9 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: The supplementary financial information required by this Item 8 is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Unaudited Quarterly Results of Operations Data,” which is incorporated herein by reference.
Report of Independent Registered Public Accounting Firm
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We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Revenue Recognition
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As described in Note 2 to the consolidated financial statements, the Company generates substantially all of its revenues by offering various advertising products on Snapchat.
−Removed: The substantial majority of such advertising revenues is generated based upon contractual agreements with customers that are on a fixed fee for advertisements delivered over a period of time, or fees based on the number of advertising impressions delivered.
−Removed: Revenue related to fixed fee agreements is recognized ratably over the service period while revenue related to agreements based on the number of advertising impressions delivered is recognized when the advertisement is displayed.
+Added: The substantial majority of such advertising revenues is generated based upon contractual agreements with customers that are on a fixed fee basis for advertisements delivered over a period of time, or fees based on the number of advertising impressions delivered.
+Added: Revenues related to fixed fee agreements are recognized ratably over the service period while revenues related to agreements based on the number of advertising impressions delivered are recognized when the advertisements are displayed.
The Company’s revenue recognition process utilizes multiple, complex, proprietary systems and tools for the initiation, processing and recording of transactions which comprise a high volume of individually low monetary value transactions.
−Removed: This process is dependent on the effective design and operation of multiple systems, processes, data sources and controls which required significant audit effort.
+Added: This process is dependent on the effective design and operation of multiple systems, sub-processes, data sources and controls which required significant audit effort.
Also, the identification and evaluation of certain non-standard terms and conditions required incremental audit effort to determine the distinct performance obligations and the timing of revenue recognition.
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We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's internal controls over the identification and evaluation of revenue recognition for standard and non-standard terms and conditions.
−Removed: To test the Company’s recognition of revenue, our audit procedures included, among others, testing the completeness and accuracy of the underlying data within the Company’s billing systems, by agreeing amounts recognized to contractual terms and conditions, and tested revenue recognized to accounts receivables and cash receipts.
+Added: To test the Company’s recognition of revenue, our audit procedures included, among others, testing the completeness and accuracy of the underlying data within the Company’s billing systems, by agreeing amounts recognized to contractual terms and conditions, and testing revenue recognized to accounts receivable and cash receipts.
Additionally, we examined standard customer online terms and conditions to understand the distinct performance obligations and tested the timing of revenue recognition.
Further, we selected a sample of non-standard contractual arrangements to understand the performance obligations and the timing of revenue recognition.
−Removed: To assess completeness of non-standard terms and conditions, we obtained confirmations of terms and conditions for a sample of customers.
−Removed: Convertible Notes
−Removed: Description of the Matter
−Removed: As described in Note 7 to the consolidated financial statements, in April 2020 the Company issued $1.0 billion of convertible senior notes due in 2025 (Convertible Notes), which permits the Company to settle the Convertible Notes in cash or stock at its option.
−Removed: The Company entered into separate capped call transactions to reduce potential dilution upon conversion of the Convertible Notes.
−Removed: These transactions are collectively referred to as the Convertible Notes Transactions.
−Removed: The accounting for the Convertible Notes Transactions was complex as it required assessment of whether features in the Convertible Notes required bifurcation and an evaluation of the appropriate classification of those features in the financial statements.
−Removed: Additionally, the Convertible Notes Transactions were complex as the valuation of the conversion feature in the Convertible Notes involved estimation of the fair value of the liability component of the Convertible Notes on a stand-alone basis.
−Removed: Auditing the Company’s accounting for the Convertible Notes Transactions involved addressing the complexity in assessing the components for separability and assessing the valuation of the liability component on a stand-alone basis.
−Removed: The Company estimated the fair value of the liability component of the Convertible Notes, absent any embedded conversion features, using a discounted cash flow model with a risk adjusted yield.
−Removed: In estimating the risk adjusted yield, the Company utilized both income and market approaches.
−Removed: For the income approach, the Company used a convertible bond pricing model, which included several assumptions including estimates of the Company’s equity volatility, dividend yield and a market risk free rate.
−Removed: For the market approach, the Company performed an evaluation of debt securities issued by companies with a similar credit risk rating to determine the fair value of the liability component.
−Removed: Additionally, the Company performed a detailed analysis of the terms of the Convertible Notes Transactions to identify whether any derivatives that required separate mark-to-market accounting under applicable accounting guidance were present.
−Removed: How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s Convertible Notes Transactions, including its controls over the estimation of the fair value of the stand-alone liability component and evaluating the existence of embedded derivatives.
−Removed: To test the Company’s initial accounting for the Convertible Notes Transactions, our audit procedures included, among others, reading the underlying agreements and evaluating the Company’s analysis of the initial accounting of the Convertible Notes Transactions, including the identification of any derivatives included in the arrangements.
−Removed: Our testing of the fair value of the liability component included, among other procedures, evaluating the Company's selection of the valuation methodology and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions.
−Removed: Specifically, when assessing the key assumptions, we evaluated the appropriateness of the Company’s estimates of its credit risk, volatility, dividend yield and the market risk free rate as well as its analysis of comparable issuances of debt securities by companies within a similar industry and with a similar credit risk rating.
−Removed: In addition, we involved a valuation specialist to assist in our evaluation of the methodology used by the Company and the appropriateness of significant assumptions.
+Added: To assess completeness of non-standard terms and conditions, we obtained external confirmations of terms and conditions for a sample of customers.
/s/ Ernst & Young LLP
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Cash flows from operating activities
−Removed: Adjustments to reconcile net loss to net cash used in operating activities:
+Added: Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
Stock-based compensation
−Removed: Deferred income taxes
−Removed: Gain on divestiture
Amortization of debt discount and issuance costs
−Removed: Lease exit charges
+Added: (Gains) losses on debt and equity securities, net
+Added: Induced conversion expense related to convertible notes
+Added: Gain on divestiture
Change in operating assets and liabilities, net of effect of acquisitions:
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Other liabilities
−Removed: Net cash used in operating activities
+Added: Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property and equipment
−Removed: Proceeds from divestiture, net
+Added: Purchases of strategic investments
Cash paid for acquisitions, net of cash acquired
−Removed: Non-marketable investments
+Added: Proceeds from divestiture, net
Purchases of marketable securities
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Proceeds from the exercise of stock options
−Removed: Stock repurchases from employees for tax withholdings
Net cash provided by financing activities
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restricted stock awards, net
+Added: Issuance of Class A non-voting common stock for the induced conversion related to convertible senior notes
Conversion of Class B voting common stock to
Class A non-voting common stock
−Removed: Stock repurchases from employees for tax withholdings
+Added: Issuance of Class A non-voting common stock in connection with acquisitions
Balance, end of period
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Stock-based compensation expense
+Added: Cumulative-effect adjustment from accounting
Shares issued in connection with exercise of
1 unchanged sentence
Issuance of Class A non-voting common stock in connection with acquisitions and divestitures
−Removed: Stock repurchases from employees for tax
Equity component of convertible senior notes, net
+Added: Issuance of Class A non-voting common stock for the induced conversion related to convertible senior notes
Purchase of capped calls
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Actual results could differ from those estimates.
−Removed: Key estimates relate primarily to determining the fair value of assets and liabilities assumed in business combinations, evaluation of contingencies, uncertain tax positions, lease exit charges, forfeiture rate, the fair value of convertible senior notes, the fair value of stock-based awards, and the fair value of non-marketable investments.
+Added: Key estimates relate primarily to determining the fair value of assets and liabilities assumed in business combinations, evaluation of contingencies, uncertain tax positions, forfeiture rate, the fair value of convertible senior notes, the fair value of stock-based awards, and the fair value of strategic investments.
On an ongoing basis, management evaluates our estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.
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We also maintain investments in U.S.
−Removed: government debt and agency securities, corporate debt securities, certificates of deposit, and commercial paper that carry high credit ratings and accordingly, minimal credit risk exists with respect to these balances.
+Added: government debt and agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper that carry high credit ratings and accordingly, minimal credit risk exists with respect to these balances.
We extend credit to our customers based on an evaluation of their ability to pay amounts due under contractual arrangement and generally do not obtain or require collateral.
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Cost of Revenue
−Removed: Cost of revenue includes payments for content and third-party selling costs, referred to as partner arrangements.
+Added: Cost of revenue includes payments for content, developer, and advertiser partner costs.
Under some of these arrangements, we pay a portion of the fees we receive from the advertisers for Snap Ads that are displayed within partner content on Snapchat.
Partner arrangement costs were $ 679.0 million, $ 324.3 million, and $ 174.7 million for the years ended December 31, 2021, 2020, and 2019, respectively.
−Removed: In addition, cost of revenue consists of expenses associated with infrastructure costs of the Snapchat mobile application, advertising measurement services, and personnel-related costs.
−Removed: Cost of revenue includes facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs for Spectacles.
+Added: In addition, cost of revenue consists of payments to third-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth costs.
+Added: Cost of revenue also includes third-party selling costs, personnel-related costs, facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs.
Advertising costs are expensed as incurred and were $ 62.4 million, $ 29.5 million, and $ 31.4 million for the years ended December 31, 2021, 2020, and 2019, respectively.
Capital Structure
−Removed: In March 2017, we completed our initial public offering (“IPO”) in which we issued and sold 160.3 million shares of Class A common stock, inclusive of the over-allotment, at an initial public offering price of $ 17.00 per share and excluding shares sold in the IPO by certain of our existing stockholders.
−Removed: On the closing of the IPO, all shares of our then-outstanding convertible preferred stock other than Series FP preferred stock automatically converted into an aggregate of 246.8 million shares of Class B common stock and all outstanding shares of Series FP preferred stock automatically converted into 215.9 million shares of Class C common stock.
−Removed: Following the IPO, we have three classes of authorized common stock – Class A common stock, Class B common stock, and Class C common stock.
−Removed: On the closing of the IPO, our Chief Executive Officer (“CEO”) received a restricted stock unit (“RSU”) award (“CEO award”) for 37.4 million shares of Series FP preferred stock, which automatically converted into an equivalent number of shares of Class C common stock on the closing of the IPO.
−Removed: The CEO award represented 3.0 % of all outstanding shares on the closing of the IPO, including shares sold by us in the IPO and vested stock options and RSUs, net of shares withheld to satisfy tax withholding obligations, on the closing of the IPO.
−Removed: The CEO award vested immediately on the closing of the IPO, and such shares were delivered to the CEO in quarterly installments over three years beginning in November 2017.
−Removed: There was no continuing service requirement for our CEO.
−Removed: The stock-based compensation expense recognized related to the CEO award was $ 636.6 million, which was based on the vesting of 37.4 million shares of Class C common stock on the closing of the IPO, at the initial public offering price of $ 17.00 per share.
−Removed: As of December 31, 2020, all shares of Class C common stock deliverable under the CEO award were settled.
+Added: We have three classes of authorized common stock – Class A common stock, Class B common stock, and Class C common stock.
+Added: Class A common stockholders have no voting rights , Class B common stockholders are entitled to one vote per share, and Class C common stockholders are entitled to ten votes per share.
+Added: Shares of our Class B common stock are convertible into an equivalent number of shares of our Class A common stock and generally convert into shares of our Class A common stock upon transfer.
+Added: Shares of our Class C common stock are convertible into an equivalent number of shares of our Class B common stock and generally convert into shares of our Class B common stock upon transfer.
Stock-based Compensation
−Removed: We measure and recognize compensation expense for stock-based payment awards, including stock options, RSUs, and restricted stock awards (“RSAs”) granted to employees, directors, and advisors, based on the grant date fair value of the awards.
+Added: We measure and recognize compensation expense for stock-based payment awards, including stock options, restricted stock units (“RSUs”), and restricted stock awards (“RSAs”) granted to employees, directors, and advisors, based on the grant date fair value of the awards.
The grant date fair value of stock options is estimated using a Black-Scholes option pricing model.
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The grant date fair value of RSUs and RSAs is estimated based on the fair value of our underlying common stock.
−Removed: Pre-2017 RSUs contained both service-based and performance conditions to vest in the underlying common stock.
−Removed: The service-based condition criteria is generally met 10 % after the first year of service, 20 % over the second year, 30 % over the third year, and 40 % over the fourth year.
−Removed: The performance condition related to these awards was satisfied on the effectiveness of the registration statement for our IPO, which occurred in March 2017.
−Removed: Awards which contain both service-based and performance conditions were recognized using the accelerated attribution method once the performance condition was probable of occurring.
−Removed: All RSUs granted after December 31, 2016 vest on the satisfaction of only a service-based condition (“Post-2017 RSUs”).
+Added: RSUs vest on the satisfaction of service conditions.
The service condition for RSUs granted prior to February 2018 is generally satisfied over four years , 10 % after the first year of service, 20 % over the second year, 30 % over the third year, and 40 % over the fourth year.
−Removed: In limited instances, we have issued Post-2017 RSUs with vesting periods in excess of four years.
+Added: In limited instances, we have issued RSUs with vesting periods in excess of four years.
The service condition for RSUs and RSAs granted after February 2018 is generally satisfied in equal monthly or quarterly installments over three or four years .
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We are subject to income taxes in the United States and numerous foreign jurisdictions.
−Removed: Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the deferred tax asset or liability is expected to be realized or settled.
+Added: Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured
+Added: using the enacted tax rates and laws that will be in effect when the deferred tax asset or liability is expected to be realized or settled.
In evaluating our ability to recover deferred tax assets, we consider all available positive and negative evidence, including historical operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis.
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government securities, U.S.
−Removed: government agency securities, corporate debt securities, certificates of deposit, and commercial paper.
−Removed: We classify our marketable securities as available-for-sale investments in our current assets because they represent investments available for current operations.
−Removed: Our available-for-sale investments are carried at fair value with any unrealized gains and losses, included in accumulated other comprehensive (loss) income in stockholders’ equity.
+Added: government agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper.
+Added: We classify marketable investments in debt securities as available-for-sale investments in our current assets because they represent investments available for current operations.
+Added: Our available-for-sale investments in debt securities are carried at fair value with any unrealized gains and losses, included in accumulated other comprehensive (loss) income in stockholders’ equity.
+Added: Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses, with any allowance for credit losses recognized as a charge in other income (expense), net on our consolidated statements of income.
+Added: We did no t record any credit losses for the years ended December 31, 2021 and December 31, 2020 on our available-for-sale debt securities.
We determine gains or losses on the sale or maturities of marketable securities using the specific identification method and these gains or losses are recorded in other income (expense), net in our consolidated statements of operations.
−Removed: Unrealized losses are recorded in other income (expense), net when a decline in fair value is determined to be other than temporary.
−Removed: Non-Marketable Investments
−Removed: Our investments in privately held companies are primarily non-marketable equity securities without readily determinable fair values.
−Removed: We adjust the carrying value of non-marketable equity securities to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment.
+Added: Publicly traded equity securities are carried at fair value with any unrealized gains and losses recorded in other income (expense), net in our consolidated statements of operations.
+Added: Strategic Investments
+Added: We hold strategic investments in privately held companies, consisting primarily of equity securities without readily determinable fair values, and to a lesser extent, debt securities.
+Added: We adjust the carrying value of these equity securities to fair
+Added: value upon observable transactions for identical or similar investments of the same issuer or upon impairment.
Any adjustments to carrying value of these investments are recorded in other income (expense) , net in our consolidated statements of operations .
−Removed: When we exercise significant influence over, but do not control the investee, such non-marketable investments are accounted for using the equity method.
+Added: Strategic investments are included within other assets on the consolidated balance sheets .
+Added: When we exercise significant influence over, but do not control the investee, such strategic investments are accounted for using the equity method.
Under the equity method of accounting, we record our share of the results of the investments within other income (expense), net in our consolidated statements of operations.
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Property and equipment are stated at cost, less accumulated depreciation.
−Removed: We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware and software, five years for furniture and equipment, and over the shorter of lease term or useful life of the assets for leasehold improvements.
+Added: We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware, software and equipment, five years for furniture, and over the shorter of lease term or useful life of the assets for leasehold improvements.
Buildings are depreciated over a useful life ranging from 20 to 45 years .
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The excess purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill.
−Removed: Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and
−Removed: selection of comparable companies.
+Added: Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies.
Our estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
−Removed: During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill.
+Added: During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding
+Added: offset to goodwill.
At the conclusion of the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations.
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In testing for goodwill impairment, we first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
−Removed: If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required.
+Added: If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then additional impairment testing is not required.
However, if we conclude otherwise, we perform the first of a two-step impairment test.
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We determine the appropriate useful life of our intangible assets by measuring the expected cash flows of acquired assets.
−Removed: The estimated useful lives of intangible assets are as follows:
+Added: The estimated useful lives of intangible assets are generally as follows:
Intangible Asset
17 unchanged sentences
Convertible Notes
−Removed: We account for the Convertible Notes as separate liability and equity components.
−Removed: The carrying amount of the liability component is calculated by measuring the fair value of a similar liability that does not have an associated convertible feature.
−Removed: The carrying amount of the equity component, representing the conversion option, is calculated by deducting the fair value of the liability component from the total principal of the Convertible Notes.
+Added: In April 2020, we entered into a purchase agreement for the sale of an aggregate of $ 1.0 billion principal amount of convertible senior notes due in 2025 (the “2025 Notes”).
+Added: In August 2019, we entered into a purchase agreement for the sale of an aggregate of $ 1.265 billion principal amount of convertible senior notes due in 2026 (the “2026 Notes”).
+Added: Prior to January 1, 2021, we accounted for the 2025 Notes and the 2026 Notes as separate liability and equity components.
+Added: On issuance, the carrying amount of the liability component was calculated by measuring the fair value of a similar liability that did not have an associated convertible feature.
+Added: The carrying amount of the equity component representing the conversion option was calculated by deducting the fair value of the liability component from the principal amount of the convertible notes as a whole.
This amount represents a debt discount which is amortized to interest expense over the term of the convertible notes using the effective interest rate method, which maintains a constant rate of interest expense based on the increasing carrying value of the debt.
+Added: Effective January 1, 2021 , we early adopted Accounting Standards Update (“ASU”) 2020-06 using the modified retrospective approach.
+Added: As a result, the Convertible Notes are each accounted for as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.
+Added: Adoption of the new standard resulted in a decrease to accumulated deficit of $ 95.0 million, a decrease to additional paid-in capital of $ 664.0 million, and an increase to convertible senior notes, net of $ 569.0 million.
Recent Accounting Pronouncements
−Removed: In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 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):
+Added: In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805):
+Added: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.
+Added: Under ASU 2021-08, an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.
+Added: The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted.
+Added: Effective January 1, 2022 , we early adopted ASU 2021-08 on a prospective basis.
+Added: The impact of adoption of this standard on our consolidated financial statements, including accounting policies, processes, and systems, was not material.
+Added: In August 2020, the FASB issued ASU 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.
−Removed: Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital.
+Added: Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Derivatives and Hedging (Topic 815), or that do not result in substantial premiums accounted for as paid-in capital.
Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives.
−Removed: The new guidance also requires the if-converted method to be applied for all convertible instruments.
+Added: The guidance also requires the if-converted method to be applied for all convertible instruments.
ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted.
2 unchanged sentences
Adoption of the new standard resulted in a decrease to accumulated deficit of $ 95.0 million, a decrease to additional paid-in capital of $ 664.0 million, and an increase to convertible senior notes, net of $ 569.0 million.
−Removed: Interest expense recognized in future periods will be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost.
−Removed: In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which clarifies the interaction between 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.
+Added: Interest expense recognized in the current and future periods will be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost.
+Added: In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which clarifies the interaction between the accounting for equity securities in 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 guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.
Effective January 1, 2021 , we adopted this standard on a prospective basis.
−Removed: We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements, including accounting policies, processes, and systems.
−Removed: In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes.
−Removed: ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.
−Removed: ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP.
−Removed: The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.
−Removed: We early adopted ASU 2019-12 in the fourth quarter of 2019.
The impact of adoption of this standard on our consolidated financial statements, including accounting policies, processes, and systems, was not material.
5 unchanged sentences
The impact of adoption of this standard on our consolidated financial statements, including accounting policies, processes, and systems, was not material.
−Removed: June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):
+Added: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments.
8 unchanged sentences
The impact of adoption of these standards on our consolidated financial statements, including accounting policies, processes, and systems, was not material.
+Added: We determine revenue recognition by first identifying the contract or contracts with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when, or as, we satisfy a performance obligation.
Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.
1 unchanged sentence
Sales tax, including value added tax, is excluded from reported revenue.
−Removed: We determine revenue recognition by first identifying the contract or contracts with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when, or as, we satisfy a performance obligation.
We generate substantially all of our revenues by offering various advertising products on Snapchat, which include Snap Ads and AR Ads, referred to as advertising revenue.
9 unchanged sentences
For the periods presented, revenue for arrangements where we are the agent was not material.
−Removed: We also generate revenue from sales of our hardware product, Spectacles.
−Removed: For the periods presented, revenue from the sales of Spectacles was not material.
+Added: We also generate revenue from sales of hardware products.
+Added: For the periods presented, revenue from the sales of hardware products was not material.
The following table represents our revenue disaggregated by geography based on the billing address of the advertising customer:
5 unchanged sentences
North America includes Mexico, the Caribbean, and Central America.
−Removed: United States revenue was $ 1.6 billion, $ 1.0 billion, and $ 752.9 million for the years ended December 31, 2020, 2019, and 2018, respectively.
+Added: United States revenue was $ 2.8 billion, $ 1.6 billion, and $ 1.0 billion for the years ended December 31, 2021, 2020, and 2019, respectively.
Europe includes Russia and Turkey.
28 unchanged sentences
As of December 31, 2021, we are authorized to issue 3,000,000,000 shares of Class A nonvoting common stock, 700,000,000 shares of Class B voting common stock, and 260,887,848 shares of Class C voting common stock, each with a par value of $ 0.00001 per share.
−Removed: Class A common stock has no voting rights , Class B common stock is entitled to one vote per share, and Class C common stock is entitled to ten votes per share.
−Removed: Shares of our Class B common stock are convertible into an equivalent number of shares of our Class A common stock and generally convert into shares of our Class A common
−Removed: stock upon transfer.
+Added: Class A common stockholders have no voting rights , Class B common stockholders are entitled to one vote per share, and Class C common stockholders are entitled to ten votes per share.
+Added: Shares of our Class B common stock are convertible into an equivalent number of shares of our Class A common stock and generally convert into shares of our Class A common stock upon transfer.
Shares of our Class C common stock are convertible into an equivalent number of shares of our Class B common stock and generally convert into shares of our Class B common stock upon transfer.
Any dividends paid to the holders of the Class A common stock, Class B common stock, and Class C common stock will be paid on a pro rata basis.
−Removed: For the year ended December 31, 20 20 , we did no t declare any dividends.
+Added: For the year ended December 31, 2021, we did not declare any dividends.
On a liquidation event, as defined in our certificate of incorporation, any distribution to common stockholders is made on a pro rata basis to the holders of the Class A common stock, Class B common stock, and Class C common stock.
3 unchanged sentences
the 2017 Equity Incentive Plan (“2017 Plan”), the 2014 Equity Incentive Plan (“2014 Plan”), and the 2012 Equity Incentive Plan (“2012 Plan”, and collectively with the 2017 Plan and the 2014 Plan, the “Stock Plans”).
−Removed: In January 2017, our board of directors adopted the 2017 Plan, and in February 2017 our stockholders approved the 2017 Plan, effective on March 1, 2017, which serves as the successor to the 2014 Plan and 2012 Plan and provides for the grant of incentive stock options to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our affiliates.
+Added: In January 2017, our board of directors adopted the 2017 Plan, and in February 2017 our stockholders approved the 2017 Plan, effective on March 1, 2017, which serves as the successor to the 2014 Plan and 2012 Plan and provides for the grant of incentive stock options to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, stock appreciation rights, RSAs, RSUs, performance stock awards, performance cash awards, and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our affiliates.
We do not expect to grant any additional awards under the 2014 Plan or 2012 Plan as of the effective date of the 2017 Plan, other than awards for up to 2,500,000 shares of Class A common stock to our employees and consultants in France under the 2014 Plan.
4 unchanged sentences
With respect to each share that returns to the 2017 Plan pursuant to (i) and (ii) of the prior sentence that was associated with an award that was outstanding under the 2014 Plan and 2012 Plan as of October 31, 2016, an additional share of Class A common stock will be added to the share reserve of the 2017 Plan, up to a maximum of 86,737,997 shares .
−Removed: The number of shares reserved for issuance under the 2017 Plan will increase automatically on January 1st of each calendar year, beginning on January 1, 2018 through January 1, 2027 , by the lesser of (i) 5.0 % of the total number of shares of our capital stock outstanding on December 31st of the immediately preceding calendar year, and (ii) a number determined by our board of directors.
+Added: The number of shares reserved for issuance under the 2017 Plan will increase automatically on January 1st of each calendar year, beginning on January 1, 2018 through January 1, 2027 , by the lesser of (i) 5.0 % of the total number of shares of our
+Added: capital stock outstanding on December 31st of the immediately preceding calendar year, and (ii) a number determined by our board of directors.
The maximum term for stock options granted under the 2017 Plan may not exceed ten years from the date of grant.
13 unchanged sentences
Unvested at December 31, 2021
−Removed: The total fair value of RSUs and RSAs vested during the years ended December 31, 2020, 2019, and 2018 was $ 969.4 million, $ 964.7 million, and $ 890.4 million, respectively.
−Removed: All compensation cost related to Pre-2017 RSUs was recognized as of December 31, 2020.
−Removed: Total unrecognized compensation cost related to Post-2017 Awards was $ 1.8 billion as of December 31, 2020 and is expected to be recognized over a weighted-average period of 2.6 years
−Removed: Additionally, we had 9.4 million RSUs that were vested but have not yet settled as of December 31, 2019, respectively.
−Removed: The balance as of December 31, 2019 was primarily related to the CEO Award .
−Removed: RSUs related to the CEO Award were fully settled as of December 31, 2020 .
+Added: The total fair value of RSUs and RSAs vested during the years ended December 31, 2021, 2020, and 2019 was $ 3.6 billion, $ 1.7 billion, and $ 1.0 billion, respectively.
+Added: Total unrecognized compensation cost related to outstanding RSUs and RSAs was $ 2.0 billion as of December 31, 2021 and is expected to be recognized over a weighted-average period of 2.2 years.
Stock Options
9 unchanged sentences
Stock-based compensation expense for stock options was not material in the years ended December 31, 2021, 2020, and 2019.
−Removed: Total unrecognized compensation cost related to unvested stock options was $ 8.4 million as of December 31, 2020 and is expected to be recognized over a weighted-average period of 1.3 years.
+Added: Total unrecognized compensation cost related to unvested stock options was $ 2.9 million as of December 31, 2021 and is expected to be recognized over a weighted-average period of 1.0 year.
The total grant date fair value of stock options that vested in the years ended December 31, 2021, 2020, and 2019 was $ 7.7 million, $ 11.1 million, and $ 23.3 million, respectively.
10 unchanged sentences
2021 Acquisitions
+Added: In May 2021, we acquired Wave Optics Limited (“Wave Optics”), a display technology company that supplies light engines and diffractive waveguides for augmented reality displays.
+Added: The total consideration was $ 541.8 million, of which $ 510.4 million represents purchase consideration and primarily consisted of 4.7 million shares of our Class A common stock with a fair value of $ 252.0 million, cash of $ 13.7 million, and a $ 238.4 million payable due no later than May 2023 in either cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election.
+Added: The remaining $ 31.4 million of total consideration transferred represents compensation for future employment services.
+Added: The allocation of purchase price is subject to change based on information received related to the assets and liabilities that existed as of the acquisition date.
+Added: The allocation of the total purchase consideration for this acquisition is estimated as follows:
+Added: (in thousands)
+Added: Customer relationships
+Added: Net deferred tax liability
+Added: Other assets acquired and liabilities assumed, net
+Added: The goodwill amount represents synergies expected to be realized from the business combination and assembled workforce.
+Added: The associated goodwill and intangible assets are not deductible for tax purposes.
+Added: Fit Analytics
+Added: In March 2021, we acquired Fit Analytics GmbH (“Fit Analytics”), a sizing technology company that powers solutions for retailers and brands, to grow our e-commerce and shopping offerings.
+Added: The purchase consideration for Fit Analytics was $ 124.4 million, which primarily represents current and future cash consideration payments.
+Added: The allocation of purchase price is subject to change based on information received related to the assets and liabilities that existed as of the acquisition date.
+Added: The allocation of the total purchase consideration for this acquisition is as follows:
+Added: (in thousands)
+Added: Customer relationships
+Added: Net deferred tax liability
+Added: Other assets acquired and liabilities assumed, net
+Added: The goodwill amount represents synergies expected to be realized from this business combination and assembled workforce.
+Added: The associated goodwill and intangible assets are not deductible for tax purposes.
+Added: Other 2021 Acquisitions
+Added: For the year ended December 31, 2021, we completed other acquisitions to enhance our existing platform, technology, and workforce.
+Added: The aggregate purchase consideration was $ 266.1 million, which included $ 139.5 million in cash, $ 93.7 million in shares of our Class A common stock, and $ 32.9 million recorded in other liabilities on the consolidated balance sheet.
+Added: The aggregate allocation of purchase consideration was as follows:
+Added: (in thousands)
+Added: Customer relationships
+Added: Net deferred tax liability
+Added: Other assets acquired and liabilities assumed, net
+Added: The goodwill amount represents synergies related to our existing platform expected to be realized from the business acquisitions and assembled workforces.
+Added: Of the acquired goodwill and intangible assets, $ 8.2 million is deductible for tax purposes.
+Added: 2020 Acquisitions
For the year ended December 31, 2020, we completed acquisitions to enhance our existing platform, technology, and workforce.
13 unchanged sentences
We recognized the change in pre-acquisition fair value of our original minority interest as a gain in Other income (expense), net on the consolidated statement of operations.
−Removed: The allocation of acquisition date fair value is preliminary and is subject to additional information related to the assets and liabilities that existed as of the acquisition date.
The allocation of acquisition date fair value was as follows:
21 unchanged sentences
Additional Information on 2021, 2020, and 2019 Acquisitions
−Removed: Unaudited pro forma results of operations assuming the above acquisitions had taken place at the beginning of each period are not provided because the historical operating results of the acquired entities were not material and pro forma results would not be materially different from reported results for the periods presented.
+Added: The operating results of the above acquisitions were included in the results of our operations from the acquisition date and were not material to our consolidated revenue or consolidated operating loss.
+Added: In addition, u naudited pro forma results of operations assuming the above acquisitions had taken place at the beginning of each period are not provided because the historical operating results of the acquired entities were not material and pro forma results would not be materially different from reported results for the periods presented.
Goodwill and Intangible Assets
3 unchanged sentences
Goodwill acquired
−Removed: Goodwill divested
Foreign currency translation
7 unchanged sentences
(in thousands, except years)
−Removed: Acquired developed technology
+Added: Customer relationships
December 31, 2020
1 unchanged sentence
(in thousands except years)
−Removed: Acquired developed technology
−Removed: Customer relationships
Amortization of intangible assets for the years ended December 31, 2021, 2020, and 2019 was $ 63.2 million, $ 33.5 million, and $ 33.4 million, respectively.
4 unchanged sentences
Convertible Notes
−Removed: In April 2020, we entered into a purchase agreement for the sale of an aggregate of $ 1.0 billion principal amount of senior convertible notes (the “2025 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).
−Removed: The 2025 Notes consisted of an $ 850.0 million initial placement and an over-allotment option that provided the initial purchasers of the 2025 Notes with the option to purchase an additional $ 150.0 million aggregate principal amount of the 2025 Notes, which was fully exercised.
−Removed: The 2025 Notes were issued pursuant to an Indenture, dated April 28, 2020 (the “Indenture”).
−Removed: The net proceeds from the issuance of the 2025 Notes were $ 888.6 million, net of debt issuance costs and cash used to purchase the 2025 Capped Call Transactions discussed below.
−Removed: The 2025 Notes are unsecured and unsubordinated obligations.
−Removed: Interest is payable in cash semi-annually in arrears beginning on November 1, 2020 at a rate of 0.25 % per year.
−Removed: The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with the terms prior to such date.
−Removed: The 2025 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 46.1233 shares of Class A common stock per $ 1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $ 21.68 (the “2025 Conversion Price”) per share of our Class A common stock.
−Removed: The conversion rate is subject to customary adjustments for certain events as described in the Indenture.
−Removed: We may redeem for cash all or any portion of the 2025 Notes, at our option, on or after May 6, 2023 if the last reported sale price of our Class A common stock has been at least 130 % of the 2025 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100 % of the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest.
+Added: In April 2021, we entered into a purchase agreement with certain counterparties for the sale of an aggregate of $ 1.15 billion principal amount of convertible senior notes due in 2027 (the “2027 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).
+Added: The 2027 Notes consisted of a $ 1.0 billion initial placement and an over-allotment option that provided the initial purchasers of the 2027 Notes with the option to purchase an additional $ 150.0 million aggregate principal amount of the 2027 Notes, which was fully exercised.
+Added: The 2027 Notes were issued pursuant to an indenture dated April 30, 2021 .
+Added: The net proceeds from the issuance of the 2027 Notes were $ 1.05 billion, net of debt issuance costs and cash used to purchase the capped call transactions (“2027 Capped Call Transactions”) discussed below.
+Added: The debt issuance costs are amortized to interest expense using the effective interest rate method.
+Added: The 2027 Notes are unsecured and unsubordinated obligations which do not bear regular interest and for which the principal balance will not accrete.
+Added: The 2027 Notes will mature on May 1, 2027 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.
+Added: The 2027 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 11.2042 shares of Class A common stock per $ 1,000 principal amount of 2027 Notes, which is equivalent to an initial conversion price of approximately $ 89.25 per share of our Class A common stock.
+Added: The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2027 Notes.
+Added: We may redeem for cash all or any portion of the 2027 Notes, at our option, on or after May 5, 2024 if the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days at a redemption price equal to 100 % of the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid special interest or additional interest, if any.
Holders of the 2027 Notes may convert all or a portion of their 2027 Notes at their option prior to February 1, 2027, in multiples of $ 1,000 principal amounts, only under the following circumstances:
1 unchanged sentence
during the five business day period after any ten consecutive trading day period in which the trading price per $ 1,000 principal amount of the 2027 Notes for each day of that ten consecutive trading day period was less than 98 % of the product of the last reported sale price of our Class A common stock and the applicable conversion rate of the 2027 Notes on such trading day;
−Removed: on a notice of redemption, in which case we may be required to increase the conversion rate for the 2025 Notes so surrendered for conversion in connection with such redemption notice;
+Added: on a notice of redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, in which case we may be required to increase the conversion rate for the 2027 Notes so surrendered for conversion in connection with such redemption notice;
on the occurrence of specified corporate events.
On or after February 1, 2027, the 2027 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
−Removed: Holders of the 2025 Notes who convert in connection with a make-whole fundamental change, as defined in the Indenture, or in connection with a redemption are entitled to an increase in the conversion rate.
−Removed: Additionally, in the event of a fundamental change, holders of the 2025 Notes may require us to repurchase all or a portion of the 2025 Notes at a price equal to 100 % of the principal amount of 2025 Notes, plus any accrued and unpaid interest, including any additional interest.
−Removed: In accounting for the issuance of the 2025 Notes, we separated the 2025 Notes into liability and equity components.
−Removed: The carrying amount of the equity component was $ 289.9 million and was recorded as a debt discount, which is amortized to interest expense at an effective interest rate of 7.39 %.
−Removed: We allocated $ 3.3 million of debt issuance costs to the equity component and the remaining debt issuance costs of $ 8.1 million were allocated to the liability component, which are amortized to interest expense under the effective interest rate method.
−Removed: The equity component of the 2025 Notes will not be remeasured as long as it continues to meet the conditions for equity classification.
−Removed: In August 2019, we entered into a purchase agreement for the sale of an aggregate of $ 1.265 billion principal amount of senior convertible notes (the “2026 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
−Removed: The net proceeds from the issuance of the 2026 Notes were $ 1.15 billion, net of debt issuance costs and cash used to purchase the 2026 Capped Call Transactions discussed below.
+Added: Holders of the 2027 Notes who convert the 2027 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2027 Notes, or in connection with a redemption are entitled to an increase in the conversion rate.
+Added: Additionally, in the event of a fundamental change, holders of the 2027 Notes may require us to repurchase all or a portion of the 2027 Notes at a price equal to 100 % of the principal amount of 2027 Notes, plus any accrued and unpaid special interest, if any.
+Added: We accounted for the issuance of the 2027 Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.
+Added: In April 2020, we entered into the 2025 Notes in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
+Added: The net proceeds from the issuance of the 2025 Notes were $ 888.6 million, net of debt issuance costs and cash used to purchase the capped call transactions (the “2025 Capped Call Transactions”) discussed below.
+Added: The debt issuance costs are amortized to interest expense using the effective interest rate method.
The 2025 Notes are unsecured and unsubordinated obligations.
+Added: Interest is payable in cash semi-annually in arrears beginning on November 1, 2020 at a rate of 0.25 % per year.
+Added: The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.
+Added: The 2025 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 46.1233 shares of Class A common stock per $ 1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $ 21.68 per share of our Class A common stock.
+Added: We may redeem for cash all or portions of the 2025 Notes, at our option, on or after May 6, 2023 based on certain circumstances.
+Added: In August 2019, we entered into the 2026 Notes (and together with the 2027 Notes and the 2025 Notes, the “Convertible Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
+Added: The net proceeds from the issuance of the 2026 Notes were $ 1.15 billion, net of debt issuance costs and cash used to purchase the capped call transactions (“2026 Capped Call Transactions”) discussed below.
+Added: The debt issuance costs are amortized to interest expense using the effective interest rate method.
+Added: The 2026 Notes are unsecured and unsubordinated obligations.
Interest is payable in cash semi-annually in arrears beginning on February 1, 2020 at a rate of 0.75 % per year.
The 2026 Notes mature on August 1, 2026 unless repurchased, redeemed, or converted in accordance with the terms prior to such date.
−Removed: The 2026 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 43.8481 shares of Class A common stock per $ 1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $ 22.81 (the “2026 Conversion Price”) per share of our Class A common stock.
+Added: The 2026 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 43.8481 shares of Class A common stock per $ 1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $ 22.81 per share of our Class A common stock.
+Added: We may redeem for cash all or portions of the 2026 Notes, at our option, on or after August 6, 2023 based on certain circumstances.
The Convertible Notes consisted of the following:
4 unchanged sentences
Net carrying amount
−Removed: Carrying amount of the equity component
−Removed: As of December 31, 2020, the debt discount and debt issuance costs on the 2025 Notes and 2026 Notes will be amortized over the remaining period of approximately 4.3 years and 5.6 years, respectively.
−Removed: Interest expense related to the amortization of debt discount and issuance costs was $ 81.4 million and $ 17.8 million for the years ended December 31, 2020 and 2019, respectively, while contractual interest expense was $ 11.2 million and $ 3.7 million for the years ended December 31, 2020 and 2019, respectively.
−Removed: As neither of the Convertible Notes were outstanding in 2018, no interest expense related to these notes was recorded for the year ended December 31, 2018.
+Added: The 2020 amounts include unamortized debt discount expense prior to the adoption of ASU 2020-06 on January 1, 2021.
+Added: Prior to January 1, 2021 , we separated the 2025 Notes and the 2026 Notes into liability and equity components.
+Added: On issuance, the carrying amount of the equity components was recorded as a debt discount and subsequently amortized to interest expense.
+Added: Effective January 1, 2021, we early adopted ASU 2020-06 using the modified retrospective approach.
+Added: As a result, the 2025 Notes and 2026 Notes are each accounted for as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.
+Added: Adoption of the new standard resulted in a decrease to accumulated deficit of $ 95.0 million, a decrease to additional paid-in capital of $ 664.0 million, and an increase to convertible senior notes, net of $ 569.0 million.
+Added: The 2027 Notes were issued after January 1, 2021.
+Added: As of December 31, 2021, the debt issuance costs on the 2027 Notes, the 2025 Notes, and the 2026 Notes will be amortized over the remaining period of approximately 5.3 years, 3.3 years and 4.6 years, respectively.
+Added: Interest expense related to the amortization of debt issuance costs was $ 4.3 million for the year ended December 31, 2021.
+Added: Interest expense related to the amortization of debt discount and issuance costs was $ 81.4 million and $ 17.8 million for the years ended December 31, 2020 and 2019, respectively.
+Added: Contractual interest expense was $ 8.9 million, $ 11.2 million, and $ 3.7 million for the years ended December 31, 2021, 2020, and 2019, respectively.
As of December 31, 2021, the if-converted value of the 2025 Notes and 2026 Notes exceeded the principal amount by $ 332.2 million and $ 890.6 million, respectively.
−Removed: The sale price for conversion was satisfied as of December 31, 2020 and as a result, the Convertible Notes first became eligible for optional conversion during the first quarter of 2021.
+Added: As of December 31, 2021, the if-converted value of the 2027 Notes did not exceed the principal amount.
+Added: The sale price for conversion was satisfied as of December 31, 2021 for the 2025 Notes and the 2026 Notes, and as a result, the 2025 Notes and 2026 Notes will continue to be eligible for optional conversion during the first quarter of 2022.
+Added: The 2027 Notes were not eligible for conversion as of December 31, 2021.
+Added: No sinking fund is provided for the Convertible Notes, which means that we are not required to redeem or retire them periodically.
Capped Call Transactions
−Removed: In connection with the pricing of the 2025 Notes and 2026 Notes, we entered into the 2025 Capped Call Transactions and the 2026 Capped Call Transactions (together, the “Capped Call Transactions”), respectively, with certain counterparties at a net cost of $ 100.0 million and $ 102.1 million, respectively.
−Removed: The cap price of the 2025 Capped Call Transactions is initially $ 32.12 per share of our Class A common stock and the cap price of the 2026 Capped Call Transaction is $ 32.58 per share of our Class A common stock.
−Removed: Both are subject to certain adjustments under the terms of the Capped Call Transactions.
+Added: In connection with the pricing of the 2027 Notes, 2025 Notes, and 2026 Notes, we entered into the 2027 Capped Call Transactions, the 2025 Capped Call Transactions, and the 2026 Capped Call Transactions (collectively, the “Capped Call Transactions”), respectively, with certain counterparties at a net cost of $ 86.8 million, $ 100.0 million, and $ 102.1 million, respectively.
+Added: The cap price of the 2027 Capped Call Transactions, the 2025 Capped Call Transactions, and the 2026 Capped Call Transaction is initially $ 121.02 , $ 32.12 , and $ 32.58 per share of our Class A common stock, respectively.
+Added: All are subject to certain adjustments under the terms of the Capped Call Transactions.
Conditions that cause adjustments to the initial strike price of the Capped Call Transactions mirror conditions that result in corresponding adjustments for the Convertible Notes.
1 unchanged sentence
The cost of the Capped Call Transactions was recorded as a reduction of our additional paid-in capital in our consolidated balance sheets.
−Removed: As of December 31, 2020, the Capped Call Transactions were in-the-money and will not be remeasured as long as they continue to meet the conditions for equity classification.
+Added: The Capped Call Transactions will not be remeasured as long as they continue to meet the conditions for equity classification.
+Added: As of December 31, 2021, the 2025 Capped Call Transactions and the 2026 Capped Call Transactions were in-the-money.
+Added: Exchange Transactions
+Added: In 2021, we entered into various exchange agreements (collectively, the “Exchange Agreements”) with certain holders of the 2025 Notes and the 2026 Notes pursuant to which we exchanged approximately $ 715.9 million principal amount of the 2025 Notes and approximately $ 426.5 million principal amount of the 2026 Notes for aggregate consideration of approximately 52.4 million shares of Class A common stock (the “Exchange Shares”).
+Added: The Exchange Shares included an additional 0.7 million shares of our Class A common stock not provided for under the original conversion terms of the 2025 Notes and the 2026 Notes to induce the holders to agree to the exchange.
+Added: The Exchange Agreements were accounted for as an induced conversion with the fair value of 0.7 million Exchange Shares, less accrued interest, recognized as an inducement expense in other income (expense), net in our consolidated statements of operations and included as an adjustment to reconcile net loss to net cash provided by (used in) operating activities in our consolidated statements of cash flows.
+Added: Inducement expense recorded for the year ended December 31, 2021 was $ 41.5 million.
+Added: The common stock consideration issued under the original terms of the 2025 Notes and 2026 Notes was accounted for under the general conversion accounting guidance with the net carrying amount of $ 1,132.6 million recorded in additional paid-in-capital and as a non-cash transaction excluded from cash activities on the consolidated statements of cash flows.
Credit Facility
−Removed: In July 2016, we entered into a five-year senior unsecured revolving credit facility (“Credit Facility”) with lenders some of which are affiliated with certain members of the underwriting syndicate for our Convertible Notes offering, that allows us to borrow up to $ 1.1 billion to fund working capital and general corporate-purpose expenditures.
−Removed: The loan bears interest at LIBO plus 0.75 %, as well as an annual commitment fee of 0.10 % on the daily undrawn balance of the facility.
−Removed: No origination fees were incurred at the closing of the Credit Facility.
−Removed: In December 2016, the amount we are permitted to borrow under the Credit Facility was increased to $ 1.2 billion.
−Removed: In February 2018, the amount we are permitted to borrow under the Credit Facility was increased to $1.25 billion.
−Removed: In August 2018 , we amended the Credit Facility to extend the term to August 2023 with respect to an aggregate of $1.05 billion of the $ 1.25 billion that we may borrow under the Credit Facility.
−Removed: In August 2019, we amended the Credit Facility to revise the covenants that restrict the repurchase of equity securities and the
−Removed: incurrence of indebtedness to permit the 2026 Capped Call Transactions and issuance of the 2026 Notes.
−Removed: In April 2020, we amended the Credit Facility to revise the covenants that restrict the incurrence of indebtedness to permit the 2025 Capped Call Transactions and issuance of the 2025 Notes.
+Added: In July 2016, we entered into a senior unsecured revolving credit facility (“Credit Facility”) with certain lenders, some of which are affiliated with certain members of the underwriting syndicate for our Convertible Notes offerings, to fund working capital and general corporate-purpose expenditures.
+Added: Since July 2016, we have amended the Credit Facility multiple times.
+Added: As of December 31, 2021, the Credit Facility has a maximum borrowing amount of $ 1.05 billion, bears interest at LIBO plus 0.75 %, as well as an annual commitment fee of 0.10 % on the daily undrawn balance of the facility and terminates in August 2023 .
As of December 31, 2021, no amounts were outstanding under the Credit Facility.
1 unchanged sentence
Commitments and Contingencies
−Removed: We have non-cancelable contractual agreements related to the hosting of our data storage processing, storage, and other computing services.
−Removed: In January 2017, we entered into the Google Cloud Platform License Agreement.
−Removed: Under the agreement, we were granted a license to access and use certain cloud services.
−Removed: The agreement has an initial term of five years and we are required to purchase at least $ 400.0 million of cloud services in each year of the agreement.
−Removed: For each of the first four years , up to 15 % of this amount may be moved to a subsequent year.
−Removed: If we fail to meet the minimum purchase commitment during any year, we are required to pay the difference.
−Removed: In March 2016, we entered into the AWS Enterprise Agreement for the use of cloud services from Amazon Web Services, Inc.
−Removed: Under the agreement, as amended, we are committed to spend an aggregate of $ 1.1 billion between January 2017 and December 2022 on AWS services ($ 90.0 million in 2018, $ 150.0 million in 2019, $ 215.0 million in 2020, $ 280.0 million in 2021, and $ 349.0 million in 2022).
−Removed: If we fail to meet the minimum purchase commitment during any year, we are required to pay the difference.
−Removed: Any such payment may be applied to future use of AWS services during the term, although it will not count towards meeting the future minimum purchase commitments.
−Removed: The future minimum contractual commitment including commitments less than one year, as of December 31, 2020 for each of the next five years are as follows:
−Removed: (in thousands)
−Removed: Year ending December 31,
−Removed: Total minimum commitments
+Added: We have non-cancelable contractual agreements primarily related to the hosting of our data storage processing, storage, and other computing services, as well as lease, content and developer partner, and other commitments.
+Added: We had $ 2.7 billion in commitments as of December 31, 2021, primarily due within three years.
+Added: For additional discussion on leases, see Note 9 to our consolidated financial statements.
Contingencies
10 unchanged sentences
The settlement agreement was preliminarily approved by the federal court in April 2020 and by the state court in November 2020.
−Removed: The settlement amount was paid into escrow in December 2020 and will be released following final approval.
−Removed: On April 3, 2018, BlackBerry Limited filed a lawsuit against us alleging that we infringe six of its patents.
−Removed: This lawsuit was dismissed in November 2019 after four of the patents were ruled to be invalid;
−Removed: and in December 2020, the U.S.
−Removed: Court of Appeals for the Federal Circuit affirmed the dismissal.
−Removed: In 2017, Vaporstream, Inc.
−Removed: filed a lawsuit against us alleging that we infringe a number of its patents.
−Removed: In March 2020, we reached a preliminary agreement to settle the matter and in the first quarter of 2020 we recorded legal expense of $ 10.0 million related to the expected settlement since we concluded the loss was probable and estimable.
−Removed: The amount was recorded in general and administrative expense in our consolidated statements of operations.
−Removed: In April 2020, the case was dismissed pursuant to a settlement agreement.
+Added: The settlement amount was paid into escrow in December 2020.
+Added: In March 2021, the federal court granted final approval of the settlement and entered judgment while the state court granted final approval of the settlement in March 2021 and entered judgment in April 2021.
+Added: The settlement amount is being released from escrow as determined by the plaintiffs’ lawyers and the settlement administrator.
+Added: In November 2021, we and certain of our officers and directors, were named as defendants in a securities class actions purportedly brought on behalf of purchasers of our Class A common stock, alleging that we and certain of our officers made false or misleading statements and omissions concerning the impact that Apple’s App Tracking Transparency framework would have on our business.
+Added: Management believes these lawsuits are without merit and intend s to vigorously defend them.
+Added: Based on the preliminary nature of the proceedings in this case, the outcome of this matter remains uncertain.
The outcomes of our legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to our financial condition, results of operations, and cash flows for a particular period.
13 unchanged sentences
We recognize rent expense on a straight-line basis over the lease term.
−Removed: Additionally, we sublease certain operating leases to third parties primarily as a result of moving to a centralized corporate office in Santa Monica, California in 2018.
The components of lease cost were as follows:
19 unchanged sentences
As of December 31, 2021, we have additional operating leases for facilities that have not yet commenced with lease obligations of $ 104.4 million.
−Removed: These operating leases will commence between 2021 and 2022 with lease terms of greater than one year to five years .
+Added: These operating leases will commence in 2022 with lease terms of greater than one year to ten years .
This table does not include lease payments that were not fixed at commencement or modification.
−Removed: In 2018, we exited various operating leases prior to the end of the contractual lease term, primarily as a result of moving to a centralized corporate office located in Santa Monica, California.
−Removed: The charges, recorded as general and administrative expenses, primarily included the present value of our remaining lease obligation on the cease use dates that occurred during the period, net of estimated sublease income.
−Removed: As of December 31, 2018, we had exited all properties associated with this event.
−Removed: On January 1, 2019, under the transition provisions of ASU 2016-02 (Topic 842), we adjusted the initial measurement of the lease asset related to the lease exit properties by $ 32.1 million which represents the carrying amount of the associated lease exit liability as of December 31, 2018.
−Removed: Changes to our estimated sublease income, including actual contracted sublease income, may result in impairment of the right-of-use asset in the period determined.
−Removed: Prior to January 1, 2019, we had several lease agreements where we were deemed the owner under build-to-suit lease accounting.
−Removed: The value of the leased property and corresponding financing obligations was included in property and equipment, net and other liabilities, respectively, on our consolidated balance sheets as of December 31, 2018.
−Removed: Net assets capitalized under build-to-suit leases were $ 48.4 million as of December 31, 2018.
−Removed: As part of the adoption of Topic 842, we derecognized those assets and liabilities and recorded the difference as an adjustment to accumulated deficit at January 1, 2019.
−Removed: These leases are included within the right-of-use asset and lease liability balances on our consolidated balance sheet as of December 31, 2020 and 2019.
Other Information
1 unchanged sentence
Lease liabilities arising from obtaining operating lease right-of-use assets were $ 99.3 million and $ 36.2 million for the years ended December 31, 2021 and 2020, respectively .
+Added: Strategic Investments
+Added: We hold strategic investments in privately held companies with a carrying value of $ 262.7 million and $ 169.5 million as of December 31, 2021 and December 31, 2020, respectively, which consist primarily of equity securities, and to a lesser extent, debt securities.
+Added: These strategic investments are primarily recorded at fair value on a non-recurring basis.
+Added: The estimation of fair value for these privately held strategic investments requires the use of significant unobservable inputs, such as the issuance of new equity by the company, and as a result, we deem these assets as Level 3 financial instruments within the fair value measurement framework.
+Added: We recognized unrealized gains on investments in privately held companies of $ 145.0 million and $ 42.4 million for the year ended December 31, 2021 and 2020, respectively and realized gains of $ 27.8 million for the year ended December 31, 2021.
+Added: Unrealized and realized gains on all strategic investments are included within other income (expense), net on the consolidated statements of operations and included as an adjustment to reconcile net loss to net cash provided by (used in) operating activities in our consolidated statements of cash flows.
+Added: Strategic investments are included within other assets on the consolidated balance sheets.
+Added: In the fourth quarter of 2021, we reclassified a publicly traded strategic investment to marketable securities.
+Added: See Note 11 for further information.
+Added: All strategic investments are reviewed periodically for impairment.
+Added: Impairment expense recorded for the year ended December 31, 2020 was $ 29.5 million.
+Added: Impairment expense for the year ended December 31, 2021 was not material .
Fair Value Measurements
4 unchanged sentences
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.
−Removed: There were no transfers between levels during the periods presented.
The following table sets forth our financial assets as of December 31, 2021 and 2020 that are measured at fair value on a recurring basis during the period:
6 unchanged sentences
government agency securities
+Added: Publicly traded equity securities (1)
Level 2 securities:
2 unchanged sentences
Certificates of deposit
+Added: In the third quarter of 2021, we reclassified a strategic investment from Level 3 to Level 1 at its fair value using the beginning-of-period approach, following the commencement of public market trading of the investment during the period (which was subject to short-term lock-up restrictions as of December 31, 2021).
December 31, 2020
9 unchanged sentences
Certificates of deposit
+Added: We held an investment in a publicly traded company with a carrying value of $ 193.2 million as of December 31, 2021, recorded as a marketable security.
+Added: We recorded $ 122.1 million in unrealized gains related to this investment.
+Added: Unrealized gains are included within other income (expense), net on the consolidated statements of operations.
Gross unrealized losses were not material as of December 31, 2021 and December 31, 2020, respectively.
As of December 31, 2021, we considered any decreases in fair value on our marketable securities to be driven by factors other than credit risk, including market risk.
−Removed: All of our marketable securities have contractual maturities of less than one year.
−Removed: For certain non-marketable investments we have elected the fair value option, using Level 3 inputs, where changes in fair value are recorded in other income (expense), net.
−Removed: Unrealized gains and losses related to these debt investments were not material for the period ended December 31, 2020.
−Removed: As of December 31, 2020 the fair value of the debt investments was recorded within other assets and was not material.
+Added: As of December 31, 2021, $ 283.1 million of our total $ 1.5 billion in marketable debt securities have contractual maturities between one and five years .
+Added: All other marketable debt securities have contractual maturities less than one year.
W e carry the Convertible Notes at face value less the unamortized discount and issuance costs on our consolidated balance sheets and present that fair value for disclosure purposes only.
−Removed: As of December 31, 2020, the fair value of the 2025 Notes and the 2026 Notes was $ 2.4 billion and $ 2.8 billion, respectively.
+Added: As of December 31, 2021, the fair value of the 2027 Notes, the 2025 Notes and the 2026 Notes was $ 1.1 billion, $ 650.1 million and $ 1.9 billion, respectively.
The estimated fair value of the Convertible Notes, which are classified as Level 2 financial instruments, was determined based on the estimated or actual bid prices of the Convertible Notes in an over-the-counter market on the last business day of the period .
3 unchanged sentences
Loss before income taxes
+Added: Includes the impact of intercompany charges to foreign affiliates for management fees and research and development cost sharing, inclusive of stock-based compensation.
The components of our income tax (benefit) expense were as follows:
1 unchanged sentence
(in thousands)
−Removed: Total current income tax (benefit) expense
−Removed: Total deferred income tax (benefit) expense
−Removed: Income tax (benefit) expense
+Added: Total current income tax expense
+Added: Total deferred income tax benefit
+Added: Income tax expense
The following is a reconciliation of the statutory federal income tax rate to our effective tax rate:
5 unchanged sentences
and foreign tax rates on foreign income
−Removed: Stock-based compensation benefit (expense)
+Added: Stock-based compensation benefit
federal research & development credit benefit
3 unchanged sentences
Total income tax benefit (expense)
+Added: Inclusive of state research and development credits
The significant components of net deferred tax balances were as follows:
12 unchanged sentences
Right-of-use asset
+Added: Investments (1)
Total deferred tax liabilities
2 unchanged sentences
Net deferred taxes
−Removed: “Other” was originally presented net in our Annual Report on Form 10-K for the period ending December 31, 2019, and is now separated into “Other Assets” and “Other Liabilities” for both comparative periods.
−Removed: “Property and Equipment” for the year ended December 31, 2019 was originally presented on a standalone basis in our December 31, 2019 Annual Report, and is now included within “Other Liabilities”.
+Added: For the year ended December 31, 2020 was originally included in “Other Liabilities” in our December 31, 2020 Annual Report as it was not significant.
+Added: The increase in the current year is primarily due to unrealized gains on our marketable securities and strategic investments.
Income tax expense was $ 13.6 million for the year ended December 31, 2021, compared to a tax expense of $ 18.7 million for the year ended December 31, 2020.
−Removed: This increase was primarily driven by a discrete expense resulting from intra-entity transfers of intangible assets, partially offset by a discrete benefit resulting from a partial valuation allowance release on our deferred tax assets due to deferred tax liabilities originating from acquisitions.
On July 22, 2020 the U.K.
1 unchanged sentence
tax rate from 17 % to 19 % effective April 1, 2020.
−Removed: This change in tax rate resulted in an increase to our U.K.
−Removed: net deferred tax assets, which are predominantly loss carryforwards, before valuation allowance of $ 39.7 million, which was fully offset by an increase in our valuation allowance.
−Removed: The issuance of the Convertible Notes in April 2020 and August 2019 resulted in a temporary difference between the carrying amount and tax basis of the Convertible Notes due to the allocation of debt proceeds and debt issuance costs between the liability and equity components.
−Removed: This basis difference resulted in the recognition of a $ 69.9 million and $ 92.1 million net deferred tax liability recorded to additional paid-in-capital in 2020 and 2019, respectively, which is fully offset by a change to our valuation allowance, also recorded to additional paid-in-capital.
−Removed: In June 2019, the United States Court of Appeals for the Ninth Circuit overturned the 2015 U.S.
−Removed: Tax Court decision in Altera Corp.
−Removed: Commissioner, thereby upholding the portion of the Treasury regulations issued under Section 482 of the Code, requiring related-party participants in a cost sharing arrangement to share stock-based compensation costs.
−Removed: In June 2020, the U.S.
−Removed: Supreme Court denied the taxpayer’s petition to review the Ninth Circuit’s decision.
−Removed: As a result, we recorded a cumulative adjustment to our intercompany cost sharing transactions from prior years, which resulted in an immaterial reduction to our deferred tax assets, caused by the differences in tax rates in the impacted jurisdictions.
−Removed: This reduction in our deferred tax assets resulted in an offsetting reduction to our valuation allowance.
+Added: On June 10, 2021, the U.K.
+Added: Finance Act 2021 was enacted to further increase the tax rate from 19% to 25 % effective April 1, 2023.
+Added: These changes to the U.K.
+Added: tax rate resulted in an increase to our U.K.
+Added: net deferred tax assets (before valuation allowance) of $ 188.9 million and $ 39.7 million for the periods ending December 31, 2021 and 2020, respectively, both of which were fully offset by an increase in our valuation allowance.
+Added: Prior to January 1, 2021, the separation of the Convertible Notes into liability and equity components resulted in a temporary difference for which a net deferred tax liability, with an offsetting valuation allowance, was recognized in additional paid-in capital.
+Added: Upon the adoption of ASU 2020-06 on January 1, 2021, the existing temporary difference on the Convertible Notes was eliminated, which resulted in the derecognition of a $ 138.8 million deferred tax liability.
+Added: Both the $ 138.8 million reduction to deferred tax liability and the offsetting increase to our valuation allowance were recorded to additional paid-in capital and accumulated deficit under the modified retrospective approach.
As of December 31, 202 1 , we had an immaterial amount of unremitted earnings related to certain foreign subsidiaries.
4 unchanged sentences
The remaining $ 5.9 billion can be carried forward indefinitely but is subject to an 80 % taxable income limitation.
−Removed: The pre-2018 federal and all state net operating loss carryforwards will begin to expire in 2031 and 2026 , respectively.
+Added: The pre- 2018 federal and certain state net operating loss carryforwards will begin to expire in 2031 and 2025 , respectively.
As of December 31, 20 21 , we had $ 3.2 billion of U.K.
−Removed: net operating loss carryforwards that can be carried forward indefinitely, however, use of such carryforwards in a given year is generally limited to 50 % of such year’s taxable income.
+Added: net operating loss carryforwards that can be carried forward indefinitely;
+Added: however, use of such carryforwards in a given year is generally limited to 50 % of such year ’s taxable income .
As of December 31, 202 1 , we had accumulated U.S.
4 unchanged sentences
We had valuation allowances against net deferred tax assets of $ 3.6 billion and $ 2.3 billion as of December 31, 202 1 and 20 20 , respectively.
−Removed: In 2020, the increase in the valuation allowance was primarily attributable to a net increase in our deferred tax assets resulting from the loss from operations and windfall tax benefits from share-based compensation, which was partially offset by the release of valuation allowance in additional paid-in-capital related to the issuance of the 2025 Notes .
+Added: In 202 1 , the increase in the valuation allowance was primarily attributable to a net increase in our deferred tax assets resulting from the loss from operations, the U.K.
+Added: tax rate increase, windfall tax benefits from share-based compensation, and the recognition of valuation allowance in additional paid-in-capital related to the adoption of ASU 2020-06 pertaining to the Convertible Notes .
Uncertain Tax Positions
8 unchanged sentences
Changes due to foreign currency translation adjustments
+Added: corporate rate increase
Ending balance of unrecognized tax benefits (excluding interest and penalties)
3 unchanged sentences
Substantially all of the unrecognized tax benefit was recorded as a reduction in our gross deferred tax assets, offset by a corresponding reduction in our valuation allowance.
−Removed: We have net unrecognized tax benefits of $ 11.8 million and $ 1.5 million that are included in other liabilities on our consolidated balance sheet as of December 31, 2020 and 2019, respectively.
+Added: We have net unrecognized tax benefits of $ 15.9 million and $ 11.8 million that is included in other liabilities on our consolidated balance sheet as of December 31, 20 21 and 20 20 , respectively.
Assuming there continues to be a valuation allowance against deferred tax assets in future periods when gross unrecognized tax benefits are realized, this would result in a tax benefit of $ 15.9 million within our provision of income taxes at such time.
46 unchanged sentences
Acquisition liability
−Removed: Accrued tax liability
−Removed: Securities class actions legal charges
+Added: Other operating costs
+Added: Deferred revenue
Total accrued expenses and other current liabilities
−Removed: Non-Marketable Investments
−Removed: We held investments in privately held companies with a carrying value of $ 169.5 million and $ 55.0 million as of December 31, 2020 and 2019, respectively, which consist primarily of equity securities.
−Removed: Non-marketable investments are included within other assets on the consolidated balance sheet.
−Removed: Such investments are reviewed periodically for impairments.
−Removed: We recorded impairments of $ 29.5 million for the year ended December 31, 2020 and $ 7.2 million for the year ended December 31, 2018, within other income (expense), net in the consolidated statements of operations.
−Removed: The impairment recorded for the year ended December 31, 2019 was not material.
−Removed: Additionally, we recognized gains on non-marketable investments of $ 42.4 million and $ 20.8 million for the years ended December 31, 2020 and 2019, respectively, within other income (expense), net on the consolidated statement of operations.
−Removed: The gains on non-marketable investments for the year ended December 31, 2018 were not material.
+Added: Other liabilities at December 31, 2021 and 2020 consisted of the following:
+Added: As of December 31,
+Added: (in thousands)
+Added: Acquisition liability
+Added: Total other liabilities
Employee Benefit Plans
1 unchanged sentence
The 401(k) Plan is available for all full-time employees who meet certain eligibility requirements.
−Removed: Eligible employees may contribute up to 100 % of their annual compensation, but are limited to the maximum annual dollar amount allowable under the Code.
−Removed: We match 100 % of each participant’s contribution up to a maximum of 3 % of the participant’s base salary, bonus, and commissions paid during the period, and we match 50 % of each participant’s contribution between 3 % and 5 % of the participant’s base salary, bonus, and commissions paid during the period.
+Added: Eligible employees may contribute up to 100 % of their eligible compensation, but are limited to the maximum annual dollar amount allowable under the Code.
+Added: We match 100 % of each participant’s contribution up to a maximum of 3 % of the participant’s eligible compensation paid during the period, and we match 50 % of each participant’s contribution between 3 % and 5 % of the participant’s eligible compensation paid during the period.
During the years ended December 31, 2021, 2020, and 2019, we recognized expense of $ 25.0 million, $ 18.4 million, and $ 15.4 million, respectively, related to matching contributions.
7 unchanged sentences
Upon termination of the sublease, this entity will purchase the hangar from Snap at its fair market value on the termination date.
−Removed: The value of these arrangements are not material to our consolidated financial statements for the current period or for the term of the agreement.
+Added: The value of these arrangements is not material to our consolidated financial statements for the current period or for the term of the agreement.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.