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Quarterly Earnings Slides
         Q2 2012
Safe Harbor
This presentation contains forward-looking statements, which are subject to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical
facts contained in this presentation, including statements regarding our estimates of future stock based
compensation expense, are forward-looking statements. These forward-looking statements are only
predictions and may differ materially from actual results due to a variety of factors, including variations in
the future price of our common stock as well as future grants and forfeitures of equity awards. In addition,
please note that the date of this presentation is July 26, 2012, and any forward-looking statements
contained herein are based on assumptions that we believe to be reasonable as of this date. We
undertake no obligation to update these statements as a result of new information or future events.



In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These
non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial
performance prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to
the corresponding GAAP measures is provided in the appendix to this presentation. Please also see the
appendix to this presentation for information concerning limitations of our key user metrics.
Monthly Active Users (MAUs)
Millions of MAUs
                                                                                                                                                             955
       Rest of World
                                                                                                                                                      901
       Asia
                                                                                                                               845
       Europe                                                                                              800                                               268
       US & Canada                                                                     739                                                            245
                                                                  680                                                          225
                                                                                                           207
                                              608                                      183
                          550                                      161
                                              133                                                                                                     234    255
      482                                                                                                                      212
                          126                                                                              196
                                                                                       174
       98                                                          156
                                              138
                          113
       96
                                                                                                           221                 229                    239    246
                                                                   201                 212
                          167                 183
      151


                          144                 154                  163                 169                 176                 179                    183    186
      137

   Q2'10               Q3'10               Q4'10               Q1'11               Q2'11                Q3'11               Q4'11               Q1'12       Q2'12
Please see Facebook’s final prospectus filed with the SEC on May 18, 2012 for definitions of user activity used to determine the number of our
MAUs, DAUs and mobile MAUs. In June 2012, we discovered an error in the algorithm we used to estimate the geographic location of our
users that affected our attribution of certain user locations for the first quarter of 2012. The first quarter of 2012 user metrics above reflect a
reclassification to more correctly attribute users by geographic region.

                                                                                                                                                                    3
Daily Active Users (DAUs)
                                                                                                                                                      552
Millions of DAUs                                                                                                                              526
       Rest of World                                                                                                     483
                                                                                                       457                                            139
       Asia                                                                                                                                   126
       Europe                                                                      417                                    109
                                                               372                                     100
       US & Canada
                                                                                    87
                                             327                                                                                              119     129
                                                                 74                                                       105
                         293                  58                                                        98
      257                                                                           85
                          54                                     72
      42                                      64
                          54                                                                                                                  152     154
       45                                                                                              135                143
                                                                                   127
                                             107                120
       85                 94


                                                                105                117                 124                126                 129     130
       85                 92                  99

   Q2'10               Q3'10              Q4'10              Q1'11               Q2'11              Q3'11              Q4'11                 Q1'12   Q2'12
DAUs / MAUs
     Q2'10             Q3'10               Q4'10               Q1'11               Q2'11              Q3'11              Q4'11               Q1'12   Q2'12
      53%               53%                 54%                 55%                 56%                57%                57%                 58%     58%

Please see Facebook’s final prospectus filed with the SEC on May 18, 2012 for definitions of user activity used to determine the number of
our MAUs, DAUs and mobile MAUs. For non-worldwide DAU user numbers presented for the periods marked March 31, 2012 and June 30,
2012, the figures represent an average of the first 25 days of the period and the last 27 days of the period, respectively, due to the
algorithm error described in the MAU note on slide 3. These average numbers do not meaningfully differ from the average numbers when
calculated over a full month.
                                                                                                                                                             4
Mobile Monthly Active Users (Mobile MAUs)
Millions of Mobile MAUs
                                                                                                                                                      543
                                                                                                                                              488
                                                                                                                           432
                                                                                                       376
                                                                                    325
                                                                288
                                            245
                         196
     155




  Q2'10               Q3'10               Q4'10              Q1'11               Q2'11              Q3'11               Q4'11                Q1'12   Q2'12
Please see Facebook’s final prospectus filed with the SEC on May 18, 2012 for definitions of user activity used to determine the number of
our MAUs, DAUs and mobile MAUs.



                                                                                                                                                             5
Revenue
Millions of Dollars
                                                                              $1,184
  Payments and other fees                                   $1,131
  Advertising                                                        $1,058
                                                                              $192
                                                    $954    $188
                                            $895                     $186
                                                    $156
                            $731    $731    $119

                             $76     $94
                $467
  $432
                                                            $943              $992
                 $17                                                 $872
   $8
                                            $776    $798
                            $655    $637
  $424          $450



 Q2'10          Q3'10       Q4'10   Q1'11   Q2'11   Q3'11   Q4'11    Q1'12    Q2'12




                                                                                       6
Revenue by User Geography
Millions of Dollars                                                                                                                         $1,184
                                                                                                                        $1,131
       Rest of World                                                                                                               $1,058   $113
                                                                                                                          $87
       Asia
                                                                                                      $954                          $87     $135
       Europe                                                                                                            $115
                                                                                   $895                $78
       US & Canada                                                                                                                 $118
                                                                                    $65
                                                                                                      $104
                                            $731               $731                 $82                                                     $346
                                                                                                                         $361
                                            $43                $47                                                                 $328
                                            $58                $62
                                                                                   $275               $290
                        $467                $218               $229
     $432                $25
      $21                $37
     $31
     $129               $134
                                                                                                                         $567               $590
                                                                                                      $482                         $525
                                                                                   $471
                                            $412               $394
     $249               $271


   Q2'10              Q3'10               Q4'10              Q1'11              Q2'11               Q3'11              Q4'11       Q1'12    Q2'12

Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when
they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated
financial statements where revenue is geographically apportioned based on the location of the advertiser or developer.


                                                                                                                                                     7
Average Revenue per User (ARPU)
US & Canada& Canada                                                                                Europe
                                                      $3.20            $3.20
                                                                                                                                                       $1.60   $1.40     $1.43
                  $2.77             $2.84     $2.80           $2.90                                                                   $1.33    $1.34
                            $2.49                                                                                   $1.25
                                                                                                                              $1.19

 $1.87   $1.93                                                                                     $0.90    $0.84




Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12                                             Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12



Asia                                         $0.56    $0.56            $0.55
                                                                                                   Rest of World                                                         $0.44
                                                              $0.53                                                                           $0.40    $0.41
                                    $0.50                                                                                             $0.38                    $0.37
                 $0.46                                                                                              $0.33
                           $0.43                                                                                              $0.31
$0.36    $0.36
                                                                                                   $0.23    $0.22




Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12                                             Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12


 Worldwide
     Q2'10               Q3'10              Q4'10              Q1'11               Q2'11              Q3'11              Q4'11                Q1'12             Q2'12
     $0.94                $0.90             $1.26              $1.14               $1.26               $1.24                $1.38             $1.21              $1.28

 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when
 they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated
 financial statements where revenue is geographically apportioned based on the location of the
 advertiser or developer. The ARPU amount for US & Canada region in Q1 2012 reflects an adjustment based on the
 reclassification of certain users between geographical regions to more correctly attribute users by geographic region.
                                                                                                                                                                                 8
Share-Based Compensation Expense
                                                                                                                 $1,106
Millions of Dollars
      Pre-2011 RSUs
      Post-2011 RSUs
      Options & Other




                                                                                                                 $986




                                                                                                                          ~ $180   ~ $185
                                                                                                                            $35      $30
                                                                                                         $103
                                                                   $64            $70             $76
                                                                                                                 $113      $135     $145
      $5             $4              $6             $7             $58            $59             $74     $97

  Q2'10          Q3'10           Q4'10          Q1'11           Q2'11          Q3'11             Q4'11   Q1'12   Q2'12    Q3'12E Q4'12E

Q3 and Q4 2012 expenses are estimates and exclude any potential impact of future acquisitions.




                                                                                                                                            9
Expenses as a % of Revenue
      Share-based compensation + Payroll tax related to share-based compensation                                    All other expenses

 Cost of Revenue                                            31%                        Research & Development                            60%
                 25%                          26%
   23%
                               22%



   23%           24%                          26%           25%
                               22%                                                                                             14%
                                                                                         11%           11%          11%

                                                                                          7%            8%          7%         9%        9%
 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12                                                         Q2'11 Q3'11 Q4'11 Q1'12 Q2'12

Marketing & Sales                                         33%                                                                            39%
                                                                                      General & Administrative




                12%                         14%
 11%                          11%
                                                                                         9%             9%          8%        10%
  9%            11%            9%           12%           11%                                                                            11%
                                                                                         7%             6%          7%         8%

Q2'11 Q3'11 Q4'11 Q1'12 Q2'12                                                          Q2'11 Q3'11 Q4'11 Q1'12 Q2'12
We have reclassified certain prior period amounts in marketing and sales to general and administrative expense to
conform to our current period presentation. These reclassifications did not affect revenue, total costs and
expenses, income (loss) from operations, or net (loss) income.

                                                                                                                                               10
GAAP Income (loss) from Operations & Margin
Income (loss) from Operations ($M)

                   $437                              $548
                            $388      $407   $414            $381
 $218     $216




                                                                     $(743)
Q2'10    Q3'10    Q4'10    Q1'11     Q2'11   Q3'11   Q4'11   Q1'12   Q2'12


% of Revenue

 51%      46%      60%      53%                      48%
                                     45%     43%             36%




                                                                     (63%)
Q2'10    Q3'10    Q4'10    Q1'11     Q2'11   Q3'11   Q4'11   Q1'12   Q2'12




                                                                              11
GAAP Net Income (loss)
Millions of Dollars

                                                $302
                 $251           $240
                        $233            $227
                                                        $205

 $129    $131




                                                                $(157)
Q2'10   Q3'10   Q4'10   Q1'11   Q2'11   Q3'11   Q4'11   Q1'12   Q2'12




                                                                         12
Non-GAAP Net Income
Millions of Dollars
                                                                                                                     $582
                                                                                                   $531




                                      $295
                  $285




             Q2 2011              Q2 2012                                                         1H'11             1H'12

                       Quarterly                                                                              YTD



Non-GAAP net income excludes share based compensation expense, related payroll tax expense and other income
tax adjustments—see the Appendix for a reconciliation of this non-GAAP measure to GAAP net income.


                                                                                                                            13
Capital Investments
Millions of Dollars                  $1,079
   Property and equipment acquired
                                                            $956
   under capital leases
   Purchases of property
                                                             $90
                                     $473
   and equipment



                                              $576
                             $510

                                              $291          $866
                             $217
                                     $606


             $89             $293             $285
             $56
             $33
            2009            2010     2011     1H'11         1H'12
                           Annual                     YTD




                                                                    14
Employees
Period-end Headcount


                                              3,976

                        3,200
                                2,661

                2,127


       1,218




      2009     2010     2011    1H'11         1H'12
               Annual                   YTD




                                                      15
Appendix
Reconciliations

                                                                Three Months Ended         Six Months Ended
                                                                      June 30,                  June 30,
                                                                 2011          2012        2011          2012
GAAP net income (loss)                                         $    240     $    (157)   $     471    $      48
    Share-based compensation expense                                  64        1,106           71        1,209
    Payroll tax expenses related to share-based compensation           6          152            7          153
    Income tax adjustments                                           (25)        (806)         (18)        (828)
Non-GAAP net income                                            $    285     $     295    $     531    $     582




                                                                                                                   17
Limitations of Key Metrics
The numbers of our MAUs and DAUs and average revenue per user (ARPU) are calculated using internal
company data. While these numbers are based on what we believe to be reasonable estimates of our user
base for the applicable period of measurement, there are inherent challenges in measuring usage of our
products across large online and mobile populations around the world. For example, there may be
individuals who maintain one or more Facebook accounts in violation of our terms of service, despite our
efforts to detect and suppress such behavior. We estimate that “duplicate” accounts (an account that a
user maintains in addition to his or her principal account) may have represented approximately 4.8% of
our worldwide MAUs as of June 30, 2012. We also seek to identify “false” accounts, which we divide into
two categories: (1) user-misclassified accounts, where users have created personal profiles for a
business, organization, or non-human entity such as a pet (such entities are permitted on Facebook using
a Page rather than a personal profile under our terms of service); and (2) undesirable accounts, which
represent user profiles that we determine are intended to be used for purposes that violate our terms of
service, such as spamming. As of June 30, 2012, we estimate user-misclassified accounts may have
represented approximately 2.4% of our worldwide MAUs and undesirable accounts may have represented
approximately 1.5% of our worldwide MAUs. We believe the percentage of accounts that are duplicate or
false is meaningfully lower in developed markets such as the United States or Australia and higher in
developing markets such as Indonesia and Turkey. However, these estimates are based on an internal
review of a limited sample of accounts and we apply significant judgment in making this determination,
such as identifying names that appear to be fake or other behavior that appears inauthentic to the
reviewers. As such, our estimation of duplicate or false accounts may not accurately represent the actual
number of such accounts. We are continually seeking to improve our ability to identify duplicate or false
accounts and estimate the total number of such accounts, and such estimates may be affected by
improvements or changes in our methodology.




                                                                                                            18
Limitations of Key Metrics (continued)
Our metrics are also affected by applications on certain mobile devices that automatically contact our
servers for regular updates with no user action involved, and this activity can cause our system to count
the user associated with such a device as an active user on the day such contact occurs. For example, we
estimate that less than 5% of our estimated worldwide DAUs as of December 31, 2011 and 2010 resulted
from this type of automatic mobile activity, and that this type of activity had a substantially smaller
effect on our estimate of worldwide MAUs and mobile MAUs. The impact of this automatic activity on our
metrics varies by geography because mobile usage varies in different regions of the world. In addition,
our data regarding the geographic location of our users is estimated based on a number of factors, such
as the user’s IP address and self-disclosed location. These factors may not always accurately reflect the
user’s actual location. For example, a mobile-only user may appear to be accessing Facebook from the
location of the proxy server that the user connects to rather than from the user’s actual location. The
methodologies used to measure user metrics may also be susceptible to algorithm or other technical
errors. For example, in early June 2012, we discovered an error in the algorithm we use to estimate the
geographic location of our users that affected our attribution of certain user locations for the period
ended March 31, 2012. While this issue did not affect our overall worldwide MAU number, it did affect our
attribution of users to different geographic regions. We estimate that the number of MAUs as of March
31, 2012 for the United States and Canada region was overstated as a result of the error by approximately
3% and these overstatements were offset by understatements in other regions. In addition, our
estimates for revenue by user location are also affected by these factors. We regularly review and may
adjust our processes for calculating these metrics to improve their accuracy. In addition, our MAU and
DAU estimates will differ from estimates published by third parties due to differences in methodology.
For example, some third parties do not count mobile users.




                                                                                                            19
Facebook's Q2 Earnings Slide Deck

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Facebook's Q2 Earnings Slide Deck

  • 2. Safe Harbor This presentation contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our estimates of future stock based compensation expense, are forward-looking statements. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including variations in the future price of our common stock as well as future grants and forfeitures of equity awards. In addition, please note that the date of this presentation is July 26, 2012, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events. In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the corresponding GAAP measures is provided in the appendix to this presentation. Please also see the appendix to this presentation for information concerning limitations of our key user metrics.
  • 3. Monthly Active Users (MAUs) Millions of MAUs 955 Rest of World 901 Asia 845 Europe 800 268 US & Canada 739 245 680 225 207 608 183 550 161 133 234 255 482 212 126 196 174 98 156 138 113 96 221 229 239 246 201 212 167 183 151 144 154 163 169 176 179 183 186 137 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Please see Facebook’s final prospectus filed with the SEC on May 18, 2012 for definitions of user activity used to determine the number of our MAUs, DAUs and mobile MAUs. In June 2012, we discovered an error in the algorithm we used to estimate the geographic location of our users that affected our attribution of certain user locations for the first quarter of 2012. The first quarter of 2012 user metrics above reflect a reclassification to more correctly attribute users by geographic region. 3
  • 4. Daily Active Users (DAUs) 552 Millions of DAUs 526 Rest of World 483 457 139 Asia 126 Europe 417 109 372 100 US & Canada 87 327 119 129 74 105 293 58 98 257 85 54 72 42 64 54 152 154 45 135 143 127 107 120 85 94 105 117 124 126 129 130 85 92 99 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 DAUs / MAUs Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 53% 53% 54% 55% 56% 57% 57% 58% 58% Please see Facebook’s final prospectus filed with the SEC on May 18, 2012 for definitions of user activity used to determine the number of our MAUs, DAUs and mobile MAUs. For non-worldwide DAU user numbers presented for the periods marked March 31, 2012 and June 30, 2012, the figures represent an average of the first 25 days of the period and the last 27 days of the period, respectively, due to the algorithm error described in the MAU note on slide 3. These average numbers do not meaningfully differ from the average numbers when calculated over a full month. 4
  • 5. Mobile Monthly Active Users (Mobile MAUs) Millions of Mobile MAUs 543 488 432 376 325 288 245 196 155 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Please see Facebook’s final prospectus filed with the SEC on May 18, 2012 for definitions of user activity used to determine the number of our MAUs, DAUs and mobile MAUs. 5
  • 6. Revenue Millions of Dollars $1,184 Payments and other fees $1,131 Advertising $1,058 $192 $954 $188 $895 $186 $156 $731 $731 $119 $76 $94 $467 $432 $943 $992 $17 $872 $8 $776 $798 $655 $637 $424 $450 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 6
  • 7. Revenue by User Geography Millions of Dollars $1,184 $1,131 Rest of World $1,058 $113 $87 Asia $954 $87 $135 Europe $115 $895 $78 US & Canada $118 $65 $104 $731 $731 $82 $346 $361 $43 $47 $328 $58 $62 $275 $290 $467 $218 $229 $432 $25 $21 $37 $31 $129 $134 $567 $590 $482 $525 $471 $412 $394 $249 $271 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the advertiser or developer. 7
  • 8. Average Revenue per User (ARPU) US & Canada& Canada Europe $3.20 $3.20 $1.60 $1.40 $1.43 $2.77 $2.84 $2.80 $2.90 $1.33 $1.34 $2.49 $1.25 $1.19 $1.87 $1.93 $0.90 $0.84 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Asia $0.56 $0.56 $0.55 Rest of World $0.44 $0.53 $0.40 $0.41 $0.50 $0.38 $0.37 $0.46 $0.33 $0.43 $0.31 $0.36 $0.36 $0.23 $0.22 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Worldwide Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 $0.94 $0.90 $1.26 $1.14 $1.26 $1.24 $1.38 $1.21 $1.28 Revenue by user geography is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue by geography disclosure in our consolidated financial statements where revenue is geographically apportioned based on the location of the advertiser or developer. The ARPU amount for US & Canada region in Q1 2012 reflects an adjustment based on the reclassification of certain users between geographical regions to more correctly attribute users by geographic region. 8
  • 9. Share-Based Compensation Expense $1,106 Millions of Dollars Pre-2011 RSUs Post-2011 RSUs Options & Other $986 ~ $180 ~ $185 $35 $30 $103 $64 $70 $76 $113 $135 $145 $5 $4 $6 $7 $58 $59 $74 $97 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12E Q4'12E Q3 and Q4 2012 expenses are estimates and exclude any potential impact of future acquisitions. 9
  • 10. Expenses as a % of Revenue Share-based compensation + Payroll tax related to share-based compensation All other expenses Cost of Revenue 31% Research & Development 60% 25% 26% 23% 22% 23% 24% 26% 25% 22% 14% 11% 11% 11% 7% 8% 7% 9% 9% Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Marketing & Sales 33% 39% General & Administrative 12% 14% 11% 11% 9% 9% 8% 10% 9% 11% 9% 12% 11% 11% 7% 6% 7% 8% Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 We have reclassified certain prior period amounts in marketing and sales to general and administrative expense to conform to our current period presentation. These reclassifications did not affect revenue, total costs and expenses, income (loss) from operations, or net (loss) income. 10
  • 11. GAAP Income (loss) from Operations & Margin Income (loss) from Operations ($M) $437 $548 $388 $407 $414 $381 $218 $216 $(743) Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 % of Revenue 51% 46% 60% 53% 48% 45% 43% 36% (63%) Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 11
  • 12. GAAP Net Income (loss) Millions of Dollars $302 $251 $240 $233 $227 $205 $129 $131 $(157) Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 12
  • 13. Non-GAAP Net Income Millions of Dollars $582 $531 $295 $285 Q2 2011 Q2 2012 1H'11 1H'12 Quarterly YTD Non-GAAP net income excludes share based compensation expense, related payroll tax expense and other income tax adjustments—see the Appendix for a reconciliation of this non-GAAP measure to GAAP net income. 13
  • 14. Capital Investments Millions of Dollars $1,079 Property and equipment acquired $956 under capital leases Purchases of property $90 $473 and equipment $576 $510 $291 $866 $217 $606 $89 $293 $285 $56 $33 2009 2010 2011 1H'11 1H'12 Annual YTD 14
  • 15. Employees Period-end Headcount 3,976 3,200 2,661 2,127 1,218 2009 2010 2011 1H'11 1H'12 Annual YTD 15
  • 17. Reconciliations Three Months Ended Six Months Ended June 30, June 30, 2011 2012 2011 2012 GAAP net income (loss) $ 240 $ (157) $ 471 $ 48 Share-based compensation expense 64 1,106 71 1,209 Payroll tax expenses related to share-based compensation 6 152 7 153 Income tax adjustments (25) (806) (18) (828) Non-GAAP net income $ 285 $ 295 $ 531 $ 582 17
  • 18. Limitations of Key Metrics The numbers of our MAUs and DAUs and average revenue per user (ARPU) are calculated using internal company data. While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring usage of our products across large online and mobile populations around the world. For example, there may be individuals who maintain one or more Facebook accounts in violation of our terms of service, despite our efforts to detect and suppress such behavior. We estimate that “duplicate” accounts (an account that a user maintains in addition to his or her principal account) may have represented approximately 4.8% of our worldwide MAUs as of June 30, 2012. We also seek to identify “false” accounts, which we divide into two categories: (1) user-misclassified accounts, where users have created personal profiles for a business, organization, or non-human entity such as a pet (such entities are permitted on Facebook using a Page rather than a personal profile under our terms of service); and (2) undesirable accounts, which represent user profiles that we determine are intended to be used for purposes that violate our terms of service, such as spamming. As of June 30, 2012, we estimate user-misclassified accounts may have represented approximately 2.4% of our worldwide MAUs and undesirable accounts may have represented approximately 1.5% of our worldwide MAUs. We believe the percentage of accounts that are duplicate or false is meaningfully lower in developed markets such as the United States or Australia and higher in developing markets such as Indonesia and Turkey. However, these estimates are based on an internal review of a limited sample of accounts and we apply significant judgment in making this determination, such as identifying names that appear to be fake or other behavior that appears inauthentic to the reviewers. As such, our estimation of duplicate or false accounts may not accurately represent the actual number of such accounts. We are continually seeking to improve our ability to identify duplicate or false accounts and estimate the total number of such accounts, and such estimates may be affected by improvements or changes in our methodology. 18
  • 19. Limitations of Key Metrics (continued) Our metrics are also affected by applications on certain mobile devices that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count the user associated with such a device as an active user on the day such contact occurs. For example, we estimate that less than 5% of our estimated worldwide DAUs as of December 31, 2011 and 2010 resulted from this type of automatic mobile activity, and that this type of activity had a substantially smaller effect on our estimate of worldwide MAUs and mobile MAUs. The impact of this automatic activity on our metrics varies by geography because mobile usage varies in different regions of the world. In addition, our data regarding the geographic location of our users is estimated based on a number of factors, such as the user’s IP address and self-disclosed location. These factors may not always accurately reflect the user’s actual location. For example, a mobile-only user may appear to be accessing Facebook from the location of the proxy server that the user connects to rather than from the user’s actual location. The methodologies used to measure user metrics may also be susceptible to algorithm or other technical errors. For example, in early June 2012, we discovered an error in the algorithm we use to estimate the geographic location of our users that affected our attribution of certain user locations for the period ended March 31, 2012. While this issue did not affect our overall worldwide MAU number, it did affect our attribution of users to different geographic regions. We estimate that the number of MAUs as of March 31, 2012 for the United States and Canada region was overstated as a result of the error by approximately 3% and these overstatements were offset by understatements in other regions. In addition, our estimates for revenue by user location are also affected by these factors. We regularly review and may adjust our processes for calculating these metrics to improve their accuracy. In addition, our MAU and DAU estimates will differ from estimates published by third parties due to differences in methodology. For example, some third parties do not count mobile users. 19