Quarterly Earnings Slides

Q3 2013

Non-GAAP Measures
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.

Daily Active Users (DAUs)

In Millions
Rest of World Asia Europe US & Canada

526 483 109 105 143 126 126 119 152 129 Q1'12
Q1'12 58%

552 139 129 154

584 152

618 161

665 180

699 195

728 208

457 100 98 135 124 Q3'11

DAUs / MAUs
Q3'11 57%

141

153

167

181

189

160

169

179

182

188

130 Q2'12
Q2'12 58%

132 Q3'12
Q3'12 58%

135 Q4'12
Q4'12 59%

139 Q1'13
Q1'13 60%

142 Q2'13
Q2'13 61%

144 Q3'13
Q313 61%

Q4'11
Q4'11 57%

Please see Facebook's most recent Form 10-Q filed with the SEC for definitions of user activity used to determine the number of our DAUs, MAUs, and mobile MAUs. The number of DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

Monthly Active Users (MAUs)

In Millions
Rest of World Asia Europe US & Canada

1,007 845 225 212 229 179 Q4'11 901 245 955 268 288

1,056 304

1,110 327

1,155 346

1,189

362

800 207 196 221 176 Q3'11

234

255

277

298

319

339

351

239 183 Q1'12

246 186 Q2'12

253 189 Q3'12

261

269

272

276

193 Q4'12

195 Q1'13

198 Q2'13

199 Q3'13

Please see Facebook's most recent Form 10-Q filed with the SEC for definitions of user activity used to determine the number of our DAUs, MAUs, and mobile MAUs. The number of DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

Mobile Daily Active Users (Mobile DAUs)

In Millions
469 425 374 329 507

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Mobile DAUs are defined as users who accessed Facebook through our mobile apps or our mobile website during a given day. The number of mobile DAUs do not include Instagram users unless they would otherwise qualify as such users based on their other activities on Facebook.

Mobile Monthly Active Users (Mobile MAUs)

In Millions
819 751 680 488 543 604 874

376

432

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Please see Facebook's most recent Form 10-Q filed with the SEC for definitions of user activity used to determine the number of our DAUs, MAUs, and mobile MAUs. The number of DAUs, MAUs, and mobile MAUs do not include Instagram users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

Mobile-Only Monthly Active Users (Mobile-Only MAUs)

In Millions
254 219 189 157 126

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Mobile-only MAUs are defined as users who accessed Facebook solely through mobile apps or our mobile website during a given month. The number of mobile-only MAUs do not include Instagram users unless they would otherwise qualify as such users based on their other activities on Facebook.

Revenue
In Millions
Payments and other fees Advertising

$1,813 $1,585 $256 * $1,458 $213 $1,262 $176 $214

$2,016 $218

$1,131 $954 $156 $188

$1,184 $1,058 $186 $192

$1,798 $1,599 $1,329 $1,086 $1,245

$798

$943

$872

$992

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

*In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.

Revenue by User Geography

In Millions
Rest of World Asia Europe US & Canada

$1,813 $1,585 $167 $1,184 $1,058 $87 $118 $328 $113 $135 $346 $1,262 $130 $154 $341 $440 $423 $198 $1,458 $159 $197 $505 $213 $247

$2,016 $238 $278

$954 $78 $104 $290

$1,131 $87 $115 $361

$538

$482

$567

$525

$590

$637

$780

$679

$848

$962

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

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 condensed consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer.

Advertising Revenue by User Geography

In Millions
Rest of World Asia Europe US & Canada

$1,798 $1,599 $1,329 $1,086 $156 $168 $374 $202 $1,245 $150 $176 $367 $451 $225 $482 $229 $255

$798 $71 $88 $245

$943 $79 $95 $306

$872 $79 $99 $274

$992 $104 $115 $294

$120 $133 $295

$395 Q3'11

$462

$419 Q1'12

$479

$538

$631

$552

$721

$832

Q4'11

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

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 condensed consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer.

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Payments & Other Fees Revenue by User Geography

In Millions
Rest of World Asia Europe US & Canada

$256 $11 $30 $188 $8 $20 $55 $186 $8 $19 $54 $192 $9 $20 $52 $176 $10 $21 $46 $149 $213 $9 $21 $56 $214 $11 $22 $54 $218 $9 $23 $56

$66

$156 $7 $16 $45

$87

$105

$106

$111

$99

$127

$127

$130

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12 *

Q1'13

Q2'13

Q3'13

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 condensed consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. *In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
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Average Revenue per User (ARPU)

Worldwide
Payments* Advertising
$1.54 $1.29 $0.18 $0.25 $1.35 $0.20 $1.60 $0.19 $1.72 $0.19 $3.40 $0.53

US & Canada
$4.08 $0.78 $3.50 $0.65

$4.32 $0.65

$4.85 $0.65

$1.11

$1.29

$1.15

$1.41

$1.53 $2.87

$3.30

$3.67 $2.85

$4.19

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Europe
$1.71 $1.37 $0.18 $0.26 $1.60 $0.21

$1.87 $0.20

$1.96 $0.20

Asia
$0.69 $0.58 $0.08 $0.10 $0.75 $0.07 $0.81 $0.07

Rest of World
$0.56 $0.04 $0.50 $0.03 $0.63 $0.03

$0.67 $0.03

$0.64 $0.07

$0.47 $0.04

$1.18

$1.46

$1.38

$1.67

$1.76 $0.50 $0.58 $0.57 $0.68

$0.74

$0.43

$0.53

$0.48

$0.60

$0.65

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

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 condensed consolidated financial statements where revenue is geographically apportioned based on the location of the marketer or developer. Please see Facebooks Form 10-Q for the quarter ended September 30, 2013 for the definition of ARPU. *In the fourth quarter of 2012 we recognized revenue from four months of Payments transactions for accounting reasons detailed on pages 47 and 48 of our Form 10-K filed on February 1, 2013.
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Share-Based Compensation Expense

In Millions
Pre-2011 RSUs Post-2011 RSUs Options & Other

$1,106

$986

$70 $59 Q3'11

$76 $74 Q4'11

$103 $97 Q1'12 $113 Q2'12

$179 $28 $138 Q3'12

$184 $24 $137 Q4'12

$170 $9 $135 Q1'13

$224 $17 $175

$239 $14 $193

Q2'13

Q3'13

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

Cost of Revenue
26% 25% 28% 26% 25%

Research & Development

19% 8% 19% 9% 20% 9% 19% 9% 18% 9%

25%

24%

28%

25%

25% 11% 10% Q4'12 11% Q1'13 10% Q2'13 10% Q3'13

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q3'12

Marketing & Sales

13% 12% Q3'12 12% 10% Q4'12 14% 12% Q1'13 15% 13% Q2'13 12% 10% Q3'13

General & Administrative

12% 10% Q3'12 11% 9% Q4'12 12% 10% Q1'13

10% 8% Q2'13

8% 7% Q3'13

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Income (Loss) from Operations

GAAP Income (Loss) from Operations (in millions) $414 $548 $381 $377 $523 $373 $562 $736

($743)
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13

Non-GAAP Income from Operations (in millions) $987

$484

$624

$485

$515

$525

$736

$563

$794

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Non-GAAP income (loss) from operations excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP income (loss) from operations.

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Operating Margin
GAAP Operating Margin 43% 48% 36% 30% 33% 31% 37%

26%

(63%)
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13

Non-GAAP Operating Margin 51% 55% 46% 43% 42% 46% 44% 49%

39%

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Non-GAAP operating margin excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP operating margin.

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Effective Tax Rate

GAAP Effective Tax Rate
($ in millions) GAAP (loss) income before provision for income taxes GAAP (provision for) benefit from income taxes Effective Tax Rate Q2 2012 $ (765) 608 79% Q3 2012 $ 372 (431) 116% Q4 2012 $ 505 (441) 87% Q1 2013 353 (134) 38% Q2 2013 545 (212) 39% FY 2011 1,695 (695) 41% FY 2012 494 (441) 89%

Non-GAAP Effective Tax Rate

($ in millions) Non-GAAP income before provision for income taxes Non-GAAP provision for income taxes Effective Tax Rate Q2 2012 493 198 40% Q3 2012 520 209 40% Q4 2012 718 292 41% Q1 2013 543 231 43% Q2 2013 777 289 37% FY 2011 1,919 755 39% FY 2012 2,217 900 41%

Q312 through Q412 GAAP effective tax rates were influenced by significant share-based compensation expense resulting from our initial public offering, a portion of which is not tax-deductiblesee the Appendix for a reconciliation of this non-GAAP measure to GAAP effective tax rate.

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Net Income (Loss)

GAAP Net Income (Loss) (in millions) $333 $425 $302

$227

$205 ($59) Q3'12

$64 ($157)

$219

Q3'11

Q4'11

Q1'12

Q2'12

Q4'12

Q1'13

Q2'13

Q3'13

Non-GAAP Net Income (in millions)

$273

$360

$287

$295

$311

$426

$312

$488

$621

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

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

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Diluted EPS
GAAP Diluted EPS $0.14 $0.09 $0.03 ($0.02) Q3'11 Q4'11 Q1'12 ($0.08) Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 $0.09 $0.13 $0.17

$0.10

Non-GAAP Diluted EPS $0.25 $0.12 $0.15 $0.12 $0.12 $0.12 $0.17 $0.19 $0.12

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Non-GAAP diluted EPS excludes share-based compensation expense, payroll tax expenses related to share-based compensation, and related income tax adjustmentssee the Appendix for a reconciliation of this non-GAAP measure to GAAP diluted EPS.

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Capital Investments
In Millions
Property and equipment acquired under capital leases Purchases of property and equipment

$1,575 $340 $1,079 $890 $11 $510 $473 $1,235 $606 $293

$1,288 $251

$1,037

$879

$217

2012 YTD

2013

2010

2011 Annual

2012

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Appendix

Reconciliations
Income from Operations (in millions) GAAP income (loss) from operations Share-based compensation expense Payroll tax expenses related to share-based compensation Non-GAAP income from operations Q3'11 414 70 $ 484 $ Q4'11 548 76 $ 624 $ Q1'12 381 103 1 $ 485 $ Q2'12 (743) 1,106 152 $ 515 $ Q3'12 377 179 (31) $ 525 $ Q4'12 523 184 29 $ 736 $ Q1'13 373 170 20 $ 563 $ Q2'13 562 224 8 $ 794 $ Q3'13 736 239 12 $ 987 $

Operating Margins GAAP operating margin Share-based compensation expense Payroll tax expenses related to share-based compensation Non-GAAP operating margin

Q3'11 43% 7% 0% 51%

Q4'11 48% 7% 0% 55%

Q1'12 36% 10% 0% 46%

Q2'12 (63%) 93% 13% 43%

Q3'12 30% 14% (2%) 42%

Q4'12 33% 12% 2% 46%

Q1'13 26% 12% 1% 39%

Q2'13 31% 12% 0% 44%

Q3'13 37% 12% 1% 49%

Net Income (Loss) (in millions) GAAP net income (loss) Share-based compensation expense Payroll tax expenses related to share-based compensation Income tax adjustments Non-GAAP net income

Q3'11 227 70 (24) $ 273 $

Q4'11 302 76 (18) $ 360 $

Q1'12 205 103 1 (22) $ 287 $

Q2'12 (157) 1,106 152 (806) $ 295 $

Q3'12 (59) 179 (31) 222 $ 311 $

Q4'12 64 184 29 149 $ 426 $

Q1'13 219 170 20 (97) $ 312 $

Q2'13 333 224 8 (77) $ 488 $

Q3'13 425 239 12 (55) $ 621 $

Diluted Earnings (Loss) Per Share GAAP diluted earnings (loss) per share Net income attributable to participating securities Non-GAAP adjustments to net income (loss) Non-GAAP adjustments to diluted shares Non-GAAP diluted earnings per share

Q3'11 0.10 0.05 0.03 (0.06) $ 0.12 $

Q4'11 0.14 0.05 0.04 (0.08) $ 0.15 $

Q1'12 0.09 0.04 0.05 (0.06) $ 0.12 $

Q2'12 (0.08) 0.24 (0.04) $ 0.12 $

Q3'12 (0.02) 0.15 (0.01) $ 0.12 $

Q4'12 0.03 0.14 $ 0.17 $

Q1'13 0.09 0.03 $ 0.12 $

Q2'13 0.13 0.06 $ 0.19 $

Q3'13 0.17 0.08 $ 0.25 $

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Reconciliations (continued)
Effective Tax Rate (in millions) GAAP income before provision for income taxes GAAP provision for income taxes GAAP effective tax rate GAAP income before provision for income taxes Share-based compensation and related payroll tax expenses Non-GAAP income before provision for income taxes Non-GAAP provision for income taxes Non-GAAP effective tax rate $ Q3'12 372 431 116% 372 148 520 209 40% $ Q4'12 505 441 87% 505 213 718 292 41% $ Q1'13 353 134 38% 353 190 543 231 43% $ Q2'13 545 212 39% 545 232 777 289 37% $ Q3'13 726 301 41% 726 251 977 356 36% FY2012 $ 494 441 89% $ 494 1,723 $ 2,217 900 41%

$ $

$ $

$ $

$ $

$ $

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Reconciliations (continued)
Free Cash Flow (in millions) Net cash provided by operating activities Purchases of property and equipment Property and equpiment acquired under capital leases Free Cash Flow $ Q3'11 565 136 102 $ 327 $ Q4'11 510 185 80 $ 245 $ Q1'12 441 453 38 $ (50) $ Q2'12 240 413 52 $ (225) $ Q3'12 250 171 161 $ (82) $ Q4'12 681 198 89 $ 394 $ Q1'13 719 327 11 $ 381 Q2'13 $ 1,322 268 $ 1,054 $ Q3'13 950 284 $ 666

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Limitations of Key Metrics and Other Data

The numbers for our key metrics, daily active users (DAUs), monthly active users (MAUs), mobile MAUs, and average revenue per user (ARPU), and certain other metrics such as mobile DAUs and mobile-only MAUs, are calculated using internal company data based on the activity of user accounts. 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, for example, that duplicate accounts (an account that a user maintains in addition to his or her principal account) may have represented between approximately 4.3% and 7.9% of our worldwide MAUs during the nine months ended September 30, 2013. We also seek to identify false accounts, which we divide into two categories: (1) usermisclassified 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. During the nine months ended September 30, 2013, for example, we estimate user-misclassified accounts may have represented between approximately 0.8% and 2.1% of our worldwide MAUs and undesirable accounts may have represented between approximately 0.4% and 1.2% 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 the United Kingdom and higher in developing markets such as India 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. Due to inherent variability in such estimates at particular dates of measurement, we disclose these estimates as a range over a recent period.

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Limitations of Key Metrics and Other Data (cont.)

Our data limitations may affect our understanding of certain details of our business. For example, while user-provided data indicates a decline in usage among younger users, this age data is unreliable because a disproportionate number of our younger users register with an inaccurate age. We have worked with third parties to develop models to analyze user data by age in the United States. These models suggest that usage by U.S. teens overall continues to be stable, but that there has recently been a decline in DAU among younger U.S. teens. The data and models we are using are not precise and our understanding of usage by age group may not be complete. Some of our historical metrics through the second quarter of 2012 have also been 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 users IP address and self-disclosed location. These factors may not always accurately reflect the users 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 users 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 used 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 and DAU numbers, 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 & Canada region was overstated as a result of the error by approximately 3% and this overstatement was 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 are not able to accurately measure mobile users or do not count mobile users for certain user groups or at all in their analyses. The numbers of DAUs, MAUs, mobile DAUs, mobile MAUs, and mobile-only MAUs discussed in these slides, as well as ARPU, do not include users of Instagram unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.

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