Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT ON FORM 8-K - EBAY INC | d8k.htm |
| EX-2.2 - AMENDMENTS TO SHARE PURCHASE AGREEMENT - EBAY INC | dex22.htm |
| EX-99.1 - PRESS RELEASE - EBAY INC | dex991.htm |
Exhibit 99.2
eBay Inc.
Unaudited Pro Forma Financial Statement Information
On November 19, 2009, eBay Inc. (“eBay” or the “Company”) sold all of the share capital of Skype Luxembourg Holdings S.a.r.l., Skype Inc. and Sonorit Holdings, A.S. (collectively with their respective subsidiaries, the “Skype Companies”) to an entity organized and owned by an investor group led by Silver Lake and including Joltid Limited and certain of its affiliated parties, the Canada Pension Plan Investment Board and Andreessen Horowitz (the “Buyer”). The Company received cash proceeds of approximately $1.9 billion, a note from a subsidiary of the Buyer in the principal amount of $125.0 million and a 30 percent equity interest in the outstanding capital stock of the Buyer. The Company also purchased senior debt securities with a face value of $50.0 million as part of a Skype debt financing. We will account for the minority equity interest using the equity method of accounting.
The unaudited Pro Forma Condensed Consolidated Balance Sheet Information as of September 30, 2009 set forth below has been presented to give effect to the sale of the controlling interest in the Skype Companies as if it had occurred on September 30, 2009. The unaudited Pro Forma Condensed Consolidated Statements of Income for the year ended December 31, 2008 and the nine month period ended September 30, 2009 set forth below have been presented after giving effect to the sale as if it had occurred on January 1, 2008, and do not assume any interest income on cash proceeds.
The unaudited pro forma financial statements have been derived from the historical audited consolidated financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2008 and interim financial statements in its Quarterly Report on Form 10-Q for the period ended September 30, 2009. The unaudited pro forma financial statements are based upon available information and assumptions that the Company believes are reasonable under the circumstances and were prepared to illustrate the estimated effects of the sale.
The unaudited pro forma financial statements have been provided for informational purposes and should not be considered indicative of the financial condition or results of operations that would have been achieved had the sale occurred as of the periods presented. In addition, the unaudited pro forma financial statements do not purport to indicate balance sheet data or results of operations as of any future date or for any future period. The unaudited pro forma financial statements, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2008 and interim financial statements in its Quarterly Report on Form 10-Q for the nine month period ended September 30, 2009.
eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
For the Year Ended December 31, 2008
(In thousands, except per share amounts)
| As Reported (a) | Skype Companies (b) |
Pro Forma Adjustments |
Pro Forma | |||||||||||||
| Net revenues |
$ | 8,541,261 | $ | (550,841 | ) | $ | — | $ | 7,990,420 | |||||||
| Cost of net revenues |
2,228,069 | (284,202 | ) | — | 1,943,867 | |||||||||||
| Gross profit |
6,313,192 | (266,639 | ) | — | 6,046,553 | |||||||||||
| Operating expenses: |
||||||||||||||||
| Sales and marketing |
1,881,551 | (91,481 | ) | — | 1,790,070 | |||||||||||
| Product development |
725,600 | (31,124 | ) | — | 694,476 | |||||||||||
| General and administrative |
998,871 | (51,067 | ) | — | 947,804 | |||||||||||
| Provision for transaction and loan losses |
347,453 | (243 | ) | — | 347,210 | |||||||||||
| Amortization of acquired intangible assets |
234,916 | (69,832 | ) | — | 165,084 | |||||||||||
| Restructuring |
49,119 | — | — | 49,119 | ||||||||||||
| Total operating expenses |
4,237,510 | (243,747 | ) | — | 3,993,763 | |||||||||||
| Income from operations |
2,075,682 | (22,892 | ) | — | 2,052,790 | |||||||||||
| Interest and other income (expense), net |
107,882 | (10,229 | ) | (28,037 | )(c) | 89,451 | ||||||||||
| 19,835 | (d) | |||||||||||||||
| Income before income taxes |
2,183,564 | (33,121 | ) | (8,202 | ) | 2,142,241 | ||||||||||
| Provision for income taxes |
(404,090 | ) | (8,447 | ) | (7,299 | )(e) | (419,836 | ) | ||||||||
| Net income |
$ | 1,779,474 | $ | (41,568 | ) | $ | (15,501 | ) | $ | 1,722,405 | ||||||
| Net income per share: |
||||||||||||||||
| Basic |
$ | 1.37 | $ | 1.32 | ||||||||||||
| Diluted |
$ | 1.36 | $ | 1.31 | ||||||||||||
| Weighted average shares: |
||||||||||||||||
| Basic |
1,303,454 | 1,303,454 | ||||||||||||||
| Diluted |
1,312,608 | 1,312,608 | ||||||||||||||
eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
For the Nine Months Ended September 30, 2009
(In thousands, except per share amounts)
| As Reported (f) | Skype Companies (b) |
Pro Forma Adjustments |
Pro Forma | |||||||||||||
| Net revenues |
$ | 6,356,430 | $ | (508,377 | ) | $ | — | $ | 5,848,053 | |||||||
| Cost of net revenues |
1,809,067 | (243,439 | ) | — | 1,565,628 | |||||||||||
| Gross profit |
4,547,363 | (264,938 | ) | — | 4,282,425 | |||||||||||
| Operating expenses: |
||||||||||||||||
| Sales and marketing |
1,359,277 | (89,012 | ) | — | 1,270,265 | |||||||||||
| Product development |
605,126 | (29,022 | ) | — | 576,104 | |||||||||||
| General and administrative |
797,966 | (38,034 | ) | — | 759,932 | |||||||||||
| Provision for transaction and loan losses |
270,597 | (1,387 | ) | — | 269,210 | |||||||||||
| Amortization of acquired intangible assets |
200,066 | (47,390 | ) | — | 152,676 | |||||||||||
| Restructuring |
36,937 | — | — | 36,937 | ||||||||||||
| Total operating expenses |
3,269,969 | (204,845 | ) | — | 3,065,124 | |||||||||||
| Income from operations |
1,277,394 | (60,093 | ) | — | 1,217,301 | |||||||||||
| Interest and other income (expense), net |
8,957 | 5,379 | (16,671 | )(c) | 12,541 | |||||||||||
| 14,876 | (d) | |||||||||||||||
| Income before income taxes |
1,286,351 | (54,714 | ) | (1,795 | ) | 1,229,842 | ||||||||||
| Provision for income taxes |
(252,160 | ) | 4,032 | (5,474 | )(e) | (253,602 | ) | |||||||||
| Net income |
$ | 1,034,191 | $ | (50,682 | ) | $ | (7,269 | ) | $ | 976,240 | ||||||
| Net income per share: |
||||||||||||||||
| Basic |
$ | 0.80 | $ | 0.76 | ||||||||||||
| Diluted |
$ | 0.80 | $ | 0.75 | ||||||||||||
| Weighted average shares: |
||||||||||||||||
| Basic |
1,288,150 | 1,288,150 | ||||||||||||||
| Diluted |
1,299,279 | 1,299,279 | ||||||||||||||
eBay Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet Information
September 30, 2009
(In Thousands)
| As Reported (g) | Skype Companies (h) |
Pro Forma Adjustments |
Pro Forma | |||||||||||
| ASSETS |
||||||||||||||
| Current assets: |
||||||||||||||
| Cash and cash equivalents |
$ | 2,557,859 | $ | (50,000 | ) | $ | 1,916,633 | (i) | $ | 4,374,492 | ||||
| (50,000 | )(j) | |||||||||||||
| Short-term investments |
601,443 | — | — | 601,443 | ||||||||||
| Accounts receivable, net |
419,982 | (37,540 | ) | — | 382,442 | |||||||||
| Loans and interest receivable, net |
511,809 | — | — | 511,809 | ||||||||||
| Funds receivable and customer accounts |
1,993,294 | — | — | 1,993,294 | ||||||||||
| Other current assets |
389,200 | (22,389 | ) | — | 366,811 | |||||||||
| Total current assets |
6,473,587 | (109,929 | ) | 1,866,633 | 8,230,291 | |||||||||
| Long-term investments |
479,285 | — | 708,768 | (k) | 1,238,053 | |||||||||
| 50,000 | (j) | |||||||||||||
| Property and equipment, net |
1,293,775 | (11,718 | ) | — | 1,282,057 | |||||||||
| Goodwill |
8,016,465 | (1,896,117 | ) | — | 6,120,348 | |||||||||
| Intangible assets, net |
909,401 | (71,664 | ) | — | 837,737 | |||||||||
| Other assets |
183,859 | (1,731 | ) | 125,000 | (l) | 307,128 | ||||||||
| Total assets |
$ | 17,356,372 | $ | (2,091,159 | ) | $ | 2,750,401 | $ | 18,015,614 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||||
| Current liabilities: |
||||||||||||||
| Accounts payable |
$ | 209,333 | $ | (9,338 | ) | $ | — | $ | 199,995 | |||||
| Funds payable and amounts due to customers |
1,993,294 | — | — | 1,993,294 | ||||||||||
| Accrued expenses and other current liabilities |
961,966 | (96,337 | ) | — | 865,629 | |||||||||
| Deferred revenue and customer advances |
231,992 | (134,661 | ) | — | 97,331 | |||||||||
| Income taxes payable |
50,093 | (6,350 | ) | — | 43,743 | |||||||||
| Borrowings from credit agreement |
200,000 | — | — | 200,000 | ||||||||||
| Total current liabilities |
3,646,678 | (246,686 | ) | — | 3,399,992 | |||||||||
| Deferred and other tax liabilities, net |
907,342 | — | — | 907,342 | ||||||||||
| Other liabilities |
51,185 | (18,307 | ) | — | 32,878 | |||||||||
| Total liabilities |
4,605,205 | (264,993 | ) | — | 4,340,212 | |||||||||
| Total stockholders’ equity |
12,751,167 | (1,826,166 | ) | 2,750,401 | (m) | 13,675,402 | ||||||||
| Total liabilities and stockholders' equity |
$ | 17,356,372 | $ | (2,091,159 | ) | $ | 2,750,401 | $ | 18,015,614 | |||||
eBay Inc.
Unaudited Notes to the Pro Forma Condensed Consolidated
Statements of Income and Balance Sheet Information
| a) | Represents Condensed Consolidated Statement of Income included in eBay’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2008. |
| b) | Represents the operations of the Skype Companies while wholly owned by eBay during the respective periods presented. |
| c) | Represent income from eBay’s retained equity interest in the Skype Companies accounted for under the equity method of accounting. |
| d) | Represents interest income on a $125.0 million note from a subsidiary of the Buyer and $50.0 million in senior debt securities purchased as part of a Skype debt financing. The $125.0 million note carries an interest rate of 12% per annum paid in kind (accrued interest is included in the principal amount). The senior debt securities in the principal amount of $50.0 million carry an interest rate of Libor plus 700 basis points. |
| e) | Represents provision for income taxes on interest income. |
| f) | Represents Condensed Consolidated Statement of Income included in eBay’s financial statements included in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2009. |
| g) | Represents Condensed Consolidated Balance Sheet included in eBay’s financial statements included in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2009. |
| h) | Represents the balance sheet of the Skype Companies while wholly owned by eBay. |
| i) | Represents the contractual cash received as a result of the sale of the Skype Companies. |
| j) | Represents senior debt securities purchased as part of a Skype debt financing. |
| k) | Represents the estimated fair value of eBay’s 30 percent interest in the outstanding capital stock of the Buyer. |
| l) | Represents a note receivable from a subsidiary of the Buyer in connection with the sale of the Skype Companies. |
| m) | The estimated nonrecurring gain on the sale of the Skype Companies has been reflected in stockholders’ equity. |