Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 1 of 10 PageID 333
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`
`
`Exhibit A
`
`

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`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 2 of 10 PageID 334
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`FACEBOOK INC
`
`FORM 10-Q
`
`(Quarterly Report)
`
`Filed 10/24/12 for the Period Ending 09/30/12
`
`
`Address
`
`
`1601 WILLOW ROAD
`MENLO PARK, CA 94025
`650-618-7714
`Telephone
`0001326801
`CIK
`FB
`Symbol
`7370 - Computer Programming, Data Processing, And
`SIC Code
`Industry Computer Services
`Sector
`Technology
`
`http://www.edgar-online.com
`© Copyright 2012, EDGAR Online, Inc. All Rights Reserved.
`Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
`
`

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`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 3 of 10 PageID 335
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`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)
`
`
`
`$
`
`
`Assets
`Current assets:
`Cash and cash equivalents
`Marketable securities
`Accounts receivable, net of allowances for doubtful accounts of $18 and $17 as of September 30,
`2012 and December 31, 2011, respectively
`Income tax refundable
`Prepaid expenses and other current assets
`Total current assets
`Property and equipment, net
`Goodwill and intangible assets, net
`Other assets
`Total assets
`Liabilities and stockholders’ equity
`Current liabilities:
`Accounts payable
`Platform partners payable
`Accrued expenses and other current liabilities
`Deferred revenue and deposits
`Current portion of capital lease obligations
`Total current liabilities
`Capital lease obligations, less current portion
`Other liabilities
`Total liabilities
`Stockholders’ equity:
`Convertible preferred stock, $0.000006 par value, issuable in series; no shares and 569 million shares
`authorized as of September 30, 2012 and December 31, 2011, respectively, no shares and 543 million shares
`issued and outstanding as of September 30, 2012 and December 31, 2011, respectively
`Common stock, $0.000006 par value; 5,000 million and 4,141 million Class A shares authorized as of
`September 30, 2012 and December 31, 2011, respectively, 949 million and 117 million shares issued and
`outstanding as of September 30, 2012 and December 31, 2011, respectively, including 2 million and 1 million
`outstanding shares subject to repurchase as of September 30, 2012 and December 31, 2011, respectively;
`4,141 million Class B shares authorized, 1,217 million and 1,213 million shares issued and outstanding as of
`September 30, 2012 and December 31, 2011, respectively, including 12 million and 2 million outstanding
`shares subject to repurchase as of September 30, 2012 and December 31, 2011, respectively
`Additional paid-in capital
`Accumulated other comprehensive loss
`Retained earnings
`Total stockholders’ equity
`Total liabilities and stockholders’ equity
`$
`See Accompanying Notes to Condensed Consolidated Financial Statements.
`
`$
`
`
`$
`
`
`
`
`
`4
`
`September 30,
`2012
`
`
`
`
`2,478 $
`7,974
`
`635
`567
`631
`12,285
`2,289
`1,423
`41
`16,038 $
`
`
`59 $
`155
`409
`85
`372
`1,080
`530
`254
`1,864
`
`
`December 31,
`2011
`
`1,512
`2,396
`
`547
`—
`149
`4,604
`1,475
`162
`90
`6,331
`
`63
`171
`296
`90
`279
`899
`398
`135
`1,432
`
`—
`
`615
`
`—
`12,585
`(6 )
`1,595
`14,174
`16,038 $
`
`—
`2,684
`(6 )
`1,606
`4,899
`6,331
`
`

`
`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 4 of 10 PageID 336
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`FACEBOOK, INC.
`CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
`(In millions, except per share amounts)
`(Unaudited)
`
`Table of Contents
`
`
`
`
`
`
`Revenue
`Costs and expenses:
`Cost of revenue
`Research and development
`Marketing and sales
`General and administrative
`Total costs and expenses
`Income from operations
`Interest and other income (expense), net:
`Interest expense
`Other income (expense), net
`Income (loss) before provision for income taxes
`Provision for income taxes
`Net (loss) income
`Less: Net income attributable to participating securities
`Net (loss) income attributable to Class A and Class B
`common stockholders
`(Loss) earnings per share attributable to Class A and
`Class B common stockholders:
`Basic
`Diluted
`Weighted average shares used to compute (loss)
`earnings per share attributable to Class A and Class B
`common stockholders:
`Basic
`Diluted
`Share-based compensation expense included in costs and
`expenses:
`Cost of revenue
`Research and development
`Marketing and sales
`General and administrative
`Total share-based compensation expense
`
`$
`
`
`
`
`$
`
`$
`
`
`$
`$
`
`
`
`
`$
`
`$
`
`2011
`
`Three Months Ended September 30,
`
`2012
`1,262 $
`
`322
`244
`168
`151
`885
`377
`
`(11 )
`6
`372
`431
`(59 ) $
`—
`
`
`
`954 $
`
`236
`108
`114
`82
`540
`414
`
`(10 )
`(25 )
`379
`152
`227 $
`77
`
`2011
`2,580
`
`Nine Months Ended September 30,
`
`2012
`3,504 $
`
`967
`1,102
`703
`717
`3,489
`15
`
`(35 )
`9
`(11 )
`—
`(11 ) $
`—
`
`613
`264
`272
`222
`1,371
`1,209
`
`(26 )
`(7 )
`1,176
`478
`698
`235
`
`(59 ) $
`
`
`(0.02 ) $
`(0.02 ) $
`
`
`2,420
`2,420
`
`
`8 $
`114
`28
`29
`179 $
`
`150 $
`
`
`0.11 $
`0.10 $
`
`
`1,316
`1,520
`
`
`3 $
`33
`13
`21
`70 $
`
`(11 ) $
`
`
`(0.01 ) $
`(0.01 ) $
`
`
`1,884
`1,884
`
`
`79 $
`719
`279
`311
`1,388 $
`
`463
`
`0.36
`0.32
`
`1,283
`1,507
`
`6
`72
`24
`39
`141
`
`See Accompanying Notes to Condensed Consolidated Financial Statements.
`
`5
`
`
`
`

`
`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 5 of 10 PageID 337
`
`Table of Contents
`
`
`FACEBOOK, INC.
`CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
`(In millions)
`(Unaudited)
`
`
`
`Cash flows from operating activities
`Net (loss) income
`Adjustments to reconcile net (loss) income to net cash provided by operating activities:
`Depreciation and amortization
`Loss on write-off of equipment
`Share-based compensation
`Deferred income taxes
`Tax benefit from share-based award activity
`Excess tax benefit from share-based award activity
`Changes in assets and liabilities:
`Accounts receivable
`Income tax refundable
`Prepaid expenses and other current assets
`Other assets
`Accounts payable
`Platform partners payable
`Accrued expenses and other current liabilities
`Deferred revenue and deposits
`Other liabilities
`Net cash provided by operating activities
`Cash flows from investing activities
`Purchases of property and equipment
`Purchases of marketable securities
`Sales of marketable securities
`Maturities of marketable securities
`Investments in non-marketable equity securities
`Acquisitions of businesses, net of cash acquired, and purchases of intangible and other assets
`Change in restricted cash and deposits
`Net cash used in investing activities
`Cash flows from financing activities
`Net proceeds from issuance of common stock
`Proceeds from exercise of stock options
`Repayment of long term debt
`Proceeds from sale and lease-back transactions
`Principal payments on capital lease obligations
`Excess tax benefit from share-based award activity
`Net cash provided by financing activities
`Effect of exchange rate changes on cash and cash equivalents
`Net increase (decrease) in cash and cash equivalents
`Cash and cash equivalents at beginning of period
`Cash and cash equivalents at end of period
`
`Supplemental cash flow data
`Cash paid during the period for:
`Interest
`Income taxes
`
`Non-cash investing and financing activities:
`
`
`$
`
`
`
`
`
`
`
`
`$
`
`
`
`$
`
`$
`
`Nine Months Ended September 30,
`
`2012
`2011
`
`(11 ) $
`
`425
`8
`1,388
`(434 )
`854
`(854 )
`
`(90 )
`(567 )
`24
`—
`20
`(16 )
`162
`(5 )
`27
`931
`
`(1,037 )
`(8,590 )
`571
`2,413
`(3 )
`(911 )
`(2 )
`(7,559 )
`
`6,760
`9
`—
`205
`(231 )
`854
`7,597
`(3 )
`966
`1,512
`2,478 $
`
`
`
`30 $
`184 $
`
`698
`
`220
`6
`141
`(29 )
`405
`(405 )
`
`(72 )
`—
`(113 )
`(25 )
`36
`91
`(9 )
`44
`51
`1,039
`
`(421 )
`(2,742 )
`95
`90
`(2 )
`(5 )
`5
`(2,980 )
`
`998
`27
`(250 )
`15
`(128 )
`405
`1,067
`(5 )
`(879 )
`1,785
`906
`
`19
`179
`
`

`
`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 6 of 10 PageID 338
`
`Table of Contents
`
`
`SIGNATURES
`
`Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be
`signed on its behalf by the undersigned, thereunto duly authorized, in the City of Menlo Park, State of California, on this 24th day of October
`2012.
`
`
` FACEBOOK, INC.
`
` /s/ DAVID A. EBERSMAN
`David A. Ebersman
`Chief Financial Officer
`(Principal Financial Officer)
`
`
`
` /s/ DAVID M. SPILLANE
`David M. Spillane
`Chief Accounting Officer
`(Principal Accounting Officer)
`
`
`
`54
`
`
`
`Date: October 24, 2012
`
`
`
`Date: October 24, 2012
`
`
`
`
`
`

`
`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 7 of 10 PageID 339
`
`CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF
`THE SARBANES-OXLEY ACT OF 2002
`
`EXHIBIT 31.1
`
`I, Mark Zuckerberg, certify that:
`
`1. I have reviewed this quarterly report on Form 10-Q of Facebook, Inc.;
`
`2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
`the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
`this report;
`
`3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
`the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
`
`4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
`Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
`
`a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
`ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
`entities, particularly during the period in which this report is being prepared;
`
`b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
`effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
`
`c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
`fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
`materially affect, the registrant’s internal control over financial reporting; and
`
`5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
`to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
`
`a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
`reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
`
`b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
`control over financial reporting.
`
`.
`
`
`
` /s/ MARK ZUCKERBERG
` Mark Zuckerberg
` Chairman and Chief Executive Officer
` (Principal Executive Officer)
`
`Date: October 24, 2012
`
`
`
`
`
`
`
`
`

`
`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 8 of 10 PageID 340
`
`CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF
`THE SARBANES-OXLEY ACT OF 2002
`
`EXHIBIT 31.2
`
`I, David A. Ebersman, certify that:
`
`1. I have reviewed this quarterly report on Form 10-Q of Facebook, Inc.;
`
`2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
`the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
`this report;
`
`3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
`the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
`
`4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
`Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
`
`a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
`ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
`entities, particularly during the period in which this report is being prepared;
`
`b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
`effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
`
`c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
`fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
`materially affect, the registrant’s internal control over financial reporting; and
`
`5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
`to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
`
`a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
`reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
`
`b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
`control over financial reporting.
`
`
`
`
`
` /s/ DAVID A. EBERSMAN
` David A. Ebersman
` Chief Financial Officer
` (Principal Financial Officer)
`
`Date: October 24, 2012
`
`
`
`
`
`
`
`
`

`
`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 9 of 10 PageID 341
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`CERTIFICATION PURSUANT TO
`18 U.S.C. SECTION 1350
`AS ADOPTED PURSUANT TO SECTION 906
`OF THE SARBANES-OXLEY ACT OF 2002
`I, Mark Zuckerberg, Chairman and Chief Executive Officer of Facebook, Inc. (Company), do hereby certify, pursuant to 18 U.S.C. Section 1350,
`as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
`
`•
`
`•
`
`the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2012 (Report) fully complies with the
`requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
`
`the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
`Company for the periods presented therein.
`
`EXHIBIT 32.1
`
`
`
`
`
` /s/ MARK ZUCKERBERG
` Mark Zuckerberg
` Chairman and Chief Executive Officer
` (Principal Executive Officer)
`
`Date: October 24, 2012
`
`
`
`
`
`
`
`
`

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`Case 2:12-cv-02769-JPM-tmp Document 38-3 Filed 01/31/13 Page 10 of 10 PageID 342
`
`CERTIFICATION PURSUANT TO
`18 U.S.C. SECTION 1350
`AS ADOPTED PURSUANT TO SECTION 906
`OF THE SARBANES-OXLEY ACT OF 2002
`I, David A. Ebersman, Chief Financial Officer of Facebook, Inc. (Company), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted
`pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
`
`EXHIBIT 32.2
`
`the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2012 (Report) fully complies with the
`requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
`
`the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
`Company for the periods presented therein.
`
`•
`
`•
`
`
`
`
`
` /s/ DAVID A. EBERSMAN
` David A. Ebersman
` Chief Financial Officer
` (Principal Financial Officer)
`
`Date: October 24, 2012