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EBay Inc. Reports Strong Third Quarter 2012 Results

eBay Inc.

Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin

 
Three Months Ended
September 30,   September 30,
2012 2011
(In millions, except percentages)
GAAP operating income $ 667 $ 537
Stock-based compensation expense 122 108
Employer payroll taxes on stock-based compensation 3 2
Amortization of acquired intangible assets within cost of net revenues 20 20
Amortization of acquired intangible assets within operating expenses 83   84  
Non-GAAP operating income $ 895   $ 751  
 
Non-GAAP operating margin 26.3 % 25.3 %
 
 

Reconciliation of GAAP Net Income to Non-GAAP Net Income

 
  Three Months Ended
September 30,   September 30,
2012 2011
(In millions, except per share amounts)
GAAP net income $ 597 $ 491
Stock-based compensation expense 122 108
Employer payroll taxes on stock-based compensation 3 2
Amortization of acquired intangible assets within cost of net revenues 20 20
Amortization of acquired intangible assets within operating expenses 83 84
Amortization of intangibles and stock-based compensation for Skype 0 24
Sale of Skype transaction related items (2 ) 0
Accretion of note receivable (4 ) (4 )
Gain from the acquisition of a business 0 (56 )
Income taxes associated with certain non-GAAP entries (101 ) (41 )
Non-GAAP net income $ 718   $ 628  
 
Diluted net income per share:
GAAP $ 0.45   $ 0.37  
Non-GAAP $ 0.55   $ 0.48  
Shares used in GAAP and non-GAAP diluted net income per-share calculation 1,314   1,309  
 

Reconciliation of GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate

 
Three Months Ended
September 30,   September 30,
2012 2011
(In millions, except percentages)
GAAP provision for income taxes (a) $ 75 $ 125
Income taxes associated with certain non-GAAP entries 101   41  
Non-GAAP provision for income taxes (b) $ 176   $ 166  
 
GAAP income before income taxes (c) $ 672 $ 616
Stock-based compensation expense 122 108
Employer payroll taxes on stock-based compensation 3 2
Amortization of acquired intangible assets within cost of net revenues 20 20
Amortization of acquired intangible assets within operating expenses 83 84
Amortization of intangibles and stock-based compensation for Skype 0 24
Sale of Skype transaction related items (2 ) 0
Accretion of note receivable (4 ) (4 )
Gain from the acquisition of a business 0   (56 )
Non-GAAP income before income taxes (d) $ 894   $ 794  
 
GAAP effective tax rate (a/c) 11 % 20 %
 
Non-GAAP effective tax rate (b/d) 20 % 21 %
 

Reconciliation of Operating Cash Flow to Free Cash Flow

 
Three Months Ended
September 30,   September 30,
2012 2011
(In millions)
Net cash provided by operating activities $ 1,154 $ 809
Less: Purchases of property and equipment, net (362 )

(283

)
Free cash flow $ 792   $

526

 




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