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FORM 10-Q
|
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[x]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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|
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eBay Inc.
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(Exact name of registrant as specified in its charter)
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||
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Delaware
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77-0430924
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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|
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2025 Hamilton Avenue
San Jose, California |
95125
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(Address of principal executive offices)
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(Zip Code)
|
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Large accelerated filer
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[x]
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Accelerated filer
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[ ]
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Non-accelerated filer
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[ ]
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(Do not check if a smaller reporting company)
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Smaller reporting company
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[ ]
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|
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|
Emerging growth company
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[ ]
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Item 1:
|
Financial Statements
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
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(In millions, except par value)
|
||||||
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(Unaudited)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,527
|
|
|
$
|
2,120
|
|
Short-term investments
|
2,279
|
|
|
3,743
|
|
||
Accounts receivable, net
|
683
|
|
|
696
|
|
||
Other current assets
|
1,274
|
|
|
1,185
|
|
||
Total current assets
|
6,763
|
|
|
7,744
|
|
||
Long-term investments
|
5,919
|
|
|
6,331
|
|
||
Property and equipment, net
|
1,548
|
|
|
1,597
|
|
||
Goodwill
|
4,815
|
|
|
4,773
|
|
||
Intangible assets, net
|
53
|
|
|
69
|
|
||
Deferred tax assets
|
5,166
|
|
|
5,199
|
|
||
Other assets
|
291
|
|
|
273
|
|
||
Total assets
|
$
|
24,555
|
|
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$
|
25,986
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
20
|
|
|
$
|
781
|
|
Accounts payable
|
252
|
|
|
330
|
|
||
Accrued expenses and other current liabilities
|
1,918
|
|
|
2,134
|
|
||
Deferred revenue
|
142
|
|
|
137
|
|
||
Income taxes payable
|
236
|
|
|
177
|
|
||
Total current liabilities
|
2,568
|
|
|
3,559
|
|
||
Deferred tax liabilities
|
3,314
|
|
|
3,424
|
|
||
Long-term debt
|
9,208
|
|
|
9,234
|
|
||
Other liabilities
|
1,869
|
|
|
1,720
|
|
||
Total liabilities
|
16,959
|
|
|
17,937
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value; 3,580 shares authorized; 1,007 and 1,029 shares outstanding
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
15,362
|
|
|
15,293
|
|
||
Treasury stock at cost, 656 and 632 shares
|
(22,903
|
)
|
|
(21,892
|
)
|
||
Retained earnings
|
14,335
|
|
|
13,929
|
|
||
Accumulated other comprehensive income
|
800
|
|
|
717
|
|
||
Total stockholders’ equity
|
7,596
|
|
|
8,049
|
|
||
Total liabilities and stockholders’ equity
|
$
|
24,555
|
|
|
$
|
25,986
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(In millions, except per share amounts)
|
||||||
|
(Unaudited)
|
||||||
Net revenues
|
$
|
2,580
|
|
|
$
|
2,303
|
|
Cost of net revenues
|
559
|
|
|
514
|
|
||
Gross profit
|
2,021
|
|
|
1,789
|
|
||
Operating expenses:
|
|
|
|
||||
Sales and marketing
|
756
|
|
|
648
|
|
||
Product development
|
334
|
|
|
278
|
|
||
General and administrative
|
270
|
|
|
245
|
|
||
Provision for transaction losses
|
72
|
|
|
62
|
|
||
Amortization of acquired intangible assets
|
10
|
|
|
9
|
|
||
Total operating expenses
|
1,442
|
|
|
1,242
|
|
||
Income from operations
|
579
|
|
|
547
|
|
||
Interest and other, net
|
(32
|
)
|
|
11
|
|
||
Income before income taxes
|
547
|
|
|
558
|
|
||
Income tax benefit (provision)
|
(140
|
)
|
|
477
|
|
||
Net income
|
$
|
407
|
|
|
$
|
1,035
|
|
|
|
|
|
||||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.40
|
|
|
$
|
0.96
|
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.94
|
|
|
|
|
|
||||
Weighted-average shares:
|
|
|
|
||||
Basic
|
1,010
|
|
|
1,083
|
|
||
Diluted
|
1,029
|
|
|
1,102
|
|
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Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
|
(Unaudited)
|
||||||
Net income
|
$
|
407
|
|
|
$
|
1,035
|
|
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
||||
Foreign currency translation gain (loss)
|
132
|
|
|
331
|
|
||
Unrealized gains (losses) on investments, net
|
(36
|
)
|
|
(20
|
)
|
||
Tax benefit (expense) on unrealized gains (losses) on investments, net
|
10
|
|
|
12
|
|
||
Unrealized gains (losses) on hedging activities, net
|
(29
|
)
|
|
(34
|
)
|
||
Tax benefit (expense) on unrealized gains (losses) on hedging activities, net
|
6
|
|
|
—
|
|
||
Other comprehensive income, net of tax
|
83
|
|
|
289
|
|
||
Comprehensive income
|
$
|
490
|
|
|
$
|
1,324
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
|
(Unaudited)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
407
|
|
|
$
|
1,035
|
|
Adjustments:
|
|
|
|
||||
Provision for transaction losses
|
72
|
|
|
62
|
|
||
Depreciation and amortization
|
179
|
|
|
163
|
|
||
Stock-based compensation
|
120
|
|
|
101
|
|
||
Deferred income taxes
|
(29
|
)
|
|
(565
|
)
|
||
Changes in assets and liabilities, and other, net of acquisition effects
|
(254
|
)
|
|
(214
|
)
|
||
Net cash provided by operating activities
|
495
|
|
|
582
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(158
|
)
|
|
(135
|
)
|
||
Purchases of investments
|
(4,794
|
)
|
|
(2,750
|
)
|
||
Maturities and sales of investments
|
6,650
|
|
|
2,770
|
|
||
Other
|
—
|
|
|
1
|
|
||
Net cash provided by (used in) investing activities
|
1,698
|
|
|
(114
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of common stock
|
9
|
|
|
11
|
|
||
Repurchases of common stock
|
(1,009
|
)
|
|
(410
|
)
|
||
Tax withholdings related to net share settlements of restricted stock units and awards
|
(60
|
)
|
|
(29
|
)
|
||
Repayment of debt
|
(750
|
)
|
|
—
|
|
||
Other
|
(15
|
)
|
|
10
|
|
||
Net cash used in financing activities
|
(1,825
|
)
|
|
(418
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
38
|
|
|
114
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
406
|
|
|
164
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
2,140
|
|
|
1,835
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
2,546
|
|
|
1,999
|
|
||
|
|
|
|
||||
Supplemental cash flow disclosures:
|
|
|
|
||||
Cash paid for:
|
|
|
|
||||
Interest
|
$
|
117
|
|
|
$
|
109
|
|
Income taxes
|
$
|
77
|
|
|
$
|
45
|
|
|
Three Months Ended March 31, 2017
|
||||||
|
As Reported
|
|
As Adjusted
|
||||
Net revenues
|
$
|
2,217
|
|
|
$
|
2,303
|
|
Cost of net revenues
|
$
|
515
|
|
|
$
|
514
|
|
Sales and marketing
|
$
|
562
|
|
|
$
|
648
|
|
Net income (loss)
|
$
|
1,035
|
|
|
$
|
1,035
|
|
|
|
|
|
||||
Net income (loss) per share - basic
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
|
|
|
||||
Net income (loss) per share - diluted
|
$
|
0.94
|
|
|
$
|
0.94
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
407
|
|
|
$
|
1,035
|
|
Denominator:
|
|
|
|
||||
Weighted average shares of common stock - basic
|
1,010
|
|
|
1,083
|
|
||
Dilutive effect of equity incentive awards
|
19
|
|
|
19
|
|
||
Weighted average shares of common stock - diluted
|
1,029
|
|
|
1,102
|
|
||
|
|
|
|
||||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.40
|
|
|
$
|
0.96
|
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.94
|
|
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive
|
1
|
|
|
1
|
|
|
December 31,
2017 |
|
Goodwill
Acquired
|
|
Adjustments
|
|
March 31,
2018 |
||||||||
Goodwill
|
$
|
4,773
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
4,815
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Useful Life (Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Useful Life (Years)
|
||||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer lists and user base
|
$
|
465
|
|
|
$
|
(440
|
)
|
|
$
|
25
|
|
|
5
|
|
$
|
458
|
|
|
$
|
(430
|
)
|
|
$
|
28
|
|
|
5
|
Marketing related
|
614
|
|
|
(599
|
)
|
|
15
|
|
|
5
|
|
607
|
|
|
(587
|
)
|
|
20
|
|
|
5
|
||||||
Developed technologies
|
274
|
|
|
(265
|
)
|
|
9
|
|
|
3
|
|
273
|
|
|
(258
|
)
|
|
15
|
|
|
3
|
||||||
All other
|
157
|
|
|
(153
|
)
|
|
4
|
|
|
4
|
|
156
|
|
|
(150
|
)
|
|
6
|
|
|
4
|
||||||
Total
|
$
|
1,510
|
|
|
$
|
(1,457
|
)
|
|
$
|
53
|
|
|
|
|
$
|
1,494
|
|
|
$
|
(1,425
|
)
|
|
$
|
69
|
|
|
|
Fiscal year:
|
|
|
||
Remaining 2018
|
|
$
|
29
|
|
2019
|
|
17
|
|
|
2020
|
|
7
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
53
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net transaction revenues:
|
|
|
|
||||
Marketplace
|
$
|
1,792
|
|
|
$
|
1,609
|
|
StubHub
|
231
|
|
|
206
|
|
||
Total net transaction revenues
|
2,023
|
|
|
1,815
|
|
||
Marketing services and other revenues:
|
|
|
|
||||
Marketplace
|
310
|
|
|
283
|
|
||
Classifieds
|
246
|
|
|
199
|
|
||
StubHub, Corporate and other
|
1
|
|
|
6
|
|
||
Total marketing services and other revenues
|
557
|
|
|
488
|
|
||
Total net revenues
|
$
|
2,580
|
|
|
$
|
2,303
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net revenues by geography:
|
|
|
|
||||
U.S.
|
$
|
1,074
|
|
|
$
|
990
|
|
United Kingdom
|
356
|
|
|
311
|
|
||
Germany
|
392
|
|
|
331
|
|
||
South Korea
|
283
|
|
|
245
|
|
||
Rest of world
|
475
|
|
|
426
|
|
||
Total net revenues
|
$
|
2,580
|
|
|
$
|
2,303
|
|
|
March 31, 2018
|
||||||||||||||
|
Gross
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Restricted cash
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
Corporate debt securities
|
2,264
|
|
|
1
|
|
|
(5
|
)
|
|
2,260
|
|
||||
|
$
|
2,283
|
|
|
$
|
1
|
|
|
$
|
(5
|
)
|
|
$
|
2,279
|
|
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
5,064
|
|
|
7
|
|
|
(54
|
)
|
|
5,017
|
|
||||
|
$
|
5,064
|
|
|
$
|
7
|
|
|
$
|
(54
|
)
|
|
$
|
5,017
|
|
|
December 31, 2017
|
||||||||||||||
|
Gross
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Restricted cash
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Corporate debt securities
|
3,726
|
|
|
1
|
|
|
(4
|
)
|
|
3,723
|
|
||||
|
$
|
3,746
|
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
3,743
|
|
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
5,458
|
|
|
12
|
|
|
(24
|
)
|
|
5,446
|
|
||||
|
$
|
5,458
|
|
|
$
|
12
|
|
|
$
|
(24
|
)
|
|
$
|
5,446
|
|
|
March 31, 2018
|
||
One year or less (including restricted cash of $19)
|
$
|
2,279
|
|
One year through two years
|
2,044
|
|
|
Two years through three years
|
1,723
|
|
|
Three years through four years
|
735
|
|
|
Four years through five years
|
515
|
|
|
Five years through six years
|
—
|
|
|
|
$
|
7,296
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Equity investments without readily determinable fair values
|
$
|
890
|
|
|
$
|
872
|
|
Equity investments under the equity method of accounting
|
12
|
|
|
13
|
|
||
Total equity investments
|
$
|
902
|
|
|
$
|
885
|
|
|
March 31, 2018
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
||||||
Assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
2,527
|
|
|
$
|
2,527
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
||||||
Restricted cash
|
19
|
|
|
19
|
|
|
—
|
|
|||
Corporate debt securities
|
2,260
|
|
|
—
|
|
|
2,260
|
|
|||
Total short-term investments
|
2,279
|
|
|
19
|
|
|
2,260
|
|
|||
Derivatives
|
31
|
|
|
—
|
|
|
31
|
|
|||
Long-term investments:
|
|
|
|
|
|
||||||
Corporate debt securities
|
5,017
|
|
|
—
|
|
|
5,017
|
|
|||
Total long-term investments
|
5,017
|
|
|
—
|
|
|
5,017
|
|
|||
Total financial assets
|
$
|
9,854
|
|
|
$
|
2,546
|
|
|
$
|
7,308
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Derivatives
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
86
|
|
|
December 31, 2017
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
||||||
Assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
2,120
|
|
|
$
|
2,120
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
||||||
Restricted cash
|
20
|
|
|
20
|
|
|
—
|
|
|||
Corporate debt securities
|
3,723
|
|
|
—
|
|
|
3,723
|
|
|||
Total short-term investments
|
3,743
|
|
|
20
|
|
|
3,723
|
|
|||
Derivatives
|
28
|
|
|
—
|
|
|
28
|
|
|||
Long-term investments:
|
|
|
|
|
|
||||||
Corporate debt securities
|
5,446
|
|
|
—
|
|
|
5,446
|
|
|||
Total long-term investments
|
5,446
|
|
|
—
|
|
|
5,446
|
|
|||
Total financial assets
|
$
|
11,337
|
|
|
$
|
2,140
|
|
|
$
|
9,197
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Derivatives
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
Balance Sheet Location
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Derivative Assets:
|
|
|
|
|
|
||||
Foreign exchange contracts designated as cash flow hedges
|
Other Current Assets
|
|
$
|
8
|
|
|
$
|
16
|
|
Foreign exchange contracts designated as net investment hedges
|
Other Current Assets
|
|
7
|
|
|
—
|
|
||
Foreign exchange contracts not designated as hedging instruments
|
Other Current Assets
|
|
16
|
|
|
10
|
|
||
Interest rate contracts designated as fair value hedges
|
Other Assets
|
|
—
|
|
|
2
|
|
||
Total derivative assets
|
|
|
$
|
31
|
|
|
$
|
28
|
|
|
|
|
|
|
|
||||
Derivative Liabilities:
|
|
|
|
|
|
||||
Foreign exchange contracts designated as cash flow hedges
|
Other Current Liabilities
|
|
$
|
40
|
|
|
$
|
18
|
|
Foreign exchange contracts not designated as hedging instruments
|
Other Current Liabilities
|
|
18
|
|
|
11
|
|
||
Interest rate contracts designated as fair value hedges
|
Other Liabilities
|
|
28
|
|
|
—
|
|
||
Total derivative liabilities
|
|
|
$
|
86
|
|
|
$
|
29
|
|
|
|
|
|
|
|
||||
Total fair value of derivative instruments
|
|
|
$
|
(55
|
)
|
|
$
|
(1
|
)
|
|
December 31, 2017
|
|
Amount of Gain (Loss)
Recognized in Other
Comprehensive
Income
|
|
Amount of Gain (Loss)
Reclassified From
AOCI to Earnings
|
|
March 31, 2018
|
||||||||
Foreign exchange contracts designated as cash flow hedges
|
$
|
(57
|
)
|
|
$
|
(57
|
)
|
|
$
|
(28
|
)
|
|
$
|
(86
|
)
|
|
December 31, 2016
|
|
Amount of Gain (Loss)
Recognized in Other
Comprehensive
Income
|
|
Amount of Gain (Loss)
Reclassified From
AOCI to Earnings
|
|
March 31, 2017
|
||||||||
Foreign exchange contracts designated as cash flow hedges
|
$
|
54
|
|
|
$
|
(14
|
)
|
|
$
|
20
|
|
|
$
|
20
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Foreign exchange contracts designated as cash flow hedges recognized in net revenues
|
$
|
(28
|
)
|
|
$
|
—
|
|
Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues and operating expenses
|
—
|
|
|
7
|
|
||
Foreign exchange contracts designated as cash flow hedges recognized in interest and other, net
|
—
|
|
|
13
|
|
||
Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net
|
(2
|
)
|
|
(4
|
)
|
||
Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income
|
$
|
(30
|
)
|
|
$
|
16
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net
|
$
|
(30
|
)
|
|
$
|
(7
|
)
|
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net
|
30
|
|
|
7
|
|
||
Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income
|
$
|
—
|
|
|
$
|
—
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Foreign exchange contracts designated as cash flow hedges
|
$
|
1,938
|
|
|
$
|
1,990
|
|
Foreign exchange contracts designated as net investment hedges
|
210
|
|
|
—
|
|
||
Foreign exchange contracts not designated as hedging instruments
|
3,721
|
|
|
2,349
|
|
||
Interest rate contracts designated as fair value hedges
|
2,400
|
|
|
2,400
|
|
||
Total
|
$
|
8,269
|
|
|
$
|
6,739
|
|
|
|
Coupon
|
|
As of
|
|
Effective
|
|
As of
|
|
Effective
|
||||||
|
|
Rate
|
|
March 31, 2018
|
|
Interest Rate
|
|
December 31, 2017
|
|
Interest Rate
|
||||||
Long-Term Debt
|
|
|
|
|
|
|
|
|
|
|
||||||
Floating Rate Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||
Senior notes due 2019
|
|
LIBOR plus 0.48%
|
|
$
|
400
|
|
|
2.354
|
%
|
|
$
|
400
|
|
|
1.955
|
%
|
Senior notes due 2023
|
|
LIBOR plus 0.87%
|
|
400
|
|
|
2.744
|
%
|
|
400
|
|
|
2.349
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed Rate Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||
Senior notes due 2018
|
|
2.500%
|
|
—
|
|
|
|
|
750
|
|
|
2.775
|
%
|
|||
Senior notes due 2019
|
|
2.200%
|
|
1,150
|
|
|
2.346
|
%
|
|
1,150
|
|
|
2.346
|
%
|
||
Senior notes due 2020
|
|
3.250%
|
|
500
|
|
|
3.389
|
%
|
|
500
|
|
|
3.389
|
%
|
||
Senior notes due 2020
|
|
2.150%
|
|
500
|
|
|
2.344
|
%
|
|
500
|
|
|
2.344
|
%
|
||
Senior notes due 2021
|
|
2.875%
|
|
750
|
|
|
2.993
|
%
|
|
750
|
|
|
2.993
|
%
|
||
Senior notes due 2022
|
|
3.800%
|
|
750
|
|
|
3.989
|
%
|
|
750
|
|
|
3.989
|
%
|
||
Senior notes due 2022
|
|
2.600%
|
|
1,000
|
|
|
2.678
|
%
|
|
1,000
|
|
|
2.678
|
%
|
||
Senior notes due 2023
|
|
2.750%
|
|
750
|
|
|
2.866
|
%
|
|
750
|
|
|
2.866
|
%
|
||
Senior notes due 2024
|
|
3.450%
|
|
750
|
|
|
3.531
|
%
|
|
750
|
|
|
3.531
|
%
|
||
Senior notes due 2027
|
|
3.600%
|
|
850
|
|
|
3.689
|
%
|
|
850
|
|
|
3.689
|
%
|
||
Senior notes due 2042
|
|
4.000%
|
|
750
|
|
|
4.114
|
%
|
|
750
|
|
|
4.114
|
%
|
||
Senior notes due 2056
|
|
6.000%
|
|
750
|
|
|
6.547
|
%
|
|
750
|
|
|
6.547
|
%
|
||
Total senior notes
|
|
|
|
9,300
|
|
|
|
|
10,050
|
|
|
|
||||
Hedge accounting fair value adjustments
|
|
|
|
(28
|
)
|
|
|
|
2
|
|
|
|
||||
Unamortized discount and debt issuance costs
|
|
|
|
(64
|
)
|
|
|
|
(68
|
)
|
|
|
||||
Less: Current portion of long-term debt
|
|
|
|
—
|
|
|
|
|
(750
|
)
|
|
|
||||
Total long-term debt
|
|
|
|
9,208
|
|
|
|
|
9,234
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Short-Term Debt
|
|
|
|
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
|
|
|
—
|
|
|
|
|
750
|
|
|
|
||||
Other indebtedness
|
|
|
|
20
|
|
|
|
|
31
|
|
|
|
||||
Total short-term debt
|
|
|
|
20
|
|
|
|
|
781
|
|
|
|
||||
Total Debt
|
|
|
|
$
|
9,228
|
|
|
|
|
$
|
10,015
|
|
|
|
|
Shares Repurchased
(1)
|
|
Average Price per Share
(2)
|
|
Value of Shares Repurchased
|
|
Remaining Amount Authorized
|
|||||||
Balance as of January 1, 2018
|
|
|
|
|
|
|
$
|
1,651
|
|
|||||
Authorization of additional plan in January 2018
|
|
|
|
|
|
|
6,000
|
|
||||||
Repurchase of shares of common stock
|
24
|
|
|
$
|
41.71
|
|
|
$
|
1,011
|
|
|
(1,011
|
)
|
|
Balance as of March 31, 2018
|
|
|
|
|
|
|
$
|
6,640
|
|
|
(1)
|
These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method.
No
repurchased shares of common stock have been retired.
|
(2)
|
Excludes broker commissions.
|
|
Units
|
|
Outstanding as of January 1, 2018
|
42
|
|
Awarded
|
1
|
|
Vested
|
(4
|
)
|
Forfeited
|
(1
|
)
|
Outstanding as of March 31, 2018
|
38
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Cost of net revenues
|
$
|
13
|
|
|
$
|
11
|
|
Sales and marketing
|
25
|
|
|
21
|
|
||
Product development
|
45
|
|
|
36
|
|
||
General and administrative
|
37
|
|
|
33
|
|
||
Total stock-based compensation expense
|
$
|
120
|
|
|
$
|
101
|
|
Capitalized in product development
|
$
|
3
|
|
|
$
|
3
|
|
|
Unrealized Gains (Losses) on Derivative Instruments
|
|
Unrealized
Gains on
Investments
|
|
Foreign
Currency
Translation
|
|
Estimated Tax (Expense) Benefit
|
|
Total
|
||||||||||
Balance as of December 31, 2017
|
$
|
(57
|
)
|
|
$
|
(15
|
)
|
|
$
|
748
|
|
|
$
|
41
|
|
|
$
|
717
|
|
Other comprehensive income (loss) before reclassifications
|
(57
|
)
|
|
(37
|
)
|
|
132
|
|
|
22
|
|
|
60
|
|
|||||
Less: Amount of gain (loss) reclassified from AOCI
|
(28
|
)
|
|
(1
|
)
|
|
—
|
|
|
6
|
|
|
(23
|
)
|
|||||
Net current period other comprehensive income
|
(29
|
)
|
|
(36
|
)
|
|
132
|
|
|
16
|
|
|
83
|
|
|||||
Balance as of March 31, 2018
|
$
|
(86
|
)
|
|
$
|
(51
|
)
|
|
$
|
880
|
|
|
$
|
57
|
|
|
$
|
800
|
|
|
Unrealized Gains (Losses) on Derivative Instruments
|
|
Unrealized
Gains on Investments |
|
Foreign
Currency Translation |
|
Estimated Tax (Expense) Benefit
|
|
Total
|
||||||||||
Balance as of December 31, 2016
|
$
|
54
|
|
|
$
|
51
|
|
|
$
|
(230
|
)
|
|
$
|
1
|
|
|
$
|
(124
|
)
|
Other comprehensive income (loss) before reclassifications
|
(14
|
)
|
|
(8
|
)
|
|
331
|
|
|
12
|
|
|
321
|
|
|||||
Less: Amount of gain (loss) reclassified from AOCI
|
20
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
Net current period other comprehensive income
|
(34
|
)
|
|
(20
|
)
|
|
331
|
|
|
12
|
|
|
289
|
|
|||||
Balance as of March 31, 2017
|
$
|
20
|
|
|
$
|
31
|
|
|
$
|
101
|
|
|
$
|
13
|
|
|
$
|
165
|
|
Details about AOCI Components
|
|
Affected Line Item in the Statement of Income
|
|
Amount of Gain (Loss) Reclassified From AOCI
|
||||||
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
|
|
2018
|
|
2017
|
||||
Gains (losses) on cash flow hedges - foreign exchange contracts
|
|
Net Revenues
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
|
Cost of net revenues
|
|
—
|
|
|
2
|
|
||
|
|
Sales and marketing
|
|
—
|
|
|
1
|
|
||
|
|
Product development
|
|
—
|
|
|
3
|
|
||
|
|
General and administrative
|
|
—
|
|
|
1
|
|
||
|
|
Interest and other, net
|
|
—
|
|
|
13
|
|
||
|
|
Total, from continuing operations before income taxes
|
|
(28
|
)
|
|
20
|
|
||
|
|
Provision for income taxes
|
|
6
|
|
|
—
|
|
||
|
|
Total, net of income taxes
|
|
(22
|
)
|
|
20
|
|
||
|
|
|
|
|
|
|
||||
Unrealized gains (losses) on investments
|
|
Interest and other, net
|
|
(1
|
)
|
|
12
|
|
||
|
|
Total, before income taxes
|
|
(1
|
)
|
|
12
|
|
||
|
|
Provision for income taxes
|
|
—
|
|
|
—
|
|
||
|
|
Total, net of income taxes
|
|
(1
|
)
|
|
12
|
|
||
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
|
Total, net of income taxes
|
|
$
|
(23
|
)
|
|
$
|
32
|
|
ITEM 2:
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Quarter Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
2,216
|
|
|
$
|
2,309
|
|
|
$
|
2,299
|
|
|
$
|
2,474
|
|
Percent change from prior quarter
|
(5
|
)%
|
|
4
|
%
|
|
0
|
%
|
|
8
|
%
|
||||
2017
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
2,303
|
|
|
$
|
2,419
|
|
|
$
|
2,498
|
|
|
$
|
2,707
|
|
Percent change from prior quarter
|
(7
|
)%
|
|
5
|
%
|
|
3
|
%
|
|
8
|
%
|
||||
2018
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
2,580
|
|
|
|
|
|
|
|
||||||
Percent change from prior quarter
|
(5
|
)%
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Net Revenues by Type:
|
|
|
|
|
|
|||||
Net transaction revenues:
|
|
|
|
|
|
|||||
Marketplace
(1)
|
$
|
1,792
|
|
|
$
|
1,609
|
|
|
11
|
%
|
StubHub
|
231
|
|
|
206
|
|
|
12
|
%
|
||
Total net transaction revenues
|
2,023
|
|
|
1,815
|
|
|
11
|
%
|
||
Marketing services and other revenues:
|
|
|
|
|
|
|||||
Marketplace
|
310
|
|
|
283
|
|
|
9
|
%
|
||
Classifieds
|
246
|
|
|
199
|
|
|
24
|
%
|
||
StubHub, Corporate and other
|
1
|
|
|
6
|
|
|
(85
|
)%
|
||
Total marketing services and other revenues
|
557
|
|
|
488
|
|
|
14
|
%
|
||
Total net revenues
|
$
|
2,580
|
|
|
$
|
2,303
|
|
|
12
|
%
|
|
|
|
|
|
|
|||||
Net Revenues by Geography:
|
|
|
|
|
|
|||||
U.S.
|
$
|
1,074
|
|
|
$
|
990
|
|
|
9
|
%
|
International
|
1,506
|
|
|
1,313
|
|
|
15
|
%
|
||
Total net revenues
|
$
|
2,580
|
|
|
$
|
2,303
|
|
|
12
|
%
|
|
(1)
|
Marketplace net transaction revenues were net of
$28 million
hedging activity during the three months ended
March 31, 2018
. There were no hedging activities within net revenues during the three months ended March 31, 2017.
|
|
Three Months Ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Supplemental Operating Data:
|
|
|
|
|
|
|||||
GMV
(1)
:
|
|
|
|
|
|
|||||
Marketplace
|
$
|
22,547
|
|
|
$
|
19,980
|
|
|
13
|
%
|
StubHub
|
1,044
|
|
|
917
|
|
|
14
|
%
|
||
Total GMV
|
$
|
23,591
|
|
|
$
|
20,897
|
|
|
13
|
%
|
|
|
|
|
|
|
|||||
Transaction take rate:
|
|
|
|
|
|
|||||
Marketplace
(2)
|
7.95
|
%
|
|
8.05
|
%
|
|
(0.10
|
)%
|
||
StubHub
(3)
|
22.08
|
%
|
|
22.50
|
%
|
|
(0.42
|
)%
|
||
Total transaction take rate
(4)
|
8.57
|
%
|
|
8.68
|
%
|
|
(0.11
|
)%
|
|
(1)
|
We define Gross Merchandise Volume (“GMV”) as the total value of all successfully closed transactions between users on our Marketplace and StubHub platforms during the applicable period regardless of whether the buyer and seller actually consummated the transaction. We believe that GMV provides a useful measure of the overall volume of closed transactions that flow through our platforms in a given period, notwithstanding the inclusion in GMV of closed transactions that are not ultimately consummated.
|
(2)
|
We define Marketplace transaction take rate as Marketplace net transaction revenues divided by Marketplace GMV.
|
(3)
|
We define StubHub transaction take rate as StubHub net transaction revenues divided by StubHub GMV.
|
(4)
|
We define total transaction take rate as total net transaction revenues divided by GMV.
|
|
Three Months Ended
March 31, |
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
As Reported
|
|
FX-Neutral
|
||||||
Total net transaction revenues
|
$
|
2,023
|
|
|
$
|
1,815
|
|
|
11
|
%
|
|
8
|
%
|
Percentage of net revenues
|
78
|
%
|
|
79
|
%
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
Total GMV
|
$
|
23,591
|
|
|
$
|
20,897
|
|
|
13
|
%
|
|
7
|
%
|
Total transaction take rate
|
8.57
|
%
|
|
8.68
|
%
|
|
(0.11
|
)%
|
|
|
|
Three Months Ended
March 31, |
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
As Reported
|
|
FX-Neutral
|
||||||
Marketplace net transaction revenues
|
$
|
1,792
|
|
|
$
|
1,609
|
|
|
11
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
||||||
Marketplace GMV
|
$
|
22,547
|
|
|
$
|
19,980
|
|
|
13
|
%
|
|
7
|
%
|
Marketplace take rate
|
7.95
|
%
|
|
8.05
|
%
|
|
(0.10
|
)%
|
|
|
|
Three Months Ended
March 31, |
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
As Reported
|
|
FX-Neutral
|
||||||
StubHub net transaction revenues
|
$
|
231
|
|
|
$
|
206
|
|
|
12
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
||||||
StubHub GMV
|
$
|
1,044
|
|
|
$
|
917
|
|
|
14
|
%
|
|
13
|
%
|
StubHub take rate
|
22.08
|
%
|
|
22.50
|
%
|
|
(0.42
|
)%
|
|
|
|
Three Months Ended
March 31, |
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
As Reported
|
|
FX-Neutral
|
||||||
MS&O revenues:
|
|
|
|
|
|
|
|
||||||
Marketplace
|
$
|
310
|
|
|
$
|
283
|
|
|
9
|
%
|
|
4
|
%
|
Classifieds
|
246
|
|
|
199
|
|
|
24
|
%
|
|
10
|
%
|
||
StubHub, Corporate and other
|
1
|
|
|
6
|
|
|
(85
|
)%
|
|
(87
|
)%
|
||
Total MS&O revenues
|
$
|
557
|
|
|
$
|
488
|
|
|
14
|
%
|
|
5
|
%
|
Percentage of net revenues
|
22
|
%
|
|
21
|
%
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Cost of net revenues
|
$
|
559
|
|
|
$
|
514
|
|
|
9
|
%
|
As a percentage of net revenues
|
21.7
|
%
|
|
22.3
|
%
|
|
|
|
|
Three Months Ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Sales and marketing
|
$
|
756
|
|
|
$
|
648
|
|
|
17
|
%
|
Percentage of net revenues
|
29
|
%
|
|
28
|
%
|
|
|
|||
Product development
|
334
|
|
|
278
|
|
|
20
|
%
|
||
Percentage of net revenues
|
13
|
%
|
|
12
|
%
|
|
|
|||
General and administrative
|
270
|
|
|
245
|
|
|
9
|
%
|
||
Percentage of net revenues
|
10
|
%
|
|
11
|
%
|
|
|
|||
Provision for transaction losses
|
72
|
|
|
62
|
|
|
18
|
%
|
||
Percentage of net revenues
|
3
|
%
|
|
3
|
%
|
|
|
|||
Amortization of acquired intangible assets
|
10
|
|
|
9
|
|
|
16
|
%
|
||
Total operating expenses
|
$
|
1,442
|
|
|
$
|
1,242
|
|
|
16
|
%
|
|
Three Months Ended
March 31, |
|
|
||||||
|
2018
|
|
2017
|
|
% Change
|
||||
Total interest and other, net
|
$
|
(32
|
)
|
|
$
|
11
|
|
|
**
|
Percentage of net revenues
|
(1
|
)%
|
|
—
|
%
|
|
|
|
**
|
Not meaningful
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Income tax provision (benefit)
|
$
|
140
|
|
|
$
|
(477
|
)
|
Effective tax rate
|
25.6
|
%
|
|
(85.4
|
)%
|
|
Three Months Ended
March 31, 2018 |
|
Three Months Ended
March 31, 2017 |
|
|
|
|
||||||||||||||
|
As Reported
|
|
Exchange Rate Effect
(1)(3)
|
|
FX-Neutral
(2)
|
|
As Reported
|
|
As Reported % Change
|
|
FX-Neutral
% Change
|
||||||||||
GMV:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marketplace
|
$
|
22,547
|
|
|
$
|
1,260
|
|
|
$
|
21,287
|
|
|
$
|
19,980
|
|
|
13
|
%
|
|
7
|
%
|
StubHub
|
1,044
|
|
|
6
|
|
|
1,038
|
|
|
917
|
|
|
14
|
%
|
|
13
|
%
|
||||
Total GMV
|
$
|
23,591
|
|
|
$
|
1,266
|
|
|
$
|
22,325
|
|
|
$
|
20,897
|
|
|
13
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net transaction revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marketplace
|
$
|
1,792
|
|
|
$
|
64
|
|
|
$
|
1,728
|
|
|
$
|
1,609
|
|
|
11
|
%
|
|
7
|
%
|
StubHub
|
231
|
|
|
1
|
|
|
230
|
|
|
206
|
|
|
12
|
%
|
|
11
|
%
|
||||
Total net transaction revenues
|
2,023
|
|
|
65
|
|
|
1,958
|
|
|
1,815
|
|
|
11
|
%
|
|
8
|
%
|
||||
Marketing services and other revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marketplace
|
310
|
|
|
16
|
|
|
294
|
|
|
283
|
|
|
9
|
%
|
|
4
|
%
|
||||
Classifieds
|
246
|
|
|
28
|
|
|
218
|
|
|
199
|
|
|
24
|
%
|
|
10
|
%
|
||||
StubHub, Corporate and other
|
1
|
|
|
—
|
|
|
1
|
|
|
6
|
|
|
(85
|
)%
|
|
(87
|
)%
|
||||
Total marketing services and other revenues
|
557
|
|
|
44
|
|
|
513
|
|
|
488
|
|
|
14
|
%
|
|
5
|
%
|
||||
Total net revenues
|
$
|
2,580
|
|
|
$
|
109
|
|
|
$
|
2,471
|
|
|
$
|
2,303
|
|
|
12
|
%
|
|
7
|
%
|
|
(1)
|
We define exchange rate effect as the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts excluding hedging activity.
|
(2)
|
We define FX-Neutral GMV as GMV minus the exchange rate effect. We define the non-GAAP financial measures of FX-Neutral net revenue as net revenue minus the exchange rate effect.
|
(3)
|
Marketplace Exchange Rate Effect was net of
$28 million
hedging activity during the three months ended
March 31, 2018
. There were no hedging activities within net revenues during the three months ended March 31, 2017.
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
495
|
|
|
$
|
582
|
|
Investing activities
|
1,698
|
|
|
(114
|
)
|
||
Financing activities
|
(1,825
|
)
|
|
(418
|
)
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
38
|
|
|
114
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
$
|
406
|
|
|
$
|
164
|
|
Item 3:
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Fair Value Asset/(Liability)
|
|
Fair Value Sensitivity
|
||||
|
(In millions)
|
||||||
Foreign exchange contracts - Cash flow hedges
|
$
|
(32
|
)
|
|
$
|
(302
|
)
|
Foreign exchange contracts - Net investment hedges
|
$
|
7
|
|
|
$
|
(6
|
)
|
Item 4:
|
Controls and Procedures
|
Item 1:
|
Legal Proceedings
|
Item 1A:
|
Risk Factors
|
•
|
ability to attract, retain and engage buyers and sellers;
|
•
|
volume of transactions and price and selection of goods;
|
•
|
trust in the seller and the transaction;
|
•
|
customer service;
|
•
|
brand recognition;
|
•
|
community cohesion, interaction and size;
|
•
|
website, mobile platform and application ease-of-use and accessibility;
|
•
|
system reliability and security;
|
•
|
reliability of delivery and payment, including customer preference for fast delivery and free shipping and returns;
|
•
|
level of service fees; and
|
•
|
quality of search tools.
|
•
|
uncertainties and instability in economic and market conditions caused by the United Kingdom’s vote to exit the European Union;
|
•
|
uncertainty regarding how the United Kingdom’s access to the European Union Single Market and the wider trading, legal, regulatory and labor environments, especially in the United Kingdom and European Union, will be impacted by the United Kingdom’s vote to exit the European Union, including the resulting impact on our business and that of our clients;
|
•
|
expenses associated with localizing our products and services and customer data, including offering customers the ability to transact business in the local currency and adapting our products and services to local preferences (e.g., payment methods) with which we may have limited or no experience;
|
•
|
trade barriers and changes in trade regulations;
|
•
|
difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language, and cultural differences;
|
•
|
stringent local labor laws and regulations;
|
•
|
credit risk and higher levels of payment fraud;
|
•
|
profit repatriation restrictions, foreign currency exchange restrictions or extreme fluctuations in foreign currency exchange rates for a particular currency;
|
•
|
political or social unrest, economic instability, repression, or human rights issues;
|
•
|
geopolitical events, including natural disasters, public health issues, acts of war, and terrorism;
|
•
|
import or export regulations;
|
•
|
compliance with U.S. laws such as the Foreign Corrupt Practices Act, and foreign laws prohibiting corrupt payments to government officials, as well as U.S. and foreign laws designed to combat money laundering and the financing of terrorist activities;
|
•
|
antitrust and competition regulations;
|
•
|
potentially adverse tax developments and consequences;
|
•
|
economic uncertainties relating to sovereign and other debt;
|
•
|
different, uncertain, or more stringent user protection, data protection, privacy, and other laws;
|
•
|
risks related to other government regulation or required compliance with local laws;
|
•
|
national or regional differences in macroeconomic growth rates;
|
•
|
local licensing and reporting obligations; and
|
•
|
increased difficulties in collecting accounts receivable.
|
•
|
our products and services continue to expand in scope and complexity;
|
•
|
we continue to expand into new businesses, including through acquisitions; and
|
•
|
the universe of patent owners who may claim that we, any of the companies that we have acquired, or our customers infringe their patents, and the aggregate number of patents controlled by such patent owners, continues to increase.
|
•
|
Some jurisdictions, in particular jurisdictions outside the United States, prohibit the resale of event tickets (anti-scalping laws) at prices above the face value of the tickets or at all, or highly regulate the resale of tickets, and new laws and regulations or changes to existing laws and regulations imposing these or other restrictions could limit or inhibit our ability to operate, or our users’ ability to continue to use, our tickets business.
|
•
|
Regulatory agencies or courts may claim or hold that we are responsible for ensuring that our users comply with these laws and regulations.
|
•
|
In many jurisdictions, our tickets business depends on commercial partnerships with event organizers or licensed ticket vendors, which we must develop and maintain on acceptable terms for our tickets business to be successful.
|
•
|
Our tickets business is subject to seasonal fluctuations and the general economic and business conditions that impact the sporting events and live entertainment industries.
|
•
|
A portion of the tickets inventory sold by sellers on the StubHub platform is processed by StubHub in digital form. Systems failures, security breaches, theft or other disruptions that result in the loss of such sellers’ tickets inventory, could result in significant costs and a loss of consumer confidence in our tickets business.
|
•
|
Lawsuits alleging a variety of causes of actions have in the past, and may in the future, be filed against StubHub and eBay by venue owners, competitors, ticket buyers, and unsuccessful ticket buyers. Such lawsuits could result in significant costs and require us to change our business practices in ways that negatively affect our tickets business.
|
•
|
Our tickets business also faces significant competition from a number of sources, including ticketing service companies, event organizers, ticket brokers, and online and offline ticket resellers. Some ticketing service companies, event organizers, and professional sports teams have begun to issue event tickets through various forms of electronic ticketing systems that are designed to restrict or prohibit the transferability (and by extension, the resale) of such event tickets either to favor their own resale affiliates or to discourage resale or restrict resale of season tickets to a preferred, designated website. Ticketing service companies have also begun to use market-based pricing strategies or dynamic pricing to charge much higher prices, and impose additional restrictions on transferability, for premium tickets.
|
•
|
Some sports teams have threatened to revoke the privileges of season ticket owners if they resell their tickets through a platform that is not affiliated with, or approved by, such sports teams.
|
•
|
requiring us to use a significant portion of our cash flow from operations and other available cash to service our indebtedness, thereby reducing the amount of cash available for other purposes, including capital expenditures and acquisitions;
|
•
|
our indebtedness and leverage may increase our vulnerability to downturns in our business, to competitive pressures, and to adverse changes in general economic and industry conditions;
|
•
|
adverse changes in the ratings assigned to our debt securities by credit rating agencies will likely increase our borrowing costs;
|
•
|
our ability to obtain additional financing for working capital, capital expenditures, acquisitions, share repurchases or other general corporate and other purposes may be limited; and
|
•
|
our flexibility in planning for, or reacting to, changes in our business and our industry may be limited.
|
•
|
incur the tax cost of repatriating funds to the United States;
|
•
|
seek additional financing in the debt or equity markets;
|
•
|
refinance or restructure all or a portion of our indebtedness;
|
•
|
sell selected assets; or
|
•
|
reduce or delay planned capital or operating expenditures.
|
•
|
the potential loss of key customers, merchants, vendors and other key business partners of the companies we acquire, or dispose of, following and continuing after announcement of our transaction plans;
|
•
|
declining employee morale and retention issues affecting employees of companies that we acquire or dispose of, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or the direction of the acquired or disposed business;
|
•
|
difficulty making new and strategic hires of new employees;
|
•
|
diversion of management time and a shift of focus from operating the businesses to the transaction, and in the case of an acquisition, integration and administration;
|
•
|
the need to provide transition services to a disposed of company, which may result in the diversion of resources and focus;
|
•
|
the need to integrate the operations, systems (including accounting, management, information, human resource and other administrative systems), technologies, products and personnel of each acquired company, which is an inherently risky and potentially lengthy and costly process;
|
•
|
the inefficiencies and lack of control that may result if such integration is delayed or not implemented, and unforeseen difficulties and expenditures that may arise as a result;
|
•
|
the need to implement or improve controls, procedures and policies appropriate for a larger public company at companies that prior to acquisition may have lacked such controls, procedures and policies or whose controls, procedures and policies did not meet applicable legal and other standards;
|
•
|
risks associated with our expansion into new international markets;
|
•
|
derivative lawsuits resulting from the acquisition or disposition;
|
•
|
liability for activities of the acquired or disposed of company before the transaction, including intellectual property and other litigation claims or disputes, violations of laws, rules and regulations, commercial disputes, tax liabilities and other known and unknown liabilities and, in the case of dispositions, liabilities to the acquirors of those businesses under contractual provisions such as representations, warranties and indemnities;
|
•
|
the potential loss of key employees following the transaction;
|
•
|
the acquisition of new customer and employee personal information by us or a third party acquiring assets or businesses from us, which in and of itself may require regulatory approval and or additional controls, policies and procedures and subject us to additional exposure; and
|
•
|
our dependence on the acquired business’ accounting, financial reporting, operating metrics and similar systems, controls and processes and the risk that errors or irregularities in those systems, controls and processes will lead to errors in our consolidated financial statements or make it more difficult to manage the acquired business.
|
Item 2:
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period Ended
|
|
Total Number of
Shares Purchased |
|
Average Price Paid
per Share (3) |
|
|
Total Number of
Shares Purchased as Part of Publicly Announced Programs |
|
Maximum Dollar
Value that May Yet be Purchased Under the Programs (2) |
||||||
January 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||
Accelerated share repurchase
|
|
16,749,869
|
|
|
|
(1)
|
|
16,749,869
|
|
|
|
||||
February 28, 2018:
|
|
|
|
|
|
|
|
|
|
||||||
Open market purchases
|
|
5,837,828
|
|
|
$
|
42.82
|
|
|
|
5,837,828
|
|
|
|
||
March 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||
Accelerated share repurchase
|
|
1,375,949
|
|
|
|
(1)
|
|
1,375,949
|
|
|
|
||||
Open market purchases
|
|
262,235
|
|
|
$
|
39.95
|
|
|
|
262,235
|
|
|
$
|
6,640,300,721
|
|
|
|
24,225,881
|
|
|
|
|
|
24,225,881
|
|
|
|
|
(1)
|
At the end of November 2017, we entered into an accelerated share repurchase agreement (“ASR”) to purchase $750 million of our common stock.16,749,869 shares were delivered in January 2018. In March 2018, the purchase period for this ASR ended and an additional 1,375,949 shares were delivered. In total, 18,125,818 shares were delivered under the November 2017 ASR at an average purchase price of $41.38 per share.
|
(2)
|
In July 2017, our Board authorized a
$3.0 billion
stock repurchase program and in January 2018 our Board authorized an additional
$6.0 billion
stock repurchase program. These stock repurchase programs have no expiration from the date of authorization.
|
(3)
|
Excludes broker commissions.
|
Item 3:
|
Defaults Upon Senior Securities
|
Item 4:
|
Mine Safety Disclosures
|
Item 5:
|
Other Information
|
Item 6:
|
Exhibits
|
Exhibit Number
|
|
Description
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
eBay Inc.
|
|
|
|
Principal Executive Officer:
|
|
|
|
|
|
|
|
By:
|
/s/ Devin N. Wenig
|
|
|
|
Devin N. Wenig
|
|
|
|
President and Chief Executive Officer
|
Date:
|
April 26, 2018
|
|
|
|
|
Principal Financial Officer:
|
|
|
|
|
|
|
|
By:
|
/s/ Scott F. Schenkel
|
|
|
|
Scott F. Schenkel
|
|
|
|
Senior Vice President, Chief Financial Officer
|
Date:
|
April 26, 2018
|
|
|
|
|
Principal Accounting Officer:
|
|
|
|
|
|
|
|
By:
|
/s/ Brian J. Doerger
|
|
|
|
Brian J. Doerger
|
|
|
|
Vice President, Chief Accounting Officer
|
Date:
|
April 26, 2018
|
|
|
1.
|
Appointment
|
2.
|
Salary
|
2.1
|
Amount:
Effective August 21, 2017, your annual salary was adjusted to S$900,000 (SGD), or S$75,000 (SGD) per month, payable monthly in arrears (or such other amounts as may from time to time be agreed in writing) over 12 months.
|
2.2
|
Deductions from Salary:
|
2.3
|
There shall be deducted from your remuneration (including but not limited to salary, allowance, bonus and commission) all such sums which the Company is entitled and authorized under the laws of Singapore to deduct and/or withhold (including but not limited to any outstanding liabilities which you may have to pay to the Inland Revenue Authority of Singapore). Should you become eligible to participate in the Central Provident Fund, eBay will withhold your share of the contributions (if applicable), as well as such other sums as may be agreed from time to time, and the Company contributions will be made to the Employee’s Central Provident Fund at the statutory rate.
|
2.4
|
Taxes:
Except as expressly provided for in this agreement and the Global Tax Equalization Policy, all income tax liabilities and other charges incurred by you in respect of your remuneration shall be borne solely by you.
|
3.
|
Hours of Work
|
4.
|
Annual Leave
|
4.1
|
Amount of Days:
You shall be entitled to 25 days annual paid leave (in addition to the statutory holidays), to be taken at a time or times convenient to, and as may be approved by, the Company. Your annual leave shall be pro-rated in proportion to the number of completed months of service in each calendar year.
|
4.2
|
Company’s Discretion to Carry Forward:
If such paid leave is not taken within the relevant year of service, the Company may, at its absolute discretion, allow the paid leave not taken to be accumulated and carried forward to the following year of service, or pay you additional salary for the number of days of paid leave not taken.
|
5.
|
Bonus Eligibility
|
6.
|
Staff Review
|
7.
|
Expenses
|
8.
|
Medical Benefits
|
9.
|
Conduct and Discipline
|
10.
|
Termination
|
10.1
|
Notice:
Upon signing this offer letter, subject to Clause 10.4 below, this Agreement may be terminated by you or by the Company upon giving three months’ written notice or by the Company paying three months’ salary in lieu of notice (or any combination thereof). The Company reserves the right to require you not to attend work and/or not to undertake all or any of your duties of employment during any period of notice (whether given by you or the Company). However, the Company shall continue to pay your salary and contractual benefits whilst you remain employed by the Company. Notwithstanding the forgoing, the Company shall be entitled to terminate your employment immediately and without three months’ written notice or by paying three months’ salary in lieu of notice in any of the following cases:
|
(a)
|
If you are dishonest or engaged in serious or persistent misconduct or, without reasonable cause, neglect or refuse to attend to your duties or fail to perform any of your obligations hereunder, or fail to observe the Company’s disciplinary rules or any other regulations of the Company from time to time in force;
|
(b)
|
If you are incapacitated by illness or otherwise unable to perform your duties hereunder for a period totaling in aggregate 6 months in any period of 12 consecutive calendar months; or
|
(c)
|
If you become bankrupt or have a receiving order made against you or make any general composition with your creditors.
|
10.2
|
Termination by You:
In the event your employment is terminated by you, subject to you executing the Company’s standard form of release within 10 days after the date of your termination of employment, the Company shall provide you with a lump sum severance payment, payable not later than 30 days after the latter of (i) your termination date or (ii) the date you execute the release, equal to three (3) times your Average Monthly Salary times your Years of Service, less any employer contributions to a Company retirement and/or pension plan, including but not limited to the Central Provident Fund; provided, however, that in the event you violate Clause 11 of this Agreement or your Employee Proprietary Information and Inventions Agreement, the lump sum severance payment will be fully refundable to the Company, less any amounts owed under applicable law in connection with your termination of employment. For purposes of calculating your severance payment pursuant to this Clause 10.2, the Capitalized terms in the preceding paragraph shall be defined as follows:
|
(a)
|
“Average Monthly Salary” shall mean the sum of (a) monthly fixed salaries paid to you for the three (3) full months immediately prior to the month in which your employment terminates, divided by the total number of days for the 3-month period, multiplied by thirty (30) days, and (b) 1/12
th
of the eIP bonus payment, if any, that you received in the one (1) year period immediately prior to your termination of employment.
|
(b)
|
“Years of Service” shall mean the total number of full years of active employment with the Company beginning on January 1, 2013; provided, however, that you will receive prorated credit towards the total number of years of service based on the portion of the year worked from January 1
st
of the applicable year through your date of termination. For example, if your employment terminated on March 31, 2018, your Years of Service would be 5.25 (i.e., 5 years for the time period between 2013 and 2018 plus 25% of a Year of Service for January 1, 2018 through March 31, 2018). For the avoidance of doubt, you will receive no credit towards your Years of Service for time worked prior to January 1, 2013 because it is understood by you and the Company that your prior service with eBay Asia Pacific Regional Management Services Limited was compensated pursuant to the terms and conditions of the Korean retirement/severance plan known as the Rules of Retirement Pay for
Imwon
through December 31, 2012.
|
10.3
|
Termination by the Company:
As an SVP under the eBay Inc. group of companies, you may be eligible for certain severance benefits under the eBay Inc. SVP and Above Standard Severance Plan and Summary Plan Description as amended and restated as of January 1, 2016 (the “Plan”) if your employment is terminated by the Company without “Cause” and outside of any “Change in Control Period” (as such terms are defined under the Plan). eBay reserves the right to amend the Plan from time to time and the terms of the Plan shall apply with respect to any severance benefits described in this Clause 10.3. In addition, if your employment is terminated by the Company for a reason other than for “Cause” (as defined in the Plan), the Company will assist with expenses incurred for your relocation from
Switzerland to Singapore or Korea
in accordance with the terms of eBay’s relocation assistance program for employees in positions comparable to yours. If you are provided severance benefits as described in this Clause 10.3 under the Plan, you will receive the higher of the payments between the Plan and any severance benefit described in Clause 10.2, except for the payment already received on or about April 2013 from eBay Asia Pacific Regional Management Services Limited pursuant to the Rules of Retirement Pay for Imwon.
|
11.
|
Non-Competition
|
11.1
|
Period:
You agree that during the period of your employment by the Company, and for a period of twelve (12) months after the termination of such employment, you shall not in the EMEA region (consisting of the countries in which eBay does business at the time of your separation) without the Company’s prior written consent:
|
(a)
|
Be directly or indirectly engaged, concerned or interested in any capacity, whether as director, principal, agent, partner, consultant, employee or otherwise in any other business which is wholly or partly in competition with the business carried on by the Company or eBay;
|
(b)
|
Accept employment in any capacity with any business concern which is wholly or partly in competition with the business carried out by the Company or eBay; or
|
(c)
|
Provide advice to any business concern which is wholly or partly in competition with the business carried on by the Company or eBay.
|
11.2
|
Competitors:
Subject to the provisions of Clause 11.3 below, the Non-Competition clause set out in Clause 11.1 above is currently limited to the retail, ecommerce or payment divisions, as applicable, of the following companies, including their majority-owned subsidiaries:
|
Alibaba
|
Ticketmonster
|
Coupang
|
Wemakeprice
|
Amazon
|
SK Planet
|
Google
|
Facebook
|
Zalando
|
Asos
|
Etsy
|
|
11.3
|
Changes to Competitors:
The companies governed by the Non-Competition clause in Clause 11.2 above may on the Company’s initiative (or the initiative of eBay Inc.’s Senior Vice President, Chief People Officer or any other delegate of the Company) be renegotiated annually and at the time of termination of employment. If the Company decides not to renegotiate the list one year, this will not imply that the right to renegotiation in subsequent years or at the time of termination of employment has been waived. By entering into this agreement, you agree to negotiate in good faith and agree that you will not unreasonably withhold your consent to add a company to the list set forth in Clause 11.2 if such company is reasonably determined to be involved in a competitive business with the Company. In addition, at your request, the Company will review the current list of companies subject to Clause 11.2 above to determine if it has reasonably determined that a company should be added to or removed from the list.
|
11.4
|
Reasonable and Necessary:
While the restrictions set out in Clauses 11.1, 11.2, and 11.3 above are considered by the Parties to be reasonable in all the circumstances and no greater than is reasonable and necessary for the protection of the Company, it is agreed that if any one or more of such restrictions shall either taken by itself or themselves together be adjudged to be beyond what is reasonable in all the circumstances for the protection of the Company’s legitimate interest but would be adjudged reasonable if any particular restriction or restrictions were deleted or if any part or parts of the wording thereof were deleted, restricted or limited in any particular manner then the said restrictions shall apply with such deletions, restrictions or limitations, as the case may be. Your obligations contained in this Clause 11 shall
|
12.
|
Employee Proprietary Information and Inventions Agreement
|
13.
|
Confidentiality
|
14.
|
Company Policies
|
15.
|
Entire Agreement
|
16.
|
No Breach
|
17.
|
Governing Law
|
1.
|
Appointment
|
2.
|
Salary
|
2.1
|
As of April 26, 2011, you were paid an annual salary of S$ 600,000 (SGD), or S$ 50,000 (SGD) per month, payable monthly in arrears (or such other amounts as may from time to time be agreed in writing) over 12 months. Effective April 3, 2012, your annual salary was adjusted to S$ 615,000 (SGD), or S$ 51,250 (SGD) per month, payable monthly in arrears (or such other amounts as may from time to time be agreed in writing) over 12 months.
|
2.2
|
Housing assistance: the Company will provide up to S$ 12,000 (SGD) per month (tax protected), which may be used to cover rent, utilities and furniture costs.
|
2.3
|
Car allowance: the Company will provide S$ 2,650 (SGD) (tax protected) as a car allowance.
|
2.4
|
Deductions from salary: there shall be deducted from your remuneration (including but not limited to salary, allowance, bonus and commission) all such sums which the Company is entitled and authorized under the laws of Singapore to deduct and/or withhold (including but not limited to any outstanding liabilities which you may have to pay to the Inland Revenue Authority of Singapore), such as your share of Central Provident Fund contributions (if applicable), as well as such other sums as may be agreed with him from time to time. Contributions will be made by the Company to the Employee’s Central Provident Fund at the statutory rate.
|
2.5
|
Taxes: Except as expressly provided for in this agreement, all income tax liabilities and other charges incurred by you in respect of your remuneration shall be borne solely by you.
|
2.6
|
Tax preparation assistance: the Company will provide tax preparation assistance for you for your tax returns in Singapore or any other country required arising from your employment with the Company.
|
3.
|
Hours of Work
|
4.
|
Annual Leave
|
4.1
|
You shall be entitled to 25 days’ annual paid leave (in addition to the statutory holidays), to be taken at a time or times convenient to, and as may be approved by, the Company. Your annual leave shall be pro-rated in proportion to the number of completed months of service in each calendar year.
|
4.2
|
If such paid leave is not taken within the relevant year of service, the Company may, at its absolute discretion, allow the paid leave not taken to be accumulated and carried forward to the following year of service, or pay you additional salary for the number of days of paid leave not taken.
|
5.
|
Bonus Eligibility
|
6.
|
Staff Review
|
7.
|
Expenses
|
8.
|
Medical Benefits
|
9.
|
Conduct and Discipline
|
9.1
|
You shall perform such duties as may from time to time be assigned to you and shall comply with all reasonable directions made by the Company.
|
9.2
|
During your employment, you shall well and faithfully serve the Company and use your utmost endeavors to promote its interests, and devote the whole of your time, attention and abilities to its affairs during the hours in which you are required to perform your duties in accordance with Clause 3 above.
|
9.3
|
You shall not, during the continuation of your employment, engage in any other employment or activity, in the absence of prior written approval from the Company (which may be withheld by the Company at its sole discretion).
|
10.
|
Termination
|
10.1
|
Upon signing this offer letter, subject to Clause 10.4 below, this Agreement may be terminated by you or by the Company upon giving three months’ written notice or by paying three months’ salary in lieu of notice (or any combination thereof). The Company reserves the right to require you not to attend work and/or not to undertake all or any of your duties of employment during any period of notice (whether given by you or the Company). However, the Company shall continue to pay your salary and contractual benefits whilst you remain employed by the Company.
|
10.2
|
In the event your employment is terminated by you or by the Company for a reason other than for Cause on or after January 1, 2013, subject to you executing the Company’s standard form of release within 10 days after the date of your termination of employment, the Company shall provide you with a lump sum severance payment, payable not later than 30 days after the latter of (i) your termination date or (ii) the date you execute the release, equal to three (3) times your Average Monthly Salary times your Years of Service, less any employer contributions to a Company retirement and/or pension plan, including but not limited to the Central Provident Fund; provided, however, that in the event you violate Clause 11 of this Agreement or your Employee Proprietary Information and Inventions Agreement the lump sum severance
|
(a)
|
“Average Monthly Salary” shall mean the sum of (a) monthly fixed salaries paid to you for the three (3) full months immediately prior to the month in which your employment terminates, divided by the total number of days for the 3-month period, multiplied by thirty (30) days, and (b) 1/12
th
of the eIP bonus payment, if any, that you received in the one (1) year period immediately prior to your termination of employment.
|
(b)
|
“Cause” shall mean (i) your failure to substantially perform your assigned duties, other than failure resulting from your death or complete incapacity due to physical or mental illness or impairment, which is not remedied within 30 days after receipt of written notice from the Company specifying such failure; (ii) your committing any act or engaging in any conduct, or conviction of any criminal offence or violating any applicable laws, which in the Company’s opinion would affect your position as an employee of the Company or would bring yourself or the Company or any of its affiliates in the Asia Pacific region into disrepute; (iii) your material violation of eBay’s Code of Business Conduct; or (iv) your commission of an act of fraud, embezzlement, misappropriation, willful misconduct, breach of company secrecy, or breach of fiduciary duty against eBay or any of its affiliates in the Asia Pacific region.
|
(c)
|
“Years of Service” shall mean the total number of full years of active employment with the Company beginning on January 1, 2013; provided, however, that you will receive prorated credit towards the total number of years of service based on the portion of the year worked from January 1
st
of the applicable year through your date of termination. For example, if your employment terminated on March 31, 2014, your Years of Service would be 1.25 (ie. 1 year for 2013 plus 25% of a Year of Service for January 1, 2014 through March 31, 2014). For the avoidance of doubt, you will receive no credit towards your Years of Service for time worked prior to January 1, 2013 because it is understood by you and the Company that your prior service with eBay Asia Pacific Regional Management Services Limited will be compensated pursuant to the terms and conditions of the Korean retirement/severance plan known as the Rules of Retirement Pay for
Imwon
through December 31, 2012.
|
10.3
|
In the event your employment is terminated by the Company for a reason other than for Cause (as defined in Clause 10.2) the Company will assist with expenses incurred for your relocation from Singapore to Korea in accordance with the terms of eBay’s relocation assistance program for employees in positions comparable to yours.
|
10.4
|
The Company shall be entitled to terminate your employment immediately upon written notice (but without prejudice to the rights and remedies of the Company for any breach of this Agreement and to your continuing obligations under this Agreement) in any of the following cases:
|
(a)
|
If you are dishonest or engaged in serious or persistent misconduct or, without reasonable cause, neglect or refuse to attend to yoru duties or fail to perform any of your obligations hereunder, or fail to observe the Company’s disciplinary rules or any other regulations of the Company from time to time in force;
|
(b)
|
If you are incapacitated by illness or otherwise unable to perform your duties hereunder for a period totaling in aggregate 6 months in any period of 12 consecutive calendar months; or
|
(c)
|
If you become bankrupt or have a receiving order made against you or make any general composition with your creditors.
|
11.
|
Non-Competition
|
11.1
|
You agree that during the period of your employment by the Company, and for a period of twelve (12) months after the termination of such employment, you shall not in the Asia Pacific region (consisting of the countries in which eBay does business at the time of your separation) without the Company’s prior written consent:
|
(a)
|
Be directly or indirectly engaged, concerned or interested in any capacity, whether as director, principal, agent, partner, consultant, employee or otherwise in any other business which is wholly or partly in competition with the business carried on by the Company or eBay;
|
(b)
|
Accept employment in any capacity with any business concern which is wholly or partly in competition with the business carried out by the Company or eBay; or
|
(c)
|
Provide advice to any business concern which is wholly or partly in competition with the business carried on by the Company or eBay.
|
11.2
|
Subject to the provisions of Clause 11.3 below, the Non-Competition clause set out in Clause 11.1 above is currently limited to the retail, ecommerce or payment divisions, as applicable, of the following companies, including their majority-owned subsidiaries:
|
Shinsegae (Emart)
|
Findall
|
Interpark
|
Maxmovie
|
GS Shop
|
Garosu
|
Alibaba
|
Fashionplus
|
H Mall
|
Ticketmonster
|
Rakuten
|
Naver
|
CJ Mall
|
Coupang
|
D&Shop
|
Nate
|
Lotte
|
Wemakeprice
|
Amazon
|
Daum
|
AK Mall
|
11St
|
Yes 24
|
Google
|
Homeplus (Tesco)
|
|
|
|
11.3
|
The companies governed by the Non-Competition clause in Clause 11.2 above may on the Company’s initiative (or the initiative of eBay Inc.’s Senior Vice President of Human Resources or any other delegate of the Company) be renegotiated annually and at the time of termination of employment. If the Company decides not to renegotiate the list one year, this will not imply that the right to renegotiation in subsequent years or at the time of termination of employment has been waived. By entering into this agreement, you agree to negotiate in good faith and agree that you will not unreasonably withhold your consent to add a company to the list set forth in Clause 11.2 if such company is reasonably determined to be involved in a competitive business with the Company. In addition, at your request, the Company will review the current list of companies subject to Clause 11.2 above to determine if it has reasonably determined that a company should be added to or removed from the list.
|
11.4
|
While the restrictions set out in Clauses 11.1, 11.2, and 11.3 above are considered by the Parties to be reasonable in all fhe circumstances and no greater than is reasonable and necessary for the protection of the Company, it is agreed that if any one or more of such restrictions shall either taken by itself or themselves together be adjudged to be beyond what is reasonable in all the circumstances for the protection of the Company’s legitimate interest but would be adjudged reasonable if any particular restriction or restrictions were deleted or if any part or parts of the wording thereof were deleted, restricted or limited in any particular manner then the said restrictions shall apply with such deletions, restrictions or limitations, as the case may be.
|
11.5
|
Your obligations contained in this Clause 11 shall continue even after the termination of this Agreement
|
11.6
|
Notwithstanding the above, you shall be entitled to enter into employment with any other related corporation of the Company.
|
12.
|
Employee Proprietary Information and Inventions Agreement
|
13.
|
Confidentiality
|
14.
|
Company Policies
|
15.
|
Entire Agreement
|
16.
|
No Breach
|
17.
|
Governing Law
|
|
Three Months Ended
March 31, |
|
Year Ended December 31,
|
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||||
Income from Continuing Operations Before Income Taxes, Noncontrolling Interest and Income/Loss of Equity Method Investees
|
$
|
548
|
|
|
$
|
2,288
|
|
|
$
|
3,672
|
|
|
$
|
2,400
|
|
|
$
|
2,539
|
|
|
$
|
2,561
|
|
|
Add: Fixed Charges
(1)
|
88
|
|
|
326
|
|
|
253
|
|
|
170
|
|
|
148
|
|
|
123
|
|
|
||||||
Earnings
(2)
|
$
|
636
|
|
|
$
|
2,614
|
|
|
$
|
3,925
|
|
|
$
|
2,570
|
|
|
$
|
2,687
|
|
|
$
|
2,684
|
|
|
Fixed Charges
(1)
|
$
|
88
|
|
|
$
|
326
|
|
|
$
|
253
|
|
|
$
|
170
|
|
|
$
|
148
|
|
|
$
|
123
|
|
|
Ratio of Earnings to Fixed Charges
|
7.2
|
|
x
|
8.0
|
|
x
|
15.5
|
|
x
|
15.1
|
|
x
|
18.2
|
|
x
|
21.8
|
|
x
|
(1)
|
Fixed Charges consist of interest expense and our estimate of an appropriate portion of rentals representative of the interest factor. The estimate of interest within rental expense is estimated to be one-third of rental expense.
|
(2)
|
Earnings consist of income from continuing operations before income taxes, noncontrolling interest and income/loss of equity method investees plus Fixed Charges.
|
|
/s/
Devin N. Wenig
|
|
Devin N. Wenig
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
/s/ Scott F. Schenkel
|
|
Scott F. Schenkel
|
|
Senior Vice President, Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
/s/
Devin N. Wenig
|
|
Devin N. Wenig
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
/s/
Scott F. Schenkel
|
|
Scott F. Schenkel
|
|
Senior Vice President, Chief Financial Officer
|
|
(Principal Financial Officer)
|