Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 17, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | EBAY INC | |
Entity Trading Symbol | EBAY | |
Entity Central Index Key | 1,065,088 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filer | No | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,082,338,026 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,979 | $ 1,816 |
Short-term investments | 4,775 | 5,333 |
Accounts receivable, net | 592 | 592 |
Other current assets | 1,147 | 1,134 |
Total current assets | 8,493 | 8,875 |
Long-term investments | 4,540 | 3,969 |
Property and equipment, net | 1,496 | 1,516 |
Goodwill | 4,648 | 4,501 |
Intangible assets, net | 86 | 102 |
Deferred tax asset | 5,263 | 4,608 |
Other assets | 282 | 276 |
Total assets | 24,808 | 23,847 |
Current liabilities: | ||
Short-term debt | 2,210 | 1,451 |
Accounts payable | 296 | 283 |
Accrued expenses and other current liabilities | 1,693 | 1,893 |
Deferred revenue | 112 | 110 |
Income taxes payable | 122 | 110 |
Total current liabilities | 4,433 | 3,847 |
Deferred and other tax liabilities, net | 1,958 | 1,888 |
Long-term debt | 6,756 | 7,509 |
Other liabilities | 66 | 64 |
Total liabilities | 13,213 | 13,308 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 3,580 shares authorized; 1,078 and 1,087 shares outstanding | 2 | 2 |
Additional paid-in capital | 14,989 | 14,907 |
Treasury stock at cost, 567 and 557 shares | (19,555) | (19,205) |
Retained earnings | 15,994 | 14,959 |
Accumulated other comprehensive income/(loss) | 165 | (124) |
Total stockholders’ equity | 11,595 | 10,539 |
Total liabilities and stockholders’ equity | $ 24,808 | $ 23,847 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock - par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock - shares authorized | 3,580,000,000 | 3,580,000,000 |
Common stock - shares outstanding | 1,078,000,000 | 1,087,000,000 |
Treasury stock - shares | 567,000,000 | 557,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net revenues | $ 2,217 | $ 2,137 |
Cost of net revenues | 515 | 477 |
Gross profit | 1,702 | 1,660 |
Operating expenses: | ||
Sales and marketing | 562 | 538 |
Product development | 278 | 239 |
General and administrative | 245 | 209 |
Provision for transaction losses | 62 | 52 |
Amortization of acquired intangible assets | 9 | 8 |
Total operating expenses | 1,156 | 1,046 |
Income from operations | 546 | 614 |
Interest and other, net | 12 | (23) |
Income before income taxes | 558 | 591 |
Income tax benefit (provision) | 477 | (109) |
Net income | $ 1,035 | $ 482 |
Net income (loss) per share: | ||
Net income per share - basic (in usd per share) | $ 0.96 | $ 0.42 |
Net income per share - diluted (in usd per share) | $ 0.94 | $ 0.41 |
Weighted-average shares: | ||
Basic (in shares) | 1,083 | 1,159 |
Diluted (in shares) | 1,102 | 1,170 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,035 | $ 482 |
Other comprehensive income (loss), net of reclassification adjustments: | ||
Foreign currency translation gain (loss) | 331 | 154 |
Unrealized gains (losses) on investments, net | (20) | 23 |
Tax benefit (expense) on unrealized gains (losses) on investments, net | 12 | (21) |
Unrealized gains (losses) on hedging activities, net | (34) | 3 |
Tax benefit (expense) on unrealized gains (losses) on hedging activities, net | 0 | 0 |
Other comprehensive income (loss), net of tax | 289 | 159 |
Comprehensive income | $ 1,324 | $ 641 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 1,035 | $ 482 |
Adjustments: | ||
Provision for transaction losses | 62 | 52 |
Depreciation and amortization | 163 | 167 |
Stock-based compensation | 101 | 88 |
Deferred income taxes | (565) | (28) |
Changes in assets and liabilities, and other, net of acquisition effects | (214) | (120) |
Net cash provided by operating activities | 582 | 641 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (135) | (158) |
Purchases of investments | (2,750) | (2,935) |
Maturities and sales of investments | 2,770 | 2,030 |
Other | 0 | (12) |
Net cash used in investing activities | (115) | (1,075) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 11 | 7 |
Repurchases of common stock | (410) | (1,001) |
Excess tax benefits from stock-based compensation | 0 | 1 |
Tax withholdings related to net share settlements of restricted stock units and awards | (29) | (8) |
Proceeds from issuance of long-term debt, net | 0 | 2,216 |
Other | 10 | 7 |
Net cash provided by (used in) financing activities | (418) | 1,222 |
Effect of exchange rate changes on cash and cash equivalents | 114 | 66 |
Net increase (decrease) in cash and cash equivalents | 163 | 854 |
Cash and cash equivalents at beginning of period | 1,816 | 1,832 |
Cash and cash equivalents at end of period | 1,979 | 2,686 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 109 | 73 |
Cash paid for income taxes | $ 45 | $ 31 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Summary of Significant Accounting Policies | The Company and Summary of Significant Accounting Policies The Company eBay Inc. is a global commerce leader, which includes our Marketplace, StubHub and Classifieds platforms. Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts and the eBay mobile apps. Our StubHub platforms include our online ticket platform located at www.stubhub.com, its localized counterparts and the StubHub mobile apps. Our Classifieds platforms include a collection of brands such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. When we refer to “we,” “our,” “us” or “eBay” in this Quarterly Report on Form 10-Q, we mean the current Delaware corporation (eBay Inc.) and its California predecessor, as well as all of our consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill and the recoverability of intangible assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. Principles of Consolidation and Basis of Presentation The accompanying condensed financial statements are consolidated and include the financial statements of eBay Inc., our wholly and majority-owned subsidiaries and variable interest entities (“VIE”) where we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest. A qualitative approach is applied to assess the consolidation requirement for VIEs. Investments in entities where we hold at least a 20% ownership interest and have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investees’ results of operations is included in interest and other, net and our investment balance is included in long-term investments. Investments in entities where we hold less than a 20% ownership interest are generally accounted for using the cost method of accounting, and our share of the investees’ results of operations is included in our condensed consolidated statement of income to the extent dividends are received. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 . We have evaluated all subsequent events through the date these condensed consolidated financial statements were issued. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for fair statement of the condensed consolidated financial position, results of operations and cash flows for these interim periods. Recently Adopted Accounting Pronouncements In 2016, the FASB issued new guidance to revise certain aspects of stock-based compensation guidance which includes income tax consequences, classification of awards as equity or liabilities, and classification on the statement of cash flows. We adopted the new standard in the first quarter of 2017. Adoption of this standard did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. While we continue to assess all potential impacts of the standard, we currently believe there will be an impact related to timing and measurement of certain fees paid by sellers based on identification of performance obligations and whether certain services would be considered a material right. In addition, we are currently assessing whether the principal versus agent considerations would change how we present revenue, specifically in our advertising and shipping arrangements. Further, we believe incentives such as coupons and rewards provided to our users could potentially be recognized as an expense, which we generally record as a reduction of revenue under current guidance. The standard is required to be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected the transition method. The Company will adopt the new revenue standards in its first quarter of 2018. In 2016, the FASB issued new guidance related to accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2016, the FASB issued new guidance related to accounting for leases. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2016, the FASB issued new guidance that requires credit losses on financial assets measured at amortized cost basis to be presented at the net amount expected to be collected, not based on incurred losses. Further, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 is permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2016, the FASB issued new guidance that clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees. Additionally, the FASB issued new guidance to include restricted cash with cash and cash equivalents when reconciling the beginning-of-the-period and end-of-the-period total amounts shown on the statement of cash flows. The new standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. While we continue to assess the potential impact of this standard, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In 2016, the FASB issued new guidance that requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This removes the exception to postpone recognition until the asset has been sold to an outside party. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. It is required to be applied on a modified retrospective basis through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2017, the FASB issued new guidance that narrows the application of when an integrated set of assets and activities is considered a business and provides a framework to assist entities in evaluating whether both an input and a substantive process are present to be considered a business. It is expected that the new guidance will reduce the number of transactions that would need to be further evaluated and accounted for as a business. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2017, the FASB issued new guidance to simplify the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Further, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early adoption permitted for impairment tests performed after January 1, 2017. While we continue to assess the potential impact of this standard, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In 2017, the FASB issued new guidance to clarify the scope and application of the sale or transfer of nonfinancial assets to noncustomers, including partial sales and also defines what constitutes an “in substance nonfinancial asset” which can include financial assets. The new guidance eliminates several accounting differences between transactions involving assets and transactions involving businesses. Further, the guidance aligns the accounting for derecognition of a nonfinancial asset with that of a business. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2017, the FASB issued new guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date to more closely align with expectations incorporated in market pricing. The new guidance will not impact debt securities held at a discount. Adoption of this standard will be made on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. |
Net Income (loss) Per Share
Net Income (loss) Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (loss) Per Share | Net Income (loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted net income (loss) per share by application of the treasury stock method. The calculation of diluted net income (loss) per share excludes all anti-dilutive common shares. The following table sets forth the computation of basic and diluted net income (loss) per share for the three months ended March 31, 2017 and 2016 (in millions, except per share amounts): Three Months Ended 2017 2016 Numerator: Net income $ 1,035 $ 482 Denominator: Weighted average shares of common stock - basic 1,083 1,159 Dilutive effect of equity incentive awards 19 11 Weighted average shares of common stock - diluted 1,102 1,170 Net income (loss) per share: Basic $ 0.96 $ 0.42 Diluted $ 0.94 $ 0.41 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive 1 6 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table presents goodwill activities during the three months ended March 31, 2017 (in millions): December 31, Goodwill Acquired Adjustments March 31, Goodwill $ 4,501 $ — $ 147 $ 4,648 The adjustments to goodwill during the three months ended March 31, 2017 were primarily due to foreign currency translation. Intangible Assets The components of identifiable intangible assets as of March 31, 2017 and December 31, 2016 are as follows (in millions, except years): March 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Intangible assets: Customer lists and user base $ 438 $ (401 ) $ 37 5 $ 434 $ (393 ) $ 41 5 Marketing related 559 (548 ) 11 5 568 (555 ) 13 5 Developed technologies 262 (235 ) 27 3 263 (229 ) 34 3 All other 154 (143 ) 11 4 154 (140 ) 14 4 Total $ 1,413 $ (1,327 ) $ 86 $ 1,419 $ (1,317 ) $ 102 Amortization expense for intangible assets was $16 million and $12 million for the three months ended March 31, 2017 and 2016 , respectively. Expected future intangible asset amortization as of March 31, 2017 is as follows (in millions): Fiscal year: Remaining 2017 $ 44 2018 27 2019 10 2020 5 Thereafter — Total $ 86 |
Segments
Segments | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segments | Segments We have one operating and reportable segment. Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The following table sets forth the breakdown of net revenues by type for the three months ended March 31, 2017 and 2016 (in millions): Three Months Ended 2017 2016 Net revenues by type: Net transaction revenues: Marketplace $ 1,525 $ 1,500 StubHub 204 177 Total net transaction revenues 1,729 1,677 Marketing services and other revenues: Marketplace 283 274 Classifieds 199 186 StubHub, Corporate and other 6 — Total marketing services and other revenues 488 460 Total net revenues $ 2,217 $ 2,137 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Investments | Investments The following tables summarize the unrealized gains and losses and estimated fair value of our investments classified as available-for-sale as of March 31, 2017 and December 31, 2016 (in millions): March 31, 2017 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments: Restricted cash $ 20 $ — $ — $ 20 Corporate debt securities (1) 4,670 19 (2 ) 4,687 Government and agency securities 64 4 — 68 $ 4,754 $ 23 $ (2 ) $ 4,775 Long-term investments: Corporate debt securities (1) 4,411 18 (8 ) 4,421 $ 4,411 $ 18 $ (8 ) $ 4,421 (1) As of March 31, 2017 , investment securities with a fair value of $711 million and a net unrealized foreign exchange gain of $20 million were held by a foreign subsidiary in which the U.S. dollar is not the functional currency. December 31, 2016 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments: Restricted cash $ 19 $ — $ — $ 19 Corporate debt securities 5,203 44 (1 ) 5,246 Government and agency securities 63 5 — 68 $ 5,285 $ 49 $ (1 ) $ 5,333 Long-term investments: Corporate debt securities 3,848 15 (12 ) 3,851 $ 3,848 $ 15 $ (12 ) $ 3,851 Investment securities in a continuous loss position for greater than 12 months had an estimated fair value of $27 million and an immaterial amount of unrealized losses as of March 31, 2017 and an estimated fair value of $123 million and an immaterial amount of unrealized losses as of December 31, 2016 . Refer to “Note 13 - Accumulated Other Comprehensive Income” for amounts reclassified to earnings from unrealized gains and losses. The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity as of March 31, 2017 are as follows (in millions): March 31, 2017 One year or less (including restricted cash of $20) $ 4,775 One year through two years 1,931 Two years through three years 1,743 Three years through four years 296 Four years through five years 451 $ 9,196 Equity and cost method investments We have made multiple equity and cost method investments, which are reported in long-term investments on our condensed consolidated balance sheet. As of March 31, 2017 and December 31, 2016 , our equity and cost method investments totaled $119 million and $118 million , respectively. |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | Fair Value Measurement of Assets and Liabilities The following tables presents financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 (in millions): March 31, 2017 Quoted Prices in Significant Other Assets: Cash and cash equivalents $ 1,979 $ 1,979 $ — Short-term investments: Restricted cash 20 20 — Corporate debt securities 4,687 — 4,687 Government and agency securities 68 — 68 Total short-term investments 4,775 20 4,755 Derivatives 107 — 107 Long-term investments: Corporate debt securities 4,421 — 4,421 Total long-term investments 4,421 — 4,421 Total financial assets $ 11,282 $ 1,999 $ 9,283 Liabilities: Derivatives $ 33 $ — $ 33 December 31, 2016 Quoted Prices in Significant Other Assets: Cash and cash equivalents $ 1,816 $ 1,816 $ — Short-term investments: Restricted cash 19 19 — Corporate debt securities 5,246 — 5,246 Government and agency securities 68 — 68 Total short-term investments 5,333 19 5,314 Derivatives 154 — 154 Long-term investments: Corporate debt securities 3,851 — 3,851 Total long-term investments 3,851 — 3,851 Total financial assets $ 11,154 $ 1,835 $ 9,319 Liabilities: Derivatives $ 48 $ — $ 48 Our financial assets and liabilities are valued using market prices on both active markets (level 1) and less active markets (level 2). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. The majority of our derivative instruments are valued using pricing models that take into account the contract terms as well as multiple inputs where applicable, such as equity prices, interest rate yield curves, option volatility and currency rates. We did not have any transfers of financial instruments between valuation levels during the three months ended March 31, 2017 . Other financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates their fair value because of the short-term nature of these instruments. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Summary of Derivative Instruments Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. To further limit credit risk, we also enter into collateral security arrangements related to certain interest rate derivative instruments whereby collateral is posted between counterparties if the fair value of the derivative instrument exceeds certain thresholds. Additional collateral would be required in the event of a significant credit downgrade by either party. Foreign Exchange Contracts We transact business in various foreign currencies and have significant international revenues as well as costs denominated in foreign currencies, which subjects us to foreign currency risk. We use foreign currency exchange contracts, primarily short-term in nature, generally one month to one year in duration but with maturities up to 18 months , to reduce the volatility of cash flows primarily related to forecasted revenues, expenses, assets and liabilities denominated in foreign currencies. The objective of the foreign exchange contracts is to better ensure that ultimately the U.S. dollar-equivalent cash flows are not adversely affected by changes in the applicable U.S. dollar/foreign currency exchange rate. For derivative instruments that are designated as cash flow hedges, the effective portion of the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (”AOCI”) and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. We evaluate the effectiveness of our foreign exchange contracts on a quarterly basis. We do not use any foreign exchange contracts for trading purposes. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Unrealized gains and losses in AOCI associated with such derivative instruments are immediately reclassified into earnings. As of March 31, 2017 , we have estimated that approximately $21 million of net derivative gains related to our cash flow hedges included in AOCI will be reclassified into earnings within the next 12 months. For our derivative instruments designated as cash flow hedges, the amounts recognized in earnings related to the ineffective portion were not material in each of the periods presented, and we did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. Interest Rate Contracts In connection with the July 2014 issuance of our fixed rate notes due 2019, 2021 and 2024, we entered into certain interest rate swap agreements that have the economic effect of modifying the fixed interest obligations associated with $2.4 billion of these notes so that the interest payable on these senior notes effectively became variable based on London InterBank Offered Rate (“LIBOR”) plus a spread. We have designated these swap agreements as qualifying hedging instruments and are accounting for them as fair value hedges. These transactions are characterized as fair value hedges for financial accounting purposes because they protect us against changes in the fair value of certain of our fixed rate borrowings due to benchmark interest rate movements. Changes in the fair values of these interest rate swap agreements are recognized in other assets or other liabilities with a corresponding increase or decrease in long-term debt. Each quarter we pay interest based on LIBOR plus a spread to the counterparty and on a semi-annual basis receive interest from the counterparty per the fixed rate of these senior notes. The net amount is recognized as interest expense in interest and other, net. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. We evaluate the effectiveness of our contracts on a quarterly basis. We do not use any interest rate swap agreements for trading purposes. For our derivative instruments designated as fair value hedges, the amounts recognized in earnings related to the ineffective portion were not material in each of the periods presented, and we did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. Fair Value of Derivative Contracts The fair values of our outstanding derivative instruments as of March 31, 2017 and December 31, 2016 were as follows (in millions): Balance Sheet Location March 31, December 31, Derivative Assets: Foreign exchange contracts designated as cash flow hedges Other Current Assets $ 48 $ 67 Foreign exchange contracts not designated as hedging instruments Other Current Assets 43 64 Interest rate contracts designated as fair value hedges Other Assets 16 23 Total derivative assets $ 107 $ 154 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other Current Liabilities $ 4 $ 3 Foreign exchange contracts not designated as hedging instruments Other Current Liabilities 29 45 Total derivative liabilities $ 33 $ 48 Total fair value of derivative instruments $ 74 $ 106 Under the master netting agreements with the respective counterparties to our derivative contracts, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, we have elected to present the derivative assets and derivative liabilities on a gross basis on our condensed consolidated balance sheet. As of March 31, 2017 , the potential effect of rights of set-off associated with the foreign exchange contracts would be an offset to both assets and liabilities by $31 million , resulting in net derivative assets and net derivative liabilities of $59 million and $1 million , respectively. We are not required to pledge, nor are we entitled to receive, collateral related to our foreign exchange derivative transactions. As of March 31, 2017 , we had neither pledged nor received collateral related to our interest rate derivative transactions. Effect of Derivative Contracts on Accumulated Other Comprehensive Income The following tables present the activity of derivative contracts that qualify for hedge accounting as of March 31, 2017 and December 31, 2016 , and the impact of these derivative contracts on AOCI for the three months ended March 31, 2017 and 2016 (in millions): December 31, 2016 Amount of Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) Amount of Gain (Loss) Reclassified From AOCI to Earnings (Effective Portion) March 31, 2017 Foreign exchange contracts designated as cash flow hedges $ 54 $ (14 ) $ 20 $ 20 December 31, 2015 Amount of Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) Amount of Gain (Loss) Reclassified From AOCI to Earnings (Effective Portion) March 31, 2016 Foreign exchange contracts designated as cash flow hedges $ 36 $ 19 $ 16 $ 39 Effect of Derivative Contracts on Condensed Consolidated Statement of Income The following table provides the location in our financial statements of the recognized gains or losses related to our foreign exchange derivative instruments (in millions): Three Months Ended 2017 2016 Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues and operating expenses $ 7 $ 4 Foreign exchange contracts designated as cash flow hedges recognized in interest and other, net 13 12 Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net (4 ) (2 ) Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income $ 16 $ 14 The following table provides the location in our financial statements of the recognized gains or losses related to our interest rate derivative instruments (in millions): Three Months Ended 2017 2016 Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net $ (7 ) $ 63 Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net 7 (63 ) Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income $ — $ — Notional Amounts of Derivative Contracts Derivative transactions are measured in terms of the notional amount, but this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. The notional amount is generally not exchanged, but is used only as the basis on which the value of foreign exchange payments under these contracts are determined. The following table provides the notional amounts of our outstanding derivatives as of March 31, 2017 and December 31, 2016 (in millions): March 31, December 31, Foreign exchange contracts designated as cash flow hedges $ 1,502 $ 1,200 Foreign exchange contracts designated as net investment hedges 96 — Foreign exchange contracts not designated as hedging instruments 3,111 2,993 Interest rate contracts designated as fair value hedges 2,400 2,400 Total $ 7,109 $ 6,593 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the carrying value of our outstanding debt (in millions, except percentages): Coupon As of Effective As of Effective Rate March 31, 2017 Interest Rate December 31, 2016 Interest Rate Long-Term Debt Floating Rate Notes: Senior notes due 2017 LIBOR plus 0.20% $ 450 1.372 % $ 450 1.223 % Senior notes due 2019 LIBOR plus 0.48% 400 1.600 % 400 1.460 % Fixed Rate Notes: Senior notes due 2017 1.350 % 1,000 1.456 % 1,000 1.456 % Senior notes due 2018 2.500 % 750 2.775 % 750 2.775 % Senior notes due 2019 2.200 % 1,150 2.346 % 1,150 2.346 % Senior notes due 2020 3.250 % 500 3.389 % 500 3.389 % Senior notes due 2021 2.875 % 750 2.993 % 750 2.993 % Senior notes due 2022 3.800 % 750 3.989 % 750 3.989 % Senior notes due 2022 2.600 % 1,000 2.678 % 1,000 2.678 % Senior notes due 2024 3.450 % 750 3.531 % 750 3.531 % Senior notes due 2042 4.000 % 750 4.114 % 750 4.114 % Senior notes due 2056 6.000 % 750 6.547 % 750 6.547 % Total senior notes 9,000 9,000 Hedge accounting fair value adjustments 16 23 Unamortized discount and debt issuance costs (60 ) (64 ) Less: Current portion of long-term debt (2,200 ) (1,450 ) Total long-term debt 6,756 7,509 Short-Term Debt Current portion of long-term debt 2,200 1,450 Unamortized discount and debt issuance costs (2 ) (1 ) Other indebtedness 12 2 Total short-term debt 2,210 1,451 Total Debt $ 8,966 $ 8,960 Senior Notes The floating rate notes are not redeemable prior to maturity. On and after March 1, 2021, we may redeem some or all of the 6.000% fixed rate notes due 2056 at any time and from time to time prior to their maturity at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. We may redeem some or all of the other fixed rate notes of each series at any time and from time to time prior to their maturity, generally at a make-whole redemption price, plus accrued and unpaid interest. If a change of control triggering event occurs with respect to the 2.500% fixed rate notes due 2018, the 3.800% fixed rate notes due 2022 or the 6.000% fixed rate notes due 2056, we must, subject to certain exceptions, offer to repurchase all of the notes of the applicable series at a price equal to 101% of the principal amount, plus accrued and unpaid interest. The indenture pursuant to which the senior notes were issued includes customary covenants that, among other things and subject to exceptions, limit our ability to incur, assume or guarantee debt secured by liens on specified assets or enter into sale and lease-back transactions with respect to specified properties, and also includes customary events of default. To help achieve our interest rate risk management objectives, in connection with the previous issuance of certain senior notes, we entered into interest rate swap agreements that effectively converted $2.4 billion of our fixed rate notes to floating rate debt based on LIBOR plus a spread. These swaps were designated as fair value hedges against changes in the fair value of certain fixed rate senior notes resulting from changes in interest rates. The gains and losses related to changes in the fair value of interest rate swaps substantially offset changes in the fair value of the hedged portion of the underlying debt that are attributable to changes in market interest rates. The effective interest rates for our senior notes include the interest payable, the amortization of debt issuance costs and the amortization of any original issue discount on these senior notes. Interest on these senior notes is payable either quarterly or semiannually. Interest expense associated with these senior notes, including amortization of debt issuance costs was approximately $68 million and $50 million during the three months ended March 31, 2017 and 2016 , respectively. As of March 31, 2017 and December 31, 2016, the estimated fair value of these senior notes was approximately $9.0 billion and $8.9 billion , respectively. Other Indebtedness Our other indebtedness is comprised of overdraft facilities. We have formal overdraft facilities in India bearing interest on drawn balances at approximately a 9.1% rate per annum. Commercial Paper We have a commercial paper program pursuant to which we may issue commercial paper notes in an aggregate principal amount at maturity of up to $1.5 billion outstanding at any time with maturities of up to 397 days from the date of issue. As of March 31, 2017 , there were no commercial paper notes outstanding. Credit Agreement As of March 31, 2017 , no borrowings were outstanding under our $2 billion credit agreement. However, as described above, we have an up to $1.5 billion commercial paper program and therefore maintain $1.5 billion of available borrowing capacity under our credit agreement in order to repay commercial paper borrowings in the event we are unable to repay those borrowings from other sources when they become due. As a result, $500 million of borrowing capacity was available as of March 31, 2017 for other purposes permitted by the credit agreement. The credit agreement includes customary representations, warranties, affirmative and negative covenants, including financial covenants, events of default and indemnification provisions in favor of the banks. The negative covenants include restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to certain exceptions. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio. The events of default include the occurrence of a change of control (as defined in the credit agreement) with respect to us. We were in compliance with all covenants in our outstanding debt instruments during the three months ended March 31, 2017 . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Off-Balance Sheet Arrangements As of March 31, 2017 , we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources. We have a cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals from the financial institution based upon our aggregate operating cash balances held within the same financial institution (“Aggregate Cash Deposits”). This arrangement also allows us to withdraw amounts exceeding the Aggregate Cash Deposits up to an agreed-upon limit. The net balance of the withdrawals and the Aggregate Cash Deposits are used by the financial institution as a basis for calculating our net interest expense or income under the arrangement. As of March 31, 2017 , we had a total of $1.1 billion in cash withdrawals offsetting our $1.1 billion in Aggregate Cash Deposits held within the financial institution under the cash pooling arrangement. Litigation and Other Legal Matters Overview We are involved in legal and regulatory proceedings on an ongoing basis. Many of these proceedings are in early stages and may seek an indeterminate amount of damages. If we believe that a loss arising from such matters is probable and can be reasonably estimated, we accrue the estimated liability in our financial statements. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For those proceedings in which an unfavorable outcome is reasonably possible but not probable, we have disclosed an estimate of the reasonably possible loss or range of losses or we have concluded that an estimate of the reasonably possible loss or range arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are not material. If we cannot estimate the probable or reasonably possible loss or range of losses arising from a proceeding, we have disclosed that fact. In assessing the materiality of a proceeding, we evaluate, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require us to change our business practices in a manner that could have a material adverse impact on our business. With respect to the matters disclosed in this Note 9, we are unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies. Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable were not material for the three months ended March 31, 2017 . Except as otherwise noted for the proceedings described in this Note 9, we have concluded, based on currently available information, that reasonably possible losses arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our recorded accruals are also not material. However, legal and regulatory proceedings are inherently unpredictable and subject to significant uncertainties. If one or more matters were resolved against us in a reporting period for amounts in excess of management’s expectations, the impact on our operating results or financial condition for that reporting period could be material. General Matters Other third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to patent disputes, and expect that we will increasingly be subject to additional patent infringement claims involving various aspects of our business as our products and services continue to expand in scope and complexity. Such claims may be brought directly or indirectly against our companies and/or against our customers (who may be entitled to contractual indemnification under their contracts with us), and we are subject to increased exposure to such claims as a result of our acquisitions and divestitures and in cases where we are entering new lines of business. We have in the past been forced to litigate such claims. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act, the Lanham Act and the Communications Decency Act are interpreted by the courts, and as we expand the scope of our business (both in terms of the range of products and services that we offer and our geographical operations) and become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries like ourselves are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws will be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and costly to defend and resolve, could require expensive changes in our methods of doing business or could require us to enter into costly royalty or licensing agreements on unfavorable terms. From time to time, we are involved in other disputes or regulatory inquiries that arise in the ordinary course of business, including suits by our users (individually or as class actions) alleging, among other things, improper disclosure of our prices, rules or policies, that our practices, prices, rules, policies or customer/user agreements violate applicable law or that we have acted unfairly and/or not acted in conformity with such prices, rules, policies or agreements. Further, the number and significance of these disputes and inquiries are increasing as the political and regulatory landscape changes; and as we have grown larger, our businesses have expanded in scope (both in terms of the range of products and services that we offer and our geographical operations) and our products and services have increased in complexity. Any claims or regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, damage awards (including statutory damages for certain causes of action in certain jurisdictions), injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm our business. Indemnification Provisions We entered into a separation and distribution agreement and various other agreements with PayPal to govern the separation and relationship of the two companies going forward. These agreements provide for specific indemnity and liability obligations and could lead to disputes between us and PayPal, which may be significant. In addition, the indemnity rights we have against PayPal under the agreements may not be sufficient to protect us and our indemnity obligations to PayPal may be significant. In addition, we have entered into indemnification agreements with each of our directors, executive officers and certain other officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us. In the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations, including our standard marketing, promotions and application-programming-interface license agreements. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by a third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In certain cases, we have agreed to provide indemnification for intellectual property infringement. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Stock Repurchase Program Our stock repurchase program is intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic repurchases of our common stock to reduce our outstanding share count. Any share repurchases under our stock repurchase program may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. Our stock repurchase program may be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash. In July 2016, our Board authorized a $2.5 billion stock repurchase program. The stock repurchase program has no expiration from the date of authorization. The stock repurchase activity under our stock repurchase program during the three months ended March 31, 2017 is summarized as follows (in millions, except per share amounts): Shares Repurchased (1) Average Price per Share (2) Value of Shares Repurchased Remaining Amount Authorized Balance as of January 1, 2017 $ 1,336 Repurchase of shares of common stock 10 $ 33.65 350 (350 ) Balance as of March 31, 2017 $ 986 (1) These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. No repurchased shares of common stock have been retired. (2) Excludes broker commissions. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Restricted Stock Unit Activity The following table presents restricted stock unit (“RSU”) activity (including performance-based RSUs that have been earned) under our equity incentive plans as of and for the three months ended March 31, 2017 (in millions except per share amounts): Units Outstanding as of January 1, 2017 44 Awarded and assumed 1 Vested (2 ) Forfeited (2 ) Outstanding as of March 31, 2017 41 The weighted average grant date fair value for RSUs awarded during the three months ended March 31, 2017 was $31.78 per share. Stock-Based Compensation Expense The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2017 and 2016 was as follows (in millions): Three Months Ended 2017 2016 Cost of net revenues $ 11 $ 7 Sales and marketing 21 21 Product development 36 31 General and administrative 33 29 Total stock-based compensation expense $ 101 $ 88 Capitalized in product development $ 3 $ 3 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are subject to both direct and indirect taxation in the U.S. and various states and foreign jurisdictions. We are under examination by certain tax authorities for the 2003 to 2013 tax years. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these or other examinations. The material jurisdictions where we are subject to potential examination by tax authorities for tax years after 2002 include, among others, the U.S. (Federal and California), Germany, Korea, Israel, Switzerland, United Kingdom and Canada. Although the timing of the resolution and/or closure of audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. During the fourth quarter of 2016, we began the process of realigning our legal structure, subsequent to the distribution of PayPal Holdings, Inc., to better reflect how we manage and operate our platforms. We consider many factors in effecting this realignment, including foreign exchange exposures, long-term cash flows and cash needs of our platforms, capital allocation considerations and the associated tax effects. As a result of the initial stages of this realignment and the associated tax agreements, in 2016 we achieved a substantial step-up in the tax basis of the intangible assets in our foreign eBay platforms. In the first quarter of 2017, we achieved a step-up in the tax basis of the intangible assets in our foreign Classifieds platforms and recognized a tax benefit of $695 million . As a result of the realignment, we no longer benefit from tax rulings previously concluded in several different jurisdictions. Without the benefit of the rulings, the noncash tax impacts of the realignment in our foreign eBay and Classifieds platforms have increased our income tax rate in certain foreign jurisdictions, most significantly Switzerland. While we experienced a higher tax rate, the realignment allows us to achieve certain cash tax benefits due to the step-up in tax basis achieved in certain foreign jurisdictions. These cash tax benefits will remain consistent, subject to the performance of our foreign platforms. The realignment is expected to extend into 2018 and primarily impact our international entities. On July 27, 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion invalidating the regulations relating to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was issued by the Tax Court in December 2015. The IRS is appealing the decision and filed its arguments opposing the Tax Court decision in June 2016. Due to the uncertainty surrounding the status of the current regulations, questions related to the scope of potential benefits or obligations, and the risk of the Tax Court’s decision being overturned upon appeal, we have not recorded any benefit or expense as of March 31, 2017 . We will continue to monitor ongoing developments and potential impacts to our consolidated financial statements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following tables summarize the changes in AOCI for the three months ended March 31, 2017 and 2016 (in millions): Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains on Investments Foreign Currency Translation Estimated Tax (Expense) Benefit Total Balance as of December 31, 2016 $ 54 $ 51 $ (230 ) $ 1 $ (124 ) Other comprehensive income (loss) before reclassifications (14 ) (8 ) 331 12 321 Less: Amount of gain (loss) reclassified from AOCI 20 12 — — 32 Net current period other comprehensive income (34 ) (20 ) 331 12 289 Balance as of March 31, 2017 $ 20 $ 31 $ 101 $ 13 $ 165 Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains on Investments Foreign Currency Translation Estimated Tax (Expense) Benefit Total Balance as of December 31, 2015 $ 36 $ 845 $ (45 ) $ (310 ) $ 526 Other comprehensive income (loss) before reclassifications 19 18 154 (21 ) 170 Less: Amount of gain (loss) reclassified from AOCI 16 (5 ) — — 11 Net current period other comprehensive income 3 23 154 (21 ) 159 Balance as of March 31, 2016 $ 39 $ 868 $ 109 $ (331 ) $ 685 The following table provides details about reclassifications out of AOCI for the three months ended March 31, 2017 and 2016 (in millions): Details about AOCI Components Affected Line Item in the Statement of Income Amount of Gain (Loss) Reclassified From AOCI Three Months Ended 2017 2016 Gains (losses) on cash flow hedges - foreign exchange contracts Cost of net revenues $ 2 $ 2 Sales and marketing 1 — Product development 3 2 General and administrative 1 — Interest and other, net 13 12 Total, from continuing operations before income taxes 20 16 Provision for income taxes — — Total, net of income taxes 20 16 Unrealized gains (losses) on investments Interest and other, net 12 (5 ) Total, before income taxes 12 (5 ) Provision for income taxes — — Total, net of income taxes 12 (5 ) Total reclassifications for the period Total, net of income taxes $ 32 $ 11 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Subsequent to March 31, 2017, we received an ownership interest in Flipkart in exchange for our eBay.in business and a $500 million cash investment. We signed the definitive agreement to sell our marketplaces business in India on April 10, 2017 and we expect to close this transaction, subject to customary closing conditions, in the second half of 2017. We are unable to estimate the financial statement impact of the sale at this time. |
The Company and Summary of Si21
The Company and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill and the recoverability of intangible assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying condensed financial statements are consolidated and include the financial statements of eBay Inc., our wholly and majority-owned subsidiaries and variable interest entities (“VIE”) where we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest. A qualitative approach is applied to assess the consolidation requirement for VIEs. Investments in entities where we hold at least a 20% ownership interest and have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investees’ results of operations is included in interest and other, net and our investment balance is included in long-term investments. Investments in entities where we hold less than a 20% ownership interest are generally accounted for using the cost method of accounting, and our share of the investees’ results of operations is included in our condensed consolidated statement of income to the extent dividends are received. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In 2016, the FASB issued new guidance to revise certain aspects of stock-based compensation guidance which includes income tax consequences, classification of awards as equity or liabilities, and classification on the statement of cash flows. We adopted the new standard in the first quarter of 2017. Adoption of this standard did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. While we continue to assess all potential impacts of the standard, we currently believe there will be an impact related to timing and measurement of certain fees paid by sellers based on identification of performance obligations and whether certain services would be considered a material right. In addition, we are currently assessing whether the principal versus agent considerations would change how we present revenue, specifically in our advertising and shipping arrangements. Further, we believe incentives such as coupons and rewards provided to our users could potentially be recognized as an expense, which we generally record as a reduction of revenue under current guidance. The standard is required to be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected the transition method. The Company will adopt the new revenue standards in its first quarter of 2018. In 2016, the FASB issued new guidance related to accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2016, the FASB issued new guidance related to accounting for leases. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2016, the FASB issued new guidance that requires credit losses on financial assets measured at amortized cost basis to be presented at the net amount expected to be collected, not based on incurred losses. Further, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 is permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2016, the FASB issued new guidance that clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees. Additionally, the FASB issued new guidance to include restricted cash with cash and cash equivalents when reconciling the beginning-of-the-period and end-of-the-period total amounts shown on the statement of cash flows. The new standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. While we continue to assess the potential impact of this standard, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In 2016, the FASB issued new guidance that requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This removes the exception to postpone recognition until the asset has been sold to an outside party. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. It is required to be applied on a modified retrospective basis through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2017, the FASB issued new guidance that narrows the application of when an integrated set of assets and activities is considered a business and provides a framework to assist entities in evaluating whether both an input and a substantive process are present to be considered a business. It is expected that the new guidance will reduce the number of transactions that would need to be further evaluated and accounted for as a business. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2017, the FASB issued new guidance to simplify the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Further, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early adoption permitted for impairment tests performed after January 1, 2017. While we continue to assess the potential impact of this standard, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In 2017, the FASB issued new guidance to clarify the scope and application of the sale or transfer of nonfinancial assets to noncustomers, including partial sales and also defines what constitutes an “in substance nonfinancial asset” which can include financial assets. The new guidance eliminates several accounting differences between transactions involving assets and transactions involving businesses. Further, the guidance aligns the accounting for derecognition of a nonfinancial asset with that of a business. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In 2017, the FASB issued new guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date to more closely align with expectations incorporated in market pricing. The new guidance will not impact debt securities held at a discount. Adoption of this standard will be made on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. |
Net Income (loss) Per Share (Ta
Net Income (loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income (loss) per share | The following table sets forth the computation of basic and diluted net income (loss) per share for the three months ended March 31, 2017 and 2016 (in millions, except per share amounts): Three Months Ended 2017 2016 Numerator: Net income $ 1,035 $ 482 Denominator: Weighted average shares of common stock - basic 1,083 1,159 Dilutive effect of equity incentive awards 19 11 Weighted average shares of common stock - diluted 1,102 1,170 Net income (loss) per share: Basic $ 0.96 $ 0.42 Diluted $ 0.94 $ 0.41 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive 1 6 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill balances and adjustments by reportable segment | The following table presents goodwill activities during the three months ended March 31, 2017 (in millions): December 31, Goodwill Acquired Adjustments March 31, Goodwill $ 4,501 $ — $ 147 $ 4,648 |
Schedule of identifiable intangible assets | The components of identifiable intangible assets as of March 31, 2017 and December 31, 2016 are as follows (in millions, except years): March 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (Years) Intangible assets: Customer lists and user base $ 438 $ (401 ) $ 37 5 $ 434 $ (393 ) $ 41 5 Marketing related 559 (548 ) 11 5 568 (555 ) 13 5 Developed technologies 262 (235 ) 27 3 263 (229 ) 34 3 All other 154 (143 ) 11 4 154 (140 ) 14 4 Total $ 1,413 $ (1,327 ) $ 86 $ 1,419 $ (1,317 ) $ 102 |
Schedule of future intangible asset amortization | Expected future intangible asset amortization as of March 31, 2017 is as follows (in millions): Fiscal year: Remaining 2017 $ 44 2018 27 2019 10 2020 5 Thereafter — Total $ 86 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of revenue by type | The following table sets forth the breakdown of net revenues by type for the three months ended March 31, 2017 and 2016 (in millions): Three Months Ended 2017 2016 Net revenues by type: Net transaction revenues: Marketplace $ 1,525 $ 1,500 StubHub 204 177 Total net transaction revenues 1,729 1,677 Marketing services and other revenues: Marketplace 283 274 Classifieds 199 186 StubHub, Corporate and other 6 — Total marketing services and other revenues 488 460 Total net revenues $ 2,217 $ 2,137 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Fair value of short and long-term investments classified as available for sale | The following tables summarize the unrealized gains and losses and estimated fair value of our investments classified as available-for-sale as of March 31, 2017 and December 31, 2016 (in millions): March 31, 2017 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments: Restricted cash $ 20 $ — $ — $ 20 Corporate debt securities (1) 4,670 19 (2 ) 4,687 Government and agency securities 64 4 — 68 $ 4,754 $ 23 $ (2 ) $ 4,775 Long-term investments: Corporate debt securities (1) 4,411 18 (8 ) 4,421 $ 4,411 $ 18 $ (8 ) $ 4,421 (1) As of March 31, 2017 , investment securities with a fair value of $711 million and a net unrealized foreign exchange gain of $20 million were held by a foreign subsidiary in which the U.S. dollar is not the functional currency. December 31, 2016 Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments: Restricted cash $ 19 $ — $ — $ 19 Corporate debt securities 5,203 44 (1 ) 5,246 Government and agency securities 63 5 — 68 $ 5,285 $ 49 $ (1 ) $ 5,333 Long-term investments: Corporate debt securities 3,848 15 (12 ) 3,851 $ 3,848 $ 15 $ (12 ) $ 3,851 |
Estimated fair values of short and long-term investments classified by date of contractual maturity | The estimated fair values of our short-term and long-term investments classified as available-for-sale by date of contractual maturity as of March 31, 2017 are as follows (in millions): March 31, 2017 One year or less (including restricted cash of $20) $ 4,775 One year through two years 1,931 Two years through three years 1,743 Three years through four years 296 Four years through five years 451 $ 9,196 |
Fair Value Measurement of Ass26
Fair Value Measurement of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities measured on a recurring basis | The following tables presents financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 (in millions): March 31, 2017 Quoted Prices in Significant Other Assets: Cash and cash equivalents $ 1,979 $ 1,979 $ — Short-term investments: Restricted cash 20 20 — Corporate debt securities 4,687 — 4,687 Government and agency securities 68 — 68 Total short-term investments 4,775 20 4,755 Derivatives 107 — 107 Long-term investments: Corporate debt securities 4,421 — 4,421 Total long-term investments 4,421 — 4,421 Total financial assets $ 11,282 $ 1,999 $ 9,283 Liabilities: Derivatives $ 33 $ — $ 33 December 31, 2016 Quoted Prices in Significant Other Assets: Cash and cash equivalents $ 1,816 $ 1,816 $ — Short-term investments: Restricted cash 19 19 — Corporate debt securities 5,246 — 5,246 Government and agency securities 68 — 68 Total short-term investments 5,333 19 5,314 Derivatives 154 — 154 Long-term investments: Corporate debt securities 3,851 — 3,851 Total long-term investments 3,851 — 3,851 Total financial assets $ 11,154 $ 1,835 $ 9,319 Liabilities: Derivatives $ 48 $ — $ 48 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of fair value of outstanding derivative instruments | The fair values of our outstanding derivative instruments as of March 31, 2017 and December 31, 2016 were as follows (in millions): Balance Sheet Location March 31, December 31, Derivative Assets: Foreign exchange contracts designated as cash flow hedges Other Current Assets $ 48 $ 67 Foreign exchange contracts not designated as hedging instruments Other Current Assets 43 64 Interest rate contracts designated as fair value hedges Other Assets 16 23 Total derivative assets $ 107 $ 154 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other Current Liabilities $ 4 $ 3 Foreign exchange contracts not designated as hedging instruments Other Current Liabilities 29 45 Total derivative liabilities $ 33 $ 48 Total fair value of derivative instruments $ 74 $ 106 |
Impact of derivative contracts on accumulated other comprehensive income | The following tables present the activity of derivative contracts that qualify for hedge accounting as of March 31, 2017 and December 31, 2016 , and the impact of these derivative contracts on AOCI for the three months ended March 31, 2017 and 2016 (in millions): December 31, 2016 Amount of Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) Amount of Gain (Loss) Reclassified From AOCI to Earnings (Effective Portion) March 31, 2017 Foreign exchange contracts designated as cash flow hedges $ 54 $ (14 ) $ 20 $ 20 December 31, 2015 Amount of Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) Amount of Gain (Loss) Reclassified From AOCI to Earnings (Effective Portion) March 31, 2016 Foreign exchange contracts designated as cash flow hedges $ 36 $ 19 $ 16 $ 39 |
Recognized gains or losses related to derivative instruments | The following table provides the location in our financial statements of the recognized gains or losses related to our foreign exchange derivative instruments (in millions): Three Months Ended 2017 2016 Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues and operating expenses $ 7 $ 4 Foreign exchange contracts designated as cash flow hedges recognized in interest and other, net 13 12 Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net (4 ) (2 ) Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income $ 16 $ 14 The following table provides the location in our financial statements of the recognized gains or losses related to our interest rate derivative instruments (in millions): Three Months Ended 2017 2016 Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net $ (7 ) $ 63 Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net 7 (63 ) Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income $ — $ — |
Notional amounts of outstanding derivatives | The following table provides the notional amounts of our outstanding derivatives as of March 31, 2017 and December 31, 2016 (in millions): March 31, December 31, Foreign exchange contracts designated as cash flow hedges $ 1,502 $ 1,200 Foreign exchange contracts designated as net investment hedges 96 — Foreign exchange contracts not designated as hedging instruments 3,111 2,993 Interest rate contracts designated as fair value hedges 2,400 2,400 Total $ 7,109 $ 6,593 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Carrying value of outstanding debt | The following table summarizes the carrying value of our outstanding debt (in millions, except percentages): Coupon As of Effective As of Effective Rate March 31, 2017 Interest Rate December 31, 2016 Interest Rate Long-Term Debt Floating Rate Notes: Senior notes due 2017 LIBOR plus 0.20% $ 450 1.372 % $ 450 1.223 % Senior notes due 2019 LIBOR plus 0.48% 400 1.600 % 400 1.460 % Fixed Rate Notes: Senior notes due 2017 1.350 % 1,000 1.456 % 1,000 1.456 % Senior notes due 2018 2.500 % 750 2.775 % 750 2.775 % Senior notes due 2019 2.200 % 1,150 2.346 % 1,150 2.346 % Senior notes due 2020 3.250 % 500 3.389 % 500 3.389 % Senior notes due 2021 2.875 % 750 2.993 % 750 2.993 % Senior notes due 2022 3.800 % 750 3.989 % 750 3.989 % Senior notes due 2022 2.600 % 1,000 2.678 % 1,000 2.678 % Senior notes due 2024 3.450 % 750 3.531 % 750 3.531 % Senior notes due 2042 4.000 % 750 4.114 % 750 4.114 % Senior notes due 2056 6.000 % 750 6.547 % 750 6.547 % Total senior notes 9,000 9,000 Hedge accounting fair value adjustments 16 23 Unamortized discount and debt issuance costs (60 ) (64 ) Less: Current portion of long-term debt (2,200 ) (1,450 ) Total long-term debt 6,756 7,509 Short-Term Debt Current portion of long-term debt 2,200 1,450 Unamortized discount and debt issuance costs (2 ) (1 ) Other indebtedness 12 2 Total short-term debt 2,210 1,451 Total Debt $ 8,966 $ 8,960 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Summary of stock repurchase activity under stock repurchase program | The stock repurchase activity under our stock repurchase program during the three months ended March 31, 2017 is summarized as follows (in millions, except per share amounts): Shares Repurchased (1) Average Price per Share (2) Value of Shares Repurchased Remaining Amount Authorized Balance as of January 1, 2017 $ 1,336 Repurchase of shares of common stock 10 $ 33.65 350 (350 ) Balance as of March 31, 2017 $ 986 (1) These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. No repurchased shares of common stock have been retired. (2) Excludes broker commissions. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of restricted stock unit activity | The following table presents restricted stock unit (“RSU”) activity (including performance-based RSUs that have been earned) under our equity incentive plans as of and for the three months ended March 31, 2017 (in millions except per share amounts): Units Outstanding as of January 1, 2017 44 Awarded and assumed 1 Vested (2 ) Forfeited (2 ) Outstanding as of March 31, 2017 41 |
Schedule of stock-based compensation expense | The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2017 and 2016 was as follows (in millions): Three Months Ended 2017 2016 Cost of net revenues $ 11 $ 7 Sales and marketing 21 21 Product development 36 31 General and administrative 33 29 Total stock-based compensation expense $ 101 $ 88 Capitalized in product development $ 3 $ 3 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Changes in accumulated balances of other comprehensive income | The following tables summarize the changes in AOCI for the three months ended March 31, 2017 and 2016 (in millions): Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains on Investments Foreign Currency Translation Estimated Tax (Expense) Benefit Total Balance as of December 31, 2016 $ 54 $ 51 $ (230 ) $ 1 $ (124 ) Other comprehensive income (loss) before reclassifications (14 ) (8 ) 331 12 321 Less: Amount of gain (loss) reclassified from AOCI 20 12 — — 32 Net current period other comprehensive income (34 ) (20 ) 331 12 289 Balance as of March 31, 2017 $ 20 $ 31 $ 101 $ 13 $ 165 Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains on Investments Foreign Currency Translation Estimated Tax (Expense) Benefit Total Balance as of December 31, 2015 $ 36 $ 845 $ (45 ) $ (310 ) $ 526 Other comprehensive income (loss) before reclassifications 19 18 154 (21 ) 170 Less: Amount of gain (loss) reclassified from AOCI 16 (5 ) — — 11 Net current period other comprehensive income 3 23 154 (21 ) 159 Balance as of March 31, 2016 $ 39 $ 868 $ 109 $ (331 ) $ 685 |
Reclassifications out of accumulated other comprehensive income | The following table provides details about reclassifications out of AOCI for the three months ended March 31, 2017 and 2016 (in millions): Details about AOCI Components Affected Line Item in the Statement of Income Amount of Gain (Loss) Reclassified From AOCI Three Months Ended 2017 2016 Gains (losses) on cash flow hedges - foreign exchange contracts Cost of net revenues $ 2 $ 2 Sales and marketing 1 — Product development 3 2 General and administrative 1 — Interest and other, net 13 12 Total, from continuing operations before income taxes 20 16 Provision for income taxes — — Total, net of income taxes 20 16 Unrealized gains (losses) on investments Interest and other, net 12 (5 ) Total, before income taxes 12 (5 ) Provision for income taxes — — Total, net of income taxes 12 (5 ) Total reclassifications for the period Total, net of income taxes $ 32 $ 11 |
Net Income (loss) Per Share (De
Net Income (loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net income | $ 1,035 | $ 482 |
Denominator: | ||
Weighted average shares of common stock - basic | 1,083 | 1,159 |
Dilutive effect of equity incentive awards (in shares) | 19 | 11 |
Weighted average shares of common stock - diluted | 1,102 | 1,170 |
Net income (loss) per share: | ||
Net income per share - basic (in usd per share) | $ 0.96 | $ 0.42 |
Net income per share - diluted (in usd per share) | $ 0.94 | $ 0.41 |
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive (in shares) | 1 | 6 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets - Goodwill Balances and Adjustments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill | |
December 31, 2016 | $ 4,501 |
Goodwill Acquired | 0 |
Adjustments | 147 |
March 31, 2017 | $ 4,648 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Intangible assets: | |||
Gross Carrying Amount | $ 1,413 | $ 1,419 | |
Accumulated Amortization | (1,327) | (1,317) | |
Intangible Assets, Net | 86 | 102 | |
Amortization expense | 16 | $ 12 | |
Customer lists and user base | |||
Intangible assets: | |||
Gross Carrying Amount | 438 | 434 | |
Accumulated Amortization | (401) | (393) | |
Intangible Assets, Net | $ 37 | $ 41 | |
Weighted Average Useful Life (Years) | 5 years | 5 years | |
Marketing related | |||
Intangible assets: | |||
Gross Carrying Amount | $ 559 | $ 568 | |
Accumulated Amortization | (548) | (555) | |
Intangible Assets, Net | $ 11 | $ 13 | |
Weighted Average Useful Life (Years) | 5 years | 5 years | |
Developed technologies | |||
Intangible assets: | |||
Gross Carrying Amount | $ 262 | $ 263 | |
Accumulated Amortization | (235) | (229) | |
Intangible Assets, Net | $ 27 | $ 34 | |
Weighted Average Useful Life (Years) | 3 years | 3 years | |
All other | |||
Intangible assets: | |||
Gross Carrying Amount | $ 154 | $ 154 | |
Accumulated Amortization | (143) | (140) | |
Intangible Assets, Net | $ 11 | $ 14 | |
Weighted Average Useful Life (Years) | 4 years | 4 years |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets - Intangible Asset Amortization Expense, Fiscal Year Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fiscal year: | ||
Remaining 2,017 | $ 44 | |
2,018 | 27 | |
2,019 | 10 | |
2,020 | 5 | |
Thereafter | 0 | |
Intangible Assets, Net | $ 86 | $ 102 |
Segments (Details)
Segments (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | |
Segment Reporting [Abstract] | ||
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Segment Reporting Information [Line Items] | ||
Total net transaction revenues | $ 1,729 | $ 1,677 |
Total marketing services and other revenues | 488 | 460 |
Total net revenues | 2,217 | 2,137 |
Marketplace | ||
Segment Reporting Information [Line Items] | ||
Total net transaction revenues | 1,525 | 1,500 |
Total marketing services and other revenues | 283 | 274 |
StubHub | ||
Segment Reporting Information [Line Items] | ||
Total net transaction revenues | 204 | 177 |
Classifieds | ||
Segment Reporting Information [Line Items] | ||
Total marketing services and other revenues | 199 | 186 |
StubHub, Corporate and other | ||
Segment Reporting Information [Line Items] | ||
Total marketing services and other revenues | $ 6 | $ 0 |
Investments - Available-For-Sal
Investments - Available-For-Sale Securities (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract] | ||
One year or less (including restricted cash of $20) | $ 4,775 | |
One year through two years | 1,931 | |
Two years through three years | 1,743 | |
Three years through four years | 296 | |
Four years through five years | 451 | |
Estimated Fair Value | 9,196 | |
Restricted cash | 19 | |
Short-term Investments | ||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 4,754 | $ 5,285 |
Gross Unrealized Gains | 23 | 49 |
Gross Unrealized Losses | (2) | (1) |
Estimated Fair Value | 4,775 | 5,333 |
Short-term Investments | Restricted cash | ||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 20 | 19 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 20 | 19 |
Short-term Investments | Corporate debt securities | ||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 4,670 | 5,203 |
Gross Unrealized Gains | 19 | 44 |
Gross Unrealized Losses | (2) | (1) |
Estimated Fair Value | 4,687 | 5,246 |
Short-term Investments | Government and agency securities | ||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 64 | 63 |
Gross Unrealized Gains | 4 | 5 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 68 | 68 |
Long-term Investments | ||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 4,411 | 3,848 |
Gross Unrealized Gains | 18 | 15 |
Gross Unrealized Losses | (8) | (12) |
Estimated Fair Value | 4,421 | 3,851 |
Long-term Investments | Corporate debt securities | ||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 4,411 | 3,848 |
Gross Unrealized Gains | 18 | 15 |
Gross Unrealized Losses | (8) | (12) |
Estimated Fair Value | 4,421 | $ 3,851 |
Non-US | Subsidiary | Corporate debt securities | ||
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Gross Unrealized Losses | (20) | |
Estimated Fair Value | $ 711 |
Investments - Available-For-S38
Investments - Available-For-Sale Securities - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Investments [Abstract] | ||
Investment securities in a continuous loss position for greater than 12 months, estimated fair value | $ 27 | $ 123 |
Investments - Cost and Equity M
Investments - Cost and Equity Method Investments (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Long-term Investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Cost and equity method investments | $ 119 | $ 118 |
Fair Value Measurement of Ass40
Fair Value Measurement of Assets and Liabilities - Financial Assets and Liabilities Measured at Fair Value, Recurring (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Derivatives | $ 107 | $ 154 |
Liabilities: | ||
Derivatives | 1 | |
Short-term Investments | ||
Assets: | ||
Investments | 4,775 | 5,333 |
Long-term Investments | ||
Assets: | ||
Investments | 4,421 | 3,851 |
Restricted cash | Short-term Investments | ||
Assets: | ||
Investments | 20 | 19 |
Corporate debt securities | Short-term Investments | ||
Assets: | ||
Investments | 4,687 | 5,246 |
Corporate debt securities | Long-term Investments | ||
Assets: | ||
Investments | 4,421 | 3,851 |
Government and agency securities | Short-term Investments | ||
Assets: | ||
Investments | 68 | 68 |
Recurring | ||
Assets: | ||
Cash and cash equivalents | 1,979 | 1,816 |
Total financial assets | 11,282 | 11,154 |
Recurring | Short-term Investments | ||
Assets: | ||
Investments | 4,775 | 5,333 |
Recurring | Other Current Assets | ||
Assets: | ||
Derivatives | 107 | 154 |
Recurring | Long-term Investments | ||
Assets: | ||
Investments | 4,421 | 3,851 |
Recurring | Other Current Liabilities | ||
Liabilities: | ||
Derivatives | 33 | 48 |
Recurring | Restricted cash | Short-term Investments | ||
Assets: | ||
Investments | 20 | 19 |
Recurring | Corporate debt securities | Short-term Investments | ||
Assets: | ||
Investments | 4,687 | 5,246 |
Recurring | Corporate debt securities | Long-term Investments | ||
Assets: | ||
Investments | 4,421 | 3,851 |
Recurring | Government and agency securities | Short-term Investments | ||
Assets: | ||
Investments | 68 | 68 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash and cash equivalents | 1,979 | 1,816 |
Total financial assets | 1,999 | 1,835 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term Investments | ||
Assets: | ||
Investments | 20 | 19 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Current Assets | ||
Assets: | ||
Derivatives | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Long-term Investments | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Current Liabilities | ||
Liabilities: | ||
Derivatives | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Restricted cash | Short-term Investments | ||
Assets: | ||
Investments | 20 | 19 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities | Short-term Investments | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities | Long-term Investments | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Government and agency securities | Short-term Investments | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Total financial assets | 9,283 | 9,319 |
Recurring | Significant Other Observable Inputs (Level 2) | Short-term Investments | ||
Assets: | ||
Investments | 4,755 | 5,314 |
Recurring | Significant Other Observable Inputs (Level 2) | Other Current Assets | ||
Assets: | ||
Derivatives | 107 | 154 |
Recurring | Significant Other Observable Inputs (Level 2) | Long-term Investments | ||
Assets: | ||
Investments | 4,421 | 3,851 |
Recurring | Significant Other Observable Inputs (Level 2) | Other Current Liabilities | ||
Liabilities: | ||
Derivatives | 33 | 48 |
Recurring | Significant Other Observable Inputs (Level 2) | Restricted cash | Short-term Investments | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | Short-term Investments | ||
Assets: | ||
Investments | 4,687 | 5,246 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | Long-term Investments | ||
Assets: | ||
Investments | 4,421 | 3,851 |
Recurring | Significant Other Observable Inputs (Level 2) | Government and agency securities | Short-term Investments | ||
Assets: | ||
Investments | $ 68 | $ 68 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Jul. 31, 2014 | |
Derivative [Line Items] | ||
Net derivative gains to be reclassified into earnings within the next 12 months | $ 21 | |
Offset asset | 31 | |
Offset liability | 31 | |
Net derivative assets | 59 | |
Net derivative liabilities | $ 1 | |
Foreign Exchange Contract | Designated as Hedging Instrument | Minimum | ||
Derivative [Line Items] | ||
Derivative contract duration | 1 month | |
Foreign Exchange Contract | Designated as Hedging Instrument | Maximum | ||
Derivative [Line Items] | ||
Derivative contract duration | 1 year | |
Foreign Exchange Contract | Designated as Hedging Instrument | Maximum | Cash Flow Hedging | ||
Derivative [Line Items] | ||
Derivative contract duration | 18 months | |
Interest Rate Swap | Designated as Hedging Instrument | Fair Value Hedging | ||
Derivative [Line Items] | ||
Derivative liability | $ 2,400 | $ 2,400 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Contracts (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 107 | $ 154 |
Derivative liabilities | 33 | 48 |
Total fair value of derivative instruments | 74 | 106 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Assets | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 48 | 67 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Liabilities | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 4 | 3 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 43 | 64 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 29 | 45 |
Interest Rate Contract | Designated as Hedging Instrument | Other Assets | Fair Value Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 16 | $ 23 |
Derivative Instruments - Deriva
Derivative Instruments - Derivatives in Accumulated Other Comprehensive Income (Details) - Designated as Hedging Instrument - Foreign Exchange Contract - Cash Flow Hedging - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effect of derivative Contracts on Accumulated Other Comprehensive Income | ||
Beginning balance | $ 54 | $ 36 |
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) | (14) | 19 |
Amount of Gain (Loss) Reclassified From AOCI to Earnings (Effective Portion) | 20 | 16 |
Ending balance | $ 20 | $ 39 |
Derivative Instruments - Effect
Derivative Instruments - Effect of Derivative Contracts on Condensed Consolidated Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Foreign Exchange Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income | $ 16 | $ 14 |
Foreign Exchange Contract | Cost of Net Revenues and Operating Expenses | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income | 7 | 4 |
Foreign Exchange Contract | Interest and Other, Net | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income | 13 | 12 |
Foreign Exchange Contract | Interest and Other, Net | Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income | (4) | (2) |
Interest Rate Contract | Interest and Other, Net | Designated as Hedging Instrument | Fair Value Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net | (7) | 63 |
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net | 7 | (63) |
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income | $ 0 | $ 0 |
Derivative Instruments - Notion
Derivative Instruments - Notional Amounts of Derivatives Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Mar. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 7,109 | $ 6,593 |
Foreign Exchange Contract | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 1,502 | 1,200 |
Foreign Exchange Contract | Designated as Hedging Instrument | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 96 | 0 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 3,111 | 2,993 |
Interest Rate Contract | Designated as Hedging Instrument | Fair Value Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 2,400 | $ 2,400 |
Debt - Carrying Value of Outsta
Debt - Carrying Value of Outstanding Debt (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Debt Instrument [Line Items] | |||
Total senior notes | $ 9,000 | $ 9,000 | |
Hedge accounting fair value adjustments | 16 | 23 | |
Unamortized discount and debt issuance costs | (60) | (64) | |
Less: Current portion of long-term debt | 2,200 | 1,450 | |
Total long-term debt | 6,756 | 7,509 | |
Current portion of long-term debt | (2,200) | (1,450) | |
Unamortized discount and debt issuance costs | (2) | (1) | |
Other indebtedness | 12 | 2 | |
Total short-term debt | 2,210 | 1,451 | |
Total Debt | 8,966 | 8,960 | |
Senior Notes | Floating rate, Senior notes due 2017 | |||
Debt Instrument [Line Items] | |||
Total senior notes | $ 450 | $ 450 | |
Effective interest rate | 1.372% | 1.223% | |
Senior Notes | Floating rate, Senior notes due 2017 | LIBOR | |||
Debt Instrument [Line Items] | |||
Coupon rate, variable rate notes | 0.20% | ||
Senior Notes | Floating rate, Senior notes due 2019 | |||
Debt Instrument [Line Items] | |||
Total senior notes | $ 400 | $ 400 | |
Effective interest rate | 1.60% | 1.46% | |
Senior Notes | Floating rate, Senior notes due 2019 | LIBOR | |||
Debt Instrument [Line Items] | |||
Coupon rate, variable rate notes | 0.48% | ||
Senior Notes | 1.350% Senior notes due 2017 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 1.35% | ||
Total senior notes | $ 1,000 | $ 1,000 | |
Effective interest rate | 1.456% | 1.456% | |
Senior Notes | 2.500% Senior notes due 2018 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 2.50% | 2.50% | |
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 2.775% | 2.775% | |
Senior Notes | 2.200% Senior notes due 2019 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 2.20% | ||
Total senior notes | $ 1,150 | $ 1,150 | |
Effective interest rate | 2.346% | 2.346% | |
Senior Notes | 3.250% Senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 3.25% | ||
Total senior notes | $ 500 | $ 500 | |
Effective interest rate | 3.389% | 3.389% | |
Senior Notes | 2.875% Senior notes due 2021 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 2.875% | ||
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 2.993% | 2.993% | |
Senior Notes | 3.800% Senior notes due 2022 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 3.80% | 3.80% | |
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 3.989% | 3.989% | |
Senior Notes | 2.600% Senior notes due 2022 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 2.60% | ||
Total senior notes | $ 1,000 | $ 1,000 | |
Effective interest rate | 2.678% | 2.678% | |
Senior Notes | 3.450% Senior notes due 2024 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 3.45% | ||
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 3.531% | 3.531% | |
Senior Notes | 4.000% Senior notes due 2042 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 4.00% | ||
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 4.114% | 4.114% | |
Senior Notes | 6.000% Senior notes due 2056 | |||
Debt Instrument [Line Items] | |||
Coupon rate, fixed rate notes | 6.00% | 6.00% | |
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 6.547% | 6.547% |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Jul. 31, 2014 | |
Interest Rate Swap | Designated as Hedging Instrument | Fair Value Hedging | ||||
Debt Instrument [Line Items] | ||||
Derivative liability | $ 2,400 | $ 2,400 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage, in the event of change of control | 101.00% | |||
Interest expense | 68 | $ 50 | ||
Fair value of long-term debt | $ 9,000 | $ 8,900 | ||
Senior Notes | 2.500% Senior notes due 2018 | ||||
Debt Instrument [Line Items] | ||||
Coupon rate, fixed rate notes | 2.50% | 2.50% | ||
Senior Notes | 3.800% Senior notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Coupon rate, fixed rate notes | 3.80% | 3.80% | ||
Senior Notes | 6.000% Senior notes due 2056 | ||||
Debt Instrument [Line Items] | ||||
Coupon rate, fixed rate notes | 6.00% | 6.00% | ||
Redemption price, percentage | 100.00% |
Debt - Commercial Paper and Cre
Debt - Commercial Paper and Credit Agreement (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Commercial Paper | |
Debt Instrument [Line Items] | |
Amount outstanding | $ 0 |
Commercial Paper | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Borrowing capacity reserved, commercial paper | $ 1,500,000,000 |
Commercial Paper | Maximum | |
Debt Instrument [Line Items] | |
Debt term | 397 days |
Unsecured Debt | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Commercial paper program | $ 1,500,000,000 |
Amount outstanding | 0 |
Maximum borrowing capacity | 2,000,000,000 |
Remaining borrowing capacity | $ 500,000,000 |
Bank Overdrafts | |
Debt Instrument [Line Items] | |
Interest rate per annum | 9.10% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Billions | Mar. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Pooling arrangement withdrawals | $ 1.1 |
Pooling arrangement deposits | $ 1.1 |
Stockholders_ Equity - Addition
Stockholders’ Equity - Additional Information (Details) | 1 Months Ended |
Jul. 31, 2016USD ($) | |
Stock Repurchase Program July 2016 | |
Equity, Class of Treasury Stock [Line Items] | |
Authorization of additional plan | $ 2,500,000,000 |
Stockholders_ Equity - Summary
Stockholders’ Equity - Summary of Stock Repurchase Activity (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Equity [Abstract] | |
Shares Repurchased | shares | 10,000,000 |
Average Price per Share (in usd per share) | $ / shares | $ 33.65 |
Value of Shares Repurchased | $ 350 |
Shares Repurchased, Remaining Amount Authorized | |
Beginning balance | 1,336 |
Repurchase of shares of common stock | (350) |
Ending balance | $ 986 |
Treasury shares retired | shares | 0 |
Employee Benefit Plans - Restri
Employee Benefit Plans - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) shares in Millions | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Units | |
Outstanding, beginning of period (in shares) | 44 |
Awarded and assumed (in shares) | 1 |
Vested (in shares) | (2) |
Forfeited (in shares) | (2) |
Outstanding, end of period (in shares) | 41 |
Weighted average grant date fair value (in usd per share) | $ / shares | $ 31.78 |
Employee Benefit Plans - Stock-
Employee Benefit Plans - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 101 | $ 88 |
Cost of net revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 11 | 7 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 21 | 21 |
Product development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 36 | 31 |
Capitalized in product development | 3 | 3 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 33 | $ 29 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Tax benefit due to step-up in tax basis of foreign assets | $ 695 |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income - Changes in Accumulated Balances of Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Tax | ||
Accumulated other comprehensive income (loss), estimated tax (expense) benefit, beginning balance | $ 1 | $ (310) |
Other comprehensive income (loss) before reclassifications, tax | 12 | (21) |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, tax | 0 | 0 |
Net current period other comprehensive income, tax | 12 | (21) |
Accumulated other comprehensive income (loss), estimated tax (expense) benefit, ending balance | 13 | (331) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 10,539 | |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income | 32 | 11 |
Other comprehensive income (loss), net of tax | 289 | 159 |
Ending balance | 11,595 | |
Unrealized Gains (Losses) on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss), Before Tax | ||
Accumulated other comprehensive income (loss), before tax, beginning balance | 54 | 36 |
Other comprehensive income (loss), before reclassifications, before tax | (14) | 19 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 20 | 16 |
Net current period other comprehensive income, before tax | (34) | 3 |
Accumulated other comprehensive income (loss), before tax, ending balance | 20 | 39 |
Unrealized Gains on Investments | ||
Accumulated Other Comprehensive Income (Loss), Before Tax | ||
Accumulated other comprehensive income (loss), before tax, beginning balance | 51 | 845 |
Other comprehensive income (loss), before reclassifications, before tax | (8) | 18 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 12 | (5) |
Net current period other comprehensive income, before tax | (20) | 23 |
Accumulated other comprehensive income (loss), before tax, ending balance | 31 | 868 |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Before Tax | ||
Accumulated other comprehensive income (loss), before tax, beginning balance | (230) | (45) |
Other comprehensive income (loss), before reclassifications, before tax | 331 | 154 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 0 | 0 |
Net current period other comprehensive income, before tax | 331 | 154 |
Accumulated other comprehensive income (loss), before tax, ending balance | 101 | 109 |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | (124) | 526 |
Other comprehensive income (loss) before reclassifications | 321 | 170 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income | 32 | 11 |
Other comprehensive income (loss), net of tax | 289 | 159 |
Ending balance | $ 165 | $ 685 |
Accumulated Other Comprehensi56
Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of net revenues | $ 515 | $ 477 |
Sales and marketing | 562 | 538 |
Product development | 278 | 239 |
General and administrative | 245 | 209 |
Interest and other, net | 12 | (23) |
Income before income taxes | 558 | 591 |
Provision for income taxes | 477 | (109) |
Net income | 1,035 | 482 |
Total reclassifications for the period | 32 | 11 |
Reclassification out of Accumulated Other Comprehensive Income | Gains (losses) on cash flow hedges - foreign exchange contracts | Foreign Exchange Contract | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of net revenues | 2 | 2 |
Sales and marketing | 1 | 0 |
Product development | 3 | 2 |
General and administrative | 1 | 0 |
Interest and other, net | 13 | 12 |
Income before income taxes | 20 | 16 |
Provision for income taxes | 0 | 0 |
Net income | 20 | 16 |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized gains (losses) on investments | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest and other, net | 12 | (5) |
Income before income taxes | 12 | (5) |
Provision for income taxes | 0 | 0 |
Net income | $ 12 | $ (5) |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | Apr. 01, 2017USD ($) |
Subsequent Event | eBay.in Business | |
Subsequent Event [Line Items] | |
Disposal consideration | $ 500 |