þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2006. | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Transition Period from to . |
Delaware
|
77-0430924 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
|
2145 Hamilton Avenue
San Jose, California (Address of principal executive offices) |
95125
(Zip Code) |
Title of each class
Common stock |
Name of exchange on which
registered
The Nasdaq Global Select Market |
Class
|
Outstanding as of February 16, 2007
|
|
Common Stock, $0.001 par
value per share
|
1,368,973,770 shares |
i
Access to broad markets
Cost effective
marketing and distribution
Ability to maximize
selling prices
Opportunity to
increase sales
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Our global community of users can easily and inexpensively
communicate, exchange information and complete transactions;
Our Marketplaces include more than a hundred million items,
creating a wide variety and selection of goods;
We bring buyers and sellers together for lower fees than
traditional intermediaries; and
Our Marketplaces provide for efficient information exchange.
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our ability to retain an active user base, to attract new users,
and to encourage existing users to list items for sale, purchase
items through our websites, or use our payment service or
communication software and products;
the volume, size, timing, and completion rate of transactions
using our websites or technology;
the amount and timing of operating costs and capital
expenditures relating to the maintenance and expansion of our
businesses, operations, and infrastructure;
our ability to integrate, manage, and profitably expand and
further monetize the Skype business;
our ability to successfully integrate and manage other recent
and prospective acquisitions;
regulatory actions imposing obligations on our businesses or our
users;
the actions of our competitors, including the introduction of
new sites, services, and products;
consumer confidence in the safety and security of transactions
using our websites or technology and our ability to manage the
costs of our user protection programs;
the costs and results of litigation that involves us;
the cost and availability of online and traditional advertising,
and the success of our brand building and marketing campaigns;
new laws or regulations, or interpretations of existing laws or
regulations, that harm our business models or restrict the
Internet, electronic commerce, online payments, or online
communications;
our ability to comply with the requirements of entities whose
services are required for our operations, such as credit card
associations;
our ability to develop product enhancements at a reasonable cost
and to develop programs and features in a timely manner;
our ability to upgrade and develop our systems, infrastructure,
and customer service capabilities to accommodate growth and to
improve our websites at a reasonable cost while maintaining 24/7
operations;
technical difficulties or service interruptions involving our
websites or services provided to us or our users by third
parties;
our ability to increase the acceptance of PayPal by online
merchants outside of the eBay Marketplaces;
our ability to expand PayPals product offerings outside of
the U.S. (including our ability to obtain any necessary
regulatory approvals);
our ability to manage PayPals transaction loss and credit
card chargeback rates and payment funding mix;
our ability to continue Skypes growth and to find
mechanisms to more effectively monetize it;
our ability to attract new personnel in a timely and effective
manner and to retain key employees;
the continued financial strength of our technology suppliers and
other parties with whom we have commercial relations;
continued consumer acceptance of the Internet as a medium for
commerce and communication in the face of increasing publicity
about fraud, spoofing, viruses, and other dangers of the
Internet;
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general economic conditions and those economic conditions
specific to the Internet and
e-commerce
industries; and
geopolitical events such as war, threat of war, or terrorist
actions.
attract new users, keep existing users active on our websites
and services, and increase the activity levels of our active
users;
react to changes in consumer use of the Internet and develop new
services, as well as new sources of revenues from our existing
services;
manage the costs of our business, including the costs associated
with maintaining and enhancing our websites, customer support,
transaction and chargeback rates, user protection programs, and
international and product expansion;
maintain sufficient transaction volume to attract buyers and
sellers;
cost effectively increase the awareness of our brands; and
provide our customers with superior community, customer support,
and trading, communication, and payment experiences.
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regulatory requirements, including regulation of Internet
services, communications, auctioneering, professional selling,
distance selling, banking, and money transmitting, that may
limit or prevent the offering of our services in some
jurisdictions, prevent enforceable agreements between sellers
and buyers, prohibit the listing of certain categories of goods,
require product changes, require special licensure, subject us
to special taxes, or limit the transfer of information between
eBay and our affiliates;
legal uncertainty regarding our liability for the listings and
other content provided by our users, including uncertainty as a
result of legal systems that are less developed with respect to
the Internet, unique local laws, and lack of clear precedent or
applicable law;
difficulties in integrating with local payment providers,
including banks, credit and debit card associations, and
electronic fund transfer systems or with the local
telecommunications infrastructure;
differing levels of retail distribution, shipping,
communications, and Internet infrastructures;
different employee/employer relationships and the existence of
workers councils and labor unions;
difficulties in staffing and managing foreign operations;
challenges associated with joint venture relationships,
including dependence on our joint venture partners;
difficulties in implementing and maintaining adequate internal
controls;
longer payment cycles, different accounting practices, and
greater problems in collecting accounts receivable;
potentially adverse tax consequences, including local taxation
of our fees or of transactions on our websites;
higher telecommunications and Internet service provider costs;
strong local competitors;
different and more stringent user protection, data protection,
and other laws;
cultural ambivalence towards, or non-acceptance of, online
trading;
seasonal reductions in business activity;
expenses associated with localizing our products, including
offering customers the ability to transact business in the local
currency;
laws and business practices that favor local competitors or
prohibit foreign ownership of certain businesses;
profit repatriation restrictions, foreign currency exchange
restrictions, and exchange rate fluctuations;
volatility in a specific countrys or regions
political or economic conditions; and
differing intellectual property laws.
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diversion of management time, as well as a shift of focus from
operating the businesses to issues related to integration and
administration, particularly given the large number and size and
varying scope of our recent acquisitions, and, in the case of
Skype, the complex earn-out structure associated with the
transaction;
declining employee morale and retention issues resulting from
changes in, or acceleration of, compensation, or changes in
management, reporting relationships, future prospects, or the
direction of the business;
the need to integrate each companys accounting,
management, information, human resource and other administrative
systems to permit effective management, and the lack of control
if such integration is delayed or not implemented;
the need to implement controls, procedures and policies
appropriate for a larger public company at companies that prior
to acquisition had lacked such controls, procedures and
policies; and
in some cases, the need to transition operations, users, and
customers onto our existing platforms.
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Our Websites.
We must constantly add new
hardware, update software and add new engineering personnel to
accommodate the increased use of our and our subsidiaries
websites and the new products and features we regularly
introduce. This upgrade process is expensive, and the increased
complexity of our websites and the need to support multiple
platforms as our portfolio of brands grows increases the cost of
additional enhancements. Failure to upgrade our technology,
features, transaction processing systems, security
infrastructure, or network infrastructure to accommodate
increased traffic or transaction volume could harm our business.
Adverse consequences could include unanticipated system
disruptions, slower response times, degradation in levels of
customer support, impaired quality of users experiences of
our services, impaired quality of services for third-party
application developers using our externally accessible
Application Programming Interface, or API, and delays in
reporting accurate financial information. We may be unable to
effectively upgrade and expand our systems in a timely manner or
smoothly integrate any newly developed or purchased technologies
or businesses with our existing systems, and any failure to do
so could result in problems on our sites. For example, in
October 2004, we experienced unscheduled downtime on the PayPal
website over a period of five days related to system upgrades.
Despite our efforts to increase site scalability and
reliability, our infrastructure could prove unable to handle a
larger volume of customer transactions. Some of our more
recently acquired businesses may be particularly subject to this
risk given their shorter histories and, in some cases, higher
growth rates. Any failure to accommodate transaction growth
could impair customer satisfaction, lead to a loss of customers,
impair our ability to add customers, or increase our costs, all
of which would harm our business. Further, steps to increase the
reliability and redundancy of our systems are expensive, reduce
our margins, and may not be successful in reducing the frequency
or duration of unscheduled downtime.
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Customer Account Billing.
Our revenues
depend on prompt and accurate billing processes. Problems with
our conversion to a new billing system during the second and
third quarters of 2004 caused incorrect account balance totals
to be displayed for some users. While these problems have been
corrected and we believe that no users were overcharged, our
failure to grow our transaction-processing capabilities to
accommodate the increasing number of transactions that must be
billed on any of our websites would harm our business and our
ability to collect revenue.
Customer Support.
We are expanding our
customer support operations to accommodate the increased number
of users and transactions on our websites and the increased
level of user protection activity we provide worldwide. If we
are unable to provide these operations in a cost-effective
manner, users of our websites may have negative experiences,
current and future revenues could suffer, and our operating
margins may decrease.
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ability to attract buyers and sellers;
volume of transactions and price and selection of goods;
customer service; and
brand recognition.
community cohesion, interaction and size;
website
ease-of-use
and accessibility;
system reliability;
reliability of delivery and payment;
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level of service fees; and
quality of search tools.
credit card merchant processors that offer their services to
online merchants, including Cardservice International, Chase
Paymentech, First Data, iPayment and Wells Fargo; and payment
gateways, including CyberSource and Authorize.net;
money remitters such as MoneyGram and Western Union;
bill payment services, including CheckFree;
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processors that provide online merchants the ability to offer
their customers the option of paying for purchases from their
bank account, including Certegy, PayByTouch and TeleCheck, a
subsidiary of First Data, or to pay on credit, including Bill Me
Later;
providers of traditional payment methods, particularly credit
cards, checks, money orders, and Automated Clearing House
transactions;
issuers of stored value targeted at online payments, including
VisaBuxx, NetSpend and Next Estate; and
Google Checkout, which enables the online payment of merchants
using credit cards.
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the possibility of environmental contamination and the costs
associated with fixing any environmental problems;
adverse changes in the value of these properties, due to
interest rate changes, changes in the neighborhoods in which the
properties are located, or other factors;
the possible need for structural improvements in order to comply
with zoning, seismic, disability act, or other
requirements; and
possible disputes with tenants, neighboring owners, or others.
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46
68
69
90
94
ITEM 5:
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
High
Low
$
58.89
$
35.00
40.94
30.78
44.98
32.75
47.60
37.22
$
47.86
$
36.93
40.82
28.20
29.48
22.83
33.99
27.00
(a)
(c)
Number of
Number of Securities
Securities
(b)
Remaining Available for
to Be Issued
Weighted Average
Future Issuance under
upon Exercise of
Exercise Price of
Equity Compensation Plans
Outstanding Options,
Outstanding Options,
(Excluding Securities
Warrants and Rights
Warrants and Rights
Reflected in Column(a))
133,608,434
(1)
$
31.01
(2)
108,066,657
(3)
768,184
(4)
0.39
134,376,618
$
30.83
108,066,657
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(1)
Includes 36,056 shares of our common stock issuable
pursuant to deferred stock units, or DSUs, under our 2003
Deferred Stock Unit Plan, and 508,150 shares of our common
stock issuable pursuant to restricted stock units under our 1998
Equity Incentive Plan. DSUs and restricted stock units represent
an unfunded, unsecured right to receive shares of eBay common
stock (or, in the case of DSUs, the equivalent value thereof in
cash or property), and the value of DSUs and restricted stock
units varies directly with the price of eBays common stock.
(2)
Because DSUs and restricted stock units do not have an exercise
price, the 36,056 shares of our common stock issuable
pursuant to DSUs under our 2003 Deferred Stock Unit Plan and
508,150 shares of our common stock issuable pursuant to
restricted stock units under our 1998 Equity Incentive Plan are
not included in the calculation of weighted average exercise
price.
(3)
Includes 5,575,774 shares of our common stock remaining
reserved for future issuance under our 1998 Employee Stock
Purchase Plan, or the ESPP, as of December 31, 2006. Our
ESPP contains an evergreen provision that
automatically increases, on each January 1, the number of
securities reserved for issuance under the ESPP by the number of
shares purchased under the ESPP in the preceding calendar year,
provided that the aggregate number of shares reserved for
issuance under the ESPP may not exceed 36,000,000 shares.
As of December 31, 2006, an aggregate amount of
9,785,222 shares had been purchased under the ESPP since
its inception. An aggregate amount of 1,624,226 shares was
purchased under the ESPP in 2006, and the number of securities
available for issuance under the ESPP was increased by that
number on January 1, 2007, bringing the total number of
shares reserved for future issuance on January 1, 2007 to
7,200,000. None of our other equity compensation plans has an
evergreen provision.
(4)
Does not include: (i) 7,050 shares of our common
stock, with a weighted average exercise price of $2.73 per
share, to be issued upon exercise of outstanding options assumed
by us under the Half.com, Inc. 1999 Equity Compensation Plan;
(ii) 37,726 shares of our common stock, with a
weighted average exercise price of $0.77 per share, to be
issued upon exercise of outstanding options assumed by us under
the X.com Corporation 1999 Stock Plan;
(iii) 494,108 shares of our common stock, with a
weighted average exercise price of $9.14 per share, to be
issued upon exercise of outstanding options assumed by us under
the PayPal, Inc. 2001 Equity Incentive Plan;
(iv) 184,562 shares of our common stock, with a
weighted average exercise price of $9.47 per share, to be
issued upon exercise of outstanding options assumed by us under
the Shopping.com Ltd. 2003 Omnibus Stock Option and Restricted
Stock Incentive Plan; (v) 944,682 shares of our common
stock, with a weighted average exercise price of $36.30 per
share, to be issued upon exercise of outstanding options assumed
by us under the Shopping.com Ltd. 2004 Equity Incentive Plan; or
(vi) 1,118,794 shares of our common stock, with a
weighted average exercise price of $3.88 per share, to be
issued upon exercise of outstanding options assumed by us under
the Skype Technologies S.A. Stock Option Plan Rules. All of the
options and related plans referenced above were assumed by us in
connection with acquisitions. We cannot make subsequent grants
or awards of our equity securities under any of these plans.
Prior to each acquisition, the stockholders of the acquired
company approved the acquired companys plan. Our
stockholders, however, did not approve any of the plans in
connection with the acquisitions.
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Total Number of
Maximum Dollar
Total Number
Average Price
Shares Purchased as
Value that May Yet
of Shares
Paid
Part of Publicly
be Purchased Under
Purchased(2)
per Share
Announced Programs
the Program(1)
720
$
29.10
$
1,333,458,652
19,626,163
$
33.02
19,625,603
$
685,455,407
10,921,107
$
32.23
10,920,547
$
333,459,583
30,547,990
30,546,150
(1)
In July 2006, our Board authorized a stock repurchase program
for up to $2.0 billion of our common stock within two years
from the date of authorization. The stock repurchase program was
announced in July 2006. Under this program, in 2006, we
repurchased approximately 54.5 million shares at an average
price of $30.56 per share. As of December 31, 2006,
$333 million remained available for further purchases under
this program. In January 2007, our Board authorized the
expansion of the stock repurchase program to provide for the
repurchase of up to an additional $2.0 billion of our
common stock by January 2009.
(2)
Includes 1,840 shares of restricted stock repurchased from
employees, in addition to the 30.5 million shares
repurchased pursuant to our stock repurchase program.
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December 31,
2002
2003
2004
2005
2006
(In thousands)
$
1,109,313
$
1,381,513
$
1,330,045
$
1,313,580
$
2,662,792
89,690
340,576
682,004
774,650
542,103
470,227
934,171
1,266,289
825,667
277,853
1,082,234
1,498,606
1,826,279
1,698,302
2,452,191
4,040,226
5,820,134
7,991,051
11,788,986
13,494,011
2,970
2,840
124,272
(4)
13,798
124,476
(4)
75
3,556,473
4,896,242
6,728,341
10,047,981
10,904,632
(1)
These results include acquired company results of operations
beginning on the date of acquisition. See Note 3 in the
notes to the consolidated financial statements, included
elsewhere in this Annual Report on Form
10-K,
for a
summary of recent significant acquisitions. Certain prior year
amounts have been reclassified to conform to current years
presentation.
(2)
Net income for 2006 included stock-based compensation expense
under Statement of Financial Accounting Standards
(SFAS) No. 123 (revised 2004),
Share-Based Payment (FAS 123(R)) of
$219.8 million, net of tax. Because we implemented
FAS 123(R) as of January 1, 2006, prior periods do not
reflect stock-based compensation expense related to this new
accounting standard. See Note 12
Stock-Based Plans to the consolidated financial statements
included in this report.
(3)
The cumulative effect of the change in accounting principle
arises from the adoption of FIN 46, Consolidation of
Variable Interest Entities.
(4)
Includes a lease obligation totaling $122.5 million that
was reclassified as short-term in 2004 as the lease expired on
March 1, 2005, at which time we purchased the facility.
(5)
Working capital is calculated as the difference between total
current assets and total current liabilities.
ITEM 7:
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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Quarter Ended
March 31
June 30
September 30
December 31
(In thousands, except percentages)
$
756,239
$
773,412
$
805,876
$
935,782
17
%
2
%
4
%
16
%
$
1,031,724
$
1,086,303
$
1,105,515
$
1,328,859
10
%
5
%
2
%
20
%
$
1,390,419
$
1,410,784
$
1,448,637
$
1,719,901
5
%
1
%
3
%
19
%
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Percent
Percent
Year Ended
Change
Year Ended
Change
Year Ended
December 31,
from
December 31,
from
December 31,
2004
2004 to 2005
2005
2005 to 2006
2006
(In thousands, except percent changes)
$
2,496,187
36%
$
3,402,301
24%
$
4,203,340
680,813
47%
1,001,915
40%
1,401,824
24,809
677%
192,756
3,177,000
39%
4,429,025
31%
5,797,920
94,309
31%
123,376
39%
171,821
$
3,271,309
39%
$
4,552,401
31%
$
5,969,741
$
2,573,607
36%
$
3,499,137
24%
$
4,334,290
697,702
47%
1,028,455
40%
1,440,530
24,809
686%
194,921
$
3,271,309
39%
$
4,552,401
31%
$
5,969,741
$
1,889,936
31%
$
2,471,273
26%
$
3,108,986
1,381,373
51%
2,081,128
37%
2,860,755
$
3,271,309
39%
$
4,552,401
31%
$
5,969,741
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Year Ended December 31,
2004
2005
2006
(In millions)
135.5
180.6
221.6
56.1
71.8
81.8
1,339.9
1,689.6
1,996.1
72.7
187.2
369.2
$
34,168
$
44,299
$
52,474
63.8
96.2
133.0
20.2
28.1
37.6
339.9
480.7
610.7
$
18,915
$
27,485
$
37,752
74.7
171.2
(1)
Rent.com, Shopping.com, and our classifieds websites are not
included in these metrics.
(2)
Cumulative total of all users who have completed the
registration process on one of eBay.coms platforms.
(3)
All users, excluding users of Half.com and Internet Auction, who
bid on, bought, or listed an item within the previous
12-month
period.
(4)
All store inventory listings on eBay.coms platforms during
the period, regardless of whether the listing subsequently
closed successfully.
(5)
Total value of all successfully closed items between users on
eBays trading platforms during the period, regardless of
whether the buyer and seller actually consummated the
transaction.
(6)
Cumulative total of all accounts opened, including users who
made payments using PayPal but have not registered, excluding
accounts that have been closed or locked and the payment gateway
business accounts.
(7)
All accounts, and users whether registered or not, that sent or
received at least one payment through the PayPal system during
the period.
(8)
Total number of payments initiated through the PayPal system
during the period, excluding the payment gateway business,
regardless of whether the payment was actually sent
successfully, or was reversed, rejected, or pending at the end
of the period.
(9)
Total dollar volume of payments initiated through the PayPal
system during the period, excluding the payment gateway
business, regardless of whether the payment was actually sent
successfully, or was reversed, rejected, or was pending at the
end of the period.
(10)
Cumulative number of unique user accounts created on Skype.
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Change from
Change from
Year Ended December 31,
2004 to 2005
2005 to 2006
2004
2005
2006
In dollars
In %
In dollars
In %
(In thousands, except percentages)
$
614,415
$
818,104
$
1,256,792
$
203,689
33
%
438,688
54
%
815,464
1,185,929
1,619,857
370,465
45
%
433,928
37
%
240,647
328,191
494,695
87,544
36
%
166,504
51
%
475,614
649,529
978,363
173,915
37
%
328,834
51
%
65,927
128,941
197,078
63,014
96
%
68,137
53
%
77,867
111,148
130,021
33,281
43
%
18,873
17
%
8,879
3,478
5,916
(5,401
)
−61
%
2,438
70
%
343,885
467,285
421,418
123,400
36
%
(45,867
)
−10
%
6,122
49
4
(6,073
)
−99
%
(45
)
−92
%
2004
2005
2006
$
233
$
1,881
$
32,981
136
8,696
96,547
654
6,468
81,489
4,809
14,727
106,393
5,832
31,772
317,410
(4,117
)
(13,023
)
(97,572
)
$
1,715
$
18,749
$
219,838
2004
2005
2006
(In thousands, except percentages)
$
614,415
$
818,104
$
1,256,792
18.8
%
18.0
%
21.1
%
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2004
2005
2006
(In thousands, except percentages)
$
815,464
$
1,185,929
$
1,619,857
24.9
%
26.1
%
27.1
%
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2004
2005
2006
(In thousands, except percentages)
$
240,647
$
328,191
$
494,695
7.4
%
7.2
%
8.3
%
2004
2005
2006
(In thousands, except percentages)
$
475,614
$
649,529
$
978,363
14.5
%
14.3
%
16.4
%
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2004
2005
2006
(In thousands, except percentages)
$
65,927
$
128,941
$
197,078
2.0
%
2.8
%
3.3
%
2004
2005
2006
(In thousands, except percentages)
$
77,867
$
111,148
$
130,021
2.4
%
2.4
%
2.2
%
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2004
2005
2006
(In thousands, except percentages)
$
8,879
$
3,478
$
5,916
0.3
%
0.1
%
0.1
%
2004
2005
2006
(In thousands, except percentages)
$
343,885
$
467,285
$
421,418
10.5
%
10.3
%
7.1
%
30
%
30
%
27
%
53
Table of Contents
54
Table of Contents
Year Ended December 31,
2004
2005
2006
(In thousands)
$
1,285,315
$
2,009,891
$
2,247,791
(2,013,220
)
(2,452,731
)
228,853
647,669
471,606
(1,260,687
)
28,768
(45,231
)
133,255
$
(51,468
)
$
(16,465
)
$
1,349,212
55
Table of Contents
Operating
Purchase
Leases
Obligations
Total
$
44,178
$
180,633
$
224,811
41,536
64,908
106,444
35,637
29,436
65,073
29,476
16,396
45,872
25,420
19,347
44,767
102,094
102,094
$
278,341
$
310,720
$
589,061
56
Table of Contents
57
Table of Contents
Year Ended December 31,
2004
2005
2006
$
3,271,309
$
4,552,401
$
5,969,741
$
90,942
$
89,499
$
100,729
2.78
%
1.97
%
1.69
%
−25 Basis
+25 Basis
Points
2006
Points
$
85,805
$
100,729
$
115,653
1,437,880
1,422,956
1,408,032
1,140,563
1,125,639
1,110,715
$
0.80
$
0.79
$
0.78
58
Table of Contents
Year Ended December 31,
2004
2005
2006
$
18,915,000
$
27,485,000
$
37,752,000
$
50,459
$
73,773
$
126,439
0.27
%
0.27
%
0.33
%
−5 Basis
+5 Basis
Points
2006
Points
$
107,562
$
126,439
$
145,315
1,441,832
1,422,956
1,404,079
1,144,515
1,125,639
1,106,762
$
0.80
$
0.79
$
0.78
59
Table of Contents
Year Ended December 31,
2004
2005
2006
$
343,885
$
467,285
$
421,418
30
%
30
%
27
%
−100 Basis
+100 Basis
Points
2006
Points
$
405,947
$
421,418
$
436,889
1,438,427
1,422,956
1,407,485
1,141,110
1,125,639
1,110,168
$
0.80
$
0.79
$
0.78
60
Table of Contents
4.7%
3 years
0%
36%
61
Table of Contents
62
Table of Contents
63
Table of Contents
ITEM 9:
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A:
CONTROLS
AND PROCEDURES
64
Table of Contents
ITEM 10:
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11:
EXECUTIVE
COMPENSATION
ITEM 12:
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13:
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14:
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
65
Table of Contents
Consolidated Financial
Statements:
66
Table of Contents
Filed with
Incorporated by Reference
this 10-K
Form
File No.
Date Filed
Sale and Purchase Agreement dated
as of September 11, 2005, by and among Registrant, Skype
Technologies S.A. and the parties identified on Schedule 1
thereto.
8-K
000-24821
9/15/2005
Earn Out Agreement dated as of
September 11, 2005, by and among Registrant, Skype
Technologies S.A. and the parties identified on Schedule I
thereto.
8-K
000-24821
9/15/2005
Form of Option Assumption
Agreement.
8-K
000-24821
10/18/2005
Form of EMI Rollover Agreement.
8-K
000-24821
10/18/2005
Amendment No. 1 to Earn Out
Agreement dated as of December 29, 2005, by and among
Registrant, Skype Technologies S.A. and the parties identified
on Schedule I thereto.
10-K
000-24821
2/24/2006
Registrants Amended and
Restated Certificate of Incorporation.
10-Q
000-24821
7/27/2005
Registrants Amended and
Restated By-laws.
10-Q
000-24821
11/13/1998
Form of Specimen Certificate for
Registrants Common Stock.
S-1
333-59097
8/19/1998
Registration Rights Agreement
dated as of September 11, 2005, by and among Registrant and
the parties identified on Schedule I thereto.
8-K
000-24821
9/15/2005
Form of Indemnity Agreement
entered into by Registrant with each of its directors and
executive officers.
S-1
333-59097
7/15/1998
Registrants 1996 Stock
Option Plan, as amended.
S-1
333-59097
7/15/1998
Registrants 1997 Stock
Option Plan, as amended.
X
Registrants 1998 Equity
Incentive Plan, as amended.
X
Form of Stock Bonus Agreement
under Registrants 1998 Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Form of Stock Option Agreement
under Registrants 1998 Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Form of Restricted Stock Unit
Agreement under Registrants 1998 Equity Incentive Plan.
X
Registrants Amended and
Restated 1998 Employee Stock Purchase Plan.
S-8
333-117913
8/4/2004
Registrants
1998 Directors Stock Option Plan, as amended.
X
Registrants 1999 Global
Equity Incentive Plan, as amended.
X
Form of Stock Option Agreement
under Registrants 1999 Global Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Form of Restricted Stock Unit
Agreement under Registrants 1999 Global Equity Incentive
Plan.
X
67
Table of Contents
Filed with
Incorporated by Reference
this 10-K
Form
File No.
Date Filed
Registrants 2001 Equity
Incentive Plan, as amended.
X
Form of Stock Option Agreement
under Registrants 2001 Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Registrants 2003 Deferred
Stock Unit Plan, as amended.
X
Form of 2003 Deferred Stock Unit
Plan Electing Director Award Agreement, as amended.
10-Q
000-24821
4/25/2006
Form of 2003 Deferred Stock Unit
Plan New Director Award Agreement, as amended.
10-Q
000-24821
4/25/2006
eBay Incentive Plan.
10-Q
000-24821
7/27/2005
Summary of Compensation Payable to
Named Executive Officers.
10-Q
000-24821
4/25/2006
Employment Letter Agreement dated
January 16, 1998, between Margaret C. Whitman and
Registrant.
S-1
333-59097
8/19/1998
Stock Option Agreement dated
June 9, 1998 between Registrant and Scott D. Cook.
10-K
000-24821
3/31/2003
Employment Letter Agreement dated
August 20, 1998, between Michael R. Jacobson and Registrant.
S-1
333-59097
9/1/1998
Offer Letter to William C. Cobb
dated November 22, 2000.
10-K
000-24821
3/25/2002
Offer Letter to John Donahoe dated
November 16, 2004.
8-K
000-24821
2/24/2005
Offer Letter to Elizabeth Axelrod
dated December 7, 2004 and addendum thereto dated
February 16, 2005.
8-K
000-24821
3/10/2005
Offer Letter to Robert H. Swan
dated February 10, 2006.
8-K
000-24821
2/21/2006
Letter Agreement regarding
supplemental relocation assistance dated July 12, 2006 to
Robert H. Swan.
8-K
000-24821
7/13/2006
Separation Agreement dated as of
August 8, 2006 between Registrant and Maynard Webb.
10-Q
000-24821
10/30/2006
Separation Agreement dated as of
September 11, 2006 between Registrant and Jeffrey Jordan.
10-Q
000-24821
10/30/2006
Consulting Agreement dated as of
September 11, 2006 between Registrant and Jeffrey Jordan.
10-Q
000-24821
10/30/2006
Credit Agreement, dated as of
November 7, 2006, by and among Registrant, Bank of America,
N.A., as Administrative Agent, and the other lenders named from
time to time therein.
8-K
000-24821
11/13/2006
List of Subsidiaries.
X
PricewaterhouseCoopers LLP consent.
X
Power of Attorney (see signature
page).
X
Certification of Registrants
Chief Executive Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002.
X
Table of Contents
Filed with
Incorporated by Reference
this 10-K
Form
File No.
Date Filed
Certification of Registrants
Chief Financial Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002.
X
Certification of Registrants
Chief Executive Officer, as required by Section 906 of the
Sarbanes-Oxley Act of 2002.
X
Certification of Registrants
Chief Financial Officer, as required by Section 906 of the
Sarbanes-Oxley Act of 2002.
X
+
Indicates a management contract or compensatory plan or
arrangement
(b)
See the Exhibits listed under Item 15
(a) (3) above.
(c)
The financial statement schedules required by this item are
listed under Item 15 (a) (2) above.
Table of Contents
70
Table of Contents
February 27, 2007
71
Table of Contents
72
Table of Contents
Year Ended December 31,
2004
2005
2006
(In thousands, except per share amounts)
$
3,271,309
$
4,552,401
$
5,969,741
614,415
818,104
1,256,792
2,656,894
3,734,297
4,712,949
815,464
1,185,929
1,619,857
240,647
328,191
494,695
475,614
649,529
978,363
65,927
128,941
197,078
1,597,652
2,292,590
3,289,993
1,059,242
1,441,707
1,422,956
77,867
111,148
130,021
(8,879
)
(3,478
)
(5,916
)
1,128,230
1,549,377
1,547,061
(343,885
)
(467,285
)
(421,418
)
(6,122
)
(49
)
(4
)
$
778,223
$
1,082,043
$
1,125,639
$
0.59
$
0.79
$
0.80
$
0.57
$
0.78
$
0.79
1,319,458
1,361,708
1,399,251
1,367,720
1,393,875
1,425,472
73
Table of Contents
Year Ended December 31,
2004
2005
2006
(In thousands)
$
778,223
$
1,082,043
$
1,125,639
139,523
(140,459
)
588,150
(8,703
)
1,922
8,327
5,525
1,297
(194
)
1,102
(1,272
)
(3,216
)
137,447
(138,512
)
593,067
$
915,670
$
943,531
$
1,718,706
74
Table of Contents
Year Ended December 31,
2004
2005
2006
(In thousands)
$
1,307
$
1,347
$
1,412
40
65
19
1,347
1,412
1,431
3,936,776
4,855,983
7,272,742
650,985
1,862,199
331,899
6,239
107,981
326,616
261,983
446,579
148,565
(45,540
)
4,855,983
7,272,742
8,034,282
(2,008
)
(4,825
)
(45,540
)
(4,068
)
(64,726
)
1,251
24,011
45,540
(4,825
)
(45,540
)
(274
)
(274
)
(274
)
(1,669,154
)
(274
)
(274
)
(1,669,428
)
856,245
1,634,468
2,716,511
778,223
1,082,043
1,125,639
1,634,468
2,716,511
3,842,150
104,196
241,642
103,130
(5,392
)
1,169
5,033
3,315
778
(116
)
139,523
(140,459
)
588,150
241,642
103,130
696,197
$
6,728,341
$
10,047,981
$
10,904,632
1,298,586
1,338,608
1,404,183
40,022
65,575
19,048
(54,719
)
1,338,608
1,404,183
1,368,512
75
Table of Contents
Year Ended December 31,
2004
2005
2006
(In thousands)
$
778,223
$
1,082,043
$
1,125,639
90,942
89,499
100,729
50,459
73,773
126,439
253,690
378,165
544,552
5,832
31,772
317,410
261,983
267,142
148,565
(92,371
)
28,652
91,690
(227,850
)
6,122
49
4
(105,540
)
(151,993
)
(169,750
)
(44,751
)
(132,606
)
(146,900
)
(312,756
)
(49,371
)
(443,530
)
(308
)
(4,612
)
10,126
(33,975
)
564
32,986
216,967
251,870
575,137
39,618
17,013
(31,026
)
20,061
3,646
47,859
30,096
61,247
329,772
1,285,315
2,009,891
2,247,791
(292,838
)
(338,281
)
(515,448
)
28,290
(1,754,808
)
(1,324,353
)
(583,263
)
1,079,548
1,928,539
1,380,227
(1,036,476
)
(2,732,230
)
(45,505
)
(8,646
)
(14,696
)
(7,158
)
(2,013,220
)
(2,452,731
)
228,853
650,638
599,845
313,482
(1,666,540
)
92,371
(126,390
)
(2,969
)
(1,849
)
647,669
471,606
(1,260,687
)
28,768
(45,231
)
133,255
(51,468
)
(16,465
)
1,349,212
1,381,513
1,330,045
1,313,580
$
1,330,045
$
1,313,580
$
2,662,792
$
8,234
$
3,478
$
5,916
13,875
40,256
179,169
107,862
1,262,674
18,436
76
Table of Contents
77
Table of Contents
78
Table of Contents
79
Table of Contents
80
Table of Contents
81
Table of Contents
82
Table of Contents
Year Ended December 31,
2004
2005
2006
$
778,223
$
1,082,043
$
1,125,639
1,319,548
1,361,748
1,403,455
(90
)
(40
)
(4,204
)
1,319,458
1,361,708
1,399,251
90
40
4,204
48,172
32,127
22,017
1,367,720
1,393,875
1,425,472
$
0.59
$
0.79
$
0.80
$
0.57
$
0.78
$
0.79
83
Table of Contents
Net
Tangible
Identifiable
Deferred
Unearned
Aggregate
Year
Assets/
Intangible
Tax
Stock-Based
Purchase
Company Name
Acquired
(Liabilities)
Assets
Liabilities
Compensation
Goodwill
Price
2005
$
18,050
$
61,800
$
(24,924
)
$
$
380,439
$
435,365
2005
(201
)
13,800
(3,786
)
71,771
81,584
2005
145,898
133,600
(29,683
)
16,759
418,711
685,285
2005
(1,610
)
280,300
(71,474
)
55,249
2,330,961
2,593,426
2005
(8,804
)
106,600
275,989
373,785
2006
2,949
6,200
43,120
52,269
Total
Customer
Trade
Other
Acquired
Year
List/
name/
Developed
Intangible
Intangible
Company Name
Acquired
User Base
Trademarks
Technologies
Assets
Assets
2005
$
34,500
$
18,000
$
8,200
$
1,100
$
61,800
2005
2,600
11,200
13,800
2005
73,600
38,700
21,300
133,600
2005
27,700
243,800
8,000
800
280,300
2005
86,700
400
19,500
106,600
2006
4,600
1,000
600
6,200
84
Table of Contents
85
Table of Contents
December 31,
2004
2005
(Unaudited)
$
3,277,534
$
4,594,954
$
684,905
$
944,057
$
0.49
$
0.66
86
Table of Contents
December 31,
Goodwill
December 31,
2005
Acquired
Adjustments
2006
$
2,486,870
$
43,120
$
118,037
$
2,648,027
1,348,385
248
1,348,633
2,312,184
262,795
2,574,979
$
6,147,439
$
43,120
$
381,080
$
6,571,639
87
Table of Contents
December 31, 2005
December 31, 2006
Gross
Net
Weighted
Gross
Net
Weighted
Carrying
Accumulated
Carrying
Average Useful
Carrying
Accumulated
Carrying
Average Useful
Amount
Amortization
Amount
Economic Life
Amount
Amortization
Amount
Economic Life
(years)
(years)
$
526,657
$
(145,397
)
$
381,260
6
$
545,527
$
(240,340
)
$
305,187
6
443,565
(75,571
)
367,994
5
480,358
(171,390
)
308,968
5
101,971
(45,882
)
56,089
4
103,351
(63,912
)
39,439
4
36,450
(14,761
)
21,689
4
58,115
(26,232
)
31,883
4
$
1,108,643
$
(281,611
)
$
827,032
$
1,187,351
$
(501,874
)
$
685,477
$
202,545
194,018
172,708
97,176
13,604
5,426
$
685,477
88
Table of Contents
Year Ended December 31, 2004
Marketplaces
Payments
Consolidated
$
2,573,607
$
697,702
$
3,271,309
1,476,965
512,946
1,989,911
1,096,642
184,756
1,281,398
222,156
1,059,242
77,867
(8,879
)
$
1,128,230
Year Ended December 31, 2005
Marketplaces
Payments
Communications
Consolidated
$
3,499,137
$
1,028,455
$
24,809
$
4,552,401
2,008,215
725,616
25,821
2,759,652
1,490,922
302,839
(1,012
)
1,792,749
351,042
1,441,707
111,148
(3,478
)
$
1,549,377
89
Table of Contents
Year Ended December 31, 2006
Marketplaces
Payments
Communications
Consolidated
$
4,334,290
$
1,440,530
$
194,921
$
5,969,741
2,503,961
1,102,919
221,819
3,828,699
1,830,329
337,611
(26,898
)
2,141,042
718,086
1,422,956
130,021
(5,916
)
$
1,547,061
December 31,
2004
2005
2006
$
1,889,936
$
2,471,273
$
3,108,986
1,381,373
2,081,128
2,860,755
$
3,271,309
$
4,552,401
$
5,969,741
December 31,
2004
2005
2006
$
659,423
$
750,353
$
917,887
80,069
86,370
100,430
$
739,492
$
836,723
$
1,018,317
Table of Contents
December 31, 2005
Gross
Gross
Gross
Amortized
Unrealized
Unrealized
Estimated
Cost
Gains
Losses
Fair Value
$
29,670
$
32
$
$
29,702
362,438
4
(2,679
)
359,763
371,537
(3,198
)
368,339
46,548
46,548
$
810,193
$
36
$
(5,877
)
$
804,352
$
1,065
$
$
$
1,065
665,418
115
(1,921
)
663,612
110,450
(1,409
)
109,041
$
776,933
$
115
$
(3,330
)
$
773,718
December 31, 2006
Gross
Gross
Gross
Amortized
Unrealized
Unrealized
Estimated
Cost
Gains
Losses
Fair Value
$
12,684
$
54
$
$
12,738
433,192
36
(640
)
432,588
109,652
1
(138
)
109,515
$
555,528
$
91
$
(778
)
$
554,841
$
2,045
$
$
$
2,045
210,159
158
210,317
$
212,204
$
158
$
$
212,362
91
Table of Contents
Less than 12 Months
12 Months or Greater
Total
Gross
Gross
Gross
Unrealized
Unrealized
Unrealized
Fair Value
Losses
Fair Value
Losses
Fair Value
Losses
$
52,887
$
(15
)
$
142,546
$
(612
)
$
195,433
$
(627
)
91,886
(151
)
91,886
(151
)
$
52,887
$
(15
)
$
234,432
$
(763
)
$
287,319
$
(778
)
December 31,
2006
$
554,841
176,794
33,523
2,045
$
767,203
92
Table of Contents
December 31,
2005
2006
(In thousands)
$
396,373
$
476,060
(62,507
)
(68,401
)
(11,078
)
(14,464
)
$
322,788
$
393,195
93
Table of Contents
December 31,
2005
2006
(In thousands)
$
324,595
$
763,757
44,610
64,003
59,274
67,879
58,756
64,822
$
487,235
$
960,461
December 31,
2005
2006
(In thousands)
$
916,782
$
1,274,282
319,821
355,222
121,766
197,835
56,881
77,915
40,968
40,836
1,456,218
1,946,090
(654,616
)
(947,894
)
$
801,602
$
998,196
December 31,
2005
2006
(In thousands)
$
27,513
$
11,092
139,080
162,889
96,502
97,416
31,904
59,371
61,328
62,940
20,246
32,140
43,257
61,653
158,727
194,168
$
578,557
$
681,669
Table of Contents
December 31,
2005
2006
(In thousands)
$
108,308
$
696,458
(8,848
)
(521
)
194
3,476
260
$
103,130
$
696,197
Operating
Leases
$
44,178
41,536
35,637
29,476
25,420
102,094
$
278,341
95
Table of Contents
96
Table of Contents
97
Table of Contents
98
Table of Contents
99
Table of Contents
Year Ended December 31,
2004
2005
2006
2.5%
3.8%
4.7%
3 years
3 years
3 years
0%
0%
0%
49%
36%
36%
100
Table of Contents
2004
2005
2006
$
233
$
1,881
$
32,981
136
8,696
96,547
654
6,468
81,489
4,809
14,727
106,393
5,832
31,772
317,410
(4,117
)
(13,023
)
(97,572
)
$
1,715
$
18,749
$
219,838
Year Ended December 31,
2004
2005
$
778,223
$
1,082,043
1,715
18,749
(190,935
)
(248,260
)
$
589,003
$
852,532
$
0.59
$
0.79
$
0.45
$
0.63
$
0.57
$
0.78
$
0.43
$
0.61
101
Table of Contents
Weighted Average
Remaining
Weighted Average
Contractual Term
Aggregate
Shares
Exercise Price
(in years)
Intrinsic Value
129,109
$
28.19
38,834
35.07
(16,233
)
16.58
(15,096
)
37.17
136,614
30.53
6.62
$
644,148
128,697
30.17
6.59
637,311
75,569
26.23
6.23
576,802
102
Table of Contents
Weighted Average
Grant-Date Fair
Shares
Value (per share)
$
526
28.13
(18
)
28.15
508
28.13
388
Weighted Average
Grant-Date Fair
Shares
Value (per share)
40
$
43.82
721
33.12
(90
)
38.09
(105
)
39.15
566
39.72
103
Table of Contents
Year Ended December 31,
2004
2005
2006
$
820,892
$
943,575
$
776,553
307,338
605,802
770,509
$
1,128,230
$
1,549,377
$
1,547,062
Year Ended December 31,
2004
2005
2006
$
246,795
$
382,925
$
460,262
57,099
89,717
122,396
23,546
79,838
66,610
327,440
552,480
649,268
27,836
(37,651
)
(146,872
)
(3,565
)
(7,106
)
(32,331
)
(7,826
)
(40,438
)
(48,647
)
16,445
(85,195
)
(227,850
)
$
343,885
$
467,285
$
421,418
104
Table of Contents
Year Ended December 31,
2004
2005
2006
$
394,881
$
542,282
$
541,471
(82,267
)
(149,463
)
(230,350
)
2,000
12,587
35,652
26,179
35,008
53,697
58,542
(6,975
)
(9,136
)
(1,142
)
1,238
17,318
(8,934
)
$
343,885
$
467,285
$
421,418
December 31,
2005
2006
$
132,832
$
111,133
71,504
192,276
9,616
4,024
213,952
307,433
(77,712
)
(69,777
)
136,240
237,656
(212,702
)
(171,422
)
(79,946
)
(30,139
)
(292,648
)
(201,561
)
$
(156,408
)
$
36,095
105
Table of Contents
106
Table of Contents
(Unaudited, in thousands, except per share amounts)
Quarter Ended
March 31
June 30
September 30
December 31
$
1,031,724
$
1,086,303
$
1,105,515
$
1,328,859
$
845,355
$
894,463
$
905,140
$
1,089,339
$
256,291
$
291,560
$
254,971
$
279,221
$
0.19
$
0.22
$
0.19
$
0.20
$
0.19
$
0.21
$
0.18
$
0.20
1,343,442
1,351,375
1,357,239
1,394,566
1,382,150
1,379,088
1,387,038
1,426,475
Quarter Ended
March 31
June 30
September 30
December 31
$
1,390,419
$
1,410,784
$
1,448,637
$
1,719,901
$
1,106,822
$
1,113,901
$
1,128,642
$
1,363,584
$
248,282
$
249,994
$
280,896
$
346,467
$
0.18
$
0.18
$
0.20
$
0.25
$
0.17
$
0.17
$
0.20
$
0.25
1,406,309
1,411,925
1,406,382
1,380,577
1,437,581
1,435,757
1,426,112
1,402,749
107
Table of Contents
Balance at
Charged/
Charged to
Charges
Balance at
Beginning of
Credited to
Other
Utilized/
End of
Period
Net Income
Account
Write-offs
Period
(In thousands)
$
48,069
$
90,942
$
(60,378
)
$
78,633
78,633
89,499
(94,547
)
73,585
73,585
100,729
(91,449
)
82,865
25,798
50,459
(45,869
)
30,388
30,388
73,773
(53,889
)
50,272
50,272
126,439
(97,185
)
79,526
165,831
(7,229
)
57,526
216,128
216,128
13,196
3,240
(154,852
)
77,712
77,712
28,513
6,420
(42,868
)
69,777
*
Prior year balances related to Allowance for PayPal Transaction
Losses and Tax Valuation Allowance were adjusted to conform to
the current years presentation.
108
Table of Contents
By:
and Director
Principal Executive Officer:
Principal Financial Officer:
By:
President, Chief Executive Officer and
Director
By:
Senior Vice President, Chief Financial
Officer
Principal Accounting Officer:
By:
Vice President, Chief Accounting Officer
109
Table of Contents
Founder, Chairman of the Board and Director
By:
Director
Director
By:
Director
Director
By:
Director
Director
By:
Director
Director
By:
Director
110
Table of Contents
Filed with
Incorporated by Reference
Exhibit Description
this 10-K
Form
File No.
Date Filed
Sale and Purchase Agreement dated
as of September 11, 2005, by and among Registrant, Skype
Technologies S.A. and the parties identified on Schedule 1
thereto.
8-K
000-24821
9/15/2005
Earn Out Agreement dated as of
September 11, 2005, by and among Registrant, Skype
Technologies S.A. and the parties identified on Schedule I
thereto.
8-K
000-24821
9/15/2005
Form of Option Assumption
Agreement.
8-K
000-24821
10/18/2005
Form of EMI Rollover Agreement.
8-K
000-24821
10/18/2005
Amendment No. 1 to Earn Out
Agreement dated as of December 29, 2005, by and among
Registrant, Skype Technologies S.A. and the parties identified
on Schedule I thereto.
10-K
000-24821
2/24/2006
Registrants Amended and
Restated Certificate of Incorporation.
10-Q
000-24821
7/27/2005
Registrants Amended and
Restated By-laws.
10-Q
000-24821
11/13/1998
Form of Specimen Certificate for
Registrants Common Stock.
S-1
333-59097
8/19/1998
Registration Rights Agreement
dated as of September 11, 2005, by and among Registrant and
the parties identified on Schedule I thereto.
8-K
000-24821
9/15/2005
Form of Indemnity Agreement
entered into by Registrant with each of its directors and
executive officers.
S-1
333-59097
7/15/1998
Registrants 1996 Stock
Option Plan, as amended.
S-1
333-59097
7/15/1998
Registrants 1997 Stock
Option Plan, as amended.
X
Registrants 1998 Equity
Incentive Plan, as amended.
X
Form of Stock Bonus Agreement
under Registrants 1998 Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Form of Stock Option Agreement
under Registrants 1998 Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Form of Restricted Stock Unit
Agreement under Registrants 1998 Equity Incentive Plan.
X
Registrants Amended and
Restated 1998 Employee Stock Purchase Plan.
S-8
333-117913
8/4/2004
Registrants
1998 Directors Stock Option Plan, as amended.
X
Registrants 1999 Global
Equity Incentive Plan, as amended.
X
Form of Stock Option Agreement
under Registrants 1999 Global Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Form of Restricted Stock Unit
Agreement under Registrants 1999 Global Equity Incentive
Plan.
X
Registrants 2001 Equity
Incentive Plan, as amended.
X
Form of Stock Option Agreement
under Registrants 2001 Equity Incentive Plan.
10-Q
000-24821
10/27/2004
Table of Contents
Filed with
Incorporated by Reference
Exhibit Description
this 10-K
Form
File No.
Date Filed
Registrants 2003 Deferred
Stock Unit Plan, as amended.
X
Form of 2003 Deferred Stock Unit
Plan Electing Director Award Agreement, as amended.
10-Q
000-24821
4/25/2006
Form of 2003 Deferred Stock Unit
Plan New Director Award Agreement, as amended.
10-Q
000-24821
4/25/2006
eBay Incentive Plan.
10-Q
000-24821
7/27/2005
Summary of Compensation Payable to
Named Executive Officers.
10-Q
000-24821
4/25/2006
Employment Letter Agreement dated
January 16, 1998, between Margaret C. Whitman and
Registrant.
S-1
333-59097
8/19/1998
Stock Option Agreement dated
June 9, 1998 between Registrant and Scott D. Cook.
10-K
000-24821
3/31/2003
Employment Letter Agreement dated
August 20, 1998, between Michael R. Jacobson and Registrant.
S-1
333-59097
9/1/1998
Offer Letter to William C. Cobb
dated November 22, 2000.
10-K
000-24821
3/25/2002
Offer Letter to John Donahoe dated
November 16, 2004.
8-K
000-24821
2/24/2005
Offer Letter to Elizabeth Axelrod
dated December 7, 2004 and addendum thereto dated
February 16, 2005.
8-K
000-24821
3/10/2005
Offer Letter to Robert H. Swan
dated February 10, 2006.
8-K
000-24821
2/21/2006
Letter Agreement regarding
supplemental relocation assistance dated July 12, 2006 to
Robert H. Swan.
8-K
000-24821
7/13/2006
Separation Agreement dated as of
August 8, 2006 between Registrant and Maynard Webb.
10-Q
000-24821
10/30/2006
Separation Agreement dated as of
September 11, 2006 between Registrant and Jeffrey Jordan.
10-Q
000-24821
10/30/2006
Consulting Agreement dated as of
September 11, 2006 between Registrant and Jeffrey Jordan.
10-Q
000-24821
10/30/2006
Credit Agreement, dated as of
November 7, 2006, by and among Registrant, Bank of America,
N.A., as Administrative Agent, and the other lenders named from
time to time therein.
8-K
000-24821
11/13/2006
List of Subsidiaries.
X
PricewaterhouseCoopers LLP consent.
X
Power of Attorney (see signature
page).
X
Certification of Registrants
Chief Executive Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002.
X
Certification of Registrants
Chief Financial Officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002.
X
Table of Contents
Filed with
Incorporated by Reference
Exhibit Description
this 10-K
Form
File No.
Date Filed
Certification of Registrants
Chief Executive Officer, as required by Section 906 of the
Sarbanes-Oxley Act of 2002.
X
Certification of Registrants
Chief Financial Officer, as required by Section 906 of the
Sarbanes-Oxley Act of 2002.
X
+
Indicates a management contract or compensatory plan or
arrangement
2
3
4
5
6
7
8
9
2
3
4
5
6
7
8
9
10
11
12
Notice of Grant of Award
and Award Agreement |
eBay Inc.
2145 Hamilton Ave. San Jose, Ca 95125 |
|
Company Tax ID: 77-0430924 |
[Name]
|
Award Number: |
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[Address]
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Plan: |
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Type: |
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Shares
|
Full Vest * | |
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eBay
Inc.
|
Date | |
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[Name]
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Date |
A-1
A-2
A-3
2
3
4
5
2
3
4
5
6
7
8
9
10
Notice of Grant of Award
and Award Agreement |
eBay Inc.
2145 Hamilton Ave. San Jose, Ca 95125 |
|
Company Tax ID: 77-0430924 |
[Name]
|
Award Number: |
|
||
[Address]
|
Plan: |
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||
Type: |
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Shares
|
Full Vest * | |
|
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eBay
Inc.
|
Date | |
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[Name]
|
Date |
A-1
A-2
A-3
A-4
1
2
3
4
5
6
7
8
9
2
3
4
5
6
7
8
9
Page | ||||||||
ARTICLE I
GENERAL |
||||||||
1.1
|
Purpose | 1 | ||||||
1.2
|
Definitions of Certain Terms | 1 | ||||||
1.3
|
Administration | 2 | ||||||
1.4
|
Persons Eligible for Awards | 2 | ||||||
1.5
|
Types of Awards Under Plan | 3 | ||||||
1.6
|
Shares of Common Stock Available for Awards | 3 | ||||||
ARTICLE II
AWARDS UNDER THE PLAN |
||||||||
2.1
|
Agreements Evidencing Awards | 3 | ||||||
2.2
|
No Rights as a Stockholder | 4 | ||||||
2.3
|
Grant of Deferred Stock Units | 4 | ||||||
2.4
|
Grant of Dividend Equivalent Rights | 4 | ||||||
ARTICLE III
MISCELLANEOUS |
||||||||
3.1
|
Amendment of the Plan | 5 | ||||||
3.2
|
Tax Withholding | 5 | ||||||
3.3
|
Required Consents and Legends | 5 | ||||||
3.4
|
Nonassignability; No Hedging | 5 | ||||||
3.5
|
Successor Entity | 6 | ||||||
3.6
|
Right of Discharge Reserved | 6 | ||||||
3.7
|
Nature of Payments | 6 | ||||||
3.8
|
Other Payments or Awards | 6 | ||||||
3.9
|
Plan Headings | 6 | ||||||
3.10
|
Termination of Plan | 6 | ||||||
3.11
|
Governing Law | 7 | ||||||
3.12
|
Severability; Entire Agreement | 7 | ||||||
3.13
|
No Third Party Beneficiaries | 7 | ||||||
3.14
|
Successors and Assigns of eBay | 7 | ||||||
3.15
|
Date of Adoption | 7 |
i
1
2
3
4
5
6
7
1. | Baazee.com, Inc., a Delaware corporation | |||
2. | Blackthorne Software, Inc., a Delaware corporation | |||
3. | Camino Networks, Inc., a Delaware corporation | |||
4. | CARad Inc., a Delaware corporation | |||
5. | EachNet, Inc., a Delaware corporation | |||
6. | eBay Domestic Holdings, Inc., a Delaware corporation | |||
7. | eBay International Inc., a Delaware corporation | |||
8. | eBay MicroPlace, Inc., a Delaware corporation | |||
9. | eBay Real Estate Inc., a Delaware corporation | |||
10. | Global Commerce Services, Inc., a Delaware corporation | |||
11. | Half.com, Inc., a Pennsylvania corporation | |||
12. | HBJ Partners, LLC, a California limited liability company | |||
13. | Marketplace Insurance Inc., a Hawaii corporation | |||
14. | PayPal Asset Management, Inc., a Delaware corporation | |||
15. | PayPal Gift Card Services, Inc., a Arizona corporation | |||
16. | PayPal Global Holdings, Inc., a Delaware corporation | |||
17. | PayPal, Inc., a Delaware corporation | |||
18. | PayPal Insurance Services, Inc., a Delaware corporation | |||
19. | ProStores, Inc., a Delaware corporation | |||
20. | The Commercial Exchange Co., Inc., a Delaware corporation | |||
21. | 111 Potrero Partners, LLC, a California limited liability company | |||
22. | Shopping.com International Holding, Inc., a Delaware corporation | |||
23. | Shopping.com Inc., a Delaware corporation. | |||
24. | Skype Inc., a Delaware corporation | |||
25. | Skype Delaware Holdings, Inc., a Delaware corporation | |||
26. | Viva Group, Inc dba Rent.com, a Delaware corporation | |||
27. | Rent.com Arizona Brokerage, LLC | |||
28. | Viva.com Realty Brokerage, LLC (Florida) | |||
29. | Viva.com Realty Brokerage, LLC (Kentucky) | |||
30. | Rent.com Hawaii, LLC | |||
31. | Viva Realty Indiana, LLC | |||
32. | Viva Realty Illinois, LLC (dba) Rent.com | |||
33. | Viva Realty Michigan, LLC | |||
34. | Viva Realty Minnesota, LLC (dba) Rent.com | |||
35. | Rent.com Nevada, LLC | |||
36. | Viva Group New Hampshire, LLC (dba) Rent.com | |||
37. | Viva Realty Washington, LLC | |||
38. | Rent.com Ohio, LLC | |||
39. | Viva Oregon, LLC | |||
40. | Rent.com Pennsylvania, LLC | |||
41. | Viva Realty Utah, LLC | |||
42. | Rent.com Vermont, LLC | |||
43. | Viva VA PA, LLC (Virginia) | |||
44. | VGI Delaware, LLC |
Jurisdiction of
Percent Ownership
If Less Than 100%
A1 Markt B.V.
The Netherlands
Baazee.com Private Limited
Mauritius
DealTime (Europe) B.V.
Netherlands
DealTime (Germany) GmbH
Germany
EachNet.com (Hong Kong) Limited
Hong Kong
EachNet.com Limited
Cayman Islands
EachNet.com Network Information
Services (Shanghai) Co., Ltd.
Peoples Republic of China
eBay Asia Pacific Regional
Management Services Ltd.
Korea
eBay Australia and New Zealand Pty
Limited
Australia
eBay Australia Pty Ltd
Australia
eBay Austria GmbH
Austria
eBay Belgium Holdings S.A.
Belgium
eBay Belgium SPRL
Belgium
eBay (BVI) Holdings Inc.
British Virgin Islands
eBay Europe Sarl
Luxembourg
eBay Europe Services Ltd.
Ireland
eBay Canada Limited
Canada
eBay CS Vancouver Inc.
Canada
eBay France SAS
France
99.98
%
eBay Global Holdings B.V.
The Netherlands
eBay GmbH
Germany
eBay EachNet.com Network
Information Services (Shanghai) Co., Ltd.
Peoples Republic of China
eBay
e-Commerce
Technology Operations (Shanghai) Co., Ltd.
Peoples Republic of China
eBay Engineering &
Research Center (Shanghai) Co., Ltd.
Peoples Republic of China
eBay India Pvt. Ltd.
India
eBay International AG
Switzerland
eBay International Hong Kong
Ltd.
Hong Kong Peoples
Republic of China
eBay Internet Support (Shanghai)
Co., Ltd.
China
eBay Ireland Limited
Ireland
eBay Israel Holding Ltd.
Israel
eBay Italia S.r.l.
Italy
eBay Japan K.K.
Japan
eBay KTA (UK) Limited
United Kingdom
eBay Motors GmbH
Germany
eBay Motors India Private Limited
India
eBay Netherlands B.V.
The Netherlands
eBay New Ventures K.K.
Japan
eBay Polska sp z o.o.
Poland
eBay PRC AG
Switzerland
eBay PRC Holdings (BVI) Inc.
British Virgin Islands
eBay Promotions (UK) Ltd.
United Kingdom
eBay Singapore Services Private
Limited
Singapore
eBay Spain International, S.L.
Spain
eBay Sverige AB
Sweden
eBay Taiwan Company Ltd.
Taiwan
eBay UK Limited
United Kingdom
Entreprises Kijiji Cananda
Inc.
Canada
GumTree.com Limited
United Kingdom
High Options Sdn Bhd
Malaysia
Hortensia B.V.
The Netherlands
Jurisdiction of
Percent Ownership
If Less Than 100%
iBazar Pro NL BV
The Netherlands
Inter Bazar
Portugal
Internet Auction Co., Ltd
Korea
99.96
%
Intoko Limited
United Kingdom
Kijiji GmbH
Germany
Kijiji India Private Limited
India
Kijiji International Limited
Ireland
Kijiji Italia s.r.l.
Italy
Kijiji Korea Co., Ltd.
Korea
Kijiji Mauritius Holding Private
Ltd.
Mauritius
Kij Kijiji Network Information
Technology Services (Shanghai) Co. Ltd.
Peoples Republic of China
Kijiji S.a.r.l.
France
Kijiji S.L.U.
Spain
Marktplaats B.V.
The Netherlands
Mobile.de & eBay Motors
GmbH
Germany
Opusforum GmbH
Germany
PChome eBay Co., Ltd.
Taiwan
35
%
PayPal Asia Services Ltd.
Mauritius
PayPal Australia Pty Limited
Australia
PayPal (BVI) Holdings Inc.
British Virgin Islands
PayPal CA Limited
Canada
PayPal Canada Limited
Canada
PayPal Deutschland GmbH
Germany
PayPal (Europe) Ltd.
United Kingdom
PayPal Europe S.A.
Luxembourg
PayPal Europe Services Ltd.
Ireland
PayPal France SAS
France
PayPal Information Technologies
(Shanghai) Co., Ltd.
Peoples Republic of China
PayPal International Limited
Ireland
PayPal Italia s.r.l.
Italy
PayPal Nederland B.V.
The Netherlands
PayPal Services Canada Limited
Canada
PayPal Singapore Private Limited
Singapore
PayPal Spain S.L.
Spain
PayPal (UK) Limited
United Kingdom
Rent New Ventures Limited
Ireland
S Technologies Limited
United Kingdom
Shanghai eBay Network Information
Services Co., Ltd.
China
50
%
Shopping.com Australia Pty
Ltd.
Australia
Shopping.com GmbH
Germany
Shopping.com Ltd.
Israel
Shopping.com France SAS
France
Shopping.com UK Ltd.
United Kingdom
Shopping Epinions International
Ltd.
Ireland
Skype Communications S.a r.l.
Luxembourg
Skype Czech Republic s.r.o.
Czech Republic
Skype Deutschland GmbH
Germany
Skype France SAS
France
Skype Hong Kong Limited
Hong Kong
Skype Italia s.r.l.
Italy
Skype Limited
Ireland
Skype Poland Sp. z o.o.
Poland
Skype Software S.a. r.l.
Luxembourg
Skype Spain S.L.
Spain
Jurisdiction of
Percent Ownership
If Less Than 100%
Skype Sweden AB
Sweden
Skype Technologies S.A.
Luxembourg
Skype Technologies OU
Estonia
Skyper Limited
Bahamas
Skype Luxembourg Holdings S.a r.l.
Luxembourg
Sonorit ApS
Denmark
Sonorit Holding AS
Norway
Sv. Bilannonser
Sweden
TelTel-Online Limited
Cayman Islands
Tradera AB
Sweden
Tradera Nordic AB
Sweden