Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 25, 2016 | Jun. 30, 2015 | |
Document Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | FB | ||
Entity Registrant Name | FACEBOOK INC | ||
Entity Central Index Key | 1,326,801 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 198 | ||
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 | 2,294,939,865 | ||
Class B Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 551,340,611 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 4,907 | $ 4,315 |
Marketable securities | 13,527 | 6,884 |
Accounts receivable, net of allowances for doubtful accounts of $68 and $39 as of December 31, 2015 and December 31, 2014, respectively | 2,559 | 1,678 |
Prepaid expenses and other current assets | 659 | 513 |
Total current assets | 21,652 | 13,390 |
Property and equipment, net | 5,687 | 3,967 |
Intangible assets, net | 3,246 | 3,929 |
Goodwill | 18,026 | 17,981 |
Other assets | 796 | 699 |
Total assets | 49,407 | 39,966 |
Current liabilities: | ||
Accounts payable | 196 | 176 |
Partners payable | 217 | 202 |
Accrued expenses and other current liabilities | 1,449 | 866 |
Deferred revenue and deposits | 56 | 66 |
Current portion of capital lease obligations | 7 | 114 |
Total current liabilities | 1,925 | 1,424 |
Capital lease obligations, less current portion | 107 | 119 |
Other liabilities | 3,157 | 2,327 |
Total liabilities | $ 5,189 | $ 3,870 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,293 million and 2,234 million shares issued and outstanding, including 8 million and 13 million outstanding shares subject to repurchase, as of December 31, 2015 and December 31, 2014, respectively; 4,141 million Class B shares authorized, 552 million and 563 million shares issued and outstanding, including 3 million and 6 million outstanding shares subject to repurchase, as of December 31, 2015 and December 31, 2014, respective | $ 0 | $ 0 |
Additional paid-in capital | 34,886 | 30,225 |
Accumulated other comprehensive loss | (455) | (228) |
Retained earnings | 9,787 | 6,099 |
Total stockholders' equity | 44,218 | 36,096 |
Total liabilities and stockholders' equity | $ 49,407 | $ 39,966 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Accounts receivable, allowances for doubtful accounts | $ 68 | $ 39 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.000006 | $ 0.000006 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.000006 | |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, shares, issued | 2,293,000,000 | 2,234,000,000 |
Common stock, shares, outstanding | 2,293,000,000 | 2,234,000,000 |
Common stock, outstanding shares subject to repurchase | 8,000,000 | 13,000,000 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.000006 | |
Common stock, shares authorized | 4,141,000,000 | 4,141,000,000 |
Common stock, shares, issued | 552,000,000 | 563,000,000 |
Common stock, shares, outstanding | 552,000,000 | 563,000,000 |
Common stock, outstanding shares subject to repurchase | 3,000,000 | 6,000,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | $ 17,928 | $ 12,466 | $ 7,872 |
Costs and expenses: | |||
Cost of revenue | 2,867 | 2,153 | 1,875 |
Research and development | 4,816 | 2,666 | 1,415 |
Marketing and sales | 2,725 | 1,680 | 997 |
General and administrative | 1,295 | 973 | 781 |
Total costs and expenses | 11,703 | 7,472 | 5,068 |
Income from operations | 6,225 | 4,994 | 2,804 |
Interest and other income/(expense), net | (31) | (84) | (50) |
Income before provision for income taxes | 6,194 | 4,910 | 2,754 |
Provision for income taxes | 2,506 | 1,970 | 1,254 |
Net income | 3,688 | 2,940 | 1,500 |
Less: Net income attributable to participating securities | 19 | 15 | 9 |
Net income attributable to Class A and Class B common stockholders | $ 3,669 | $ 2,925 | $ 1,491 |
Earnings per share attributable to Class A and Class B common stockholders: | |||
Basic (in dollars per share) | $ 1.31 | $ 1.12 | $ 0.62 |
Diluted (in dollars per share) | $ 1.29 | $ 1.10 | $ 0.60 |
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: | |||
Basic (in shares) | 2,803 | 2,614 | 2,420 |
Diluted (in shares) | 2,853 | 2,664 | 2,517 |
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | $ 2,969 | $ 1,837 | $ 906 |
Cost of revenue | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | 81 | 62 | 42 |
Research and development | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | 2,350 | 1,328 | 604 |
Marketing and sales | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | 320 | 249 | 133 |
General and administrative | |||
Share-based compensation expense included in costs and expenses: | |||
Share-based compensation expense | $ 218 | $ 198 | $ 127 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 3,688 | $ 2,940 | $ 1,500 |
Other comprehensive income (loss): | |||
Change in foreign currency translation adjustment, net of tax | (202) | (239) | 11 |
Change in unrealized gain/loss on available-for-sale investments and other, net of tax | (25) | (3) | 1 |
Comprehensive income | $ 3,461 | $ 2,698 | $ 1,512 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Stockholders' Equity |
Common stock, shares outstanding beginning at Dec. 31, 2012 | 2,372 | |||||
Common stock, value, outstanding beginning at Dec. 31, 2012 | $ 0 | |||||
Total Stockholders' Equity, beginning at Dec. 31, 2012 | $ 10,094 | $ 2 | $ 1,659 | $ 11,755 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, shares | 27 | |||||
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 | |||||
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 | |||||
Issuance of common stock related to acquisitions, value | $ 0 | 77 | $ 77 | |||
Issuance of common stock for settlement of restricted stock units (RSUs) | 65 | 0 | ||||
Shares withheld related to net share settlement, shares | (27) | |||||
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, shares outstanding ending at Dec. 31, 2013 | 2,547 | |||||
Common stock, value, outstanding ending at Dec. 31, 2013 | $ 0 | |||||
Total Stockholders' Equity, ending at Dec. 31, 2013 | 12,297 | 14 | 3,159 | 15,470 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock for cash upon exercise of stock options, shares | 9 | |||||
Issuance of common stock for cash upon exercise of stock options, value | $ 0 | 18 | 18 | |||
Issuance of common stock related to acquisitions, shares | 201 | |||||
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 | 0 | ||||
Shares withheld related to net share settlement, shares | (1) | |||||
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, shares outstanding ending at Dec. 31, 2014 | 2,797 | |||||
Common 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 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock for cash upon exercise of stock options, shares | 4 | |||||
Issuance of common stock for cash upon exercise of stock options, value | $ 0 | 0 | $ 0 | |||
Issuance of common stock for settlement of restricted stock units (RSUs) | 44 | 0 | ||||
Shares withheld related to net share settlement, shares | 0 | |||||
Shares withheld related to net share settlement, value | (20) | $ (20) | ||||
Share-based compensation, related to employee share-based awards | 2,960 | 2,960 | ||||
Tax benefit from share-based award activity | 1,721 | 1,721 | ||||
Other comprehensive income | (227) | (227) | ||||
Net income | 3,688 | 3,688 | 3,688 | |||
Common stock, shares outstanding ending at Dec. 31, 2015 | 2,845 | |||||
Common stock, value, outstanding ending at Dec. 31, 2015 | $ 0 | |||||
Total Stockholders' Equity, ending at Dec. 31, 2015 | $ 44,218 | $ 34,886 | $ (455) | $ 9,787 | $ 44,218 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net income | $ 3,688 | $ 2,940 | $ 1,500 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,945 | 1,243 | 1,011 |
Lease abandonment | 0 | (31) | 117 |
Share-based compensation | 2,960 | 1,786 | 906 |
Deferred income taxes | (795) | (210) | (37) |
Tax benefit from share-based award activity | 1,721 | 1,853 | 602 |
Excess tax benefit from share-based award activity | (1,721) | (1,869) | (609) |
Other | 17 | 7 | 56 |
Changes in assets and liabilities: | |||
Accounts receivable | (973) | (610) | (378) |
Prepaid expenses and other current assets | (144) | (123) | 355 |
Other assets | (3) | (216) | (142) |
Accounts payable | 18 | 31 | 26 |
Partners payable | 17 | (28) | 12 |
Accrued expenses and other current liabilities | 513 | 328 | (38) |
Deferred revenue and deposits | (9) | 10 | 8 |
Other liabilities | 1,365 | 346 | 833 |
Net cash provided by operating activities | 8,599 | 5,457 | 4,222 |
Cash flows from investing activities | |||
Purchases of property and equipment | (2,523) | (1,831) | (1,362) |
Purchases of marketable securities | (15,938) | (9,104) | (7,433) |
Sales of marketable securities | 6,928 | 8,438 | 2,988 |
Maturities of marketable securities | 2,310 | 1,909 | 3,563 |
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets | (313) | (4,975) | (368) |
Change in restricted cash and deposits | 102 | (348) | (11) |
Other investing activities, net | 0 | (2) | (1) |
Net cash used in investing activities | (9,434) | (5,913) | (2,624) |
Cash flows from financing activities | |||
Net proceeds from issuance of common stock | 0 | 0 | 1,478 |
Taxes paid related to net share settlement | (20) | (73) | (889) |
Proceeds from exercise of stock options | 0 | 18 | 26 |
Repayment of long-term debt | 0 | 0 | (1,500) |
Principal payments on capital lease obligations | (119) | (243) | (391) |
Excess tax benefit from share-based award activity | 1,721 | 1,869 | 609 |
Net cash provided by (used in) financing activities | 1,582 | 1,571 | (667) |
Effect of exchange rate changes on cash and cash equivalents | (155) | (123) | 8 |
Net increase in cash and cash equivalents | 592 | 992 | 939 |
Cash and cash equivalents at beginning of period | 4,315 | 3,323 | 2,384 |
Cash and cash equivalents at end of period | 4,907 | 4,315 | 3,323 |
Cash paid during the period for: | |||
Interest | 10 | 14 | 38 |
Income taxes | 273 | 184 | 82 |
Cash received during the period for: | |||
Income taxes | 3 | 6 | 421 |
Non-cash investing and financing activities: | |||
Fair value of shares issued related to acquisitions of businesses | 0 | 14,344 | 77 |
Promissory note payable issued in connection with an acquisition | 198 | 0 | 0 |
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 | 88 | 91 | 53 |
Property and equipment acquired under capital leases | |||
Non-cash investing and financing activities: | |||
Property and equipment incurred but not yet paid | $ 0 | $ 0 | $ 11 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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 generate substantially all of our revenue from advertising. 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 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, 2015 , 2014 , and 2013 consists of the following (in millions): Year Ended December 31, 2015 2014 2013 Advertising $ 17,079 $ 11,492 $ 6,986 Payments and other fees 849 974 886 Total revenue $ 17,928 $ 12,466 $ 7,872 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 less than one month 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, energy and bandwidth 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, costs associated with data partner arrangements, 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 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, 2015 , 2014 , and 2013 , we realized tax benefits from share-based award activity of $1.72 billion , $1.85 billion , and $602 million , 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, 2015 , 2014 , and 2013 , by $1.72 billion , $1.87 billion , and $609 million , 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 $281 million , $135 million , and $117 million for the years ended December 31, 2015 , 2014 , and 2013 , 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 Three to 30 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 2032 . 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. We record assets and liabilities for the estimated construction costs incurred by third parties under build-to-suit lease arrangements to the extent that we are involved in the construction of structural improvements or bear construction risk prior to commencement of a lease. 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. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. 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 charges during the years presented. We review goodwill for impairment at least annually or more frequently if events or changes in circumstances would more likely than not reduce the fair value of our single reporting unit below its carrying value. We evaluate indefinite-lived intangible assets for impairment annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. As of December 31, 2015 , no impairment of goodwill or indefinite-lived intangible assets has been identified. 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. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. 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, 2015 2014 Deferred revenue $ 28 $ 38 Deposits 28 28 Total deferred revenue and deposits $ 56 $ 66 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, 2015 and 2014 , we had a cumulative translation loss, net of tax of $430 million and $227 million , respectively. Net losses resulting from foreign exchange transactions were $66 million , $87 million , and $14 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. These losses were recorded as interest and other income/(expense), net in our consolidated statements of income. Credit Risk and Concentration Our financial instruments 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 47% , 45% , and 46% of our revenue for the years ended December 31, 2015 , 2014 , and 2013 , 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, China, 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, 2015 , 2014 , and 2013 , our bad debt expenses were $44 million , $19 million , and $21 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, 2015 , 2014 , and 2013 . 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 (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. As such, the updated standard will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. We are still evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for us beginning on January 1, 2017 with early application permitted as of the beginning of any interim or annual reporting period. We early adopted this standard retrospectively, and reclassified $280 million of our current deferred tax assets to noncurrent deferred tax assets as of December 31, 2014. This resulted in net adjustments of $62 million increase and $218 million decrease to our noncurrent deferred tax assets and noncurrent deferred tax liability, respectively, on our December 31, 2014 consolidated balance sheet. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions During the year ended December 31, 2015 , we completed several business acquisitions for total consideration of $488 million , primarily related to a business combination involving land and buildings adjacent to our headquarters in Menlo Park. Included in this amount is a $198 million promissory note payable issued in connection with this particular acquisition. This promissory note payable is classified under accrued expenses and other current liabilities in our consolidated balance sheets. These acquisitions were not material to our consolidated financial statements, either individually or in the aggregate. Accordingly, pro forma historical results of operations related to these business acquisitions during the year ended December 31, 2015 have not been presented. We have included the financial results of these business acquisitions in our consolidated financial statements from their respective dates of acquisition. The following table summarizes the allocation of the total consideration transferred during the year ended December 31, 2015 , including the related estimated useful lives, where applicable: (in millions) Useful lives (in years) Finite-lived intangible assets: Acquired technology $ 30 3 Other 5 3 Land acquired 379 Other net tangible assets acquired 12 Deferred tax assets, net 17 Net assets acquired $ 443 Goodwill 45 Total fair value consideration $ 488 Goodwill generated from all business acquisitions completed during the year ended December 31, 2015 is primarily attributable to expected synergies from future growth and potential monetization opportunities. The amount of goodwill generated during this period that is deductible for tax purposes is not material. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2015 | |
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 and inducement awards under separate non-plan RSU award agreements. In addition, the computation of the diluted EPS of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock. Diluted EPS attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding. Basic and dilutive securities in our basic and diluted EPS calculation for the year ended December 31, 2015 and 2014 do not include contingent earn-out shares. Issuance of these earn-out shares is dependent upon the completion of certain milestones. These milestones have not been met as of December 31, 2015 and accordingly, these shares have been excluded from the effect of basic and dilutive securities. The RSUs excluded from the EPS calculation because the impact would be anti-dilutive, were not material for the years ended December 31, 2015 , 2014 , and 2013 , respectively. 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, 2015 2014 2013 Class A Class B Class A Class B Class A Class B Basic EPS: Numerator Net income $ 2,959 $ 729 $ 2,308 $ 632 $ 1,114 $ 386 Less: Net income attributable to participating securities 15 4 12 3 7 2 Net income attributable to common stockholders $ 2,944 $ 725 $ 2,296 $ 629 $ 1,107 $ 384 Denominator Weighted average shares outstanding 2,259 559 2,059 568 1,803 631 Less: Shares subject to repurchase 10 5 6 7 5 9 Number of shares used for basic EPS computation 2,249 554 2,053 561 1,798 622 Basic EPS $ 1.31 $ 1.31 $ 1.12 $ 1.12 $ 0.62 $ 0.62 Diluted EPS: Numerator Net income attributable to common stockholders $ 2,944 $ 725 $ 2,296 $ 629 $ 1,107 $ 384 Reallocation of net income attributable to participating securities 19 — 15 — 9 — Reallocation of net income as a result of conversion of Class B to Class A common stock 725 — 629 — 384 — Reallocation of net income to Class B common stock — 15 — 23 — 39 Net income attributable to common stockholders for diluted EPS $ 3,688 $ 740 $ 2,940 $ 652 $ 1,500 $ 423 Denominator Number of shares used for basic EPS computation 2,249 554 2,053 561 1,798 622 Conversion of Class B to Class A common stock 554 — 561 — 622 — Weighted average effect of dilutive securities: Employee stock options 8 8 13 13 65 65 RSUs 37 9 30 13 25 15 Shares subject to repurchase 5 2 7 4 7 7 Number of shares used for diluted EPS computation 2,853 573 2,664 591 2,517 709 Diluted EPS $ 1.29 $ 1.29 $ 1.10 $ 1.10 $ 0.60 $ 0.60 |
Cash and Cash Equivalents, and
Cash and Cash Equivalents, and Marketable Securities | 12 Months Ended |
Dec. 31, 2015 | |
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 and cash equivalents, and marketable securities (in millions): December 31, 2015 2014 Cash and cash equivalents: Cash $ 1,703 $ 2,162 Money market funds 2,409 2,153 U.S. government securities 597 — U.S. government agency securities 145 — Corporate debt securities 53 — Total cash and cash equivalents 4,907 4,315 Marketable securities: U.S. government securities 5,948 2,830 U.S. government agency securities 4,475 2,710 Corporate debt securities 3,104 1,344 Total marketable securities 13,527 6,884 Total cash and cash equivalents, and marketable securities $ 18,434 $ 11,199 The gross unrealized gains or losses on our marketable securities as of December 31, 2015 and 2014 were not significant. In addition, the gross unrealized loss that had been in a continuous loss position for 12 months or longer was not significant as of December 31, 2015 . There was no such loss as of December 31, 2014 . As of December 31, 2015 , we considered the decreases in market value on our marketable securities to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired. The following table classifies our marketable securities by contractual maturities (in millions): December 31, 2015 2014 Due in one year $ 5,029 $ 3,422 Due in one to two years 8,498 3,462 Total $ 13,527 $ 6,884 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2015 | |
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 Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents: Money market funds $ 2,409 $ 2,409 $ — $ — U.S. government securities 597 597 — — U.S. government agency securities 145 145 — — Corporate debt securities 53 — 53 — Marketable securities: U.S. government securities 5,948 5,948 — — U.S. government agency securities 4,475 4,475 — — Corporate debt securities 3,104 — 3,104 — Total cash equivalents and marketable securities $ 16,731 $ 13,574 $ 3,157 $ — Other liabilities: Contingent consideration liability $ 260 $ — $ — $ 260 Fair Value Measurement at Reporting Date Using Description December 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3 Cash equivalents: Money market funds $ 2,153 $ 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 We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. We classify our contingent consideration liability in connection with an acquisition in 2014 within Level 3 as factors used to develop the estimated fair value are unobservable inputs that are not supported by market activity. We estimate the fair value of our contingent consideration liability based on the present value of probability-weighted future cash flows related to the contingent earn-out criteria and the fair value of our common stock on each reporting date. Changes in the fair value of the contingent consideration liability subsequent to the acquisition date, such as changes in the probability assessment and the fair value of our common stock, are recognized in earnings in the period when the change in the estimated fair value occurs. During the year ended December 31, 2015 , we recognized an increase in the fair value of our contingent liability of $69 million , in research and development expense in our consolidated statements of income, primarily due to an increase in the fair value of our common stock. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consists of the following (in millions): December 31, 2015 2014 Land $ 596 $ 153 Buildings 2,273 1,420 Leasehold improvements 447 304 Network equipment 3,633 3,020 Computer software, office equipment and other 248 149 Construction in progress 622 738 Total 7,819 5,784 Less: Accumulated depreciation (2,132 ) (1,817 ) Property and equipment, net $ 5,687 $ 3,967 Depreciation expense on property and equipment was $1.22 billion , $923 million , and $857 million during 2015 , 2014 , and 2013 , respectively. Property and equipment at December 31, 2015 and 2014 includes $287 million and $700 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 $71 million and $425 million at December 31, 2015 and 2014 , respectively. Construction in progress includes costs primarily related to construction of data centers and office buildings, and network equipment infrastructure to support our data centers around the world. The construction of office buildings includes the leased office space in London, United Kingdom for which we are considered to be the owner for accounting purposes. See Note 10 in these notes to the consolidated financial statements for additional information. No interest was capitalized during the years ended December 31, 2015 and 2014 . Interest capitalized during the year ended December 31, 2013 was not material. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows (in millions): 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 Goodwill acquired 45 Balance as of December 31, 2015 $ 18,026 Intangible assets consist of the following (in millions): December 31, 2015 December 31, 2014 Weighted-Average Remaining Useful Lives (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite-lived intangible assets: Acquired users 5.7 $ 2,056 $ (382 ) $ 1,674 $ 2,056 $ (85 ) $ 1,971 Acquired technology 3.3 831 (310 ) 521 813 (144 ) 669 Acquired patents 6.5 785 (333 ) 452 773 (239 ) 534 Trade names 4.1 629 (163 ) 466 632 (46 ) 586 Other 3.5 162 (89 ) 73 164 (55 ) 109 Total finite-lived intangible assets 5.2 $ 4,463 $ (1,277 ) $ 3,186 $ 4,438 $ (569 ) $ 3,869 Indefinite-lived intangible assets: In-process research and development (IPR&D) $ 60 $ — $ 60 $ 60 $ — $ 60 Total intangible assets $ 4,523 $ (1,277 ) $ 3,246 $ 4,498 $ (569 ) $ 3,929 As of December 31, 2015 , technological feasibility has not been established for our IPR&D intangible assets. They have no alternative future use and, as such, continue to be accounted for as indefinite-lived intangible assets. Amortization expense of intangible assets for the years ended December 31, 2015 , 2014 , and 2013 was $730 million , $319 million , and $145 million , respectively. As of December 31, 2015 , expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions): 2016 $ 701 2017 658 2018 603 2019 520 2020 357 Thereafter 347 Total $ 3,186 |
Liabilities
Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Liabilities | Liabilities The components of accrued expenses and other current liabilities are as follows (in millions): December 31, 2015 2014 Accrued compensation and benefits $ 473 $ 322 Accrued property and equipment 192 164 Promissory note payable (1) 201 — Other current liabilities 583 380 Accrued expenses and other current liabilities $ 1,449 $ 866 (1) See Note 2 in these notes to the consolidated financial statements for additional information related to our promissory note payable. The components of other liabilities are as follows (in millions): December 31, 2015 2014 Income tax payable $ 2,458 $ 1,190 Deferred tax liabilities (1) 163 769 Contingent consideration liability 267 193 Other liabilities 269 175 Other liabilities $ 3,157 $ 2,327 (1) In November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. We early adopted this standard retrospectively, and as a result of the reclassifications, certain noncurrent deferred tax liabilities were netted with noncurrent deferred tax assets. See Note 1 in these notes to the consolidated financial statements for additional information. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 , 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, 2015 | |
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 is 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 2016 and 2032 . We are committed to pay a portion of the related actual operating expenses under certain of these lease agreements. Certain of these arrangements have free rent periods or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis. 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, 2015 (in millions): Capital Leases Operating Leases Financing obligation, building in progress - leased facility (1) 2016 $ 16 $ 209 $ — 2017 15 230 — 2018 16 216 — 2019 16 200 13 2020 17 159 25 Thereafter 94 438 299 Total minimum lease payments $ 174 $ 1,452 $ 337 Less: amount representing interest and taxes (60 ) Less: current portion of the present value of minimum lease payments (7 ) Capital lease obligations, net of current portion $ 107 (1) In 2015, we entered into an agreement to lease an entire office building in London, United Kingdom, that is currently under construction. As a result of our involvement during the construction period, we are considered to be the owner of the construction project for accounting purposes. The above financing obligation, building in progress - leased facility represents the total expected financing and lease obligation associated with this lease and will be settled through monthly lease payments to the landlord when we occupy the office space upon completion. This amount includes $62 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2015 . Operating lease expense was $181 million , $125 million , and $130 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Other contractual commitments We also have $1.22 billion of non-cancelable contractual commitments as of December 31, 2015 , 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. On July 24, 2015, the court of appeals affirmed the dismissal of the derivative actions. On December 11, 2015, the court granted plaintiffs' motion for class certification in the consolidated securities action. In addition, the events surrounding our IPO became the subject of various state and federal government inquiries. In May 2014, the Securities and Exchange Commission (SEC) notified us that it had terminated its inquiry and that no enforcement action had been recommended by the SEC. We are also party to various legal proceedings and claims that arise in the ordinary course of business. With respect to our outstanding legal matters, we believe that the amount or estimable range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period, could be materially adversely affected. 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, 2015 , 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, 2015 . |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Follow-on Offering In December 2013, we completed a follow-on offering in which we issued and sold 27 million shares of Class A common stock at a public offering price of $55.05 per share and the selling stockholders sold 43 million 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, 2015 , we are authorized to issue 5,000 million shares of Class A common stock and 4,141 million 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, 2015 , 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, 2015 , there were 2,293 million shares and 552 million 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 Equity Incentive Plan (2012 Plan) and the 2005 Stock Plan (collectively, Stock Plans). Our 2012 Plan serves as the successor to our 2005 Stock Plan and provides for the issuance of incentive and nonstatutory stock options, restricted stock awards, stock appreciation rights, RSUs, performance shares and stock bonuses to qualified employees, directors and consultants. Outstanding awards under the 2005 Stock Plan continue to be subject to the terms and conditions of the 2005 Stock Plan. We initially reserved 25 million shares of our Class A common stock for issuance under our 2012 Plan. The number of shares reserved for issuance under our 2012 Plan increases automatically on the first day of January of each of 2013 through 2022 by a number of shares of Class A common stock equal to the lesser of (i) 2.5% of the total outstanding shares of our 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 2015 and 2014. In addition, shares available for grant under the 2005 Stock Plan, which were reserved but not issued, forfeited or repurchased at their original issue price, or subject to outstanding awards under the 2005 Stock Plan as of the effective date of our IPO, were added to the reserves of the 2012 Plan 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 board of directors or a committee thereof. In connection with an acquisition in 2014, we granted inducement awards covering an aggregate of 37 million RSUs earned over a service period of four years. These awards are excluded from the Stock Plans and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements. The following table summarizes the activities of stock option awards under the Stock Plans for the year ended December 31, 2015 : Shares Subject to Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ( 1) (in thousands) (in years) (in millions) Balance as of December 31, 2014 12,984 $ 4.78 Stock options exercised (4,541 ) 0.48 Balance as of December 31, 2015 8,443 $ 7.10 3.7 $ 824 Stock options vested and expected to vest as of December 31, 2015 8,441 $ 7.10 3.7 $ 824 Stock options exercisable as of December 31, 2015 6,250 $ 5.19 3.3 $ 622 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock, as reported on the NASDAQ Global Select Market, of $104.66 on December 31, 2015 . There were no options granted, forfeited, or canceled for the year ended December 31, 2015 . The aggregate intrinsic value of the options exercised in the years ended December 31, 2015 , 2014 , and 2013 was $403 million , $624 million , and $4.58 billion , respectively. The total grant date fair value of stock options vested during the years ended December 31, 2015 , 2014 , and 2013 was $5 million , $7 million , and $7 million , respectively. The following table summarizes additional information regarding outstanding and exercisable options under the Stock Plans at December 31, 2015 : Options Outstanding Options Exercisable Exercise Price (Range) Number of Shares Weighted Average Remaining Contractual Term Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price (in thousands) (in years) (in thousands) $0.10 - 0.18 446 0.6 $ 0.11 446 $ 0.11 0.29 - 0.33 1,182 1.5 0.32 1,182 0.32 1.85 968 3.0 1.85 968 1.85 2.95 1,147 3.6 2.95 1,147 2.95 10.39 3,500 4.6 10.39 2,334 10.39 15.00 1,200 4.8 15.00 173 15.00 8,443 3.7 $ 7.10 6,250 $ 5.19 The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2015 : Unvested RSUs (1) Number of Shares Weighted Average Grant Date Fair Value (in thousands) Unvested at December 31, 2014 138,055 $ 55.89 Granted 31,507 82.15 Vested (46,434 ) 49.19 Forfeited (6,719 ) 51.19 Unvested at December 31, 2015 116,409 $ 65.95 (1) Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements. The fair value as of the respective vesting dates of RSUs that vested during the years ended December 31, 2015 , 2014 , and 2013 was $4.23 billion , $2.77 billion , and $1.55 billion , respectively. As of December 31, 2015 , there was $7.23 billion of unrecognized share-based compensation expense, of which $6.67 billion is related to RSUs and $559 million is related to restricted shares, shares with performance conditions related to our contingent consideration, and stock options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately three years . |
Interest and other income_(expe
Interest and other income/(expense), net | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 2014 2013 Interest expense $ (23 ) $ (23 ) $ (56 ) Interest income 52 27 19 Foreign currency exchange losses, net (66 ) (87 ) (14 ) Other 6 (1 ) 1 Interest and other income/(expense), net $ (31 ) $ (84 ) $ (50 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before provision for income taxes for the years ended December 31, 2015 , 2014 , and 2013 are as follows (in millions): Year Ended December 31, 2015 2014 2013 Domestic $ 2,802 $ 4,918 $ 3,197 Foreign 3,392 (8 ) (443 ) Income before provision for income taxes $ 6,194 $ 4,910 $ 2,754 The provision for income taxes consisted of the following (in millions): Year Ended December 31, 2015 2014 2013 Current: Federal $ 3,012 $ 1,999 $ 1,154 State 183 130 69 Foreign 123 96 68 Total current tax expense 3,318 2,225 1,291 Deferred: Federal (800 ) (240 ) (28 ) State (17 ) (14 ) (7 ) Foreign 5 (1 ) (2 ) Total deferred tax benefit (812 ) (255 ) (37 ) Provision for income taxes $ 2,506 $ 1,970 $ 1,254 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, 2015 2014 2013 U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.0 1.4 1.6 Research tax credits (1.4 ) (1.1 ) (4.7 ) Share-based compensation 2.2 6.5 5.2 Effect of non-U.S. operations (0.9 ) (3.6 ) 6.8 Other 3.5 1.9 1.6 Effective tax rate 40.4 % 40.1 % 45.5 % 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 $1.72 billion , $1.85 billion and $602 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. Our deferred tax assets (liabilities) are as follows (in millions): December 31, 2015 2014 Deferred tax assets: Net operating loss carryforward $ 476 $ 130 Tax credit carryforward 297 190 Share-based compensation 529 225 Accrued expenses and other liabilities 239 136 Other 34 21 Total deferred tax assets 1,575 702 Less: valuation allowance (205 ) (101 ) Deferred tax assets, net of valuation allowance 1,370 601 Deferred tax liabilities: Depreciation and amortization (270 ) (101 ) Purchased intangible assets (934 ) (1,190 ) Deferred foreign taxes (15 ) — Total deferred tax liabilities (1,219 ) (1,291 ) Net deferred tax assets (liabilities) $ 151 $ (690 ) The valuation allowance was approximately $205 million and $101 million as of December 31, 2015 and 2014 , respectively, primarily related to state tax credits that we do not believe will ultimately be realized. As of December 31, 2015 , the U.S. federal and state net operating loss carryforwards were $2.70 billion and $3.31 billion , which will begin to expire in 2032 and 2023 , respectively, if not utilized. If realized, the impact of the net operating loss carryforwards will be recognized as a benefit of $655 million through additional paid in capital. We have federal and state tax credit carryforwards of $1.08 billion and $905 million , respectively, which will begin to expire in 2030 and 2032 , respectively, if not utilized. 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 income includes 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, 2015 2014 2013 Gross unrecognized tax benefits-beginning of period $ 1,682 $ 1,316 $ 164 Increases related to prior year tax positions 322 24 425 Decreases related to prior year tax positions (52 ) — (13 ) Increases related to current year tax positions 1,066 346 740 Decreases related to settlements of prior year tax positions (1 ) (4 ) — Gross unrecognized tax benefits-end of period $ 3,017 $ 1,682 $ 1,316 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, 2015 and 2014 was not material. If the balance of gross unrecognized tax benefits of $3.02 billion as of December 31, 2015 was realized in a future period, this would result in a tax benefit of $2.40 billion within our provision of income taxes at such time. On July 27, 2015, the United States Tax Court issued an opinion in Altera Corp. v. Commissioner related to the treatment of share-based compensation expense in an intercompany cost-sharing arrangement. This opinion concluded that related parties in a cost-sharing arrangement are not required to share share-based compensation. A final decision was issued by the Tax Court, however, this decision may be appealed by the Commissioner. The impact of the conclusions stated by the Tax Court in its opinion was not material to our consolidated financial statements. 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 and future years remain open to examination by the IRS. Our 2011 and future years remain open 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, 2015 | |
Segments, Geographical Areas [Abstract] | |
Geographical Information | Geographical Information Revenue by geography is based on the billing address of the marketer or developer. The following tables set forth revenue and property and equipment, net by geographic area (in millions): Year Ended December 31, 2015 2014 2013 Revenue: United States $ 8,513 $ 5,649 $ 3,613 Rest of the world (1) 9,415 6,817 4,259 Total revenue $ 17,928 $ 12,466 $ 7,872 (1) No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented December 31, 2015 2014 Property and equipment, net: United States $ 4,498 $ 3,256 Sweden 713 514 Rest of the world 476 197 Total property and equipment, net $ 5,687 $ 3,967 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 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, 2015 , 2014 , and 2013 consists of the following (in millions): Year Ended December 31, 2015 2014 2013 Advertising $ 17,079 $ 11,492 $ 6,986 Payments and other fees 849 974 886 Total revenue $ 17,928 $ 12,466 $ 7,872 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 less than one month 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, energy and bandwidth 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, costs associated with data partner arrangements, 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 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, 2015 , 2014 , and 2013 , we realized tax benefits from share-based award activity of $1.72 billion , $1.85 billion , and $602 million , 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, 2015 , 2014 , and 2013 , by $1.72 billion , $1.87 billion , and $609 million , 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 $281 million , $135 million , and $117 million for the years ended December 31, 2015 , 2014 , and 2013 , 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 Three to 30 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 2032 . 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. We record assets and liabilities for the estimated construction costs incurred by third parties under build-to-suit lease arrangements to the extent that we are involved in the construction of structural improvements or bear construction risk prior to commencement of a lease. |
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. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. 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 charges during the years presented. We review goodwill for impairment at least annually or more frequently if events or changes in circumstances would more likely than not reduce the fair value of our single reporting unit below its carrying value. We evaluate indefinite-lived intangible assets for impairment annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. As of December 31, 2015 , no impairment of goodwill or indefinite-lived intangible assets has been identified. 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. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. 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, 2015 2014 Deferred revenue $ 28 $ 38 Deposits 28 28 Total deferred revenue and deposits $ 56 $ 66 |
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, 2015 and 2014 , we had a cumulative translation loss, net of tax of $430 million and $227 million , respectively. Net losses resulting from foreign exchange transactions were $66 million , $87 million , and $14 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. These losses were recorded as interest and other income/(expense), net in our consolidated statements of income. |
Credit Risk and Concentration | Credit Risk and Concentration Our financial instruments 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 47% , 45% , and 46% of our revenue for the years ended December 31, 2015 , 2014 , and 2013 , 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, China, 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, 2015 , 2014 , and 2013 , our bad debt expenses were $44 million , $19 million , and $21 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, 2015 , 2014 , and 2013 . |
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 (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. As such, the updated standard will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. We are still evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for us beginning on January 1, 2017 with early application permitted as of the beginning of any interim or annual reporting period. We early adopted this standard retrospectively, and reclassified $280 million of our current deferred tax assets to noncurrent deferred tax assets as of December 31, 2014. This resulted in net adjustments of $62 million increase and $218 million decrease to our noncurrent deferred tax assets and noncurrent deferred tax liability, respectively, on our December 31, 2014 consolidated balance sheet. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Revenue by type | Revenue for the years ended December 31, 2015 , 2014 , and 2013 consists of the following (in millions): Year Ended December 31, 2015 2014 2013 Advertising $ 17,079 $ 11,492 $ 6,986 Payments and other fees 849 974 886 Total revenue $ 17,928 $ 12,466 $ 7,872 |
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 Three to 30 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, 2015 2014 Deferred revenue $ 28 $ 38 Deposits 28 28 Total deferred revenue and deposits $ 56 $ 66 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, Total Consideration Transferred | The following table summarizes the allocation of the total consideration transferred during the year ended December 31, 2015 , including the related estimated useful lives, where applicable: (in millions) Useful lives (in years) Finite-lived intangible assets: Acquired technology $ 30 3 Other 5 3 Land acquired 379 Other net tangible assets acquired 12 Deferred tax assets, net 17 Net assets acquired $ 443 Goodwill 45 Total fair value consideration $ 488 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 2014 2013 Class A Class B Class A Class B Class A Class B Basic EPS: Numerator Net income $ 2,959 $ 729 $ 2,308 $ 632 $ 1,114 $ 386 Less: Net income attributable to participating securities 15 4 12 3 7 2 Net income attributable to common stockholders $ 2,944 $ 725 $ 2,296 $ 629 $ 1,107 $ 384 Denominator Weighted average shares outstanding 2,259 559 2,059 568 1,803 631 Less: Shares subject to repurchase 10 5 6 7 5 9 Number of shares used for basic EPS computation 2,249 554 2,053 561 1,798 622 Basic EPS $ 1.31 $ 1.31 $ 1.12 $ 1.12 $ 0.62 $ 0.62 Diluted EPS: Numerator Net income attributable to common stockholders $ 2,944 $ 725 $ 2,296 $ 629 $ 1,107 $ 384 Reallocation of net income attributable to participating securities 19 — 15 — 9 — Reallocation of net income as a result of conversion of Class B to Class A common stock 725 — 629 — 384 — Reallocation of net income to Class B common stock — 15 — 23 — 39 Net income attributable to common stockholders for diluted EPS $ 3,688 $ 740 $ 2,940 $ 652 $ 1,500 $ 423 Denominator Number of shares used for basic EPS computation 2,249 554 2,053 561 1,798 622 Conversion of Class B to Class A common stock 554 — 561 — 622 — Weighted average effect of dilutive securities: Employee stock options 8 8 13 13 65 65 RSUs 37 9 30 13 25 15 Shares subject to repurchase 5 2 7 4 7 7 Number of shares used for diluted EPS computation 2,853 573 2,664 591 2,517 709 Diluted EPS $ 1.29 $ 1.29 $ 1.10 $ 1.10 $ 0.60 $ 0.60 |
Cash and Cash Equivalents, an26
Cash and Cash Equivalents, and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents, and Marketable Securities [Abstract] | |
Cash, Cash Equivalents and Marketable Securities | The following table sets forth the cash and cash equivalents, and marketable securities (in millions): December 31, 2015 2014 Cash and cash equivalents: Cash $ 1,703 $ 2,162 Money market funds 2,409 2,153 U.S. government securities 597 — U.S. government agency securities 145 — Corporate debt securities 53 — Total cash and cash equivalents 4,907 4,315 Marketable securities: U.S. government securities 5,948 2,830 U.S. government agency securities 4,475 2,710 Corporate debt securities 3,104 1,344 Total marketable securities 13,527 6,884 Total cash and cash equivalents, and marketable securities $ 18,434 $ 11,199 |
Marketable Securities by Contractual Maturities | The following table classifies our marketable securities by contractual maturities (in millions): December 31, 2015 2014 Due in one year $ 5,029 $ 3,422 Due in one to two years 8,498 3,462 Total $ 13,527 $ 6,884 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents: Money market funds $ 2,409 $ 2,409 $ — $ — U.S. government securities 597 597 — — U.S. government agency securities 145 145 — — Corporate debt securities 53 — 53 — Marketable securities: U.S. government securities 5,948 5,948 — — U.S. government agency securities 4,475 4,475 — — Corporate debt securities 3,104 — 3,104 — Total cash equivalents and marketable securities $ 16,731 $ 13,574 $ 3,157 $ — Other liabilities: Contingent consideration liability $ 260 $ — $ — $ 260 Fair Value Measurement at Reporting Date Using Description December 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3 Cash equivalents: Money market funds $ 2,153 $ 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 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment consists of the following (in millions): December 31, 2015 2014 Land $ 596 $ 153 Buildings 2,273 1,420 Leasehold improvements 447 304 Network equipment 3,633 3,020 Computer software, office equipment and other 248 149 Construction in progress 622 738 Total 7,819 5,784 Less: Accumulated depreciation (2,132 ) (1,817 ) Property and equipment, net $ 5,687 $ 3,967 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows (in millions): 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 Goodwill acquired 45 Balance as of December 31, 2015 $ 18,026 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following (in millions): December 31, 2015 December 31, 2014 Weighted-Average Remaining Useful Lives (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite-lived intangible assets: Acquired users 5.7 $ 2,056 $ (382 ) $ 1,674 $ 2,056 $ (85 ) $ 1,971 Acquired technology 3.3 831 (310 ) 521 813 (144 ) 669 Acquired patents 6.5 785 (333 ) 452 773 (239 ) 534 Trade names 4.1 629 (163 ) 466 632 (46 ) 586 Other 3.5 162 (89 ) 73 164 (55 ) 109 Total finite-lived intangible assets 5.2 $ 4,463 $ (1,277 ) $ 3,186 $ 4,438 $ (569 ) $ 3,869 Indefinite-lived intangible assets: In-process research and development (IPR&D) $ 60 $ — $ 60 $ 60 $ — $ 60 Total intangible assets $ 4,523 $ (1,277 ) $ 3,246 $ 4,498 $ (569 ) $ 3,929 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following (in millions): December 31, 2015 December 31, 2014 Weighted-Average Remaining Useful Lives (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite-lived intangible assets: Acquired users 5.7 $ 2,056 $ (382 ) $ 1,674 $ 2,056 $ (85 ) $ 1,971 Acquired technology 3.3 831 (310 ) 521 813 (144 ) 669 Acquired patents 6.5 785 (333 ) 452 773 (239 ) 534 Trade names 4.1 629 (163 ) 466 632 (46 ) 586 Other 3.5 162 (89 ) 73 164 (55 ) 109 Total finite-lived intangible assets 5.2 $ 4,463 $ (1,277 ) $ 3,186 $ 4,438 $ (569 ) $ 3,869 Indefinite-lived intangible assets: In-process research and development (IPR&D) $ 60 $ — $ 60 $ 60 $ — $ 60 Total intangible assets $ 4,523 $ (1,277 ) $ 3,246 $ 4,498 $ (569 ) $ 3,929 |
Estimated Amortization Expense for Unamortized Acquired Intangible Assets | As of December 31, 2015 , expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions): 2016 $ 701 2017 658 2018 603 2019 520 2020 357 Thereafter 347 Total $ 3,186 |
Liabilities (Tables)
Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 2014 Accrued compensation and benefits $ 473 $ 322 Accrued property and equipment 192 164 Promissory note payable (1) 201 — Other current liabilities 583 380 Accrued expenses and other current liabilities $ 1,449 $ 866 (1) See Note 2 in these notes to the consolidated financial statements for additional information related to our promissory note payable. |
Other Liabilities | The components of other liabilities are as follows (in millions): December 31, 2015 2014 Income tax payable $ 2,458 $ 1,190 Deferred tax liabilities (1) 163 769 Contingent consideration liability 267 193 Other liabilities 269 175 Other liabilities $ 3,157 $ 2,327 (1) In November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. We early adopted this standard retrospectively, and as a result of the reclassifications, certain noncurrent deferred tax liabilities were netted with noncurrent deferred tax assets. See Note 1 in these notes to the consolidated financial statements for additional information. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for 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, 2015 (in millions): Capital Leases Operating Leases Financing obligation, building in progress - leased facility (1) 2016 $ 16 $ 209 $ — 2017 15 230 — 2018 16 216 — 2019 16 200 13 2020 17 159 25 Thereafter 94 438 299 Total minimum lease payments $ 174 $ 1,452 $ 337 Less: amount representing interest and taxes (60 ) Less: current portion of the present value of minimum lease payments (7 ) Capital lease obligations, net of current portion $ 107 (1) In 2015, we entered into an agreement to lease an entire office building in London, United Kingdom, that is currently under construction. As a result of our involvement during the construction period, we are considered to be the owner of the construction project for accounting purposes. The above financing obligation, building in progress - leased facility represents the total expected financing and lease obligation associated with this lease and will be settled through monthly lease payments to the landlord when we occupy the office space upon completion. This amount includes $62 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2015 . |
Schedule of Future Minimum Lease Payments for Capital 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, 2015 (in millions): Capital Leases Operating Leases Financing obligation, building in progress - leased facility (1) 2016 $ 16 $ 209 $ — 2017 15 230 — 2018 16 216 — 2019 16 200 13 2020 17 159 25 Thereafter 94 438 299 Total minimum lease payments $ 174 $ 1,452 $ 337 Less: amount representing interest and taxes (60 ) Less: current portion of the present value of minimum lease payments (7 ) Capital lease obligations, net of current portion $ 107 (1) In 2015, we entered into an agreement to lease an entire office building in London, United Kingdom, that is currently under construction. As a result of our involvement during the construction period, we are considered to be the owner of the construction project for accounting purposes. The above financing obligation, building in progress - leased facility represents the total expected financing and lease obligation associated with this lease and will be settled through monthly lease payments to the landlord when we occupy the office space upon completion. This amount includes $62 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2015 . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stock Option Activity under Stock Plans | The following table summarizes the activities of stock option awards under the Stock Plans for the year ended December 31, 2015 : Shares Subject to Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ( 1) (in thousands) (in years) (in millions) Balance as of December 31, 2014 12,984 $ 4.78 Stock options exercised (4,541 ) 0.48 Balance as of December 31, 2015 8,443 $ 7.10 3.7 $ 824 Stock options vested and expected to vest as of December 31, 2015 8,441 $ 7.10 3.7 $ 824 Stock options exercisable as of December 31, 2015 6,250 $ 5.19 3.3 $ 622 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock, as reported on the NASDAQ Global Select Market, of $104.66 on December 31, 2015 . |
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, 2015 : Options Outstanding Options Exercisable Exercise Price (Range) Number of Shares Weighted Average Remaining Contractual Term Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price (in thousands) (in years) (in thousands) $0.10 - 0.18 446 0.6 $ 0.11 446 $ 0.11 0.29 - 0.33 1,182 1.5 0.32 1,182 0.32 1.85 968 3.0 1.85 968 1.85 2.95 1,147 3.6 2.95 1,147 2.95 10.39 3,500 4.6 10.39 2,334 10.39 15.00 1,200 4.8 15.00 173 15.00 8,443 3.7 $ 7.10 6,250 $ 5.19 |
Restricted Stock Units Award Activity | The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2015 : Unvested RSUs (1) Number of Shares Weighted Average Grant Date Fair Value (in thousands) Unvested at December 31, 2014 138,055 $ 55.89 Granted 31,507 82.15 Vested (46,434 ) 49.19 Forfeited (6,719 ) 51.19 Unvested at December 31, 2015 116,409 $ 65.95 (1) Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements. |
Interest and other income_(ex33
Interest and other income/(expense), net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 2014 2013 Interest expense $ (23 ) $ (23 ) $ (56 ) Interest income 52 27 19 Foreign currency exchange losses, net (66 ) (87 ) (14 ) Other 6 (1 ) 1 Interest and other income/(expense), net $ (31 ) $ (84 ) $ (50 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 , 2014 , and 2013 are as follows (in millions): Year Ended December 31, 2015 2014 2013 Domestic $ 2,802 $ 4,918 $ 3,197 Foreign 3,392 (8 ) (443 ) Income before provision for income taxes $ 6,194 $ 4,910 $ 2,754 |
Schedule of Provision for Income Taxes | The provision for income taxes consisted of the following (in millions): Year Ended December 31, 2015 2014 2013 Current: Federal $ 3,012 $ 1,999 $ 1,154 State 183 130 69 Foreign 123 96 68 Total current tax expense 3,318 2,225 1,291 Deferred: Federal (800 ) (240 ) (28 ) State (17 ) (14 ) (7 ) Foreign 5 (1 ) (2 ) Total deferred tax benefit (812 ) (255 ) (37 ) Provision for income taxes $ 2,506 $ 1,970 $ 1,254 |
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, 2015 2014 2013 U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.0 1.4 1.6 Research tax credits (1.4 ) (1.1 ) (4.7 ) Share-based compensation 2.2 6.5 5.2 Effect of non-U.S. operations (0.9 ) (3.6 ) 6.8 Other 3.5 1.9 1.6 Effective tax rate 40.4 % 40.1 % 45.5 % |
Schedule of Deferred Tax Assets and Liabilities | Our deferred tax assets (liabilities) are as follows (in millions): December 31, 2015 2014 Deferred tax assets: Net operating loss carryforward $ 476 $ 130 Tax credit carryforward 297 190 Share-based compensation 529 225 Accrued expenses and other liabilities 239 136 Other 34 21 Total deferred tax assets 1,575 702 Less: valuation allowance (205 ) (101 ) Deferred tax assets, net of valuation allowance 1,370 601 Deferred tax liabilities: Depreciation and amortization (270 ) (101 ) Purchased intangible assets (934 ) (1,190 ) Deferred foreign taxes (15 ) — Total deferred tax liabilities (1,219 ) (1,291 ) Net deferred tax assets (liabilities) $ 151 $ (690 ) |
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, 2015 2014 2013 Gross unrecognized tax benefits-beginning of period $ 1,682 $ 1,316 $ 164 Increases related to prior year tax positions 322 24 425 Decreases related to prior year tax positions (52 ) — (13 ) Increases related to current year tax positions 1,066 346 740 Decreases related to settlements of prior year tax positions (1 ) (4 ) — Gross unrecognized tax benefits-end of period $ 3,017 $ 1,682 $ 1,316 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segments, Geographical Areas [Abstract] | |
Revenue and Property and Equipment by Geographic Area | Revenue by geography is based on the billing address of the marketer or developer. The following tables set forth revenue and property and equipment, net by geographic area (in millions): Year Ended December 31, 2015 2014 2013 Revenue: United States $ 8,513 $ 5,649 $ 3,613 Rest of the world (1) 9,415 6,817 4,259 Total revenue $ 17,928 $ 12,466 $ 7,872 (1) No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented December 31, 2015 2014 Property and equipment, net: United States $ 4,498 $ 3,256 Sweden 713 514 Rest of the world 476 197 Total property and equipment, net $ 5,687 $ 3,967 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Advertising | $ 17,079 | $ 11,492 | $ 6,986 |
Payments and other fees | 849 | 974 | 886 |
Total revenue | $ 17,928 | $ 12,466 | $ 7,872 |
Advertising arrangement typical term, less than | 1 month |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Share-based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Tax benefit from share-based award activity | $ 1,721 | $ 1,853 | $ 602 |
Excess tax benefit from share-based award activity | $ 1,721 | $ 1,869 | $ 609 |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Service period | 4 years |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Property & Equipment and Lease Obligations (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Network equipment | Minimum | |
Property, Plant and Equipment | |
Useful life of property and equipment | 3 years |
Network equipment | Maximum | |
Property, Plant and Equipment | |
Useful life of property and equipment | 5 years |
Buildings | Minimum | |
Property, Plant and Equipment | |
Useful life of property and equipment | 3 years |
Buildings | Maximum | |
Property, Plant and Equipment | |
Useful life of property and equipment | 30 years |
Computer software, office equipment and other | Minimum | |
Property, Plant and Equipment | |
Useful life of property and equipment | 3 years |
Computer software, office equipment and other | Maximum | |
Property, Plant and Equipment | |
Useful life of property and equipment | 5 years |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Accounting Policies [Abstract] | |
Goodwill, impairment loss | $ 0 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Other Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 281 | $ 135 | $ 117 |
Deferred Revenue & Deposits [Abstract] | |||
Deferred revenue, rate payable to developer upon utilization of virtual currency | 70.00% | ||
Deferred revenue | $ 28 | 38 | |
Deposits | 28 | 28 | |
Total deferred revenue and deposits | $ 56 | $ 66 | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Lease expiration year | 2,032 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Foreign Currency (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Cumulative translation loss, net of tax | $ (430) | $ (227) | |
Foreign currency exchange losses, net | $ (66) | $ (87) | $ (14) |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Credit Risk and Concentration (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)customers | Dec. 31, 2014USD ($)customers | Dec. 31, 2013USD ($)customers | |
Concentration Risk | |||
Provision for doubtful accounts | $ | $ 44 | $ 19 | $ 21 |
Major customer percentage | 10.00% | 10.00% | 10.00% |
Geographic concentration risk | Sales revenue | United States | |||
Concentration Risk | |||
Concentration risk percentage | 47.00% | 45.00% | 46.00% |
Customer concentration risk | |||
Concentration Risk | |||
Number of major customer | customers | 0 | 0 | 0 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Recently Issued and Adopted Accounting Pronouncement (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Noncurrent deferred tax liability | $ 163 | $ 769 |
Prepaid expenses and other current assets | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Current deferred tax assets | 280 | |
Other assets | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Noncurrent deferred tax assets | 62 | |
Other liabilities | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Noncurrent deferred tax liability | $ 218 |
Acquisitions - Other (Details)
Acquisitions - Other (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||
Promissory note payable issued in connection with an acquisition | $ 198 | $ 0 | $ 0 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | 18,026 | $ 17,981 | $ 839 |
Series of Individually Immaterial Business Acquisitions | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Land acquired | 379 | ||
Other net tangible assets acquired | 12 | ||
Deferred tax assets, net | 17 | ||
Net assets acquired | 443 | ||
Goodwill | 45 | ||
Total fair value consideration | 488 | ||
Series of Individually Immaterial Business Acquisitions | Acquired technology | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Finite-lived intangible assets | $ 30 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||
Series of Individually Immaterial Business Acquisitions | Other | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Finite-lived intangible assets | $ 5 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator | |||
Net income | $ 3,688 | $ 2,940 | $ 1,500 |
Less: Net income attributable to participating securities | 19 | 15 | 9 |
Net income attributable to common stockholders | $ 3,669 | $ 2,925 | $ 1,491 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 2,803 | 2,614 | 2,420 |
Basic EPS (in dollars per share) | $ 1.31 | $ 1.12 | $ 0.62 |
Numerator | |||
Net income attributable to common stockholders | $ 3,669 | $ 2,925 | $ 1,491 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 2,803 | 2,614 | 2,420 |
Number of shares used for diluted EPS computation (in shares) | 2,853 | 2,664 | 2,517 |
Diluted EPS (in dollars per share) | $ 1.29 | $ 1.10 | $ 0.60 |
Class A Common Stock | |||
Numerator | |||
Net income | $ 2,959 | $ 2,308 | $ 1,114 |
Less: Net income attributable to participating securities | 15 | 12 | 7 |
Net income attributable to common stockholders | $ 2,944 | $ 2,296 | $ 1,107 |
Denominator | |||
Weighted average shares outstanding (in shares) | 2,259 | 2,059 | 1,803 |
Less: Shares subject to repurchase (in shares) | 10 | 6 | 5 |
Number of shares used for basic EPS computation (in shares) | 2,249 | 2,053 | 1,798 |
Basic EPS (in dollars per share) | $ 1.31 | $ 1.12 | $ 0.62 |
Numerator | |||
Net income attributable to common stockholders | $ 2,944 | $ 2,296 | $ 1,107 |
Reallocation of net income attributable to participating securities | 19 | 15 | 9 |
Reallocation of net income as a result of conversion of Class B to Class A common stock | 725 | 629 | 384 |
Reallocation of net income to Class B common stock | 0 | 0 | 0 |
Net income attributable to common stockholders for diluted EPS | $ 3,688 | $ 2,940 | $ 1,500 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 2,249 | 2,053 | 1,798 |
Conversion of Class B to Class A common stock (in shares) | 554 | 561 | 622 |
Shares subject to repurchase (in shares) | 5 | 7 | 7 |
Number of shares used for diluted EPS computation (in shares) | 2,853 | 2,664 | 2,517 |
Diluted EPS (in dollars per share) | $ 1.29 | $ 1.10 | $ 0.60 |
Class A Common Stock | Restricted Stock Units (RSUs) | |||
Denominator | |||
Share based payment arrangements (in shares) | 37 | 30 | 25 |
Class A Common Stock | Employee Stock Option | |||
Denominator | |||
Share based payment arrangements (in shares) | 8 | 13 | 65 |
Class B Common Stock | |||
Numerator | |||
Net income | $ 729 | $ 632 | $ 386 |
Less: Net income attributable to participating securities | 4 | 3 | 2 |
Net income attributable to common stockholders | $ 725 | $ 629 | $ 384 |
Denominator | |||
Weighted average shares outstanding (in shares) | 559 | 568 | 631 |
Less: Shares subject to repurchase (in shares) | 5 | 7 | 9 |
Number of shares used for basic EPS computation (in shares) | 554 | 561 | 622 |
Basic EPS (in dollars per share) | $ 1.31 | $ 1.12 | $ 0.62 |
Numerator | |||
Net income attributable to common stockholders | $ 725 | $ 629 | $ 384 |
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 | 15 | 23 | 39 |
Net income attributable to common stockholders for diluted EPS | $ 740 | $ 652 | $ 423 |
Denominator | |||
Number of shares used for basic EPS computation (in shares) | 554 | 561 | 622 |
Conversion of Class B to Class A common stock (in shares) | 0 | 0 | 0 |
Shares subject to repurchase (in shares) | 2 | 4 | 7 |
Number of shares used for diluted EPS computation (in shares) | 573 | 591 | 709 |
Diluted EPS (in dollars per share) | $ 1.29 | $ 1.10 | $ 0.60 |
Class B Common Stock | Restricted Stock Units (RSUs) | |||
Denominator | |||
Share based payment arrangements (in shares) | 9 | 13 | 15 |
Class B Common Stock | Employee Stock Option | |||
Denominator | |||
Share based payment arrangements (in shares) | 8 | 13 | 65 |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities (Details) $ in Millions | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)security | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) |
Cash, Cash Equivalents and Marketable Securities | ||||
Cash and cash equivalents | $ 4,907 | $ 4,315 | $ 3,323 | $ 2,384 |
Marketable securities | 13,527 | 6,884 | ||
Total cash and cash equivalents, and marketable securities | 18,434 | $ 11,199 | ||
Number of positions in a continuous loss position for 12 months or longer | security | 0 | |||
U.S. government securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Marketable securities | 5,948 | $ 2,830 | ||
U.S. government agency securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Marketable securities | 4,475 | 2,710 | ||
Corporate debt securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Marketable securities | 3,104 | 1,344 | ||
Cash | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Cash and cash equivalents | 1,703 | 2,162 | ||
Money market funds | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Cash and cash equivalents | 2,409 | 2,153 | ||
U.S. government securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Cash and cash equivalents | 597 | 0 | ||
U.S. government agency securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Cash and cash equivalents | 145 | 0 | ||
Corporate debt securities | ||||
Cash, Cash Equivalents and Marketable Securities | ||||
Cash and cash equivalents | $ 53 | $ 0 |
Cash and Cash Equivalents, an47
Cash and Cash Equivalents, and Marketable Securities - Contractual Maturities of Debt Securities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and Cash Equivalents, and Marketable Securities [Abstract] | ||
Due in one year | $ 5,029 | $ 3,422 |
Due in one to two years | 8,498 | 3,462 |
Total marketable securities | $ 13,527 | $ 6,884 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Marketable securities | $ 13,527 | $ 6,884 |
Change in fair value of contingent consideration liability | 69 | |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total cash equivalents and marketable securities | 16,731 | 9,037 |
Contingent consideration liability | 260 | 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 | 13,574 | 7,693 |
Contingent consideration liability | 0 | 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 | 3,157 | 1,344 |
Contingent consideration liability | 0 | 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 | 260 | 191 |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Marketable securities | 5,948 | 2,830 |
U.S. government securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Marketable securities | 5,948 | 2,830 |
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 | 5,948 | 2,830 |
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 | 4,475 | 2,710 |
U.S. government agency securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Marketable securities | 4,475 | 2,710 |
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 | 4,475 | 2,710 |
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 | 3,104 | 1,344 |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Marketable securities | 3,104 | 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 | 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 | 3,104 | 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 | 0 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 2,409 | 2,153 |
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 | 2,409 | 2,153 |
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 |
U.S. government securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 597 | |
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 | ||
Cash equivalents | 597 | |
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 | ||
Cash equivalents | 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 | ||
Cash equivalents | 0 | |
U.S. government agency securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 145 | |
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 | ||
Cash equivalents | 145 | |
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 | ||
Cash equivalents | 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 | ||
Cash equivalents | 0 | |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | 53 | |
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 | ||
Cash equivalents | 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 | ||
Cash equivalents | 53 | |
Corporate debt securities | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash equivalents | $ 0 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment | |||
Property and equipment, gross | $ 7,819,000,000 | $ 5,784,000,000 | |
Less: Accumulated depreciation | (2,132,000,000) | (1,817,000,000) | |
Property and equipment, net | 5,687,000,000 | 3,967,000,000 | |
Depreciation expense | 1,220,000,000 | 923,000,000 | $ 857,000,000 |
Assets acquired under capital lease agreements | 287,000,000 | 700,000,000 | |
Accumulated depreciation of property and equipment acquired under capital leases | 71,000,000 | 425,000,000 | |
Interest costs capitalized | 0 | 0 | |
Land | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 596,000,000 | 153,000,000 | |
Buildings | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 2,273,000,000 | 1,420,000,000 | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 447,000,000 | 304,000,000 | |
Network equipment | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 3,633,000,000 | 3,020,000,000 | |
Computer software, office equipment and other | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 248,000,000 | 149,000,000 | |
Construction in progress | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $ 622,000,000 | $ 738,000,000 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Change in Carrying Amount (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Goodwill beginning | $ 17,981 | $ 839 |
Goodwill acquired | 45 | 17,150 |
Effect of currency translation adjustment | (8) | |
Goodwill ending | $ 18,026 | $ 17,981 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Remaining Useful Lives (in years) | 5 years 1 month 28 days | ||
Gross Carrying Amount | $ 4,463 | $ 4,438 | |
Accumulated Amortization | 1,277 | 569 | |
Net Carrying Amount | 3,186 | 3,869 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Total intangible assets, Gross | 4,523 | 4,498 | |
Accumulated Amortization | (1,277) | (569) | |
Total intangible assets, Net | 3,246 | 3,929 | |
Amortization expense | 730 | 319 | $ 145 |
In-process research and development (IPR&D) | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 60 | 60 | |
Acquired users | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Remaining Useful Lives (in years) | 5 years 8 months 25 days | ||
Gross Carrying Amount | $ 2,056 | 2,056 | |
Accumulated Amortization | 382 | 85 | |
Net Carrying Amount | 1,674 | 1,971 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (382) | (85) | |
Acquired technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Remaining Useful Lives (in years) | 3 years 4 months | ||
Gross Carrying Amount | $ 831 | 813 | |
Accumulated Amortization | 310 | 144 | |
Net Carrying Amount | 521 | 669 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (310) | (144) | |
Acquired patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Remaining Useful Lives (in years) | 6 years 6 months | ||
Gross Carrying Amount | $ 785 | 773 | |
Accumulated Amortization | 333 | 239 | |
Net Carrying Amount | 452 | 534 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (333) | (239) | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Remaining Useful Lives (in years) | 4 years 1 month 3 days | ||
Gross Carrying Amount | $ 629 | 632 | |
Accumulated Amortization | 163 | 46 | |
Net Carrying Amount | 466 | 586 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (163) | (46) | |
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Remaining Useful Lives (in years) | 3 years 6 months 4 days | ||
Gross Carrying Amount | $ 162 | 164 | |
Accumulated Amortization | 89 | 55 | |
Net Carrying Amount | 73 | 109 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (89) | $ (55) |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2,016 | $ 701 | |
2,017 | 658 | |
2,018 | 603 | |
2,019 | 520 | |
2,020 | 357 | |
Thereafter | 347 | |
Net Carrying Amount | $ 3,186 | $ 3,869 |
Liabilities (Details)
Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Liabilities and Other Current Liabilities [Abstract] | ||
Accrued compensation and benefits | $ 473 | $ 322 |
Accrued property and equipment | 192 | 164 |
Promissory note payable | 201 | 0 |
Other current liabilities | 583 | 380 |
Accrued expenses and other current liabilities | 1,449 | 866 |
Other Liabilities [Abstract] | ||
Income tax payable | 2,458 | 1,190 |
Noncurrent deferred tax liability | 163 | 769 |
Contingent consideration liability | 267 | 193 |
Other liabilities | 269 | 175 |
Other liabilities | $ 3,157 | $ 2,327 |
Long-term Debt - Borrowings (De
Long-term Debt - Borrowings (Details) - Revolving Credit Facility - 2013 Revolving Credit Facility - USD ($) | 1 Months Ended | 12 Months Ended |
Aug. 31, 2013 | Dec. 31, 2015 | |
Debt Instrument | ||
Term loan facility, term period (in years) | 5 years | |
Line of credit facility, maximum borrowing capacity | $ 6,500,000,000 | |
Debt instrument, interest rate basis during period | LIBOR | |
Basis spread on variable rate (percent) | 1.00% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.10% | |
Line of credit facility, amount outstanding | $ 0 |
Commitments and Contingencies55
Commitments and Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases [Abstract] | |||
Capital lease agreement period | 3 years | ||
Capital Leases, Future Minimum Payments Due | |||
2,016 | $ 16 | ||
2,017 | 15 | ||
2,018 | 16 | ||
2,019 | 16 | ||
2,020 | 17 | ||
Thereafter | 94 | ||
Total minimum lease payments | 174 | ||
Less: amount representing interest and taxes | (60) | ||
Less: current portion of the present value of minimum lease payments | (7) | $ (114) | |
Capital lease obligations, less current portion | 107 | 119 | |
Operating Leases, Future Minimum Payments Due | |||
2,016 | 209 | ||
2,017 | 230 | ||
2,018 | 216 | ||
2,019 | 200 | ||
2,020 | 159 | ||
Thereafter | 438 | ||
Total minimum lease payments | 1,452 | ||
Financing Obligation, Future Minimum Payments Due | |||
2,016 | 0 | ||
2,017 | 0 | ||
2,018 | 0 | ||
2,019 | 13 | ||
2,020 | 25 | ||
Thereafter | 299 | ||
Total minimum lease payments | 337 | ||
Financing obligation, building in progress - leased facility | 62 | ||
Operating lease expense | 181 | $ 125 | $ 130 |
Other contractual commitments | |||
Other contractual commitments | $ 1,220 | ||
Contractual obligation, period | 5 years | ||
Minimum | |||
Leases [Abstract] | |||
Interest rate | 1.00% | ||
Lease expiration year | 2,016 | ||
Maximum | |||
Leases [Abstract] | |||
Interest rate | 13.00% | ||
Lease expiration year | 2,032 | ||
Building | |||
Leases [Abstract] | |||
Capital lease agreement period | 15 years |
Stockholders' Equity - Follow-
Stockholders' Equity - Follow-on Offering (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock | ||||
Net proceeds from issuance of common stock | $ 0 | $ 0 | $ 1,478 | |
Class A Common Stock | ||||
Class of Stock | ||||
Issuance of common stock, shares | 27,004,761 | |||
Share price | $ 55.05 | $ 104.66 | $ 55.05 | |
Sale of stock, sold by stockholders | 42,995,239 | |||
Net proceeds from issuance of common stock | $ 1,478 | |||
Underwriting discounts and commissions | 7 | |||
Other offering costs | $ 1 |
Stockholders' Equity - Common
Stockholders' Equity - Common Stock (Details) | Dec. 31, 2015vote$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Class of Stock | ||
Common stock, par value | $ / shares | $ 0.000006 | $ 0.000006 |
Class A Common Stock | ||
Class of Stock | ||
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, par value | $ / shares | $ 0.000006 | |
Common stock, number of votes by class | vote | 1 | |
Common stock, shares, issued | 2,293,000,000 | 2,234,000,000 |
Common stock, shares, outstanding | 2,293,000,000 | 2,234,000,000 |
Class B Common Stock | ||
Class of Stock | ||
Common stock, shares authorized | 4,141,000,000 | 4,141,000,000 |
Common stock, par value | $ / shares | $ 0.000006 | |
Common stock, number of votes by class | vote | 10 | |
Common stock, shares, issued | 552,000,000 | 563,000,000 |
Common stock, shares, outstanding | 552,000,000 | 563,000,000 |
Stockholders' Equity - Share-b
Stockholders' Equity - Share-based Compensation Plans (Detail) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2014shares | Dec. 31, 2015plansshares | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based employee compensation plans, number | plans | 2 | ||
2012 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
2012 equity incentive plan shares authorized | 25,000,000 | ||
Shares reserved for issuance increase percentage | 2.50% | ||
Share-based compensation arrangement by share-based payment award, expiration period (in years) | 10 years | ||
Share-based compensation arrangement by share-based payment award, expiration period for plan (in years) | 10 years | ||
2012 Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares reserved for issuance increase date range | Jan. 1, 2013 | ||
2012 Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares reserved for issuance increase date range | Jan. 1, 2022 | ||
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 O
Stockholders' Equity - Stock Option Award Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of Shares | |||
Ending balance (in shares) | 8,443,000 | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value of the options exercised | $ 403 | $ 624 | $ 4,580 |
Total grant date fair value of stock options vested | $ 5 | $ 7 | $ 7 |
Employee Stock Option | |||
Number of Shares | |||
Beginning balance (in shares) | 12,984,000 | ||
Stock options exercised (in shares) | (4,541,000) | ||
Ending balance (in shares) | 8,443,000 | 12,984,000 | |
Stock options vested and expected to vest as of period end (in shares) | 8,441,000 | ||
Stock options exercisable as of period end (in shares) | 6,250,000 | ||
Weighted Average Exercise Price | |||
Beginning Balance (in dollars per share) | $ 4.78 | ||
Stock options exercised (in dollars per share) | 0.48 | ||
Ending Balance (in dollars per share) | 7.10 | $ 4.78 | |
Stock options vested and expected to vest as of period end (in dollars per share) | 7.10 | ||
Stock options exercisable as of period end (in dollars per share) | $ 5.19 | ||
Weighted Average Remaining Contractual Term | |||
Balance at period end (in years) | 3 years 7 months 25 days | ||
Stock options vested and expected to vest as of period end (in years) | 3 years 7 months 25 days | ||
Stock options exercisable as of period end (in years) | 3 years 3 months 14 days | ||
Aggregate Intrinsic Value | |||
Balance at period end | $ 824 | ||
Stock options vested and expected to vest as of period end | 824 | ||
Stock options exercisable as of period end | $ 622 | ||
Options granted in period | 0 | ||
Options forfeited or canceled in period | 0 | ||
Class A Common Stock | |||
Aggregate Intrinsic Value | |||
Share price | $ 104.66 | $ 55.05 |
Stockholders' Equity - Stock60
Stockholders' Equity - Stock Options Additional Disclosures (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |
Number of Shares | shares | 8,443 |
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 7 months 25 days |
Options Outstanding, Weighted Average Exercise Price | $ 7.10 |
Options Exercisable, Number of Shares | shares | 6,250 |
Options Exercisable, Weighted Average Exercise Price | $ 5.19 |
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 | shares | 446 |
Options Outstanding, Weighted Average Remaining Contractual Term | 6 months 25 days |
Options Outstanding, Weighted Average Exercise Price | $ 0.11 |
Options Exercisable, Number of Shares | shares | 446 |
Options Exercisable, Weighted Average Exercise Price | $ 0.11 |
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 | shares | 1,182 |
Options Outstanding, Weighted Average Remaining Contractual Term | 1 year 5 months 20 days |
Options Outstanding, Weighted Average Exercise Price | $ 0.32 |
Options Exercisable, Number of Shares | shares | 1,182 |
Options Exercisable, Weighted Average Exercise Price | $ 0.32 |
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 | shares | 968 |
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 10 days |
Options Outstanding, Weighted Average Exercise Price | $ 1.85 |
Options Exercisable, Number of Shares | shares | 968 |
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 | shares | 1,147 |
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 7 months 18 days |
Options Outstanding, Weighted Average Exercise Price | $ 2.95 |
Options Exercisable, Number of Shares | shares | 1,147 |
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 | shares | 3,500 |
Options Outstanding, Weighted Average Remaining Contractual Term | 4 years 6 months 22 days |
Options Outstanding, Weighted Average Exercise Price | $ 10.39 |
Options Exercisable, Number of Shares | shares | 2,334 |
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 | shares | 1,200 |
Options Outstanding, Weighted Average Remaining Contractual Term | 4 years 9 months 20 days |
Options Outstanding, Weighted Average Exercise Price | $ 15 |
Options Exercisable, Number of Shares | shares | 173 |
Options Exercisable, Weighted Average Exercise Price | $ 15 |
Stockholders' Equity - RSU Awa
Stockholders' Equity - RSU Award Activity (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of Shares | |||
Unvested at beginning of period (in shares) | 138,055 | ||
Granted (in shares) | 31,507 | ||
Vested (in shares) | (46,434) | ||
Forfeited (in shares) | (6,719) | ||
Unvested at end of period (in shares) | 116,409 | 138,055 | |
Weighted Average Grant Date Fair Value | |||
Unvested at beginning of period (in dollars per share) | $ 55.89 | ||
Granted (in dollars per share) | 82.15 | ||
Vested (in dollars per share) | 49.19 | ||
Forfeited (in dollars per share) | 51.19 | ||
Unvested at end of period (in dollars per share) | $ 65.95 | $ 55.89 | |
Fair value of vested RSUs | $ 4,230 | $ 2,770 | $ 1,550 |
Stockholders' Equity - Additio
Stockholders' Equity - Additional Award Disclosures (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Future period share-based compensation expense | $ 7,230 |
Future period share-based compensation expense period of recognition (in years) | 3 years |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Future period share-based compensation expense | $ 6,670 |
Other Awards | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Future period share-based compensation expense | $ 559 |
Interest and other income_(ex63
Interest and other income/(expense), net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Nonoperating Income (Expense) [Abstract] | |||
Interest expense | $ (23) | $ (23) | $ (56) |
Interest income | 52 | 27 | 19 |
Foreign currency exchange losses, net | (66) | (87) | (14) |
Other | 6 | (1) | 1 |
Interest and other income/(expense), net | $ (31) | $ (84) | $ (50) |
Income Taxes - Schedule for In
Income Taxes - Schedule for Income Before Income Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 2,802 | $ 4,918 | $ 3,197 |
Foreign | 3,392 | (8) | (443) |
Income before provision for income taxes | $ 6,194 | $ 4,910 | $ 2,754 |
Income Taxes - Provision for I
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 3,012 | $ 1,999 | $ 1,154 |
State | 183 | 130 | 69 |
Foreign | 123 | 96 | 68 |
Total current tax expense | 3,318 | 2,225 | 1,291 |
Deferred: | |||
Federal | (800) | (240) | (28) |
State | (17) | (14) | (7) |
Foreign | 5 | (1) | (2) |
Total deferred tax benefit | (812) | (255) | (37) |
Provision for income taxes | $ 2,506 | $ 1,970 | $ 1,254 |
Income Taxes - Effective Incom
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
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 | 2.00% | 1.40% | 1.60% |
Research tax credits | (1.40%) | (1.10%) | (4.70%) |
Share-based compensation | 2.20% | 6.50% | 5.20% |
Effect of non-U.S. operations | (0.90%) | (3.60%) | 6.80% |
Other | 3.50% | 1.90% | 1.60% |
Effective tax rate | 40.40% | 40.10% | 45.50% |
Income Taxes - Deferred Tax As
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 476 | $ 130 |
Tax credit carryforward | 297 | 190 |
Share-based compensation | 529 | 225 |
Accrued expenses and other liabilities | 239 | 136 |
Other | 34 | 21 |
Total deferred tax assets | 1,575 | 702 |
Less: valuation allowance | (205) | (101) |
Deferred tax assets, net of valuation allowance | 1,370 | 601 |
Deferred tax liabilities: | ||
Depreciation and amortization | (270) | (101) |
Purchased intangible assets | (934) | (1,190) |
Deferred foreign taxes | (15) | 0 |
Total deferred tax liabilities | (1,219) | (1,291) |
Net deferred tax assets | $ 151 | |
Net deferred tax liabilities | $ (690) |
Income Taxes - Unrecognized Ta
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits | |||
Gross unrecognized tax benefits-beginning of period | $ 1,682 | $ 1,316 | $ 164 |
Increases related to prior year tax positions | 322 | 24 | 425 |
Decreases related to prior year tax positions | (52) | 0 | (13) |
Increases related to current year tax positions | 1,066 | 346 | 740 |
Decreases related to settlements of prior year tax positions | (1) | (4) | 0 |
Gross unrecognized tax benefits-end of period | $ 3,017 | $ 1,682 | $ 1,316 |
Income Taxes - Narrative (Deta
Income Taxes - Narrative (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure | ||||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% | |
Tax benefit from share-based award activity | $ 1,721 | $ 1,853 | $ 602 | |
Valuation allowance, deferred tax assets | 205 | 101 | ||
Tax-effected benefit to be recognized in additional paid in capital if net operating loss carryforward is utilized | $ 655 | |||
Cumulative stock ownership change threshold | 50.00% | |||
Change in ownership percentage over period | 3 years | |||
Unrecognized tax benefits | $ 3,017 | $ 1,682 | $ 1,316 | $ 164 |
Unrecognized tax benefits that would impact effective tax rate | 2,400 | |||
Internal Revenue Service (IRS) | ||||
Income Tax Disclosure | ||||
Operating loss carryforwards | $ 2,700 | |||
Operating loss carryforwards expiration year | 2,032 | |||
Tax credit carryforward | $ 1,080 | |||
Tax credit carryforward expiration year | 2,030 | |||
State and Local Jurisdiction | ||||
Income Tax Disclosure | ||||
Operating loss carryforwards | $ 3,310 | |||
Operating loss carryforwards expiration year | 2,023 | |||
Tax credit carryforward | $ 905 | |||
Tax credit carryforward expiration year | 2,032 |
Geographical Information - Reve
Geographical Information - Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue by Geographical Area | |||
Revenue | $ 17,928 | $ 12,466 | $ 7,872 |
United States | |||
Revenue by Geographical Area | |||
Revenue | 8,513 | 5,649 | 3,613 |
Rest of the world | |||
Revenue by Geographical Area | |||
Revenue | $ 9,415 | $ 6,817 | $ 4,259 |
Geographical Information - Prop
Geographical Information - Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | $ 5,687 | $ 3,967 |
United States | ||
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | 4,498 | 3,256 |
Sweden | ||
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | 713 | 514 |
Rest of the world | ||
Long-Lived Assets, by Geographical Area | ||
Property and equipment, net | $ 476 | $ 197 |