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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______

Commission file number 001-37713
 ebay-20220331_g1.jpg
eBay Inc.
(Exact name of registrant as specified in its charter)
Delaware 77-0430924
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2025 Hamilton Avenue
San Jose , California 95125
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:
(408) 376-7108
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol Name of exchange on which registered
Common stock EBAY The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes    No 
As of May 2, 2022, there were 559,842,135 shares of the registrant’s common stock, $0.001 par value, outstanding, which is the only class of common or voting stock of the registrant issued.




eBay Inc.
TABLE OF CONTENTS

2

PART I: FINANCIAL INFORMATION

Item 1:    Financial Statements (unaudited)

Index
Page
4
5
6
7
8
3

eBay Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
  March 31,
2022
December 31,
2021
  (In millions, except par value)
  (Unaudited)
ASSETS
Current assets:    
Cash and cash equivalents $ 1,798  $ 1,379 
Short-term investments 3,771  5,944 
Customer accounts and funds receivable 626  681 
Other current assets 1,154  1,107 
Total current assets 7,349  9,111 
Long-term investments 2,213  2,575 
Property and equipment, net 1,192  1,236 
Goodwill 4,141  4,178 
Operating lease right-of-use assets 570  289 
Deferred tax assets 3,224  3,255 
Equity investment in Adevinta 3,748  5,391 
Other assets 543  591 
Total assets $ 22,980  $ 26,626 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt $ 1,755  $ 1,355 
Accounts payable 245  262 
Customer accounts and funds payable 652  707 
Accrued expenses and other current liabilities 1,851  1,927 
Income taxes payable 479  371 
Total current liabilities 4,982  4,622 
Operating lease liabilities 481  200 
Deferred tax liabilities 2,701  3,116 
Long-term debt 6,578  7,727 
Other liabilities 1,184  1,183 
Total liabilities 15,926  16,848 
Commitments and Contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.001 par value; 3,580 shares authorized; 571 and 594 shares outstanding
Additional paid-in capital 16,904  16,659 
Treasury stock at cost, 1,146 and 1,121 shares
(44,809) (43,371)
Retained earnings 34,615  36,090 
Accumulated other comprehensive income 342  398 
Total stockholders’ equity 7,054  9,778 
Total liabilities and stockholders’ equity $ 22,980  $ 26,626 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

eBay Inc.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
  Three Months Ended
March 31,
  2022 2021
  (In millions, except per share amounts)
  (Unaudited)
Net revenues $ 2,483  $ 2,638 
Cost of net revenues 689  606 
Gross profit 1,794  2,032 
Operating expenses:
Sales and marketing 478  546 
Product development 301  304 
General and administrative 226  246 
Provision for transaction losses 96  88 
Amortization of acquired intangible assets
Total operating expenses 1,102  1,191 
Income from operations 692  841 
Gain (loss) on equity investments and warrant, net (2,291) (36)
Interest and other, net (50) (81)
Income (loss) from continuing operations before income taxes (1,649) 724 
Income tax benefit (provision) 310  (156)
Income (loss) from continuing operations (1,339) 568 
Income (loss) from discontinued operations, net of income taxes (2) 73 
Net income (loss) $ (1,341) $ 641 
Income (loss) per share - basic:
Continuing operations $ (2.28) $ 0.83 
Discontinued operations —  0.11 
Net income (loss) per share - basic $ (2.28) $ 0.94 
Income (loss) per share - diluted:
Continuing operations $ (2.28) $ 0.82 
Discontinued operations —  0.10 
Net income (loss) per share - diluted $ (2.28) $ 0.92 
Weighted-average shares:
Basic 587  681 
Diluted 587  693 

The accompanying notes are an integral part of these condensed consolidated financial statements.


5

eBay Inc.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Three Months Ended
March 31,
  2022 2021
  (In millions)
  (Unaudited)
Net income (loss) $ (1,341) $ 641 
Other comprehensive income (loss), net of reclassification adjustments:
Foreign currency translation gains (losses) (34) (117)
Unrealized gains (losses) on investments, net (51) (3)
Tax benefit (expense) on unrealized gains (losses) on investments, net 13  — 
Unrealized gains (losses) on hedging activities, net 20  74 
Tax benefit (expense) on unrealized gains (losses) on hedging activities, net (4) (17)
Other comprehensive income (loss), net of tax (56) (63)
Comprehensive income (loss) $ (1,397) $ 578 

The accompanying notes are an integral part of these condensed consolidated financial statements.


6

eBay Inc.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
  Three Months Ended
March 31,
  2022 2021
  (In millions, except per share amounts)
(Unaudited)
Common stock:
Balance, beginning of period $ $
Common stock issued —  — 
Common stock repurchased —  — 
Balance, end of period
Additional paid-in-capital:
Balance, beginning of period 16,659  16,497 
Common stock and stock-based awards issued
Tax withholdings related to net share settlements of restricted stock units and awards (61) (69)
Stock-based compensation 111  116 
Forward contract for share repurchases 188  — 
Other
Balance, end of period 16,904  16,546 
Treasury stock at cost:
Balance, beginning of period (43,371) (36,515)
Common stock repurchased (1,438) (292)
Balance, end of period (44,809) (36,807)
Retained earnings:
Balance, beginning of period 36,090  22,961 
Net income (loss) (1,341) 641 
Dividends and dividend equivalents declared (134) (126)
Balance, end of period 34,615  23,476 
Accumulated other comprehensive income:
Balance, beginning of period 398  616 
Foreign currency translation adjustment (34) (117)
Change in unrealized gains (losses) on investments (51) (3)
Change in unrealized gains (losses) on derivative instruments 20  74 
Tax benefit (provision) on above items (17)
Balance, end of period 342  553 
Total stockholders’ equity $ 7,054  $ 3,770 
Dividends and dividend equivalents declared per share or restricted stock unit $ 0.22  $ 0.18 

The accompanying notes are an integral part of these condensed consolidated financial statements.


7

eBay Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
  Three Months Ended
March 31,
  2022 2021
  (In millions)
  (Unaudited)
Cash flows from operating activities:    
Net income (loss) $ (1,341) $ 641 
Income (loss) from discontinued operations, net of income taxes (73)
Adjustments:
Provision for transaction losses 96  88 
Depreciation and amortization 118  134 
Stock-based compensation 111  103 
Loss (gain) on investments, net 14  (1)
Deferred income taxes (376) 103 
Change in fair value of warrant 115  36 
Change in fair value of equity investment in Adevinta 1,643  — 
Change in fair value of equity investment in Gmarket 182  — 
Unrealized change in fair value of equity investment in KakaoBank 91  — 
Unrealized change in fair value of equity investment in Adyen 80  — 
Realized change in fair value of shares sold in Adyen 166  — 
Loss (gain) on extinguishment of debt —  10 
Changes in assets and liabilities, net of acquisition effects (272) (93)
Net cash provided by continuing operating activities 629  948 
Net cash provided by (used in) discontinued operating activities (16) 94 
Net cash provided by operating activities 613  1,042 
Cash flows from investing activities:    
Purchases of property and equipment (83) (83)
Purchases of investments (5,475) (3,424)
Maturities and sales of investments 6,827  3,772 
Proceeds from the sale of shares in Adyen 473  — 
Proceeds from the sale of shares in KakaoBank 27  — 
Other
Net cash provided by continuing investing activities 1,772  267 
Net cash provided by (used in) discontinued investing activities —  (2)
Net cash provided by investing activities 1,772  265 
Cash flows from financing activities:    
Proceeds from issuance of common stock — 
Repurchases of common stock (1,069) (304)
Payments for taxes related to net share settlements of restricted stock units and awards (61) (20)
Payments for dividends (129) (122)
Repayment of debt (750) (1,156)
Net borrowings under commercial paper program —  400 
Net funds receivable and payable activity 56  97 
Other — 
Net cash used in continuing financing activities (1,952) (1,101)
Net cash provided by (used in) discontinued financing activities —  (68)
Net cash used in financing activities (1,952) (1,169)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (18) (11)
Net increase in cash, cash equivalents and restricted cash 415  127 
Cash, cash equivalents and restricted cash at beginning of period 1,406  1,594 
Cash, cash equivalents and restricted cash at end of period $ 1,821  $ 1,721 
Less: Cash, cash equivalents and restricted cash of discontinued operations —  199 
Cash, cash equivalents and restricted cash of continuing operations at end of period $ 1,821  $ 1,522 

8

eBay Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS—(Continued)
Three Months Ended
March 31,
2022 2021
(In millions)
(Unaudited)
Supplemental cash flow disclosures:
Cash paid for:
Interest $ 80  $ 104 
Income taxes $ 35  $ 75 

The accompanying notes are an integral part of these condensed consolidated financial statements.


9

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 — The Company and Summary of Significant Accounting Policies

The Company

eBay Inc. is a global commerce leader, which includes our Marketplace platforms. Founded in 1995 in San Jose, California, eBay is one of the world’s largest and most vibrant marketplaces for discovering great value and unique selection. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity for all. Our technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere. 

When we refer to “we,” “our,” “us,” the “Company” or “eBay” in this Quarterly Report on Form 10-Q, we mean the current Delaware corporation (eBay Inc.) and its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, investments including level 3 investments in Gmarket and warrant, the recoverability of goodwill and intangible assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates.

Principles of Consolidation and Basis of Presentation

The accompanying condensed financial statements are consolidated and include the financial statements of eBay Inc., our wholly and majority-owned subsidiaries and variable interest entities (“VIE”) where we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest. A qualitative approach is applied to assess the consolidation requirement for VIE’s. Equity investments in entities where we have not elected the fair value option and where we hold at least a 20% ownership interest or have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investees’ results of operations is included in gain (loss) on equity investments and warrant, net and our equity investment balance is included in long-term investments. Equity investments in entities where we hold less than a 20% ownership interest are generally accounted for as equity investments to be measured at fair value or, under an election, at cost if it does not have readily determinable fair value, in which case the carrying value would be adjusted upon the occurrence of an observable price change in an orderly transaction for identical or similar instruments or impairment.

Upon the transfer of our Classifieds business to Adevinta ASA (“Adevinta”) on June 24, 2021, shares in Adevinta were included as part of total consideration received under the definitive agreement. The equity interest in Adevinta is accounted for under the fair value option. As of March 31, 2022, our ownership in Adevinta was 33%. Subsequent changes in fair value are included in gain (loss) on equity investments and warrant, net.

Additionally, upon completion of the sale of 80.01% of the outstanding equity interests of eBay Korea LLC, a limited liability company incorporated under the laws of Korea and a wholly owned subsidiary of eBay KTA (“eBay Korea”) to E-mart Inc. and one of its wholly owned subsidiaries (together, “Emart”) on November 14, 2021, we retained 19.99% of the outstanding equity interests of the new entity, Gmarket Global LLC (“Gmarket”) formerly known as Apollo Korea, which is accounted for under the fair value option. Subsequent changes in fair value are included in gain (loss) on equity investments and warrant, net and our equity investment balance is included in long-term investments.

10

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2021. We have evaluated all subsequent events through the date these condensed consolidated financial statements were issued. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the condensed consolidated financial position, results of operations and cash flows for these interim periods.

Significant Accounting Policies

There were no significant changes to our significant accounting policies disclosed in “Note 1 The Company and Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2021.

Recent Accounting Pronouncements Not Yet Adopted

In March 2022, the Financial Accounting Standards Board issued new guidance to expand the scope of financial assets that can be included in a closed portfolio hedged using the portfolio layer method to allow consistent accounting for similar hedges. The expanded scope permits the application of the same portfolio hedging method to both prepayable and nonprepayable financial assets. The standard will be effective for annual reporting periods beginning after December 15, 2022, including interim reporting periods within those fiscal years. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.



11

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 2 — Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted net income (loss) per share by application of the treasury stock method. The calculation of diluted net income (loss) per share excludes all anti-dilutive common shares.

The following table presents the computation of basic and diluted net income (loss) per share for the periods indicated (in millions, except per share amounts):
  Three Months Ended
March 31,
  2022 2021
Numerator:
Income (loss) from continuing operations $ (1,339) $ 568 
Income (loss) from discontinued operations, net of income taxes (2) 73 
Net income (loss) $ (1,341) $ 641 
Denominator:
Weighted average shares of common stock - basic 587  681 
Dilutive effect of equity incentive awards —  12 
Weighted average shares of common stock - diluted 587  693 
Income (loss) per share - basic:
Continuing operations $ (2.28) $ 0.83 
Discontinued operations —  0.11 
Net income (loss) per share - basic $ (2.28) $ 0.94 
Income (loss) per share - diluted:
Continuing operations $ (2.28) $ 0.82 
Discontinued operations —  0.10 
Net income (loss) per share - diluted $ (2.28) $ 0.92 
Common stock equivalents excluded from income (loss) per diluted share because their effect would have been anti-dilutive


12

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 3 — Discontinued Operations

Classifieds

On June 24, 2021, we completed the previously announced transfer of our Classifieds business to Adevinta for $2.5 billion in cash, subject to certain adjustments, and approximately 540 million shares in Adevinta which represented an equity interest of 44%. Together, the total consideration received under the definitive agreement was valued at approximately $13.3 billion, based on the closing trading price of Adevinta’s outstanding shares at the Oslo Stock Exchange on June 24, 2021. The transfer resulted in a pre-tax gain of $12.5 billion and related income tax expense of $2.1 billion, both within income from discontinued operations. The results of our Classifieds business have been presented as discontinued operations in our consolidated statement of income for all periods presented through June 24, 2021 as the transfer represented a strategic shift in our business that had a major effect on our operations and financial results.

In addition, upon closing we entered into a transition service agreement (“TSA”) with Adevinta to support the operations of Classifieds after the divestiture for fees of $29 million. This agreement commenced with the close of the transaction and has minimum initial terms ranging from 6 to 12 months and can be extended for a maximum of six months.

eBay Korea

On November 14, 2021, we completed the previously announced sale of 80.01% of the outstanding equity interests of eBay Korea to Emart, pursuant to the terms and conditions of the securities purchase agreement, in exchange for approximately $3.0 billion of gross cash proceeds as of the transaction close date, subject to certain adjustments. The sale resulted in a pre-tax gain of $3.2 billion inclusive of a $81 million currency translation adjustment and a $44 million gain on the net investment hedge settled in the fourth quarter of 2021, as well as income tax expense of $369 million. The results of our eBay Korea business have been presented as discontinued operations in our condensed consolidated statement of income for all periods presented through November 14, 2021 as the transfer represented a strategic shift in our business that had a major effect on our operations and financial results.

In addition, upon closing we entered into a transition service agreement with eBay Korea to support the operations of eBay Korea after the divestiture for immaterial fees. This agreement commenced with the close of the transaction and has minimum initial terms of 6 months and can be extended for a maximum of 3 months.

Discontinued operations

The following table presents financial results from discontinued operations, net of income taxes in our condensed consolidated statement of income for the periods indicated (in millions):
  Three Months Ended
March 31,
  2022 2021
Classifieds income (loss) from discontinued operations, net of income taxes $ —  $ 72 
eBay Korea income (loss) from discontinued operations, net of income taxes (2)
Income (loss) from discontinued operations, net of income taxes $ (2) $ 73 


13

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents cash flows for discontinued operations for the periods indicated (in millions):
  Three Months Ended
March 31,
  2022 2021
Classifieds net cash provided by (used in) discontinued operating activities
$ (1) $ 104 
eBay Korea net cash provided by (used in) discontinued operating activities
(15) (10)
Net cash provided by (used in) discontinued operating activities $ (16) $ 94 
Classifieds net cash used in discontinued investing activities
$ —  $ (1)
eBay Korea net cash used in discontinued investing activities
—  (1)
Net cash used in discontinued investing activities $ —  $ (2)
Classifieds net cash provided by (used in) discontinued financing activities
$ —  $ — 
eBay Korea net cash used in discontinued financing activities
—  (68)
Net cash used in discontinued financing activities $ —  $ (68)

Classifieds

The financial results of Classifieds are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income through June 24, 2021, when the transfer of Classifieds was completed. Each period presented below includes the impact of intercompany revenue agreements through June 24, 2021. The impact of these intercompany revenue agreements to net revenues and cost of net revenues was $2 million for the three months ended March 31, 2021. The continuing revenue and cash flows are not considered to be material.

The following table presents the financial results of Classifieds for the periods indicated (in millions):
  Three Months Ended
March 31,
  2022 2021
Net revenues $ —  $ 276 
Cost of net revenues —  30 
Gross profit —  246 
Operating expenses:
Sales and marketing —  87 
Product development —  43 
General and administrative —  27 
Provision for transaction losses — 
Amortization of acquired intangible assets —  — 
Total operating expenses —  159 
Income (loss) from operations of discontinued operations —  87 
Interest and other, net — 
Income (loss) from discontinued operations before income taxes —  88 
Income tax provision —  (16)
Income (loss) from discontinued operations, net of income taxes $ —  $ 72 


14

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
eBay Korea

The financial results of eBay Korea are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. The following table presents the financial results of eBay Korea (in millions):
  Three Months Ended
March 31,
  2022 2021
Net revenues $ —  $ 385 
Cost of net revenues —  217 
Gross profit —  168 
Operating expenses:
Sales and marketing —  141 
Product development —  14 
General and administrative 12 
Total operating expenses 167 
Income (loss) from operations of discontinued operations (2)
Interest and other, net —  — 
Income (loss) from discontinued operations before income taxes (2)
Income tax benefit (provision) —  — 
Income (loss) from discontinued operations, net of income taxes $ (2) $

StubHub, PayPal and Enterprise

For the three months ended March 31, 2022 and 2021, the discontinued operations activity related to our former StubHub, PayPal and Enterprise businesses was immaterial.


15

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 4 — Segments

We have one operating and reportable segment. Our reportable segment is Marketplace, which includes our online marketplace located at www.ebay.com, its localized counterparts and the eBay suite of mobile apps. Our management and our chief operating decision maker review financial information presented on a consolidated basis for purposes of allocating resources and evaluating performance and do not evaluate using asset information.

During the second quarter of 2021, we classified the results of our eBay Korea business which was part of our Marketplace segment as discontinued operations in our consolidated statement of income for the periods presented. See “Note 3 — Discontinued Operations” for additional information.

The accounting policies of our segment are the same as those described in “Note 1 — The Company and Summary of Significant Accounting Policies.”

The following table summarizes net revenues by type for the periods indicated (in millions):
  Three Months Ended
March 31,
  2022 2021
Net revenues by type:
Net transaction revenues $ 2,355  $ 2,476 
Marketing services and other revenues 128  162 
Total net revenues $ 2,483  $ 2,638 

The following table summarizes the allocation of net revenues based on geography for the periods indicated (in millions):
  Three Months Ended
March 31,
  2022 2021
U.S. $ 1,226  $ 1,296 
United Kingdom 418  503 
Germany 273  344 
Rest of world 566  495 
Total net revenues $ 2,483  $ 2,638 

Net revenues, inclusive of the effects of foreign exchange during each period, are attributed to U.S. and international geographies primarily based upon the country in which the seller, platform that displays advertising, other service provider or customer, as the case may be, is located.


16

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 5 — Investments

The following tables summarize the unrealized gains and losses and estimated fair value of our investments classified as available-for-sale debt securities and restricted cash as of the dates indicated (in millions):
  March 31, 2022
  Gross
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Short-term investments:
Restricted cash $ 20  $ —  $ —  $ 20 
Corporate debt securities 2,907  —  —  2,907 
Government and agency securities 40  —  —  40 
$ 2,967  $ —  $ —  $ 2,967 
Long-term investments:
Corporate debt securities $ 812  $ —  $ (28) $ 784 
Government and agency securities 798     —     (28)   770 
$ 1,610  $ —  $ (56) $ 1,554 
  December 31, 2021
  Gross
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Short-term investments:
Restricted cash $ 22  $ —  $ —  $ 22 
Corporate debt securities 4,151  —  4,152 
Government and agency securities 25  —  —  25 
$ 4,198  $ $ —  $ 4,199 
Long-term investments:
Corporate debt securities $ 954  $ $ (5) $ 950 
Government and agency securities 779     —     (2)   777 
$ 1,733  $ $ (7) $ 1,727 

We consider cash to be restricted when withdrawal or general use is legally restricted. Restricted cash is held primarily in interest bearing accounts primarily related to our global sabbatical program. Our fixed-income investments consist of predominantly investment grade corporate debt securities and government and agency securities. The corporate debt and government and agency securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies.

The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We regularly review investment securities for other-than-temporary impairment using both qualitative and quantitative criteria. Investments classified as available-for-sale debt securities are carried at fair value with changes reflected in other comprehensive income. Where there is an intention or a requirement to sell an impaired available-for-sale debt security, the entire impairment is recognized in earnings with a corresponding adjustment to the amortized cost basis of the security. We presently do not intend to sell any of the available-for-sale debt securities in an unrealized loss position and expect to realize the full value of all these investments upon maturity or sale.


17

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We regularly review investment securities for credit impairment using both qualitative and quantitative criteria. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through interest and other, net for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. We did not recognize any credit-related impairment through an allowance for credit losses as of March 31, 2022.

Investment securities in a continuous loss position for less than 12 months had an estimated fair value of $3.8 billion and unrealized losses of $55 million as of March 31, 2022, and an estimated fair value of $3.1 billion and an immaterial amount of unrealized losses as of December 31, 2021. Investment securities in a continuous loss position for greater than 12 months had an estimated fair value of $22 million and an immaterial amount of unrealized losses as of March 31, 2022, and there were no investment securities in a continuous loss position for greater than 12 months as of December 31, 2021. Refer to “Note 14 — Accumulated Other Comprehensive Income” for amounts reclassified to earnings from unrealized gains and losses.

The following table presents estimated fair values of our short-term and long-term investments classified as available-for-sale debt securities and restricted cash by date of contractual maturity as of the date indicated (in millions):
  March 31, 2022
One year or less (including restricted cash of $20)
$ 2,967 
One year through two years 427 
Two years through three years 663 
Three years through four years 329 
Four years through five years 135 
$ 4,521 

Equity Investments

The following table summarizes our equity investments as of the dates indicated (in millions):
  Balance Sheet Location March 31, 2022 December 31, 2021
Equity investments with readily determinable fair values Short-term investments $ 804  $ 1,745 
Equity investment in Adevinta Equity investment in Adevinta 3,748  5,391 
Equity investment under the fair value option Long-term investments 543  725 
Equity investments under the equity method of accounting Long-term investments 38  38 
Equity investments without readily determinable fair values Long-term investments 78  85 
Total equity investments $ 5,211  $ 7,984 

Equity investment in Adevinta

We account for equity investments through which we exercise significant influence but do not have control over the investee under the fair value option or under the equity method. Our equity investment in Adevinta is accounted for under the fair value option.


18

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Upon completion of the transfer of our Classifieds business to Adevinta on June 24, 2021, we received an equity investment of 44% in Adevinta valued at $10.8 billion at the close of the transfer. On November 18, 2021, we completed the sale of approximately 135 million of our voting shares in Adevinta to Permira, inclusive of the option exercised by Permira to purchase additional voting shares, for total cash consideration of approximately $2.3 billion which reduced our ownership in Adevinta to 33%. Following the close of the share sale in November 2021, our equity investment in Adevinta is reported in the long-term assets section on the condensed consolidated balance sheet to reflect our contractual requirement to retain at least 25% of the total number of issued and outstanding equity securities of Adevinta until October 14, 2023, subject to certain exceptions specified in the agreement.

At the initial recognition of the equity investment, we elected the fair value option where subsequent changes in fair value are recognized in earnings. The investment is classified within Level 1 in the fair value hierarchy as the valuation can be obtained from real time quotes in active markets. The fair value of the equity investment is measured based on Adevinta’s closing stock price and prevailing foreign exchange rate at each balance sheet date and the changes in fair value are reflected in gain (loss) on equity investments and warrant, net in the condensed consolidated statement of income. We believe the fair value option election creates more transparency of the current value in the equity investment in Adevinta. Our non-voting shares are convertible to voting shares on a one-to-one basis, subject to a limitation of 33% voting interest. For the three months ended March 31, 2022, an unrealized loss of $1,643 million was recorded in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income related to the change in fair value of the investment. The fair value of the investment was $3,748 million and $5,391 million as of March 31, 2022 and December 31, 2021, respectively.

Equity investments with readily determinable fair values

Equity investments with readily determinable fair values are classified within Level 1 in the fair value hierarchy as the valuation can be obtained from real time quotes in active markets. Subsequent changes in fair value are reflected in gain (loss) on equity investments and warrant, net in the condensed consolidated statement of income.

In August 2021, one of our equity investments, KakaoBank Corp. (“KakaoBank”), which previously did not have a readily determinable fair value, completed its initial public offering which resulted in this investment having a readily determinable fair value. The fair value of the equity investment is measured based on KakaoBank’s closing stock price and prevailing foreign exchange rate at each balance sheet date. For the three months ended March 31, 2022, an unrealized loss of $91 million was recorded in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income related to the change in fair value of the investment. During the three months ended March 31, 2022, we sold a portion of our shares in KakaoBank for $45 million and recorded a realized loss on the change in fair value of shares sold of $8 million in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income. There were $18 million of unsettled shares sold as of March 31, 2022 which were subsequently settled in the second quarter of 2022. The fair value of the investment was $540 million and $684 million as of March 31, 2022 and December 31, 2021, respectively and is reported within short-term investments in our condensed consolidated balance sheet.

We entered into a warrant agreement in conjunction with a commercial agreement with Adyen that vests in a series of four tranches, at a specified price per share upon meeting processing volume milestone targets on a calendar year basis. When a relevant milestone is reached, the warrant becomes exercisable with respect to the corresponding tranche of warrant shares up until the warrant expiration date of January 31, 2025. In the fourth quarter of 2021, we met the processing volume milestone target to vest the first tranche of the warrant. Upon vesting of the first tranche, we exercised the option to purchase shares of Adyen valued at $1.1 billion in exchange for approximately $110 million in cash. The fair value of the equity investment is measured based on Adyen’s closing stock price and prevailing foreign exchange rate at each balance sheet date. For the three months ended March 31, 2022, an unrealized loss of $80 million was recorded in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income related to the change in fair value of the investment. During the three months ended March 31, 2022, we sold a portion of our shares in Adyen for $551 million and recorded a realized loss on the change in fair value of shares sold of $166 million in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income. There were $78 million of unsettled shares sold as of March 31, 2022 which were subsequently settled in the second quarter of 2022. As of March 31, 2022 and December 31, 2021, the fair value of the investment was $264 million and $1,061 million, respectively and is

19

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
reported within short-term investments in our condensed consolidated balance sheet. Refer to “Note 6 — Derivative Instruments” for more information about the warrant.

Subsequent to March 31, 2022, we sold additional shares in Adyen for $130 million and recorded a realized loss on the change in fair value of shares sold of $1 million, and we sold additional shares in KakaoBank for $79 million and recorded a realized loss on the change in fair value of shares sold of $14 million in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income.

Equity investment under the fair value option

We account for equity investments through which we exercise significant influence but do not have control over the investee under the fair value option or under the equity method. Our equity investment in Gmarket is accounted for under the fair value option.

On November 14, 2021, we completed the previously announced sale of 80.01% of the outstanding equity interests of eBay Korea to Emart. Upon completion of the sale, we retained 19.99% of the outstanding equity interest of the new entity, Gmarket, over whom we are able to exercise significant influence based on the terms of the securities purchase agreement, including through our board representation. Our equity investment in Gmarket was valued at $728 million as of the transaction close date. At the initial recognition of this equity investment, we elected the fair value option where subsequent changes in fair value are recognized in gain (loss) on equity investments and warrant, net in the condensed consolidated statement of income. We believe the fair value option election creates more transparency of the current value in the equity investment in Gmarket. Our retained investment in Gmarket is subject to a two year right held by Emart to purchase the remaining interest at the close price of the sale.

For the three months ended March 31, 2022 an unrealized loss of $182 million was recorded in gain (loss) on equity investments and warrant, net related to the change in fair value of the investment. As of March 31, 2022 and December 31, 2021, the fair value of the investment was $543 million and $725 million, respectively and is reported within long-term investments in our condensed consolidated balance sheet.

The investment is classified as Level 3 in the fair value hierarchy as the valuation reflects management’s estimate of assumptions that market participants would use in pricing the equity investment. Refer to “Note 7 — Fair Value Measurement of Assets and Liabilities” for more information.

Other equity method investments

We account for equity investments through which we exercise significant influence but do not have control over the investee under the fair value option or under the equity method. For equity investments accounted for under the equity method, our consolidated results of operations include, as a component of gain (loss) on equity investments and warrant, net, our share of the net income or loss of the equity investments accounted for under the equity method of accounting.


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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Equity investments without readily determinable fair values

The following table summarizes the change in total carrying value related to equity investments without readily determinable fair values still held for the periods indicated (in millions):
Three Months Ended
March 31,
2022 2021
Carrying value, beginning of period $ 85  $ 539 
Downward adjustments for observable price changes and impairment (7) — 
Foreign currency translation and other —  (11)
Carrying value, end of period $ 78  $ 528 

For the three months ended March 31, 2022, we recorded a downward adjustment of $7 million to the carrying value of a strategic investment in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income.

For such equity investments without readily determinable fair values still held at March 31, 2022, the cumulative upward adjustment for observable price changes was $41 million and cumulative downward adjustment for observable price changes and impairments was $298 million.

The following table summarizes unrealized gains and losses related to equity investments held at March 31, 2022 and presented within gain (loss) on equity investments and warrant, net for the periods indicated (in millions):
  Three Months Ended
March 31,
2022 2021
Net gains/(losses) recognized during the period on equity investments $ (2,177) $ — 
Less: Net gains/(losses) recognized during the period on equity investments sold during the period (174) — 
Total unrealized gains/(losses) on equity investments held at March 31, 2022
$ (2,003) $ — 



21

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 6 — Derivative Instruments

Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. These hedging contracts reduce, but do not entirely eliminate, the impact of adverse foreign exchange rate and interest rate movements. We do not use any of our derivative instruments for trading purposes.

We use foreign currency exchange contracts to reduce the volatility of cash flows related to forecasted revenues, expenses, assets and liabilities, including intercompany balances denominated in foreign currencies. These contracts are generally one month to one year in duration but with maturities up to 24 months. The objective of the foreign exchange contracts is to ensure that ultimately the U.S. dollar-equivalent cash flows are not adversely affected by changes in the applicable U.S. dollar/foreign currency exchange rate. We evaluate the effectiveness of our foreign exchange contracts designated as cash flow or net investment hedges on a quarterly basis.

In 2020, we began to hedge the variability of forecasted interest payments on anticipated debt issuance using forward-starting interest rate swaps. These interest rate swaps effectively fix the benchmark interest rate and have the economic effect of hedging the variability of forecasted interest payments for up to 10 years on an anticipated debt issuance. Similar to other cash flow hedges, we recorded changes in the fair value of these interest rate swaps in accumulated other comprehensive income (loss) (“AOCI”) until the anticipated debt issuance. In May 2021, we issued $2.5 billion of senior unsecured notes, which consisted of notes maturing in 2026, 2031 and 2051. As a result, we terminated the interest rate swaps and the gain associated with the termination of approximately $45 million is amortized to interest expense over the terms of our notes due in May 2026 and May 2031.

During 2020, we began to hedge the variability of the cash flows in interest payments associated with our floating-rate debt using interest rate swaps. These interest rate swap agreements effectively convert our floating-rate debt that is based on London Interbank Offered Rate (“LIBOR”) to a fixed-rate basis, reducing the impact of interest-rate changes on future interest expense. The total notional amount of these interest rate swaps was $400 million as of March 31, 2022 with terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate. Our interest rate swap contracts have maturity dates in 2023. Similar to other cash flow hedges, we record changes in the fair value of these interest rate swaps in AOCI and their fair value is amortized over the term of the debt to interest expense.

Cash Flow Hedges

For derivative instruments that are designated as cash flow hedges, the derivative’s gain or loss is initially reported as a component of AOCI and subsequently reclassified into earnings in the same period the forecasted hedged transaction affects earnings. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Unrealized gains and losses in AOCI associated with such derivative instruments are immediately reclassified into earnings. As of March 31, 2022, we have estimated that approximately $35 million of net derivative gains related to our foreign exchange cash flow hedges and $10 million net derivative gains related to our interest rate cash flow hedges included in AOCI will be reclassified into earnings within the next 12 months. We classify cash flows related to our cash flow hedges as operating activities in our condensed consolidated statement of cash flows.

Non-Designated Hedges

Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets or liabilities, including intercompany balances and equity investments denominated in non-functional currencies. The gains and losses on our derivatives not designated as hedging instruments are recorded in interest and other, net, which are offset by the foreign currency gains and losses on the related assets and liabilities that are also recorded in interest and other, net. We classify cash flows related to our non-designated hedging instruments in the same line item as the cash flows of the related assets or liabilities, which is generally within operating activities in our condensed consolidated statement of cash flows. Cash flows related to the settlement of non-designated hedging instruments related to equity investments are classified within investing activities in our condensed consolidated statement of cash flows.

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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Warrant

We entered into a warrant agreement in conjunction with a commercial agreement with Adyen that, subject to meeting certain conditions, entitles us to acquire a fixed number of shares up to 5% of Adyen’s fully diluted issued and outstanding share capital at a specific date. The warrant has a term of seven years and vests in a series of four tranches, at a specified price per share (fixed for the first two tranches) upon meeting processing volume milestone targets on a calendar year basis. When or if a relevant milestone is reached, the warrant becomes exercisable with respect to the corresponding tranche of warrant shares up until the warrant expiration date of January 31, 2025. The maximum number of tranches that can vest in one calendar year is two.

In 2021, we met the processing volume milestone target to vest the first tranche of the warrant. Upon vesting of the first tranche, we exercised the option to purchase shares of Adyen valued at approximately $1.1 billion in exchange for approximately $110 million in cash. Our equity investment in Adyen is accounted for as an equity investment with a readily determinable fair value. Refer to “Note 5 — Investments” for more information about our equity investments.
 
The warrant is accounted for as a derivative under ASC Topic 815, Derivatives and Hedging. We report the warrant at fair value within warrant asset in our condensed consolidated balance sheets and changes in the fair value of the warrant are recognized in gain (loss) on equity investments and warrant, net in our condensed consolidated statement of income. The day-one value attributable to the other side of the warrant, which was recorded as a deferred credit, is reported within other liabilities in our condensed consolidated balance sheets and is amortized over the life of the commercial arrangement. See “Note 7 — Fair Value Measurements” for information about the fair value measurement of the warrant.

Fair Value of Derivative Contracts

The following table presents fair values of our outstanding derivative instruments as of the dates indicated (in millions):
  Balance Sheet Location March 31,
2022
December 31,
2021
Derivative Assets:
Foreign exchange contracts designated as cash flow hedges Other current assets $ 82  $ 63 
Foreign exchange contracts not designated as hedging instruments Other current assets 25  22 
Interest rate contracts designated as cash flow hedges Other current assets — 
Warrant Other assets 329  444 
Foreign exchange contracts designated as cash flow hedges Other assets 25  24 
Total derivative assets $ 465  $ 553 
Derivative Liabilities:
Foreign exchange contracts designated as cash flow hedges Other current liabilities $ $ — 
Foreign exchange contracts not designated as hedging instruments Other current liabilities 11  17 
Foreign exchange contracts designated as cash flow hedges Other liabilities — 
Total derivative liabilities $ 18  $ 17 
Total fair value of derivative instruments $ 447  $ 536 



23

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Under the master netting agreements with the respective counterparties to our derivative contracts, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, we have elected to present the derivative assets and derivative liabilities on a gross basis on our condensed consolidated balance sheet. As of March 31, 2022, the potential effect of rights of set-off associated with the foreign exchange contracts would be an offset to both assets and liabilities by $14 million, resulting in net derivative assets of $118 million and net derivative liabilities of $3 million. As of March 31, 2022, there was no potential effect of rights of set-off associated with the interest rate contracts, as there were only asset positions of $4 million.

Effect of Derivative Contracts on Accumulated Other Comprehensive Income

The following tables present the activity of derivative instruments designated as cash flow hedges as of March 31, 2022 and December 31, 2021, and the impact of these derivative contracts on AOCI for the periods indicated (in millions): 
  December 31, 2021 Amount of Gain (Loss) Recognized in Other Comprehensive Income Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings March 31, 2022
Foreign exchange contracts designated as cash flow hedges $ 25  $ 25  $ $ 44 
Interest rate contracts designated as cash flow hedges 30  31 
Total
$ 55  $ 27  $ $ 75 
  December 31, 2020 Amount of Gain (Loss) Recognized in Other Comprehensive Income Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings March 31, 2021
Foreign exchange contracts designated as cash flow hedges $ (95) $ $ (27) $ (65)
Interest rate contracts designated as cash flow hedges 10  43  (1) 54 
Total
$ (85) $ 46  $ (28) $ (11)

Effect of Derivative Contracts on Condensed Consolidated Statement of Income

The following table summarizes the total gain (loss) recognized in the condensed consolidated statement of income from our foreign exchange derivative contracts by location for the periods indicated (in millions): 
Three Months Ended
March 31,
  2022 2021
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 — 
Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net 15  (6)
Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income $ 21  $ (33)


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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the total gain (loss) recognized in the condensed consolidated statement of income from our interest rate derivative contracts by location for the periods indicated (in millions): 
Three Months Ended
March 31,
  2022 2021
Gain (loss) from interest rate contracts designated as cash flow hedges recognized in interest and other, net $ $ (1)

The following table summarizes the total gain (loss) recognized in the condensed consolidated statement of income due to changes in the fair value of the warrant for the periods indicated (in millions): 
Three Months Ended
March 31,
  2022 2021
Gain (loss) attributable to changes in the fair value of warrant recognized in gain (loss) on equity investments and warrant, net $ (115) $ (36)

Notional Amounts of Derivative Contracts

Derivative transactions are measured in terms of the notional amount, but this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. The notional amount is generally not exchanged, but is used only as the basis on which the value of foreign exchange payments under these contracts are determined. The following table presents the notional amounts of our outstanding derivatives as of the dates indicated (in millions):
March 31,
2022
December 31,
2021
Foreign exchange contracts designated as cash flow hedges $ 2,180  $ 2,066 
Foreign exchange contracts not designated as hedging instruments 2,229  3,159 
Interest rate contracts designated as cash flow hedges 400  400 
Total $ 4,809  $ 5,625 

Credit Risk

Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. To further limit credit risk, we also enter into collateral security arrangements related to certain interest rate derivative instruments whereby collateral is posted between counterparties if the fair value of the derivative instrument exceeds certain thresholds. Additional collateral would be required in the event of a significant credit downgrade by either party. We are not required to pledge, nor are we entitled to receive, collateral related to our foreign exchange derivative transactions.



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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 7 — Fair Value Measurement of Assets and Liabilities

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated (in millions):
March 31, 2022
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Assets:      
Cash and cash equivalents $ 1,798  $ 1,798  $ —  $ — 
Short-term investments:
Restricted cash 20  20  —  — 
Corporate debt securities 2,907  —  2,907  — 
Government and agency securities 40  —  40  — 
Equity investments with readily determinable fair values 804  804  —  — 
Total short-term investments 3,771  824  2,947  — 
Equity investment in Adevinta 3,748  3,748  —  — 
Derivatives 465  —  136  329 
Long-term investments:
Corporate debt securities 784  —  784  — 
Government and agency securities 770  —  770  — 
Equity investment under the fair value option 543  —  —  543 
Total long-term investments 2,097  —  1,554  543 
Total financial assets $ 11,879  $ 6,370  $ 4,637  $ 872 
Liabilities:
Derivatives $ 18  $ —  $ 18  $ — 


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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2021
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Assets:      
Cash and cash equivalents $ 1,379  $ 1,379  $ —  $ — 
Short-term investments:
Restricted cash 22  22  —  — 
Corporate debt securities 4,152  —  4,152  — 
Government and agency securities 25  —  25  — 
Equity investments with readily determinable fair values 1,745  1,745  —  — 
Total short-term investments 5,944  1,767  4,177  — 
Equity investment in Adevinta 5,391  5,391  —  — 
Derivatives 553  —  109  444 
Long-term investments:
Corporate debt securities 950  —  950  — 
Government and agency securities 777  —  777  — 
Equity investment under the fair value option 725  —  —  725 
Total long-term investments 2,452  —  1,727  725 
Total financial assets $ 15,719  $ 8,537  $ 6,013  $ 1,169 
Liabilities:
Derivatives $ 17  $ —  $ 17  $ — 

Our financial assets and liabilities are valued using market prices on both active markets (Level 1), less active markets (Level 2) and little or no market activity (Level 3). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. Level 3 instrument valuations typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. We did not have any transfers of financial instruments between valuation levels during the three months ended March 31, 2022.

Other financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates their fair value because of the short-term nature of these instruments.

Fair value measurement of derivative instruments

The majority of our derivative instruments are valued using pricing models that take into account the contract terms as well as multiple inputs where applicable, such as equity prices, interest rate yield curves, option volatility and currency rates. Our warrant, which is accounted for as a derivative instrument, is valued using a Black-Scholes model. Key assumptions used in the valuation include risk-free interest rates; Adyen’s common stock price, equity volatility and common stock outstanding; exercise price; and details specific to the warrant. The value is also probability adjusted for management’s assumptions with respect to vesting of the remaining three tranches which are each subject to meeting processing volume milestone targets. These assumptions and the probability of meeting processing volume milestone targets may have a significant impact on the value of the warrant. Refer to “Note 6 — Derivative Instruments” for further details on our derivative instruments.


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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present a reconciliation of the opening to closing balance of assets measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):
March 31,
2022
December 31,
2021
Opening balance at beginning of period $ 444  $ 1,051 
Exercise of options under warrant —  (961)
Change in fair value (115) 354 
Closing balance at end of period $ 329  $ 444 

The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the warrant as of March 31, 2022 (in millions):
Fair value Valuation technique Unobservable Input
Range (weighted average)(1)
Warrant $ 329  Black-Scholes and Monte Carlo Probability of vesting
0.0% - 55.0% (50%)
Equity volatility
(42%)
(1) Probability of vesting was weighted by the unadjusted value of the tranches. For volatility, the average represents the arithmetic average of the points within the range and is not weighted by the relative fair value or notional amount.

Fair value measurement of equity investments

Certain of our equity investments are measured at fair value on a recurring basis, including our equity investment in Adevinta, equity investments with readily determinable fair values and equity investment under the fair value option.

Our equity investment in Adevinta is accounted for under the fair value option and classified within Level 1 in the fair value hierarchy as the fair value is measured based on Adevinta’s closing stock price and prevailing foreign exchange rate at each balance sheet date. Our equity investments with readily determinable fair values are also classified within Level 1 in the fair value hierarchy as the valuation can be obtained from real time quotes in active markets.

Our equity investment in Gmarket was initially recognized on November 14, 2021 in connection with the sale of 80.01% of the outstanding equity interests of eBay Korea to Emart. This equity investment is accounted for under the fair value option and its initial valuation of $728 million was based on the sale price of eBay Korea. Our investment in Gmarket is subject to a two year right held by Emart from the date of disposal to purchase the remaining interest at or near the close price of the sale.

The following table presents a reconciliation of the opening to closing balance of the equity investment in Gmarket measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):
March 31,
2022
December 31,
2021 (1)
Opening balance at beginning of period $ 725  $ — 
Recognition of equity investment —  728 
Change in fair value (182) (3)
Closing balance at end of period $ 543  $ 725 
(1) There were no indicators of a potential material change in fair value of the investment between the date of recognition and December 31, 2021. The fair value of the investment was $725 million as of December 31, 2021 due to foreign currency adjustments.


28

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
This investment is classified within Level 3 in the fair value hierarchy as valuation of the investment reflects management’s estimate of assumptions that market participants would use in pricing the asset. The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the equity investment in Gmarket as of March 31, 2022 that may have a significant impact on the overall valuation (in millions):
Fair value Valuation technique Unobservable Input Range
Equity investment in Gmarket $ 543  Market multiples
Revenue multiple — GPC method (1)
1.2x — 2.5x
Revenue multiple — GMAC method (1)
1.4x — 4.1x
(1) The primary unobservable inputs used in the fair value measurement of our equity investment in Gmarket under the fair value option, when using the Guideline Public Company (GPC) method and the Guideline Merged and Acquired Company (GMAC) method under the market multiple approach, are the respective revenue multiples. Significant increases (decreases) in the revenue multiples in isolation would result in significantly higher (lower) fair value measurement. The market multiples are derived from respective groups of guideline public companies and guideline merged and acquired companies.

Refer to “Note 5 — Investments” for further details about our equity investments.



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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 8 — Debt

The following table summarizes the carrying value of our outstanding debt as of the dates indicated (in millions, except percentages):
Coupon As of Effective As of Effective
 Rate March 31, 2022  Interest Rate December 31, 2021  Interest Rate
Long-Term Debt
Floating Rate Notes:
Senior notes due 2023
LIBOR plus 0.87%
$ 400  1.100  % $ 400  1.100  %
Fixed Rate Notes:
Senior notes due 2022 —  % —  —  % 750  3.989  %
Senior notes due 2022 2.600  % 605  2.678  % 605  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 2025 1.900  % 800  1.803  % 800  1.803  %
Senior notes due 2026 1.400  % 750  1.252  % 750  1.252  %
Senior notes due 2027 3.600  % 850  3.689  % 850  3.689  %
Senior notes due 2030 2.700  % 950  2.623  % 950  2.623  %
Senior notes due 2031 2.600  % 750  2.186  % 750  2.186  %
Senior notes due 2042 4.000  % 750  4.114  % 750  4.114  %
Senior notes due 2051 3.650  % 1,000  2.517  % 1,000  2.517  %
Total senior notes 8,355  9,105 
Hedge accounting fair value adjustments (1)
Unamortized premium/(discount) and debt issuance costs (29) (30)
Less: Current portion of long-term debt (1,755) (1,355)
Total long-term debt 6,578  7,727 
Short-Term Debt
Current portion of long-term debt 1,755  1,355 
Total short-term debt 1,755  1,355 
Total Debt $ 8,333  $ 9,082 
(1) Includes the fair value adjustments to debt associated with terminated interest rate swaps which are being recorded as a reduction to interest expense over the remaining term of the related notes.


Senior Notes

On February 9, 2022, the company redeemed the $750 million aggregate principal amount of the 3.800% senior notes due March 2022. Total cash consideration paid was $750 million, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

Subsequent to March 31, 2022, the company redeemed the $605 million aggregate principal amount of the 2.600% senior notes due 2022. Total cash consideration paid was $605 million, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

None of the floating rate notes are redeemable prior to maturity. We may redeem some or all of the other fixed rate notes of each series at any time and from time to time prior to their maturity, generally at a make-whole redemption price, plus accrued and unpaid interest.



30

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
If a change of control triggering event (as defined in the applicable senior notes) occurs with respect to the floating rate notes due 2023, the 2.750% fixed rate notes due 2023, the 1.900% fixed rate notes due 2025, the 1.400% fixed rate notes due 2026, the 3.600% fixed rate notes due 2027, the 2.700% fixed rate notes due 2030, the 2.600% fixed rate notes due 2031 or the 3.650% fixed rate notes due 2051, we must, subject to certain exceptions, offer to repurchase all of the notes of the applicable series at a price equal to 101% of the principal amount, plus accrued and unpaid interest.

The indenture pursuant to which the senior notes were issued includes customary covenants that, among other things and subject to exceptions, limit our ability to incur, assume or guarantee debt secured by liens on specified assets or enter into sale and lease-back transactions with respect to specified properties, and also includes customary events of default with customary grace periods in certain circumstances, including payment defaults and bankruptcy-related defaults.

To help achieve our interest rate risk management objectives, during the second quarter of 2020, we entered into interest rate swap agreements that effectively converted $400 million of our LIBOR-based floating-rate debt to a fixed-rate basis. These swaps were designated as cash flow hedges and have maturity dates in 2023.

The effective interest rates for our senior notes include the interest payable, the amortization of debt issuance costs and the amortization of any original issue discount and premium on these senior notes. Interest on these senior notes is payable either quarterly or semiannually. Interest expense associated with these senior notes, including amortization of debt issuance costs, was approximately $60 million and $66 million during the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022 and December 31, 2021, the estimated fair value of these senior notes, using Level 2 inputs, was approximately $8.1 billion and $9.5 billion, respectively.

Commercial Paper

We have a commercial paper program pursuant to which we may issue commercial paper notes in an aggregate principal amount at maturity of up to $1.5 billion outstanding at any time with maturities of up to 397 days from the date of issue. As of March 31, 2022, there were no commercial paper notes outstanding.

Credit Agreement

In March 2020, we entered into a credit agreement that provides for an unsecured $2 billion five-year credit facility. We may also, subject to the agreement of the applicable lenders, increase commitments under the revolving credit facility by up to $1 billion. Funds borrowed under the credit agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes.

As of March 31, 2022, no borrowings were outstanding under our $2 billion credit agreement. However, as described above, we have an up to $1.5 billion commercial paper program and are required to maintain available borrowing capacity under our credit agreement in order to repay commercial paper borrowings in the event we are unable to repay those borrowings from other sources when they become due, in an aggregate amount of $1.5 billion. As of March 31, 2022, no borrowings were outstanding under our commercial paper program; therefore, $2 billion of borrowing capacity was available for other purposes permitted by the credit agreement, subject to customary conditions to borrowing. The credit agreement includes a covenant limiting our consolidated leverage ratio to no more than 4.0:1.0, subject to, upon the occurrence of a qualified material acquisition, if so elected by us, a step-up to 4.5:1.0 for the four fiscal quarters completed following such qualified material acquisition. The credit agreement includes customary events of default, with corresponding grace periods in certain circumstances, including payment defaults, cross-defaults and bankruptcy-related defaults. In addition, the credit agreement contains customary affirmative and negative covenants, including restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to customary exceptions. The credit agreement also contains customary representations and warranties.

We were in compliance with all financial covenants in our outstanding debt instruments during the three months ended March 31, 2022.

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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 9 — Supplemental Consolidated Financial Information

Contract Balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represents amounts invoiced and revenue recognized prior to invoicing when we have satisfied our performance obligation and have the unconditional right to payment. The allowance for doubtful accounts and authorized credits is estimated based upon our assessment of various factors including historical experience, the age of the accounts receivable balances, current economic conditions reasonable and supportable forecasts, and other factors that may affect our customers’ ability to pay. The allowance for doubtful accounts and authorized credits was $60 million and $74 million as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, we reported an allowance for doubtful accounts of $32 million reflecting a decrease of $16 million, net of write-offs of $26 million for the three months ended March 31, 2022. As of December 31, 2021, we reported an allowance for doubtful accounts of $42 million.

Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the period. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized for the three month period ended March 31, 2022 that was included in the deferred revenue balance at the beginning of the period was $37 million. The amount of revenue recognized for the three month period ended March 31, 2021 that was included in the deferred revenue balance at the beginning of the period was $44 million.

Cash, cash equivalents and restricted cash
March 31,
2022
December 31,
2021
(In millions)
Cash and cash equivalents $ 1,798  $ 1,379 
Customer accounts
Restricted cash included in short-term investments 20  22 
Cash, cash equivalents and restricted cash $ 1,821  $ 1,406 

Customer accounts and funds receivable
March 31,
2022
December 31,
2021
(In millions)
Cash and cash equivalents $ $
Funds receivable 623  676 
Customer accounts and funds receivable $ 626  $ 681 

Other current assets
March 31,
2022
December 31,
2021
(In millions)
Payment processor advances $ 374  $ 453 
Prepaid expenses 117  114 
Accounts receivable, net 87  98 
Other 576  442 
Other current assets $ 1,154  $ 1,107 


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eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Goodwill

The following table presents goodwill activity for the period indicated (in millions):
  December 31,
2021
Goodwill
Acquired
  Adjustments   March 31,
2022
Goodwill $ 4,178  $ —  $ (37) $ 4,141 

The adjustments to goodwill during the three months ended March 31, 2022 were primarily due to foreign currency translation.

Accrued expenses and other current liabilities
March 31,
2022
December 31,
2021
(In millions)
Compensation and related benefits $ 356  $ 517 
Sales and use tax and VAT accruals 348  396 
Advertising accruals 194  172 
Operating lease liabilities 146  150 
Transaction loss reserve 110  116 
Deferred revenue 38  79 
Other 659  497 
Accrued expenses and other current liabilities $ 1,851  $ 1,927 

Gain (loss) on equity investments and warrant, net
Three Months Ended
March 31,
2022 2021
(In millions)
Change in fair value of equity investment in Adevinta $ (1,643) $ — 
Change in fair value of equity investment in Gmarket
(182) — 
Realized change in fair value of shares sold in Adyen (166) — 
Unrealized change in fair value of equity investment in Adyen (80) — 
Unrealized change in fair value of equity investment in KakaoBank (91) — 
Realized change in fair value of shares sold in KakaoBank (8) — 
Change in fair value of warrant (115) (36)
Gain (loss) on other investments (6) — 
Total gain (loss) on equity investments and warrant, net $ (2,291) $ (36)

33

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 10 — Commitments and Contingencies

Off-Balance Sheet Arrangements

As of March 31, 2022, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

We have a cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals from the financial institution based upon our aggregate operating cash balances held within the same financial institution (“Aggregate Cash Deposits”). This arrangement also allows us to withdraw amounts exceeding the Aggregate Cash Deposits up to an agreed-upon limit. The net balance of the withdrawals and the Aggregate Cash Deposits are used by the financial institution as a basis for calculating our net interest expense or income under the arrangement. As of March 31, 2022, we had a total of $1.5 billion in aggregate cash deposits, partially offset by $1.3 billion in cash withdrawals, held within the financial institution under the cash pooling arrangement.

Litigation and Other Legal Matters
 
Overview

We are involved in legal and regulatory proceedings on an ongoing basis. Many of these proceedings are in early stages and may seek an indeterminate amount of damages. If we believe that a loss arising from such matters is probable and can be reasonably estimated, we accrue the estimated liability in our financial statements. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For those proceedings in which an unfavorable outcome is reasonably possible but not probable, we have disclosed an estimate of the reasonably possible loss or range of losses or we have concluded that an estimate of the reasonably possible loss or range of losses arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) is not material. If we cannot estimate the probable or reasonably possible loss or range of losses arising from a proceeding, we have disclosed that fact. In assessing the materiality of a proceeding, we evaluate, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require us to change our business practices in a manner that could have a material adverse impact on our business. With respect to the matters disclosed in this Overview, we are unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies.

Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable were not material for the three months ended March 31, 2022. We have concluded, based on currently available information, that reasonably possible losses arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our recorded accruals are also not material. However, legal and regulatory proceedings are inherently unpredictable and subject to significant uncertainties. If one or more matters were resolved against us in a reporting period for amounts in excess of management’s expectations, the impact on our operating results or financial condition for that reporting period could be material. Legal fees are expensed as incurred.


34

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
General Matters

Third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to patent disputes, and expect that we could be subject to additional patent infringement claims involving various aspects of our business as our products and services continue to expand in scope and complexity. Such claims may be brought directly or indirectly against us and/or against our customers (who may be entitled to contractual indemnification under their contracts with us), and we are subject to increased exposure to such claims as a result of our acquisitions and divestitures and in cases where we are entering new lines of business. We have in the past been forced to litigate such claims. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act, the Lanham Act and the Communications Decency Act are interpreted by the courts, and as we expand the scope of our business (both in terms of the range of products and services that we offer and our geographical operations) and become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries like ourselves are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws will be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and costly to defend and resolve, could require expensive changes in our methods of doing business or could require us to enter into costly royalty or licensing agreements on unfavorable terms.

From time to time, we are involved in other disputes or regulatory inquiries that arise in the ordinary course of business, including suits by our users (individually or as class actions) alleging, among other things, improper disclosure of our prices, rules or policies, that our practices, prices, rules, policies or customer/user agreements violate applicable law or that we have acted unfairly and/or not acted in conformity with such practices, prices, rules, policies or agreements. Further, the number and significance of these disputes and inquiries are increasing as the political and regulatory landscape changes and, as we have grown larger, our businesses have expanded in scope (both in terms of the range of products and services that we offer and our geographical operations) and our products and services have increased in complexity. Any claims or regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, damage awards (including statutory damages for certain causes of action in certain jurisdictions), injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm our business.

From time to time, the Company receives subpoenas or requests for information from various government agencies, typically for potential misconduct by sellers on the Company’s Marketplace platforms. More recently, the Company has received subpoenas or requests for information from government agencies related to potential liability of the Company for products sold by sellers on the Marketplace platforms. The Company generally responds to government subpoenas and requests in the ordinary course of business and in a cooperative, thorough and timely manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company.

In this regard, the Company has responded to inquiries from the U.S. Department of Justice regarding products sold on the Marketplace platforms alleged to violate certain laws and regulations, including regulations of the Environmental Protection Agency and, separately, regulations of the Drug Enforcement Agency. If the Company is found to be liable for such activities on the Marketplace, it could be subject to monetary damages, changes in our business practices, or other remedies that could have a material adverse impact on our business. At this time, we are unable to estimate the possible loss because the matters are still under investigation and involve novel legal questions relevant to the Company’s potential liability. Given the uncertainties involved, the ultimate resolution of these matters may be material to our operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of our net income or loss for that period.


35

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Indemnification Provisions

We entered into a separation and distribution agreement and various other agreements with PayPal to govern the separation and relationship of the two companies. These agreements provide for specific indemnity and liability obligations and could lead to disputes between us and PayPal, which may be significant. In addition, the indemnity rights we have against PayPal under the agreements may not be sufficient to protect us and our indemnity obligations to PayPal may be significant.

In addition, we have entered into indemnification agreements with each of our directors, executive officers and certain other officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us.

In the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations, including our standard marketing, promotions and application programming interface license agreements. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by a third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In certain cases, we have agreed to provide indemnification for intellectual property infringement. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our condensed consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively. 


36

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 11 — Stockholders’ Equity

Stock Repurchase Program

Our stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of our common stock to reduce our outstanding share count. Any share repurchases under our stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. Our stock repurchase programs may be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash.

In August 2021 our Board authorized an additional $3.0 billion stock repurchase program and in February 2022 our Board authorized an additional $4.0 billion stock repurchase program. These stock repurchase programs have no expiration from the date of authorization.

On October 29, 2021, we entered into accelerated share repurchase agreements (the “2021 ASR Agreements”) with two financial institutions (each a “2021 ASR Counterparty”), as part of our share repurchase program. Under the 2021 ASR Agreements, we paid an aggregate amount of $2.5 billion to the 2021 ASR Counterparties and received an initial delivery of approximately 29.3 million shares of our common stock, which were recorded as a $2,125 million increase to treasury stock. In December 2021, the 2021 ASR Agreement with one of the 2021 ASR Counterparties settled and resulted in a delivery of approximately 3.4 million additional shares of our common stock, which were recorded as a $188 million increase to treasury stock. The remaining $188 million was evaluated as an unsettled forward contract indexed to our own stock, classified within stockholders’ equity as of December 31, 2021.

In January 2022, the 2021 ASR Agreement with the remaining 2021 ASR Counterparty settled and resulted in a delivery of approximately 3.3 million additional shares of our common stock. The related forward contract was settled and recorded as a $188 million increase to treasury stock during the three months ended March 31, 2022. In total under the 2021 ASR Agreements, approximately 36.0 million shares were repurchased at an average price per share of $69.43.

The following table summarizes stock repurchase activity under our stock repurchase programs for the period indicated (in millions, except per share amounts):
Shares
Repurchased (1)
Average Price
per Share (2)
Value of Shares
Repurchased (2)
Remaining Amount Authorized
Balance as of January 1, 2022 $ 1,991 
Authorization of additional plan in February 2022 4,000 
Repurchase of shares of common stock 22  $ 57.34  $ 1,250  (1,250)
Accelerated share repurchases (3)
$ —  — 
Balance as of March 31, 2022 $ 4,741 
(1) These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. None of the repurchased shares of common stock have been retired.
(2) Excludes broker commissions.
(3) As indicated above, in January 2022, the 2021 ASR Agreement with the remaining ASR Counterparty settled and resulted in delivery of approximately 3.3 million additional shares.

For the three months ended March 31, 2022, share repurchases of $1.25 billion included $181 million of unsettled shares as of March 31, 2022, which were subsequently settled in the second quarter of 2022.


37

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Dividends

The Company paid a total of $129 million and $122 million in cash dividends during the three months ended March 31, 2022 and 2021, respectively. In May 2022, our Board of Directors declared a cash dividend of $0.22 per share of common stock to be paid on June 17, 2022 to stockholders of record as of June 1, 2022.


38

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 12 — Employee Benefit Plans

Restricted Stock Unit Activity

The following table presents restricted stock unit (“RSU”) activity under our equity incentive plans for the period indicated (in millions):
  Units
Outstanding as of January 1, 2022 20 
Awarded
Vested (3)
Forfeited (1)
Outstanding as of March 31, 2022 17 

The weighted average grant date fair value for RSUs awarded during the three months ended March 31, 2022 was $57.82 per share.

Stock-Based Compensation Expense

The following table presents the impact on our results of continuing operations of recording stock-based compensation expense for the periods indicated (in millions):
Three Months Ended
March 31,
  2022 2021
Cost of net revenues $ 12  $ 10 
Sales and marketing 20  20 
Product development 45  42 
General and administrative 34  31 
Total stock-based compensation expense $ 111  $ 103 
Capitalized in product development $ $



39

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 13 — Income Taxes

We are subject to both direct and indirect taxation in the U.S. and various states and foreign jurisdictions. We are under examination by certain tax authorities for the 2010 to 2020 tax years. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these or other examinations. The material jurisdictions where we are subject to potential examination by tax authorities for tax years after 2009 include, among others, the U.S. (Federal and California), Germany, Israel, Singapore, Switzerland and the United Kingdom.
 
Although the timing of the resolution and/or closure of audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.

We have recognized the tax consequences of all foreign unremitted earnings and management has no specific plans to indefinitely reinvest the unremitted earnings of our foreign subsidiaries as of the balance sheet date. We have not provided for deferred taxes on outside basis differences in our investments in our foreign subsidiaries that are unrelated to unremitted earnings. These basis differences will be indefinitely reinvested. A determination of the unrecognized deferred taxes related to these other components of our outside basis difference is not practicable.


40

eBay Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 14 — Accumulated Other Comprehensive Income

The following tables summarize the changes in AOCI for the periods indicated (in millions):
Unrealized Gains (Losses) on Derivative Instruments Unrealized
Gains (Losses) on
Investments
Foreign
Currency
Translation
Estimated Tax (Expense) Benefit Total
Balance as of December 31, 2021 $ 65  $ (7) $ 328  $ 12  $ 398 
Other comprehensive income (loss) before reclassifications 27  (51) (34) (50)
Less: Amount of gain (loss) reclassified from AOCI —  —  (1)
Net current period other comprehensive income (loss) 20  (51) (34) (56)
Balance as of March 31, 2022 $ 85  $ (58) $ 294  $ 21  $ 342 
Unrealized Gains (Losses) on Derivative Instruments Unrealized
Gains (Losses) on
Investments
Foreign
Currency
Translation
Estimated Tax (Expense) Benefit Total
Balance as of December 31, 2020 $ (85) $ $ 654  $ 42  $ 616 
Other comprehensive income (loss) before reclassifications 46  (3) (117) (11) (85)
Less: Amount of gain (loss) reclassified from AOCI (28) —  —  (22)
Net current period other comprehensive income (loss) 74  (3) (117) (17) (63)
Balance as of March 31, 2021 $ (11) $ $ 537  $ 25