eBay Inc. Reports Strong Fourth Quarter and Full Year 2012 Results

  eBay Inc. Reports Strong Fourth Quarter and Full Year 2012 Results

Net Income up Double Digits in 2012 on Record Revenue

Business Wire

SAN JOSE, Calif. -- January 16, 2013

eBay Inc., a global commerce platform and payments leader (NASDAQ:EBAY), today
reported that revenue for the fourth quarter ended December 31,2012 increased
18% to $4.0 billion, compared to the same period of 2011. The company reported
fourth quarter net income on a GAAP basis of $751 million, or $0.57 per
diluted share, and net income on a non-GAAP basis of $927 million, or $0.70
per diluted share. The increase in non-GAAP earnings per diluted share was
driven by double digit user growth across the portfolio, strong gains in
mobile adoption, and accelerating growth in the company's Marketplaces
business, reflecting a 19% increase in U.S. gross merchandise volume (GMV),
excluding vehicles.

For the full year, revenue increased 21% to $14.1 billion, compared to 2011.
The company reported net income on a GAAP basis of $2.6 billion, or $1.99 per
diluted share, and net income on a non-GAAP basis of $3.1 billion, or $2.36
per diluted share. eBay Inc. enabled more than $175 billion of commerce volume
(ECV) in 2012, representing growth of 18%. ECV is the total commerce and
payment volume across all three business units consisting of Marketplaces GMV,
PayPal merchant services net total payment volume and GSI global ecommerce
(GeC) merchandise sales.

"We had a great finish to an excellent year, with fourth quarter results
exceeding our expectations," said John Donahoe, eBay Inc. President and CEO.
"eBay Marketplaces in particular had a terrific fourth quarter, with growth in
the U.S. accelerating three points, outpacing ecommerce."

"Mobile continues to rewrite the commerce playbook, and we continue to be a
mobile commerce and payments leader," Donahoe said. "eBay mobile finished the
year with $13 billion in volume - more than double the prior year - and PayPal
mobile handled almost $14 billion in payment volume, more than triple the
prior year. In 2013, we expect each to exceed $20 billion."

"Web-enabled multichannel commerce is evolving quickly, and consumer shopping
behavior is changing rapidly. Our focus is on being a global commerce leader
in this new environment, connecting buyers and sellers everywhere, and being a
preferred multichannel partner of choice for retailers and brands of all
sizes."

The company's PayPal business continued to expand its leadership position in
global payments. PayPal's active account growth accelerated to 15% and ended
the year with approximately 123 million registered accounts. PayPal added
nearly 2 million accounts a month in the fourth quarter, representing the
company's fastest active account growth rate in years. Net total payment
volume (TPV) increased 24%, producing revenue growth of 24%. Key drivers
included continued merchant and consumer adoption coupled with geographic
expansion. PayPal's mobile payment volume reached nearly $14 billion in 2012,
up more than 250% over the prior year, as more consumers used their
smartphones and tablets to pay online. In addition, PayPal continued to invest
in future growth initiatives and made significant progress towards the rollout
of its offline payment solutions. Twenty-three major retailers adopted
PayPal's offline payment solutions in 18,000 locations in 2012.

The company's Marketplaces business delivered a record $2 billion revenue in
the fourth quarter, propelled by strong performance in the U.S. Revenue for
the full year was driven by continued investments in the customer experience
and efforts to bring the world's inventory to global buyers. Active user
growth accelerated two points to 12%, driven by mobile, site enhancements
designed to streamline the shopping experience on eBay and emerging markets.
Fixed price GMV, excluding vehicles, increased 21% and contributed to a 16%
increase in GMV, excluding vehicles. U.S. GMV growth, excluding vehicles,
accelerated three points to 19%. Mobile commerce volume in 2012 grew more than
120% to $13 billion driven primarily by increased adoption of eBay's mobile
apps and increased engagement from product innovation. eBay's suite of mobile
apps attracted more than 4 million new customers in 2012.

GSI revenue for the quarter increased 10% to $398 million driven primarily by
a 17% increase in GeC merchandise sales. Same store sales grew 19% outpacing
ecommerce. For the full year, GSI shipped a record 146 million units for its
clients. GSI contributed revenue of $1.1 billion in 2012, as GSI continued to
grow its relationships, investing and driving value to its clients through
eBay Inc. technology solutions, including mobile app development, buy online
and pick up in-store and mobile express checkout.

Fourth Quarter and Full Year 2012 Financial Highlights (presented in millions, except per
share data and percentages)

               Fourth Quarter                       Full Year           
              2012     2011     Change            2012      2011      Change
GAAP                                                                    
Net revenue    $3,992   $3,380   $612      18%    $14,072   $11,652   $2,420   21%
Net income*    $751     $1,980   $(1,229)  (62%)  $2,609    $3,229    $(620)   (19)%
Earnings per   $0.57    $1.51    $(0.94)   (62%)  $1.99     $2.46     $(0.47)  (19)%
diluted share
Non-GAAP                                                                
Net income     $927     $789     $138      17%    $3,100    $2,667    $433     16%
Earnings per   $0.70    $0.60    $0.10     17%    $2.36     $2.03     $0.33    16%
diluted share

              Fourth Quarter                      Full Year            
              2012     2011     Change            2012      2011      Change
Business                                                                
Units
Payments                                                                
Net revenue    $1,541   $1,240   $301      24%    $5,574    $4,412    $1,162   26%
Net total
payment        $41,471  $33,372  $8,099    24%    $144,937  $118,758  $26,179  22%
volume
Merchant       $28,026  $21,959  $6,067    28%    $97,277   $77,700   $19,577  25%
Services
On eBay        $13,444  $11,413  $2,031    18%    $47,660   $41,058   $6,602   16%
Marketplaces                                                            
Net revenue    $2,050   $1,772   $278      16%    $7,398    $6,642    $756     11%
Gross
merchandise    $19,105  $16,490  $2,615    16%    $67,763   $60,332   $7,431   12%
volume (excl.
vehicles)
U.S.           $7,338   $6,157   $1,181    19%    $26,424   $22,866   $3,558   16%
International  $11,767  $10,333  $1,434    14%    $41,339   $37,466   $3,873   10%
GSI                                                                     
Net revenue**  $398     $364     $34       10%    $1,083    $590      N/A      N/A
GeC
Merchandise    $1,595   $1,362   $233      17%    $3,682    $2,046    N/A      N/A
Sales

* GAAP net income for the fourth quarter of 2011 reflects the gain on the sale
of the company's remaining investment in Skype.
** Full year 2011 results reflect net revenue attributable to the GSI segment
for the period from June 17, 2011 (the date that the acquisition was
completed) through December 31, 2011.

Other Selected Financial Results

  *Operating margin — GAAP operating margin decreased to 21.9% for the fourth
    quarter of 2012, compared to 22.3% for the same period last year. Non-GAAP
    operating margin decreased to 28.5% for the quarter, compared to 28.7% for
    the same period last year. The decrease in GAAP operating margin and
    non-GAAP operating margin was due primarily to the impact of acquisitions
    and business mix.
  *Taxes — The GAAP effective tax rate for the fourth quarter of 2012 was
    14%, compared to 19% for the fourth quarter of 2011. For the fourth
    quarter of 2012, the non-GAAP effective tax rate was 18% compared to 20%
    for the fourth quarter of 2011. The decrease in the GAAP effective tax
    rate was due primarily to U.S. taxes on the sale of the remaining equity
    interest in Skype in the fourth quarter of 2011.
  *Cash flow — The company generated $1.4 billion of operating cash flow and
    $1.1 billion of free cash flow during the fourth quarter. For the full
    year the company generated $3.8 billion of operating cash flow and $2.6
    billion of free cash flow.
  *Stock repurchase program — The company repurchased approximately $256
    million of its common stock in the fourth quarter.
  *Cash and cash equivalents and non-equity investments — The company's cash
    and cash equivalents and non-equity investments portfolio totaled $11.5
    billion at December31, 2012.
  *PayPal customer balances — The company now holds PayPal U.S. customer
    balances directly, rather than as a custodian for its customers. As a
    result, PayPal U.S. customer balances and the associated customer
    liability are now reflected on the company's consolidated balance sheet,
    contributing to the $8.1 billion balance in funds receivable and customer
    accounts at December 31, 2012.

  *Restructuring — The company incurred restructuring charges of $31 million
    during the fourth quarter of 2012 related to work force reductions
    designed to simplify and streamline its organization and strengthen the
    overall competitiveness of its existing businesses.

Business Outlook

  *First quarter 2013 — eBay expects net revenues in the range of $3,650 -
    $3,750 million with GAAP earnings per diluted share in the range of $0.48
    - $0.50 and non-GAAP earnings per diluted share in the range of $0.60 -
    $0.62.
  *Full year 2013 — eBay expects net revenues in the range of $16,000 -
    $16,500 million with GAAP earnings per diluted share in the range of $2.23
    - $2.29 and non-GAAP earnings per diluted share in the range of $2.70 -
    $2.75.

Quarterly Conference Call

eBay Inc. will host a conference call to discuss fourth quarter and full year
2012 results at 2:00p.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 http://investor.ebayinc.com. In addition, an archive of
the webcast will be accessible for 90 days through the same link.

About eBay Inc.

Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) is a global
commerce platform and payments leader connecting millions of buyers and
sellers. We do so through eBay, the world's largest online marketplace, which
allows users to buy and sell in nearly every country on earth; through PayPal,
which enables individuals and businesses to securely, easily and quickly send
and receive digital payments; and through GSI, which facilitates ecommerce,
multichannel retailing and digital marketing for global enterprises.
X.commerce harnesses the developer community of Magento, an ecommerce
platform, by providing technology solutions and eBay Inc. capabilities to
merchants of all sizes, supporting eBay Inc.'s mission of enabling commerce.
We also reach millions through specialized marketplaces such as StubHub, the
world's largest ticket marketplace, and eBay classifieds sites, which together
have a presence in more than 1,000 cities around the world. 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 millions, except as otherwise noted. As a result, certain amounts may
not sum or recalculate using the rounded dollar amounts provided.

Non-GAAPFinancial Measures

This press release includes the following financial measures defined as
“non-GAAP financial measures” by the Securities and Exchange Commission, or
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
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 or as a substitute for the financial
information prepared and presented in accordance with generally accepted
accounting principles. For a reconciliation of these non-GAAP financial
measures to the nearest comparable GAAP measures, see “Business Outlook,”
“Non-GAAPMeasures of Financial Performance,” “Reconciliation of
GAAPOperating Margin to Non-GAAPOperating Margin,” “Reconciliation of
GAAPNet Income to Non-GAAPNet Income and Reconciliation of GAAP Effective
Tax Rate to Non-GAAPEffective 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 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 expected financial results for the
first quarter and full year 2013, and the future growth in the Payments,
Marketplaces and GSI businesses, mobile payments and mobile commerce. The
company's actual results could differ materially from those predicted or
implied and reported results should not be considered as an indication of
future performance. Factors that could cause or contribute to such differences
include, but are not limited to: changes in political, business and economic
conditions, including any European or general economic downturn or crisis and
any conditions that affect ecommerce growth; fluctuations in foreign currency
exchange rates; the company's ability to profitably integrate, manage and grow
businesses that have been acquired recently or may be acquired in the future;
the company's need to successfully react to the increasing importance of
mobile payments and mobile commerce and the increasing social aspect of
commerce; the company's ability to deal with the increasingly competitive
ecommerce environment, including competition for its sellers from other
trading sites and other means of selling, and competition for its buyers from
other merchants, online and offline; 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 effect of
management changes and business initiatives; the company's need and ability to
manage other regulatory, tax and litigation risks as its services are offered
in more jurisdictions and applicable laws become more restrictive; any changes
the company may make to its product offerings; the competitive, regulatory,
credit card association-related and other risks specific to PayPal and Bill Me
Later, especially as PayPal continues to expand geographically and introduce
new products and as new laws and regulations related to financial services
companies come into effect; the company's ability to timely upgrade and
develop its systems, infrastructure and customer service capabilities,
including GSI's v.11 initiative, at reasonable cost; and the company's ability
to maintain site stability and performance on all of its sites while adding
new products and features in a timely fashion. 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 http://investor.ebayinc.com or the
SEC's website at www.sec.gov. Undue reliance should not be placed on the
forward-looking statements in this release, which are based on information
available to the company on the date hereof. eBay assumes no obligation to
update such statements.


eBay Inc.
Unaudited Condensed Consolidated Balance Sheet

                                                December 31,  December 31,
                                                 2012           2011
                                                 (In millions)
                                                 
ASSETS
Current assets:
Cash and cash equivalents                        $  6,817       $   4,691
Short-term investments                           2,591          1,238
Accounts receivable, net                         822            682
Loans and interest receivable, net               2,160          1,501
Funds receivable and customer accounts           8,094          3,968
Other current assets                             1,099         581
Total current assets                             21,583         12,661
Long-term investments                            3,044          2,453
Property and equipment, net                      2,491          1,986
Goodwill                                         8,537          8,365
Intangible assets, net                           1,128          1,406
Other assets                                     491           449
Total assets                                     $  37,274     $   27,320
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt                                  $  413         $   565
Accounts payable                                 301            282
Funds payable and amounts due to customers       8,094          3,968
Accrued expenses and other current liabilities   2,058          1,511
Deferred revenue                                 137            110
Income taxes payable                             63            298
Total current liabilities                        11,066         6,734
Deferred and other tax liabilities, net          1,020          1,073
Long-term debt                                   4,106          1,525
Other liabilities                                207           58
Total liabilities                                16,399        9,390
                                                                
Total stockholders' equity                       20,875        17,930
Total liabilities and stockholders' equity       $  37,274     $   27,320


eBay Inc.
Unaudited Condensed Consolidated Statement of Income

                       Three Months Ended December   Year Ended December 31,
                        31,
                        2012           2011           2012        2011
                        (In millions, except per share amounts)
                        
Net revenues            $  3,992        $  3,380       $ 14,072     $ 11,652
Cost of net revenues    1,223          1,034         4,216       3,461    
(1)
Gross profit            2,769          2,346         9,856       8,191    
Operating expenses:
Sales and marketing     793             672            2,913        2,435
(1)
Product development     416             344            1,573        1,235
(1)
General and             435             346            1,567        1,364
administrative (1)
Provision for
transaction and loan    168             145            580          517
losses
Amortization of
acquired intangible     83             85            335         267      
assets
Total operating         1,895          1,592         6,968       5,818    
expenses
Income from             874             754            2,888        2,373
operations
Interest and other      3              1,682         196         1,537    
income (expense), net
Income before income    877             2,436          3,084        3,910
taxes
Provision for income    (126      )     (456      )    (475     )   (681     )
taxes
Net income              $  751         $  1,980      $ 2,609     $ 3,229  
Net income per share:
Basic                   $  0.58        $  1.54       $ 2.02      $ 2.50   
Diluted                 $  0.57        $  1.51       $ 1.99      $ 2.46   
Weighted average
shares:
Basic                   1,294          1,289         1,292       1,293    
Diluted                 1,318          1,308         1,313       1,313    
                                                                    

(1) Includes
stock-based
compensation as
follows:
Cost of net revenues    $  13           $  13          $ 55         $ 56
Sales and marketing     36              31             135          132
Product development     37              32             138          123
General and             41             35            160         147      
administrative
                        $  127         $  111        $ 488       $ 458    


eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows

                       Three Months Ended December   Year Ended December 31,
                        31,
                        2012           2011           2012         2011
                        (In millions)
Cash flows from
operating activities:
Net income              $  751          $  1,980       $  2,609      $ 3,229
Adjustments:
Provision for
transaction and loan    168             145            580           517
losses
Depreciation and        319             273            1,200         940
amortization
Stock-based             127             111            488           458
compensation
Investment gain/loss,   9               (1,667    )    37            (1,485  )
net
Gain on divested        —               —              (118      )   —
businesses
Changes in assets and
liabilities, net of     12             141           (958      )   (385    )
acquisition effects
Net cash provided by    1,386          983           3,838        3,274   
operating activities
Cash flows from
investing activities:
Purchases of property   (296      )     (292      )    (1,257    )   (963    )
and equipment, net
Changes in principal    (392      )     (332      )    (727      )   (587    )
loans receivable, net
Purchases of            (1,658    )     (407      )    (3,128    )   (2,290  )
investments
Maturities and sales    483             298            1,421         1,596
of investments
Acquisitions, net of    —               (68       )    (143      )   (3,223  )
cash acquired
Proceeds from the       —               2,269          —             2,269
sale of Skype
Proceeds from
divested business,      —               —              144           —
net of cash disposed
Other                   4              (7        )    (73       )   (109    )
Net cash provided by
(used in) investing     (1,859    )     1,461         (3,763    )   (3,307  )
activities
Cash flows from
financing activities:
Proceeds from
issuance of common      124             54             483           242
stock
Repurchases of common   (256      )     (250      )    (898      )   (1,064  )
stock
Excess tax benefits
from stock-based        35              14             130           80
compensation
Tax withholdings
related to net share
settlements of          (34       )     (16       )    (186      )   (147    )
restricted stock
awards and units
Net borrowings
(repayments) under      —               (450      )    (550      )   250
commercial paper
program
Proceeds from
issuance of long-term   —               —              2,976         —
debt
Repayment of acquired   —               —              —             (199    )
debt
Funds receivable and    (3,288    )     (672      )    (4,127    )   (1,369  )
customer accounts
Funds payable and
amounts due to          3,288           672            4,127         1,369
customers
Other                   —              —             (4        )   —       
Net cash provided by
(used in) financing     (131      )     (648      )    1,951        (838    )
activities
Effect of exchange
rate changes on cash    90             (104      )    100          (15     )
and cash equivalents
Net (decrease)
increase in cash and    (514      )     1,692          2,126         (886    )
cash equivalents
Cash and cash
equivalents at          7,331          2,999         4,691        5,577   
beginning of period
Cash and cash
equivalents at end of   $  6,817       $  4,691      $  6,817     $ 4,691 
period


eBay Inc.
Unaudited Summary of Consolidated Net Revenues

Net Revenues by Type
                Three Months Ended
                 December    September   June 30,    March 31,   December
                 31,          30,                                    31,
                 2012        2012        2012        2012        2011
Net
transaction      (In millions, except percentages)
revenues
Marketplaces     $ 1,672      $ 1,490      $ 1,491      $ 1,425      $ 1,443
Current
quarter vs       12      %    —            5       %    (1      )%   7       %
prior quarter
Current
quarter vs       16      %    10      %    10      %    11      %    15      %
prior year
quarter
Percent of
Marketplaces     56      %    55      %    57      %    55      %    57      %
revenue from
international
                                                                     
Payments         1,432        1,264        1,234        1,216        1,157
Current
quarter vs       13      %    2       %    1       %    5       %    12      %
prior quarter
Current
quarter vs       24      %    22      %    25      %    29      %    25      %
prior year
quarter
Percent of
Payments         56      %    55      %    55      %    54      %    55      %
revenue from
international
                                                                     
GSI              333          170          164          182          295
Current
quarter vs       97      %    3       %    (10     )%   (38     )%   99      %
prior quarter
Current
quarter vs       13      %    14      %    N/A          N/A          N/A
prior year
quarter
Percent of GSI
revenue from     3       %   3       %   4       %   4       %   3       %
international
Total net
transaction      3,437        2,925        2,889        2,823        2,895
revenues
Current
quarter vs       17      %    1       %    2       %    (2      )%   14      %
prior quarter
Current
quarter vs       19      %    15      %    23      %    27      %    32      %
prior year
quarter
                                                                     
Marketing
services and
other revenues
Marketplaces     378          316          323          303          329
Current
quarter vs       20      %    (2      )%   7       %    (8      )%   10      %
prior quarter
Current
quarter vs       15      %    5       %    3       %    13      %    24      %
prior year
quarter
Percent of
Marketplaces     72      %    75      %    74      %    75      %    72      %
revenue from
international
                                                                     
Payments         109          102          123          93           83
Current
quarter vs       7       %    (17     )%   32      %    12      %    12      %
prior quarter
Current
quarter vs       32      %    37      %    50      %    87      %    84      %
prior year
quarter
Percent of
Payments         17      %    15      %    11      %    15      %    17      %
revenue from
international
                                                                     
GSI              65           57           57           55           68
Current
quarter vs       14      %    —            3       %    (19     )%   26      %
prior quarter
Current
quarter vs       (6      )%   4       %    N/A          N/A          N/A
prior year
quarter
Percent of GSI
revenue from     —            —            —            —            —
international
                                                                     
Corporate and    12         11         10         6          5       
other
Total
marketing        564          485          513          457          485
services and
other revenues
Current
quarter vs       16      %    (5      )%   12      %    (6      )%   13      %
prior quarter
Current
quarter vs       16      %    13      %    27      %    43      %    56      %
prior year
quarter
                                                                     
Elimination of
inter-segment    (9      )   (6      )   (4      )   (3      )   N/A
net revenue
and other (1)
Total net        $ 3,992    $ 3,404    $ 3,398    $ 3,277    $ 3,380 
revenues
Current
quarter vs       17      %    —            4       %    (3      )%   14      %
prior quarter
Current
quarter vs       18      %    15      %    23      %    29      %    35      %
prior year
quarter

    
(1)   Represents revenue generated between our reportable segments.


Net Revenues
by Geography    Three Months Ended
(1)
                 December     September   June 30,   March 31,   December
                 31,           30,                                   31,
                 2012         2012        2012       2012        2011
                 (In millions, except percentages)
U.S. net         $  1,949      $ 1,637      $ 1,611     $ 1,581      $ 1,665
revenues
Current
quarter vs       19        %   2       %    2       %   (5      )%   17      %
prior quarter
Current
quarter vs       17        %   15      %    29      %   39      %    49      %
prior year
quarter
Percent of       49        %   48      %    47      %   48      %    49      %
total
                                                                     
International    2,043         1,767        1,787       1,696        1,715
net revenues
Current
quarter vs       16        %   (1      )%   5       %   (1      )%   12      %
prior quarter
Current
quarter vs       19        %   15      %    18      %   21      %    25      %
prior year
quarter
Percent of       51        %   52      %    53      %   52      %    51      %
total
                                                             
Total net        $  3,992    $ 3,404    $ 3,398   $ 3,277    $ 3,380 
revenues
Current
quarter vs       17        %   —            4       %   (3      )%   14      %
prior quarter
Current
quarter vs       18        %   15      %    23      %   29      %    35      %
prior year
quarter

    
      Revenues are attributed to U.S. and international geographies primarily
(1)   based upon the country in which the seller, payment recipient, customer,
      website that displays advertising, or other service provider, as the
      case may be, is located.


eBay Inc.
Unaudited Payments Supplemental Operating Data

              Three Months Ended
               December     September   June 30,    March 31,   December
               31,           30,                                    31,
               2012         2012        2012        2012        2011
               (In millions, except percentages)
Active
registered     122.7         117.4        113.2        109.8        106.3
accounts (1)
Current
quarter vs     5         %   4        %   3        %   3        %   3        %
prior
quarter
Current
quarter vs     15        %   14       %   13       %   12       %   13       %
prior year
quarter
                                                                    
Net number
of payments    691.7         589.2        564.8        555.7        548.1
(2)
Current
quarter vs     17        %   4        %   2        %   1        %   19       %
prior
quarter
Current
quarter vs     26        %   28       %   31       %   31       %   30       %
prior year
quarter
                                                                    
Net total
payment        $  41,471     $ 35,159     $ 34,451     $ 33,857     $ 33,372
volume (3)
Current
quarter vs     18        %   2        %   2        %   1        %   14       %
prior
quarter
Current
quarter vs     24        %   20       %   20       %   24       %   24       %
prior year
quarter
Merchant
Services net
total
payment        68        %   67       %   67       %   66       %   66       %
volume as %
of net total
payment
volume
                                                                    
Transaction
rates
Take rate      3.72      %   3.89     %   3.94     %   3.87     %   3.71     %
Transaction    1.03      %   1.07     %   1.07     %   1.07     %   1.04     %
expense
Loss rate      0.28      %   0.30     %   0.26     %   0.26     %   0.27     %
Transaction    64.7      %   64.8     %   66.3     %   65.6     %   64.8     %
margin (4)
                                                                    
Loan
portfolio
rates
Risk
adjusted       15.6      %   16.5     %   15.5     %   16.8     %   16.9     %
margin (5)
Net
charge-off     5.3       %   4.9      %   4.6      %   4.5      %   4.4      %
rate (6)
90-day
delinquency    2.7       %   2.9      %   2.5      %   2.4      %   2.4      %
rate (7)

    
      All registered accounts that successfully sent or received at least one
(1)   payment or payment reversal through the PayPal system or Bill Me Later
      accounts that are currently able to transact and that received a
      statement within the last 12 months.
      Number of payments, net of payment reversals, successfully completed
(2)   through our Payments networks and Zong, excluding PayPal's payments
      gateway business, and on Bill Me Later accounts during the quarter.
      Total dollar volume of payments, net of payment reversals, successfully
(3)   completed through our Payments networks and Zong, excluding PayPal's
      payment gateway business, and on Bill Me Later accounts during the
      period.
      Transaction Margin calculation has been adjusted to include total
      revenues (including revenue from credit) less transaction expense
(4)   (including credit cost of funds) less transaction loss (including credit
      loan losses), divided by global take rate (based on global total
      revenues divided by total TPV).
      The risk adjusted margin represents the annualized ratio of Bill Me
(5)   Later revenue, excluding contra-revenue incentives to customers or
      merchants, less cost of funds, and less net credit and fraud losses
      relative to average loans receivable for the quarter.
(6)   Net charge-off rate represents the annualized ratio of Bill Me Later net
      credit losses relative to average loans receivable for the quarter.
      90-day delinquency rate is the ratio of Bill Me Later end of period
(7)   account balances that have missed three or more consecutive payments
      relative to total ending loan receivables.


eBay Inc.
Unaudited eBay Marketplaces Supplemental Operating Data

             Three Months Ended
              December     September    June 30,     March 31,    December
              31,           30,                                       31,
              2012         2012         2012         2012         2011
              (In millions, except percentages)
Active        112.3         108.3         104.8         102.4         100.4
Users (1)
Current
quarter vs    4        %    3        %    2        %    2        %    2        %
prior
quarter
Current
quarter vs    12       %    10       %    8        %    7        %    6        %
prior year
quarter
                                                                      
Gross
Merchandise
Volume        $ 19,105      $ 16,281      $ 16,171      $ 16,206      $ 16,490
(excluding
vehicles)
(2)
Current
quarter vs    17       %    1        %    —             (2       )%   12       %
prior
quarter
Current
quarter vs    16       %    11       %    10       %    12       %    10       %
prior year
quarter
                                                                      
Vehicles
Gross         $ 1,727       $ 1,994       $ 2,021       $ 1,871       $ 1,864
Merchandise
Volume (3)
Current
quarter vs    (13      )%   (1       )%   8        %    —             (13      )%
prior
quarter
Current
quarter vs    (7       )%   (7       )%   (10      )%   (9       )%   (3       )%
prior year
quarter
                                                                      
Fixed Price
Trading (4)
as % of       68       %    66       %    65       %    64       %    64       %
total gross
merchandise
volume


eBay's classifieds websites and Shopping.com are not included in these
metrics.

      All users, excluding users of Half.com, StubHub, and our Korean
(1)  subsidiaries (Gmarket and eBay Auction Co.), who bid on, bought, listed
      or sold an item within the previous 12-month period. Users may register
      more than once, and as a result, may have more than one account.
      Total value of all successfully closed items between users on eBay
(2)   Marketplaces trading platforms during the quarter, regardless of whether
      the buyer and seller actually consummated the transaction, excluding
      vehicles gross merchandise volume.
      Total value of all successfully closed vehicle transactions between
(3)   users on eBay Marketplaces trading platforms during the quarter,
      regardless of whether the buyer and seller actually consummated the
      transaction.
      Primarily, total gross merchandise volume related to eBay's “Buy It Now”
(4)   feature on eBay Marketplaces trading platforms relative to total gross
      merchandise volume during the quarter.

                                                                             
eBay Inc.
Unaudited GSI Supplemental Operating Data
                                                                             
                 Three Months Ended
                  December 31,  September   June 30,  March 31,  December
                                 30,                                 31,
                  2012          2012        2012      2012       2011
                  (In millions, except percentages)
GeC Merchandise   $  1,595       $  698       $ 674      $  715      $ 1,362
Sales (1)
Current quarter
vs prior          129       %    4       %    (6    )%      (48 )%     127   %
quarter
Current quarter
vs prior year     17        %    16      %    N/A        N/A         N/A
quarter

    
      Represents the retail value of all sales transactions, inclusive of
      freight charges and net of allowance for returns and discounts, which
(1)   flow through the GSI ecommerce services platform, whether we record the
      full amount of such transaction as a product sale or a percentage of
      such transaction as a service fee.
      

                                  eBay Inc.
                               Business Outlook
                   (In Millions, Except Per Share Amounts)

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 eBay's future
performance is difficult to predict. Such guidance is based on information
available on the date of this press release, and eBay assumes no obligation to
update it.

eBay'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 eBay'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 Form10-K and
subsequent quarterly reports on Form10-Q, copies of which may be obtained by
visiting the company's investor relations website at
http://investor.ebayinc.com or the SEC's website at www.sec.gov.


                                  Three Months Ended
                                             March 31, 2013
                    (In millions, except     GAAP             Non-GAAP (a)
                    per share amounts)
                    Net Revenue              $3,650 - $3,750   $3,650 - $3,750
                    Diluted EPS              $0.48 - $0.50     $0.60 - $0.62
                                                               
                                                               
                                             Twelve Months Ended
                                             December 31, 2013
                    (In millions, except     GAAP              Non-GAAP (b)
                    per share amounts)
                    Net Revenue              $16,000 -         $16,000 -
                                             $16,500           $16,500
                    Diluted EPS              $2.23 - $2.29     $2.70 - $2.75

    
      Estimated non-GAAP amounts above for the three months ending March 31,
      2013, reflect adjustments that exclude the estimated amortization of
      acquired intangible assets of approximately $95-$105 million, estimated
(a)   stock-based compensation expense and employer payroll taxes on
      stock-based compensation expense of approximately $130-$140 million and
      the accretion of a note receivable of approximately $5 million as well
      as the related tax impact.
      
      Estimated non-GAAP amounts above for the twelve months ending December
      31, 2013, reflect adjustments that exclude the estimated amortization of
      acquired intangible assets of approximately $380-$400 million, estimated
(b)   stock-based compensation expense and employer payroll taxes on
      stock-based compensation expense of approximately $560-$600 million and
      the accretion of a note receivable of approximately $20 million as well
      as the related tax impact.
      

                                  eBay Inc.
                  Non-GAAPMeasures of Financial Performance

To supplement the company's condensed consolidated financial statements
presented in accordance with generally accepted accounting principles, or
GAAP, eBay 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 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 eBay's results of operations as determined in accordance with
GAAP. These measures should only be used to evaluate eBay'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 the company's
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 eBay 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, eBay'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, significant gains or losses from the disposal/acquisition of a
business, restructuring-related charges and the income taxes associated with
the foregoing. In addition to the corresponding GAAP measures, eBay's
management also uses the foregoing non-GAAP measures in reviewing the
financial results of eBay.

eBay 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. eBay 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. eBay also
previously excluded its proportionate share of Skype's stock-based
compensation expense. The related employer payroll taxes is dependent on
eBay'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 eBay's operation of the business.

Amortization or impairment of acquired intangible assets, impairment of
goodwill and significant gains or losses and transaction expenses from the
acquisition or disposal of a business. eBay 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. eBay
also previously excluded its proportionate share of Skype's amortization of
acquired intangibles expense. eBay also settled a legal exposure in
conjunction with the acquisition of a business and excludes this settlement
payment. In addition, eBay's results are also impacted by hedge transactions
related to unique movements of cash from significant business acquisitions or
dispositions. eBay excludes the impact of the accretion of a note receivable
associated with the disposal of certain businesses. eBay excludes these items
because management does not believe they correlate to the ongoing operating
results of eBay's business.

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

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, eBay also uses free cash
flow. Free cash flow represents operating cash flows less net purchases of
property and equipment. eBay 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 eBay's business, make strategic acquisitions, and repurchase stock.
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.


eBay Inc.
Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin

                    Three Months Ended           Year Ended
                     December 31,  December 31,   December 31,  December 31,
                     2012           2011           2012           2011
                     (In millions, except percentages)
GAAP operating       $  874         $   754        $  2,888       $  2,373
income
Stock-based
compensation
expense and          130            112            509            475
related employer
payroll taxes
Acquisition
related              —              1              —              58
transaction
expenses
Amortization of
acquired
intangible assets    18             20             78             61
within cost of net
revenues
Amortization of
acquired
intangible assets    83             85             335            267
within operating
expenses
Restructuring        31            —             31            —         
Total non-GAAP
operating income     262           218           953           861       
adjustments
Non-GAAP operating   $  1,136      $   972       $  3,841      $  3,234  
income
Non-GAAP operating   28.5      %    28.7      %    27.3      %    27.8      %
margin


Reconciliation of GAAP Net Income to Non-GAAP Net Income and
GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate

                    Three Months Ended           Year Ended
                     December 31,  December 31,   December 31,  December 31,
                     2012           2011           2012           2011
                     (In millions, except per share amounts)
GAAP income before   $   877        $  2,436       $  3,084       $  3,910
income taxes
GAAP provision for   (126      )    (456      )    (475      )    (681      )
income taxes
GAAP net income      $   751        $  1,980       $  2,609       $  3,229
Non-GAAP
adjustments to net
income:
Non-GAAP operating
income adjustments   262            218            953            861
(see table above)
Accretion of note    (4        )    (4        )    (23       )    (8        )
receivable
Acquisition          (1        )    —              2              (73       )
related items
Amortization of
intangibles and
stock-based          —              —              —              43
compensation for
Skype
Sale of Skype and
transaction          —              (1,664    )    (2        )    (1,664    )
related items
(Gain) Loss on       —              —              (118      )    256
divested business
Tax effect of
non-GAAP             (81       )    259           (321      )    23        
adjustments
Non-GAAP net         $   927        $  789         $  3,100       $  2,667
income
                                                                  
Diluted net income
per share:
GAAP                 $   0.57      $  1.51       $  1.99       $  2.46   
Non-GAAP             $   0.70      $  0.60       $  2.36       $  2.03   
Shares used in
GAAP and non-GAAP
diluted net income   1,318         1,308         1,313         1,313     
per-share
calculation
                                                                  
GAAP effective tax   14        %    19        %    15        %    17        %
rate
Tax effect of
non-GAAP             4         %    1         %    5         %    3         %
adjustments to net
income
Non-GAAP effective   18        %    20        %    20        %    20        %
tax rate


Reconciliation of Operating Cash Flow to Free Cash Flow

                    Three Months Ended           Year Ended
                     December 31,  December 31,   December 31,  December 31,
                     2012           2011           2012           2011
                     (In millions)
Net cash provided
by operating         $  1,386       $   983        $  3,838       $  3,274
activities
Less: Purchases of
property and         (296      )    (292      )    (1,257    )    (963      )
equipment, net
Free cash flow       $  1,090      $   691       $  2,581      $  2,311  

Contact:

eBay Inc.
Investor Relations Contact:
Tracey Ford
tford@ebay.com
Tom Hudson
thhudson@ebay.com
or
Media Relations Contact:
Amanda Miller
press@ebay.com
or
Investor Information Request:
408-376-7493
or
Company News:
http://www.ebayinc.com/news
or
Investor Relations website:
http://investor.ebayinc.com
 
Press spacebar to pause and continue. Press esc to stop.