Property and equipment consists of the following (in millions):
December 31, March 31, 2012 2010 2011 (unaudited) Network equipment . . . $ 478 $1,016 $ 1,382 Land . . . 29 34 34 Buildings . . . — 355 373 Leasehold improvements . . . 58 120 148
Computer software, office equipment and other . . . 61 73 76
Construction in progress . . . 194 327 379 Total . . . 820 1,925 2,392
Less accumulated depreciation and amortization . . . (246) (450) (537)
Property and equipment, net . . . $ 574 $1,475 $ 1,855 Property and equipment at December 31, 2010 and 2011 and March 31, 2012 includes $298 million, $881 million, and $979 million, respectively, acquired under capital lease agreements. Accumulated amortization under capital leases totaled $85 million, $210 million, and $280 million at December 31, 2010 and 2011, and March 31, 2012, respectively. Amortization of assets under capital leases is included in depreciation and amortization expense.
Construction in progress includes costs primarily related to the construction and network equipment of data centers in Oregon and North Carolina in the United States and in Sweden, and our new corporate headquarters in Menlo Park, California. Interest capitalized during the years presented was not material.
FACEBOOK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Information as of March 31, 2012 and for the three months ended March 31, 2011 and 2012 is unaudited) Note 4. Goodwill and Intangible Assets
Goodwill and intangible assets consist of the following (in millions):
December 31, March 31,
2012
2010 2011
(unaudited) Acquired patents . . . $ 33 $ 51 $ 83
Acquired non-compete agreements . . . 11 18 18
Acquired technology and other . . . 27 43 43
Accumulated amortization . . . (12) (32) (37)
Net acquired intangible assets . . . 59 80 107
Goodwill . . . 37 82 82 Goodwill and intangible assets . . . $ 96 $ 162 $ 189 Acquired patents have estimated useful lives ranging from four to 18 years at acquisition. The average term of acquired non-compete agreements is generally two years. Acquired technology and other have estimated useful lives of two to ten years. Amortization expense of intangible assets for the years ended December 31, 2009, 2010, and 2011 was $2 million, $9 million, and $20 million, respectively.
During the year ended December 31, 2011, we completed business acquisitions for total consideration of $68 million. These acquisitions were not material to our consolidated financial statements individually or in the aggregate. Our acquisitions prior to 2011 were also not material individually or in the aggregate. There were no business combinations completed during the three months ended March 31, 2012.
The following table presents the aggregated estimated fair value of the assets acquired for all acquisitions completed during the year ended December 31, 2011 (in millions):
Acquired technology and other . . . $16
Acquired non-compete agreements . . . 7
Net assets acquired . . . 4
Deferred income tax liabilities . . . (7)
Goodwill . . . 48
Total . . . $68 Pro forma results of operations related to our 2011 acquisitions have not been presented because they are not material to our consolidated statements of income, either individually or in the aggregate. For all acquisitions completed during the year ended December 31, 2011, acquired technology and other had a weighted-average useful life of three years and the term of the non-compete agreements is generally two years.
FACEBOOK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Information as of March 31, 2012 and for the three months ended March 31, 2011 and 2012 is unaudited)
The changes in carrying amount of goodwill for the years ended December 31, 2010 and 2011 are as follows (in millions):
Balance as of December 31, 2009 . . . $11
Goodwill acquired . . . 26
Balance as of December 31, 2010 . . . 37
Goodwill acquired . . . 48
Effect of currency translation adjustment . . . (3)
Balance as of December 31, 2011 . . . $82
As of December 31, 2011, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions): 2012 . . . $21 2013 . . . 11 2014 . . . 7 2015 . . . 7 2016 . . . 6 Thereafter . . . 28 Total . . . $80
Note 5. Long-term Debt
In March 2010, we entered into a senior unsecured term loan facility with certain lenders. This facility allowed for the drawdown of up to $250 million in unsecured senior loans with a maturity of five years. In April 2010 we drew down the full amount available under the facility at an interest rate of 4.5%, payable quarterly. The loan could be repaid by us at any time without penalty. Debt issuance costs of approximately $1 million were recorded in other non-current assets and were being amortized to interest expense over the contractual term of the loan. On March 2, 2011, we repaid in full the long-term debt balance of $250 million, and expensed the remaining unamortized debt issuance costs.
In 2011, we entered into an agreement for an unsecured five-year revolving credit facility that allowed us to borrow up to $2,500 million, with interest payable on borrowed amounts set at the London Interbank Offered Rate (LIBOR) plus 1.0%. No amounts were drawn down under this agreement as of December 31, 2011. In February 2012, we terminated this credit facility and entered into a new agreement for an unsecured five-year revolving credit facility that allows us to borrow up to $5,000 million for general corporate purposes, with interest payable on the borrowed amounts set at LIBOR plus 1.0%. Prior to our initial public offering, we can borrow up to $2,500 million under this facility. Origination fees are amortized over the term of the credit facility. Under the terms of the new agreement, we are obligated to pay a commitment fee of 0.10% per annum on the daily undrawn balance.
Concurrent with our entering into the new revolving credit facility, we also entered into a bridge credit facility that allows us to borrow up to $3,000 million to fund tax withholding and remittance obligations related to the settlement of RSUs in connection with our initial public offering, with interest payable on the borrowed amounts set at LIBOR plus 1.0%, and an additional 0.25% payable on drawn balances outstanding from and after the 180th day of borrowing. We may make a single borrowing under this bridge facility beginning on the closing
FACEBOOK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Information as of March 31, 2012 and for the three months ended March 31, 2011 and 2012 is unaudited)
date of our initial public offering and ending on the date that is 240 days after that date. Any amounts outstanding under this facility will be due one year after the date we draw on the facility but no later than June 30, 2014. During the term of this bridge facility, the lenders’ commitments are subject to reduction and amounts borrowed thereunder are subject to repayment in the event we raise capital through certain asset sales, debt issuances, or equity issuances. Origination fees are amortized over the term of the facility, and we are obligated to pay an additional upfront fee of 0.20% of the aggregate amount of the borrowings requested on any applicable funding date. Under the terms of the agreement, we are obligated to pay a commitment fee of 0.10% per annum on the daily undrawn balance from and after the 90th day following the date we entered into the bridge facility.