FACEBOOK INC, 10-Q filed on 7/27/2017
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2017
Jul. 24, 2017
Class A Common Stock
Jul. 24, 2017
Class B Common Stock
Entity Information
 
 
 
Document Type
10-Q 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Jun. 30, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
Q2 
 
 
Trading Symbol
FB 
 
 
Entity Registrant Name
FACEBOOK INC 
 
 
Entity Central Index Key
0001326801 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
2,370,333,098 
533,863,486 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 6,252 
$ 8,903 
Marketable securities
29,200 
20,546 
Accounts receivable, net of allowances for doubtful accounts of $90 and $94 as of June 30, 2017 and December 31, 2016, respectively
3,897 
3,993 
Prepaid expenses and other current assets
1,455 
959 
Total current assets
40,804 
34,401 
Property and equipment, net
10,628 
8,591 
Intangible assets, net
2,186 
2,535 
Goodwill
18,129 
18,122 
Other assets
2,096 
1,312 
Total assets
73,843 
64,961 
Current liabilities:
 
 
Accounts payable
323 
302 
Partners payable
278 
280 
Accrued expenses and other current liabilities
2,626 
2,203 
Deferred revenue and deposits
88 
90 
Total current liabilities
3,315 
2,875 
Other liabilities
4,047 
2,892 
Total liabilities
7,362 
5,767 
Stockholders' equity:
 
 
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,371 million and 2,354 million shares issued and outstanding, including 2 million and 4 million outstanding shares subject to repurchase, as of June 30, 2017 and December 31, 2016, respectively; 4,141 million Class B shares authorized, 532 million and 538 million shares issued and outstanding, including 1 million and 2 million outstanding shares subject to repurchase, as of June 30, 2017 and December 31, 2016, respectively
0 
0 
Additional paid-in capital
39,291 
38,227 
Accumulated other comprehensive loss
(370)
(703)
Retained earnings
27,560 
21,670 
Total stockholders' equity
66,481 
59,194 
Total liabilities and stockholders' equity
$ 73,843 
$ 64,961 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Current assets:
 
 
Accounts receivable, allowances for doubtful accounts
$ 90 
$ 94 
Stockholders' equity:
 
 
Common stock, par value (in dollars per share)
$ 0.000006 
$ 0.000006 
Class A Common Stock
 
 
Stockholders' equity:
 
 
Common stock, shares authorized
5,000,000,000 
5,000,000,000 
Common stock, shares issued
2,371,000,000 
2,354,000,000 
Common stock, shares outstanding
2,371,000,000 
2,354,000,000 
Common stock, outstanding shares subject to repurchase
2,000,000 
4,000,000 
Class B Common Stock
 
 
Stockholders' equity:
 
 
Common stock, shares authorized
4,141,000,000 
4,141,000,000 
Common stock, shares issued
532,000,000 
538,000,000 
Common stock, shares outstanding
532,000,000 
538,000,000 
Common stock, outstanding shares subject to repurchase
1,000,000 
2,000,000 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Revenue
$ 9,321 
$ 6,436 
$ 17,353 
$ 11,818 
Costs and expenses:
 
 
 
 
Cost of revenue
1,237 
917 
2,395 
1,755 
Research and development
1,919 
1,471 
3,753 
2,814 
Marketing and sales
1,124 
901 
2,181 
1,728 
General and administrative
640 
413 
1,295 
778 
Total costs and expenses
4,920 
3,702 
9,624 
7,075 
Income from operations
4,401 
2,734 
7,729 
4,743 
Interest and other income, net
87 
20 
168 
78 
Income before provision for income taxes
4,488 
2,754 
7,897 
4,821 
Provision for income taxes
594 
471 
938 
800 
Net income
3,894 
2,283 
6,959 
4,021 
Less: Net income attributable to participating securities
4 
7 
10 
13 
Net income attributable to Class A and Class B common stockholders
3,890 
2,276 
6,949 
4,008 
Earnings per share attributable to Class A and Class B common stockholders:
 
 
 
 
Basic (in dollars per share)
$ 1.34 
$ 0.80 
$ 2.40 
$ 1.41 
Diluted (in dollars per share)
$ 1.32 
$ 0.78 
$ 2.36 
$ 1.38 
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
 
 
 
 
Basic (in shares)
2,900 
2,856 
2,895 
2,850 
Diluted (in shares)
2,951 
2,921 
2,950 
2,912 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
1,032 
817 
1,899 
1,563 
Cost of revenue
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
47 
29 
81 
51 
Research and development
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
787 
631 
1,457 
1,217 
Marketing and sales
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
120 
95 
216 
177 
General and administrative
 
 
 
 
Share-based compensation expense included in costs and expenses:
 
 
 
 
Share-based compensation expense
$ 78 
$ 62 
$ 145 
$ 118 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 3,894 
$ 2,283 
$ 6,959 
$ 4,021 
Other comprehensive income (loss):
 
 
 
 
Change in foreign currency translation adjustment, net of tax
246 
(116)
306 
20 
Change in unrealized gain/loss on available-for-sale investments and other, net of tax
10 
19 
27 
61 
Comprehensive income
$ 4,150 
$ 2,186 
$ 7,292 
$ 4,102 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Cash flows from operating activities
 
 
Net income
$ 6,959 
$ 4,021 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
1,400 
1,137 
Share-based compensation
1,899 
1,563 
Deferred income taxes
(58)
(178)
Other
12 
19 
Changes in assets and liabilities:
 
 
Accounts receivable
223 
(225)
Prepaid expenses and other current assets
(577)
(257)
Other assets
82 
4 
Accounts payable
(38)
(39)
Partners payable
(10)
14 
Accrued expenses and other current liabilities
157 
414 
Deferred revenue and deposits
(4)
23 
Other liabilities
373 
646 
Net cash provided by operating activities
10,418 
7,142 
Cash flows from investing activities
 
 
Purchases of property and equipment
(2,715)
(2,127)
Purchases of marketable securities
(14,137)
(9,635)
Sales of marketable securities
3,998 
4,158 
Maturities of marketable securities
1,498 
903 
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets
(8)
(20)
Change in restricted cash and deposits
33 
74 
Net cash used in investing activities
(11,331)
(6,647)
Cash flows from financing activities
 
 
Taxes paid related to net share settlement of equity awards
(1,495)
0 
Principal payments on capital lease and other financing obligations
0 
(312)
Repurchases of Class A common stock
(378)
0 
Other financing activities, net
12 
6 
Net cash used in financing activities
(1,861)
(306)
Effect of exchange rate changes on cash and cash equivalents
123 
12 
Net (decrease) increase in cash and cash equivalents
(2,651)
201 
Cash and cash equivalents at beginning of period
8,903 
4,907 
Cash and cash equivalents at end of period
6,252 
5,108 
Cash paid during the period for:
 
 
Interest
0 
11 
Income taxes, net
1,359 
407 
Non-cash investing and financing activities:
 
 
Net change in accounts payable, accrued expenses and other current liabilities, and other liabilities related to property and equipment additions
157 
89 
Change in unsettled repurchases of Class A common stock
$ 30 
$ 0 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.
The condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.
The condensed consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2017.
There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 that have had a material impact on our condensed consolidated financial statements and related notes.
In the fourth quarter of 2016, we elected to early adopt Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09). We were required to reflect any adoption adjustments as of January 1, 2016, the beginning of the annual period that included the interim period of adoption. As such, our condensed consolidated statements of income and statements of comprehensive income for the three and six months ended June 30, 2016 and statements of cash flows for the six months ended June 30, 2016 had been adjusted to reflect the impact of ASU 2016-09 adoption. See "Note 1—Summary of Significant Accounting Policies" in the notes to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for detailed adoption information.
Use of Estimates
Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, collectability of accounts receivable, loss contingencies, 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.
Recently Issued Accounting Pronouncements
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. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The new standard further requires new disclosures about contracts with customers, including the significant judgments the registrant has made when applying the guidance. We will be adopting the new standard effective January 1, 2018. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We currently anticipate adopting the standard using the modified retrospective method. While we are still in the process of completing our analysis on the impact this guidance will have on our consolidated financial statements, related disclosures, and our internal controls over financial reporting, we do not expect the impact to be material.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. This guidance will be effective for us in the first quarter of 2019 on a modified retrospective basis and early adoption is permitted. We currently anticipate adopting the new standard effective January 1, 2019. While we continue to evaluate the effect of adopting this guidance on our consolidated financial statements and related disclosures, we expect our operating leases, as disclosed in Note 8 — Commitments and Contingencies, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets upon adoption, which will increase our total assets and liabilities.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for us in the first quarter of 2018 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.
Earnings per Share
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, such as awards under our equity compensation plans and inducement awards under separate non-plan restricted stock unit (RSU) award agreements. In addition, the computation of the diluted EPS of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock. Diluted EPS attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.
Certain RSUs were excluded from the EPS calculation because the impact would be anti-dilutive. These excluded RSUs were not material for the three and six months ended June 30, 2017 and 2016, 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): 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
Basic EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
3,177

 
$
717

 
$
1,846

 
$
437

 
$
5,673

 
$
1,286

 
$
3,250

 
$
771

Less: Net income attributable to participating securities
4

 
—

 
5

 
2

 
8

 
2

 
11

 
2

Net income attributable to common stockholders
$
3,173

 
$
717

 
$
1,841

 
$
435

 
$
5,665

 
$
1,284

 
$
3,239

 
$
769

Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
2,368

 
535

 
2,317

 
548

 
2,363

 
536

 
2,310

 
549

Less: Shares subject to repurchase
2

 
1

 
7

 
2

 
3

 
1

 
7

 
2

Number of shares used for basic EPS computation
2,366

 
534

 
2,310

 
546

 
2,360

 
535

 
2,303

 
547

Basic EPS
$
1.34

 
$
1.34

 
$
0.80

 
$
0.80

 
$
2.40

 
$
2.40

 
$
1.41

 
$
1.41

Diluted EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
$
3,173

 
$
717

 
$
1,841

 
$
435

 
$
5,665

 
$
1,284

 
$
3,239

 
$
769

Reallocation of net income attributable to participating securities
4

 
—

 
7

 
—

 
10

 
—

 
13

 
—

Reallocation of net income as a result of conversion of Class B to Class A common stock
717

 
—

 
435

 
—

 
1,284

 
—

 
769

 
—

Reallocation of net income to Class B common stock
—

 
(2
)
 
—

 
6

 
—

 
(1
)
 
—

 
9

Net income attributable to common stockholders for diluted EPS
$
3,894

 
$
715

 
$
2,283

 
$
441

 
$
6,959

 
$
1,283

 
$
4,021

 
$
778

Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares used for basic EPS computation
2,366

 
534

 
2,310

 
546

 
2,360

 
535

 
2,303

 
547

Conversion of Class B to Class A common stock
534

 
—

 
546

 
—

 
535

 
—

 
547

 
—

Weighted average effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee stock options
4

 
4

 
7

 
7

 
4

 
4

 
7

 
7

RSUs
45

 
3

 
50

 
7

 
47

 
3

 
48

 
7

Shares subject to repurchase
2

 
1

 
5

 
1

 
3

 
1

 
5

 
1

Earn-out shares
—

 
—

 
3

 
3

 
1

 
1

 
2

 
2

Number of shares used for diluted EPS computation
2,951

 
542

 
2,921

 
564

 
2,950

 
544

 
2,912

 
564

Diluted EPS
$
1.32

 
$
1.32

 
$
0.78

 
$
0.78

 
$
2.36

 
$
2.36

 
$
1.38

 
$
1.38

Cash and Cash Equivalents, and Marketable Securities
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):
 
June 30, 2017
 
December 31, 2016
Cash and cash equivalents:
 
 
 
Cash
$
1,452

 
$
1,364

Money market funds
4,421

 
5,409

U.S. government securities
25

 
1,463

U.S. government agency securities
90

 
667

Certificate of deposits and time deposits
264

 
—

Total cash and cash equivalents
6,252

 
8,903

Marketable securities:
 
 
 
U.S. government securities
11,061

 
7,130

U.S. government agency securities
9,623

 
7,411

Corporate debt securities
8,516

 
6,005

Total marketable securities
29,200

 
20,546

Total cash and cash equivalents, and marketable securities
$
35,452

 
$
29,449


The gross unrealized gains or losses on our marketable securities as of June 30, 2017 and December 31, 2016 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 June 30, 2017 and December 31, 2016. As of June 30, 2017, 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):
 
June 30, 2017
Due in one year
$
7,739

Due in one to five years
21,461

Total
$
29,200

Fair Value Measurement
Fair Value Measurement
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
 
June 30, 2017
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
4,421

 
$
4,421

 
$
—

 
$
—

U.S. government securities
 
25

 
25

 
—

 
—

U.S. government agency securities
 
90

 
90

 
—

 
—

Certificate of deposits and time deposits
 
264

 
—

 
264

 
—

Marketable securities:
 
 
 
 
 
 
 
 
U.S. government securities
 
11,061

 
11,061

 
—

 
—

U.S. government agency securities
 
9,623

 
9,623

 
—

 
—

Corporate debt securities
 
8,516

 
—

 
8,516

 
—

Total cash equivalents and marketable securities
 
$
34,000

 
$
25,220

 
$
8,780

 
$
—

 
 
 
 
 
 
 
 
 
Accrued expenses and other current liabilities:
 
 
 
 
 
 
 
 
Contingent consideration liability
 
$
347

 
$
—

 
$
347

 
$
—

 
 
 
 
Fair Value Measurement at
Reporting Date Using
Description
 
December 31, 2016
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
5,409

 
$
5,409

 
$
—

 
$
—

U.S. government securities
 
1,463

 
1,463

 
—

 
—

U.S. government agency securities
 
667

 
667

 
—

 
—

Marketable securities:
 
 
 
 
 
 
 
 
U.S. government securities
 
7,130

 
7,130

 
—

 
—

U.S. government agency securities
 
7,411

 
7,411

 
—

 
—

Corporate debt securities
 
6,005

 
—

 
6,005

 
—

Total cash equivalents and marketable securities
 
$
28,085

 
$
22,080

 
$
6,005

 
$
—

 
 
 
 
 
 
 
 
 
Accrued expenses and other current liabilities:
 
 
 
 
 
 
 
 
Contingent consideration liability
 
$
242

 
$
—

 
$
242

 
$
—


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 within Level 2 as the valuation inputs are based on quoted market prices and market observable data. During the three and six months ended June 30, 2017, we recognized an increase in the fair value of our contingent consideration liability of $21 million and $105 million, respectively, primarily due to the increase in the fair value of our common stock.
Property and Equipment
Property and Equipment
Property and Equipment
Property and equipment consists of the following (in millions): 
 
June 30,
2017
 
December 31,
2016
Land
$
720

 
$
696

Buildings
4,013

 
3,109

Leasehold improvements
742

 
531

Network equipment
6,685

 
5,179

Computer software, office equipment and other
517

 
398

Construction in progress
1,991

 
1,890

Total
14,668

 
11,803

Less: Accumulated depreciation
(4,040
)
 
(3,212
)
Property and equipment, net
$
10,628

 
$
8,591


Construction in progress includes costs related to construction of data centers, office buildings, and network equipment infrastructure to support our data centers around the world. No interest was capitalized during the three and six months ended June 30, 2017 and 2016.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the six months ended June 30, 2017 are as follows (in millions): 
Balance as of December 31, 2016
$
18,122

Effect of currency translation adjustment
7

Balance as of June 30, 2017
$
18,129

Intangible assets consist of the following (in millions):
 
 
 
June 30, 2017
 
December 31, 2016
 
Weighted-Average Remaining Useful Lives (in years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Acquired users
4.3
 
$
2,056

 
$
(826
)
 
$
1,230

 
$
2,056

 
$
(678
)
 
$
1,378

Acquired technology
2.0
 
931

 
(614
)
 
317

 
931

 
(518
)
 
413

Acquired patents
6.0
 
785

 
(461
)
 
324

 
785

 
(420
)
 
365

Trade names
2.7
 
629

 
(350
)
 
279

 
629

 
(293
)
 
336

Other
3.0
 
162

 
(126
)
 
36

 
162

 
(119
)
 
43

Total intangible assets
4.0
 
$
4,563

 
$
(2,377
)
 
$
2,186

 
$
4,563

 
$
(2,028
)
 
$
2,535



Amortization expense of intangible assets was $174 million and $349 million for the three and six months ended June 30, 2017, respectively, and $193 million and $373 million for the three and six months ended June 30, 2016, respectively.
As of June 30, 2017, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):
The remainder of 2017
$
338

2018
619

2019
526

2020
357

2021
265

Thereafter
81

Total
$
2,186

Long-term Debt
Long-term Debt
Long-term Debt
In May 2016, we entered into a five-year senior unsecured revolving credit facility that allows us to borrow up to $2.0 billion. Any amounts outstanding under this facility will be due and payable on May 20, 2021. As of June 30, 2017, no amounts had been drawn down, and we were in compliance with the covenants under this facility.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Commitments
Leases
During the six months ended June 30, 2017, we entered into additional non-cancelable operating lease agreements, mostly related to office buildings. Our various non-cancelable operating lease agreements for certain of our offices, land, facilities, and data centers have original lease periods expiring between 2017 and 2038 and our total future minimum payments related to these operating leases as of June 30, 2017 was $2.7 billion. We are committed to pay a portion of the related actual operating expenses under certain of these lease agreements. Certain of these arrangements have free rent periods or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis. Operating lease expense was $81 million and $156 million for the three and six months ended June 30, 2017, respectively, and $66 million and $129 million for the three and six months ended June 30, 2016, respectively.
Contingencies
Beginning on May 22, 2012, multiple putative class actions, derivative actions, and individual actions were filed in state and federal courts in the United States and in other jurisdictions against us, our directors, and/or certain of our officers alleging violation of securities laws or breach of fiduciary duties in connection with our 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. On April 14, 2017, we filed a motion for summary judgment. Trial is scheduled to begin on October 23, 2017.
On April 27, 2016, we announced a proposal to create a new class of non-voting capital stock (Class C capital stock) and our intention to declare and pay a dividend of two shares of Class C capital stock for each outstanding share of Class A and Class B common stock (the Reclassification). Following our announcement of the Reclassification, beginning on April 29, 2016, multiple purported class action lawsuits were filed on behalf of our stockholders in the Delaware Court of Chancery against us, certain of our board of directors, and Mark Zuckerberg. The lawsuits have been consolidated under the caption In re Facebook, Inc. Class C Reclassification Litig., C.A. No. 12286-VCL, and the consolidated complaint generally alleges that the defendants breached their fiduciary duties in connection with the Reclassification. Among other remedies, these lawsuits seek to enjoin the Reclassification as well as unspecified money damages, costs, and attorneys’ fees. Trial is scheduled to begin on September 26, 2017. We believe that the lawsuits are without merit and intend to vigorously defend against all claims asserted.
We are also party to various legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. With respect to these matters, we evaluate the developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated.
We believe that the amount or estimable range of reasonably possible or probable 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 these matters is inherently uncertain. Therefore, if one or more of these 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 in which any such outcome becomes probable and estimable, could be materially adversely affected.
For information regarding income tax contingencies, see Note 10 — Income Taxes.
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
Reclassification
In April 2016, our board of directors approved the Reclassification by approving amendments to our restated certificate of incorporation (the New Certificate) that would, among other things, create a new non-voting Class C capital stock. The Class C capital stock will have the same rights and powers, rank equally (including as to dividends and distributions, mergers or similar business combinations, and in connection with any liquidation, dissolution, or winding up of the corporation), share ratably and be identical in all other respects and as to all matters to the shares of Class A and Class B common stock, except for voting rights and as expressly provided in the New Certificate. The New Certificate was approved by our stockholders on June 20, 2016. As of June 30, 2017, the New Certificate was not yet effective.
As part of the Reclassification, we announced that our board of directors intends to issue two shares of the Class C capital stock as a one-time stock dividend for each share of Class A and Class B common stock outstanding. The record and payment dates for this dividend will be determined by our board of directors in its discretion and there can be no assurance as to the timing of such dates. For accounting purposes, we expect this dividend will be treated as a stock split in the form of a dividend.
Share Repurchase Program
In November 2016, our board of directors authorized a $6.0 billion share repurchase program of our Class A common stock, which commenced in 2017 and does not have an expiration date. The timing and actual number of shares repurchased depend on a variety of factors, including price, general business and market conditions, and other investment opportunities, and shares may be repurchased through open market purchases or privately negotiated transactions, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act. During the six months ended June 30, 2017, we repurchased and subsequently retired approximately 3 million shares of our Class A common stock for an aggregate amount of approximately $408 million.
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. Our board of directors approved the amendment and restatement of our 2012 Plan (the Amended 2012 Plan), which was approved by our stockholders and adopted by us in June 2016.
We initially reserved 25 million shares of our Class A common stock for issuance under our 2012 Plan. Following the date of the contemplated stock dividend of Class C capital stock described above, if it is declared and paid, the shares reserved and available for issuance under our Amended 2012 Plan will be shares of the new Class C capital stock, except for shares reserved for awards outstanding immediately prior to the payment of the dividend. The number of shares reserved for issuance under our Amended 2012 Plan increases automatically on January 1 of each of the calendar years during the term of the Amended 2012 Plan, which will continue through and including April 2026 unless terminated earlier by our board of directors or a committee thereof, by a number of shares of Class C capital stock (and prior to the date of the payment of the stock dividend described above, Class A common stock) equal to the lesser of (i) 2.5% of the total issued and outstanding shares of our Class A common stock and Class C capital stock as of the immediately preceding December 31st or (ii) a number of shares determined by our board of directors. Our board of directors elected not to increase the number of shares reserved for issuance in 2017.
The following table summarizes the activities of stock option awards under the Stock Plans for the six months ended June 30, 2017: 
 
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, 2016
5,687

 
$
7.78

 
 
 
 
Stock options exercised
(2,154
)
 
5.67

 
 
 
 
Balance as of June 30, 2017
3,533

 
$
9.07

 
2.7
 
$
501

Stock options exercisable as of June 30, 2017
2,749

 
$
7.38

 
2.6
 
$
395

(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 of $150.98, as reported on the NASDAQ Global Select Market on June 30, 2017.
The following table summarizes the activities for our unvested RSUs for the six months ended June 30, 2017:
 
Unvested RSUs(1)
 
Number of Shares
 
Weighted Average Grant Date Fair Value
 
(in thousands)
 
 
Unvested at December 31, 2016
98,586

 
$
82.99

Granted
28,565

 
140.14

Vested
(22,810
)
 
79.72

Forfeited
(3,719
)
 
95.32

Unvested at June 30, 2017
100,622

 
$
99.49


(1)
Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements.
The fair value as of the respective vesting dates of RSUs that vested during the three and six months ended June 30, 2017 was $1.51 billion and $3.21 billion, respectively, and $1.18 billion and $2.63 billion during the three and six months ended June 30, 2016, respectively.
As of June 30, 2017, there was $8.78 billion of unrecognized share-based compensation expense, of which (i) $8.68 billion was related to RSUs, and (ii) $100 million was related to restricted shares, shares related to our contingent consideration with performance conditions that were met in the second quarter of 2016 but are still subject to a service condition, and stock options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately three years.
Income Taxes
Income Taxes
Income Taxes
Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, we update our estimate of the annual effective tax rate, and if our estimated annual effective tax rate changes, we make a cumulative adjustment in that quarter. Our quarterly tax provision and our quarterly estimate of our annual effective tax rate are subject to significant volatility due to several factors, including our ability to accurately predict the proportion of our income (loss) before provision for income taxes in multiple jurisdictions, the tax effects of our share-based compensation, and the effects of acquisitions and the integration of those acquisitions.
Our 2017 effective tax rate differs from the U.S. statutory rate primarily due to a portion of our income before provision for income taxes being earned in jurisdictions with tax rates lower than the U.S. statutory rate where we plan to indefinitely reinvest a certain portion of those earnings, as well as the recognition of excess tax benefits from share-based compensation.
Our gross unrecognized tax benefits were $3.45 billion and $3.31 billion as of June 30, 2017 and December 31, 2016, respectively. If the gross unrecognized tax benefits as of June 30, 2017 were realized in a subsequent period, this would result in a tax benefit of $2.68 billion within our provision of income taxes at such time. Our existing tax positions will continue to generate an increase in unrecognized tax benefits in subsequent periods. 
In July 2016, we received a Statutory Notice of Deficiency (Notice) from the IRS related to transfer pricing with our foreign subsidiaries in conjunction with the examination of the 2010 tax year. While the Notice applies only to the 2010 tax year, the IRS states that it will also apply its position to tax years subsequent to 2010, which, if the IRS prevails in its position, could result in an additional federal tax liability of an estimated, aggregate amount of approximately $3.0 billion to $5.0 billion in excess of the amounts in our originally filed U.S. return, plus interest and any penalties asserted. We do not agree with the position of the IRS and have filed a petition in the United States Tax Court challenging the Notice. We have previously accrued an estimated unrecognized tax benefit consistent with the guidance in ASC 740 that is lower than the potential additional federal tax liability of $3.0 billion to $5.0 billion in excess of the amounts in our originally filed U.S. return, plus interest and penalties. If the IRS prevails in the assessment of additional tax due based on its position, the assessed tax, interest and penalties, if any, could have a material adverse impact on our financial position, results of operations or cash flows. As of June 30, 2017, we have not resolved this matter and proceedings continue in the United States Tax Court.
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 2011 through 2013 tax years. Our 2014 and subsequent years remain open to examination by the IRS. Our 2012 and subsequent years remain open to examination in Ireland.
We believe that adequate amounts have been reserved for any adjustments to the provision for income taxes or other tax items that may ultimately result from these examinations. 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. 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. However, we do not anticipate a significant impact to such amounts within the next 12 months.
Geographical Information
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):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Revenue:
 
 
 
 
 
 
 
United States
$
4,048

 
$
2,852

 
$
7,574

 
$
5,361

Rest of the world (1)
5,273

 
3,584

 
9,779

 
6,457

Total revenue
$
9,321

 
$
6,436

 
$
17,353

 
$
11,818

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented.
 
June 30,
2017
 
December 31,
2016
Property and equipment, net:
 
 
 
United States
$
8,215

 
$
6,793

Rest of the world (1)
2,413

 
1,798

Total property and equipment, net
$
10,628

 
$
8,591

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total property and equipment, net for any period presented.
Summary of Significant Accounting Policies (Policies)
Basis of Presentation 
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.
The condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.
The condensed consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2017.
There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 that have had a material impact on our condensed consolidated financial statements and related notes.
In the fourth quarter of 2016, we elected to early adopt Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09). We were required to reflect any adoption adjustments as of January 1, 2016, the beginning of the annual period that included the interim period of adoption. As such, our condensed consolidated statements of income and statements of comprehensive income for the three and six months ended June 30, 2016 and statements of cash flows for the six months ended June 30, 2016 had been adjusted to reflect the impact of ASU 2016-09 adoption. See "Note 1—Summary of Significant Accounting Policies" in the notes to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for detailed adoption information.
Use of Estimates 
Use of Estimates
Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, collectability of accounts receivable, loss contingencies, 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.
Recently Issued Accounting Pronouncements 
Recently Issued Accounting Pronouncements
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. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The new standard further requires new disclosures about contracts with customers, including the significant judgments the registrant has made when applying the guidance. We will be adopting the new standard effective January 1, 2018. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We currently anticipate adopting the standard using the modified retrospective method. While we are still in the process of completing our analysis on the impact this guidance will have on our consolidated financial statements, related disclosures, and our internal controls over financial reporting, we do not expect the impact to be material.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. This guidance will be effective for us in the first quarter of 2019 on a modified retrospective basis and early adoption is permitted. We currently anticipate adopting the new standard effective January 1, 2019. While we continue to evaluate the effect of adopting this guidance on our consolidated financial statements and related disclosures, we expect our operating leases, as disclosed in Note 8 — Commitments and Contingencies, will be subject to the new standard. We will recognize right-of-use assets and operating lease liabilities on our consolidated balance sheets upon adoption, which will increase our total assets and liabilities.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for us in the first quarter of 2018 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.
Earnings per Share (Tables)
Numerators and Denominators of Basic and Diluted EPS Computations for Common Stock
The numerators and denominators of the basic and diluted EPS computations for our common stock are calculated as follows (in millions, except per share amounts): 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
Basic EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
3,177

 
$
717

 
$
1,846

 
$
437

 
$
5,673

 
$
1,286

 
$
3,250

 
$
771

Less: Net income attributable to participating securities
4

 
—

 
5

 
2

 
8

 
2

 
11

 
2

Net income attributable to common stockholders
$
3,173

 
$
717

 
$
1,841

 
$
435

 
$
5,665

 
$
1,284

 
$
3,239

 
$
769

Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
2,368

 
535

 
2,317

 
548

 
2,363

 
536

 
2,310

 
549

Less: Shares subject to repurchase
2

 
1

 
7

 
2

 
3

 
1

 
7

 
2

Number of shares used for basic EPS computation
2,366

 
534

 
2,310

 
546

 
2,360

 
535

 
2,303

 
547

Basic EPS
$
1.34

 
$
1.34

 
$
0.80

 
$
0.80

 
$
2.40

 
$
2.40

 
$
1.41

 
$
1.41

Diluted EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
$
3,173

 
$
717

 
$
1,841

 
$
435

 
$
5,665

 
$
1,284

 
$
3,239

 
$
769

Reallocation of net income attributable to participating securities
4

 
—

 
7

 
—

 
10

 
—

 
13

 
—

Reallocation of net income as a result of conversion of Class B to Class A common stock
717

 
—

 
435

 
—

 
1,284

 
—

 
769

 
—

Reallocation of net income to Class B common stock
—

 
(2
)
 
—

 
6

 
—

 
(1
)
 
—

 
9

Net income attributable to common stockholders for diluted EPS
$
3,894

 
$
715

 
$
2,283

 
$
441

 
$
6,959

 
$
1,283

 
$
4,021

 
$
778

Denominator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares used for basic EPS computation
2,366

 
534

 
2,310

 
546

 
2,360

 
535

 
2,303

 
547

Conversion of Class B to Class A common stock
534

 
—

 
546

 
—

 
535

 
—

 
547

 
—

Weighted average effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee stock options
4

 
4

 
7

 
7

 
4

 
4

 
7

 
7

RSUs
45

 
3

 
50

 
7

 
47

 
3

 
48

 
7

Shares subject to repurchase
2

 
1

 
5

 
1

 
3

 
1

 
5

 
1

Earn-out shares
—

 
—

 
3

 
3

 
1

 
1

 
2

 
2

Number of shares used for diluted EPS computation
2,951

 
542

 
2,921

 
564

 
2,950

 
544

 
2,912

 
564

Diluted EPS
$
1.32

 
$
1.32

 
$
0.78

 
$
0.78

 
$
2.36

 
$
2.36

 
$
1.38

 
$
1.38

Cash and Cash Equivalents, and Marketable Securities (Tables)
Cash and Cash Equivalents, and Marketable Securities 
The following table sets forth the cash and cash equivalents, and marketable securities (in millions):
 
June 30, 2017
 
December 31, 2016
Cash and cash equivalents:
 
 
 
Cash
$
1,452

 
$
1,364

Money market funds
4,421

 
5,409

U.S. government securities
25

 
1,463

U.S. government agency securities
90

 
667

Certificate of deposits and time deposits
264

 
—

Total cash and cash equivalents
6,252

 
8,903

Marketable securities:
 
 
 
U.S. government securities
11,061

 
7,130

U.S. government agency securities
9,623

 
7,411

Corporate debt securities
8,516

 
6,005

Total marketable securities
29,200

 
20,546

Total cash and cash equivalents, and marketable securities
$
35,452

 
$
29,449

Marketable Securities by Contractual Maturities 
The following table classifies our marketable securities by contractual maturities (in millions):
 
June 30, 2017
Due in one year
$
7,739

Due in one to five years
21,461

Total
$
29,200

Fair Value Measurement (Tables)
Assets and Liabilities Measured at Fair Value
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
 
June 30, 2017
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
4,421

 
$
4,421

 
$
—

 
$
—

U.S. government securities
 
25

 
25

 
—

 
—

U.S. government agency securities
 
90

 
90

 
—

 
—

Certificate of deposits and time deposits
 
264

 
—

 
264

 
—

Marketable securities:
 
 
 
 
 
 
 
 
U.S. government securities
 
11,061

 
11,061

 
—

 
—

U.S. government agency securities
 
9,623

 
9,623

 
—

 
—

Corporate debt securities
 
8,516

 
—

 
8,516

 
—

Total cash equivalents and marketable securities
 
$
34,000

 
$
25,220

 
$
8,780

 
$
—

 
 
 
 
 
 
 
 
 
Accrued expenses and other current liabilities:
 
 
 
 
 
 
 
 
Contingent consideration liability
 
$
347

 
$
—

 
$
347

 
$
—

 
 
 
 
Fair Value Measurement at
Reporting Date Using
Description
 
December 31, 2016
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
5,409

 
$
5,409

 
$
—

 
$
—

U.S. government securities
 
1,463

 
1,463

 
—

 
—

U.S. government agency securities
 
667

 
667

 
—

 
—

Marketable securities:
 
 
 
 
 
 
 
 
U.S. government securities
 
7,130

 
7,130

 
—

 
—

U.S. government agency securities
 
7,411

 
7,411

 
—

 
—

Corporate debt securities
 
6,005

 
—

 
6,005

 
—

Total cash equivalents and marketable securities
 
$
28,085

 
$
22,080

 
$
6,005

 
$
—

 
 
 
 
 
 
 
 
 
Accrued expenses and other current liabilities:
 
 
 
 
 
 
 
 
Contingent consideration liability
 
$
242

 
$
—

 
$
242

 
$
—

Property and Equipment (Tables)
Property and Equipment
Property and equipment consists of the following (in millions): 
 
June 30,
2017
 
December 31,
2016
Land
$
720

 
$
696

Buildings
4,013

 
3,109

Leasehold improvements
742

 
531

Network equipment
6,685

 
5,179

Computer software, office equipment and other
517

 
398

Construction in progress
1,991

 
1,890

Total
14,668

 
11,803

Less: Accumulated depreciation
(4,040
)
 
(3,212
)
Property and equipment, net
$
10,628

 
$
8,591

Goodwill and Intangible Assets (Tables)
Changes in Carrying Amount of Goodwill 
The changes in the carrying amount of goodwill for the six months ended June 30, 2017 are as follows (in millions): 
Balance as of December 31, 2016
$
18,122

Effect of currency translation adjustment
7

Balance as of June 30, 2017
$
18,129

Schedule of Intangible Assets 
Intangible assets consist of the following (in millions):
 
 
 
June 30, 2017
 
December 31, 2016
 
Weighted-Average Remaining Useful Lives (in years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Acquired users
4.3
 
$
2,056

 
$
(826
)
 
$
1,230

 
$
2,056

 
$
(678
)
 
$
1,378

Acquired technology
2.0
 
931

 
(614
)
 
317

 
931

 
(518
)
 
413

Acquired patents
6.0
 
785

 
(461
)
 
324

 
785

 
(420
)
 
365

Trade names
2.7
 
629

 
(350
)
 
279

 
629

 
(293
)
 
336

Other
3.0
 
162

 
(126
)
 
36

 
162

 
(119
)
 
43

Total intangible assets
4.0
 
$
4,563

 
$
(2,377
)
 
$
2,186

 
$
4,563

 
$
(2,028
)
 
$
2,535

Expected Amortization Expense for Unamortized Acquired Intangible Assets 
As of June 30, 2017, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):
The remainder of 2017
$
338

2018
619

2019
526

2020
357

2021
265

Thereafter
81

Total
$
2,186

Stockholders' Equity (Tables)
Stock Option Activity under Stock Plans 
The following table summarizes the activities of stock option awards under the Stock Plans for the six months ended June 30, 2017: 
 
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, 2016
5,687

 
$
7.78

 
 
 
 
Stock options exercised
(2,154
)
 
5.67

 
 
 
 
Balance as of June 30, 2017
3,533

 
$
9.07

 
2.7
 
$
501

Stock options exercisable as of June 30, 2017
2,749

 
$
7.38

 
2.6
 
$
395

(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 of $150.98, as reported on the NASDAQ Global Select Market on June 30, 2017.
Restricted Stock Units Award Activity 
The following table summarizes the activities for our unvested RSUs for the six months ended June 30, 2017:
 
Unvested RSUs(1)
 
Number of Shares
 
Weighted Average Grant Date Fair Value
 
(in thousands)
 
 
Unvested at December 31, 2016
98,586

 
$
82.99

Granted
28,565

 
140.14

Vested
(22,810
)
 
79.72

Forfeited
(3,719
)
 
95.32

Unvested at June 30, 2017
100,622

 
$
99.49


(1)
Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements.
Geographical Information (Tables)
Revenue and Property and Equipment by Geographic Area
Revenue by geography is based on the billing address of the marketer or developer. The following tables set forth revenue and property and equipment, net by geographic area (in millions):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Revenue:
 
 
 
 
 
 
 
United States
$
4,048

 
$
2,852

 
$
7,574

 
$
5,361

Rest of the world (1)
5,273

 
3,584

 
9,779

 
6,457

Total revenue
$
9,321

 
$
6,436

 
$
17,353

 
$
11,818

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented.
 
June 30,
2017
 
December 31,
2016
Property and equipment, net:
 
 
 
United States
$
8,215

 
$
6,793

Rest of the world (1)
2,413

 
1,798

Total property and equipment, net
$
10,628

 
$
8,591

 
(1)
No individual country, other than disclosed above, exceeded 10% of our total property and equipment, net for any period presented.
Earnings per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Numerator
 
 
 
 
Net income
$ 3,894 
$ 2,283 
$ 6,959 
$ 4,021 
Less: Net income attributable to participating securities
4 
7 
10 
13 
Net income attributable to Class A and Class B common stockholders
3,890 
2,276 
6,949 
4,008 
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
2,900 
2,856 
2,895 
2,850 
Basic EPS (in dollars per share)
$ 1.34 
$ 0.80 
$ 2.40 
$ 1.41 
Numerator
 
 
 
 
Net income attributable to common stockholders
3,890 
2,276 
6,949 
4,008 
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
2,900 
2,856 
2,895 
2,850 
Weighted average effect of dilutive securities:
 
 
 
 
Number of shares used for diluted EPS computation (in shares)
2,951 
2,921 
2,950 
2,912 
Diluted EPS (in dollars per share)
$ 1.32 
$ 0.78 
$ 2.36 
$ 1.38 
Class A Common Stock
 
 
 
 
Numerator
 
 
 
 
Net income
3,177 
1,846 
5,673 
3,250 
Less: Net income attributable to participating securities
4 
5 
8 
11 
Net income attributable to Class A and Class B common stockholders
3,173 
1,841 
5,665 
3,239 
Denominator
 
 
 
 
Weighted average shares outstanding (in shares)
2,368 
2,317 
2,363 
2,310 
Less: Shares subject to repurchase (in shares)
2 
7 
3 
7 
Number of shares used for basic EPS computation (in shares)
2,366 
2,310 
2,360 
2,303 
Basic EPS (in dollars per share)
$ 1.34 
$ 0.80 
$ 2.40 
$ 1.41 
Numerator
 
 
 
 
Net income attributable to common stockholders
3,173 
1,841 
5,665 
3,239 
Reallocation of net income attributable to participating securities
4 
7 
10 
13 
Reallocation of net income as a result of conversion of Class B to Class A common stock
717 
435 
1,284 
769 
Reallocation of net income to Class B common stock
0 
0 
0 
0 
Net income attributable to common stockholders for diluted EPS
3,894 
2,283 
6,959 
4,021 
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
2,366 
2,310 
2,360 
2,303 
Conversion of Class B to Class A common stock (in shares)
534 
546 
535 
547 
Weighted average effect of dilutive securities:
 
 
 
 
Shares subject to repurchase (in shares)
2 
5 
3 
5 
Earn-out shares (in shares)
0 
3 
1 
2 
Number of shares used for diluted EPS computation (in shares)
2,951 
2,921 
2,950 
2,912 
Diluted EPS (in dollars per share)
$ 1.32 
$ 0.78 
$ 2.36 
$ 1.38 
Class A Common Stock |
Employee Stock Options
 
 
 
 
Weighted average effect of dilutive securities:
 
 
 
 
Share based payment arrangements (in shares)
4 
7 
4 
7 
Class A Common Stock |
Restricted Stock Units (RSUs)
 
 
 
 
Weighted average effect of dilutive securities:
 
 
 
 
Share based payment arrangements (in shares)
45 
50 
47 
48 
Class B Common Stock
 
 
 
 
Numerator
 
 
 
 
Net income
717 
437 
1,286 
771 
Less: Net income attributable to participating securities
0 
2 
2 
2 
Net income attributable to Class A and Class B common stockholders
717 
435 
1,284 
769 
Denominator
 
 
 
 
Weighted average shares outstanding (in shares)
535 
548 
536 
549 
Less: Shares subject to repurchase (in shares)
1 
2 
1 
2 
Number of shares used for basic EPS computation (in shares)
534 
546 
535 
547 
Basic EPS (in dollars per share)
$ 1.34 
$ 0.80 
$ 2.40 
$ 1.41 
Numerator
 
 
 
 
Net income attributable to common stockholders
717 
435 
1,284 
769 
Reallocation of net income attributable to participating securities
0 
0 
0 
0 
Reallocation of net income as a result of conversion of Class B to Class A common stock
0 
0 
0 
0 
Reallocation of net income to Class B common stock
(2)
6 
(1)
9 
Net income attributable to common stockholders for diluted EPS
$ 715 
$ 441 
$ 1,283 
$ 778 
Denominator
 
 
 
 
Number of shares used for basic EPS computation (in shares)
534 
546 
535 
547 
Conversion of Class B to Class A common stock (in shares)
0 
0 
0 
0 
Weighted average effect of dilutive securities:
 
 
 
 
Shares subject to repurchase (in shares)
1 
1 
1 
1 
Earn-out shares (in shares)
0 
3 
1 
2 
Number of shares used for diluted EPS computation (in shares)
542 
564 
544 
564 
Diluted EPS (in dollars per share)
$ 1.32 
$ 0.78 
$ 2.36 
$ 1.38 
Class B Common Stock |
Employee Stock Options
 
 
 
 
Weighted average effect of dilutive securities:
 
 
 
 
Share based payment arrangements (in shares)
4 
7 
4 
7 
Class B Common Stock |
Restricted Stock Units (RSUs)
 
 
 
 
Weighted average effect of dilutive securities:
 
 
 
 
Share based payment arrangements (in shares)
3 
7 
3 
7 
Cash and Cash Equivalents, and Marketable Securities (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Jun. 30, 2016
Dec. 31, 2015
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Cash and cash equivalents
$ 6,252 
$ 8,903 
$ 5,108 
$ 4,907 
Marketable securities
29,200 
20,546 
 
 
Total cash and cash equivalents, and marketable securities
35,452 
29,449 
 
 
U.S. government securities
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Marketable securities
11,061 
7,130 
 
 
U.S. government agency securities
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Marketable securities
9,623 
7,411 
 
 
Corporate debt securities
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Marketable securities
8,516 
6,005 
 
 
Cash
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Cash and cash equivalents
1,452 
1,364 
 
 
Money market funds
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Cash and cash equivalents
4,421 
5,409 
 
 
U.S. government securities
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Cash and cash equivalents
25 
1,463 
 
 
U.S. government agency securities
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Cash and cash equivalents
90 
667 
 
 
Certificate of deposits and time deposits
 
 
 
 
Cash and Cash Equivalents, and Marketable Securities
 
 
 
 
Cash and cash equivalents
$ 264 
$ 0 
 
 
Cash and Cash Equivalents, and Marketable Securities - Contractual Maturities of Marketable Debt Securities (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Contractual Maturities of Marketable Securities
 
 
Due in one year
$ 7,739 
 
Due in one to five years
21,461 
 
Total marketable securities
$ 29,200 
$ 20,546 
Fair Value Measurement (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
$ 29,200 
$ 29,200 
$ 20,546 
Change in fair value of contingent consideration liability
21 
105 
 
U.S. government securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
11,061 
11,061 
7,130 
U.S. government agency securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
9,623 
9,623 
7,411 
Corporate debt securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
8,516 
8,516 
6,005 
Fair Value, Measurements, Recurring
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Total cash equivalents and marketable securities
34,000 
34,000 
28,085 
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
25,220 
25,220 
22,080 
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
8,780 
8,780 
6,005 
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 
0 
Fair Value, Measurements, Recurring |
Accrued Expenses and Other Current Liabilities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Contingent consideration liability
347 
347 
242 
Fair Value, Measurements, Recurring |
Accrued Expenses and Other Current Liabilities |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Contingent consideration liability
0 
0 
0 
Fair Value, Measurements, Recurring |
Accrued Expenses and Other Current Liabilities |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Contingent consideration liability
347 
347 
242 
Fair Value, Measurements, Recurring |
Accrued Expenses and Other Current Liabilities |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Contingent consideration liability
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
11,061 
11,061 
7,130 
Fair Value, Measurements, Recurring |
U.S. government securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
11,061 
11,061 
7,130 
Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government agency securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
9,623 
9,623 
7,411 
Fair Value, Measurements, Recurring |
U.S. government agency securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
9,623 
9,623 
7,411 
Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
0 
0 
0 
Fair Value, Measurements, Recurring |
Corporate debt securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
8,516 
8,516 
6,005 
Fair Value, Measurements, Recurring |
Corporate debt securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
0 
0 
0 
Fair Value, Measurements, Recurring |
Corporate debt securities |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
8,516 
8,516 
6,005 
Fair Value, Measurements, Recurring |
Corporate debt securities |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Marketable securities
0 
0 
0 
Fair Value, Measurements, Recurring |
Money market funds
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
4,421 
4,421 
5,409 
Fair Value, Measurements, Recurring |
Money market funds |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
4,421 
4,421 
5,409 
Fair Value, Measurements, Recurring |
Money market funds |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
0 
0 
0 
Fair Value, Measurements, Recurring |
Money market funds |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
25 
25 
1,463 
Fair Value, Measurements, Recurring |
U.S. government securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
25 
25 
1,463 
Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government securities |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government agency securities
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
90 
90 
667 
Fair Value, Measurements, Recurring |
U.S. government agency securities |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
90 
90 
667 
Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
0 
0 
0 
Fair Value, Measurements, Recurring |
U.S. government agency securities |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
0 
0 
0 
Fair Value, Measurements, Recurring |
Certificate of deposits and time deposits
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
264 
264 
 
Fair Value, Measurements, Recurring |
Certificate of deposits and time deposits |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
0 
0 
 
Fair Value, Measurements, Recurring |
Certificate of deposits and time deposits |
Significant Other Observable Inputs (Level 2)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
264 
264 
 
Fair Value, Measurements, Recurring |
Certificate of deposits and time deposits |
Significant Unobservable Inputs (Level 3)
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
 
 
 
Cash equivalents
$ 0 
$ 0 
 
Property and Equipment (Detail) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Property, Plant and Equipment
 
 
 
 
 
Property and equipment, gross
$ 14,668,000,000 
 
$ 14,668,000,000 
 
$ 11,803,000,000 
Less: Accumulated depreciation
(4,040,000,000)
 
(4,040,000,000)
 
(3,212,000,000)
Property and equipment, net
10,628,000,000 
 
10,628,000,000 
 
8,591,000,000 
Interest costs capitalized
0 
0 
0 
0 
 
Land
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
Property and equipment, gross
720,000,000 
 
720,000,000 
 
696,000,000 
Buildings
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
Property and equipment, gross
4,013,000,000 
 
4,013,000,000 
 
3,109,000,000 
Leasehold improvements
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
Property and equipment, gross
742,000,000 
 
742,000,000 
 
531,000,000 
Network equipment
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
Property and equipment, gross
6,685,000,000 
 
6,685,000,000 
 
5,179,000,000 
Computer software, office equipment and other
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
Property and equipment, gross
517,000,000 
 
517,000,000 
 
398,000,000 
Construction in progress
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
Property and equipment, gross
$ 1,991,000,000 
 
$ 1,991,000,000 
 
$ 1,890,000,000 
Goodwill and Intangible Assets - Change in Carrying Amount (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Goodwill
 
Goodwill beginning
$ 18,122 
Effect of currency translation adjustment
7 
Goodwill ending
$ 18,129 
Goodwill and Intangible Assets - Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
 
 
Amortization expense
$ 174 
$ 193 
$ 349 
$ 373 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted Average Remaining Useful Life (in years)
 
 
3 years 11 months 13 days 
 
 
Gross Carrying Amount
4,563 
 
4,563 
 
4,563 
Accumulated Amortization
(2,377)
 
(2,377)
 
(2,028)
Net Carrying Amount
2,186 
 
2,186 
 
2,535 
Acquired users
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted Average Remaining Useful Life (in years)
 
 
4 years 3 months 18 days 
 
 
Gross Carrying Amount
2,056 
 
2,056 
 
2,056 
Accumulated Amortization
(826)
 
(826)
 
(678)
Net Carrying Amount
1,230 
 
1,230 
 
1,378 
Acquired technology
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted Average Remaining Useful Life (in years)
 
 
2 years 0 months 0 days 
 
 
Gross Carrying Amount
931 
 
931 
 
931 
Accumulated Amortization
(614)
 
(614)
 
(518)
Net Carrying Amount
317 
 
317 
 
413 
Acquired patents
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted Average Remaining Useful Life (in years)
 
 
6 years 0 months 0 days 
 
 
Gross Carrying Amount
785 
 
785 
 
785 
Accumulated Amortization
(461)
 
(461)
 
(420)
Net Carrying Amount
324 
 
324 
 
365 
Trade names
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted Average Remaining Useful Life (in years)
 
 
2 years 8 months 12 days 
 
 
Gross Carrying Amount
629 
 
629 
 
629 
Accumulated Amortization
(350)
 
(350)
 
(293)
Net Carrying Amount
279 
 
279 
 
336 
Other
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted Average Remaining Useful Life (in years)
 
 
3 years 0 months 0 days 
 
 
Gross Carrying Amount
162 
 
162 
 
162 
Accumulated Amortization
(126)
 
(126)
 
(119)
Net Carrying Amount
$ 36 
 
$ 36 
 
$ 43 
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
The remainder of 2017
$ 338 
 
2018
619 
 
2019
526 
 
2020
357 
 
2021
265 
 
Thereafter
81 
 
Net Carrying Amount
$ 2,186 
$ 2,535 
Long-term Debt (Details) (Revolving Credit Facility, 2016 Facility, USD $)
1 Months Ended
May 31, 2016
Jun. 30, 2017
Revolving Credit Facility |
2016 Facility
 
 
Debt Instrument
 
 
Term period (in years)
5 years 
 
Maximum borrowing capacity
$ 2,000,000,000.0 
 
Amount outstanding
 
$ 0 
Commitments and Contingencies (Details) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended
Apr. 27, 2016
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Leases [Abstract]
 
 
 
 
 
Future minimum operating lease payments
 
$ 2,700,000,000 
 
$ 2,700,000,000 
 
Operating lease expense
 
$ 81,000,000 
$ 66,000,000 
$ 156,000,000 
$ 129,000,000 
Loss Contingency, Information about Litigation Matters [Abstract]
 
 
 
 
 
Stock dividend, number of shares of Class C capital stock each shareholder of Class A and Class B common stock will receive for every share they hold
2 
 
 
 
 
Minimum
 
 
 
 
 
Leases [Abstract]
 
 
 
 
 
Lease expiration year
 
 
 
2017 
 
Maximum
 
 
 
 
 
Leases [Abstract]
 
 
 
 
 
Lease expiration year
 
 
 
2038 
 
Stockholders' Equity - Share Repurchase Program (Details) (Class A Common Stock, USD $)
Share data in Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Nov. 30, 2016
Class A Common Stock
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share repurchase program, authorized amount
 
$ 6,000,000,000 
Shares repurchased and retired (in shares)
3 
 
Shares repurchased and retired
$ 408,000,000 
 
Stockholders' Equity - Share-based Compensation Plans (Detail)
6 Months Ended
Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award
 
Share-based employee compensation plans, number
2 
2012 Plan
 
Share-based Compensation Arrangement by Share-based Payment Award
 
Equity incentive plan shares authorized
25,000,000 
Shares reserved for issuance increase, percentage
2.50% 
2012 Plan |
Maximum
 
Share-based Compensation Arrangement by Share-based Payment Award
 
Shares reserved for issuance increase, date range
Jan. 01, 2026 
Stockholders' Equity - Stock Option Activity (Details) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Class A Common Stock
 
Aggregate Intrinsic Value
 
Common stock, closing share price (in usd per share)
$ 151 
Employee Stock Options
 
Number of Shares
 
Beginning balance (in shares)
5,687 
Stock options exercised (in shares)
(2,154)
Ending balance (in shares)
3,533 
Stock options exercisable as of period end (in shares)
2,749 
Weighted Average Exercise Price
 
Beginning balance (in dollars per share)
$ 7.78 
Stock options exercised (in dollars per share)
$ 5.67 
Ending balance (in dollars per share)
$ 9.07 
Stock options exercisable as of period end (in dollars per share)
$ 7.38 
Weighted Average Remaining Contractual Term
 
Balance at period end
2 years 8 months 26 days 
Stock options exercisable as of period end
2 years 6 months 29 days 
Aggregate Intrinsic Value
 
Balance at period end
$ 501 1
Stock options exercisable as of period end
$ 395 1
Stockholders' Equity - Restricted Stock Units (Details) (Restricted Stock Units (RSUs), USD $)
In Billions, except Share data in Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Restricted Stock Units (RSUs)
 
 
 
 
Number of Shares
 
 
 
 
Unvested at beginning of period (in shares)
 
 
98,586 1
 
Granted (in shares)
 
 
28,565 1
 
Vested (in shares)
 
 
(22,810)1
 
Forfeited (in shares)
 
 
(3,719)1
 
Unvested at end of period (in shares)
100,622 1
 
100,622 1
 
Weighted Average Grant Date Fair Value
 
 
 
 
Unvested at beginning of period (in dollars per share)
 
 
$ 82.99 1
 
Granted (in dollars per share)
 
 
$ 140.14 1
 
Vested (in dollars per share)
 
 
$ 79.72 1
 
Forfeited (in dollars per share)
 
 
$ 95.32 1
 
Unvested at end of period (in dollars per share)
$ 99.49 1
 
$ 99.49 1
 
Fair value of vested RSUs
$ 1.51 
$ 1.18 
$ 3.21 
$ 2.63 
Stockholders' Equity - Additional Award Disclosures (Details) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended 6 Months Ended
Apr. 27, 2016
Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award
 
 
Stock dividend, number of shares of Class C capital stock each shareholder of Class A and Class B common stock will receive for every share they hold
2 
 
Unrecognized share-based compensation expense
 
$ 8,780 
Unrecognized share-based compensation expense recognition period (in years)
 
3 years 
Restricted Stock Units (RSUs)
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
Unrecognized share-based compensation expense
 
8,680 
Other Awards
 
 
Share-based Compensation Arrangement by Share-based Payment Award
 
 
Unrecognized share-based compensation expense
 
$ 100 
Income Tax (Details) (USD $)
In Billions, unless otherwise specified
1 Months Ended
Jun. 30, 2017
Dec. 31, 2016
Jul. 31, 2016
Minimum
Jul. 31, 2016
Maximum
Income Tax Examination [Line Items]
 
 
 
 
Unrecognized tax benefits
$ 3.45 
$ 3.31 
 
 
Unrecognized tax benefits that would result in tax benefit if realized
2.68 
 
 
 
Income tax examination, estimate of possible loss
 
 
$ 3.0 
$ 5.0 
Geographical Information - Revenue (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Revenue by Geographical Area
 
 
 
 
Revenue
$ 9,321 
$ 6,436 
$ 17,353 
$ 11,818 
United States
 
 
 
 
Revenue by Geographical Area
 
 
 
 
Revenue
4,048 
2,852 
7,574 
5,361 
Rest of the world
 
 
 
 
Revenue by Geographical Area
 
 
 
 
Revenue
$ 5,273 1
$ 3,584 1
$ 9,779 1
$ 6,457 1
Geographical Information - Property and Equipment, Net (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Long-Lived Assets By Geographical Area
 
 
Total property and equipment, net
$ 10,628 
$ 8,591 
United States
 
 
Long-Lived Assets By Geographical Area
 
 
Total property and equipment, net
8,215 
6,793 
Rest of the world
 
 
Long-Lived Assets By Geographical Area
 
 
Total property and equipment, net
$ 2,413 1
$ 1,798 1