102,000 | ||||
Stock options exercised (in shares) | -9,118,000 | ||||
Ending balance (in shares) | 12,984,000 | ||||
Stock options vested and expected to vest as of period end (in shares) | 12,980,000 | ||||
Stock options exercisable as of period end (in shares) | 9,850,000 | ||||
Weighted Average Exercise Price | |||||
Beginning Balance (in dollars per share) | $3.56 | ||||
Stock options exercised (in dollars per share) | $1.82 | ||||
Ending Balance (in dollars per share) | $4.78 | ||||
Stock options vested and expected to vest as of period end (in dollars per share) | $4.78 | ||||
Stock options exercisable as of period end (in dollars per share) | $2.49 | ||||
Weighted Average Remaining Contractual Term | |||||
Balance at period end (in years) | 3 years 9 months 16 days | ||||
Stock options vested and expected to vest as of period end (in years) | 3 years 9 months 16 days | ||||
Stock options exercisable as of period end (in years) | 3 years 2 months 13 days | ||||
Aggregate Intrinsic Value | |||||
Balance at period end | 951 | ||||
Stock options vested and expected to vest as of period end | 951 | ||||
Stock options exercisable as of period end | $744 | ||||
Options granted in period | 0 | ||||
Class A Common Stock | |||||
Aggregate Intrinsic Value | |||||
Share price | $78.02 | $55.05 | $38 |
Stockholders_Equity_Stock_Opti1
Stockholders' Equity - Stock Options Additional Disclosures (Details) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Number of shares | 12,984 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 3 years 9 months 16 days |
Options Outstanding, Weighted-Average Exercise Price | $4.78 |
Options Exercisable, Number of Shares | 9,850 |
Options Exercisable, Weighted-Average Exercise Price | $2.49 |
Exercise Price Range 0.06 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Exercise Price, maximum | $0.06 |
Number of shares | 191 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 0 years 11 months 25 days |
Options Outstanding, Weighted-Average Exercise Price | $0.06 |
Options Exercisable, Number of Shares | 191 |
Options Exercisable, Weighted-Average Exercise Price | $0.06 |
Exercise Price Range 0.10 - 0.18 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Exercise Price, minimum | $0.10 |
Exercise Price, maximum | $0.18 |
Number of shares | 1,784 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 1 year 5 months 10 days |
Options Outstanding, Weighted-Average Exercise Price | $0.10 |
Options Exercisable, Number of Shares | 1,784 |
Options Exercisable, Weighted-Average Exercise Price | $0.10 |
Exercise Price Range 0.29 - 0.33 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Exercise Price, minimum | $0.29 |
Exercise Price, maximum | $0.33 |
Number of shares | 3,509 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 2 years 2 months 46 days |
Options Outstanding, Weighted-Average Exercise Price | $0.30 |
Options Exercisable, Number of Shares | 3,509 |
Options Exercisable, Weighted-Average Exercise Price | $0.30 |
Exercise Price Range 1.85 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Exercise Price, maximum | $1.85 |
Number of shares | 1,605 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 4 years 0 months 10 days |
Options Outstanding, Weighted-Average Exercise Price | $1.85 |
Options Exercisable, Number of Shares | 1,605 |
Options Exercisable, Weighted-Average Exercise Price | $1.85 |
Exercise Price Range 2.95 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Exercise Price, maximum | $2.95 |
Number of shares | 1,195 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 4 years 7 months 18 days |
Options Outstanding, Weighted-Average Exercise Price | $2.95 |
Options Exercisable, Number of Shares | 1,195 |
Options Exercisable, Weighted-Average Exercise Price | $2.95 |
Exercise Price Range 10.39 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Exercise Price, maximum | $10.39 |
Number of shares | 3,500 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 5 years 6 months 22 days |
Options Outstanding, Weighted-Average Exercise Price | $10.39 |
Options Exercisable, Number of Shares | 1,458 |
Options Exercisable, Weighted-Average Exercise Price | $10.39 |
Exercise Price Range 15.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Exercise Price, maximum | $15 |
Number of shares | 1,200 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 5 years 9 months 20 days |
Options Outstanding, Weighted-Average Exercise Price | $15 |
Options Exercisable, Number of Shares | 108 |
Options Exercisable, Weighted-Average Exercise Price | $15 |
Stockholders_Equity_RSU_Award_
Stockholders' Equity - RSU Award Activity (Details) (Restricted Stock Units (RSUs), USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of vested RSUs | $2.77 | $1.55 | $1.99 |
Number of Shares | |||
Unvested at beginning of period (in shares) | 103,971,000 | ||
Granted (in shares) | 84,606,000 | ||
Vested (in shares) | -41,233,000 | ||
Forfeited (in shares) | -9,289,000 | ||
Unvested at end of period (in shares) | 138,055,000 | 103,971,000 | |
Weighted Average Grant Date Fair Value | |||
Unvested at beginning of period (in dollars per share) | $27.30 | ||
Granted (in dollars per share) | $74.03 | ||
Vested (in dollars per share) | $25.76 | ||
Forfeited (in dollars per share) | $34.80 | ||
Unvested at end of period (in dollars per share) | $55.89 | $27.30 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Award Disclosures (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Future period share-based compensation expense | $7,960,000,000 | ||
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 | |||
Fair value of vested RSUs | 2,770,000,000 | 1,550,000,000 | 1,990,000,000 |
Future period share-based compensation expense | 6,960,000,000 | ||
Other Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Future period share-based compensation expense | $999,000,000 |
Interest_and_other_incomeexpen1
Interest and other income/(expense), net (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Nonoperating Income (Expense) [Abstract] | |||
Interest expense | ($23) | ($56) | ($51) |
Interest income | 27 | 19 | 14 |
Foreign currency exchange losses, net | -87 | -14 | -9 |
Other | -1 | 1 | 2 |
Interest and other income (expense), net | ($84) | ($50) | ($44) |
Income_Taxes_Schedule_for_Inco
Income Taxes - Schedule for Income Before Income Tax (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Domestic | $4,918 | $3,197 | $1,062 |
Foreign | -8 | -443 | -568 |
Income before provision for income taxes | $4,910 | $2,754 | $494 |
Income_Taxes_Provision_for_Inc
Income Taxes - Provision for Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||
Federal | $1,999 | $1,154 | $559 |
State | 130 | 69 | 45 |
Foreign | 96 | 68 | 22 |
Total current tax expense | 2,225 | 1,291 | 626 |
Deferred: | |||
Federal | -240 | -28 | -172 |
State | -14 | -7 | -6 |
Foreign | -1 | -2 | -7 |
Total deferred tax benefit | -255 | -37 | -185 |
Provision for income taxes | $1,970 | $1,254 | $441 |
Income_Taxes_Effective_Income_
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 1.40% | 1.60% | 6.20% |
Research tax credits | -1.10% | -4.70% | 0.00% |
Share-based compensation | 6.50% | 5.20% | 19.20% |
Effect of non-U.S. operations | -3.60% | 6.80% | 26.90% |
Other | 1.90% | 1.60% | 2.00% |
Effective tax rate | 40.10% | 45.50% | 89.30% |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ||
Net operating loss carryforward | $130 | $6 |
Tax credit carryforward | 190 | 164 |
Share-based compensation | 225 | 120 |
Accrued expenses and other liabilities | 136 | 141 |
Other | 21 | 5 |
Total deferred tax assets | 702 | 436 |
Less: valuation allowance | -101 | -82 |
Deferred tax assets, net of valuation allowance | 601 | 354 |
Deferred tax liabilities: | ||
Depreciation and amortization | -101 | -68 |
Purchased intangible assets | -1,190 | -90 |
Deferred foreign taxes | 0 | -43 |
Total deferred tax liabilities | -1,291 | -201 |
Net deferred tax (liabilities) assets | ($690) | $153 |
Income_Taxes_Unrecognized_Tax_
Income Taxes - Unrecognized Tax Benefits (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of Unrecognized Tax Benefits | |||
Gross unrecognized tax benefits-beginning of period | $1,316 | $164 | $63 |
Increases related to prior year tax positions | 24 | 425 | 13 |
Decreases related to prior year tax positions | 0 | -13 | -16 |
Increases related to current year tax positions | 346 | 740 | 104 |
Decreases related to settlements of prior year tax positions | -4 | 0 | 0 |
Gross unrecognized tax benefits-end of period | $1,682 | $1,316 | $164 |
Income_Taxes_Narrative_Detail
Income Taxes - Narrative (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Disclosure | ||||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% | |
Tax benefit from share-based award activity | $1,853,000,000 | $602,000,000 | $1,033,000,000 | |
Valuation allowance, deferred tax assets | 101,000,000 | 82,000,000 | ||
Tax-effected benefit to be recognized in additional paid in capital if net operating loss carryforward is utilized | 1,470,000,000 | |||
Cumulative stock ownership change threshold | 50.00% | |||
Change in ownership percentage over period | 3 years | |||
Unrecognized tax benefits | 1,682,000,000 | 1,316,000,000 | 164,000,000 | 63,000,000 |
Unrecognized tax benefits that would impact effective tax rate | 1,160,000,000 | |||
Internal Revenue Service (IRS) | ||||
Income Tax Disclosure | ||||
Operating loss carryforwards | 4,530,000,000 | |||
Operating Loss Carryforwards Expiration Year | 2028 | |||
Tax credit carryforward | 800,000,000 | |||
Tax Credit Carryforward Expiration Year | 2032 | |||
State and Local Jurisdiction | ||||
Income Tax Disclosure | ||||
Operating loss carryforwards | 4,460,000,000 | |||
Operating Loss Carryforwards Expiration Year | 2021 | |||
Tax credit carryforward | $753,000,000 | |||
Tax Credit Carryforward Expiration Year | 2032 |
Geographical_Information_Reven
Geographical Information - Revenue (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Revenue by Geographical Area | ||||||
Revenue | $12,466 | $7,872 | $5,089 | |||
United States | ||||||
Revenue by Geographical Area | ||||||
Revenue | 5,649 | 3,613 | 2,578 | |||
Rest of the world | ||||||
Revenue by Geographical Area | ||||||
Revenue | $6,817 | [1] | $4,259 | [1] | $2,511 | [1] |
[1] | No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented |
Geographical_Information_Prope
Geographical Information - Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | $3,967 | $2,882 |
United States | ||
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | 3,256 | 2,368 |
Sweden | ||
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | 514 | 415 |
Rest of the world | ||
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | $197 | $99 |