Ebay Inc. Unaudited Consolidated Financial Information

The following excerpt is from the company's SEC filing.
San Jose, California, July 13, 2021
- On June 24, 2021, eBay Inc., a Delaware corporation (“eBay” or "the company"), and its wholly owned subsidiary eBay KTA (UK) Ltd., a private company limited by shares incorporated under the laws of the United Kingdom ("Seller"), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Emerald SPV Co., Ltd., a wholly owned subsidiary of Purchaser Guarantor (“Purchaser”) and E-mart Inc., a joint stock company incorporated under the laws of Korea (“Purchaser Guarantor”) to sell 80.01% of the outstanding equity interests of eBay Korea LLC, a limited liability c ompany incorporated under the laws of Korea and a wholly owned subsidiary of eBay KTA (“eBay Korea”), pursuant to the terms and conditions of the Purchase Agreement (the "Transaction"). As a result, the eBay Korea business has been classified as held for sale and historical financial results for prior periods have been reflected as discontinued operations. The second quarter 2021 results will be reported and discussed on its quarterly conference call and webcast on August 11, 2021.
The unaudited consolidated financial statements included in this Exhibit 99.1 are derived from eBay’s consolidated financial statements for the nine consecutive fiscal quarters ended March 31, 2021 and are adjusted to reflect the Transaction, which we believe will assist investors in evaluating eBay’s financial performance. These unaudited consolidated financial statements have been further adjusted to reflect certain financial measures that have not been prepared in accordance with generally accepted accounting principles (“GAAP”), which we also believe will assist investors in evaluating eBay’s financial performance.
The following unaudited consolidated financial statements should be read in conjunction with (i) the audited consolidated financial statements, the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in eBay’s Annual Reports on Form 10-K for the years ended December 31, 2020 and December 31, 2019 and (ii) the unaudited consolidated financial statements, the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in eBay’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021, September 30, 2020, June 30, 2020, March 31, 2020, September 30, 2019, June 30, 2019, and March 31, 2019.
Three month periods ending March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019
Previously Reported column
. For the three month periods ending March 31, 2021, December 31, 2020 and September 30, 2020, the information in the "Previously Reported" column in the unaudited consolidated balance sheets, unaudited consolidated statements of income and unaudited condensed consolidated statements of cash flows is derived from eBay’s historical consolidated financial statements for the periods presented. The three month periods ending March 31, 2021, December 31, 2020 and September 30, 2020 reflect StubHub and Classifieds (but not eBay Korea) as discontinued operations.
For the three month periods ending June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, the information in the "Previously Reported" column in the unaudited consolidated balance sheets, unaudited consolidated statements of income and unaudited condensed consolidated statements of cash flows is derived from eBay's historical consolidated financial statements presented in the Form 8-K filed on October 1, 2020. The three month periods ending June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019 reflect StubHub and Classifieds (but not eBay Korea) as discontinued operations.
Discontinued Operations column.
The information in the "Discontinued Operations" column in the following unaudited consolidated balance sheets, unaudited consolidated statements of income and unaudited condensed consolidated statements of cash flows is derived from eBay's unaudited consolidated financial statements and the related accounting records for the interim periods ending March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019.
The interim periods ending March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019 reflect the results of the eBay Korea business, inclusive of certain costs directly attributable to the Transaction and excluding corporate overhead costs that were previously allocated to eBay Korea for each period. The information in the "Discontinued Operations" column in the following unaudited consolidated balance sheets is derived from eBay's unaudited consolidated financial statements and the related accounting records as of March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, adjusted for certain assets and liabilities that directly relate to eBay Korea for the respective periods that are expected to be transferred pursuant to the Transaction for the respective periods.
Non-GAAP Adjustments column
. To supplement the following unaudited consolidated financial statements, the information in the following unaudited consolidated statements of income has been further adjusted to reflect certain non-GAAP measures that should only be used to evaluate the company’s results of operations in conjunction with the corresponding GAAP measures.
These non-GAAP measures are not prepared in accordance with GAAP and are not 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.
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 or gains and losses, 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 Adyen, restructuring-related charges, discontinued operations 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 information in the "Non-GAAP Adjustments" column in the following unaudited consolidated statements of income was derived from eBay's unaudited consolidated financial statements and the related accounting records for the interim periods included and reflects the non-GAAP adjustments. Those non-GAAP adjustments reflect the following items:
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 Adyen, 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.
Discontinued Operations.
These are results from previously divested businesses and businesses that are held for sale, including certain costs related to the transactions, net of tax.
eBay Inc.
Unaudited Consolidated Balance Sheet
As of March 31, 2021
(in millions)
Discontinued Operations
(Korea)
ASSETS
Current assets:
Cash and cash equivalents
1,667 
1,505 
Short-term investments
1,700 
1,694 
Accounts receivable, net
Customer accounts and funds receivable
1,016 
Other current assets
Current assets held for sale
1,171 
Total current assets
6,691 
5,781 
Long-term investments
1,059 
Property and equipment, net
1,321 
1,261 
Goodwill
4,591 
4,208 
Intangible assets, net
Operating lease right-of-use assets
Deferred tax assets
3,448 
Warrant asset
1,015 
Other assets
Total assets
18,731 
(1,442)
17,289 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt
1,172 
1,159 
Accounts payable
Customer accounts and funds payable
1,073 
Accrued expenses and other current liabilities
1,849 
1,775 
Deferred revenue
Income taxes payable
Current liabilities held for sale
Total current liabilities
5,130 
4,359 
Operating lease liabilities
Deferred tax liabilities
2,381 
2,395 
Long-term debt
5,855 
5,853 
Other liabilities
1,251 
1,247 
Total liabilities
14,961 
14,141 
Total stockholders' equity
3,770 
3,148 
Total liabilities and stockholders' equity
Unaudited Consolidated Statement of Income - Non-GAAP
Three Months Ended March 31, 2021
(in millions, except per share amounts)
Non-GAAP eBay
Net revenues
3,023 
2,638 
Cost of net revenues
Gross profit
2,200 
2,032 
2,042 
Operating expenses:
Sales and marketing
Product development
General and administrative
(a)(d)
Provision for transaction losses
Amortization of acquired intangible assets
Total operating expenses
1,358 
1,191 
1,057 
Income from operations
Interest and other, net
Income from continuing operations before income taxes
Income tax provision
Income from discontinued operations, net of income taxes
Net income
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
(a) Stock-based compensation expense and related employer payroll taxes
(b) Amortization of acquired intangible assets
(c) Income taxes associated with certain non-GAAP adjustments
(d) Other significant gains, losses or charges
(e) Change in fair market value of warrant
(f) Discontinued operations
Unaudited Condensed Consolidated Statement of Cash Flows
Cash flows from operating activities:
(Income) loss from discontinued operations, net of income taxes
Adjustments:
Depreciation and amortization
(Gain) loss on investments, net
Deferred income taxes
Change in fair value of warrant
(Gain) loss on extinguishment of debt
Changes in assets and liabilities, net of acquisition effects
Net cash provided by continuing operating activities
Net cash provided by discontinued operating activities
Net cash provided by operating activities
1,042 
Cash flows from investing activities:
Purchases of property and equipment
Purchases of investments
(3,424)
Maturities and sales of investments
3,772 
Net cash used in continuing investing activities
Net cash used in discontinued investing activities
Net cash used in investing activities
Cash flows from financing activities:
Repurchases of common stock
Payments for taxes related to net share settlements of restricted stock units and awards
Payments for dividends
Repayment of debt
(1,156)
Net borrowings under commercial paper program
Net funds receivable and payable activity
Net cash used in continuing financing activities
(1,101)
Net cash used in discontinued financing activities
Net cash used in financing activities
(1,169)
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
1,594 
Cash, cash equivalents and restricted cash at end of period
1,721 
Less: Cash, cash equivalents and restricted cash of held for sale business
Cash, cash equivalents and restricted cash of continuing operations at end of period
1,690 
1,522 
Supplemental cash flow disclosures:
Cash paid for:
As of December 31, 2020
1,428 
1,101 
2,398 
2,392 
1,764 
1,070 
1,188 
7,190 
(1,077)
6,113 
1,292 
4,675 
4,285 
3,537 
1,051 
19,310 
(1,626)
17,684 
2,910 
2,146 
4,002 
3,147 
2,359 
2,368 
7,745 
7,740 
1,263 
1,260 
15,749 
14,831 
3,561 
2,853 
Three Months Ended December 31, 2020
2,868 
2,478 
2,126 
1,930 
1,940 
1,449 
1,269 
1,156 
(d)(e)
1,109 
1,094 
(d) Gains or losses on investments
Net cash provided by (used in) discontinued operating activities
(3,990)
4,389 
Proceeds from issuance of common stock
Net increase (decrease) in cash, cash equivalents and restricted cash
1,119 
1,571 
1,238 
As of September 30, 2020
2,697 
2,691 
1,486 
1,116 
6,739 
(1,002)
5,737 
1,301 
1,242 
4,537 
4,159 
3,749 
3,730 
18,421 
(1,549)
16,872 
2,536 
1,838 
3,840 
3,060 
2,280 
2,276 
7,738 
7,730 
1,264 
15,501 
14,642 
2,920 
2,230 
Three Months Ended September 30, 2020
2,606 
2,258 
1,950 
1,780 
1,790 
1,271 
1,118 
1,011 
(7,224)
9,074 
1,718 
1,726 
1,711 
(1,771)
(1,773)
1,025 
1,089 
As of June 30, 2020
4,297 
4,291 
1,209 
7,194 
6,295 
1,342 
1,283 
4,484 
4,109 
3,822 
3,804 
18,903 
17,461 
2,353 
1,686 
1,279 
4,544 
2,294 
2,279 
8,161 
8,150 
1,257 
16,658 
15,823 
2,245 
1,638 
Three Months Ended June 30, 2020
2,668 
2,337 
(a)(b)
2,095 
1,920 
1,931 
1,305 
1,019 
(e)(f)
(e) Gains or losses on investments
(f) Change in fair market value of warrant
(g) Discontinued operations
(10,968)
10,471 
Proceeds from issuance of long-term debt, net
1,007 
Interest on finance lease obligations
As of March 31, 2020
3,550 
3,544 
1,140 
6,071 
5,204 
1,047 
1,387 
1,327 
4,459 
4,087 
3,905 
3,888 
17,887 
(1,413)
16,474 
1,005 
2,085 
1,426 
1,068 
1,054 
4,514 
3,781 
2,335 
2,324 
7,724 
7,711 
1,339 
1,336 
16,354 
15,526 
1,533 
Three Months Ended March 31, 2020
2,129 
1,821 
1,627 
1,467 
1,477 
1,062 
2,981 
2,991 
(2,991)
3,412 
(2,905)
(2,981)
(10,705)
9,195 
(1,568)
(1,558)
Net cash provided by discontinued investing activities
4,074 
4,064 
Net cash provided by investing activities
2,506 
(3,997)
(3,159)
(3,157)
(3,161)
Unaudited Consolidated Balance Sheet
As of December 31, 2019
1,850 
1,844 
1,064 
4,370 
3,450 
1,275 
1,460 
1,393 
4,533 
4,155 
3,980 
3,962 
16,654 
(1,489)
15,165 
1,020 
1,009 
2,097 
1,452 
3,644 
2,931 
2,355 
6,738 
6,721 
1,353 
1,352 
14,551 
13,725 
2,103 
1,440 
Three Months Ended December 31, 2019
2,236 
1,904 
1,680 
1,509 
1,520 
(a)(c)
1,202 
1,055 
Income (loss) from discontinued operations, net of income taxes
(c) Other significant gains, losses or charges
(d) Change in fair market value of warrant
(e) Discontinued operations
(9,576)
10,065 
Net cash provided by continuing investing activities
(1,110)
(1,108)
Net cash provided by discontinued financing activities
Less: Cash and cash equivalents of discontinued operations
As of September 30, 2019
2,189 
2,184 
4,840 
3,964 
1,406 
1,468 
1,413 
4,487 
4,113 
3,998 
3,987 
17,191 
(1,423)
15,768 
2,151 
1,543 
3,198 
2,534 
2,339 
2,313 
7,235 
7,219 
1,399 
1,397 
14,638 
13,852 
2,553 
1,916 
Three Months Ended September 30, 2019
2,083 
1,799 
1,553 
1,403 
1,145 
1,014 
(e)(d)
(Gain) loss on sale of business
(13,223)
14,656 
Equity investment in Paytm Mall
1,147 
1,148 
1,143 
(1,022)
(1,550)
(2,723)
(2,725)
1,521 
As of June 30, 2019
2,969 
2,964 
1,379 
6,446 
(1,478)
4,968 
1,894 
1,461 
4,556 
4,175 
4,070 
4,059 
19,558 
(2,046)
17,512 
2,063 
2,054 
2,171 
1,507 
4,750 
4,024 
2,406 
2,382 
7,243 
7,224 
1,400 
1,398 
16,284 
15,427 
3,274 
(1,189)
Three Months Ended June 30, 2019
2,156 
1,859 
1,624 
1,458 
1,470 
1,160 
1,017 
(12,252)
13,080 
(1,518)
(1,651)
Net cash used in provided by discontinued financing activities
(1,653)
1,712 
1,462 
As of March 31, 2019
1,620 
2,746 
2,740 
1,302 
6,248 
(1,480)
4,768 
2,927 
1,529 
1,496 
4,582 
4,199 
4,117 
4,105 
20,498 
(2,028)
18,470 
1,550 
2,071 
4,062 
3,341 
2,477 
2,452 
7,700 
1,478 
1,475 
16,227 
15,389 
4,271 
(1,190)
3,081 
Three Months Ended March 31, 2019
2,161 
1,867 
1,643 
1,474 
1,132 
Net cash used in discontinued operating activities
(11,915)
12,747 
(1,431)
(1,605)
2,219 
1,637 

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

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