Facebook 2013 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2013 Facebook annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

50
and interest on the $1.5 billion term loan that was drawn down in the fourth quarter of 2012. Changes in other income (expense), net
were primarily due to lower foreign exchange losses in 2012 resulting from the periodic re-measurement of our foreign currency
balances and an increase in interest income driven by higher invested cash balances.
Provision for income taxes
Year Ended December 31,
2013 2012 2011 2013 vs 2012
% Change 2012 vs 2011
% Change
(dollars in millions)
Provision for income taxes $ 1,254 $ 441 $ 695 184% (37)%
Effective tax rate 46% 89% 41%
2013 Compared to 2012. Our provision for income taxes in 2013 increased $813 million, or 184%, compared to 2012, primarily
due to an increase in pretax income. Our effective tax rate decreased primarily due to a lower amount of non-deductible share-based
compensation resulting from recognition of expense related to Pre-2011 RSUs as a result of our IPO in May 2012. Our effective tax
rate in 2013 was also lower due to the reinstatement in 2013 of the federal tax credit for research and development activities. We
recognized the benefit from the reinstatement of the tax credit for 2012 and 2013 during the year ended December 31, 2013.
2012 Compared to 2011. Our provision for income taxes in 2012 decreased $254 million, or 37%, compared to 2011, primarily
due to a decrease in pretax income. Our effective tax rate increased primarily due to the impact of non-deductible share-based
compensation and the losses arising outside the United States in jurisdictions where we do not receive a tax benefit. Our effective tax
rate in 2012 was also higher due to the expiration of the federal tax credit for research and development activities.