false2021Q2000132680112/3100013268012021-01-012021-06-30xbrli:shares0001326801us-gaap:CommonClassAMember2021-07-230001326801us-gaap:CommonClassBMember2021-07-23iso4217:USD00013268012021-06-3000013268012020-12-31iso4217:USDxbrli:shares0001326801us-gaap:CommonClassAMember2021-06-300001326801us-gaap:CommonClassAMember2020-12-310001326801us-gaap:CommonClassBMember2020-12-310001326801us-gaap:CommonClassBMember2021-06-3000013268012021-04-012021-06-3000013268012020-04-012020-06-3000013268012020-01-012020-06-300001326801us-gaap:CostOfSalesMember2021-04-012021-06-300001326801us-gaap:CostOfSalesMember2020-04-012020-06-300001326801us-gaap:CostOfSalesMember2021-01-012021-06-300001326801us-gaap:CostOfSalesMember2020-01-012020-06-300001326801us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-300001326801us-gaap:ResearchAndDevelopmentExpenseMember2020-04-012020-06-300001326801us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-06-300001326801us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-06-300001326801us-gaap:SellingAndMarketingExpenseMember2021-04-012021-06-300001326801us-gaap:SellingAndMarketingExpenseMember2020-04-012020-06-300001326801us-gaap:SellingAndMarketingExpenseMember2021-01-012021-06-300001326801us-gaap:SellingAndMarketingExpenseMember2020-01-012020-06-300001326801us-gaap:GeneralAndAdministrativeExpenseMember2021-04-012021-06-300001326801us-gaap:GeneralAndAdministrativeExpenseMember2020-04-012020-06-300001326801us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-06-300001326801us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-06-300001326801us-gaap:CommonStockMember2021-03-310001326801us-gaap:AdditionalPaidInCapitalMember2021-03-310001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001326801us-gaap:RetainedEarningsMember2021-03-3100013268012021-03-310001326801us-gaap:CommonStockMember2020-03-310001326801us-gaap:AdditionalPaidInCapitalMember2020-03-310001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001326801us-gaap:RetainedEarningsMember2020-03-3100013268012020-03-310001326801us-gaap:CommonStockMember2021-04-012021-06-300001326801us-gaap:CommonStockMember2020-04-012020-06-300001326801us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001326801us-gaap:RetainedEarningsMember2021-04-012021-06-300001326801us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001326801us-gaap:RetainedEarningsMember2020-04-012020-06-300001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001326801us-gaap:CommonStockMember2021-06-300001326801us-gaap:AdditionalPaidInCapitalMember2021-06-300001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001326801us-gaap:RetainedEarningsMember2021-06-300001326801us-gaap:CommonStockMember2020-06-300001326801us-gaap:AdditionalPaidInCapitalMember2020-06-300001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001326801us-gaap:RetainedEarningsMember2020-06-3000013268012020-06-300001326801us-gaap:CommonStockMember2020-12-310001326801us-gaap:AdditionalPaidInCapitalMember2020-12-310001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001326801us-gaap:RetainedEarningsMember2020-12-310001326801us-gaap:CommonStockMember2019-12-310001326801us-gaap:AdditionalPaidInCapitalMember2019-12-310001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001326801us-gaap:RetainedEarningsMember2019-12-3100013268012019-12-310001326801us-gaap:CommonStockMember2021-01-012021-06-300001326801us-gaap:CommonStockMember2020-01-012020-06-300001326801us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300001326801us-gaap:RetainedEarningsMember2021-01-012021-06-300001326801us-gaap:AdditionalPaidInCapitalMember2020-01-012020-06-300001326801us-gaap:RetainedEarningsMember2020-01-012020-06-300001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-06-300001326801us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-06-300001326801us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-06-300001326801us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-06-300001326801us-gaap:OtherAssetsMember2021-06-300001326801us-gaap:OtherAssetsMember2020-06-300001326801us-gaap:AdvertisingMember2021-04-012021-06-300001326801us-gaap:AdvertisingMember2020-04-012020-06-300001326801us-gaap:AdvertisingMember2021-01-012021-06-300001326801us-gaap:AdvertisingMember2020-01-012020-06-300001326801us-gaap:ServiceOtherMember2021-04-012021-06-300001326801us-gaap:ServiceOtherMember2020-04-012020-06-300001326801us-gaap:ServiceOtherMember2021-01-012021-06-300001326801us-gaap:ServiceOtherMember2020-01-012020-06-300001326801fb:USCanadaMember2021-04-012021-06-300001326801fb:USCanadaMember2020-04-012020-06-300001326801fb:USCanadaMember2021-01-012021-06-300001326801fb:USCanadaMember2020-01-012020-06-300001326801srt:EuropeMember2021-04-012021-06-300001326801srt:EuropeMember2020-04-012020-06-300001326801srt:EuropeMember2021-01-012021-06-300001326801srt:EuropeMember2020-01-012020-06-300001326801srt:AsiaPacificMember2021-04-012021-06-300001326801srt:AsiaPacificMember2020-04-012020-06-300001326801srt:AsiaPacificMember2021-01-012021-06-300001326801srt:AsiaPacificMember2020-01-012020-06-300001326801fb:RestOfWorldMember2021-04-012021-06-300001326801fb:RestOfWorldMember2020-04-012020-06-300001326801fb:RestOfWorldMember2021-01-012021-06-300001326801fb:RestOfWorldMember2020-01-012020-06-300001326801country:US2021-04-012021-06-300001326801country:US2020-04-012020-06-300001326801country:US2021-01-012021-06-300001326801country:US2020-01-012020-06-300001326801us-gaap:CommonClassAMember2021-04-012021-06-300001326801us-gaap:CommonClassBMember2021-04-012021-06-300001326801us-gaap:CommonClassAMember2020-04-012020-06-300001326801us-gaap:CommonClassBMember2020-04-012020-06-300001326801us-gaap:CommonClassAMember2021-01-012021-06-300001326801us-gaap:CommonClassBMember2021-01-012021-06-300001326801us-gaap:CommonClassAMember2020-01-012020-06-300001326801us-gaap:CommonClassBMember2020-01-012020-06-300001326801us-gaap:CashMember2021-06-300001326801us-gaap:CashMember2020-12-310001326801us-gaap:MoneyMarketFundsMember2021-06-300001326801us-gaap:MoneyMarketFundsMember2020-12-310001326801us-gaap:USGovernmentDebtSecuritiesMember2021-06-300001326801us-gaap:USGovernmentDebtSecuritiesMember2020-12-310001326801us-gaap:BankTimeDepositsMember2021-06-300001326801us-gaap:BankTimeDepositsMember2020-12-310001326801us-gaap:CorporateDebtSecuritiesMember2021-06-300001326801us-gaap:CorporateDebtSecuritiesMember2020-12-310001326801us-gaap:USGovernmentDebtSecuritiesMember2021-06-300001326801us-gaap:USGovernmentDebtSecuritiesMember2020-12-310001326801us-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-06-300001326801us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001326801us-gaap:CorporateDebtSecuritiesMember2021-06-300001326801us-gaap:CorporateDebtSecuritiesMember2020-12-310001326801us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2021-06-300001326801us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2021-06-300001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-06-300001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-06-300001326801us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel1Member2021-06-300001326801us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Member2021-06-300001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-06-300001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-06-300001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-06-300001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-06-300001326801us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-06-300001326801us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-06-300001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-06-300001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-06-300001326801us-gaap:FairValueInputsLevel1Member2021-06-300001326801us-gaap:FairValueInputsLevel2Member2021-06-300001326801us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2020-12-310001326801us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2020-12-310001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001326801us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel1Member2020-12-310001326801us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Member2020-12-310001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001326801us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001326801us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001326801us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001326801us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001326801us-gaap:FairValueInputsLevel1Member2020-12-310001326801us-gaap:FairValueInputsLevel2Member2020-12-310001326801us-gaap:LandMember2021-06-300001326801us-gaap:LandMember2020-12-310001326801us-gaap:BuildingMember2021-06-300001326801us-gaap:BuildingMember2020-12-310001326801us-gaap:LeaseholdImprovementsMember2021-06-300001326801us-gaap:LeaseholdImprovementsMember2020-12-310001326801fb:NetworkEquipmentMember2021-06-300001326801fb:NetworkEquipmentMember2020-12-310001326801fb:ComputerSoftwareOfficeEquipmentAndOtherMember2021-06-300001326801fb:ComputerSoftwareOfficeEquipmentAndOtherMember2020-12-310001326801us-gaap:ConstructionInProgressMember2021-06-300001326801us-gaap:ConstructionInProgressMember2020-12-31xbrli:pure0001326801srt:MinimumMember2021-01-012021-06-300001326801srt:MaximumMember2021-01-012021-06-300001326801fb:AcquiredusersMember2021-01-012021-06-300001326801fb:AcquiredusersMember2021-06-300001326801fb:AcquiredusersMember2020-12-310001326801us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-06-300001326801us-gaap:TechnologyBasedIntangibleAssetsMember2021-06-300001326801us-gaap:TechnologyBasedIntangibleAssetsMember2020-12-310001326801us-gaap:PatentsMember2021-01-012021-06-300001326801us-gaap:PatentsMember2021-06-300001326801us-gaap:PatentsMember2020-12-310001326801us-gaap:TradeNamesMember2021-01-012021-06-300001326801us-gaap:TradeNamesMember2021-06-300001326801us-gaap:TradeNamesMember2020-12-310001326801us-gaap:OtherIntangibleAssetsMember2021-01-012021-06-300001326801us-gaap:OtherIntangibleAssetsMember2021-06-300001326801us-gaap:OtherIntangibleAssetsMember2020-12-31fb:claim00013268012018-07-272018-07-270001326801fb:UnitedStatesFederalTradeCommissionInquiryMember2020-04-012020-04-300001326801fb:IllinoisBiometricInformationPrivacyActMember2020-01-150001326801fb:IllinoisBiometricInformationPrivacyActMemberus-gaap:SettledLitigationMember2021-03-312021-03-3100013268012020-01-31fb:plan0001326801fb:EquityIncentivePlan2012Memberus-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001326801fb:EquityIncentivePlan2012Member2021-01-010001326801fb:EquityIncentivePlan2012Member2021-01-012021-06-300001326801us-gaap:RestrictedStockUnitsRSUMember2020-12-310001326801us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001326801us-gaap:RestrictedStockUnitsRSUMember2021-06-300001326801us-gaap:RestrictedStockUnitsRSUMember2021-04-012021-06-300001326801us-gaap:RestrictedStockUnitsRSUMember2020-04-012020-06-300001326801us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001326801us-gaap:TaxYear2010Memberus-gaap:InternalRevenueServiceIRSMember2020-01-152020-01-150001326801fb:TaxYears2011Through2013Memberus-gaap:InternalRevenueServiceIRSMember2011-01-012013-12-31fb:notice0001326801fb:TaxYears2011Through2013Memberus-gaap:InternalRevenueServiceIRSMember2018-03-310001326801country:US2021-06-300001326801country:US2020-12-310001326801us-gaap:NonUsMember2021-06-300001326801us-gaap:NonUsMember2020-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________ 
FORM 10-Q
____________________________________________ 
(Mark One)
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
Commission File Number: 001-35551
____________________________________________ 
Facebook, Inc.
(Exact name of registrant as specified in its charter)
____________________________________________ 
Delaware20-1665019
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
1601 Willow Road, Menlo Park, California 94025
(Address of principal executive offices and Zip Code)

(650543-4800
(Registrant's telephone number, including area code)
 ____________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.000006FBThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No    
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date.
ClassNumber of Shares Outstanding
Class A Common Stock $0.000006 par value2,383,812,263 shares outstanding as of July 23, 2021
Class B Common Stock $0.000006 par value435,632,238 shares outstanding as of July 23, 2021




FACEBOOK, INC.

TABLE OF CONTENTS

  Page 
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.
2



Table of Contents
NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward‑looking statements.
We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward‑looking statements.
Unless expressly indicated or the context requires otherwise, the terms "Facebook," "company," "we," "us," and "our" in this document refer to Facebook, Inc., a Delaware corporation, and, where appropriate, its subsidiaries. The term "Facebook" may also refer to our products, regardless of the manner in which they are accessed. The term "Family" refers to our Facebook, Instagram, Messenger, and WhatsApp products. For references to accessing Facebook or our other products on the "web" or via a "website," such terms refer to accessing such products on personal computers. For references to accessing Facebook or our other products on "mobile," such term refers to accessing such products via a mobile application or via a mobile-optimized version of our websites such as m.facebook.com, whether on a mobile phone or tablet.

3



Table of Contents
LIMITATIONS OF KEY METRICS AND OTHER DATA

The numbers for our key metrics are calculated using internal company data based on the activity of user accounts. We have historically reported the numbers of our daily active users (DAUs), monthly active users (MAUs), and average revenue per user (ARPU) (collectively, our "Facebook metrics") based on user activity only on Facebook and Messenger and not on our other products. Beginning with our Annual Report on Form 10-K for the year ended December 31, 2019, we also report our estimates of the numbers of our daily active people (DAP), monthly active people (MAP), and average revenue per person (ARPP) (collectively, our "Family metrics") based on the activity of users who visited at least one of Facebook, Instagram, Messenger, and WhatsApp (collectively, our "Family" of products) during the applicable period of measurement. We believe our Family metrics better reflect the size of our community and the fact that many people are using more than one of our products. As a result, over time we intend to report our Family metrics as key metrics in place of DAUs, MAUs, and ARPU in our periodic reports filed with the Securities and Exchange Commission.

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. The methodologies used to measure these metrics require significant judgment and are also susceptible to algorithm or other technical errors. In addition, we are continually seeking to improve our estimates of our user base, and such estimates may change due to improvements or changes in our methodology. We regularly review our processes for calculating these metrics, and from time to time we discover inaccuracies in our metrics or make adjustments to improve their accuracy, which can result in adjustments to our historical metrics. Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments. We generally do not intend to update previously disclosed Family metrics for any such inaccuracies or adjustments that are within the error margins disclosed below.

In addition, our Facebook metrics and Family metrics estimates will differ from estimates published by third parties due to differences in methodology.

Facebook Metrics

We regularly evaluate our Facebook metrics to estimate the number of "duplicate" and "false" accounts among our MAUs. A duplicate account is one that a user maintains in addition to his or her principal account. We divide "false" accounts 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) violating accounts, which represent user profiles that we believe are intended to be used for purposes that violate our terms of service, such as bots and spam. The estimates of duplicate and false accounts are based on an internal review of a limited sample of accounts, and we apply significant judgment in making this determination. For example, to identify duplicate accounts we use data signals such as identical IP addresses and similar user names, and to identify false accounts we look for names that appear to be fake or other behavior that appears inauthentic to the reviewers. Any loss of access to data signals we use in this process, whether as a result of our own product decisions, actions by third-party browser or mobile platforms, regulatory or legislative requirements, limitations while our personnel work remotely during the COVID-19 pandemic, or other factors, also may impact the stability or accuracy of our estimates of duplicate and false accounts. Our estimates also may change as our methodologies evolve, including through the application of new data signals or technologies or product changes that may allow us to identify previously undetected duplicate or false accounts and may improve our ability to evaluate a broader population of our users. Duplicate and false accounts are very difficult to measure at our scale, and it is possible that the actual number of duplicate and false accounts may vary significantly from our estimates.

In the fourth quarter of 2020, we estimated that duplicate accounts may have represented approximately 11% of our worldwide MAUs. We believe the percentage of duplicate accounts is meaningfully higher in developing markets such as the Philippines and Vietnam, as compared to more developed markets. In the fourth quarter of 2020, we estimated that false accounts may have represented approximately 5% of our worldwide MAUs. Our estimation of false accounts can vary as a result of episodic spikes in the creation of such accounts, which we have seen originate more frequently in specific countries such as Indonesia and Vietnam. From time to time, we disable certain user accounts, make product changes, or take other actions to reduce the number of duplicate or false accounts among our users, which may also reduce our DAU and MAU
4



Table of Contents
estimates in a particular period. We intend to disclose our estimates of the number of duplicate and false accounts among our MAUs on an annual basis.

The numbers of DAUs and MAUs discussed in this Quarterly Report on Form 10-Q, as well as ARPU, do not include users on Instagram, WhatsApp, or our other products, unless they would otherwise qualify as DAUs or MAUs, respectively, based on their other activities on Facebook.

Family Metrics

Many people in our community have user accounts on more than one of our products, and some people have multiple user accounts within an individual product. Accordingly, for our Family metrics, we do not seek to count the total number of user accounts across our products because we believe that would not reflect the actual size of our community. Rather, our Family metrics represent our estimates of the number of unique people using at least one of Facebook, Instagram, Messenger, and WhatsApp. We do not require people to use a common identifier or link their accounts to use multiple products in our Family, and therefore must seek to attribute multiple user accounts within and across products to individual people. To calculate these metrics, we rely upon complex techniques, algorithms and machine learning models that seek to count the individual people behind user accounts, including by matching multiple user accounts within an individual product and across multiple products when we believe they are attributable to a single person, and counting such group of accounts as one person. These techniques and models require significant judgment, are subject to data and other limitations discussed below, and inherently are subject to statistical variances and uncertainties. We estimate the potential error in our Family metrics primarily based on user survey data, which itself is subject to error as well. While we expect the error margin for our Family metrics to vary from period to period, we estimate that such margin generally will be approximately 4% of our worldwide MAP. At our scale, it is very difficult to attribute multiple user accounts within and across products to individual people, and it is possible that the actual numbers of unique people using our products may vary significantly from our estimates, potentially beyond our estimated error margins. As a result, it is also possible that our Family metrics may indicate changes or trends in user numbers that do not match actual changes or trends.

To calculate our estimates of Family DAP and MAP, we currently use a series of machine learning models that are developed based on internal reviews of limited samples of user accounts and calibrated against user survey data. We apply significant judgment in designing these models and calculating these estimates. For example, to match user accounts within individual products and across multiple products, we use data signals such as similar device information, IP addresses, and user names. We also calibrate our models against data from periodic user surveys of varying sizes and frequency across our products, which are inherently subject to error. The timing and results of such user surveys have in the past contributed, and may in the future contribute, to changes in our reported Family metrics from period to period. In addition, our data limitations may affect our understanding of certain details of our business and increase the risk of error for our Family metrics estimates. Our techniques and models rely on a variety of data signals from different products, and we rely on more limited data signals for some products compared to others. For example, as a result of limited visibility into encrypted products, we have fewer data signals from WhatsApp user accounts and primarily rely on phone numbers and device information to match WhatsApp user accounts with accounts on our other products. Similarly, although Messenger Kids users are included in our Family metrics, we do not seek to match their accounts with accounts on our other applications for purposes of calculating DAP and MAP. Any loss of access to data signals we use in our process for calculating Family metrics, whether as a result of our own product decisions, actions by third-party browser or mobile platforms, regulatory or legislative requirements, limitations while our personnel work remotely during the COVID-19 pandemic, or other factors, also may impact the stability or accuracy of our reported Family metrics, as well as our ability to report these metrics at all. Our estimates of Family metrics also may change as our methodologies evolve, including through the application of new data signals or technologies, product changes, or other improvements in our user surveys, algorithms, or machine learning that may improve our ability to match accounts within and across our products or otherwise evaluate the broad population of our users. In addition, such evolution may allow us to identify previously undetected violating accounts (as defined below).

We regularly evaluate our Family metrics to estimate the percentage of our MAP consisting solely of "violating" accounts. We define "violating" accounts as accounts which we believe are intended to be used for purposes that violate our terms of service, including bots and spam. In the fourth quarter of 2020, we estimated that approximately 3% of our worldwide MAP consisted solely of violating accounts. Such estimation is based on an internal review of a limited sample of accounts, and we apply significant judgment in making this determination. For example, we look for account information and behaviors associated with Facebook and Instagram accounts that appear to be inauthentic to the reviewers, but we have
5



Table of Contents
limited visibility into WhatsApp user activity due to encryption. In addition, if we believe an individual person has one or more violating accounts, we do not include such person in our violating accounts estimation as long as we believe they have one account that does not constitute a violating account. From time to time, we disable certain user accounts, make product changes, or take other actions to reduce the number of violating accounts among our users, which may also reduce our DAP and MAP estimates in a particular period. We intend to disclose our estimates of the percentage of our MAP consisting solely of violating accounts on an annual basis. Violating accounts are very difficult to measure at our scale, and it is possible that the actual number of violating accounts may vary significantly from our estimates.

The numbers of Family DAP and MAP discussed in this Quarterly Report on Form 10-Q, as well as ARPP, do not include users on our other products, unless they would otherwise qualify as DAP or MAP, respectively, based on their other activities on our Family products.

User Geography

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 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 our metrics are also susceptible to algorithm or other technical errors, and our estimates for revenue by user location and revenue by user device are also affected by these factors.

6



Table of Contents
PART I—FINANCIAL INFORMATION
Item 1.Financial Statements
FACEBOOK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except for number of shares and par value)
(Unaudited)
June 30,
2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents$16,186 $17,576 
Marketable securities47,894 44,378 
Accounts receivable, net of allowances of $108 million and $114 million as of June 30, 2021 and December 31, 2020, respectively
11,698 11,335 
Prepaid expenses and other current assets4,919 2,381 
Total current assets80,697 75,670 
Equity investments6,393 6,234 
Property and equipment, net50,909 45,633 
Operating lease right-of-use assets, net10,525 9,348 
Intangible assets, net514 623 
Goodwill19,219 19,050 
Other assets2,352 2,758 
Total assets$170,609 $159,316 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$973 $1,331 
Partners payable949 1,093 
Operating lease liabilities, current1,051 1,023 
Accrued expenses and other current liabilities11,510 11,152 
Deferred revenue and deposits391 382 
Total current liabilities14,874 14,981 
Operating lease liabilities, non-current10,956 9,631 
Other liabilities6,552 6,414 
Total liabilities32,382 31,026 
Commitments and contingencies
Stockholders' equity:
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,389 million and 2,406 million shares issued and outstanding, as of June 30, 2021 and December 31, 2020, respectively; 4,141 million Class B shares authorized, 437 million and 443 million shares issued and outstanding, as of June 30, 2021 and December 31, 2020, respectively
  
Additional paid-in capital52,845 50,018 
Accumulated other comprehensive income285 927 
Retained earnings85,097 77,345 
Total stockholders' equity138,227 128,290 
Total liabilities and stockholders' equity$170,609 $159,316 
See Accompanying Notes to Condensed Consolidated Financial Statements.
7



Table of Contents
FACEBOOK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Revenue$29,077 $18,687 $55,248 $36,423 
Costs and expenses:
Cost of revenue5,399 3,829 10,530 7,288 
Research and development6,096 4,462 11,293 8,477 
Marketing and sales3,259 2,840 6,102 5,627 
General and administrative1,956 1,593 3,578 3,175 
Total costs and expenses16,710 12,724 31,503 24,567 
Income from operations12,367 5,963 23,745 11,856 
Interest and other income, net146 168 271 136 
Income before provision for income taxes12,513 6,131 24,016 11,992 
Provision for income taxes2,119 953 4,124 1,911 
Net income$10,394 $5,178 $19,892 $10,081 
Earnings per share attributable to Class A and Class B common stockholders:
Basic$3.67 $1.82 $7.00 $3.54 
Diluted$3.61 $1.80 $6.90 $3.51 
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
Basic2,834 2,850 2,841 2,851 
Diluted2,877 2,879 2,881 2,876 
Share-based compensation expense included in costs and expenses:
Cost of revenue$163 $117 $281 $211 
Research and development1,967 1,261 3,376 2,260 
Marketing and sales239 187 413 336 
General and administrative179 130 309 223 
Total share-based compensation expense$2,548 $1,695 $4,379 $3,030 
See Accompanying Notes to Condensed Consolidated Financial Statements.
8



Table of Contents
FACEBOOK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Net income$10,394 $5,178 $19,892 $10,081 
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax169 247 (432)(129)
Change in unrealized gain (loss) on available-for-sale investments and other, net of tax(38)155 (210)476 
Comprehensive income$10,525 $5,580 $19,250 $10,428 
See Accompanying Notes to Condensed Consolidated Financial Statements.
9



Table of Contents
FACEBOOK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In millions)
(Unaudited) 
Three Months Ended June 30, 2021Three Months Ended June 30, 2020
Class A and Class B Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income Retained EarningsTotal Stockholders' EquityClass A and Class B Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossRetained EarningsTotal Stockholders' Equity
SharesPar ValueSharesPar Value
Balances at beginning of period2,841 $ $51,160 $154 $82,343 $133,657 2,851 $ $46,688 $(544)$59,160 $105,304 
Issuance of common stock11 — — — — — 10 — — — — — 
Shares withheld related to net share settlement(4)— (863)— (491)(1,354)(4)— (578)— (175)(753)
Share-based compensation— — 2,548 — — 2,548 — — 1,695 — — 1,695 
Share repurchases(22)— — — (7,149)(7,149)(7)— — — (1,379)(1,379)
Other comprehensive income— — — 131 — 131 — — — 402 — 402 
Net income— — — — 10,394 10,394 — — — — 5,178 5,178 
Balances at end of period2,826 $ $52,845 $285 $85,097 $138,227 2,850 $ $47,805 $(142)$62,784 $110,447 
Six Months Ended June 30, 2021Six Months Ended June 30, 2020
Class A and Class B Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive IncomeRetained EarningsTotal Stockholders' EquityClass A and Class B Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossRetained EarningsTotal Stockholders' Equity
SharesPar ValueSharesPar Value
Balances at beginning of period2,849 $ $50,018 $927 $77,345 $128,290 2,852 $ $45,851 $(489)$55,692 $101,054 
Issuance of common stock22 — — — — — 18 — — — — — 
Shares withheld related to net share settlement(8)— (1,552)— (880)(2,432)(7)— (1,076)— (368)(1,444)
Share-based compensation— — 4,379 — — 4,379 — — 3,030 — — 3,030 
Share repurchases(37)— — — (11,260)(11,260)(13)— — — (2,621)(2,621)
Other comprehensive (loss) income— — — (642)— (642)— — — 347 — 347 
Net income — — — — 19,892 19,892 — — — — 10,081 10,081 
Balances at end of period2,826 $ $52,845 $285 $85,097 $138,227 2,850 $ $47,805 $(142)$62,784 $110,447 
See Accompanying Notes to Condensed Consolidated Financial Statements.
10



Table of Contents
FACEBOOK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Six Months Ended June 30,
 20212020
Cash flows from operating activities
Net income$19,892 $10,081 
Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation and amortization3,958 3,301 
   Share-based compensation4,379 3,030 
   Deferred income taxes647 690 
   Other(88)49 
Changes in assets and liabilities:
   Accounts receivable(517)1,924 
   Prepaid expenses and other current assets(2,313)(353)
   Other assets(195)(15)
   Accounts payable(134)(100)
   Partners payable(133)(158)
   Accrued expenses and other current liabilities(200)(3,016)
   Deferred revenue and deposits9 (1)
   Other liabilities184 (554)
Net cash provided by operating activities25,489 14,878 
Cash flows from investing activities
Purchases of property and equipment(8,884)(6,813)
Purchases of marketable securities(16,528)(14,063)
Sales of marketable securities6,337 5,381 
Maturities of marketable securities6,327 7,868 
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets(259)(372)
Other investing activities(62)(288)
Net cash used in investing activities(13,069)(8,287)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards(2,432)(1,444)
Repurchases of Class A common stock(11,018)(2,618)
Principal payments on finance leases(274)(209)
Net change in overdraft in cash pooling entities3 (17)
Other financing activities(13)114 
Net cash used in financing activities(13,734)(4,174)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(129)(127)
Net increase (decrease) in cash, cash equivalents, and restricted cash(1,443)2,290 
Cash, cash equivalents, and restricted cash at beginning of the period17,954 19,279 
Cash, cash equivalents, and restricted cash at end of the period$16,511 $21,569 
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents$16,186 $21,045 
Restricted cash, included in prepaid expenses and other current assets201 308 
Restricted cash, included in other assets124 216 
Total cash, cash equivalents, and restricted cash$16,511 $21,569 
See Accompanying Notes to Condensed Consolidated Financial Statements.
11



Table of Contents
FACEBOOK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended June 30,
20212020
Supplemental cash flow data
Cash paid for income taxes$6,294 $1,250 
Non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities$2,249 $1,592 
Acquisition of businesses and other investments in accrued expenses and other current liabilities and other liabilities$73 $316 
Other current assets through financing arrangements in accrued expenses and other current liabilities$381 $ 
Repurchases of Class A common stock in accrued expenses and other current liabilities$310 $46 
See Accompanying Notes to Condensed Consolidated Financial Statements.
12



Table of Contents
FACEBOOK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. 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 year ended December 31, 2020.
The condensed consolidated balance sheet as of December 31, 2020 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., its subsidiaries where we have controlling financial interests, and any variable interest entities for which we are deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated.
The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2021.
Use of Estimates
Preparation of condensed consolidated financial statements in 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, valuation of equity investments, income taxes, loss contingencies, valuation of long-lived assets including goodwill and intangible assets and their associated estimated useful lives, collectibility of accounts receivable, credit losses of available-for-sale debt securities, fair value of financial instruments, and leases. 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.
Significant Accounting Policies
There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Recently Adopted Accounting Pronouncements
On January 1, 2021, we adopted Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (ASU 2020-01), which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for
13



Table of Contents
convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

Note 2. Revenue
Revenue disaggregated by revenue source consists of the following (in millions):
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Advertising$28,580 $18,321 $54,018 $35,760 
Other revenue497 366 1,230 663 
Total revenue$29,077 $18,687 $55,248 $36,423 
Revenue disaggregated by geography, based on the addresses of our customers, consists of the following (in millions):
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
United States and Canada(1)
$12,612 $8,292 $24,048 $16,304 
Europe(2)
7,220 4,249 13,604 8,398 
Asia-Pacific6,677 4,611 12,778 8,582 
Rest of World(2)
2,568 1,535 4,818 3,139 
Total revenue$29,077 $18,687 $55,248 $36,423 
____________________________________
(1)    United States revenue was $11.82 billion and $7.83 billion for the three months ended June 30, 2021 and 2020, respectively, and $22.57 billion and $15.38 billion for the six months ended June 30, 2021 and 2020, respectively.
(2)    Europe includes Russia and Turkey, and Rest of World includes Africa, Latin America, and the Middle East.
Our total deferred revenue was $386 million and $371 million as of June 30, 2021 and December 31, 2020, respectively. As of June 30, 2021, we expect $348 million of our deferred revenue to be realized in less than a year.
14



Table of Contents
Note 3. Earnings per Share
We compute earnings per share (EPS) of Class A and Class B common stock using the two-class method.
Basic EPS is computed by dividing net income by the weighted-average number of shares of our Class A and Class B common stock outstanding.
For the calculation of diluted EPS, net income for basic EPS is adjusted by the effect of dilutive securities under our equity compensation plans. In addition, the computation of the diluted EPS of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock. Diluted EPS attributable to common stockholders is computed by dividing the resulting net income by the weighted-average number of fully diluted common shares outstanding.
Restricted stock units (RSUs) with anti-dilutive effect were excluded from the EPS calculation and they were not material for the three and six months ended June 30, 2021 and 2020.
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,
 2021202020212020
 Class AClass BClass AClass BClass AClass BClass AClass B
Basic EPS:
Numerator
Net income$8,785 $1,609 $4,371 $807 $16,810 $3,082 $8,509 $1,572 
Denominator
Weighted-average shares outstanding2,395 439 2,406 444 2,401 440 2,407 444 
Basic EPS$3.67 $3.67 $1.82 $1.82 $7.00 $7.00 $3.54 $3.54 
Diluted EPS:
Numerator
Net income$8,785 $1,609 $4,371 $807 $16,810 $3,082 $8,509 $1,572 
Reallocation of net income as a result of conversion of Class B to Class A common stock1,609  807  3,082  1,572  
Reallocation of net income to Class B common stock (24) (8) (44) (13)
Net income for diluted EPS$10,394 $1,585 $5,178 $799 $19,892 $3,038 $10,081 $1,559 
Denominator
Number of shares used for basic EPS computation2,395 439 2,406 444 2,401 440 2,407 444 
Conversion of Class B to Class A common stock439  444  440  444  
Weighted-average effect of dilutive RSUs43  29  40  25  
Number of shares used for diluted EPS computation2,877 439 2,879 444 2,881 440 2,876 444 
Diluted EPS$3.61 $3.61 $1.80 $1.80 $6.90 $6.90 $3.51 $3.51 
    

15



Table of Contents
Note 4. Cash and Cash Equivalents, and Marketable Securities
The following table sets forth the cash and cash equivalents and marketable securities (in millions):
June 30, 2021December 31, 2020
Cash and cash equivalents:
Cash$6,132 $6,488 
Money market funds9,346 9,755 
U.S. government securities298 1,016 
Certificate of deposits and time deposits355 305 
Corporate debt securities55 12 
Total cash and cash equivalents16,186 17,576 
Marketable securities:
U.S. government securities23,184 20,921 
U.S. government agency securities10,705 11,698 
Corporate debt securities14,005 11,759 
Total marketable securities47,894 44,378 
Total cash and cash equivalents and marketable securities$64,080 $61,954 
The gross unrealized gains on our marketable securities were $410 million and $641 million as of June 30, 2021 and December 31, 2020, respectively. The gross unrealized losses on our marketable securities were not material as of June 30, 2021 and December 31, 2020. The allowance for credit losses was not material as of June 30, 2021 and December 31, 2020.
The following table classifies our marketable securities by contractual maturities (in millions):
June 30, 2021
Due within one year$11,819 
Due after one year to five years36,075 
Total$47,894 

16



Table of Contents
Note 5. Equity Investments
Our equity investments are investments in equity securities of privately-held companies without readily determinable market values. The changes in the carrying value of equity investments for the six months ended June 30, 2021 are as follows (in millions): 
Balance as of December 31, 2020$6,234 
Additions20 
Impairment(10)
Adjustments149 
Balance as of June 30, 2021$6,393 

Note 6. Fair Value Measurement
The following table summarizes our assets measured at fair value and the classification by level of input within the fair value hierarchy (in millions): 
  Fair Value Measurement at Reporting Date Using
DescriptionJune 30, 2021Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
 (Level 2)
Cash equivalents:
Money market funds$9,346 $9,346 $ 
U.S. government securities298 298  
Certificate of deposits and time deposits355  355 
Corporate debt securities55  55 
Marketable securities:
U.S. government securities23,184 23,184  
U.S. government agency securities10,705 10,705  
Corporate debt securities14,005  14,005 
Total cash equivalents and marketable securities$57,948 $43,533 $14,415 
17



Table of Contents
  Fair Value Measurement at Reporting Date Using
DescriptionDecember 31, 2020Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
 (Level 2)
Cash equivalents:
Money market funds$9,755 $9,755 $ 
U.S. government securities1,016 1,016  
Certificate of deposits and time deposits305  305 
Corporate debt securities12  12 
Marketable securities:
U.S. government securities20,921 20,921  
U.S. government agency securities11,698 11,698  
Corporate debt securities11,759  11,759 
Total cash equivalents and marketable securities$55,466 $43,390 $12,076 
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 have other assets and liabilities classified within Level 3 because factors used to develop the estimated fair value are unobservable inputs that are not supported by market activity. The aggregate absolute value of these Level 3 assets and liabilities was not material as of June 30, 2021 and December 31, 2020.

Note 7. Property and Equipment
Property and equipment, net consists of the following (in millions): 
June 30, 2021December 31, 2020
Land$1,428 $1,326 
Buildings19,873 17,360 
Leasehold improvements5,294 4,321 
Network equipment24,085 22,003 
Computer software, office equipment and other2,814 2,458 
Finance lease right-of-use assets2,557 2,295 
Construction in progress12,593 11,288 
Total68,644 61,051 
Less: Accumulated depreciation(17,735)(15,418)
Property and equipment, net$50,909 $45,633 
Depreciation expense on property and equipment was $1.86 billion and $1.58 billion for the three months ended June 30, 2021 and 2020, respectively, and $3.72 billion and $3.07 billion for the six months ended June 30, 2021 and 2020, respectively. Construction in progress includes costs mostly related to construction of data centers, network equipment infrastructure to support our data centers around the world, and office buildings.

18



Table of Contents
Note 8. Leases
We have entered into various non-cancelable operating lease agreements for certain of our offices, data centers, land, colocations, and equipment. We have also entered into various non-cancelable finance lease agreements for certain network equipment. Our leases have original lease periods expiring between the remainder of 2021 and 2093. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.
The components of lease costs are as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Finance lease cost
     Amortization of right-of-use assets$83 $60 $164 $120 
     Interest4 4 7 7 
Operating lease cost371 344 733 684 
Variable lease cost and other, net59 57 126 117 
       Total lease cost$517 $465 $1,030 $928 
Supplemental balance sheet information related to leases is as follows:
June 30, 2021December 31, 2020
Weighted-average remaining lease term
     Operating leases12.5 years12.2 years
     Finance leases14.7 years14.9 years
Weighted-average discount rate
     Operating leases3.0 %3.1 %
     Finance leases2.8 %2.9 %
The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2021 (in millions):
Operating LeasesFinance Leases
The remainder of 2021$613 $51 
20221,448 55 
20231,436