Facebook 2013 Annual Report Download - page 80

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78
The following is a schedule, by years, of the future minimum lease payments required under non-cancelable capital and operating
leases as of December 31, 2013 (in millions):
Capital
Leases Operating
Leases
2014 $ 255 $ 142
2015 127 142
2016 21 139
2017 15 131
2018 16 112
Thereafter 127 312
Total minimum lease payments $ 561 $ 978
Less: amount representing interest and taxes (85)
Less: current portion of the present value of minimum lease payments (239)
Capital lease obligations, net of current portion $ 237
Operating lease expenses totaled $130 million, $196 million, and $219 million for the years ended December 31, 2013, 2012 and
2011, respectively.
Other contractual commitments
We also have $258 million of non-cancelable contractual commitments as of December 31, 2013, primarily related to network
infrastructure for our data center operations and, to a lesser extent, construction of our data center sites. The majority of these commitments
are due within five years.
Contingencies
Legal Matters
Beginning on May 22, 2012, multiple putative class actions, derivative actions, and individual actions were filed in state and federal
courts in the United States and in other jurisdictions against us, our directors, and/or certain of our officers alleging violation of securities
laws or breach of fiduciary duties in connection with our IPO and seeking unspecified damages. We believe these lawsuits are without
merit, and we intend to continue to vigorously defend them. On October 4, 2012, on our motion, the vast majority of the cases in the
United States, along with multiple cases filed against The NASDAQ OMX Group, Inc. and The Nasdaq Stock Market LLC (collectively
referred to herein as NASDAQ) alleging technical and other trading-related errors by NASDAQ in connection with our IPO, were ordered
centralized for coordinated or consolidated pre-trial proceedings in the United States District Court for the Southern District of New York.
On February 13, 2013, the court granted our motion to dismiss four derivative actions against our directors and certain of our officers
with leave to amend. On October 8, 2013, the court heard argument on our motion to dismiss the consolidated securities class action, as
well as our motion to dismiss, and the plaintiffs' motion to remand to state court, certain other derivative actions. On December 18, 2013,
the court denied our motion to dismiss the consolidated securities class action. On December 23, 2013, the court granted our motion to
dismiss, and denied the plaintiffs’ motion to remand to state court, certain other derivative actions. In addition, the events surrounding
our IPO have become the subject of various government inquiries, and we are cooperating with those inquiries.
We are also party to various legal proceedings and claims that arise in the ordinary course of business. Among these pending legal
matters, one case, Rembrandt Social Media, LP v. Facebook, Inc., et al., was scheduled to begin trial in December 2013 in the U.S.
District Court for the Eastern District of Virginia. In this case, the plaintiff alleges that we infringe certain patents held by the plaintiff.
The plaintiff is seeking significant monetary damages and equitable relief. This trial date was vacated in December 2013 and the case is
currently on appeal. We believe the claims made by the plaintiff in the Rembrandt case are without merit, and we intend to continue to
defend ourselves vigorously.
With respect to our outstanding legal matters, we believe that the amount or estimable range of reasonably possible loss will not,
either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations,
or cash flows. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved
against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular
reporting period, could be materially adversely affected.