eBay: Gaap - Continuing Operations

The following excerpt is from the company's SEC filing.

Income (loss) from continuing operations

Earnings (loss) per diluted share from continuing operations

Non-GAAP - Continuing Operations

Net income

Earnings per diluted share

Other Selected Financial and Operational Results

Operating margin — GAAP operating margin increased to

for the

quarter of

, compared to

for the same period last year. Non-GAAP operating margin increased to

in the

Taxes — The GAAP effective tax rate for continuing operations for the

. The non-GAAP effective tax rate for continuing operations for the

Cash flow — The company generated

$550 million

of operating cash flow from continuing operations and

$368 million

of free cash flow during the

Capital returns — The company repurchased approximately

$1.5 billion

of its common stock, or

42 million

shares, in the 

 quarter of

. The company's total repurchase authorization remaining as of

March 31, 2019

$5.7 billion

. The company also paid cash dividends of $

125 million

during the first quarter of 2019.

Cash and cash equivalents and non-equity investments — The company's cash and cash equivalents and non-equity investments portfolio totaled

$7.3 billion

Business Outlook

Second quarter 2019 — The company expects net revenue between $2.64 billion and $2.69 billion, representing Organic FX-Neutral growth of 2% - 4%, with GAAP earnings per diluted share from continuing operations in the range of $0.41 - $0.45 and non-GAAP earnings per diluted share from continuing operations in the range of $0.61 - $0.63.

Full year 2019 — The company expects net revenue between $10.83 billion and $10.93 billion, representing Organic FX-Neutral growth of 2% - 3%, with GAAP earnings per diluted share from continuing operations in the range of $1.94 - $2.04 and non-GAAP earnings per diluted share from continuing operations in the range of $2.64 - $2.70

Dividend Declaration

eBay's Board of Directors has declared a cash dividend of $0.14 per share of the Company's common stock. The dividend is payable on June 20, 2019 to shareholders of record as of June 1, 2019.

Quarterly Conference Call and Webcast

eBay Inc. will host a conference call to discuss

results at 2:00 p.m. Pacific Time today. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, can be accessed through the company's Investor Relations website at

https://investors.ebayinc.com

. In addition, an archive of the webcast will be accessible for at least three months through the same link.

eBay Inc. uses its Investor Relations website at

as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor, in addition to following press releases, SEC filings, public conference calls and webcasts.

About eBay

eBay Inc. (NASDAQ: EBAY) is a global commerce leader including the Marketplace, StubHub and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity for all. Founded in 1995 in San Jose, Calif., eBay is one of the world’s largest and most vibrant marketplaces for discovering great value and unique selection. In 2018, eBay enabled $95 billion of gross merchandise volume. For more information about the company and its global portfolio of online brands, visit

www.ebayinc.com.

Presentation

All growth rates represent year-over-year comparisons, except as otherwise noted. All amounts in tables are presented in U.S. dollars, rounded to the nearest million, except as otherwise noted. As a result, certain amounts may not sum or recalculate using the rounded dollar amounts provided.

Non-GAAP Financial Measures

This press release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission (SEC): non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin, non-GAAP effective tax rate and free cash flow. These non-GAAP financial measures are presented on a continuing operations basis. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with generally accepted accounting principles (GAAP). For a reconciliation of these non-GAAP financial measures to the nearest comparable GAAP measures, see “Business Outlook,” “Non-GAAP Measures of Financial Performance,” “Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin,” “Reconciliation of GAAP Net Income to Non-GAAP Net Income and Reconciliation of GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate” and “Reconciliation of Operating Cash Flow to Free Cash Flow” included in this press release.

Forward-Looking Statements

This press release contains forward-looking statements relating to, among other things, the future performance of eBay Inc. and its consolidated subsidiaries that are based on the company's current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of eBay Inc. and its consolidated subsidiaries, including expected financial results for the second quarter and full year 2019 and the future growth in its business, dividends and share repurchases. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to: changes in political, business and economic conditions, any regional or general economic downturn or crisis and any conditions that affect ecommerce growth or cross-border trade; the company’s ability to realize expected growth opportunities in payments intermediation and advertising; fluctuations in foreign currency exchange rates; the company’s need to successfully react to the increasing importance of mobile commerce and the increasing social aspect of commerce; an increasingly competitive environment for its business; changes to the company’s capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the company’s share repurchases, or management of operating cash; the company’s ability to manage its indebtedness, including managing exposure to interest rates and maintaining its credit ratings; the company’s need to manage an increasingly large enterprise with a broad range of businesses of varying degrees of maturity and in many different geographies; the company’s need and ability to manage regulatory, tax, data security and litigation risks; whether the operational, marketing and strategic benefits of the separation of the eBay and PayPal businesses can be achieved; the company’s ability to timely upgrade and develop its technology systems, infrastructure and customer service capabilities at reasonable cost while maintaining site stability and performance and adding new products and features; and the company’s ability to integrate, manage and grow businesses that have been acquired or may be acquired in the future.

The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

More information about factors that could affect the company's operating results is included under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the company's most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company's Investor Relations website at

or the SEC's website at

. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the company on the date hereof. The company assumes no obligation to update such statements.

Investor Relations Contact:

Joe Billante

ir@ebay.com

Media Relations Contact:

Julianne Whitelaw

press@ebay.com

Company News:

https://www.ebayinc.com/stories/news/

Investor Relations website:

Unaudited Condensed Consolidated Balance Sheet

December 31,

(In millions)

ASSETS

Current assets:

Short-term investments

Accounts receivable, net

Other current assets

Total current assets

Long-term investments

Property and equipment, net

Goodwill

Intangible assets, net

Operating lease right-of-use assets

Deferred tax assets

Other assets

Total assets

22,329

22,819

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term debt

Accounts payable

Accrued expenses and other current liabilities

Deferred revenue

Income taxes payable

Total current liabilities

Operating lease liabilities

Deferred tax liabilities

Long-term debt

Other liabilities

Total liabilities

17,126

16,538

Total stockholders' equity

Total liabilities and stockholders' equity

Unaudited Condensed Consolidated Statement of Income

Three Months Ended

March 31,

(In millions, except per share amounts)

Net revenues

Cost of net revenues

Gross profit

Operating expenses:

Sales and marketing

Product development

General and administrative

Provision for transaction losses

Amortization of acquired intangible assets

Total operating expenses

Income from operations

Interest and other, net

Income from continuing operations before income taxes

Income tax provision

Loss from discontinued operations, net of income taxes

Income per share - basic:

Continuing operations

Discontinued operations

Net income per share - basic

Income per share - diluted:

Net income per share - diluted

Weighted average shares:

Diluted

(1) Includes stock-based compensation as follows:

Unaudited Condensed Consolidated Statement of Cash Flows

(In millions)

Cash flows from operating activities:

Adjustments:

Depreciation and amortization

Stock-based compensation

Loss on investments, net

Deferred income taxes

Change in fair value of warrant

Changes in assets and liabilities, net of acquisition effects

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property and equipment

Purchases of investments

(11,926

(4,794

Maturities and sales of investments

12,747

Acquisitions, net of cash acquired

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock

Repurchases of common stock

(1,431

(1,009

Payments for taxes related to net share settlements of restricted stock units and awards

Payments for dividends

Repayment of debt

Net cash used in financing activities

(1,605

(1,825

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Unaudited Summary of Consolidated Net Revenues

September 30,

June 30,

(In millions, except percentages)

Net Revenues by Type:

Net transaction revenues:

Marketplace

Current quarter vs prior year quarter

Percent from international

Total net transaction revenues

Marketing services and other revenues:

Elimination of intersegment revenue

Total marketing services and other revenues

Total net revenues

(1) Foreign currency impact

(2) Hedge gain/(loss)

** Not meaningful

Unaudited Supplemental Operating Data

Active Buyers

Gross Merchandise Volume

21,571

23,231

21,482

22,569

22,547

Total GMV

22,589

24,641

22,719

23,629

23,591

All buyers who successfully closed a transaction on our Marketplace and StubHub platforms within the previous 12-month period. Buyers may register more than once, and as a result, may have more than one account. Starting in the second quarter of 2018, year-over-year growth rate is on a pro-forma basis, which includes Giosis' Japan business active buyers in both current and prior year periods.

Total value of all successfully closed transactions between users on our Marketplace and StubHub platforms during the period regardless of whether the buyer and seller actually consummated the transaction. We believe that GMV provides a useful measure of the overall volume of closed transactions that flow through our platforms in a given period, notwithstanding the inclusion in GMV of closed transactions that are not ultimately consummated.

The guidance figures provided below and elsewhere in this press release are forward-looking statements, reflect a number of estimates, assumptions and other uncertainties, and are approximate in nature because the company's future performance is difficult to predict. Such guidance is based on information available on the date of this press release, and the company assumes no obligation to update it.

The company's future performance involves risks and uncertainties, and the company's actual results could differ materially from the information below and elsewhere in this press release. Some of the factors that could affect the company's operating results are set forth under the caption “Forward-Looking Statements” above in this press release. More information about factors that could affect the company's operating results is included under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in its most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting eBay's investor relations website at

Three Months Ending

June 30, 2019

(In billions, except per share amounts)

$2.64 - $2.69

Diluted EPS from continuing operations

Twelve Months Ending

December 31, 2019

$10.83 - $10.93

(a) Estimated non-GAAP amounts above for the three months ending June 30, 2019 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $12 - $17 million, estimated stock-based compensation expense and associated employer payroll tax expense of approximately $150 - $160 million and an adjustment that excludes the net deferred tax impact related to the step-up in the tax basis of intangible assets of approximately $40 - $50 million.

(b) Estimated non-GAAP amounts above for the twelve months ending December 31, 2019 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $50 - $60 million, estimated stock-based compensation expense and associated employer payroll tax expense of approximately $550 - $570 million and an adjustment that excludes the net deferred tax impact related to the step-up in the tax basis of intangible assets of approximately $170 - $190 million.

To supplement the company's condensed consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin, non-GAAP effective tax rate, and free cash flow. These non-GAAP financial measures are presented on a continuing operations basis.

These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the company's results of operations in conjunction with the corresponding GAAP measures.

Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release can be found in the tables included in this press release.

These non-GAAP measures are provided to enhance investors' overall understanding of the company's current financial performance and its prospects for the future. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, or net purchases of property and equipment, as the case may be, that may not be indicative of its core operating results and business outlook. In addition, because the company has historically reported certain non-GAAP results to investors, the company believes that the inclusion of non-GAAP measures provides consistency in the company's financial reporting.

For its internal budgeting process, and as discussed further below, the company's management uses financial measures that do not include stock-based compensation expense, employer payroll taxes on stock-based compensation, amortization or impairment of acquired intangible assets, impairment of goodwill, amortization of deferred tax assets associated with the realignment of its legal structure and related foreign exchange effects, significant gains or losses from the disposal/acquisition of a business, certain gains and losses on investments, gains or losses associated with a warrant agreement that the company entered into with a service provider, restructuring-related charges and the income taxes associated with the foregoing. In addition to the corresponding GAAP measures, the company's management also uses the foregoing non-GAAP measures in reviewing the financial results of the company.

The company excludes the following items from non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin and non-GAAP effective tax rate:

Stock-based compensation expense and related employer payroll taxes.

This expense consists of expenses for stock options, restricted stock and employee stock purchases. The company excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash expenses that management does not believe are reflective of ongoing operating results. The related employer payroll taxes are dependent on the company's stock price and the timing and size of exercises by employees of their stock options and the vesting of their restricted stock, over which management has limited to no control, and as such management does not believe it correlates to the company's operation of the business.

Amortization or impairment of acquired intangible assets, impairment of goodwill, certain amortization of deferred tax assets and related foreign exchange effects, significant gains or losses and transaction expenses from the acquisition or disposal of a business and certain gains or losses on investments.

The company incurs amortization or impairment of acquired intangible assets and goodwill in connection with acquisitions and may incur significant gains or losses from the acquisition or disposal of a business and therefore excludes these amounts from its non-GAAP measures. The company also excludes certain gains and losses on investments. The company excludes the non-cash amortization of deferred tax assets associated with the realignment of its legal structure, which is not reduced by the effects of the Tax Cuts and Jobs Act, and related foreign exchange effects. The company excludes these items because management does not believe they correlate to the ongoing operating results of the company's business.

Restructuring.

These charges consist of expenses for employee severance and other exit and disposal costs. The company excludes significant restructuring charges primarily because management does not believe they are reflective of ongoing operating results.

Other certain significant gains, losses, or charges that are not indicative of the company’s core operating results.

These are significant gains, losses, or charges during a period that are the result of isolated events or transactions which have not occurred frequently in the past and are not expected to occur regularly or be repeated in the future. The company excludes these amounts from its results primarily because management does not believe they are indicative of its current or ongoing operating results.

Change in fair market value of warrant.

These are gains or losses associated with a warrant agreement that the company entered into with a service provider, which are attributable to changes in fair value during the period.

Tax effect of non-GAAP adjustments.

This amount is used to present stock-based compensation and the other amounts described above on an after-tax basis consistent with the presentation of non-GAAP net income.

In addition to the non-GAAP measures discussed above, the company also uses free cash flow. Free cash flow represents operating cash flows less purchases of property and equipment. The company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property, buildings, and equipment, which can then be used to, among other things, invest in the company's business, make strategic acquisitions, repurchase stock and pay dividends. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the company's cash balance for the period.  

GAAP operating income

Amortization of acquired intangible assets within cost of net revenues

Amortization of acquired intangible assets within operating expenses

Other significant gains, losses or charges

Total non-GAAP operating income adjustments

Non-GAAP operating income

Reconciliation of GAAP Net Income to Non-GAAP Net Income and

GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate*

(In millions, except per share amounts and percentages)

GAAP income from continuing operations before income taxes

GAAP provision for income taxes

GAAP net income from continuing operations

Non-GAAP adjustments to net income from continuing operations:

Non-GAAP operating income from continuing operations adjustments (see table above)

Non-GAAP net income from continuing operations

Diluted net income from continuing operations per share:

Shares used in GAAP and non-GAAP diluted net income per-share calculation

GAAP effective tax rate - Continuing operations

Tax effect of non-GAAP adjustments to net income from continuing operations

Non-GAAP effective tax rate - Continuing operations

*Presented on a continuing operations basis

Reconciliation of Operating Cash Flow to Free Cash Flow*

Net cash provided by continuing operating activities

Less: Purchases of property and equipment

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Amendments to Articles of Incorporation or Bylaws - June 5, 2019
eBay Inc. director just picked up 6,606 shares - June 3, 2019
eBay Inc. director just picked up 6,606 shares - June 3, 2019
eBay Inc. director just picked up 9,248 shares - June 3, 2019
eBay Inc. director was just granted 6,872 restricted shares - June 3, 2019

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