Q3 2013 Financial Highlights

Q3 2013 Financial Highlights

October 16, 2013

• This presentation contains non-GAAP measures relating to the company's performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in the appendix at the end of this presentation. All growth rates represent year-over-year comparisons, except as otherwise noted. • This presentation contains forward-looking statements relating to our future performance that are based on our current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the fourth quarter and full year 2013 and future growth in the Payments, Marketplaces and Enterprise businesses. • Our actual results may differ materially from those included in this presentation for a variety of reasons, including, but not limited to: changes in political, business, and economic conditions, including any continuing U.S. government shutdown or default; foreign exchange rate fluctuations; our need to successfully react to the increasing importance of mobile payments and mobile commerce and the social aspect of commerce; an increasingly competitive environment for our businesses; the complexity of managing an increasingly large enterprise with a broad range of businesses; our need to manage regulatory, tax and litigation risks (including risks specific to PayPal and Bill Me Later); our need to timely upgrade and develop our technology systems, infrastructure, and customer service capabilities at reasonable cost while maintaining site stability and performance and adding new products and features; and our ability to integrate, manage and grow businesses recently acquired or that may be acquired in the future. • You can find more information about factors that could affect our operating results in our most recent annual report on Form 10-K and our subsequent quarterly reports on Form 10-Q (available at http://investor.ebayinc.com). You should not rely on any forward-looking statements, and we assume no obligation to update them. All information in this presentation is as of October 16, 2013, and we do not intend, and undertake no duty, to update this presentation.


2

eBay Inc. Q3 2013 Financial Highlights • Strong third quarter results – Enabled Commerce Volume (ECV*) of $52B (up 21%)… eBay Inc. take rate** of 7.6%

– Revenue grew 14%. Non-GAAP EPS of $0.64, up 17% – Generated $1,017M of free cash flow – Double digit active user growth at both PayPal and Marketplaces – Announced agreement to acquire Braintree for $800M; received $485M from the sale of investments in ShopRunner and RueLaLa, and repayment of the Kynetic note receivable

• We are maintaining our full year guidance, and expect to be at the lower end of the range for top and bottom line† *Enabled Commerce Volume (ECV) includes Marketplaces GMV, PayPal Merchant Services TPV and eBay Enterprise Merchandise Sales not earned on eBay or paid for via PayPal or Bill Me Later during the period. Excludes volume transacted through the Magento platform **eBay Inc. take rate is calculated as eBay Inc. Revenue / ECV †As adjusted for the expected impact of the Braintree acquisition announced on September 26, 2013 (assuming closing in late Q4-13) Calculations of Non-GAAP EPS and Free Cash Flow (FCF) are included in the Appendix of this presentation


3

eBay Inc. Enabled Commerce Volume ($ millions)

Enabled Commerce Volume* 50,185

41,906

48,795

50,597

51,507

42,593

Mobile leader: 75% growth in mobile ECV, 3.2M new customers added via mobile Global reach: 22% of ECV cross-border; PayPal localized in Russia; eBay Fashion app launched in Brazil; Global Shipping Program expanded to 37 countries Omnichannel expansion: Enhanced PayPal app rolled out in 125 countries, and order ahead live in 4 countries; Click & Collect announced in U.K.

Q2 12

Reported Y/Y Growth Fx-Neutral Y/Y Growth Take Rate**

15% 19% 8.1%

Q3 12

16% 19% 8.0%

Q4 12

21% 21% 8.0%

Q1 13

19% 19% 7.7%

Q2 13

Q3 13

21% 21% 7.7%

21% 21% 7.6%

Engagement: >500M items listed on Marketplaces globally; free 2 day shipping pilot at 9 eBay Enterprise clients when paying with PayPal

*Enabled Commerce Volume (ECV) includes Marketplaces GMV, PayPal Merchant Services TPV and eBay Enterprise Merchandise Sales not earned on eBay or paid for via PayPal or Bill Me Later during the period. Excludes volume transacted through the Magento platform **eBay Inc. take rate is calculated as eBay Inc. Revenue / ECV


4

eBay Inc. Revenue ($ millions)

Revenue 3,992

2,760

Q2 11

3,748

3,877

3,892

3,380

3,277

3,398

3,404

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

2,966

Q3 11

Reported Y/Y Growth

25%

32%

35%

29%

23%

15%

18%

14%

14%

14%

Organic Y/Y Growth*

18%

18%

19%

18%

18%

18%

19%

15%

15%

14%

*Calculation of Organic Y/Y Growth is included in the Appendix of this presentation


5

eBay Inc. Non-GAAP EPS Non-GAAP EPS* $0.70

$0.60

Reported Y/Y Growth Non-GAAP Op. Margin*

$0.48

$0.48

Q2 11

Q3 11

Q4 11

$0.63

$0.63

$0.64

$0.55

$0.56

$0.55

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

20%

20%

17%

18%

16%

14%

17%

14%

12%

17%

27.6%

25.3%

28.7%

26.9%

27.3%

26.3%

28.5%

27.4%

26.3%

26.8%

*Calculations of Non-GAAP EPS and Non-GAAP Op. Margin are included in the Appendix of this presentation


6

eBay Inc. Free Cash Flow ($ millions)

Free Cash Flow* 1,090

1,017

792 691

543

638

658

526 411 289

Q2 11

Q3 11

Reported Y/Y Growth

5%

-9%

Capex % of Revenue

9%

FCF % of Revenue

20%

Q4 11

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

5%

-48%

-24%

51%

58%

121%

60%

28%

10%

9%

7%

10%

11%

7%

8%

9%

8%

18%

20%

9%

12%

23%

27%

17%

17%

26%

*Calculation of Free Cash Flow (FCF) is included in the Appendix of this presentation


7

Payments Revenue ($ millions)

123

Revenue 149

127

1,435

1,475

1,493

109

114

1,431

102

Marketing Services & Other Revenue

Transaction Revenue

$ Millions Y/Y Growth Fx-Neutral Y/Y Growth % Int'l

1,234

1,264

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

1,357 26% 27% 51%

1,367 23% 24% 51%

1,541 24% 24% 52%

1,548 18% 20% 51%

1,624 20% 21% 51%

1,620 19% 20% 52%

Reflects reclassification of a portion of Marketing Services & Other (MS&O) revenue from International to the U.S. for Q4’11-Q4’12


8

Payments Operating Metrics (In millions, except %) Global Active Accounts Y/Y Growth

Q2 12 113.2 13%

Q3 12 117.4 14%

Q4 12 122.7 15%

Q1 13 127.7 16%

Q2 13 132.4 17%

Q3 13 137.4 17%

564.8 31%

589.2 28%

691.7 26%

681.6 23%

700.6 24%

729.4 24%

11,336 15% 18% 23,114 23% 26% 34,451 20% 23% 47%

11,455 15% 18% 23,704 23% 26% 35,159 20% 23% 47%

13,444 18% 18% 28,026 28% 28% 41,471 24% 25% 48%

12,953 13% 14% 28,087 25% 26% 41,040 21% 22% 47%

13,006 15% 15% 29,807 29% 29% 42,813 24% 25% 48%

13,112 14% 15% 30,725 30% 30% 43,837 25% 25% 48%

Global On eBay Penetration Rate

75.6%

76.6%

76.6%

76.9%

77.2%

78.2%

Take Rate Transaction Expense Loss Rate Transaction Margin**

3.94% 1.07% 0.26% 66.3%

3.89% 1.07% 0.30% 64.8%

3.72% 1.03% 0.28% 64.7%

3.77% 1.05% 0.29% 64.4%

3.79% 1.04% 0.31% 64.4%

3.70% 1.05% 0.30% 63.4%

Payments Segment Margin

25.8%

22.6%

23.0%

24.1%

23.0%

22.7%

Net Number of Payments Y/Y Growth On eBay TPV Y/Y Growth Fx-Neutral Y/Y Growth Merchant Services TPV* Y/Y Growth Fx-Neutral Y/Y Growth Total TPV Y/Y Growth Fx-Neutral Y/Y Growth % Int'l TPV

Expanded merchant coverage online, added 3 new Internet Retailer 100 clients in the U.S. and 7 in Europe

Innovated in omnichannel with enhanced mobile app; enabling closed loop offers; PayPal Here U.K. Chip & PIN launch; and partnerships with TSYS and MICROS Segment margin up due primarily to operating expense leverage partially offset by lower take rate from large merchant mix, foreign currency hedges, and lower cross-currency transaction growth

*Merchant Services TPV includes TPV for Bill Me Later (whether used within or outside of the PayPal wallet) and Zong **Transaction Margin calculation has been adjusted to include total revenues (including revenue from credit and Zong), less transaction expense (including credit cost of funds), less transaction loss (including credit loan losses), divided by global take rate (based on global total revenues divided by total TPV)


9

Credit Operating Metrics Portfolio Balance: $2.6B* BML Growth

BML Share of U.S. GMV & TPV**

30%

3,000 Portfolio Balance ($M)

2,500

20%

2,000 Risk Adj. Margin***

10%

5%

BML Offshore Funded Portfolio 2,000

BML Share of US Addressable GMV

4%

1,600 1,400

BML Share of US Addressable GMV & MS TPV

3%

1,200

80% % Offshore

60%

1,000

1,500

2%

800

1,000

500

100%

Offshore funded loan receivable bal ($M)

1,800

40%

600 BML Share of MS TPV

1%

400

20%

200 0%

0 Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

0%

Q3 13

0

Q2 12

Strong growth…Good margins

Q3 12

Q4 12

Q1 13

Q2 13

0% Q2 12

Q3 13

Improved funding mix

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Increasing returns to offshore cash

Credit Operating Metrics BML TPV ($M) BML TPV (Y/Y growth)

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

696

775

1,034

849

934

1,009

39%

37%

31%

34%

31%

30%

Portfolio Balance ($M)

1,692

1,878

2,261

2,258

2,391

2,564

Risk Adjusted Margin†

15.5%

16.5%

15.6%

15.8%

16.2%

16.1%

Net Charge-offs

4.6%

4.9%

5.3%

5.3%

5.6%

5.5%

*Gross receivables balance as of 9/30/13 **% of US Marketplaces GMV and Merchant Services TPV funded using Bill Me Later (excluding Bill Me Later legacy business) †Risk adjusted margin represents the annualized ratio of Bill Me Later revenue, excluding contra-revenue incentives to customers or merchants, less cost of funds less net credit and fraud losses relative to average loans receivable for the three month period


10

Marketplaces Revenue ($ millions)

Revenue 378

349

364

359

1,672

1,608

1,637

1,668

Q1 13

Q2 13

Q3 13

323

316

1,491

1,490

Q2 12

Q3 12

Q4 12

1,814 9% 14% 60%

1,806 9% 13% 58%

2,050 16% 16% 59%


Transaction Revenue

$ Millions Y/Y Growth Fx-Neutral Y/Y Growth % Int'l

1,957 13% 13% 59%

2,001 10% 10% 59%

2,027 12% 12% 58%


11

Marketplaces Operating Metrics (In millions, except percentages) Global Active Users Y/Y Growth Y/Y Growth in Sold Items

Q2 12 104.8 8%

Q3 12 108.3 10%

Q4 12 112.3 12%

Q1 13 116.2 13%

Q2 13 119.7 14%

Q3 13 123.6 14%

EU and Korea stabilized, with deterioration in the U.S. GMV growth driven primarily by mobile, and improved customer experience

19.7%

19.0%

17.4%

11.7%

11.3%

11.4%

US Non-Vehicles GMV Y/Y Growth Int'l Non-Vehicles GMV Y/Y Growth Fx-Neutral Y/Y Growth Non-Vehicles GMV Y/Y Growth Fx-Neutral Y/Y Growth

6,241 14% 9,930 8% 16% 16,171 10% 15%

6,479 16% 9,801 8% 15% 16,281 11% 15%

7,338 19% 11,767 14% 14% 19,105 16% 16%

7,364 16% 10,962 11% 11% 18,326 13% 13%

7,266 16% 11,026 11% 11% 18,292 13% 13%

7,420 15% 10,940 12% 11% 18,360 13% 12%

Vehicles GMV Y/Y Growth Fx-Neutral Y/Y Growth

2,021 -10% -7%

1,994 -7% -5%

1,727 -7% -8%

1,686 -10% -10%

1,805 -11% -10%

1,765 -11% -11%

Fixed price as a % of GMV Marketplaces Segment Margin

65%

66%

68%

68%

69%

71%

39.6%

39.0%

41.5%

42.1%

39.7%

38.9%

• Expanded selection via seller improvements • Improved trust with top rated seller coverage • Free shipping on 54% of U.S. transactions • Improved search experience through Cassini Segment margin down driven primarily by investments in trust and technology partially offset by operating expense leverage


12

eBay Enterprise Revenue & Operating Metrics ($ millions)

Revenue/Metrics Revenue growth impacted by take rate alignment, client mix, and channel mix

65


Transaction Revenue

Total Revenue Y/Y Growth Merchandise Sales* Y/Y Growth Same Store Sales (SSS) Y/Y Growth

Segment Margin

52

55

50

52

53

186

193

185

334 169

171

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

221 9% 674 18% 21% 4.7%

226 12% 698 16% 19% 6.1%

398 10% 1,569 15% 17% 20.3%

236 0% 807 13% 16% 2.8%

246 11% 815 21% 19% 4.4%

238 5% 787 13% 13% 5.0%

4 brands on the new platform in Q3, and new client Sony live on 10/11 Leveraging eBay Inc. assets • PayPal: 97% of volume covered by PayPal, with 15% share of checkout; 5 clients offering PayPal POS • Marketplaces: 27 client sites live

*Merchandise Sales represents the retail value of all sales transactions, inclusive of freight charges and net of allowances for returns and discounts, which flow through our eBay Enterprise Commerce Technologies, whether we record the full amount of such transaction as a product sale or a net amount of such transaction as a service fee Reconciliation of eBay Enterprise revenue / operating metrics to amounts reported in eBay Inc.’s financial statements can be found in the Appendix of this presentation


13

eBay Inc. Operating Expenses* Sales & Marketing

Product Development

General & Admin.

(% of Revenue)

(% of Revenue)

(% of Revenue)

Prov. for Trxn and Loan Loss** (% of Revenue)

20.3%

18.4%

10.4%

Q3 12

Q3 13

Shift in spend & marketing efficiencies

Q3 12

10.1%

Q3 13

Product & customer experience investments

9.6%

Q3 12

9.3%

Q3 13

Operating leverage

4.3%

4.7%

Q3 12

Q3 13

Marketplaces trust initiatives & PayPal TPV growing faster than eBay Inc. revenue

Q3-13 Non-GAAP Op Income: $1,040M Q3-13 Non-GAAP Net Income: $837M *All expenses are shown on a Non-GAAP basis (calculations can be found in the Appendix of this presentation) **Prov. for Trxn and Loan Loss includes Marketplaces and PayPal transaction loss, Marketplaces consumer protection programs, bad debt expense and BML loan loss Calculations of Non-GAAP Operating Income and Non-GAAP Net Income are included in the Appendix of this presentation


14

eBay Inc. Cash Flow & Capital Allocation ($ billions)

Cash Balance/Flows

Free Cash Flow / Other Movements

13.0

11.7

0.1 1.0

0.6

0.2

4.9

Generated FCF† of $1,017M

•

$485M from divestiture of ShopRunner & RueLaLa investments, and repayment of Kynetic note receivable

•

Capex ~8% driven by search/data investments and site operations

•

Repurchased 2.8M shares for ~$146M

•

67% of BML loan receivables portfolio funded with offshore cash

•

Total US cash and non-equity investments at quarter end ~$3.9B

7.7

Short/Long-Term Investments Int'l Cash

5.7

3.2

US Cash

2.1

1.1 Q2'13 Ending Balance*

•

FCF

Buyback

BML

Other**

Q3'13 Ending Balance*

*Cash balances/flows include cash, cash equivalents and non-equity investments **Other includes primarily FX impact, employee stock plans, and acquisitions/divestitures †Calculation of Free Cash Flow is included in the Appendix of this presentation


15

Guidance Context • Macro environment…Europe and APAC mostly stable…U.S. weaker with cautious outlook for Holiday season

• Currency…the U.S. Dollar has weakened since July vs. the British Pound and Euro…positive impact to topline, but no impact to bottom line due to hedging • Investments/operating leverage… ─ We expect a $0.01 dilution to Non-GAAP EPS from the anticipated closing of the Braintree acquisition in late Q4

─ We expect to increase spend through our eBay Enterprise/PayPal free shipping pilot to drive higher conversion for merchants and increase share of checkout for PayPal ─ Strong operating leverage…Q3 momentum carries into Q4 Calculation of Non-GAAP EPS is included in the Appendix of this presentation


16

Q4 Guidance Q4 2013 Guidance**

Low

High

$4.50

$4.60

Y/Y Growth

13%

15%

Non-GAAP EPS*

$0.79

$0.81

12%

15%

Revenue (in billions)

Y/Y Growth

We are maintaining our full year guidance, and expect to be at the lower end of the range for top and bottom line†

*Calculation of Non-GAAP EPS is included in the Appendix of this presentation **Assumes closing of Braintree acquisition in late Q4-13 †As adjusted for the expected impact of the Braintree acquisition announced on September 26, 2013 (assuming closing in late Q4-13)


17

Summary • Strong quarter for our core businesses… while continuing to test and learn in “adjacencies” (MS&O, credit) and “seeds” (local, geographic expansion, omnichannel) • PayPal continues its strong growth… increasing focus on simplifying and improving customer experience • Marketplaces is stable in deteriorating U.S. environment… driven by investments in the buyer and seller experience • eBay Enterprise… continues to position its assets for growth, invest in technology and grow the client portfolio • Investing for long-term… focused on delivering omnichannel technology and commerce solutions to a larger addressable market


18

Q&A

Appendix

eBay Inc. RoIC Return on Invested Capital* 25.3% 24.5%

23.9%

23.7% 23.0%

Q2 11

Q3 11

Q4 11

Q1 12

22.2%

22.2%

Q2 12

Q3 12

22.5%

Q4 12

22.9%

Q1 13

23.2%

Q2 13

Q3 13

*Trailing 12-month Pro-Forma Net Operating Profits After Tax / (Average Total Assets – 95% of Average Cash, Cash Equivalents, and Investments - Average Current Liabilities) Calculation of Return on Invested Capital is included in the Appendix of this presentation


21

Marketplaces GMV Formats Fixed Price GMV

Auction GMV

Vehicles GMV

($ billions)

($ billions)

($ billions)

$13.7

$11.3

$13.1

$13.4

$13.9

$11.7

$4.8

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

16%

21%

18%

18%

19%

Y/Y Growth

16%

$5.2

$4.9

$4.5

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

20% 64%

-1%

0%

4%

2%

1%

-2%

21%

17%

18%

18%

4%

66%

67%

Strong performance ...

69%

27%

$2.0

$1.7

$1.7

$1.8

$1.8

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

-7%

-10%

-11%

-11%

4%

-8%

-10%

-10%

-11%

25%

8%

8%

9%

9%

-10%

-7%

FX-Neutral Y/Y Growth

5%

2%

1%

-3%

-7%

-5%

% of Total FX-Neutral GMV


66%

$2.0

Y/Y Growth



62%

$5.4

Y/Y Growth


20%

Q2 12

$4.6

26%

26%

24%

... Stable dollar volume as shift continues to fixed price ...

22%

11%

11%

... Shifting from GMV to lead gen model


22

Calculation of Organic Revenue Growth Mar 31,

Jun 30,

Sept 30,

Dec 31,

2011

2011

2011

2011

Total revenue growth

16 %

25 %

32 %

35 %

Acquisition/Disposition impact

(1)%

(2)%

(11)%

(16)%

Foreign currency impact

(1)%

(5)%

(3)%

—%

Total organic revenue growth

14 %

18 %

18 %

19 %


Mar 31,

Jun 30,

Sept 30,

Dec 31,

2012

2012

2012

2012

29 %

23 %

15 %

18 %

(11)%

(8)%

—%

1%


—%

3%

3%

—%


18 %

18 %

18 %

19 %


Mar 31,

June 30,

Sept 30,

2013

2013

2013


14 %

14 %

14 %


0.5 %

—%

—%


0.5 %

1%

—%


15 %

15 %

14 %


23

Reconciliation of Quarterly GAAP to Non-GAAP Operating Margin (in millions)

GAAP operating income (loss) Stock-based compensation expense and related employer payroll taxes Acquisition related transaction expense

$

Amortization of acquired intangible assets (1) Restructuring

Sept 30,

Dec 31,

Mar 31,

Jun 30,

Sept 30,

Dec 31,

Mar 31,

Jun 30,

Sept 30,

2011

2011

2012

2012

2012

2012

2013

2013

2013

537 $

754 $

653 $

695 $

667 $

874 $

800 $

750 $

799

110

112

125

129

125

130

129

168

141

—

1

—

—

—

—

—

—

—

104

105

105

103

103

101

100

101

100

—

—

—

—

—

31

(4)

—

—

Non-GAAP operating income

$

751 $

972 $

883 $

927 $

895 $

1,136 $

1,025 $

1,019 $

1,040

Revenues

$

2,966 $

3,380 $

3,277 $

3,398 $

3,404 $

3,992 $

3,748 $

3,877 $

3,892

GAAP operating margin

18.1 %

22.3 %

19.9 %

20.5 %

19.6 %

21.9 %

21.3 %

19.3 %

20.5 %

Non-GAAP operating margin

25.3 %

28.7 %

26.9 %

27.3 %

26.3 %

28.5 %

27.4 %

26.3 %

26.8 %

(1) Includes amortization of acquired intangible assets within cost of net revenues and operating expenses.


24

Reconciliation of Quarterly GAAP to Non-GAAP Net Income / EPS (in millions, except per share data)

GAAP net income

$

Stock-based compensation expense and related employer payroll taxes Acquisition related transaction expense Amortization of acquired intangible assets (1)

Sept 30,

Dec 31,

Mar 31,

Jun 30,

Sept 30,

Dec 31,

Mar 31,

Jun 30,

Sept 30,

2011

2011

2012

2012

2012

2012

2013

2013

2013

491 $

1,980 $

570 $

692 $

597 $

751 $

677 $

640 $

689

110

112

125

129

125

130

129

168

141

—

1

—

—

—

—

—

—

—

104

105

105

103

103

101

100

101

100

Restructuring

—

—

—

—

—

31

(4)

—

—

Skype sale and transaction related items

—

—

—

(2)

—

—

—

—

(1,664)

Amortization of intangibles and stockbased compensation for Skype

24

—

—

—

—

—

—

—

—

Gain from the acquisition of a business

(56)

—

—

—

—

—

—

—

—

Acquisition related items

—

—

—

—

—

(1)

—

—

—

Loss on divested business

—

—

3

—

—

—

—

—

—

Accretion of note receivable

(4)

(4)

(9)

(5)

(4)

(4)

(5)

(5)

(5)

Amortization of intangibles

—

—

—

—

—

—

2

2

2

Gain on sale of RueLaLa and ShopRunner

—

—

—

—

—

—

—

—

(75)

Gain on investment

—

—

—

—

—

—

—

(5)

Gain from the divestiture of a business

—

—

—

(118)

—

—

—

—

(101)

Income taxes associated with certain nonGAAP entries

—

(41)

259

(69)

(71)

(81)

(70)

(79)

(15)

Non-GAAP net income

$

628 $

789 $

725

730 $

718 $

927 $

829 $

822 $

837

Non-GAAP net income per diluted share

$

0.48 $

0.60 $

0.55

0.56 $

0.55 $

0.70 $

0.63 $

0.63 $

0.64

Shares used in non-GAAP diluted share calculation

1,309

1,308

1,308

1,309

1,314

1,318

1,319

1,313

1,310

(1) Includes amortization of acquired intangible assets within cost of net revenues and operating expenses.


25

Reconciliation of Quarterly GAAP to Non-GAAP Quarterly Statement of Income Reported

Three Months Ended

Three Months Ended

September 30, 2013

September 30, 2012

Non-GAAP Entries

Non-GAAP

Non-GAAP Entries

Reported

Non-GAAP

(in millions, except per share data and percentages) Net revenues

$

Cost of net revenues

3,892 1,224

$ (9) (a)

3,892 $

3,404

1,196

1,022

$

(19) (c)

Gross Profit

2,668

28

—

$

3,404

(13) (a)

989

(20) (c)

2,696

2,382

33

2,415

Operating expenses: Sales and marketing

755

(38) (a)

717

726

(35) (a)

691

Product development

433

(42) (a)

391

389

(34) (a)

355

General and administrative

415

(51) (a)

363

369

(40) (a)

326

(1) (b) Provision for transaction and loan losses Amortization of acquired intangible assets

185 81

185 (81) (c)

Total operating expense

1,869

(213)

Income from operations

799

241

Interest and other income, net

74

2

Accretion of note receivable Income before income taxes

873

Provision for income taxes

(184)

Net income

$

689

Basic

$

Diluted

$

(3) (b)

(r)

148

148

—

83

1,656

1,715

(195)

1,520

1,040

667

228

895

(4)

5

—

(1)

(83) (c)

(75) (t)

(2) (h)

(5) (m)

(4) (m)

163 (15) (d) 148

1,036

672

(199)

(75)

$

837 $

597

0.53

$

0.65 $

0.53

$

0.64 $

222

$

121

—

(a) Stock-based compensation expense (b) Employer payroll taxes on stock-based compensation (c) Amortization of acquired intangible assets and developed technology (d) Income taxes associated with certain non-GAAP entries

894

(101) (d)

Notes:

(176)

$

718

0.46

$

0.56

0.45

$

0.55

(h) Sale of Skype and transaction related items (i) Acquisition related transaction expense (j) Gain from the acquisition of a business

Net income per share:

Weighted average shares:

(k) Loss on divested business (m) Accretion of note receivable (p) Gain on the divestiture of a business

Basic

1,295

1,295

1,292

1,292

Diluted

1,310

1,310

1,314

1,314

Operating margin

21 %

6%

27 %

20 %

6%

26 %

Effective tax rate

21 %

(2)%

19 %

11 %

9%

20 %

(q) Fanatics lawsuit settlement (r) Intangible amortization (t) Gain on sale of RueLaLa and ShopRunner


26

Calculation of Free Cash Flow Three Months Ended Mar 31,

Jun 30,

Sept 30,

Dec 31,

Full Year

2011

2011

2011

2011

2011

(in millions) GAAP operating cash flow Purchases of property and equipment, net Free cash flow

$

700 $

783 $

809 $

983 $

3,274

$

(149) 551 $

(240) 543 $

(283) 526 $

(292) 691 $

(963) 2,311

Mar 31, 2012 GAAP operating cash flow Purchases of property and equipment, net Free cash flow

Three Months Ended Jun 30, Sept 30, 2012 2012 (in millions)

Dec 31, 2012

Full Year 2012

$

531 $

768

1,154

1,386

3,838

$

(242) 289 $

(357) 411

(362) 792

(296) 1,090

(1,257) 2,581

Three Months Ended Mar 31, Jun 30, Sept 30, 2013 2013 2013 (in millions) GAAP operating cash flow Purchases of property and equipment, net Free cash flow

$

937

1,011

1,334

$

(299) 638

(353) 658

(317) 1,017


27

Reconciliation and Calculation of Return on Invested Capital In millions, except percentages

Numerator components: Non-GAAP operating income

Q3'11 $

Tax rate Non-GAAP operating income after tax

Denominator components:

751

Q4'11 $

21 % $

594

972

Q1'12 $

20 % $

778

883

Q2'12 $

20 % $

705

927

$

24 % $

705

Q3'12

Q4'12

895

$ 1,136

20 % $

719

Q1'13 $

18 % $

929

1,025

Q2'13 $

20 % $

825

1,019

Q3'13 $ 1,040

19 % $

824

$

841

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Total assets Total cash, cash equivalents and investments

$24,901

$27,320

$28,207

$28,258

$32,502

$ 37,274

$ 38,000

$

38,550

$ 40,067

$ 7,031

$ 8,382

$ 8,732

$ 8,384

$11,635

$ 12,452

$ 12,574

$

12,944

$ 14,409

Current liabilities

$ 6,145

$ 6,734

$ 6,965

$ 6,800

$ 7,061

$ 11,066

$ 11,721

$

11,669

$ 12,028

TTM Non-GAAP operating income after tax

$ 2,491

$ 2,594

$ 2,691

$ 2,782

$ 2,906

$ 3,057

$

$

3,295

$ 3,418

TTM average total assets

3,177

Q2'13

19 %

Q3'13

22,938

24,413

25,653

26,704

28,238

30,712

32,808

34,877

37,238

TTM 95% of average cash, cash equivalents and investments

7,707

7,882

7,809

7,601

8,392

9,421

10,218

11,018

12,163

TTM average current liabilities

5,076

5,661

6,150

6,558

6,741

7,725

8,694

9,635

10,680

24.5 %

23.9 %

23.0 %

22.2 %

22.2 %

22.5 %

22.9 %

23.2 %

23.7 %

ROIC


28

Q4’13 GAAP and Non-GAAP Guidance

Three Months Ending December 31, 2013 (in millions, except per share amounts) Revenues Diluted EPS

GAAP

Non-GAAP (a)

$4,500 - $4,600

$4,500 - $4,600

$0.67 - $0.69

$0.79 - $0.81

(a) Estimated non-GAAP amounts above for the three months ending December 31, 2013, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $95-$105 million and estimated stock-based compensation expense and employer payroll taxes on stock-based compensation expense of approximately $145-$155 million as well as the related tax impact.


29

Reconciliation of eBay Enterprise Revenue & Operating Metrics All figures is US$ Millions

Q4'12

Merchandise Sales Volume: As reported in eBay Inc. financial statements Accounting adjustment Adjusted Merchandise Sales Volume

1,595 (26) 1,569

Merchandise Sales Volume y/y Growth: As reported in eBay Inc. financial statements

17%

Accounting adjustment

-2%

Adjusted Merchandise Sales Volume

15%

Same Store Sales (SSS) y/y Growth: As reported in eBay Inc. financial statements

19%

Accounting adjustment

-2%

Adjusted SSS y/y Growth

17%


30