Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 27, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37713 | |
Entity Registrant Name | EBAY INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0430924 | |
Entity Address, Address Line One | 2025 Hamilton Avenue | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95125 | |
City Area Code | 408 | |
Local Phone Number | 376-7008 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 700,853,258 | |
Entity Central Index Key | 0001065088 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock | |
Entity Trading Symbol | EBAY | |
Security Exchange Name | NASDAQ | |
6.000% Senior notes due 2056 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.00% Notes due 2056 | |
Entity Trading Symbol | EBAYL | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 880 | $ 923 |
Short-term investments | 3,550 | 1,850 |
Accounts receivable, net of allowance for doubtful accounts of $127 and $100 | 635 | 691 |
Other current assets | 1,183 | 1,101 |
Current assets of discontinued operations | 0 | 141 |
Total current assets | 6,248 | 4,706 |
Long-term investments | 1,077 | 1,305 |
Property and equipment, net | 1,409 | 1,484 |
Goodwill | 4,850 | 4,929 |
Intangible assets, net | 50 | 62 |
Operating lease right-of-use assets | 598 | 599 |
Deferred tax assets | 4,287 | 4,369 |
Other assets | 410 | 414 |
Long-term assets of discontinued operations | 0 | 306 |
Total assets | 18,929 | 18,174 |
Current liabilities: | ||
Short-term debt | 1,015 | 1,022 |
Accounts payable | 268 | 251 |
Accrued expenses and other current liabilities | 2,175 | 2,189 |
Deferred revenue | 108 | 135 |
Income taxes payable | 1,107 | 210 |
Current liabilities of discontinued operations | 0 | 259 |
Total current liabilities | 4,673 | 4,066 |
Operating lease liabilities | 456 | 472 |
Deferred tax liabilities | 2,619 | 2,646 |
Long-term debt | 7,724 | 6,738 |
Other liabilities | 1,342 | 1,356 |
Long-term liabilities of discontinued operations | 0 | 26 |
Total liabilities | 16,814 | 15,304 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 3,580 shares authorized; 701 and 796 shares outstanding | 2 | 2 |
Additional paid-in capital | 15,723 | 16,126 |
Treasury stock at cost, 995 and 897 shares | (34,946) | (31,396) |
Retained earnings | 21,051 | 17,754 |
Accumulated other comprehensive income | 285 | 384 |
Total stockholders’ equity | 2,115 | 2,870 |
Total liabilities and stockholders’ equity | $ 18,929 | $ 18,174 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 127 | $ 100 |
Common stock - par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock - shares authorized (in shares) | 3,580,000,000 | 3,580,000,000 |
Common stock - shares outstanding (in shares) | 701,000,000 | 796,000,000 |
Treasury stock - shares (in shares) | 995,000,000 | 897,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net revenues | $ 2,374 | $ 2,413 |
Cost of net revenues | 526 | 539 |
Gross profit | 1,848 | 1,874 |
Operating expenses: | ||
Sales and marketing | 607 | 647 |
Product development | 267 | 272 |
General and administrative | 234 | 284 |
Provision for transaction losses | 102 | 67 |
Amortization of acquired intangible assets | 9 | 11 |
Total operating expenses | 1,219 | 1,281 |
Income from operations | 629 | 593 |
Interest and other, net | 2 | 64 |
Income from continuing operations before income taxes | 631 | 657 |
Income tax provision | (146) | (141) |
Income from continuing operations | 485 | 516 |
Income from discontinued operations, net of income taxes | 2,927 | 2 |
Net income | $ 3,412 | $ 518 |
Income per share - basic: | ||
Continuing operations (in usd per share) | $ 0.64 | $ 0.58 |
Discontinued operations (in usd per share) | 3.89 | 0 |
Net income per share - basic (in usd per share) | 4.53 | 0.58 |
Income per share - diluted: | ||
Continuing operations (in usd per share) | 0.64 | 0.57 |
Discontinued operations (in usd per share) | 3.87 | 0 |
Net income per share - diluted (in usd per share) | $ 4.51 | $ 0.57 |
Weighted-average shares: | ||
Basic (in shares) | 753 | 900 |
Diluted (in shares) | 757 | 908 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 3,412 | $ 518 |
Other comprehensive income (loss), net of reclassification adjustments: | ||
Foreign currency translation gains (losses) | (113) | (32) |
Unrealized gains (losses) on investments, net | (31) | 40 |
Tax benefit (expense) on unrealized gains (losses) on investments, net | 8 | (10) |
Unrealized gains (losses) on hedging activities, net | 47 | (41) |
Tax benefit (expense) on unrealized gains (losses) on hedging activities, net | (10) | 9 |
Other comprehensive income (loss), net of tax | (99) | (34) |
Comprehensive income (loss) | $ 3,313 | $ 484 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Treasury stock at cost | Retained earnings | Accumulated other comprehensive income |
Beginning balance at Dec. 31, 2018 | $ 2 | $ 15,716 | $ (26,394) | $ 16,459 | $ 498 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued | 0 | |||||
Common stock repurchased/forfeited | 0 | |||||
Common stock and stock-based awards issued | 3 | |||||
Tax withholdings related to net share settlements of restricted stock units and awards | (54) | |||||
Stock-based compensation | 121 | |||||
Common stock repurchased | 0 | (1,501) | ||||
Other | (1) | |||||
Net income | $ 518 | 518 | ||||
Dividends and dividend equivalents declared | (130) | |||||
Foreign currency translation adjustment | (32) | |||||
Change in unrealized gains (losses) on investments | 40 | 40 | ||||
Change in unrealized gains (losses) on derivative instruments | (41) | |||||
Tax benefit (provision) on above items | (1) | |||||
Ending balance at Mar. 31, 2019 | $ 5,203 | 2 | 15,785 | (27,895) | 16,847 | 464 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends and dividend equivalents declared per share or restricted stock unit (in usd per share) | $ 0.14 | |||||
Beginning balance at Dec. 31, 2019 | $ 2,870 | 2 | 16,126 | (31,396) | 17,754 | 384 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued | 0 | |||||
Common stock repurchased/forfeited | 0 | |||||
Common stock and stock-based awards issued | 4 | |||||
Tax withholdings related to net share settlements of restricted stock units and awards | (40) | |||||
Stock-based compensation | 94 | |||||
Common stock repurchased | (998) | (450) | (3,550) | |||
Other | (11) | |||||
Net income | 3,412 | 3,412 | ||||
Dividends and dividend equivalents declared | (115) | |||||
Foreign currency translation adjustment | (113) | |||||
Change in unrealized gains (losses) on investments | (31) | (31) | ||||
Change in unrealized gains (losses) on derivative instruments | 47 | |||||
Tax benefit (provision) on above items | (2) | |||||
Ending balance at Mar. 31, 2020 | $ 2,115 | $ 2 | $ 15,723 | $ (34,946) | $ 21,051 | $ 285 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends and dividend equivalents declared per share or restricted stock unit (in usd per share) | $ 0.16 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 3,412 | $ 518 |
(Income) loss from discontinued operations, net of income taxes | (2,927) | (2) |
Adjustments: | ||
Provision for transaction losses | 102 | 67 |
Depreciation and amortization | 147 | 162 |
Stock-based compensation | 100 | 112 |
(Gain) loss on investments, net | (38) | 1 |
Deferred income taxes | 52 | 21 |
Change in fair value of warrant | (12) | (113) |
Changes in assets and liabilities, net of acquisition effects | (134) | (194) |
Net cash provided by continuing operating activities | 702 | 572 |
Net cash provided by (used in) discontinued operating activities | (110) | (22) |
Net cash provided by operating activities | 592 | 550 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (98) | (180) |
Purchases of investments | (10,705) | (11,915) |
Maturities and sales of investments | 9,195 | 12,747 |
Acquisitions, net of cash acquired | 0 | (93) |
Other | 39 | 12 |
Net cash provided by (used in) continuing investing activities | (1,569) | 571 |
Net cash provided by (used in) discontinued investing activities | 4,075 | (13) |
Net cash provided by investing activities | 2,506 | 558 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 5 | 5 |
Repurchases of common stock | (3,997) | (1,431) |
Payments for taxes related to net share settlements of restricted stock units and awards | (40) | (54) |
Payments for dividends | (114) | (125) |
Proceeds from issuance of long-term debt, net | 994 | 0 |
Other | (9) | 0 |
Net cash provided by (used in) continuing financing activities | (3,161) | (1,605) |
Net cash provided by (used in) discontinued financing activities | 0 | 0 |
Net cash used in financing activities | (3,161) | (1,605) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (34) | (10) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (97) | (507) |
Cash, cash equivalents and restricted cash at beginning of period | 996 | 2,219 |
Cash, cash equivalents and restricted cash at end of period | 899 | 1,712 |
Less: Cash, cash equivalents and restricted cash of discontinued operations | 0 | 31 |
Cash, cash equivalents and restricted cash of continuing operations at end of period | 899 | 1,681 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 90 | 107 |
Cash paid for interest on financial lease obligations | 3 | 0 |
Cash paid for income taxes | $ 63 | $ 93 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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 and Classifieds platforms. Founded in 1995 in San Jose, California, eBay is one of the world’s largest and most vibrant marketplaces for discovering great value and unique selection. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity. Our technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere. When we refer to “we,” “our,” “us,” the “Company” or “eBay” in this Quarterly Report on Form 10-Q, we mean the current Delaware corporation (eBay Inc.) and its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires. On February 13, 2020, we completed the previously announced sale of our StubHub business to an affiliate of viagogo. Beginning in the first quarter of 2020, StubHub’s financial results for periods prior to the sale have been reflected in our condensed consolidated statement of income as discontinued operations. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year are classified as discontinued operations in our condensed consolidated balance sheet. See “Note 4 – Discontinued Operations” for additional information. We have two reportable segments to reflect the way management and our chief operating decision maker (“CODM”) review and assess performance of the business. During the first quarter of 2020, we classified the results of our previously reported StubHub segment as discontinued operations in our condensed consolidated statement of income for all prior periods presented. Our two reportable segments are Marketplace and Classifieds. Marketplace includes our online marketplace located at www.ebay.com, its localized counterparts and the eBay suite of mobile apps. Classifieds includes a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. For further information on our segments, refer to “Note 6 – Segments”. Prior period segment information has been reclassified to conform to the current period segment presentation. 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, investments, 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 as equity investments to be measured at fair value or, under an election, at cost if it does not have readily determinable fair value, in which case the carrying value would be adjusted upon the occurrence of an observable price change in an orderly transaction for identical or similar instruments or impairment. 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, 2019. 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 the fair statement of the condensed consolidated financial position, results of operations and cash flows for these interim periods. Significant Accounting Policies Notwithstanding the addition of policies below for allowance for credit losses, the re were no significant changes to our significant accounting policies disclosed in “Note 1 – The Company and Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2019. Credit losses – Financial assets measured at amortized cost We are exposed to credit losses primarily through our receivables from sellers or advertisers on our Marketplace and Classifieds platforms, respectively. We develop estimates to reflect the risk of credit loss which are based on historical loss trends adjusted for asset specific attributes, current conditions and reasonable and supportable forecasts of the economic conditions that will exist through the contractual life of the financial asset. Our receivables are recovered over a period of 0-180 days, therefore, forecasted changes to economic conditions are not expected to have a significant effect on the estimate of the allowance for doubtful accounts, except in extraordinary circumstances. We write off the asset when it is no longer deemed collectible or when it goes past due 180 days whichever is earlier, with certain limited exceptions. We monitor our ongoing credit exposure through an active review of collection trends. Our activities include monitoring the timeliness of payment collection, managing dispute resolution and performing timely account reconciliations. We may employ collection agencies to pur sue recovery of defaulted receivables. At March 31, 2020, we reported allowances for doubtful accounts of $127 million reflecting an increase of $27 million, net of write-offs of $32 million for the three months ended March 31, 2020. We are also exposed to credit losses from customer accounts and funds receivable balances held by third party financial institutions. These balances are either held by financial institutions associated with payment intermediation activity and awaiting settlement, or are installment collections from financial institutions. We assess these balances for credit loss based on a review of the average period for which the funds are held, credit ratings of the financial institutions and by assessing the probability of default and loss given default models. At March 31, 2020, we did not record any credit-related loss. Credit losses – Available-for-sale debt securities We periodically assess our portfolio of debt investments for impairment. For debt securities in an unrealized loss position, this assessment first takes into account our intent to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value through interest and other, net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, we assess whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through interest and other, net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Recently Adopted Accounting Pronouncements In 2016, the Financial Accounting Standards Board (“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. This standard impacts the Company’s accounting for allowances for doubtful accounts, available-for-sale securities and other assets subject to credit risk. In preparation for the adoption of this standard, we have updated our credit loss models as needed. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed 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. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. In 2018, the FASB issued new guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor (i.e., a service contract). Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those fiscal years. We adopted this guidance prospectively in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. In 2018, the FASB issued new guidance to clarify the interaction between Collaborative Arrangements and Revenue from Contracts with Customers standards. The guidance (1) clarifies that certain transactions between collaborative arrangement participants should be accounted for under revenue guidance; (2) adds unit of account guidance to the collaborative arrangement guidance to align with the revenue standard; and (3) clarifies presentation guidance for transactions with a collaborative arrangement participant that is not accounted for under the revenue standard. The guidance is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The standard will be effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those fiscal years. We are evaluating the impact of adopting this new accounting guidance on our condensed consolidated financial statements. In 2019, the FASB issued new guidance to decrease diversity in practice and increase comparability for the accounting of certain equity securities and investments under the equity method of accounting. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2020. We are evaluating the impact of adopting this new guidance on our condensed consolidated financial statements. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income 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 per share by application of the treasury stock method. The calculation of diluted net income per share excludes all anti-dilutive common shares. The following table sets forth the computation of basic and diluted net income per share for the three months ended March 31, 2020 and 2019 (in millions, except per share amounts): Three Months Ended 2020 2019 Numerator: Income from continuing operations $ 485 $ 516 Income from discontinued operations, net of income taxes 2,927 2 Net income $ 3,412 $ 518 Denominator: Weighted average shares of common stock - basic 753 900 Dilutive effect of equity incentive awards 4 8 Weighted average shares of common stock - diluted 757 908 Income per share - basic: Continuing operations $ 0.64 $ 0.58 Discontinued operations 3.89 — Net income per share - basic $ 4.53 $ 0.58 Income per share - diluted: Continuing operations $ 0.64 $ 0.57 Discontinued operations 3.87 — Net income per share - diluted $ 4.51 $ 0.57 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive 15 11 |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Motors.co.uk In February 2019, we completed our acquisition of the U.K.-based classifieds site, Motors.co.uk, for $93 million in cash. We believe the acquisition will increase our international presence and give buyers access to more listings. The aggregate purchase consideration was allocated as follows (in millions): Motors.co.uk Goodwill $ 65 Purchased intangible assets 30 Net liabilities (2) Total $ 93 We assigned the goodwill to our Classifieds segment. The goodwill recognized is primarily attributable to expected synergies and the assembled workforce of Motors.co.uk. We generally do not expect goodwill to be deductible for income tax purposes. Our condensed consolidated financial statements include the operating results of Motors.co.uk from the date of acquisition. Separate post acquisition operating results and pro forma results of operations for this acquisition have not been presented as the effect of the acquisition is not material to our financial results. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations StubHub On February 13, 2020, we completed the previously announced sale of our StubHub business to an affiliate of viagogo for a purchase price of $4.05 billion in cash, subject to certain adjustments specified in the purchase agreement, including adjustments for indebtedness, cash, working capital and transaction expenses of StubHub at the closing of the transaction. The sale was completed for $4.1 billion in proceeds ($3.2 billion, net of income taxes of $900 million) and a pre-tax gain of $3.9 billion upon closing within income from discontinued operations, both subject to working capital adjustments. At December 31, 2019, our StubHub segment did not meet the criteria for assets held for sale due to uncertainty that closing conditions of the sale, such as the buyer obtaining debt and equity financing, would be met on a timely basis. Upon the completion of the sale in the first quarter of 2020, we classified the results of our previous StubHub segment as discontinued operations in our condensed consolidated statement of income, condensed consolidated balance sheet and condensed consolidated statement of cash flows for all prior periods presented. In connection with the sale of StubHub, we entered into a transition service agreement (“TSA”) with viagogo pursuant to which we will provide services, including, but not limited to, business support services for StubHub after the divestiture for fees of $40 million. These agreements commenced with the close of the transaction and have minimum initial terms ranging from 12 to 18 months and can be extended by viagogo for a maximum of 12 months. The financial results of StubHub are presented as income from discontinued operations, net of income taxes in our condensed consolidated statement of income. The following table presents financial results from discontinued operations (in millions): Three Months Ended 2020 (1) 2019 StubHub income from discontinued operations, net of income taxes $ 2,928 $ 5 PayPal and Enterprise (loss) from discontinued operations, net of income taxes (1) (3) Income from discontinued operations, net of income taxes 2,927 2 (1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, in addition to the gain on sale recorded during the three months ended March 31, 2020. The following table presents cash flows for StubHub (in millions): Three Months Ended 2020 (1) 2019 Net cash (used in) discontinued operating activities $ (110) $ (22) Net cash provided by (used in) discontinued investing activities $ 4,075 $ (13) (1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, in addition to the gain on sale recorded during the three months ended March 31, 2020. The financial results of StubHub are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. The following table presents the financial results of StubHub (in millions): Three Months Ended 2020 (1) 2019 Net revenues $ 100 $ 230 Cost of net revenues 31 62 Gross profit 69 168 Operating expenses: Sales and marketing 51 95 Product development 29 25 General and administrative 33 25 Provision for transaction losses 3 5 Amortization of acquired intangible assets 1 2 Total operating expenses 117 152 Income (loss) from operations of discontinued operations (48) 16 Pre-tax gain on sale 3,876 — Income from discontinued operations before income taxes 3,828 16 Income tax provision (900) (11) Income from discontinued operations, net of income taxes $ 2,928 $ 5 (1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, in addition to the gain on sale recorded during the three months ended March 31, 2020. For the three months ended March 31, 2020 and 2019, the loss from discontinued operations related to PayPal and Enterprise was immaterial. The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheet (in millions): December 31, 2019 Carrying amounts of assets included as part of discontinued operations: Cash and cash equivalents $ 52 Accounts receivable, net 9 Other current assets 80 Total current assets of discontinued operations $ 141 Long-term investments 11 Property and equipment, net 26 Goodwill 224 Intangible assets, net 5 Operating lease right-of-use assets 29 Deferred tax assets 8 Other assets 3 Total long-term assets of discontinued operations $ 306 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable $ 19 Accrued expenses and other current liabilities 215 Deferred revenue 23 Income taxes payable 2 Total current liabilities of discontinued operations $ 259 Operating lease liabilities 20 Other liabilities 6 Total long-term liabilities of discontinued operations $ 26 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table presents goodwill activity by reportable segment during the three months ended March 31, 2020 (in millions): December 31, Goodwill Adjustments March 31, Marketplace $ 4,533 $ — $ (74) $ 4,459 Classifieds 396 — (5) 391 Total $ 4,929 $ — $ (79) $ 4,850 The adjustments to goodwill during the three months ended March 31, 2020 were primarily due to foreign currency translation. Intangible Assets The components of identifiable intangible assets are as follows (in millions, except years): March 31, 2020 December 31, 2019 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 $ 424 $ (382) $ 42 5 $ 432 $ (383) $ 49 5 Marketing related 477 (473) 4 5 491 (486) 5 5 Developed technologies 232 (229) 3 3 235 (230) 5 3 All other 161 (160) 1 4 161 (158) 3 4 Total $ 1,294 $ (1,244) $ 50 $ 1,319 $ (1,257) $ 62 Amortization expense for intangible assets was $10 million and $13 million for the three months ended March 31, 2020 and 2019, respectively. Expected future intangible asset amortization as of March 31, 2020 is as follows (in millions): Remaining 2020 $ 28 2021 18 2022 2 2023 2 2024 — Total $ 50 |
Segments
Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segments | Segments We have two reportable segments to reflect the way management and our CODM review and assess performance of the business. During the first quarter of 2020, we classified the results of our previous StubHub segment as discontinued operations in our condensed consolidated statement of income for all prior periods presented. Our two reportable segments are Marketplace and Classifieds. Marketplace includes our online marketplace located at www.ebay.com, its localized counterparts and the eBay suite of mobile apps. Classifieds includes a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. The accounting policies of our segments are the same as those described in “Note 1 – The Company and Summary of Significant Accounting Policies”. Prior period segment information has been reclassified to conform to the current period segment presentation. Our reportable segments reflect the way management and our CODM review and assess performance of the business. Our CODM reviews revenue and operating income (loss) for each reportable segment. Our CODM does not evaluate reportable segments using asset information. Corporate and other costs includes: (i) corporate management costs, such as human resources, finance and legal, that are not allocated to our segments; (ii) amortization of intangible assets; (iii) restructuring charges; (iv) stock-based compensation; and (v) results of operations of various initiatives that support all of our reportable segments. Segment net revenue and operating income were as follows (in millions): Three Months Ended 2020 2019 Net Revenues Marketplace Net transaction revenues $ 1,900 $ 1,885 Marketing services and other revenues 230 277 Total Marketplace 2,130 2,162 Classifieds (1) 248 256 Elimination of inter-segment net revenue (2) (4) (5) Total consolidated net revenue $ 2,374 $ 2,413 Operating income (loss) Marketplace $ 761 $ 769 Classifieds 83 91 Corporate and other costs (215) (267) Total operating income 629 593 Interest and other, net 2 64 Income before income taxes $ 631 $ 657 (1) Classifieds net revenues consists entirely of marketing services and other revenue. (2) Represents revenue generated between our reportable segments. The following table summarizes the allocation of net revenues based on geography (in millions): Three Months Ended 2020 2019 U.S. $ 822 $ 842 Germany 357 384 United Kingdom 348 353 South Korea 312 297 Rest of world 535 537 Total net revenues $ 2,374 $ 2,413 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
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 (in millions): March 31, 2020 Gross Gross Gross Estimated Short-term investments: Restricted cash $ 19 $ — $ — $ 19 Corporate debt securities 3,436 1 (6) 3,431 Government and agency securities 100 — — 100 $ 3,555 $ 1 $ (6) $ 3,550 Long-term investments: Corporate debt securities 765 — (21) 744 $ 765 $ — $ (21) $ 744 December 31, 2019 Gross Gross Gross Estimated Short-term investments: Restricted cash $ 21 $ — $ — $ 21 Corporate debt securities 1,653 1 — 1,654 Government and agency securities 175 — — 175 $ 1,849 $ 1 $ — $ 1,850 Long-term investments: Corporate debt securities 957 4 — 961 $ 957 $ 4 $ — $ 961 Investments classified as available-for-sale are carried at fair value with changes reflected in other comprehensive income. Where there is an intention or a requirement to sell an impaired available-for-sale debt security, the entire impairment is recognized in earnings with a corresponding adjustment to the amortized cost basis of the security. We presently do not intend to sell any of the securities in an unrealized loss position and expect to realize the full value of all these investments upon maturity or sale. We regularly review investment securities for credit impairment using both qualitative and quantitative criteria. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through interest and other, net for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. We did not recognize any credit-related impairment through an allowance for credit losses as of March 31, 2020. Investment securities in a continuous loss position for less than 12 months had an estimated fair value of $2.7 billion and $28 million of unrealized losses as of March 31, 2020, and an estimated fair value of $774 million and an immaterial amount of unrealized losses as of December 31, 2019. As of March 31, 2020 there were no investment securities in a continuous loss position for greater than 12 months. Investment securities in a continuous loss position for greater than 12 months had an estimated fair value of $92 million and an immaterial amount of unrealized losses as of December 31, 2019. Refer to “Note 16 – 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, 2020 are as follows (in millions): March 31, 2020 One year or less (including restricted cash of $19) $ 3,550 One year through two years 501 Two years through three years 243 $ 4,294 Equity Investments Our equity investments are reported in long-term investments on our condensed consolidated balance sheet. The following table provides a summary of our equity investments (in millions): March 31, 2020 December 31, 2019 Equity investments without readily determinable fair values $ 326 $ 337 Equity investments under the equity method of accounting 7 7 Total equity investments $ 333 $ 344 The following table summarizes the change in total carrying value during the three months ended March 31, 2020 and 2019 related to equity investments without readily determinable fair values still held (in millions): Three Months Ended 2020 2019 Carrying value, beginning of period $ 337 $ 137 Foreign currency translation and other (11) — Carrying value, end of period $ 326 $ 137 For such equity investments without readily determinable fair values still held at March 31, 2020, cumulative downward adjustments for price changes and impairment was $81 million. There have been no upward adjustments for price changes to our equity investments without readily determinable fair values still held at March 31, 2020. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 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. These hedging contracts reduce, but do not entirely eliminate, the impact of adverse foreign exchange rate and interest rate movements. We do not use any of our derivative instruments for trading purposes. We use foreign currency exchange contracts to reduce the volatility of cash flows related to forecasted revenues, expenses, assets and liabilities, including intercompany balances denominated in foreign currencies. These contracts are generally one month to one year in duration but with maturities up to 24 months. 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. We evaluate the effectiveness of our foreign exchange contracts designated as cash flow or net investment hedges on a quarterly basis. During the first quarter of 2020, we began to hedge the variability of forecasted interest payments on anticipated debt issuance using forward-starting interest rate swaps. The total notional amount of these forward-starting interest swaps was $100 million as of March 31, 2020 with terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate. These interest rate swaps effectively fix the benchmark interest rate and have the economic effect of hedging the variability of forecasted interest payments for up to 10 years on an anticipated debt issuance in 2022, and they will be terminated upon issuance of the debt. Similar to other cash flow hedges, we record changes in the fair value of these interest rate swaps in accumulated other comprehensive income (loss) until the anticipated debt issuance. Upon debt issuance and termination of the derivative instruments, their fair value will be amortized over the term of the new debt to interest expense. We evaluate the effectiveness of interest rate swaps designated as cash flow hedges on a quarterly basis. We used interest rate swaps to manage interest rate risk on our fixed rate notes issued in July 2014 and maturing in 2019, 2021 and 2024. These interest rate swaps had 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. There were no interest rate swaps designated as fair value hedges outstanding as of March 31, 2020. Cash Flow Hedges For derivative instruments that are designated as cash flow hedges, 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 hedged transaction affects earnings. 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, 2020, we have estimated that approximately $38 million of net derivative gains related to our cash flow hedges included in accumulated other comprehensive income will be reclassified into earnings within the next 12 months. We classify cash flows related to our cash flow hedges as operating activities in our condensed consolidated statement of cash flows. Net Investment Hedges For derivative instruments that are designated as net investment hedges, the derivative’s gain or loss is initially reported in the translation adjustments component of AOCI and is reclassified to net earnings in the period in which the hedged subsidiary is either sold or substantially liquidated. Fair Value Hedges We designated the interest rate swaps used to manage interest rate risk on our fixed rate notes issued in July 2014 and maturing in 2019, 2021 and 2024 as qualifying hedging instruments and accounted for them as fair value hedges. These transactions were designated as fair value hedges for financial accounting purposes because they protected us against changes in the fair value of certain of our fixed rate borrowings due to benchmark interest rate movements. In 2019, $1.15 billion related to our 2.200% senior notes due 2019 of the $2.4 billion aggregate notional amount matured. In addition, during 2019, we terminated the interest rate swaps related to $750 million of our 2.875% senior notes due July 2021 and $500 million of our 3.450% senior notes due July 2024. As a result of the early termination, hedge accounting was discontinued prospectively and the gain on termination was recorded as an increase to the long-term debt balance and is being recognized over the remaining life of the underlying debt as a reduction to interest expense. The gain recognized during the three months ended March 31, 2020 was immaterial . Non-Designated Hedges Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets or liabilities, including intercompany balances denominated in non-functional currencies. The gains and losses on our derivatives not designated as hedging instruments are recorded in interest and other , net, which are offset by the foreign currency gains and losses on the related assets and liabilities that are also recorded in interest and other, net. We classify cash flows related to our non-designated hedging instruments as operating activities in our condensed consolidated statement of cash flows. Warrant We entered into a warrant agreement in conjunction with a commercial agreement with Adyen that, subject to meeting certain conditions, entitles us to acquire a fixed number of shares up to 5% of Adyen’s fully diluted issued and outstanding share capital at a specific date. The warrant has a term of seven years and will vest in a series of four tranches, at a specified price per share (fixed for the first two tranches) upon meeting processing volume milestone targets on a calendar year basis. If and when a relevant milestone is reached, the warrant becomes exercisable with respect to the corresponding tranche of warrant shares up until the warrant expiration date of January 31, 2025. The maximum number of tranches that can vest in one calendar year is two. The warrant is accounted for as a derivative under ASC Topic 815, Derivatives and Hedging . We report the warrant at fair value within other assets in our condensed consolidated balance sheets and changes in the fair value of the warrant are recognized in interest and other, net in our condensed consolidated statement of income. The day-one value attributable to the other side of the warrant, which was recorded as a deferred credit, is reported within other liabilities in our condensed consolidated balance sheets and will be amortized over the life of the commercial arrangement. Fair Value of Derivative Contracts The fair values of our outstanding derivative instruments 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 $ 70 $ 36 Foreign exchange contracts designated as net investment hedges Other Current Assets 4 — Foreign exchange contracts not designated as hedging instruments Other Current Assets 23 15 Warrant Other Assets 293 281 Foreign exchange contracts designated as cash flow hedges Other Assets 24 15 Total derivative assets $ 414 $ 347 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other Current Liabilities $ 2 $ 2 Foreign exchange contracts designated as net investment hedges Other Current Liabilities 1 2 Foreign exchange contracts not designated as hedging instruments Other Current Liabilities 18 19 Total derivative liabilities $ 21 $ 23 Total fair value of derivative instruments $ 393 $ 324 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, 2020, the potential effect of rights of set-off associated with the foreign exchange contracts would be an offset to both assets and liabilities by $21 million, resulting in net derivative assets of $100 million and net derivative liabilities of zero. Effect of Derivative Contracts on Accumulated Other Comprehensive Income The following tables present the activity of derivative instruments designated as cash flow hedges as of March 31, 2020 and December 31, 2019, and the impact of these derivative contracts on AOCI for the three months ended March 31, 2020 and 2019 (in millions): December 31, 2019 Amount of Gain (Loss) Recognized in Other Comprehensive Income Less: Amount of Gain (Loss) March 31, 2020 Foreign exchange contracts designated as cash flow hedges $ (9) $ 47 $ — $ 38 December 31, 2018 Amount of Gain (Loss) Recognized in Other Comprehensive Income Less: Amount of Gain (Loss) March 31, 2019 Foreign exchange contracts designated as cash flow hedges $ 68 $ (21) $ 20 $ 27 Effect of Derivative Contracts on Condensed Consolidated Statement of Income The following table provides a summary of the total gain (loss) recognized in the condensed consolidated statement of income from our foreign exchange derivative contracts by location (in millions): Three Months Ended 2020 2019 Foreign exchange contracts designated as cash flow hedges recognized in net revenues $ 1 $ 20 Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net 9 (5) Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income $ 10 $ 15 The following table provides a summary of the total gain (loss) recognized in the condensed consolidated statement of income from our interest rate derivative contracts by location (in millions): Three Months Ended 2020 2019 Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net $ — $ 15 Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net — (15) Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income $ — $ — The following table provides a summary of the total gain (loss) recognized in the condensed consolidated statement of income due to changes in the fair value of the warrant (in millions): Three Months Ended 2020 2019 Gain (loss) attributable to changes in the fair value of warrant recognized in interest and other, net $ 12 $ 113 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 (in millions): March 31, December 31, Foreign exchange contracts designated as cash flow hedges $ 2,023 $ 1,983 Foreign exchange contracts designated as net investment hedges 165 200 Foreign exchange contracts not designated as hedging instruments 2,006 2,439 Interest rate contracts designated as cash flow hedges 100 — Total $ 4,294 $ 4,622 |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | Fair Value Measurement of Assets and Liabilities The following tables present our financial assets and liabilities measured at fair value on a recurring basis (in millions): March 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 880 $ 780 $ 100 $ — Short-term investments: Restricted cash 19 19 — — Corporate debt securities 3,431 — 3,431 — Government and agency securities 100 — 100 — Total short-term investments 3,550 19 3,531 — Derivatives 414 — 121 293 Long-term investments: Corporate debt securities 744 — 744 — Total long-term investments 744 — 744 — Total financial assets $ 5,588 $ 799 $ 4,496 $ 293 Liabilities: Derivatives $ 21 $ — $ 21 $ — December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 923 $ 923 $ — $ — Short-term investments: Restricted cash 21 21 — — Corporate debt securities 1,654 — 1,654 — Government and agency securities 175 — 175 — Total short-term investments 1,850 21 1,829 — Derivatives 347 — 66 281 Long-term investments: Corporate debt securities 961 — 961 — Total long-term investments 961 — 961 — Total financial assets $ 4,081 $ 944 $ 2,856 $ 281 Liabilities: Derivatives $ 23 $ — $ 23 $ — Our financial assets and liabilities are valued using market prices on both active markets (Level 1), less active markets (Level 2) and little or no market activity (Level 3). 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. Level 3 instrument valuations typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. We did not have any transfers of financial instruments between valuation levels during the three months ended March 31, 2020. 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. Our warrant, which is accounted for as a derivative instrument, is valued using a Black-Scholes model. Key assumptions used in the valuation include risk-free interest rates; Adyen’s common stock price, equity volatility and common stock outstanding; exercise price; and details specific to the warrant. The value is also probability adjusted for management’s assumptions with respect to vesting of the four tranches which are each subject to meeting processing volume milestone targets. These assumptions and the probability of meeting processing volume milestone targets may have a significant impact on the value of the warrant. Refer to “Note 8 – Derivative Instruments” for further details on our derivative instruments. 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. The following table presents a reconciliation of the opening to closing balance of assets measured using significant unobservable inputs (Level 3) (in millions): March 31, December 31, Opening balance $ 281 $ 148 Change in fair value 12 133 Closing balance $ 293 $ 281 The following presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the warrant as of March 31, 2020 (in millions): Fair value Valuation technique Unobservable Input Range (weighted average) (1) Warrant $ 293 Black-Scholes and Monte Carlo Probability of vesting 0.0% - 90.0% (69.0%) Equity volatility 20.7% - 55.3% (35.0%) (1) Probability of vesting were weighted by the unadjusted value of the tranches. For volatility, the average represents the arithmetic average of the inputs and is not weighted by the relative fair value or notional amount. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 Interest Rate December 31, 2019 Interest Rate Long-Term Debt Floating Rate Notes: Senior notes due 2023 LIBOR plus 0.87% $ 400 2.746 % $ 400 2.913 % Fixed Rate Notes: Senior notes due 2020 3.250% 500 3.389 % 500 3.389 % Senior notes due 2020 2.150% 500 2.344 % 500 2.344 % 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 2023 2.750% 750 2.866 % 750 2.866 % Senior notes due 2024 3.450% 750 3.531 % 750 3.531 % Senior notes due 2025 1.900% 500 2.082 % — — % Senior notes due 2027 3.600% 850 3.689 % 850 3.689 % Senior notes due 2030 2.700% 500 2.788 % — — % 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 8,750 7,750 Hedge accounting fair value adjustments (1) 14 15 Unamortized discount and debt issuance costs (53) (44) Other long-term borrowings 13 17 Less: Current portion of long-term debt (1,000) (1,000) Total long-term debt 7,724 6,738 Short-Term Debt Current portion of long-term debt 1,000 1,000 Unamortized discount and debt issuance costs — (1) Other short-term borrowings 15 23 Total short-term debt 1,015 1,022 Total Debt $ 8,739 $ 7,760 (1) Includes the fair value adjustments to debt associated with terminated interest rate swaps which are being recorded as a reduction to interest expense over the remaining term of the related notes. Senior Notes In March 2020, we issued senior unsecured notes, or senior notes, in an aggregate principal amount of $1 billion. The issuance consisted of $500 million of 1.900% fixed rate notes due 2025 and $500 million of 2.700% fixed rate notes due 2030. None of the floating rate notes are 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 (as defined in the applicable senior notes) occurs with respect to the 2.150% fixed rate notes due 2020, the 3.800% fixed rate notes due 2022, the floating rate notes due 2023, the 2.750% fixed rate notes due 2023, the 1.900% fixed rate notes due 2025, the 3.600% fixed rate notes due 2027, the 2.700% fixed rate notes due 2030 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 with customary grace periods in certain circumstances, including payment defaults and bankruptcy-related defaults. 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. In 2019, $1.15 billion related to our 2.200% senior notes of the $2.4 billion aggregate notional amount matured. In addition, during 2019, we terminated the interest rate swaps related to $750 million of our 2.875% senior notes due July 2021 and $500 million of our 3.450% senior notes due July 2024. As a result of the early termination, hedge accounting was discontinued prospectively and the gain on termination was recorded as an increase to the long-term debt balance and is being recognized over the remaining life of the underlying debt as a reduction to interest expense. The gain recognized during the three months ended March 31, 2020 was immaterial . 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 $70 million and $80 million during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020 and December 31, 2019, the estimated fair value of these senior notes, using Level 2 inputs, was approximately $8.7 billion and $7.9 billion, respectively. 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, 2020, there were no commercial paper notes outstanding. Credit Agreement In March 2020, we entered into a credit agreement that provides for an unsecured $2 billion five credit facility by up to $1 billion. Funds borrowed under the credit agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes. The credit agreement replaced our prior $2 billion unsecured revolving credit agreement dated November 2015, which was terminated effective March 2020. As of March 31, 2020, 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 are required to maintain 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, in an aggregate amount of $1.5 billion. However as of March 31, 2020, no borrowings were outstanding under our commercial paper program; therefore, $2 billion of borrowing capacity was available for other purposes permitted by the credit agreement, subject to customary conditions to borrowing. The credit agreement includes a covenant limiting our consolidated leverage ratio to no more than 4.0:1.0, subject to, upon the occurrence of a qualified material acquisition, if so elected by us, a step-up to 4.5:1.0 for the four fiscal quarters completed following such qualified material acquisition. The credit agreement includes customary events of default, with corresponding grace periods in certain circumstances, including payment defaults, cross-defaults and bankruptcy-related defaults. In addition, the credit agreement contains customary affirmative and negative covenants, including restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to customary exceptions. The credit agreement also contains customary representations and warranties. We were in compliance with all covenants in our outstanding debt instruments during the three months ended March 31, 2020. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2020 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | Balance Sheet Components Contract Balances Accounts receivable represents amounts invoiced and revenue recognized prior to invoicing when we have satisfied our performance obligation and have the unconditional right to payment. The allowance for doubtful accounts and authorized credits is estimated based upon our assessment of various factors including historical experience, the age of the accounts receivable balances, current economic conditions reasonable and supportable forecasts, and other factors that may affect our customers’ ability to pay. The allowance for doubtful accounts and authorized credits was $176 million and $128 million as of March 31, 2020 and December 31, 2019, respectively. Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the period. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized for the three month period ended March 31, 2020 that was included in the deferred revenue balance at the beginning of the period was $81 million. The amount of revenue recognized for the three month period ended March 31, 2019 that was included in the deferred revenue balance at the beginning of the period was $68 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Off-Balance Sheet Arrangements As of March 31, 2020, 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, 2020, we had a total of $4.5 billion in aggregate cash deposits, partially offset by $4.5 billion in cash withdrawals, 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 of losses arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) is 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 12, 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, 2020. Except as otherwise noted for the proceedings described in this Note 12, 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. Legal fees are expensed as incurred. General Matters 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 could 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 us 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 practices, 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. 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. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Stock Repurchase Program Our stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of our common stock to reduce our outstanding share count. Any share repurchases under our stock repurchase programs 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 programs 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 January 2019, our Board authorized a $4.0 billion stock repurchase program and in January 2020, our Board authorized an additional $5.0 billion stock repurchase program. These stock repurchase programs have no expiration from the date of authorization. On February 13, 2020, we entered into accelerated share repurchase agreements (the “ASR Agreements”) with each of three financial institutions (each an “ASR Counterparty”), as part of our share repurchase program. Under the ASR Agreements, we paid an aggregate amount of $3.0 billion to the ASR Counterparties and received an initial delivery of approximately 69 million shares of our common stock, which shares were recorded as a $2.55 billion increase to treasury stock. The final number of shares to be repurchased will be based on the volume-weighted average stock price of our common stock during the terms of the agreements, less a discount. This is evaluated as an unsettled forward contract indexed to our own stock, with $450 million classified within stockholders’ equity. The transactions are scheduled to settle in the third quarter of 2020 but may settle earlier in certain circumstances. At final settlement, each ASR Counterparty may be required to deliver additional shares of our common stock to us or, under certain circumstances, we may be required to make a cash payment or deliver shares of our common stock to the applicable ASR Counterparty, with the method of settlement at our election. The stock repurchase activity under our stock repurchase programs during the three months ended March 31, 2020 is summarized as follows (in millions, except per share amounts): Shares Repurchased (1) Average Price per Share (2) Value of Shares Repurchased (2) Remaining Amount Authorized Balance as of January 1, 2020 $ 2,151 Authorization of additional plan in January 2020 5,000 Repurchase of shares of common stock 29 $ 34.30 $ 998 (998) Accelerated share repurchases (3) 69 $ 2,550 (2,550) Unsettled forward contract for share repurchase — $ 450 (450) Balance as of March 31, 2020 $ 3,153 (1) These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. None of the repurchased shares of common stock have been retired. (2) Excludes broker commissions. (3) As indicated above, under the ASR Agreements, we paid an aggregate amount of $3.0 billion to the ASR Counterparties and received an initial delivery of 69 million shares of our common stock. Pursuant to the terms of the ASR Agreements, the final number of shares and the average purchase price will be determined at the end of the applicable purchase periods, which are scheduled to occur in the third quarter of 2020 but may occur earlier in certain circumstances. Dividends The Company paid a total of $114 million in cash dividends during the three months ended March 31, 2020 and $125 million in cash dividends during the three months ended March 31, 2019. In April 2020, our Board of Directors declared a cash dividend of $0.16 per share of common stock to be paid on June 19, 2020 to stockholders of record as of June 1, 2020. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 (in millions): Units Outstanding as of January 1, 2020 28 Awarded 1 Vested (3) Forfeited (5) Outstanding as of March 31, 2020 21 The weighted average grant date fair value for RSUs awarded during the three months ended March 31, 2020 was $36.50 per share. Stock-Based Compensation Expense The impact on our results of operations of recording stock-based compensation expense was as follows (in millions): Three Months Ended 2020 2019 Cost of net revenues $ 10 $ 12 Sales and marketing 20 21 Product development 39 42 General and administrative 31 37 Total stock-based compensation expense $ 100 $ 112 Capitalized in product development $ 4 $ 3 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
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 2008 to 2018 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 2007 include, among others, the U.S. (Federal and California), Germany, Korea, Israel, Switzerland and the United Kingdom. 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. 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. We expect the gross amount of unrecognized tax benefits to be reduced within the next twelve months by at least $19 million. 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 Internal Revenue Service (“IRS”) appealed the decision in June 2016. On July 24, 2018, the Ninth Circuit Federal Court issued a decision that was subsequently withdrawn and a reconstituted panel has conferred on the appeal. On June 7, 2019, the Ninth Circuit Federal Court upheld the cost-sharing regulations and on November 11, 2019 the U.S. Tax Court of Appeals for the Ninth Circuit released a court order denying an en banc rehearing of the case Altera Corp. v Commissioner following Altera’s petition filed on July 22, 2019. On February 10, 2020, a petition for writ of certiorari was filed with the U.S. Supreme Court. It has not been determined if this writ of certiorari will be heard by the U.S. Supreme Court as of the date of our filing. 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, 2020. 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, 2020 | |
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, 2020 and 2019 (in millions): Unrealized Gains (Losses) on Derivative Instruments Unrealized Foreign Estimated Tax (Expense) Benefit Total Balance as of December 31, 2019 $ (9) $ 5 $ 363 $ 25 $ 384 Other comprehensive income (loss) before reclassifications 47 (31) (113) (2) (99) Less: Amount of gain (loss) reclassified from AOCI — — — — — Net current period other comprehensive income (loss) 47 (31) (113) (2) (99) Balance as of March 31, 2020 $ 38 $ (26) $ 250 $ 23 $ 285 Unrealized Gains (Losses) on Derivative Instruments Unrealized Foreign Estimated Tax (Expense) Benefit Total Balance as of December 31, 2018 $ 68 $ (56) $ 462 $ 24 $ 498 Other comprehensive income (loss) before reclassifications (21) 40 (32) (5) (18) Less: Amount of gain (loss) reclassified from AOCI 20 — — (4) 16 Net current period other comprehensive income (loss) (41) 40 (32) (1) (34) Balance as of March 31, 2019 $ 27 $ (16) $ 430 $ 23 $ 464 The following table provides a summary of reclassifications out of AOCI (in millions): Details about AOCI Components Affected Line Item in the Statement of Income Amount of Gain (Loss) Reclassified From AOCI Three Months Ended 2020 2019 Gains (losses) on cash flow hedges - foreign exchange contracts Net Revenues $ — $ 20 Total, from continuing operations before income taxes — 20 Provision for income taxes — (4) Total, net of income taxes — 16 Total reclassifications for the period Total, net of income taxes $ — $ 16 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring The following table summarizes restructuring reserve activity during the three months ended March 31, 2020 (in millions): Employee Severance and Benefits Accrued liability as of January 1, 2020 $ 28 Charges 8 Payments (24) Accrued liability as of March 31, 2020 $ 12 During the first quarter of 2020 we substantially completed the reduction in workforce that was approved by management during the fourth quarter of 2019, primarily in our Marketplace segment. We incurred pre-tax restructuring charges of approximately $8 million in the first quarter of 2020 in connection with the action taken in the fourth quarter of 2019. During the first quarter of 2019, management approved a plan to drive operational improvement that included the reduction of workforc e, primarily in our Marketplace segment. We incurred pre-tax restructuring charges of approximately $38 million, which were primarily related to employee severance and benefits. The reduction was substantially completed in the first quarter of 2019. Restructuring charges are included in general and administrative expenses in the condensed consolidated statement of income. |
The Company and Summary of Si_2
The Company and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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, investments, 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 as equity investments to be measured at fair value or, under an |
Credit losses - Financial assets measured at amortized cost and Available-for-sale securities | Credit losses – Financial assets measured at amortized cost We are exposed to credit losses primarily through our receivables from sellers or advertisers on our Marketplace and Classifieds platforms, respectively. We develop estimates to reflect the risk of credit loss which are based on historical loss trends adjusted for asset specific attributes, current conditions and reasonable and supportable forecasts of the economic conditions that will exist through the contractual life of the financial asset. Our receivables are recovered over a period of 0-180 days, therefore, forecasted changes to economic conditions are not expected to have a significant effect on the estimate of the allowance for doubtful accounts, except in extraordinary circumstances. We write off the asset when it is no longer deemed collectible or when it goes past due 180 days whichever is earlier, with certain limited exceptions. We monitor our ongoing credit exposure through an active review of collection trends. Our activities include monitoring the timeliness of payment collection, managing dispute resolution and performing timely account reconciliations. We may employ collection agencies to pur sue recovery of defaulted receivables. At March 31, 2020, we reported allowances for doubtful accounts of $127 million reflecting an increase of $27 million, net of write-offs of $32 million for the three months ended March 31, 2020. We are also exposed to credit losses from customer accounts and funds receivable balances held by third party financial institutions. These balances are either held by financial institutions associated with payment intermediation activity and awaiting settlement, or are installment collections from financial institutions. We assess these balances for credit loss based on a review of the average period for which the funds are held, credit ratings of the financial institutions and by assessing the probability of default and loss given default models. At March 31, 2020, we did not record any credit-related loss. Credit losses – Available-for-sale debt securities We periodically assess our portfolio of debt investments for impairment. For debt securities in an unrealized loss position, this assessment first takes into account our intent to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value through interest and other, net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, we assess whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through interest and other, net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In 2016, the Financial Accounting Standards Board (“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. This standard impacts the Company’s accounting for allowances for doubtful accounts, available-for-sale securities and other assets subject to credit risk. In preparation for the adoption of this standard, we have updated our credit loss models as needed. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed 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. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. In 2018, the FASB issued new guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor (i.e., a service contract). Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those fiscal years. We adopted this guidance prospectively in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. In 2018, the FASB issued new guidance to clarify the interaction between Collaborative Arrangements and Revenue from Contracts with Customers standards. The guidance (1) clarifies that certain transactions between collaborative arrangement participants should be accounted for under revenue guidance; (2) adds unit of account guidance to the collaborative arrangement guidance to align with the revenue standard; and (3) clarifies presentation guidance for transactions with a collaborative arrangement participant that is not accounted for under the revenue standard. The guidance is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The standard will be effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those fiscal years. We are evaluating the impact of adopting this new accounting guidance on our condensed consolidated financial statements. In 2019, the FASB issued new guidance to decrease diversity in practice and increase comparability for the accounting of certain equity securities and investments under the equity method of accounting. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2020. We are evaluating the impact of adopting this new guidance on our condensed consolidated financial statements. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 per share for the three months ended March 31, 2020 and 2019 (in millions, except per share amounts): Three Months Ended 2020 2019 Numerator: Income from continuing operations $ 485 $ 516 Income from discontinued operations, net of income taxes 2,927 2 Net income $ 3,412 $ 518 Denominator: Weighted average shares of common stock - basic 753 900 Dilutive effect of equity incentive awards 4 8 Weighted average shares of common stock - diluted 757 908 Income per share - basic: Continuing operations $ 0.64 $ 0.58 Discontinued operations 3.89 — Net income per share - basic $ 4.53 $ 0.58 Income per share - diluted: Continuing operations $ 0.64 $ 0.57 Discontinued operations 3.87 — Net income per share - diluted $ 4.51 $ 0.57 Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive 15 11 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of aggregate purchase consideration allocated | The aggregate purchase consideration was allocated as follows (in millions): Motors.co.uk Goodwill $ 65 Purchased intangible assets 30 Net liabilities (2) Total $ 93 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Financial Results of Discontinued Operations | The following table presents financial results from discontinued operations (in millions): Three Months Ended 2020 (1) 2019 StubHub income from discontinued operations, net of income taxes $ 2,928 $ 5 PayPal and Enterprise (loss) from discontinued operations, net of income taxes (1) (3) Income from discontinued operations, net of income taxes 2,927 2 (1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, in addition to the gain on sale recorded during the three months ended March 31, 2020. The following table presents cash flows for StubHub (in millions): Three Months Ended 2020 (1) 2019 Net cash (used in) discontinued operating activities $ (110) $ (22) Net cash provided by (used in) discontinued investing activities $ 4,075 $ (13) (1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, in addition to the gain on sale recorded during the three months ended March 31, 2020. The financial results of StubHub are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. The following table presents the financial results of StubHub (in millions): Three Months Ended 2020 (1) 2019 Net revenues $ 100 $ 230 Cost of net revenues 31 62 Gross profit 69 168 Operating expenses: Sales and marketing 51 95 Product development 29 25 General and administrative 33 25 Provision for transaction losses 3 5 Amortization of acquired intangible assets 1 2 Total operating expenses 117 152 Income (loss) from operations of discontinued operations (48) 16 Pre-tax gain on sale 3,876 — Income from discontinued operations before income taxes 3,828 16 Income tax provision (900) (11) Income from discontinued operations, net of income taxes $ 2,928 $ 5 (1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, in addition to the gain on sale recorded during the three months ended March 31, 2020. For the three months ended March 31, 2020 and 2019, the loss from discontinued operations related to PayPal and Enterprise was immaterial. The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheet (in millions): December 31, 2019 Carrying amounts of assets included as part of discontinued operations: Cash and cash equivalents $ 52 Accounts receivable, net 9 Other current assets 80 Total current assets of discontinued operations $ 141 Long-term investments 11 Property and equipment, net 26 Goodwill 224 Intangible assets, net 5 Operating lease right-of-use assets 29 Deferred tax assets 8 Other assets 3 Total long-term assets of discontinued operations $ 306 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable $ 19 Accrued expenses and other current liabilities 215 Deferred revenue 23 Income taxes payable 2 Total current liabilities of discontinued operations $ 259 Operating lease liabilities 20 Other liabilities 6 Total long-term liabilities of discontinued operations $ 26 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill balances and adjustments by reportable segment | The following table presents goodwill activity by reportable segment during the three months ended March 31, 2020 (in millions): December 31, Goodwill Adjustments March 31, Marketplace $ 4,533 $ — $ (74) $ 4,459 Classifieds 396 — (5) 391 Total $ 4,929 $ — $ (79) $ 4,850 |
Schedule of identifiable intangible assets | The components of identifiable intangible assets are as follows (in millions, except years): March 31, 2020 December 31, 2019 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 $ 424 $ (382) $ 42 5 $ 432 $ (383) $ 49 5 Marketing related 477 (473) 4 5 491 (486) 5 5 Developed technologies 232 (229) 3 3 235 (230) 5 3 All other 161 (160) 1 4 161 (158) 3 4 Total $ 1,294 $ (1,244) $ 50 $ 1,319 $ (1,257) $ 62 |
Schedule of future intangible asset amortization | Expected future intangible asset amortization as of March 31, 2020 is as follows (in millions): Remaining 2020 $ 28 2021 18 2022 2 2023 2 2024 — Total $ 50 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of revenue by type | Segment net revenue and operating income were as follows (in millions): Three Months Ended 2020 2019 Net Revenues Marketplace Net transaction revenues $ 1,900 $ 1,885 Marketing services and other revenues 230 277 Total Marketplace 2,130 2,162 Classifieds (1) 248 256 Elimination of inter-segment net revenue (2) (4) (5) Total consolidated net revenue $ 2,374 $ 2,413 Operating income (loss) Marketplace $ 761 $ 769 Classifieds 83 91 Corporate and other costs (215) (267) Total operating income 629 593 Interest and other, net 2 64 Income before income taxes $ 631 $ 657 (1) Classifieds net revenues consists entirely of marketing services and other revenue. (2) Represents revenue generated between our reportable segments. |
Schedule of revenue by geographic area | The following table summarizes the allocation of net revenues based on geography (in millions): Three Months Ended 2020 2019 U.S. $ 822 $ 842 Germany 357 384 United Kingdom 348 353 South Korea 312 297 Rest of world 535 537 Total net revenues $ 2,374 $ 2,413 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 (in millions): March 31, 2020 Gross Gross Gross Estimated Short-term investments: Restricted cash $ 19 $ — $ — $ 19 Corporate debt securities 3,436 1 (6) 3,431 Government and agency securities 100 — — 100 $ 3,555 $ 1 $ (6) $ 3,550 Long-term investments: Corporate debt securities 765 — (21) 744 $ 765 $ — $ (21) $ 744 December 31, 2019 Gross Gross Gross Estimated Short-term investments: Restricted cash $ 21 $ — $ — $ 21 Corporate debt securities 1,653 1 — 1,654 Government and agency securities 175 — — 175 $ 1,849 $ 1 $ — $ 1,850 Long-term investments: Corporate debt securities 957 4 — 961 $ 957 $ 4 $ — $ 961 |
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, 2020 are as follows (in millions): March 31, 2020 One year or less (including restricted cash of $19) $ 3,550 One year through two years 501 Two years through three years 243 $ 4,294 |
Schedule of equity method investments | The following table provides a summary of our equity investments (in millions): March 31, 2020 December 31, 2019 Equity investments without readily determinable fair values $ 326 $ 337 Equity investments under the equity method of accounting 7 7 Total equity investments $ 333 $ 344 |
Schedule of equity securities without readily determinable fair value | The following table summarizes the change in total carrying value during the three months ended March 31, 2020 and 2019 related to equity investments without readily determinable fair values still held (in millions): Three Months Ended 2020 2019 Carrying value, beginning of period $ 337 $ 137 Foreign currency translation and other (11) — Carrying value, end of period $ 326 $ 137 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of fair value of outstanding derivative instruments | The fair values of our outstanding derivative instruments 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 $ 70 $ 36 Foreign exchange contracts designated as net investment hedges Other Current Assets 4 — Foreign exchange contracts not designated as hedging instruments Other Current Assets 23 15 Warrant Other Assets 293 281 Foreign exchange contracts designated as cash flow hedges Other Assets 24 15 Total derivative assets $ 414 $ 347 Derivative Liabilities: Foreign exchange contracts designated as cash flow hedges Other Current Liabilities $ 2 $ 2 Foreign exchange contracts designated as net investment hedges Other Current Liabilities 1 2 Foreign exchange contracts not designated as hedging instruments Other Current Liabilities 18 19 Total derivative liabilities $ 21 $ 23 Total fair value of derivative instruments $ 393 $ 324 |
Impact of derivative contracts on accumulated other comprehensive income | The following tables present the activity of derivative instruments designated as cash flow hedges as of March 31, 2020 and December 31, 2019, and the impact of these derivative contracts on AOCI for the three months ended March 31, 2020 and 2019 (in millions): December 31, 2019 Amount of Gain (Loss) Recognized in Other Comprehensive Income Less: Amount of Gain (Loss) March 31, 2020 Foreign exchange contracts designated as cash flow hedges $ (9) $ 47 $ — $ 38 December 31, 2018 Amount of Gain (Loss) Recognized in Other Comprehensive Income Less: Amount of Gain (Loss) March 31, 2019 Foreign exchange contracts designated as cash flow hedges $ 68 $ (21) $ 20 $ 27 |
Recognized gains or losses related to derivative instruments | The following table provides a summary of the total gain (loss) recognized in the condensed consolidated statement of income from our foreign exchange derivative contracts by location (in millions): Three Months Ended 2020 2019 Foreign exchange contracts designated as cash flow hedges recognized in net revenues $ 1 $ 20 Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net 9 (5) Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income $ 10 $ 15 The following table provides a summary of the total gain (loss) recognized in the condensed consolidated statement of income from our interest rate derivative contracts by location (in millions): Three Months Ended 2020 2019 Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net $ — $ 15 Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net — (15) Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income $ — $ — The following table provides a summary of the total gain (loss) recognized in the condensed consolidated statement of income due to changes in the fair value of the warrant (in millions): Three Months Ended 2020 2019 Gain (loss) attributable to changes in the fair value of warrant recognized in interest and other, net $ 12 $ 113 |
Notional amounts of outstanding derivatives | The following table provides the notional amounts of our outstanding derivatives (in millions): March 31, December 31, Foreign exchange contracts designated as cash flow hedges $ 2,023 $ 1,983 Foreign exchange contracts designated as net investment hedges 165 200 Foreign exchange contracts not designated as hedging instruments 2,006 2,439 Interest rate contracts designated as cash flow hedges 100 — Total $ 4,294 $ 4,622 |
Fair Value Measurement of Ass_2
Fair Value Measurement of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities measured on a recurring basis | The following tables present our financial assets and liabilities measured at fair value on a recurring basis (in millions): March 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 880 $ 780 $ 100 $ — Short-term investments: Restricted cash 19 19 — — Corporate debt securities 3,431 — 3,431 — Government and agency securities 100 — 100 — Total short-term investments 3,550 19 3,531 — Derivatives 414 — 121 293 Long-term investments: Corporate debt securities 744 — 744 — Total long-term investments 744 — 744 — Total financial assets $ 5,588 $ 799 $ 4,496 $ 293 Liabilities: Derivatives $ 21 $ — $ 21 $ — December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 923 $ 923 $ — $ — Short-term investments: Restricted cash 21 21 — — Corporate debt securities 1,654 — 1,654 — Government and agency securities 175 — 175 — Total short-term investments 1,850 21 1,829 — Derivatives 347 — 66 281 Long-term investments: Corporate debt securities 961 — 961 — Total long-term investments 961 — 961 — Total financial assets $ 4,081 $ 944 $ 2,856 $ 281 Liabilities: Derivatives $ 23 $ — $ 23 $ — |
Schedule of assets measured using significant unobservable inputs | The following table presents a reconciliation of the opening to closing balance of assets measured using significant unobservable inputs (Level 3) (in millions): March 31, December 31, Opening balance $ 281 $ 148 Change in fair value 12 133 Closing balance $ 293 $ 281 The following presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the warrant as of March 31, 2020 (in millions): Fair value Valuation technique Unobservable Input Range (weighted average) (1) Warrant $ 293 Black-Scholes and Monte Carlo Probability of vesting 0.0% - 90.0% (69.0%) Equity volatility 20.7% - 55.3% (35.0%) (1) Probability of vesting were weighted by the unadjusted value of the tranches. For volatility, the average represents the arithmetic average of the inputs and is not weighted by the relative fair value or notional amount. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 Interest Rate December 31, 2019 Interest Rate Long-Term Debt Floating Rate Notes: Senior notes due 2023 LIBOR plus 0.87% $ 400 2.746 % $ 400 2.913 % Fixed Rate Notes: Senior notes due 2020 3.250% 500 3.389 % 500 3.389 % Senior notes due 2020 2.150% 500 2.344 % 500 2.344 % 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 2023 2.750% 750 2.866 % 750 2.866 % Senior notes due 2024 3.450% 750 3.531 % 750 3.531 % Senior notes due 2025 1.900% 500 2.082 % — — % Senior notes due 2027 3.600% 850 3.689 % 850 3.689 % Senior notes due 2030 2.700% 500 2.788 % — — % 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 8,750 7,750 Hedge accounting fair value adjustments (1) 14 15 Unamortized discount and debt issuance costs (53) (44) Other long-term borrowings 13 17 Less: Current portion of long-term debt (1,000) (1,000) Total long-term debt 7,724 6,738 Short-Term Debt Current portion of long-term debt 1,000 1,000 Unamortized discount and debt issuance costs — (1) Other short-term borrowings 15 23 Total short-term debt 1,015 1,022 Total Debt $ 8,739 $ 7,760 (1) Includes the fair value adjustments to debt associated with terminated interest rate swaps which are being recorded as a reduction to interest expense over the remaining term of the related notes. |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of stock repurchase activity under stock repurchase program | The stock repurchase activity under our stock repurchase programs during the three months ended March 31, 2020 is summarized as follows (in millions, except per share amounts): Shares Repurchased (1) Average Price per Share (2) Value of Shares Repurchased (2) Remaining Amount Authorized Balance as of January 1, 2020 $ 2,151 Authorization of additional plan in January 2020 5,000 Repurchase of shares of common stock 29 $ 34.30 $ 998 (998) Accelerated share repurchases (3) 69 $ 2,550 (2,550) Unsettled forward contract for share repurchase — $ 450 (450) Balance as of March 31, 2020 $ 3,153 (1) These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. None of the repurchased shares of common stock have been retired. (2) Excludes broker commissions. (3) As indicated above, under the ASR Agreements, we paid an aggregate amount of $3.0 billion to the ASR Counterparties and received an initial delivery of 69 million shares of our common stock. Pursuant to the terms of the ASR Agreements, the final number of shares and the average purchase price will be determined at the end of the applicable purchase periods, which are scheduled to occur in the third quarter of 2020 but may occur earlier in certain circumstances. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 (in millions): Units Outstanding as of January 1, 2020 28 Awarded 1 Vested (3) Forfeited (5) Outstanding as of March 31, 2020 21 |
Schedule of stock-based compensation expense | The impact on our results of operations of recording stock-based compensation expense was as follows (in millions): Three Months Ended 2020 2019 Cost of net revenues $ 10 $ 12 Sales and marketing 20 21 Product development 39 42 General and administrative 31 37 Total stock-based compensation expense $ 100 $ 112 Capitalized in product development $ 4 $ 3 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 and 2019 (in millions): Unrealized Gains (Losses) on Derivative Instruments Unrealized Foreign Estimated Tax (Expense) Benefit Total Balance as of December 31, 2019 $ (9) $ 5 $ 363 $ 25 $ 384 Other comprehensive income (loss) before reclassifications 47 (31) (113) (2) (99) Less: Amount of gain (loss) reclassified from AOCI — — — — — Net current period other comprehensive income (loss) 47 (31) (113) (2) (99) Balance as of March 31, 2020 $ 38 $ (26) $ 250 $ 23 $ 285 Unrealized Gains (Losses) on Derivative Instruments Unrealized Foreign Estimated Tax (Expense) Benefit Total Balance as of December 31, 2018 $ 68 $ (56) $ 462 $ 24 $ 498 Other comprehensive income (loss) before reclassifications (21) 40 (32) (5) (18) Less: Amount of gain (loss) reclassified from AOCI 20 — — (4) 16 Net current period other comprehensive income (loss) (41) 40 (32) (1) (34) Balance as of March 31, 2019 $ 27 $ (16) $ 430 $ 23 $ 464 |
Reclassifications out of accumulated other comprehensive income | The following table provides a summary of reclassifications out of AOCI (in millions): Details about AOCI Components Affected Line Item in the Statement of Income Amount of Gain (Loss) Reclassified From AOCI Three Months Ended 2020 2019 Gains (losses) on cash flow hedges - foreign exchange contracts Net Revenues $ — $ 20 Total, from continuing operations before income taxes — 20 Provision for income taxes — (4) Total, net of income taxes — 16 Total reclassifications for the period Total, net of income taxes $ — $ 16 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring activity | The following table summarizes restructuring reserve activity during the three months ended March 31, 2020 (in millions): Employee Severance and Benefits Accrued liability as of January 1, 2020 $ 28 Charges 8 Payments (24) Accrued liability as of March 31, 2020 $ 12 |
The Company and Summary of Si_3
The Company and Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of reportable segments | segment | 2 | |
Allowance for doubtful accounts | $ 127 | $ 100 |
Increase in allowance for doubtful accounts receivable | 27 | |
Allowance for doubtful accounts receivable, write-offs | $ 32 | |
Minimum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accounts receivable, number of days outstanding | 0 days | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accounts receivable, number of days outstanding | 180 days |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Income from continuing operations | $ 485 | $ 516 |
Income from discontinued operations, net of income taxes | 2,927 | 2 |
Net income | $ 3,412 | $ 518 |
Denominator: | ||
Weighted average shares of common stock - basic (in shares) | 753 | 900 |
Dilutive effect of equity incentive awards (in shares) | 4 | 8 |
Weighted average shares of common stock - diluted (in shares) | 757 | 908 |
Income per share - basic: | ||
Continuing operations (in usd per share) | $ 0.64 | $ 0.58 |
Discontinued operations (in usd per share) | 3.89 | 0 |
Net income per share - basic (in usd per share) | 4.53 | 0.58 |
Income per share - diluted: | ||
Continuing operations (in usd per share) | 0.64 | 0.57 |
Discontinued operations (in usd per share) | 3.87 | 0 |
Net income per share - diluted (in usd per share) | $ 4.51 | $ 0.57 |
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive (in shares) | 15 | 11 |
Business Combinations - Acquisi
Business Combinations - Acquisition Activity (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Feb. 28, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 4,850 | $ 4,929 | |
Motors.co.uk | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 93 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | 65 | ||
Purchased intangible assets | 30 | ||
Net liabilities | (2) | ||
Total | $ 93 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Millions | Feb. 13, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Transaction service agreement, fees | $ 40 | ||
Transaction service agreement, extension term | 12 months | ||
Minimum | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Transaction service agreement, term | 12 months | ||
Maximum | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Transaction service agreement, term | 18 months | ||
StubHub | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income taxes of discontinued operations | $ 900 | $ 11 | |
StubHub | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration received for business disposal | $ 4,050 | ||
Proceeds received for business disposal | 4,100 | ||
Proceeds received for business disposal, net of income taxes and transaction costs | 3,200 | ||
Income taxes of discontinued operations | $ 900 | ||
Gain on sale of business | $ 3,900 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Financial Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income from discontinued operations, net of income taxes | $ 2,927 | $ 2 |
StubHub | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net revenues | 100 | 230 |
Cost of net revenues | 31 | 62 |
Gross profit | 69 | 168 |
Sales and marketing | 51 | 95 |
Product development | 29 | 25 |
General and administrative | 33 | 25 |
Provision for transaction losses | 3 | 5 |
Amortization of acquired intangible assets | 1 | 2 |
Amortization of acquired intangible assets | 117 | 152 |
Income (loss) from operations of discontinued operations | (48) | 16 |
Pre-tax gain on sale | 3,876 | 0 |
Income from discontinued operations before income taxes | 3,828 | 16 |
Income tax provision | (900) | (11) |
Income from discontinued operations, net of income taxes | 2,928 | 5 |
Paypal and Enterprise | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income from discontinued operations, net of income taxes | $ (1) | $ (3) |
Discontinued Operations - Sum_2
Discontinued Operations - Summary of Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net cash (used in) discontinued operating activities | $ (110) | $ (22) |
Net cash provided by (used in) discontinued investing activities | 4,075 | (13) |
StubHub | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net cash (used in) discontinued operating activities | (110) | (22) |
Net cash provided by (used in) discontinued investing activities | $ 4,075 | $ (13) |
Discontinued Operations - Sum_3
Discontinued Operations - Summary of Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Cash and cash equivalents | $ 52 | |
Accounts receivable, net | 9 | |
Other current assets | 80 | |
Total current assets of discontinued operations | $ 0 | 141 |
Long-term investments | 11 | |
Property and equipment, net | 26 | |
Goodwill | 224 | |
Intangible assets, net | 5 | |
Operating lease right-of-use assets | 29 | |
Deferred tax assets | 8 | |
Other assets | 3 | |
Total long-term assets of discontinued operations | 0 | 306 |
Accounts payable | 19 | |
Accrued expenses and other current liabilities | 215 | |
Deferred revenue | 23 | |
Income taxes payable | 2 | |
Total current liabilities of discontinued operations | 0 | 259 |
Operating lease liabilities | 20 | |
Other liabilities | 6 | |
Total long-term liabilities of discontinued operations | $ 0 | $ 26 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Balances and Adjustments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 4,929 |
Goodwill Acquired | 0 |
Adjustments | (79) |
Ending balance | 4,850 |
Marketplace | |
Goodwill [Roll Forward] | |
Beginning balance | 4,533 |
Goodwill Acquired | 0 |
Adjustments | (74) |
Ending balance | 4,459 |
Classifieds | |
Goodwill [Roll Forward] | |
Beginning balance | 396 |
Goodwill Acquired | 0 |
Adjustments | (5) |
Ending balance | $ 391 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Intangible assets: | |||
Gross Carrying Amount | $ 1,294 | $ 1,319 | |
Accumulated Amortization | (1,244) | (1,257) | |
Net Carrying Amount | 50 | 62 | |
Amortization expense | 10 | $ 13 | |
Customer lists and user base | |||
Intangible assets: | |||
Gross Carrying Amount | 424 | 432 | |
Accumulated Amortization | (382) | (383) | |
Net Carrying Amount | $ 42 | $ 49 | |
Weighted Average Useful Life (Years) | 5 years | 5 years | |
Marketing related | |||
Intangible assets: | |||
Gross Carrying Amount | $ 477 | $ 491 | |
Accumulated Amortization | (473) | (486) | |
Net Carrying Amount | $ 4 | $ 5 | |
Weighted Average Useful Life (Years) | 5 years | 5 years | |
Developed technologies | |||
Intangible assets: | |||
Gross Carrying Amount | $ 232 | $ 235 | |
Accumulated Amortization | (229) | (230) | |
Net Carrying Amount | $ 3 | $ 5 | |
Weighted Average Useful Life (Years) | 3 years | 3 years | |
All other | |||
Intangible assets: | |||
Gross Carrying Amount | $ 161 | $ 161 | |
Accumulated Amortization | (160) | (158) | |
Net Carrying Amount | $ 1 | $ 3 | |
Weighted Average Useful Life (Years) | 4 years | 4 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Asset Amortization Expense, Fiscal Year Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fiscal year: | ||
2020 | $ 28 | |
2021 | 18 | |
2022 | 2 | |
2023 | 2 | |
2024 | 0 | |
Net Carrying Amount | $ 50 | $ 62 |
Segments (Details)
Segments (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Net Revenues | ||
Total consolidated net revenue | $ 2,374 | $ 2,413 |
Operating income (loss) | ||
Total operating income | 629 | 593 |
Interest and other, net | 2 | 64 |
Income from continuing operations before income taxes | 631 | 657 |
U.S. | ||
Net Revenues | ||
Total consolidated net revenue | 822 | 842 |
Germany | ||
Net Revenues | ||
Total consolidated net revenue | 357 | 384 |
United Kingdom | ||
Net Revenues | ||
Total consolidated net revenue | 348 | 353 |
South Korea | ||
Net Revenues | ||
Total consolidated net revenue | 312 | 297 |
Rest of world | ||
Net Revenues | ||
Total consolidated net revenue | 535 | 537 |
Operating Segments | ||
Net Revenues | ||
Total consolidated net revenue | 2,374 | 2,413 |
Operating Segments | Marketplace | ||
Net Revenues | ||
Total consolidated net revenue | 2,130 | 2,162 |
Operating income (loss) | ||
Total operating income | 761 | 769 |
Operating Segments | Classifieds | ||
Net Revenues | ||
Total consolidated net revenue | 248 | 256 |
Operating income (loss) | ||
Total operating income | 83 | 91 |
Elimination of inter-segment net revenue | ||
Net Revenues | ||
Total consolidated net revenue | (4) | (5) |
Corporate and other costs | ||
Operating income (loss) | ||
Total operating income | (215) | (267) |
Net transaction revenues | Operating Segments | Marketplace | ||
Net Revenues | ||
Total consolidated net revenue | 1,900 | 1,885 |
Marketing services and other revenues | Operating Segments | Marketplace | ||
Net Revenues | ||
Total consolidated net revenue | $ 230 | $ 277 |
Investments - Available-For-Sal
Investments - Available-For-Sale Securities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value | $ 4,294 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
One year or less (including restricted cash of $19) | 3,550 | |
One year through two years | 501 | |
Two years through three years | 243 | |
Estimated Fair Value | 4,294 | |
Short-term investments: | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 3,555 | $ 1,849 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (6) | 0 |
Estimated Fair Value | 3,550 | 1,850 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
Estimated Fair Value | 3,550 | 1,850 |
Short-term investments: | Restricted cash | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 19 | 21 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 19 | 21 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
Estimated Fair Value | 19 | 21 |
Short-term investments: | Corporate debt securities | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 3,436 | 1,653 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (6) | 0 |
Estimated Fair Value | 3,431 | 1,654 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
Estimated Fair Value | 3,431 | 1,654 |
Short-term investments: | Government and agency securities | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 100 | 175 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 100 | 175 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
Estimated Fair Value | 100 | 175 |
Long-term investments: | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 765 | 957 |
Gross Unrealized Gains | 0 | 4 |
Gross Unrealized Losses | (21) | 0 |
Estimated Fair Value | 744 | 961 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
Estimated Fair Value | 744 | 961 |
Long-term investments: | Corporate debt securities | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Gross Amortized Cost | 765 | 957 |
Gross Unrealized Gains | 0 | 4 |
Gross Unrealized Losses | (21) | 0 |
Estimated Fair Value | 744 | 961 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
Estimated Fair Value | $ 744 | $ 961 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Investments [Abstract] | ||
Investment securities in a continuous unrealized loss position for less then 12 months | $ 2,700,000,000 | $ 774,000,000 |
Investment securities in a continuous loss position for less than 12 months, unrealized losses | 28,000,000 | |
Estimated fair value for securities in continuous unrealized loss position for greater than 12 months | $ 0 | $ 92,000,000 |
Investments - Equity Investment
Investments - Equity Investments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Investments [Abstract] | ||||
Equity investments without readily determinable fair values | $ 326 | $ 337 | $ 137 | $ 137 |
Equity investments under the equity method of accounting | 7 | 7 | ||
Total equity investments | $ 333 | $ 344 |
Investments - Carrying Value of
Investments - Carrying Value of Equity Investments Without Readily Determinable Fair Values (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity Securities without Readily Determinable Fair Value [Roll Forward] | ||
Carrying value, beginning of period | $ 337 | $ 137 |
Foreign currency translation and other | (11) | 0 |
Carrying value, end of period | 326 | $ 137 |
Cumulative downward adjustments for price changes and impairment | $ 81 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2019USD ($) | Mar. 31, 2020USD ($)tranche | Dec. 31, 2019USD ($) | Jul. 31, 2014USD ($) | |
Derivative [Line Items] | ||||
Derivative, notional amount | $ 4,294,000,000 | $ 4,622,000,000 | ||
Net derivative gains to be reclassified into earnings within the next 12 months | 38,000,000 | |||
Offset asset | 21,000,000 | |||
Offset liability | 21,000,000 | |||
Net derivative assets | 100,000,000 | |||
Net derivative liabilities | 0 | |||
Foreign Exchange Contract | Designated as Hedging Instrument | Cash Flow Hedging | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 2,023,000,000 | $ 1,983,000,000 | ||
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 | 24 months | |||
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging | ||||
Derivative [Line Items] | ||||
Derivative contract duration | 10 years | |||
Derivative, notional amount | $ 100,000,000 | |||
Interest Rate Swap | Designated as Hedging Instrument | Fair Value Hedging | ||||
Derivative [Line Items] | ||||
Derivative liability | $ 2,400,000,000 | $ 2,400,000,000 | ||
Warrant | ||||
Derivative [Line Items] | ||||
Maximum percentage of acquired shares | 5.00% | |||
Warrants term (years) | 7 years | |||
Number of tranches | tranche | 4 | |||
Maximum number of tranches that can vest per year | tranche | 2 | |||
Senior Notes | ||||
Derivative [Line Items] | ||||
Debt instrument, face amount | $ 1,000,000,000 | |||
2.200% Senior notes due 2019 | Senior Notes | ||||
Derivative [Line Items] | ||||
Repayments of debt | $ 1,150,000,000 | |||
interest rate (in percentage) | 2.20% | |||
2.875% Senior notes due 2021 | Senior Notes | ||||
Derivative [Line Items] | ||||
interest rate (in percentage) | 2.875% | 2.875% | ||
Debt instrument, face amount | $ 750,000,000 | $ 750,000,000 | ||
3.450% Senior notes due 2024 | Senior Notes | ||||
Derivative [Line Items] | ||||
interest rate (in percentage) | 3.45% | 3.45% | ||
Debt instrument, face amount | $ 500,000,000 | $ 500,000,000 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Contracts (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 414 | $ 347 |
Derivative liabilities | 21 | 23 |
Total fair value of derivative instruments | 393 | 324 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Assets | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 70 | 36 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Assets | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 4 | 0 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other Assets | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 24 | 15 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Liabilities | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 2 | 2 |
Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Liabilities | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 1 | 2 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 23 | 15 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 18 | 19 |
Warrant | Designated as Hedging Instrument | Other Assets | Fair Value Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 293 | $ 281 |
Derivative Instruments - Deriva
Derivative Instruments - Derivatives in Accumulated Other Comprehensive Income (Details) - Foreign Exchange Contract - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Effect of derivative Contracts on Accumulated Other Comprehensive Income | ||
Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings | $ 10 | $ 15 |
Designated as Hedging Instrument | Cash Flow Hedging | ||
Effect of derivative Contracts on Accumulated Other Comprehensive Income | ||
Beginning balance | (9) | 68 |
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 47 | (21) |
Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings | 0 | 20 |
Ending balance | $ 38 | $ 27 |
Derivative Instruments - Effect
Derivative Instruments - Effect of Derivative Contracts on Condensed Consolidated Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Foreign Exchange Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income | $ 10 | $ 15 |
Foreign Exchange Contract | 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 | 0 | 20 |
Foreign Exchange Contract | Revenues | 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 | 1 | 20 |
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 | 9 | (5) |
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 | 0 | 15 |
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net | 0 | (15) |
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income | 0 | 0 |
Warrant | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net | $ 12 | $ 113 |
Derivative Instruments - Notion
Derivative Instruments - Notional Amounts of Derivatives Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative, notional amount | $ 4,294 | $ 4,622 |
Foreign Exchange Contract | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, notional amount | 2,023 | 1,983 |
Foreign Exchange Contract | Designated as Hedging Instrument | Net Investment Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, notional amount | 165 | 200 |
Foreign Exchange Contract | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, notional amount | 2,006 | 2,439 |
Interest Rate Contract | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, notional amount | $ 100 | $ 0 |
Fair Value Measurement of Ass_3
Fair Value Measurement of Assets and Liabilities - Financial Assets and Liabilities Measured at Fair Value, Recurring (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Derivatives | $ 100,000,000 | |
Liabilities: | ||
Derivatives | 0 | |
Recurring | ||
Assets: | ||
Cash and cash equivalents | 880,000,000 | $ 923,000,000 |
Total financial assets | 5,588,000,000 | 4,081,000,000 |
Recurring | Short-term investments: | ||
Assets: | ||
Investments | 3,550,000,000 | 1,850,000,000 |
Recurring | Derivatives | ||
Assets: | ||
Derivatives | 414,000,000 | 347,000,000 |
Recurring | Long-term Investments | ||
Assets: | ||
Investments | 744,000,000 | 961,000,000 |
Recurring | Derivatives | ||
Liabilities: | ||
Derivatives | 21,000,000 | 23,000,000 |
Recurring | Restricted cash | Short-term investments: | ||
Assets: | ||
Investments | 19,000,000 | 21,000,000 |
Recurring | Corporate debt securities | Short-term investments: | ||
Assets: | ||
Investments | 3,431,000,000 | 1,654,000,000 |
Recurring | Corporate debt securities | Long-term Investments | ||
Assets: | ||
Investments | 744,000,000 | 961,000,000 |
Recurring | Government and agency securities | Short-term investments: | ||
Assets: | ||
Investments | 100,000,000 | 175,000,000 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash and cash equivalents | 780,000,000 | 923,000,000 |
Total financial assets | 799,000,000 | 944,000,000 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term investments: | ||
Assets: | ||
Investments | 19,000,000 | 21,000,000 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivatives | ||
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) | Derivatives | ||
Liabilities: | ||
Derivatives | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Restricted cash | Short-term investments: | ||
Assets: | ||
Investments | 19,000,000 | 21,000,000 |
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 | 100,000,000 | 0 |
Total financial assets | 4,496,000,000 | 2,856,000,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Short-term investments: | ||
Assets: | ||
Investments | 3,531,000,000 | 1,829,000,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Derivatives | ||
Assets: | ||
Derivatives | 121,000,000 | 66,000,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Long-term Investments | ||
Assets: | ||
Investments | 744,000,000 | 961,000,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Derivatives | ||
Liabilities: | ||
Derivatives | 21,000,000 | 23,000,000 |
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 | 3,431,000,000 | 1,654,000,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | Long-term Investments | ||
Assets: | ||
Investments | 744,000,000 | 961,000,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Government and agency securities | Short-term investments: | ||
Assets: | ||
Investments | 100,000,000 | 175,000,000 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Total financial assets | 293,000,000 | 281,000,000 |
Recurring | Significant Unobservable Inputs (Level 3) | Short-term investments: | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Derivatives | ||
Assets: | ||
Derivatives | 293,000,000 | 281,000,000 |
Recurring | Significant Unobservable Inputs (Level 3) | Long-term Investments | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Derivatives | ||
Liabilities: | ||
Derivatives | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Restricted cash | Short-term investments: | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | Short-term investments: | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | Long-term Investments | ||
Assets: | ||
Investments | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Government and agency securities | Short-term investments: | ||
Assets: | ||
Investments | $ 0 | $ 0 |
Fair Value Measurement of Ass_4
Fair Value Measurement of Assets and Liabilities - Assets Measured Valued Using Unobservable Inputs (Details) - Recurring - Significant Unobservable Inputs (Level 3) - Warrant - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 281 | $ 148 |
Change in fair value | 12 | 133 |
Ending balance | $ 293 | $ 281 |
Fair Value Measurement of Ass_5
Fair Value Measurement of Assets and Liabilities - Quantitative Information About Level 3 Significant Inputs (Details) | Mar. 31, 2020 |
Probability of vesting | Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant, measurement input | 0 |
Probability of vesting | Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant, measurement input | 0.900 |
Probability of vesting | Weighted Average | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant, measurement input | 0.690 |
Equity volatility | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant, measurement input | 0.350 |
Equity volatility | Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant, measurement input | 0.207 |
Equity volatility | Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant, measurement input | 0.553 |
Debt - Carrying Value of Outsta
Debt - Carrying Value of Outstanding Debt (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Jul. 31, 2019 | |
Long-Term Debt | |||
Total senior notes | $ 8,750 | $ 7,750 | |
Hedge accounting fair value adjustments | 14 | 15 | |
Unamortized discount and debt issuance costs | (53) | (44) | |
Other long-term borrowings | 13 | 17 | |
Current portion of long-term debt | (1,000) | (1,000) | |
Total long-term debt | 7,724 | 6,738 | |
Short-Term Debt | |||
Current portion of long-term debt | 1,000 | 1,000 | |
Unamortized discount and debt issuance costs | 0 | (1) | |
Other short-term borrowings | 15 | 23 | |
Total short-term debt | 1,015 | 1,022 | |
Total Debt | 8,739 | 7,760 | |
Senior Notes | Floating rate, Senior notes due 2023 | |||
Long-Term Debt | |||
Total senior notes | $ 400 | $ 400 | |
Effective interest rate | 2.746% | 2.913% | |
Senior Notes | Floating rate, Senior notes due 2023 | LIBOR | |||
Long-Term Debt | |||
Variable rate | 0.87% | ||
Senior Notes | 3.250% Senior notes due 2020 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 3.25% | ||
Total senior notes | $ 500 | $ 500 | |
Effective interest rate | 3.389% | 3.389% | |
Senior Notes | 2.150% Senior notes due 2020 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 2.15% | ||
Total senior notes | $ 500 | $ 500 | |
Effective interest rate | 2.344% | 2.344% | |
Senior Notes | 2.875% Senior notes due 2021 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 2.875% | 2.875% | |
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 2.993% | 2.993% | |
Senior Notes | 3.800% Senior notes due 2022 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 3.80% | ||
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 3.989% | 3.989% | |
Senior Notes | 2.600% Senior notes due 2022 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 2.60% | ||
Total senior notes | $ 1,000 | $ 1,000 | |
Effective interest rate | 2.678% | 2.678% | |
Senior Notes | 2.750% Senior notes due 2023 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 2.75% | ||
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 2.866% | 2.866% | |
Senior Notes | 3.450% Senior notes due 2024 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 3.45% | 3.45% | |
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 3.531% | 3.531% | |
Senior Notes | 1.900% Senior notes due 2025 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 1.90% | ||
Total senior notes | $ 500 | $ 0 | |
Effective interest rate | 2.082% | 0.00% | |
Senior Notes | 3.600% Senior notes due 2027 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 3.60% | ||
Total senior notes | $ 850 | $ 850 | |
Effective interest rate | 3.689% | 3.689% | |
Senior Notes | 2.700% Senior notes due 2030 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 2.70% | ||
Total senior notes | $ 500 | $ 0 | |
Effective interest rate | 2.788% | 0.00% | |
Senior Notes | 4.000% Senior notes due 2042 | |||
Long-Term Debt | |||
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 | |||
Long-Term Debt | |||
Coupon rate, fixed rate notes | 6.00% | ||
Total senior notes | $ 750 | $ 750 | |
Effective interest rate | 6.547% | 6.547% |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Jul. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jul. 31, 2014 | |
Interest Rate Swap | Designated as Hedging Instrument | Fair Value Hedging | |||||
Debt Instrument [Line Items] | |||||
Derivative liability | $ 2,400,000,000 | $ 2,400,000,000 | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 1,000,000,000 | ||||
Redemption price, percentage, in the event of change of control | 101.00% | ||||
Interest expense | $ 70,000,000 | $ 80,000,000 | |||
Fair value of long-term debt | 8,700,000,000 | $ 7,900,000,000 | |||
Senior Notes | 1.900% Senior notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 500,000,000 | ||||
Coupon rate, fixed rate notes | 1.90% | ||||
Senior Notes | 2.700% Senior notes due 2030 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 500,000,000 | ||||
Coupon rate, fixed rate notes | 2.70% | ||||
Senior Notes | 6.000% Senior notes due 2056 | |||||
Debt Instrument [Line Items] | |||||
Coupon rate, fixed rate notes | 6.00% | ||||
Redemption price, percentage | 100.00% | ||||
Senior Notes | 2.150% Senior notes due 2020 | |||||
Debt Instrument [Line Items] | |||||
Coupon rate, fixed rate notes | 2.15% | ||||
Senior Notes | 3.800% Senior notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Coupon rate, fixed rate notes | 3.80% | ||||
Senior Notes | 2.750% Senior notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Coupon rate, fixed rate notes | 2.75% | ||||
Senior Notes | 3.600% Senior notes due 2027 | |||||
Debt Instrument [Line Items] | |||||
Coupon rate, fixed rate notes | 3.60% | ||||
Senior Notes | 2.200% Senior notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Coupon rate, fixed rate notes | 2.20% | ||||
Repayment of debt | $ 1,150,000,000 | ||||
Senior Notes | 2.875% Senior notes due 2021 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 750,000,000 | $ 750,000,000 | |||
Coupon rate, fixed rate notes | 2.875% | 2.875% | |||
Senior Notes | 3.450% Senior notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 500,000,000 | $ 500,000,000 | |||
Coupon rate, fixed rate notes | 3.45% | 3.45% |
Debt - Commercial Paper and Cre
Debt - Commercial Paper and Credit Agreement (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($) | Nov. 30, 2015USD ($) | |
Debt Instrument [Line Items] | ||
Allowable increase in borrowing capacity, maximum | $ 1,000,000,000 | |
Maximum consolidated leverage ratio | 4 | |
Maximum consolidated leverage ratio following a material acquisition | 4.5 | |
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] | ||
Debt term | 5 years | |
Amount outstanding | $ 0 | |
Maximum borrowing capacity | 2,000,000,000 | $ 2,000,000,000 |
Remaining borrowing capacity | $ 2,000,000,000 |
Balance Sheet Components (Detai
Balance Sheet Components (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Balance Sheet Components [Abstract] | |||
Allowance for doubtful accounts and authorized credits | $ 176 | $ 128 | |
Deferred revenue recognized | $ 81 | $ 68 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Billions | Mar. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Pooling arrangement deposits | $ 4.5 |
Pooling arrangement withdrawals | $ 4.5 |
Stockholders_ Equity - Addition
Stockholders’ Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions | Feb. 13, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 |
Equity, Class of Treasury Stock [Line Items] | ||||||
Authorized repurchase amount | $ 5,000,000,000 | |||||
Value of shares repurchased | $ 998,000,000 | |||||
Shares repurchased (in shares) | 29 | |||||
Dividends paid | $ 114,000,000 | $ 125,000,000 | ||||
Treasury stock at cost | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Value of shares repurchased | 3,550,000,000 | 1,501,000,000 | ||||
Additional paid-in capital | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Value of shares repurchased | 450,000,000 | $ 0 | ||||
Stock Repurchase Program January 2019 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Authorized repurchase amount | $ 4,000,000,000 | |||||
Stock Repurchase Program January 2020 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Authorized repurchase amount | $ 5,000,000,000 | |||||
Accelerated Share Repurchased Agreement | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Value of shares repurchased | $ 3,000,000,000 | |||||
Shares repurchased (in shares) | 69 | |||||
Accelerated Share Repurchased Agreement | Treasury stock at cost | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Value of shares repurchased | $ 2,550,000,000 | $ 2,550,000,000 | ||||
Shares repurchased (in shares) | 69 | |||||
Accelerated Share Repurchased Agreement | Additional paid-in capital | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Value of shares repurchased | $ 450,000,000 | $ 450,000,000 | ||||
Shares repurchased (in shares) | 0 | |||||
Subsequent Event | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividends declared (in usd per share) | $ 0.16 |
Stockholders_ Equity - Summary
Stockholders’ Equity - Summary of Stock Repurchase Activity (Details) - USD ($) | Feb. 13, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Jan. 31, 2020 |
Equity [Abstract] | ||||
Shares repurchased (in shares) | 29,000,000 | |||
Average Price per Share (in usd per share) | $ 34.30 | |||
Value of shares repurchased | $ 998,000,000 | |||
Shares Repurchased, Remaining Amount Authorized | ||||
Beginning balance | 2,151,000,000 | |||
Authorized repurchase amount | $ 5,000,000,000 | |||
Repurchase of shares of common stock | (998,000,000) | |||
Ending balance | $ 3,153,000,000 | |||
Treasury shares retired (in shares) | 0 | |||
Treasury stock at cost | ||||
Equity [Abstract] | ||||
Value of shares repurchased | $ 3,550,000,000 | $ 1,501,000,000 | ||
Shares Repurchased, Remaining Amount Authorized | ||||
Repurchase of shares of common stock | (3,550,000,000) | (1,501,000,000) | ||
Additional paid-in capital | ||||
Equity [Abstract] | ||||
Value of shares repurchased | 450,000,000 | 0 | ||
Shares Repurchased, Remaining Amount Authorized | ||||
Repurchase of shares of common stock | $ (450,000,000) | $ 0 | ||
Accelerated Share Repurchased Agreement | ||||
Equity [Abstract] | ||||
Shares repurchased (in shares) | 69,000,000 | |||
Value of shares repurchased | $ 3,000,000,000 | |||
Shares Repurchased, Remaining Amount Authorized | ||||
Repurchase of shares of common stock | (3,000,000,000) | |||
Accelerated Share Repurchased Agreement | Treasury stock at cost | ||||
Equity [Abstract] | ||||
Shares repurchased (in shares) | 69,000,000 | |||
Value of shares repurchased | 2,550,000,000 | $ 2,550,000,000 | ||
Shares Repurchased, Remaining Amount Authorized | ||||
Repurchase of shares of common stock | (2,550,000,000) | $ (2,550,000,000) | ||
Accelerated Share Repurchased Agreement | Additional paid-in capital | ||||
Equity [Abstract] | ||||
Shares repurchased (in shares) | 0 | |||
Value of shares repurchased | 450,000,000 | $ 450,000,000 | ||
Shares Repurchased, Remaining Amount Authorized | ||||
Repurchase of shares of common stock | $ (450,000,000) | $ (450,000,000) |
Employee Benefit Plans - Restri
Employee Benefit Plans - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) shares in Millions | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Units | |
Outstanding, beginning of period (in shares) | 28 |
Awarded (in shares) | 1 |
Vested (in shares) | (3) |
Forfeited (in shares) | (5) |
Outstanding, end of period (in shares) | 21 |
Weighted average grant date fair value (in usd per share) | $ / shares | $ 36.50 |
Employee Benefit Plans - Stock-
Employee Benefit Plans - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 100 | $ 112 |
Cost of net revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 10 | 12 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 20 | 21 |
Product development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 39 | 42 |
Capitalized in product development | 4 | 3 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 31 | $ 37 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Mar. 31, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Decrease in unrecognized tax benefits, reasonably possible | $ 19 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Changes in Accumulated Balances of Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Tax | ||
Accumulated other comprehensive income (loss), estimated tax (expense) benefit, beginning balance | $ 25 | $ 24 |
Other comprehensive income (loss) before reclassifications, tax | (2) | (5) |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, tax | 0 | (4) |
Net current period other comprehensive income (loss), tax | (2) | (1) |
Accumulated other comprehensive income (loss), estimated tax (expense) benefit, ending balance | 23 | 23 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 2,870 | |
Other comprehensive income (loss) before reclassifications | (99) | (18) |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income | 0 | 16 |
Other comprehensive income (loss), net of tax | (99) | (34) |
Ending balance | 2,115 | 5,203 |
Unrealized Gains (Losses) on Derivative Instruments | ||
Accumulated Other Comprehensive Income (Loss), Before Tax | ||
Accumulated other comprehensive income (loss), before tax, beginning balance | (9) | 68 |
Other comprehensive income (loss), before reclassifications, before tax | 47 | (21) |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 0 | 20 |
Net current period other comprehensive income (loss), before tax | 47 | (41) |
Accumulated other comprehensive income (loss), before tax, ending balance | 38 | 27 |
Unrealized Gains (Losses) on Investments | ||
Accumulated Other Comprehensive Income (Loss), Before Tax | ||
Accumulated other comprehensive income (loss), before tax, beginning balance | 5 | (56) |
Other comprehensive income (loss), before reclassifications, before tax | (31) | 40 |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 0 | 0 |
Net current period other comprehensive income (loss), before tax | (31) | 40 |
Accumulated other comprehensive income (loss), before tax, ending balance | (26) | (16) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Before Tax | ||
Accumulated other comprehensive income (loss), before tax, beginning balance | 363 | 462 |
Other comprehensive income (loss), before reclassifications, before tax | (113) | (32) |
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax | 0 | 0 |
Net current period other comprehensive income (loss), before tax | (113) | (32) |
Accumulated other comprehensive income (loss), before tax, ending balance | 250 | 430 |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 384 | 498 |
Ending balance | $ 285 | $ 464 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total, from continuing operations before income taxes | $ 631 | $ 657 |
Provision for income taxes | (146) | (141) |
Net income | 3,412 | 518 |
Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net income | 0 | 16 |
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] | ||
Net Revenues | 0 | 20 |
Total, from continuing operations before income taxes | 0 | 20 |
Provision for income taxes | 0 | (4) |
Net income | $ 0 | $ 16 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 28 | |
Charges | 8 | $ 38 |
Payments | (24) | |
Ending balance | $ 12 |