SAN JOSE, Calif.--(BUSINESS WIRE)--
eBay Inc., a global commerce platform and payments company (Nasdaq:EBAY)
today reported that the company is updating its third quarter and full
year 2012 earnings per diluted share guidance to account for the
expected impact of its $3 billion debt offering, which priced earlier
today. Closing of the offering is scheduled for July 24, 2012 and is
subject to customary closing conditions.
"As we disclosed in our earnings release yesterday, we have been
evaluating sources of additional liquidity even though we believe that
our strong balance sheet and free cash flow will allow us to finance our
organic needs and stock repurchase programs over the near to medium
term. We also do not anticipate meaningful mergers and acquisitions
activity in the near term," said eBay Inc. Chief Financial Officer Bob
Swan. "In light of the low interest rate environment, we felt that
conditions were right and decided to opportunistically enter the market."
Based on the pricing of the debt offering announced today, the company
expects that the $3 billion public debt offering will increase its
interest expense by approximately $32 million in 2012, including the
amortization of debt discount and offering expenses.
Assuming the closing of the offering:
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Third quarter 2012 — eBay expects net revenues in the range of $3,300
- $3,400 million, which is unchanged from the amounts in the company's
July 18, 2012 earnings release. However, eBay now expects GAAP
earnings per diluted share in the range of $0.41 - $0.43 and non-GAAP
earnings per diluted share in the range of $0.52 - $0.54.
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Full year 2012 — eBay expects net revenues in the range of $13,800 -
$14,100 million, which is unchanged from the amounts in the company's
July 18, 2012 earnings release. However, eBay now expects GAAP
earnings per diluted share in the range of $1.89 - $1.94 and non-GAAP
earnings per diluted share in the range of $2.28 - $2.33.
About eBay Inc.
Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) is a global
commerce platform and payments leader connecting millions of buyers and
sellers. We do so through eBay, the world's largest online marketplace,
which allows users to buy and sell in nearly every country on earth;
through PayPal, which enables individuals and businesses to securely,
easily and quickly send and receive digital payments; and through GSI,
which facilitates ecommerce, multichannel retailing and digital
marketing for global enterprises. X.commerce brings together the
technology assets and developer communities of eBay, PayPal and Magento,
an ecommerce platform, to support eBay Inc.'s mission of enabling
commerce. We also reach millions through specialized marketplaces such
as StubHub, the world's largest ticket marketplace, and eBay classifieds
sites, which together have a presence in more than 1,000 cities around
the world. For more information about the company and its global
portfolio of online brands, visit www.ebayinc.com.
Non-GAAP Financial Measure
This press release includes the following financial measure defined as a
"non-GAAP financial measure" by the Securities and Exchange Commission
(SEC): non-GAAP earnings per diluted share. This measure may be
different from non-GAAP financial measures used by other companies. The
presentation of this financial information, which is not prepared under
any comprehensive set of accounting rules or principles, is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with generally accepted
accounting principles (GAAP). For a reconciliation of this non-GAAP
financial measure to the nearest comparable GAAP measure, see "Business
Outlook" included in this press release.
Forward-Looking Statements
This press release contains forward-looking statements relating to,
among other things, the future performance of eBay and its consolidated
subsidiaries that are based on the company's current expectations,
forecasts and assumptions and involve risks and uncertainties. These
statements include, but are not limited to, statements regarding the
closing of its debt offering and expected financial results for the
third quarter and full year 2012. The company's actual results could
differ materially from those predicted or implied and reported results
should not be considered as an indication of future performance. Factors
that could cause or contribute to such differences include, but are not
limited to: the closing of our announced public offering of debt
securities; changes in political, business and economic conditions,
including any European or general economic downturn or crisis and any
conditions that affect ecommerce growth; fluctuations in foreign
currency exchange rates; changes in our capital allocation; the
company's ability to profitably integrate, manage and grow businesses
that have been acquired recently or may be acquired in the future; the
company's need to successfully react to the increasing importance of
mobile payments and mobile commerce and the increasing social aspect of
commerce; the company's ability to deal with the increasingly
competitive ecommerce environment, including competition for its sellers
from other trading sites and other means of selling, and competition for
its buyers from other merchants, online and offline; the company's need
to manage an increasingly large enterprise with a broad range of
businesses of varying degrees of maturity and in many different
geographies; the effect of management changes and business initiatives;
the company's need and ability to manage other regulatory, tax and
litigation risks as its services are offered in more jurisdictions and
applicable laws become more restrictive; any changes the company may
make to its product offerings; the competitive, regulatory, credit card
association-related and other risks specific to PayPal and Bill Me
Later, especially as PayPal continues to expand geographically and
introduce new products and as new laws and regulations related to
financial services companies come into effect; the company's ability to
timely upgrade and develop its systems, infrastructure and customer
service capabilities, including GSI's v.11 initiative, at reasonable
cost; and the company's ability to maintain site stability and
performance on all of its sites while adding new products and features
in a timely fashion. The forward-looking statements in this release do
not include the potential impact of any acquisitions or divestitures
that may be announced and/or completed after the date hereof.
More information about factors that could affect the company's operating
results is included under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the company's most recent annual report on Form 10-K and
subsequent quarterly reports on Form 10-Q, copies of which may be
obtained by visiting the company's Investor Relations website at http://investors.ebayinc.com
or the SEC's website at www.sec.gov.
Undue reliance should not be placed on the forward-looking statements in
this release, which are based on information available to the company on
the date hereof. eBay assumes no obligation to update such statements.
eBay Inc.
Business Outlook
(In Millions,
Except Per Share Amounts)
The guidance figures provided below and elsewhere in this press
release are forward-looking statements, reflect a number of estimates,
assumptions and other uncertainties (including the assumed closing of
the debt offering referred to above), and are approximate in nature
because eBay's future performance is difficult to predict. Such guidance
is based on information available on the date of this press release, and
eBay assumes no obligation to update it.
eBay's future performance involves risks and uncertainties, and the
company's actual results could differ materially from the information
below and elsewhere in this press release. Some of the factors that
could affect the company's operating results are set forth under the
caption "Forward-Looking Statements" above in this press release. More
information about factors that could affect eBay's operating results is
included under the captions "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in its
most recent annual report on Form 10-K and subsequent quarterly reports
on Form 10-Q, copies of which may be obtained by visiting the company's
investor relations website at http://investors.ebayinc.com
or the SEC's website at www.sec.gov.
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Three Months Ending
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September 30, 2012
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(In millions, except per share amounts)
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GAAP
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Non-GAAP (a)
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Net Revenue
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$3,300 - $3,400
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$3,300 - $3,400
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Diluted EPS
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$0.41 - $0.43
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$0.52 - $0.54
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Twelve Months Ending
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December 31, 2012
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(In millions, except per share amounts)
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GAAP
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Non-GAAP (b)
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Net Revenue
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$13,800 - $14,100
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$13,800 - $14,100
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Diluted EPS
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$1.89 - $1.94
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$2.28 - $2.33
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(a)
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Estimated non-GAAP amounts above for the three months ending
September 30, 2012, reflect adjustments that exclude the estimated
amortization of acquired intangible assets of approximately $95 -
$105 million, estimated stock-based compensation expense and
employer payroll taxes on stock-based compensation expense of
approximately $115 - $135 million, and the accretion of a note
receivable of approximately $5 million as well as the related tax
impact.
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(b)
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Estimated non-GAAP amounts above for the 12 months ending December
31, 2012, reflect adjustments that exclude the estimated
amortization of acquired intangible assets of approximately $400 -
$420 million, estimated stock-based compensation expense and
employer payroll taxes on stock-based compensation expense of
approximately $485 - $515 million, the gain on a divestiture of
approximately $118 million, and the accretion of a note receivable
of approximately $20 - $25 million as well as the related tax
impact.
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eBay Inc.
Non-GAAP Measures of Financial Performance
To supplement the company's condensed consolidated financial statements
presented in accordance with generally accepted accounting principles
(GAAP), eBay uses non-GAAP measures of certain components of financial
performance. These non-GAAP measures include non-GAAP earnings per
diluted share.
This non-GAAP measure is not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different from
non-GAAP measures used by other companies. In addition, this non-GAAP
measure is not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with eBay's results of operations
as determined in accordance with GAAP. This measure should only be used
to evaluate eBay's results of operations in conjunction with the
corresponding GAAP measures.
Reconciliation to the nearest GAAP measure of the non-GAAP measure
included in this press release can be found in the table included in
this press release.
This non-GAAP measure is provided to enhance investors' overall
understanding of the company's current financial performance and the
company's prospects for the future. Specifically, the company believes
this non-GAAP measure provides useful information to both management and
investors by excluding certain expenses, gains and losses or net
purchases of property and equipment, as the case may be, that may not be
indicative of its core operating results and business outlook. In
addition, because eBay has historically reported certain non-GAAP
results to investors, the company believes that the inclusion of
non-GAAP measures provides consistency in the company's financial
reporting.
For its internal budgeting process, and as discussed further below,
eBay's management uses financial measures that do not include
stock-based compensation expense, employer payroll taxes on stock-based
compensation, amortization of acquired intangible assets, significant
gains or losses from the disposal/acquisition of a business, and the
income taxes associated with the foregoing. In addition to the
corresponding GAAP measure, eBay's management also uses the foregoing
non-GAAP measure in reviewing the financial results of eBay.
eBay excludes the following items from non-GAAP earnings per diluted
share:
Stock-based compensation expense. This expense consists of
expenses for stock options, restricted stock and employee stock
purchases. eBay excludes stock-based compensation expenses from its
non-GAAP measures primarily because they are non-cash expenses that
management does not believe are reflective of ongoing operating results.
Employer payroll taxes on stock-based compensation. This amount
is dependent on eBay's stock price and the timing and size of exercises
by employees of their stock options and the vesting of their restricted
stock, over which management has limited to no control, and as such
management does not believe it correlates to eBay's operation of the
business.
Amortization of acquired intangible assets and significant gains or
losses and transaction expenses from the acquisition or disposal of a
business. eBay incurs amortization of acquired intangible assets in
connection with acquisitions and may incur significant gains or losses
from the acquisition or disposal of a business and therefore excludes
these amounts from its non-GAAP measures. eBay excludes the impact of
the accretion of a note receivable associated with the disposal of
certain businesses. eBay excludes these items because management does
not believe they correlate to the ongoing operating results of eBay's
business.
Income taxes associated with certain non-GAAP entries. This
amount is used to present stock-based compensation and the other amounts
described above on an after-tax basis consistent with the presentation
of non-GAAP net income.
eBay Inc.
Investor Relations Contact:
Cosmin Pitigoi
cpitigoi@ebay.com
or
Media
Relations Contact:
Amanda Miller
press@ebay.com
or
Investor
Information Request:
408-376-7493
or
Company News:
http://www.ebayinc.com/news
or
Investor
Relations website:
http://investors.ebayinc.com
Source: eBay Inc.
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