10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 001-37713

	eBay Inc.
(Exact name of registrant as specified in its charter)

Delaware	77-0430924
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2065 Hamilton Avenue San Jose, California	95125
(Address of principal executive offices)	(Zip Code)

(408) 376-7400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  [x]    No  [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  [x]    No  [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[x]		Accelerated filer	[ ]
Non-accelerated filer	[ ]	(Do not check if a smaller reporting company)	Smaller reporting company	[ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  [ ]    No  [x]

As of April 22, 2016, there were 1,148,904,240 of the registrant’s common stock, $0.001 par value, outstanding, which is the only class of common or voting stock of the registrant issued.

PART I: FINANCIAL INFORMATION

Item 1: Financial Statements

eBay Inc.

CONDENSED CONSOLIDATED BALANCE SHEET

	March 31, 2016			December 31, 2015
	(In millions, except par value amounts)
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,686		$	1,832
Short-term investments	5,327			4,299
Accounts receivable, net	599			619
Other current assets	1,091			1,154
Total current assets	9,703			7,904
Long-term investments	3,370			3,391
Property and equipment, net	1,497			1,554
Goodwill	4,519			4,451
Intangible assets, net	82			90
Other assets	437			365
Total assets	$	19,608		$	17,755
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	6		$	—
Accounts payable	275			349
Accrued expenses and other current liabilities	1,651			1,736
Deferred revenue	115			106
Income taxes payable	60			72
Total current liabilities	2,107			2,263
Deferred and other tax liabilities, net	2,080			2,092
Long-term debt	9,030			6,749
Other liabilities	74			75
Total liabilities	13,291			11,179
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.001 par value; 3,580 shares authorized; 1,143 and 1,184 shares outstanding	2			2
Additional paid-in capital	14,627			14,538
Treasury stock at cost, 486 and 443 shares	(17,204		)	(16,203		)
Retained earnings	8,207			7,713
Accumulated other comprehensive income	685			526
Total stockholders’ equity	6,317			6,576
Total liabilities and stockholders’ equity	$	19,608		$	17,755

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

	Three Months Ended March 31,
	2016			2015
	(In millions, except per share amounts)
	(Unaudited)
Net revenues	$	2,137		$	2,061
Cost of net revenues	477			411
Gross profit	1,660			1,650
Operating expenses:
Sales and marketing	538			519
Product development	239			221
General and administrative	209			302
Provision for transaction losses	52			69
Amortization of acquired intangible assets	8			10
Total operating expenses	1,046			1,121
Income from operations	614			529
Interest and other, net	(23		)	10
Income from continuing operations before income taxes	591			539
Provision for income taxes	(109		)	(90		)
Income from continuing operations	$	482		$	449
Income from discontinued operations, net of income taxes	—			177
Net income	$	482		$	626
Income per share - basic:
Continuing operations	$	0.42		$	0.37
Discontinued operations	—			0.14
Net income per share - basic	$	0.42		$	0.51
Income per share - diluted:
Continuing operations	$	0.41		$	0.37
Discontinued operations	—			0.14
Net income per share - diluted	$	0.41		$	0.51
Weighted average shares:
Basic	1,159			1,216
Diluted	1,170			1,229

The accompanying notes are an integral part of these condensed consolidated financial statements.

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eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Three Months Ended March 31,
	2016			2015
	(In millions)
	(Unaudited)
Net income	$	482		$	626
Other comprehensive income (loss), net of reclassification adjustments:
Foreign currency translation gain (loss)	154			(265		)
Unrealized gains (losses) on investments, net	23			(22		)
Tax benefit (expense) on unrealized gains (losses) on investments, net	(21		)	9
Unrealized gains (losses) on hedging activities, net	3			89
Tax benefit (expense) on unrealized gains (losses) on hedging activities, net	—			(2		)
Other comprehensive income (loss), net of tax	159			(191		)
Comprehensive income	$	641		$	435

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	Three Months Ended March 31,
	2016			2015
	(In millions)
	(Unaudited)
Cash flows from operating activities:
Net income	$	482		$	626
Income from discontinued operations, net of income taxes	—			(177		)
Adjustments:
Provision for transaction losses	52			69
Depreciation and amortization	167			160
Stock-based compensation	88			93
Changes in assets and liabilities, and other, net of acquisition effects	(148		)	(270		)
Net cash provided by continuing operating activities	641			501
Net cash provided by discontinued operating activities	—			650
Net cash provided by operating activities	641			1,151
Cash flows from investing activities:
Purchases of property and equipment	(158		)	(96		)
Purchases of investments	(2,935		)	(2,420		)
Maturities and sales of investments	2,030			2,019
Other	(12		)	(1		)
Net cash used in continuing investing activities	(1,075		)	(498		)
Net cash used in discontinued investing activities	—			(226		)
Net cash used in investing activities	(1,075		)	(724		)
Cash flows from financing activities:
Proceeds from issuance of common stock	7			38
Repurchases of common stock	(1,001		)	(1,000		)
Excess tax benefits from stock-based compensation	1			20
Tax withholdings related to net share settlements of restricted stock units and awards	(8		)	(51		)
Proceeds from issuance of long-term debt, net	2,216			—
Other	7			—
Net cash provided by (used in) continuing financing activities	1,222			(993		)
Net cash provided by discontinued financing activities	—			8
Net cash provided by (used) in financing activities	1,222			(985		)
Effect of exchange rate changes on cash and cash equivalents	66			(297		)
Net increase (decrease) in cash and cash equivalents	854			(855		)
Cash and cash equivalents at beginning of period	1,832			6,328
Cash and cash equivalents at end of period	$	2,686		$	5,473
Less: Cash and cash equivalents of discontinued operations	—			2,367
Cash and cash equivalents of continuing operations at end of period	$	2,686		$	3,106
Supplemental cash flow disclosures:
Cash paid for interest	$	73		$	74
Cash paid for income taxes	$	31		$	101

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — The Company and Summary of Significant Accounting Policies

The Company

eBay Inc. is a global commerce leader, including our Marketplace, StubHub and Classifieds platforms. Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts and the eBay mobile apps. Our StubHub platforms include our online ticket platform located at www.stubhub.com and the StubHub mobile apps. Our Classifieds platforms include a collection of brands such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Classifieds and others. 

When we refer to “we,” “our,” “us” or “eBay” in this document, we mean the current Delaware corporation (eBay Inc.) and its California predecessor, as well as all of our consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

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, 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 using the cost method of accounting, and our share of the investees’ results of operations is included in our condensed consolidated statement of income to the extent dividends are received.

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, 2015. 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 fair presentation of the condensed consolidated financial statements for interim periods.

Recent Accounting Pronouncements

In 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years

6

eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

beginning December 15, 2016. In 2016, the FASB issued additional guidance to clarify the implementation guidance. We are evaluating the impact of adopting the new accounting guidance on our consolidated financial statements.

In 2015, the FASB issued new guidance related to presentation of debt issuance costs. The new standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We adopted this standard retrospectively in the first quarter of 2016. The balance sheet as of December 31, 2015 was retrospectively adjusted, which resulted in reductions to other assets of $30 million and long-term debt of $30 million.

In 2016, the FASB issued new guidance related to accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

In 2016, the FASB issued new guidance related to accounting for leases. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

In 2016, the FASB issued new guidance to revise aspects of stock-based compensation guidance which include income tax consequences, classification of awards as equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

7

eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 2 — 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 periods indicated:

	Three Months Ended March 31,
	2016		2015
	(In millions, except per share amounts)
Numerator:
Income from continuing operations	$	482	$	449
Income from discontinued operations, net of income taxes	—		177
Net income	$	482	$	626
Denominator:
Weighted average shares of common stock - basic	1,159		1,216
Dilutive effect of equity incentive awards	11		13
Weighted average shares of common stock - diluted	1,170		1,229
Income per share - basic:
Continuing operations	$	0.42	$	0.37
Discontinued operations	—		0.14
Net income per share - basic	$	0.42	$	0.51
Income per share - diluted:
Continuing operations	$	0.41	$	0.37
Discontinued operations	—		0.14
Net income per share - diluted	$	0.41	$	0.51
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive	6		4

Note 3 — Discontinued Operations

On June 26, 2015, our Board approved the separation of PayPal through the distribution of 100% of the outstanding common stock of PayPal Holdings, Inc. ("PayPal") to our stockholders (the "Distribution"). To consummate the Distribution, our Board declared a pro rata dividend of PayPal Holdings, Inc. common stock to eBay’s stockholders of record as of the close of business on July 8, 2015 (the “Record Date”). Each eBay stockholder received one (1) share of PayPal Holdings, Inc. common stock for every share of eBay common stock held at the close of business on the Record Date. The Distribution occurred on July 17, 2015. Immediately following the Distribution, PayPal became an independent, publicly traded company and is listed on The NASDAQ Stock Market under the ticker “PYPL.” eBay continues to trade on The NASDAQ Stock Market under the ticker “EBAY.” We have classified the results of PayPal as discontinued operations in our consolidated statement of income for all periods presented. In connection with the Distribution, we reviewed our capital allocation strategy to ensure that each of PayPal and eBay would be well capitalized at Distribution. Pursuant to the terms of the separation and distribution agreement entered into between us and PayPal on June 26, 2015, upon Distribution, assets related to the PayPal business were transferred to, and liabilities related to the PayPal business were retained or assumed by, PayPal. As part of this strategy, we contributed approximately $3.8 billion of cash to PayPal in 2015.

During the second quarter of 2015, our Board approved a plan to sell the businesses underlying our former Enterprise segment (“Enterprise”). Based on the expected sales proceeds, we recorded a goodwill impairment of $786 million in the second quarter of 2015. On July 16, 2015, we signed a definitive agreement to sell Enterprise for $925 million and on November 2, 2015, the sale closed. We recorded a loss of $35 million upon closing included within income from discontinued

8

eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

operations, net of income taxes. We have classified the results of Enterprise as discontinued operations in our condensed consolidated statement of income for all periods presented.

The financial results of PayPal and Enterprise are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. The following table presents the combined financial results of PayPal and Enterprise for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016			2015
	(In millions)
Net revenues	$	—		$	2,387
Cost of net revenues	—			1,039
Gross profit	—			1,348
Operating expenses:
Sales and marketing	—			275
Product development	—			264
General and administrative	(2		)	363
Provision for transaction and loan losses	—			195
Amortization of acquired intangible assets	—			48
Total operating expenses	(2		)	1,145
Income from operations of discontinued operations	2			203
Interest and other, net	—			(2		)
Income from discontinued operations before income taxes	2			201
Provision for income taxes	(2		)	(24		)
Income from discontinued operations, net of income taxes	$	—		$	177

Note 4 — Goodwill and Intangible Assets

Goodwill

The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2016:

	December 31, 2015		Goodwill Acquired		Adjustments		March 31, 2016
	(In millions)
Goodwill	$	4,451	$	6	$	62	$	4,519

The adjustments to goodwill during the three months ended March 31, 2016 were due primarily to foreign currency translation.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Intangible Assets

The components of identifiable intangible assets are as follows: 

	March 31, 2016								December 31, 2015
	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)
	(In millions, except years)
Intangible assets:
Customer lists and user base	$	425	$	(408	)	$	17	5	$	419	$	(399	)	$	20	5
Marketing related	608		(586		)	22		5	594		(570		)	24		5
Developed technologies	244		(221		)	23		4	238		(215		)	23		4
All other	157		(137		)	20		4	157		(134		)	23		4
	$	1,434	$	(1,352	)	$	82		$	1,408	$	(1,318	)	$	90

Amortization expense for intangible assets was $12 million and $16 million for the three months ended March 31, 2016 and 2015, respectively.

Expected future intangible asset amortization as of March 31, 2016 is as follows (in millions):

Fiscal years:
Remaining 2016	$	35
2017	35
2018	11
2019	1
2020	—
Thereafter	—
	$	82

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 5 — Segments

We have one operating and reportable segment. Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

The following table sets forth the breakdown of net revenues by type for the periods presented:

	Three Months Ended March 31,
	2016		2015
	(In millions)
Net Revenues by Type:
Net transaction revenues:
Marketplace	$	1,500	$	1,536
StubHub	177		132
Total net transaction revenues	1,677		1,668
Marketing services and other revenues:
Marketplace	274		235
Classifieds	186		162
Corporate and other	—		(4		)
Total marketing services and other revenues	460		393
Total net revenues	$	2,137	$	2,061

Note 6 — Investments

At March 31, 2016 and December 31, 2015, the estimated fair value of our short-term and long-term investments classified as available for sale, were as follows:

	March 31, 2016
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Short-term investments:
Restricted cash	$	25	$	—	$	—		$	25
Corporate debt securities (1)	4,349		2		(56		)	4,295
Government and agency securities	50		—		—			50
Equity instruments	9		948		—			957
	$	4,433	$	950	$	(56	)	$	5,327
Long-term investments:
Corporate debt securities (1)	3,266		16		(42		)	3,240
	$	3,266	$	16	$	(42	)	$	3,240

(1) At March 31, 2016 investment securities with a fair value and an unrealized foreign exchange loss of $1.1 billion and $55 million, respectively, were held by a foreign subsidiary in which the U.S. Dollar is not the functional currency.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	December 31, 2015
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Short-term investments:
Restricted cash	$	28	$	—	$	—		$	28
Corporate debt securities	3,302		1		(16		)	3,287
Government and agency securities	55		—		—			55
Equity instruments	9		920		—			929
	$	3,394	$	921	$	(16	)	$	4,299
Long-term investments:
Corporate debt securities	3,327		7		(67		)	3,267
	$	3,327	$	7	$	(67	)	$	3,267

At March 31, 2016, investment securities in a continuous loss position for greater than 12 months had an estimated fair value and unrealized loss of $485 million and $35 million, respectively. At December 31, 2015, investment securities in a continuous loss position for greater than 12 months had an estimated fair value and unrealized loss of $769 million and $40 million, respectively. Refer to “Note 14 - 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 at March 31, 2016 are as follows:

	March 31, 2016
	(In millions)
One year or less (including restricted cash of $25)	$	4,369
One year through two years	1,476
Two years through three years	1,482
Three years through four years	242
Four years through five years	36
Five years through six years	—
Six years through seven years	—
Seven years through eight years	5
Eight years through nine years	—
Nine years through ten years	—
	$	7,610

Equity and cost method investments

We have made multiple equity and cost method investments which are reported in long-term investments on our condensed consolidated balance sheet. As of March 31, 2016 and December 31, 2015, our equity and cost method investments totaled $130 million and $124 million, respectively.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 7 — Fair Value Measurement of Assets and Liabilities

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015:

Description	Balance as of March 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	2,686	$	2,156	$	530
Short-term investments:
Restricted cash	25		25		—
Corporate debt securities	4,295		—		4,295
Government and agency securities	50		—		50
Equity instruments	957		957		—
Total short-term investments	5,327		982		4,345
Derivatives	190		—		190
Long-term investments:
Corporate debt securities	3,240		—		3,240
Total long-term investments	3,240		—		3,240
Total financial assets	$	11,443	$	3,138	$	8,305
Liabilities:
Derivatives	$	62	$	—	$	62

Description	Balance as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	1,832	$	1,664	$	168
Short-term investments:
Restricted cash	28		28		—
Corporate debt securities	3,287		—		3,287
Government and agency securities	55		—		55
Equity instruments	929		929		—
Total short-term investments	4,299		957		3,342
Derivatives	97		—		97
Long-term investments:
Corporate debt securities	3,267		—		3,267
Total long-term investments	3,267		—		3,267
Total financial assets	$	9,495	$	2,621	$	6,874
Liabilities:
Derivatives	$	25	$	—	$	25

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our financial assets and liabilities are valued using market prices on both active markets (level 1) and less active markets (level 2). 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. 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. We did not have any transfers of financial instruments between valuation levels during the three months ended March 31, 2016.

Cash and cash equivalents are short-term, highly liquid investments with original or remaining maturities of three months or less when purchased and are comprised primarily of bank deposits, certificates of deposit and commercial paper.

In addition, we had cost and equity method investments of approximately $130 million and $124 million included in long-term investments on our condensed consolidated balance sheet at March 31, 2016 and December 31, 2015, respectively.

Our derivative instruments vary in duration depending on contract type. Our foreign exchange derivative contracts are primarily short-term in nature, generally one month to one year in duration. Certain foreign currency contracts designated as cash flow hedges may have a duration of up to 18 months. The duration of our interest rate derivative contracts match the duration of the fixed rate notes due 2019, 2021 and 2024.

As of March 31, 2016 and December 31, 2015, we held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities.

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.

Note 8 — Derivative Instruments

Summary of 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. Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. To further limit credit risk, we also enter into collateral security arrangements related to certain interest rate derivative instruments whereby collateral is posted between counterparties if the fair value of the derivative instrument exceeds certain thresholds. Additional collateral would be required in the event of a significant credit downgrade by either party.

Foreign Exchange Contracts

We transact business in various foreign currencies and have significant international revenues as well as costs denominated in foreign currencies, which subjects us to foreign currency risk. We use foreign currency exchange contracts, primarily short-term in nature, generally one month to one year in duration but with maturities up to 18 months, to reduce the volatility of cash flows primarily related to forecasted revenues, expenses, assets and liabilities denominated in foreign currencies. 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. For derivative instruments that are designated as cash flow hedges, the effective portion of the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. We evaluate the effectiveness of our foreign exchange contracts on a quarterly basis. We do not use any foreign exchange contracts for trading purposes.

For our derivative instruments designated as cash flow hedges, the amounts recognized in earnings related to the ineffective portion were not material in each of the periods presented, and we did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. As of March 31, 2016, we have estimated that approximately $42 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.

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Interest Rate Contracts

In connection with the July 2014 issuance of our fixed rate notes due 2019, 2021 and 2024, we entered into certain interest rate swap agreements that have 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. We have designated these swap agreements as qualifying hedging instruments and are accounting for them as fair value hedges. These transactions are characterized as fair value hedges for financial accounting purposes because they protect us against changes in the fair value of certain of our fixed rate borrowings due to benchmark interest rate movements. Changes in the fair values of these interest rate swap agreements are recognized in other assets or other liabilities with a corresponding increase or decrease in long-term debt. Each quarter we pay interest based on LIBOR plus a spread to the counterparty and on a semi-annual basis receive interest from the counterparty per the fixed rate of these senior notes. The net amount is recognized as interest expense in interest and other, net. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. We evaluate the effectiveness of our contracts on a quarterly basis. We do not use any interest rate swap agreements for trading purposes.

For our derivative instruments designated as fair value hedges, the amounts recognized in earnings related to the ineffective portion were not material in each of the periods presented, and we did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness.

Fair Value of Derivative Contracts

The fair values of our outstanding derivative instruments as of March 31, 2016 and December 31, 2015 were as follows:

	Balance Sheet Location	March 31, 2016		December 31, 2015
		(In millions)
Derivative Assets:
Foreign exchange contracts designated as cash flow hedges	Other Current Assets	$	54	$	42
Foreign exchange contracts not designated as hedging instruments	Other Current Assets	32		14
Interest rate contracts designated as fair value hedges	Other Assets	104		41
Total derivative assets		$	190	$	97
Derivative Liabilities:
Foreign exchange contracts designated as cash flow hedges	Other Current Liabilities	$	12	$	1
Foreign exchange contracts not designated as hedging instruments	Other Current Liabilities	50		24
Total derivative liabilities		$	62	$	25
Total fair value of derivative instruments		$	128	$	72

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, 2016, the potential effect of rights of set-off associated with the foreign exchange contracts discussed above would be an offset to both assets and liabilities by $56 million, resulting in net derivative assets and derivative liabilities of $30 million and $6 million, respectively. We are not required to pledge, nor are we entitled to receive, collateral related to our foreign exchange derivative transactions. As of March 31, 2016, we had neither pledged nor received collateral related to our interest rate derivative transactions.

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Effect of Derivative Contracts on Accumulated Other Comprehensive Income

The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2016 and December 31, 2015, and the impact of these derivative contracts on accumulated other comprehensive income for the three months ended March 31, 2016: 

	December 31, 2015		Amount of gain (loss) recognized in other comprehensive income (effective portion)		Amount of gain (loss) reclassified from accumulated other comprehensive income to earnings (effective portion)		March 31, 2016
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	36	$	19	$	16	$	39

The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2015 and December 31, 2014, and the impact of these derivative contracts on accumulated other comprehensive income for the three months ended March 31, 2015:

	December 31, 2014		Amount of gain (loss) recognized in other comprehensive income (effective portion)		Amount of gain (loss) reclassified from accumulated other comprehensive income to earnings (effective portion)		March 31, 2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	41	$	45	$	20	$	66

Effect of Derivative Contracts on Condensed Consolidated Statement of Income

The following table provides the location in our financial statements of the recognized gains or losses related to our foreign exchange derivative instruments: 

	Three Months Ended March 31,
	2016			2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues and operating expenses	$	4		$	20
Foreign exchange contracts designated as cash flow hedges recognized in interest and other, net	12			—
Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net	(2		)	16
Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income	$	14		$	36

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The following table provides the location in our financial statements of the recognized gains or losses related to our interest rate derivative instruments: 

	Three Months Ended March 31,
	2016			2015
	(In millions)
Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net	$	63		$	37
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net	(63		)	(37		)
Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income	$	—		$	—

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:

	March 31,
	2016		2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	1,542	$	489
Foreign exchange contracts not designated as hedging instruments	2,864		2,256
Interest rate contracts designated as fair value hedges	2,400		2,400
Total	$	6,806	$	5,145

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Note 9 — Debt

The following table summarizes the carrying value of our outstanding debt:

	Coupon		As of			Effective		As of			Effective
	Rate		March 31, 2016			Interest Rate		December 31, 2015			Interest Rate
	(In millions, except percentages)
Long-Term Debt
Floating Rate Notes:
Senior notes due 2017	LIBOR plus 0.20%		$	450		0.651	%	$	450		0.586	%
Senior notes due 2019	LIBOR plus 0.48%		400			0.853	%	400			0.825	%
Fixed Rate Notes:
Senior notes due 2017	1.350	%	1,000			1.456	%	1,000			1.456	%
Senior notes due 2018	2.500	%	750			2.775	%	—			—	%
Senior notes due 2019	2.200	%	1,150			2.346	%	1,150			2.346	%
Senior notes due 2020	3.250	%	500			3.389	%	500			3.389	%
Senior notes due 2021	2.875	%	750			2.993	%	750			2.993	%
Senior notes due 2022	3.800	%	750			3.989	%	—			—	%
Senior notes due 2022	2.600	%	1,000			2.678	%	1,000			2.678	%
Senior notes due 2024	3.450	%	750			3.531	%	750			3.531	%
Senior notes due 2042	4.000	%	750			4.114	%	750			4.114	%
Senior notes due 2056	6.000	%	750			6.547	%	—			—	%
Total senior notes			9,000					6,750
Hedge accounting fair value adjustments			104					41
Unamortized discount and debt issuance costs			(74		)			(42		)
Total long-term debt			$	9,030				$	6,749
Short-Term Debt
Other indebtedness			6					—
Total short-term debt			6					—
Total Debt			$	9,036				$	6,749

Senior Notes

In the three months ended March 31, 2016, we issued senior unsecured notes, or senior notes, in an aggregate principal amount of $2.25 billion. This consists of $750 million aggregate principal amount of 2.500% fixed rate notes due 2018, $750 million aggregate principal amount of 3.800% fixed rate notes due 2022 and $750 million aggregate principal amount of 6.000% fixed rate notes due 2056.

The floating rate notes are not redeemable prior to maturity. On and after March 1, 2021, we may redeem some or all of the 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 notes) occurs with respect to the 2.500% fixed rate notes due 2018, the 3.800% fixed rate notes due 2022 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.

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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 debt 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.

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, during the three months ended March 31, 2016 and 2015 was approximately $50 million and $45 million, respectively. At March 31, 2016, the estimated fair value of these senior notes was approximately $8.9 billion.

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.

Commercial Paper

We have an up to $1.5 billion commercial paper program pursuant to which we may issue commercial paper notes with maturities of up to 397 days from the date of issue in an aggregate principal amount at maturity of up to $1.5 billion outstanding at any time. As of March 31, 2016, there were no commercial paper notes outstanding.

Credit Agreement

As of March 31, 2016, 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 therefore maintain $1.5 billion of 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. As a result, at March 31, 2016, $500 million of borrowing capacity was available for other purposes permitted by the credit agreement. The credit agreement includes customary representations, warranties, affirmative and negative covenants, including financial covenants, events of default and indemnification provisions in favor of the banks. The negative covenants include restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to certain exceptions. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio. The events of default include the occurrence of a change of control (as defined in the credit agreement) with respect to us.

We were in compliance with all covenants in our outstanding debt instruments for the three-month period ended March 31, 2016.

Note 10 — Commitments and Contingencies

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 arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are 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

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matters disclosed in this Note 10, 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, 2016. Except as otherwise noted for the proceedings described in this Note 10, 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.

Litigation

In March 2015, StubHub filed suit against Ticketmaster and the Golden State Warriors, alleging antitrust and various state law violations arising out of the defendants’ restrictive ticketing practices, which include prohibiting the resale of Warriors tickets on StubHub or any other non-Ticketmaster secondary exchange (StubHub, Inc. v. Golden State Warriors, LLC et al, N.D. Cal. No. 3:15-cv-01436). StubHub filed a First Amended Complaint on June 30, 2015. The defendants filed a Motion to Dismiss the Amended Complaint which was granted in November 2015. StubHub is appealing this decision.

Regulatory Proceedings

In May 2014, we publicly announced that criminals were able to penetrate our network and steal certain data, including user names, encrypted user passwords and other non-financial user data. Upon making this announcement, we required all buyers and sellers on our platform to reset their passwords in order to login to their account. In addition to making this public announcement, we proactively approached a number of regulatory and governmental bodies, including those with the most direct supervisory authority over our data privacy and data security programs, to specifically inform them of the incident and our actions to protect our customers in response. Certain of those regulatory agencies have requested us to provide further, more detailed information regarding the incident, and we believe that we have fully cooperated in all of those requests. To date, we have not been informed by any regulatory authority of an intention to bring any enforcement action arising from this incident; however, in the future we may be subject to fines or other regulatory action. In addition, in July 2014, a putative class action lawsuit was filed against us for alleged violations and harm resulting from the incident. The lawsuit was dismissed with leave to amend.

General Matters

Other 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 will increasingly 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 our companies 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 prices, rules, policies or agreements. Further, the number and significance of these disputes and inquiries are increasing 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

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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 going forward. 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 the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations, including our standard marketing, promotions and application-programming-interface license agreements. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by a third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In certain cases, we have agreed to provide indemnification for intellectual property infringement. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively. 

Off-Balance Sheet Arrangements

As of March 31, 2016, 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, 2016, we had a total of $1.4 billion in cash withdrawals offsetting our $1.4 billion in Aggregate Cash Deposits held within the financial institution under the cash pooling arrangement.

Note 11 — Stock Repurchase Programs

In January 2015, our Board authorized an additional $2 billion stock repurchase program, with no expiration from the date of authorization. In June 2015, our Board authorized an additional $1 billion stock repurchase program, with no expiration from the date of authorization. The 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 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.  

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The stock repurchase activity under our stock repurchase programs during the three months ended March 31, 2016 is summarized as follows:

	Shares Repurchased	Average Price per Share (1)		Value of Shares Repurchased	Remaining Amount Authorized
	(In millions, except per share amounts)
Balance as of January 1, 2016					$	1,836
Repurchase of shares of common stock	42	$	23.67	1,000	(1,000		)
Balance as of March 31, 2016					$	836

(1) Excludes broker commissions.

As of March 31, 2016, a total of approximately $836 million remained available for future repurchases of our common stock under our June 2015 stock repurchase program. These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. No repurchased shares of common stock have been retired.

Note 12 — Stock-Based Plans

Stock Option Activity

The following table summarizes stock option activity for the three months ended March 31, 2016:  

	Options
	(In millions)
Outstanding as of January 1, 2016	7
Granted and assumed	—
Exercised	—
Forfeited/expired/canceled	(1	)
Outstanding as of March 31, 2016	6

Restricted Stock Unit Activity

The following table summarizes restricted stock unit (“RSU”) activity for the three months ended March 31, 2016:  

	Units
	(In millions)
Outstanding as of January 1, 2016	36
Awarded and assumed	1
Vested	(1	)
Forfeited	—
Outstanding as of March 31, 2016	36

The weighted average grant date fair value for RSUs awarded during the period was $23.31 per share.

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Stock-Based Compensation Expense

The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2016 and 2015 was as follows:

	Three Months Ended March 31,
	2016		2015
	(In millions)
Cost of net revenues	$	7	$	8
Sales and marketing	21		24
Product development	31		29
General and administrative	29		32
Total stock-based compensation expense	$	88	$	93
Capitalized in product development	$	3	$	3

Stock Option Valuation Assumptions

We calculated the fair value of each stock option award on the date of grant using the Black-Scholes option pricing model. The following weighted average assumptions were used for the three months ended March 31, 2015:  

	Three Months Ended March 31,
	2015
Risk-free interest rate	1.46	%
Expected life (in years)	4.4
Dividend yield	—	%
Expected volatility	27	%

An immaterial amount of stock options were granted during the three months ended March 31, 2016.

Our computation of expected volatility is based on a combination of historical and market-based implied volatility from traded options on our common stock. Our computation of expected life is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

Note 13 — 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 2003 to 2013 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 certain tax years after 2002 include, among others, the U.S. (Federal and California), France, Germany, Italy, Korea, Israel, Switzerland, Singapore, United Kingdom and Canada.

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. However, 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.

On July 27, 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion related 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. At this time, the U.S. Department of the Treasury has not withdrawn the requirement to include stock-based compensation from its regulations. 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

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not recorded any benefit or expense as of March 31, 2016. We will continue to monitor ongoing developments and potential impacts to our consolidated financial statements.

Note 14 — Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2016:

	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains on Investments			Foreign Currency Translation			Estimated tax (expense) benefit			Total
	(In millions)
Beginning balance	$	36	$	845		$	(45	)	$	(310	)	$	526
Other comprehensive income (loss) before reclassifications	19		18			154			(21		)	170
Amount of gain (loss) reclassified from accumulated other comprehensive income	16		(5		)	—			—			11
Net current period other comprehensive income	3		23			154			(21		)	159
Ending balance	$	39	$	868		$	109		$	(331	)	$	685

The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2015:

	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains on Investments			Foreign Currency Translation			Estimated tax (expense) benefit			Total
	(In millions)
Beginning balance	$	168	$	1,029		$	334		$	(360	)	$	1,171
Other comprehensive income (loss) before reclassifications	159		(23		)	(265		)	7			(122		)
Amount of gain (loss) reclassified from accumulated other comprehensive income	70		(1		)	—			—			69
Net current period other comprehensive income	89		(22		)	(265		)	7			(191		)
Ending balance	$	257	$	1,007		$	69		$	(353	)	$	980

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The following table provides details about reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2016 and 2015:

Details about Accumulated Other Comprehensive Income Components	Affected Line Item in the Statement of Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income
		Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Gains (losses) on cash flow hedges - foreign exchange contracts	Cost of net revenues	$	2		$	6
	Sales and marketing	—			1
	Product development	2			11
	General and administrative	—			2
	Interest and other, net	12			—
	Total, from continuing operations before income taxes	16			20
	Provision for income taxes	—			—
	Total, from continuing operations net of income taxes	16			20
	Total, from discontinued operations net of income taxes	—			50
	Total, net of income taxes	16			70
Unrealized gains (losses) on investments	Interest and other, net	(5		)	(1		)
	Total, before income taxes	(5		)	(1		)
	Provision for income taxes	—			—
	Total, net of income taxes	(5		)	(1		)
Total reclassifications for the period	Total, net of income taxes	$	11		$	69

Note 15 — Restructuring

In January 2015, at a regular meeting of our Board, our Board approved a plan to implement a strategic reduction of our existing global workforce. As a result, we reduced our workforce globally. The reduction was completed in the first half of 2015. The restructuring costs are aggregated in general and administrative expenses in the condensed consolidated statement of income.

No restructuring costs were recognized during the three months ended March 31, 2016. $60 million of restructuring costs were recognized during the three months ended March 31, 2015. No liability remained at March 31, 2016 for these restructuring costs.

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Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that involve expectations, plans or intentions (such as those relating to future business, future results of operations or financial condition, new or planned features or services, or management strategies). You can identify these forward-looking statements by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in “Part II — Item 1A: Risk Factors” of this Quarterly Report on Form 10-Q as well as in our condensed consolidated financial statements, related notes, and the other information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission, or the SEC. We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the unaudited condensed consolidated financial statements and the related notes that appear elsewhere in this report.

When we refer to “we,” “our,” “us” or “eBay” in this Quarterly Report on Form 10-Q, we mean the current Delaware corporation (eBay Inc.) and its California predecessor, as well as all of our consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

Overview

eBay Inc. is a global commerce leader, including our Marketplace, StubHub and Classifieds platforms. Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts and the eBay mobile apps. Our StubHub platforms include our online ticket platform located at www.stubhub.com and the StubHub mobile apps. Our Classifieds platforms include a collection of brands such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Classifieds and others. 

Net revenues for the three months ended March 31, 2016 increased 4% to $2.1 billion compared to the same period of the prior year. FX-Neutral (as defined below) net revenue increased 6% for the three months ended March 31, 2016 compared to the same period of the prior year. Operating margin increased to 29% for the three months ended March 31, 2016 compared to 26% in the same period of the prior year. Diluted earnings per share from continuing operations increased to $0.41 for the three months ended March 31, 2016 compared to $0.37 in the same period of the prior year. We generated cash flow from continuing operating activities of $641 million for the three months ended March 31, 2016 compared to $501 million in the same period of the prior year.

Impact of Foreign Currency Exchange Rates

Our commerce platforms operate globally, resulting in certain revenues that are denominated in foreign currencies, primarily the Euro, British pound, Korean won and Australian dollar, subjecting us to foreign currency risk which may adversely impact our financial results. We calculate the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts. The foreign exchange (“FX”) neutral, or constant currency, net revenue amounts are non-GAAP financial measures and are not in accordance with, or an alternative to, measures prepared in accordance with generally accepted accounting principles (“GAAP”). The information in this section should be read in connection with the information in “Non-GAAP Measure of Financial Performance.”

Because we generated a majority of our net revenues internationally, including the three months ended March 31, 2016 and 2015, we are subject to the risks of doing business in foreign countries as discussed under “Part II - Item 1A - Risk Factors.”

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The following table sets forth a reconciliation of FX-Neutral GMV and FX-Neutral net revenues (each as defined below) to our reported GMV and net revenues for the periods presented:

	Three Months Ended March 31, 2016							Three Months Ended March 31, 2015
	As Reported		Exchange Rate Effect(1)			FX-Neutral(2)		As Reported			As Reported Percent Change		FX-Neutral Percent Change
	(In millions, except percentage changes)
GMV (3):
Marketplace	$	19,581	$	(624	)	$	20,205	$	19,476		1	%	4	%
StubHub	869		(1		)	870		675			29	%	29	%
Total GMV	$	20,450	$	(625	)	$	21,075	$	20,151		1	%	5	%
Net transaction revenues:
Marketplace	$	1,500	$	(44	)	$	1,544	$	1,536		(2	)%	1	%
StubHub	177		—			177		132			34	%	34	%
Total net transaction revenues	1,677		(44		)	1,721		1,668			1	%	3	%
Marketing services and other revenues:
Marketplace	274		(5		)	279		235			17	%	19	%
Classifieds	186		(4		)	190		162			15	%	17	%
Corporate and other	—		—			—		(4		)	**		**
Total marketing services and other revenues	460		(9		)	469		393			17	%	19	%
Total net revenues	$	2,137	$	(53	)	$	2,190	$	2,061		4	%	6	%

(1) We define exchange rate effect as the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts.

(2) We define FX-Neutral Gross Merchandise Volume as Gross Merchandise Volume minus the exchange rate effect. We define the non-GAAP financial measures of FX-Neutral net revenue as net revenue minus the exchange rate effect.

(3) We define Gross Merchandise Volume (“GMV”) as the total value of all successfully closed transactions between users on our Marketplace and StubHub platforms during the applicable period regardless of whether the buyer and seller actually consummated the transaction. We believe that GMV provides a useful measure of the overall volume of closed transactions that flow through our platforms in a given period, notwithstanding the inclusion in GMV of closed transactions that are not ultimately consummated.

Cost of net revenues were positively impacted by $10 million (inclusive of a positive impact of approximately $2 million from hedging activities) due to foreign currency movements relative to the U.S. dollar in the three months ended March 31, 2016 compared to the same period in the prior year.

Operating expenses were positively impacted by $20 million (inclusive of a positive impact of approximately $2 million from hedging activities) due to foreign currency movements relative to the U.S. dollar in the three months ended March 31, 2016 compared to the same period in the prior year.

The effect of foreign currency exchange rate movements during the three months ended March 31, 2016 compared to the same period in the prior year, was due to the strengthening of the U.S. dollar against other currencies, primarily the British pound, the Euro and the Korean won.

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Results of Operations

Summary of Net Revenues

We generate two types of net revenues: net transaction revenues and marketing services and other revenues. Net transaction revenues are derived principally from final value fees (which are fees payable on transactions closed on our Marketplace and StubHub platforms), listing fees and other service fees. Marketing services and other revenues consists of Marketplace and Classifieds revenue principally from the sale of advertisements, vehicles classifieds listing on Marketplace platforms, revenue sharing arrangements, classifieds fees, marketing service fees and lead referral fees. To drive traffic to our platforms, we provide incentives to our users in the form of coupons and buyer and seller rewards. These incentives are generally treated as reductions in revenue.

The following table sets forth the breakdown of net revenues by type and geography for the periods presented:

	Three Months Ended March 31,
	2016		2015
	(In millions)
Net Revenues by Type:
Net transaction revenues:
Marketplace	$	1,500	$	1,536
StubHub	177		132
Total net transaction revenues	1,677		1,668
Marketing services and other revenues:
Marketplace	274		235
Classifieds	186		162
Corporate and other	—		(4		)
Total marketing services and other revenues	460		393
Total net revenues	$	2,137	$	2,061
Net Revenues by Geography:
U.S.	$	909	$	864
International	1,228		1,197
Total net revenues	$	2,137	$	2,061

Revenues are attributed to U.S. and international geographies based primarily upon the country in which the seller, platform that displays advertising, other service provider or customer, as the case may be, is located.

The following table sets forth, for the periods presented, certain key operating metrics that we believe are significant factors affecting our net revenues:

	Three Months Ended March 31,						Percent
	2016			2015			Change
	(In millions, except percentage changes)
Supplemental Operating Data:
GMV:
Marketplace	$	19,581		$	19,476		1	%
StubHub	869			675			29	%
Total GMV	$	20,450		$	20,151		1	%
Transaction take rate:
Marketplace (1)	7.66		%	7.89		%	(0.23	)%
StubHub (2)	20.37		%	19.56		%	0.81	%
Total transaction take rate (3)	8.20		%	8.28		%	(0.08	)%

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(1)    We define Marketplace transaction take rate as Marketplace net transaction revenues divided by Marketplace GMV.

(2)    We define StubHub transaction take rate as StubHub net transaction revenues divided by StubHub GMV.

(3)    We define total transaction take rate as total net transaction revenues divided by GMV.

Seasonality

The following table sets forth, for the periods presented, our total net revenues and the sequential quarterly changes in these net revenues:

	Three Months Ended
	March 31			June 30			September 30			December 31
	(In millions, except percentage changes)
2014
Net revenues	$	2,149		$	2,168		$	2,150		$	2,323
Percent change from prior quarter	(6		)%	1		%	(1		)%	8		%
2015
Net revenues	$	2,061		$	2,110		$	2,099		$	2,322
Percent change from prior quarter	(11		)%	2		%	(1		)%	11		%
2016
Net revenues	$	2,137		—			—			—
Percent change from prior quarter	(8		)%	—		%	—		%	—		%

We expect transaction activity patterns on our platforms to mirror general consumer buying patterns. We expect that these trends will continue.

Net Transaction Revenues

Net transaction revenues increased $9 million, or 1%, and GMV also increased 1% in the three months ended March 31, 2016 compared to the same period in the prior year. Net transaction revenues represented 78% of total net revenues in the three months ended March 31, 2016 compared to 81% in the same period in the prior year. The increase in net transaction revenues and GMV was driven primarily by FX-Neutral net revenue and FX-Neutral GMV increases offset partially by a negative impact from foreign currency movements relative to the U.S. dollar. FX-Neutral net transaction revenue and FX-Neutral GMV increased 3% and 5% respectively, in the three months ended March 31, 2016 compared to the same period in the prior year. The FX-Neutral GMV increase of 5% was driven by an increase in FX-Neutral Marketplace GMV, and to a lesser extent, StubHub GMV. The total transaction take rate was lower in the three months ended March 31, 2016 compared to the same period in the prior year due to decrease in our Marketplace transaction take rate, partially offset by an increase in our StubHub transaction take rate.

Marketplace net transaction revenues decreased $36 million, or 2%, while Marketplace GMV increased 1%, in the three months ended March 31, 2016 compared to the same period in the prior year. The decrease in Marketplace net transaction revenues was driven primarily by a negative impact from foreign currency movements relative to the U.S. dollar. FX-Neutral Marketplace net transaction revenue and FX-Neutral Marketplace GMV increased 1% and 4% respectively, in the three months ended March 31, 2016 compared to the same period in the prior year. The FX-Neutral Marketplace GMV increase of 4% was driven primarily by an increase in volume in local currencies on our Marketplace platforms internationally and to a lesser extent, the U.S. The increase in FX-Neutral Marketplace net transaction revenue was less than the increase in FX-Neutral Marketplace GMV due to a lower Marketplace transaction take rate. The Marketplace transaction take rate was lower in the three months ended March 31, 2016 compared to the same period in the prior year due to an increase in our buyer and seller incentives, which are accounted for as a reduction of revenue, as well as a shift in vertical and seller mix.

StubHub net transaction revenues increased $45 million, or 34%, while StubHub GMV increased 29% in in the three months ended March 31, 2016 compared to the same period in the prior year. The increase in StubHub net transaction revenues was driven primarily by an increase in StubHub GMV and an increase in StubHub transaction take rate. The StubHub GMV increase was driven primarily by an increase in volume of ticket sales related to Sports and Concerts. The increase in StubHub net transaction revenue was greater than the increase in StubHub GMV due to a higher StubHub transaction take rate. The StubHub transaction take rate was higher in in the three months ended March 31, 2016 compared to the same period in the prior year due primarily to a change in mix of events and sellers on the StubHub platforms.

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Net transaction revenues earned internationally totaled $922 million and $920 million during the three months ended March 31, 2016 and 2015, respectively, representing 55% of total net transaction revenues in both periods.

Marketing Services and Other Revenues

Marketing services and other revenues increased $67 million, or 17%, in the three months ended March 31, 2016 compared to the same period of the prior year. The increase was driven primarily by an increase in FX-Neutral marketing services and other revenues offset partially by a negative impact from foreign currency movements relative to the U.S. dollar. FX-Neutral marketing services and other revenues increased 19% in the three months ended March 31, 2016 compared to the same period of the prior year. The FX-Neutral marketing services and other revenues increase was driven by increased FX-Neutral Marketplace marketing services and other revenues, and to a lesser extent, increased FX-Neutral Classifieds marketing services and other revenues.

Marketplace marketing services and other revenues increased $39 million, or 17%, in the three months ended March 31, 2016 compared to the same period of the prior year. The increase was driven primarily by an increase in FX-Neutral Marketplace marketing services and other revenues offset partially by a negative impact from foreign currency movements relative to the U.S. dollar. FX-Neutral Marketplace marketing services and other revenues increased by 19% in the three months ended March 31, 2016 compared to the same period of the prior year. The increase in FX-Neutral Marketplace marketing services and other revenues was primarily driven by increased fees earned for referral services and increased revenue in local currencies from advertising display on our Marketplace platforms. The increase in fees earned for referral services consist primarily of fees for customers acquired and incentives for the usage of PayPal products on certain Marketplace platforms, which were not included in marketing services and other revenues prior to the distribution of PayPal.

Classifieds marketing services and other revenues increased $24 million, or 15%, in the three months ended March 31, 2016 compared to the same period of the prior year. The increase was driven primarily by an increase in FX-Neutral Classifieds marketing services and other revenues offset partially by a negative impact from foreign currency movements relative to the U.S. dollar. FX-Neutral Classifieds marketing services and other revenues increased by 17% in the three months ended March 31, 2016 compared to the same period of the prior year. The increase in FX-Neutral Classifieds marketing services and other revenues was driven primarily by increased revenue from our Classifieds platforms in our developed markets of Germany, Canada and the UK.

Summary of Cost of Net Revenues

The following table summarizes changes in cost of net revenues for the periods presented:

	Three Months Ended March 31,						Change from 2015 to 2016
	2016			2015			in Dollars		in %
	(In millions, except percentages)
Cost of net revenues	$	477		$	411		$	66	16	%
As a percentage of net revenues	22.3		%	19.9		%

Cost of net revenues consists primarily of costs associated with customer support, site operations, and payment processing. Significant components of these costs include employee compensation, contractor costs, facilities costs, depreciation of equipment and amortization expense, bank transaction fees, and credit card interchange and assessment fees.

Cost of net revenues increased $66 million, or 16%, during the three months ended March 31, 2016, compared to the same period of the prior year. The increase was due primarily to an increase in transaction fees for payment services and continued investment in our site operations and data centers offset by a favorable impact due to foreign currency movements relative to the U.S. dollar. The increase in transaction fees for payment services consists primarily of the impact of transaction fees for payment services provided by PayPal which were not included in cost of net revenues prior to the Distribution. Cost of net revenues as a percentage of net revenues was 22.3% and 19.9% respectively, for the three months ended March 31, 2016 and 2015.

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Summary of Operating Expenses and Interest and Other, net

The following table summarizes changes in operating expenses and interest and other, net for the periods presented: 

	Three Months Ended March 31,					Change from 2015 to 2016
	2016			2015		in Dollars			in %
	(In millions, except percentage changes)
Sales and marketing	$	538		$	519	$	19		4	%
Product development	239			221		18			8	%
General and administrative	209			302		(93		)	(31	)%
Provision for transaction losses	52			69		(17		)	(25	)%
Amortization of acquired intangible assets	8			10		(2		)	(20	)%
Interest and other, net	(23		)	10		(33		)	(330	)%

The following table summarizes operating expenses and interest and other, net as a percentage of net revenues for the periods presented: 

	Three Months Ended March 31,
	2016		2015
Sales and marketing	25	%	25	%
Product development	11	%	11	%
General and administrative	10	%	15	%
Provision for transaction losses	2	%	3	%
Amortization of acquired intangible assets	—	%	—	%
Interest and other, net	(1	)%	—	%

Sales and Marketing

Sales and marketing expenses consist primarily of advertising costs and marketing programs (both online and offline), employee compensation, contractor costs, facilities costs and depreciation on equipment. Online marketing expenses represent traffic acquisition costs in various channels such as paid search, affiliates marketing and display advertising. Offline advertising includes primarily brand campaigns and buyer/seller communications.

Sales and marketing expenses increased $19 million, or 4%, during the three months ended March 31, 2016 compared to the same period of the prior year. The increase in sales and marketing expense was due primarily to an increase in marketing program costs (both online and offline programs) offset by a favorable impact from foreign currency movements relative to the U.S. dollar. Sales and marketing expenses as a percentage of net revenues were 25% for both the three months ended March 31, 2016 and 2015.

Product Development

Product development expenses consist primarily of employee compensation, contractor costs, facilities costs and depreciation on equipment. Product development expenses are net of required capitalization of major platforms and other product development efforts, including the development of our platform architecture, migration of certain platforms, and seller tools. Our top technology priorities include structured data, multi-screen capabilities, improved seller tools and buyer experiences.

Capitalized internal use and website development costs were $25 million in the three months ended March 31, 2016 compared to $37 million in the three months ended March 31, 2015 and are primarily reflected as a cost of net revenues when amortized in future periods.

Product development expenses increased $18 million, or 8%, during the three months ended March 31, 2016 compared to the same period of the prior year primarily related to favorable hedging relative to the U.S. dollar in the three months ended March 31, 2015 that did not recur to the same extent in the three months ended March 31, 2016 and increased depreciation on

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equipment. Product development expenses as a percentage of net revenues were 11% for both the three months ended March 31, 2016 and 2015.

General and Administrative

General and administrative expenses consist primarily of employee compensation, contractor costs, facilities costs, depreciation of equipment, employer payroll taxes on stock-based compensation, legal expenses, restructuring, insurance premiums and professional fees. Our legal expenses, including those related to various ongoing legal proceedings, may fluctuate substantially from period to period.

General and administrative expenses decreased $93 million, or 31%, during the three months ended March 31, 2016 compared to the same period of the prior year. The decrease was due primarily to restructuring expenses in the three months ended March 31, 2015 that did not recur in the three months ended March 31, 2016. These expenses were due to restructuring costs from our global workforce reduction and costs related to the distribution of PayPal. General and administrative expenses as a percentage of net revenues were 10% and 15% for the three months ended March 31, 2016 and 2015, respectively.

Provision for Transaction Losses

Provision for transaction losses consists primarily of transaction loss expense associated with our customer protection programs, fraud and bad debt expense associated with our accounts receivable balance. We expect our provision for transaction losses to fluctuate depending on many factors, including changes to our customer protection programs and the impact of regulatory changes.

Provision for transaction losses decreased $17 million, or 25%, during the three months ended March 31, 2016 compared to the same periods of the prior year due. The decrease was due primarily to lower customer protection program costs. Provision for transaction losses as a percentage of net revenues were 2% and 3% for the three months ended March 31, 2016 and 2015, respectively.

Amortization of Acquired Intangible Assets

From time to time we have purchased, and we expect to continue to purchase, assets and businesses. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in our amortization expense in periods subsequent to acquisition. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to six years. Amortization of acquired intangible assets is also impacted by our sales of assets and businesses and timing of acquired intangible assets becoming fully amortized. See “Note 4 - Goodwill and Intangible Assets” to our condensed consolidated financial statements included in this report.

Amortization of acquired intangible assets decreased $2 million during the three months ended March 31, 2016 compared to the same period of the prior year. The decrease was due to certain intangible assets becoming fully amortized during 2015.

Interest and Other, Net

Interest and other, net consists primarily of interest earned on cash, cash equivalents and investments, as well as foreign exchange transaction gains and losses, our portion of operating results from investments accounted for under the equity method of accounting, investment gain/loss on acquisitions or disposals and interest expense, consisting of interest charges on any amounts borrowed and commitment fees on unborrowed amounts under our credit agreement and interest expense on our outstanding debt securities and commercial paper, if any.

Interest and other, net decreased $33 million during the three months ended March 31, 2016 compared to the same period of the prior year. The decrease in interest and other, net was due primarily to a decrease in interest income due to a lower overall cash, short-term investments and long-term investments balances after the Distribution, an increase in interest expense related to the issuance of senior notes during the three months ended March 31, 2016 and an increase in losses associated with cost and equity method investments.

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Provision for Income Taxes

	Three Months Ended March 31,
	2016			2015
	(In millions, except percentages)
Provision for income taxes	$	109		$	90
Effective tax rate	18		%	17		%

Our effective tax rate was 18% for the three months ended March 31, 2016 compared to 17% for the same period in the prior year. The increase in our effective tax rate for the three months ended March 31, 2016 compared to the same period of the prior year was primarily related to favorable items in the three months ended March 31, 2015 related to the distribution of PayPal that did not recur in the three months ended March 31, 2016.

From time to time, we engage in certain intercompany transactions and legal entity restructurings. We consider many factors when evaluating these transactions, including the alignment of our corporate structure with our organizational objectives and the operational and tax efficiency of our corporate structure, as well as the long-term cash flows and cash needs of our different businesses. These transactions may impact our overall tax rate and/or result in additional cash tax payments. The impact in any period may be significant. These transactions may be complex and the impact of such transactions on future periods may be difficult to estimate.

We are regularly under examination by tax authorities both domestically and internationally. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations, although we can provide no assurances that this will be the case given the inherent uncertainties in these examinations. Due to the ongoing tax examinations, we believe it is impractical to determine the amount and timing of these adjustments.

Non-GAAP Measure of Financial Performance

To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, we use FX-Neutral net revenues, which are non-GAAP financial measures. We define the FX-Neutral net revenue as net revenue minus the exchange rate effect. We define exchange rate effect as the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts.

These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. These measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

Reconciliation of FX-neutral net revenues to the most directly comparable GAAP measure can be found in the table under “Impact of Foreign Currency Exchange Rates” included above. These non-GAAP measures are provided to enhance investors’ overall understanding of our current financial performance and its prospects for the future. Specifically, we believe these non-GAAP measures provide useful information to both management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook. In addition, because we have historically reported certain non-GAAP results to investors, we believe that the inclusion of these non-GAAP measures provide consistency in our financial reporting.

In addition to these corresponding GAAP measures, management uses the foregoing non-GAAP measures in reviewing our financial results.

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Liquidity and Capital Resources

Cash Flows

	Three Months Ended March 31,
	2016			2015
	(In millions)
Net cash provided by (used in):
Continuing operating activities	$	641		$	501
Continuing investing activities	(1,075		)	(498		)
Continuing financing activities	1,222			(993		)
Effect of exchange rates on cash and cash equivalents	66			(297		)
Net increase in cash and cash equivalents - discontinued operations	—			432
Net increase (decrease) in cash and cash equivalents	$	854		$	(855	)

Continuing Operating Activities

The net cash provided by continuing operating activities of $641 million in the three months ended March 31, 2016 was due primarily to net income of $482 million with adjustments of $167 million in depreciation and amortization, $52 million in provision for transaction losses, and $88 million in stock-based compensation and a decrease of $148 million in changes in assets and liabilities, and other, net of acquisition effects.

The net cash provided by continuing operating activities of $501 million in the three months ended March 31, 2015 was due primarily to net income of $626 million with adjustments for income from discontinued operations of $177 million, $160 million in depreciation and amortization, $93 million in stock-based compensation and $69 million in provision for transaction losses, and a decrease of $270 million in changes in assets and liabilities, and other, net of acquisition effects.

Continuing Investing Activities

The net cash used in continuing investing activities of $1.1 billion in the three months ended March 31, 2016 was due primarily to cash paid for purchases of investments of $2.9 billion and purchases of property and equipment of $158 million partially offset by proceeds of $2.0 billion from the maturities and sale of investments.

The net cash used in continuing investing activities of $498 million in the three months ended March 31, 2015 was due primarily to cash paid for purchases of investments of $2.4 billion and purchases of property and equipment of $96 million partially offset by proceeds of $2.0 billion from the maturities and sale of investments.

Continuing Financing Activities

The net cash provided by continuing financing activities of $1.2 billion in the three months ended March 31, 2016 was due primarily to cash inflows of $2.2 billion from the issuance of senior notes partially offset by cash outflows of $1.0 billion to repurchase common stock.

The net cash used in continuing financing activities of $993 million in the three months ended March 31, 2015 was due primarily to cash outflows of $1.0 billion to repurchase common stock and cash paid for tax withholdings in the amount of $51 million related to net share settlements of restricted stock units and awards. These cash outflows were partially offset by $38 million from the issuance of common stock in connection with the exercise of stock options and the effect of $20 million of excess tax benefits from stock-based compensation.

The positive effect of exchange rate movements on cash and cash equivalents during the three months ended March 31, 2016 was due to the weakening of the U.S. dollar against other currencies, primarily the Euro.

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Stock Repurchases

In January 2015, our Board authorized an additional $2 billion stock repurchase program, with no expiration from the date of authorization. In June 2015, our Board authorized an additional $1 billion stock repurchase program, with no expiration from the date of authorization. The 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 repurchases of our common stock to reduce 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.

During the three months ended March 31, 2016, we repurchased approximately $1.0 billion of our common stock under our stock repurchase programs. As of March 31, 2016, a total of approximately $836 million remained available for future repurchases of our common stock under our June 2015 repurchase program. 

We expect, subject to market conditions and other uncertainties, to continue making opportunistic repurchases of our common stock. However, 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.  

Shelf Registration Statement and Long-Term Debt

At March 31, 2016, we had an effective shelf registration statement on file with the Securities and Exchange Commission that allows us to issue various types of debt securities, as well as common stock, preferred stock, warrants, depositary shares representing fractional interest in shares of preferred stock, purchase contracts and units from time to time in one or more offerings. Each issuance under the shelf registration statement will require the filing of a prospectus supplement identifying the amount and terms of the securities to be issued. The registration statement does not limit the amount of securities that may be issued thereunder. Our ability to issue securities is subject to market conditions and other factors including, in the case of our debt securities, our credit ratings and compliance with the covenants in our credit agreement.

In the three months ended March 31, 2016, we issued senior unsecured notes, or senior notes, in an aggregate principal amount of $2.25 billion. This consists of $750 million aggregate principal amount of 2.500% fixed rate notes due 2018, $750 million aggregate principal amount of 3.800% fixed rate notes due 2022 and $750 million aggregate principal amount of 6.000% fixed rate notes due 2056.

We previously issued senior notes in underwritten public offerings under prior registration statements. The senior notes that remained outstanding as of March 31, 2016 consisted of $450 million aggregate principal amount of floating rate notes due 2017, $1.0 billion aggregate principal amount of 1.35% fixed rate notes due 2017, $400 million aggregate principal amount of floating rate notes due 2019, $1.15 billion aggregate principal amount of 2.2% fixed rate notes due 2019, $500 million aggregate principal amount of 3.250% fixed rate notes due 2020, $750 million aggregate principal amount of 2.875% fixed rate notes due 2021, $1.0 billion aggregate principal amount of 2.60% fixed rate notes due 2022, $750 million aggregate principal amount of 3.45% fixed rate notes due 2024 and $750 million aggregate principal amount of 4.00% fixed rate notes due 2042.

The net proceeds from the sale of these senior notes will be used for general corporate purposes, including, among other things, capital expenditures, share repurchases, repayment of indebtedness and possible acquisitions.

The floating rate notes are not redeemable prior to maturity. On and after March 1, 2021, we may redeem some or all of the 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 notes) occurs with respect to the 2.500% fixed rate notes due 2018, the 3.800% fixed rate notes due 2022 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.

To help achieve our interest rate risk management objectives, we previously entered into interest rate swap agreements that effectively converted $2.4 billion of the fixed rate notes to floating rate debt based on the London InterBank Offered Rate (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.

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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.

Commercial Paper

We have a $1.5 billion commercial paper program pursuant to which we may issue commercial paper notes with maturities of up to 397 days from the date of issue in an aggregate principal amount up to $1.5 billion at any time outstanding. As of March 31, 2016, there were no commercial paper notes outstanding.

Credit Agreement

As of March 31, 2016, no borrowings or letters of credit were outstanding under our $2 billion credit agreement. As described above, we have an up to $1.5 billion commercial paper program and maintain $1.5 billion of 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. As a result, at March 31, 2016, $500 million of borrowing capacity was available for other purposes permitted by the credit agreement. The credit agreement contains customary representations, warranties, affirmative and negative covenants, including financial covenants, events of default and indemnification provisions in favor of the banks. The negative covenants include restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to certain exceptions. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio.

We were in compliance with all covenants in our outstanding debt instruments for the three-month period ended March 31, 2016.

Credit Ratings

As of March 31, 2016, we were rated investment grade by Standard and Poor’s Financial Services, LLC (long-term rated BBB+, short-term rated A-2, with a stable outlook), Moody’s Investor Service (long-term rated Baa1, short-term rated P-2, with a stable outlook), and Fitch Ratings, Inc. (long-term rated BBB, short-term rated F-2, with a stable outlook). We disclose these ratings to enhance the understanding of our sources of liquidity and the effects of our ratings on our costs of funds. Our borrowing costs depend, in part, on our credit ratings and any further actions taken by these credit rating agencies to lower our credit ratings, as described above, will likely increase our borrowing costs. 

Liquidity and Capital Resource Requirements

As of March 31, 2016 and December 31, 2015, we had assets classified as cash and cash equivalents, as well as short-term and long-term non-equity investments, in an aggregate amount of $10.3 billion and $8.5 billion, respectively. As of March 31, 2016, this amount included assets held in certain of our foreign operations totaling approximately $6.9 billion. Of the $6.9 billion held by our non-U.S. subsidiaries, approximately $4.8 billion was available for use in the U.S. without incurring additional U.S. income taxes in excess of the amounts already accrued in our condensed consolidated financial statements as of March 31, 2016. As of March 31, 2016, we had not repatriated any of these funds to the U.S. and, as a result, we have not yet paid U.S. tax on any portion of these funds. However, to the extent we repatriate these funds to the U.S., we will be required to pay U.S. income and applicable foreign withholding taxes on those amounts during the period when such repatriation occurs. The remaining amount of non-U.S. cash and cash equivalents, as well as short-term and long-term non-equity investments, have been indefinitely reinvested and, therefore, no U.S. current or deferred taxes have been accrued as this amount is necessary to support our planned ongoing investments in our foreign operations. We believe our U.S. sources of cash and liquidity are sufficient to meet our business needs in the U.S., and we do not expect that we will need to repatriate the funds we have designated as indefinitely reinvested outside the U.S. Under current tax laws, should our plans change and we were to choose to repatriate some or all of the funds we have designated as indefinitely reinvested outside the U.S., such amounts would be subject to U.S. income taxes and applicable non-U.S. income and withholding taxes.

We actively monitor all counterparties that hold our cash and cash equivalents and non-equity investments, focusing primarily on the safety of principal and secondarily on improving yield on these assets. We diversify our cash and cash equivalents and investments among various counterparties in order to reduce our exposure should any one of these counterparties fail or encounter difficulties. To date, we have not experienced any material loss or lack of access to our invested cash, cash equivalents or short-term investments; however, we can provide no assurances that access to our invested cash, cash equivalents or short-term investments will not be impacted by adverse conditions in the financial markets. At any point in time

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we have funds in our operating accounts and customer accounts that are deposited and invested with third party financial institutions.

We believe that our existing cash, cash equivalents and short-term and long-term investments, together with cash expected to be generated from operations, borrowings available under our credit agreement and commercial paper program, and our access to capital markets, will be sufficient to fund our operating activities, anticipated capital expenditures and stock repurchases for the foreseeable future.

Off-Balance Sheet Arrangements

As of March 31, 2016, 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, 2016, we had a total of $1.4 billion in cash withdrawals offsetting our $1.4 billion in Aggregate Cash Deposits held within the financial institution under the cash pooling arrangements.

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 going forward. 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 the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations, including our standard marketing, promotions and application-programming-interface license agreements. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by a third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In certain cases, we have agreed to provide indemnification for intellectual property infringement. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

The information in this section should be read in connection with the information on financial market risk related to changes in interest rates and non-U.S. currency exchange rates in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2015. Our market risk profile has not changed significantly during the first three months of 2016.

Interest Rate Risk

We are exposed to interest rate risk relating to our investment portfolio and our outstanding debt. We seek to reduce earnings volatility that may result from changes in interest rates. 

As of March 31, 2016, approximately 24% of our total cash and investment portfolio was held in cash and cash equivalents. As such, changes in interest rates will impact interest income. As discussed below, fixed rate securities may have their fair market value adversely affected due to a rise in interest rates, and we may suffer losses in principal if we are forced to sell securities that have declined in market value due to changes in interest rates.

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As of December 31, 2013, 100% of the outstanding senior notes bore interest at fixed rates. In July 2014, we issued additional senior notes in an aggregate principal amount of $3.5 billion comprised of $850 million of floating rate notes and $2.65 billion of fixed rate notes, as described in the “Shelf Registration Statement and Long-Term Debt” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2) in this Quarterly Report. In order to reduce volatility that may result from changes in interest rates, we entered into $2.4 billion of interest rate swap agreements that have the economic effect of modifying the fixed interest obligations associated with $1.15 billion of our 2.2% senior notes due July 2019, $750 million of our 2.875% senior notes due July 2021, and $500 million of our 3.450% senior notes due July 2024 so that the interest payable on those notes effectively became variable based on LIBOR plus a spread. Further changes in interest rates will impact interest expense on any borrowings under our revolving credit facility, which bear interest at floating rates, and the interest rate on any commercial paper borrowings we make and any debt securities we may issue in the future and, accordingly, will impact interest expense.

As of March 31, 2016, we held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities.

Investments in both fixed-rate and floating-rate interest-earning instruments carry varying degrees of interest rate risk. The fair market value of our fixed-rate investment securities may be adversely impacted due to a rise in interest rates. In general, fixed-rate securities with longer maturities are subject to greater interest-rate risk than those with shorter maturities. While floating-rate securities generally are subject to less interest rate risk than fixed-rate securities, floating-rate securities may produce less income than expected if interest rates decrease and may also suffer a decline in market value if interest rates increase. Due in part to these factors, our investment income may fall short of expectations or we may suffer losses in principal if we sell securities that have declined in market value due to changes in interest rates. As of March 31, 2016, the balance of our government bond and corporate debt securities portfolio was $7.6 billion, which represented approximately 67% of our total cash and investment portfolio. A 100 basis point increase or decrease in interest rates would not have a material impact on our financial assets or liabilities as of March 31, 2016.

Investment Risk

The primary objective of our investment activities is to preserve principal while at the same time improving yields without significantly increasing risk. To achieve this objective, we maintain our portfolio of cash equivalents and short-term and long-term investments in a variety of asset types, including bank deposits, government bonds and corporate debt securities.

As of March 31, 2016, our cost and equity method investments totaled $130 million, which represented approximately 1% of our total cash and investment portfolio, and were primarily related to equity method investments in privately held companies. We review our investments for impairment when events and circumstances indicate a decline in fair value of such assets below carrying value is other-than-temporary. Our analysis includes a review of recent operating results and trends, recent sales/acquisitions of the securities in which we have invested and other publicly available data.

Equity Price Risk

We are exposed to equity price risk on marketable equity instruments due to market volatility. As of March 31, 2016, the total fair value of our marketable equity instruments (primarily related to our equity holdings in MercadoLibre) was $957 million, which represented approximately 8% of our total cash and investment portfolio.

Foreign Currency Risk

Our commerce platforms operate globally, resulting in certain revenues and costs that are denominated in foreign currencies, primarily the Euro, British pound, Korean won and Australian dollar, subjecting us to foreign currency risk which may adversely impact our financial results. We transact business in various foreign currencies and have significant international revenues as well as costs. In addition, we charge our international subsidiaries for their use of intellectual property and technology and for certain corporate services we provide. Our cash flow, results of operations and certain of our intercompany balances that are exposed to foreign exchange rate fluctuations may differ materially from expectations and we may record significant gains or losses due to foreign currency fluctuations and related hedging activities.

We have a foreign exchange exposure management program designed to identify material foreign currency exposures, manage these exposures and reduce the potential effects of currency fluctuations on our reported consolidated cash flows and results of operations through the purchase of foreign currency exchange contracts. The effectiveness of the program and the resulting usage of foreign exchange derivative contracts is at times limited by our ability to achieve cash flow hedge accounting. Subsequent to the distribution of PayPal, fewer of our currency flows meet the U.S. GAAP criteria for cash flow

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hedge accounting. While, economically, we face the same currency risks, our statement of income is more subject to volatility due to currency fluctuations. These foreign currency exchange contracts are accounted for as derivative instruments; for additional details related to our derivative instruments, please see “Note 8 – Derivative Instruments” to our condensed consolidated financial statements included in this report.

We use foreign exchange derivative contracts and invest non-U.S. cash in U.S. denominated investments to ultimately protect our forecasted U.S. dollar-equivalent earnings from adverse changes in foreign currency exchange rates. These hedging contracts reduce, but do not entirely eliminate, the impact of adverse currency exchange rate movements. Most of these contracts are designated as cash flow hedges for accounting purposes. For qualifying cash flow hedges, the effective portion of 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 transaction affects earnings. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. For contracts not designated as cash flow hedges for accounting purposes, the derivative’s gain or loss is recognized immediately in earnings in our condensed consolidated statement of income. However, only certain revenue and costs are eligible for cash flow hedge accounting.

Certain of our foreign subsidiaries held U.S. denominated marketable securities at March 31, 2016. The U.S. dollar/Euro is the primary foreign exchange exposure for these nonfunctional currency denominated marketable securities. These marketable securities are classified as available-for-sale and as such, fluctuations in the foreign exchange are recorded in accumulated other comprehensive income within the condensed consolidated balance sheet. These fluctuations are subsequently reclassified from accumulated other comprehensive income to interest and other, net in the period in which the marketable securities are sold. The realized foreign exchange gains and losses on these securities offset a portion of the foreign exchange fluctuations in earnings for the company.

The following table illustrates the fair values of outstanding foreign exchange contracts designated as cash flow hedges and nonfunctional currency denominated marketable securities and the before-tax effect on fair values of a hypothetical adverse change in the foreign exchange rates that existed at March 31, 2016. The sensitivities for foreign currency contracts and nonfunctional currency denominated marketable securities are based on a 20 percent adverse change in foreign exchange rates, against relevant functional currencies.

	Fair Value Asset/(Liability)		Fair Value Sensitivity (1)
	(In millions)
Foreign exchange contracts - Cash flow hedges	$	42	$	(48	)
Marketable Securities	$	1,132	$	(226	)

(1)    A hypothetical adverse change of 20% in the foreign exchange rates at March 31, 2016, would have resulted in a before-tax loss of $48 million and $226 million to be recorded in AOCI related to foreign exchange contracts designated as cash flow hedges and nonfunctional currency denominated marketable securities.

Since our risk management programs are highly effective, the potential loss in value for each risk management portfolio described above would be largely offset by changes in the value of the underlying exposure.

In addition, we use foreign exchange contracts to offset the foreign exchange risk on our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. These contracts reduce, but do not entirely eliminate, the impact of currency exchange rate movements on our assets and liabilities. The foreign currency gains and losses on the assets and liabilities are recorded in interest and other, net, which are offset by the gains and losses on the foreign exchange contracts.

We considered the historical trends in currency exchange rates and determined that it was reasonably possible that adverse changes in exchange rates of 20% for all currencies could be experienced in the near term. These changes would have resulted in an adverse impact on income before income taxes of approximately $9 million at March 31, 2016 taking into consideration the offsetting effect of foreign exchange forwards in place as of March 31, 2016.

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Item 4: Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934) required by Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, our Chief Executive Officer and our Chief Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.

(b) Changes in internal controls. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Item 1: Legal Proceedings

The information set forth under “Note 10 — Commitments and Contingencies — Litigation and Other Legal Matters” to the condensed consolidated financial statements included in Part I, Item 1 of this report is incorporated herein by reference.

Item 1A: Risk Factors

You should carefully review the following discussion of the risks that may affect our business, results of operations and financial condition, as well as our consolidated financial statements and notes thereto and the other information appearing in this report, for important information regarding risks that affect us.

Risk Factors That May Affect our Business, Results of Operations and Financial Condition

Our operating and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition, results of operations and cash flows, as well as the trading price of our common stock and debt securities.

Our operating and financial results have varied on a quarterly basis during our operating history and may continue to fluctuate significantly as a result of a variety of factors, including as a result of the risks set forth in this “Risk Factors” section. It is difficult for us to forecast the level or source of our revenues or earnings (loss) accurately. In view of the rapidly evolving nature of our business, period-to-period comparisons of our operating results may not be meaningful, and you should not rely upon them as an indication of future performance. We do not have backlog, and substantially all of our net revenues each quarter come from transactions involving sales during that quarter. Due to the inherent difficulty in forecasting revenues, it is also difficult to forecast expenses as a percentage of net revenues. Quarterly and annual expenses as a percentage of net revenues reflected in our consolidated financial statements may be significantly different from historical or projected rates. Our operating results in one or more future quarters may fall below the expectations of securities analysts and investors. The trading price of our common stock and debt securities could decline, perhaps substantially, as a result of the factors described in this paragraph.

Substantial and increasingly intense competition worldwide in ecommerce may harm our business.

The businesses and markets in which we operate are intensely competitive. We currently and potentially compete with a wide variety of online and offline companies providing goods and services to consumers and merchants. The Internet and mobile networks provide new, rapidly evolving and intensely competitive channels for the sale of all types of goods and services. We compete in two-sided markets, and must attract both buyers and sellers to use our platforms. Consumers who purchase or sell goods and services through us have more and more alternatives, and merchants have more channels to reach consumers. We expect competition to continue to intensify. Online and offline businesses increasingly are competing with each other and our competitors include a number of online and offline retailers with significant resources, large user communities and well-established brands. Moreover, the barriers to entry into these channels can be low, and businesses easily can launch online sites or mobile platforms and applications at nominal cost by using commercially available software or partnering with any of a number of successful ecommerce companies. As we respond to changes in the competitive environment, we may, from time to time, make pricing, service or marketing decisions or acquisitions that may be controversial with and lead to dissatisfaction among sellers, which could reduce activity on our platform and harm our profitability.

We face increased competitive pressure online and offline. In particular, the competitive norm for, and the expected level of service from, ecommerce and mobile commerce has significantly increased, due to, among other factors, improved user experience, greater ease of buying goods, lower (or no) shipping costs, faster shipping times and more favorable return policies. Also, certain platform businesses, such as Alibaba, Apple, Google and Facebook, many of whom are larger than us or have greater capitalization, have a dominant and secure position in other industries or certain significant markets, and offer other goods and services to consumers and merchants that we do not offer. If we are unable to change our products, offerings and services in ways that reflect the changing demands of ecommerce and mobile commerce marketplaces, particularly the higher growth of sales of fixed-price items and higher expected service levels (some of which depend on services provided by sellers on our platforms), or compete effectively with and adapt to changes in larger platform businesses, our business will suffer.

Competitors with other revenue sources may also be able to devote more resources to marketing and promotional campaigns, adopt more aggressive pricing policies and devote more resources to website, mobile platforms and applications

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and systems development than we can. Other competitors may offer or continue to offer faster and/or free shipping, delivery on Sunday, same-day delivery, favorable return policies or other transaction-related services which improve the user experience on their sites and which could be impractical or inefficient for our sellers to match. Competitors may be able to innovate faster and more efficiently, and new technologies may increase the competitive pressures by enabling competitors to offer more efficient or lower-cost services.

Some of our competitors control other products and services that are important to our success, including credit card interchange, Internet search, and mobile operating systems. Such competitors could manipulate pricing, availability, terms or operation of service related to their products and services in a manner that impacts our competitive offerings. For example, Google, which operates a shopping platform service, has from time to time made changes to its search algorithms that reduced the amount of search traffic directed to us from searches on Google. If we are unable to use or adapt to operational changes in such services, we may face higher costs for such services, face integration or technological barriers or lose customers, which could cause our business to suffer.

Consumers who might use our sites to buy goods have a wide variety of alternatives, including traditional department, warehouse, boutique, discount and general merchandise stores (as well as the online and mobile operations of these traditional retailers), online retailers and their related mobile offerings, online and offline classified services and other shopping channels, such as offline and online home shopping networks. In the United States, these include Amazon.com (which recently opened an experimental brick-and-mortar store in New York City and continues to expand into new geographies and lines of business), Google, Wal-Mart, Target, Sears, Macy’s, JC Penney, Costco, Office Depot, Staples, OfficeMax, Sam’s Club, Rakuten, Yahoo! Shopping, MSN, QVC and Home Shopping Network, among others. In addition, consumers have a large number of online and offline channels focused on one or more of the categories of products offered on our site.

Consumers also can turn to many companies that offer a variety of services that provide other channels for buyers to find and buy items from sellers of all sizes, including social media, online aggregation and classifieds platforms, such as craigslist, Oodle.com and a number of international websites operated by Schibsted ASA or Naspers Limited. Consumers also can turn to shopping-comparison sites, such as Google Shopping. In certain markets, our fixed-price listing and traditional auction-style listing formats increasingly are being challenged by other formats, such as classifieds.

Our Classifieds platforms offer classifieds listings in the United States and a variety of international markets. In many markets in which they operate, our Classifieds platforms compete for customers and for advertisers against more established online and offline classifieds platforms or other competing websites.

Our online shopping comparison websites (Shopping.com) compete with sites such as Google Shopping, Rakuten, Nextag.com, Pricegrabber.com, Shopzilla, Buscapé in Latin America (owned by Naspers) and Yahoo! Product Search, which offer shopping search engines that allow consumers to search the Internet for specified products. In addition, sellers are increasingly utilizing multiple sales channels, including the acquisition of new customers by paying for search-related advertisements on horizontal search engine sites, such as Google, Yahoo!, Naver and Baidu. We use product search engines and paid search advertising to help users find our sites, but these services also have the potential to divert users to other online shopping destinations. Consumers may choose to search for products and services with a horizontal search engine or shopping comparison website, and such sites may also send users to other shopping destinations.

Consumers and merchants who might use our sites to sell goods also have many alternatives, including general ecommerce sites, such as Amazon and Alibaba, and more specialized sites, such as Etsy. Our international sites also compete for sellers with general and specialized ecommerce sites. Sellers may also choose to sell their goods through other channels, such as classifieds platforms. Consumers and merchants also can create and sell through their own sites, and may choose to purchase online advertising instead of using our services. In some countries, there are online sites that have larger customer bases and greater brand recognition, as well as competitors that may have a better understanding of local culture and commerce. We increasingly may compete with local competitors in developing countries that have unique advantages, such as a greater ability to operate under local regulatory authorities.

In addition, certain manufacturers may limit or cease distribution of their products through online channels, such as our sites. Manufacturers may attempt to use contractual obligations or existing or future government regulation to prohibit or limit ecommerce in certain categories of goods or services. Manufacturers may also attempt to enforce minimum resale price maintenance or minimum advertised price arrangements to prevent distributors from selling on our platforms or on the Internet generally, or at prices that would make us less attractive relative to other alternatives. The adoption by manufacturers of policies, or their use of laws or regulations, in each case discouraging or restricting the sales of goods or services over the Internet, could force our users to stop selling certain products on our platforms, which could result in reduced operating margins, loss of market share and diminished value of our brands.

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The principal competitive factors for us include the following:

• ability to attract, retain and engage buyers and sellers;

• volume of transactions and price and selection of goods;

• trust in the seller and the transaction;

• customer service;

• brand recognition;    

• community cohesion, interaction and size;

• website, mobile platform and application ease-of-use and accessibility;

• system reliability and security;

• reliability of delivery and payment, including customer preference for fast delivery and free shipping and returns;

• level of service fees; and

• quality of search tools.

We may be unable to compete successfully against current and future competitors. Some current and potential competitors have longer operating histories, larger customer bases and greater brand recognition in other business and Internet sectors than we do.

Global and regional economic conditions could harm our business.

Our operations and performance depend significantly on global and regional economic conditions. Adverse economic conditions and events (including volatility or distress in the equity and/or debt or credit markets) have in the past negatively impacted regional and global financial markets and will likely continue to do so from time to time in the future. Uncertainties relating to the ability of Greece to remain in the European Monetary Union may adversely impact the economy of the European Union, which is an important market in which we do business. These events and conditions could have a negative and adverse impact on companies and customers with which we do business or cause us to write down our assets or investments. In addition, financial turmoil affecting the banking system or financial markets could cause additional consolidation of the financial services industry, or significant financial service institution failures, new or incremental tightening in the credit markets, low liquidity, and extreme volatility in fixed income, credit, currency, and equity markets. Adverse impacts to the companies and customers with which we do business, the banking system, or financial markets could have a material adverse effect on our business, including a reduction in the volume and prices of transactions on our commerce platforms.

We are exposed to fluctuations in foreign currency exchange rates.

Because we generate the majority of our revenues outside the United States but report our financial results in U.S. dollars, our financial results are impacted by fluctuations in foreign currency exchange rates, or foreign exchange rates. The results of operations of many of our internationally focused platforms are exposed to foreign exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency into U.S. dollars for financial reporting purposes. If the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated revenues or expenses will result in increased U.S. dollar denominated revenues and expenses. Similarly, if the U.S. dollar strengthens against foreign currencies, particularly the Euro, British pound, Korean won or Australian dollar, our translation of foreign currency denominated revenues or expenses will result in lower U.S. dollar denominated net revenues and expenses. In addition to this translation effect, a strengthening U.S. dollar will typically adversely affect the volume of goods being sold by U.S. sellers to Europe and Australia more than it positively affects the volume of goods being sold by sellers in those geographies to buyers in the United States, thereby further negatively impacting our financial results.

While from time to time we enter into transactions to hedge portions of our foreign currency translation exposure, it is impossible to predict or eliminate the effects of this exposure. Fluctuations in foreign exchange rates could significantly impact our financial results, which may have a significant impact on the trading price of our common stock and debt securities.

Our international operations are subject to increased risks, which could harm our business.

Our international businesses, especially in the United Kingdom, Germany, Australia and Korea, and cross-border business from greater China, have generated a majority of our net revenues in recent years. In addition to uncertainty about our ability to generate revenues from our foreign operations and expand into international markets, there are risks inherent in doing business internationally, including:

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• expenses associated with localizing our products and services and customer data, including offering customers the ability to transact business in the local currency and adapting our products and services to local preferences (e.g., payment methods) with which we may have limited or no experience;

• trade barriers and changes in trade regulations;

• difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language, and cultural differences;

• stringent local labor laws and regulations;

• credit risk and higher levels of payment fraud;

• profit repatriation restrictions, foreign currency exchange restrictions or extreme fluctuations in foreign currency exchange rates for a particular currency;

• political or social unrest, economic instability, repression, or human rights issues;

• geopolitical events, including natural disasters, public health issues, acts of war, and terrorism;

• import or export regulations;

• compliance with U.S. laws such as the Foreign Corrupt Practices Act, and foreign laws prohibiting corrupt payments to government officials, as well as U.S. and foreign laws designed to combat money laundering and the financing of terrorist activities;

• antitrust and competition regulations;

• potentially adverse tax developments and consequences;

• economic uncertainties relating to sovereign and other debt;

• different, uncertain, or more stringent user protection, data protection, privacy, and other laws;

• risks related to other government regulation or required compliance with local laws;

• national or regional differences in macroeconomic growth rates;

• local licensing and reporting obligations; and

• increased difficulties in collecting accounts receivable.

Violations of the complex foreign and U.S. laws and regulations that apply to our international operations may result in fines, criminal actions, or sanctions against us, our officers, or our employees; prohibitions on the conduct of our business; and damage to our reputation. Although we have implemented policies and procedures designed to promote compliance with these laws, there can be no assurance that our employees, contractors, or agents will not violate our policies. These risks inherent in our international operations and expansion increase our costs of doing business internationally and could harm our business.

Any factors that reduce cross-border trade or make such trade more difficult could harm our business.

Cross-border trade is an important source of both revenue and profits for us. Cross-border trade also represents our primary (or in some cases, only) presence in certain important markets, such as Brazil/Latin America, China, and various other countries. In addition, our cross-border trade is also subject to, and may be impacted by, foreign exchange rate fluctuations.

The interpretation and application of specific national or regional laws, such as those related to intellectual property rights of authentic products, selective distribution networks, and sellers in other countries listing items on the Internet, and the potential interpretation and application of laws of multiple jurisdictions (e.g., the jurisdiction of the buyer, the seller, and/or the location of the item being sold) are often extremely complicated in the context of cross-border trade. The interpretation and/or application of such laws could impose restrictions on, or increase the costs of, purchasing, selling, shipping, or returning goods across national borders.

The shipping of goods across national borders is often more expensive and complicated than domestic shipping. Customs and duty procedures and reviews, including duty-free thresholds in various key markets, the interaction of national postal systems, and security related governmental processes at international borders, may increase costs, discourage cross-border purchases, delay transit and create shipping uncertainties. Any factors that increase the costs of cross-border trade or restrict, delay, or make cross-border trade more difficult or impractical would lower our revenues and profits and could harm our business.

Our business may be adversely affected by geopolitical events, natural disasters, seasonal factors and other factors that cause our users to spend less time on our websites or mobile platforms and applications, including increased usage of other websites.

Our users may spend less time on our websites and our applications for mobile devices as a result of a variety of diversions, including: geopolitical events, such as war, the threat of war, or terrorist activity; natural disasters; power shortages or outages, major public health issues, including pandemics; social networking or other entertainment websites or mobile applications; significant local, national or global events capturing the attention of a large part of the population; and seasonal

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fluctuations due to a variety of factors. If any of these, or any other factors, divert our users from using of our websites or mobile applications, our business could be materially adversely affected.

Our success depends to a large degree on our ability to successfully address the rapidly evolving market for transactions on mobile devices.

Mobile devices are increasingly used for ecommerce transactions. A significant and growing portion of our users access our platforms through mobile devices. We may lose users if we are not able to continue to meet our users’ mobile and multi-screen experience expectations. The variety of technical and other configurations across different mobile devices and platforms increases the challenges associated with this environment. In addition, a number of other companies with significant resources and a number of innovative startups have introduced products and services focusing on mobile markets.

Our ability to successfully address the challenges posed by the rapidly evolving market for mobile transactions is crucial to our continued success, and any failure to continuously increase the volume of mobile transactions effected through our platforms could harm our business.

If we cannot keep pace with rapid technological developments to provide new and innovative programs, products and services, the use of our products and our revenues could decline.

Rapid, significant technological changes continue to confront the industries in which we operate. We cannot predict the effect of technological changes on our business. In addition to our own initiatives and innovations, we rely in part on third parties, including some of our competitors, for the development of and access to new technologies. We expect that new services and technologies applicable to the industries in which we operate will continue to emerge. These new services and technologies may be superior to, or render obsolete, the technologies we currently use in our products and services. Incorporating new technologies into our products and services may require substantial expenditures and take considerable time, and ultimately may not be successful. In addition, our ability to adopt new services and develop new technologies may be inhibited by industry-wide standards, new laws and regulations, resistance to change from clients or merchants, or third parties’ intellectual property rights. Our success will depend on our ability to develop new technologies and adapt to technological changes and evolving industry standards.

Our business is subject to extensive government regulation and oversight.

We are subject to laws and regulations affecting our domestic and international operations in a number of areas, including consumer protection, data privacy requirements, intellectual property ownership and infringement, prohibited items and stolen goods, resale of event tickets, tax, anti-competition, export requirements, anti-corruption, labor, advertising, digital content, real estate, billing, ecommerce, promotions, quality of services, telecommunications, mobile communications and media, environmental, and health and safety regulations, as well as laws and regulations intended to combat money laundering and the financing of terrorist activities.

Compliance with these laws, regulations, and similar requirements may be onerous and expensive, and variances and inconsistencies from jurisdiction to jurisdiction may further increase the cost of compliance and doing business. Any such costs, which may rise in the future as a result of changes in these laws and regulations or in their interpretation, could individually or in the aggregate make our products and services less attractive to our customers, delay the introduction of new products or services in one or more regions, or cause us to change or limit our business practices. We have implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no assurance that our employees, contractors, or agents will not violate such laws and regulations or our policies and procedures.  

Regulation in the areas of privacy and protection of user data could harm our business.

We are subject to laws relating to the collection, use, retention, security, and transfer of personally identifiable information about our users around the world. Much of the personal information that we collect, especially financial information, is regulated by multiple laws. User data protection laws may be interpreted and applied inconsistently from country to country. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between or among ourselves, our subsidiaries, and other parties with which we have commercial relations. These laws continue to develop in ways we cannot predict and that may harm our business.

Regulatory scrutiny of privacy, user data protection, use of data and data collection is increasing on a global basis. We are subject to a number of privacy and similar laws and regulations in the countries in which we operate and these laws and regulations will likely continue to evolve over time, both through regulatory and legislative action and judicial decisions. Some

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of these laws impose requirements that are inconsistent with one another, yet regulators may claim that both apply. Complying with these varying national requirements could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business and violations of privacy-related laws can result in significant penalties. In addition, compliance with these laws may restrict our ability to provide services to our customers that they may find to be valuable. A determination that there have been violations of laws relating to our practices under communications-based laws could expose us to significant damage awards, fines and other penalties that could, individually or in the aggregate, materially harm our business. In particular, because of the enormous number of texts, emails and other communications we send to our users, communications laws that provide a specified monetary damage award or fine for each violation (such as those described below) could result in particularly large awards or fines.

For example, the Federal Communications Commission amended certain of its regulations under the Telephone Consumer Protection Act, or TCPA, in 2012 and 2013 in a manner that could increase our exposure to liability for certain types of telephonic communication with customers, including but not limited to text messages to mobile phones. Under the TCPA, plaintiffs may seek actual monetary loss or statutory damages of $500 per violation, whichever is greater, and courts may treble the damage award for willful or knowing violations. We are regularly subject to class-action lawsuits, as well as individual lawsuits, containing allegations that our businesses violated the TCPA. These lawsuits, and other private lawsuits not currently alleged as class actions, seek damages (including statutory damages) and injunctive relief, among other remedies. Given the enormous number of communications we send to our users, a determination that there have been violations of the TCPA or other communications-based statutes could expose us to significant damage awards that could, individually or in the aggregate, materially harm our business.

We post on our websites our privacy policies and practices concerning the collection, use and disclosure of user data. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any regulatory requirements or orders or other federal, state or international privacy or consumer protection-related laws and regulations could result in proceedings or actions against us by governmental entities or others (e.g., class action privacy litigation), subject us to significant penalties and negative publicity, require us to change our business practices, increase our costs and adversely affect our business. Data collection, privacy and security have become the subject of increasing public concern. If Internet and mobile users were to reduce their use of our websites, mobile platforms, products, and services as a result of these concerns, our business could be harmed. As noted above, we are also subject to the possibility of security breaches, which themselves may result in a violation of these laws.

Other laws and regulations could harm our business.

It is not always clear how laws and regulations governing matters relevant to our business, such as property ownership, copyrights, trademarks, and other intellectual property issues, parallel imports and distribution controls, taxation, libel and defamation, and obscenity apply to our businesses. Many of these laws were adopted prior to the advent of the Internet, mobile, and related technologies and, as a result, do not contemplate or address the unique issues of the Internet and related technologies. Many of these laws, including some of those that do reference the Internet are subject to interpretation by the courts on an ongoing basis and the resulting uncertainty in the scope and application of these laws and regulations increases the risk that we will be subject to private claims and governmental actions alleging violations of those laws and regulations.

As our activities, the products and services we offer, and our geographical scope continue to expand, regulatory agencies or courts may claim or hold that we or our users are subject to additional requirements (including licensure) or prohibited from conducting our business in their jurisdiction, either generally or with respect to certain actions. Financial and political events have increased the level of regulatory scrutiny on large companies, and regulatory agencies may view matters or interpret laws and regulations differently than they have in the past and in a manner adverse to our businesses. Our success and increased visibility have driven some existing businesses that perceive us to be a threat to their businesses to raise concerns about our business models to policymakers and regulators. These businesses and their trade association groups employ significant resources in their efforts to shape the legal and regulatory regimes in countries where we have significant operations. They may employ these resources in an effort to change the legal and regulatory regimes in ways intended to reduce the effectiveness of our businesses and the ability of users to use our products and services. These established businesses have raised concerns relating to pricing, parallel imports, professional seller obligations, selective distribution networks, stolen goods, copyrights, trademarks and other intellectual property rights and the liability of the provider of an Internet marketplace for the conduct of its users related to those and other issues. Any changes to the legal or regulatory regimes in a manner that would increase our liability for third-party listings could negatively impact our business.

Numerous U.S. states and foreign jurisdictions, including the State of California, have regulations regarding “auctions” and the handling of property by “secondhand dealers” or “pawnbrokers.” Several states and some foreign jurisdictions have attempted to impose such regulations upon us or our users, and others may attempt to do so in the future. Attempted

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enforcement of these laws against some of our users appears to be increasing and we could be required to change the way we or our users do business in ways that increase costs or reduce revenues, such as forcing us to prohibit listings of certain items or restrict certain listing formats in some locations. We could also be subject to fines or other penalties, and any of these outcomes could harm our business.

A number of the lawsuits against us relating to trademark issues seek to have our platforms subject to unfavorable local laws. For example, “trademark exhaustion” principles provide trademark owners with certain rights to control the sale of a branded authentic product until it has been placed on the market by the trademark holder or with the holder’s consent. The application of “trademark exhaustion” principles is largely unsettled in the context of the Internet, and if trademark owners are able to force us to prohibit listings of certain items in one or more locations, our business could be harmed.

As we expand and localize our international activities, we are increasingly becoming obligated to comply with the laws of the countries or markets in which we operate. In addition, because our services are accessible worldwide and we facilitate sales of goods and provide services to users worldwide, one or more jurisdictions may claim that we or our users are required to comply with their laws based on the location of our servers or one or more of our users, or the location of the product or service being sold or provided in an ecommerce transaction. For example, we were found liable in France, under French law, for transactions on some of our websites worldwide that did not involve French buyers or sellers. Laws regulating Internet, mobile and ecommerce technologies outside of the United States are generally less favorable to us than those in the United States. Compliance may be more costly or may require us to change our business practices or restrict our service offerings, and the imposition of any regulations on us or our users may harm our business. In addition, we may be subject to multiple overlapping legal or regulatory regimes that impose conflicting requirements on us (e.g., in cross-border trade). Our alleged failure to comply with foreign laws could subject us to penalties ranging from criminal prosecution to significant fines to bans on our services, in addition to the significant costs we may incur in defending against such actions.

We are regularly subject to general litigation, regulatory disputes, and government inquiries.

We are regularly subject to claims, lawsuits (including class actions and individual lawsuits), government investigations, and other proceedings involving competition and antitrust, intellectual property, privacy, consumer protection, accessibility claims, securities, tax, labor and employment, commercial disputes, content generated by our users, services and other matters. The number and significance of these disputes and inquiries have increased as our company has grown larger, our businesses have expanded in scope and geographic reach, and our products and services have increased in complexity.

The outcome and impact of such claims, lawsuits, government investigations, and proceedings cannot be predicted with certainty. Regardless of the outcome, such investigations and proceedings can have an adverse impact on us because of legal costs, diversion of management resources, and other factors. Determining reserves for our pending litigation is a complex, fact-intensive process that is subject to judgment calls. It is possible that a resolution of one or more such proceedings could require us to make substantial payments to satisfy judgments, fines or penalties or to settle claims or proceedings, any of which could harm our business. These proceedings could also result in reputational harm, criminal sanctions, consent decrees, or orders preventing us from offering certain products, or services, or requiring a change in our business practices in costly ways, or requiring development of non-infringing or otherwise altered products or technologies. Any of these consequences could harm our business.

We are subject to regulatory activity and antitrust litigation under competition laws.

We are subject to scrutiny by various government agencies under U.S. and foreign laws and regulations, including competition laws. Some jurisdictions also provide private rights of action for competitors or consumers to assert claims of anti-competitive conduct. Other companies and government agencies have in the past and may in the future allege that our actions violate the antitrust or competition laws of the United States, individual states, the European Commission or other countries, or otherwise constitute unfair competition. An increasing number of governments are regulating competition law activities, including increased scrutiny in large markets such as China. Our business partnerships or agreements or arrangements with customers or other companies could give rise to regulatory action or antitrust litigation. Some regulators, particularly those outside of the United States, may perceive our business to be used so broadly that otherwise uncontroversial business practices could be deemed anticompetitive. Certain competition authorities have conducted market studies of our industries. Such claims and investigations, even if without foundation, may be very expensive to defend, involve negative publicity and substantial diversion of management time and effort and could result in significant judgments against us or require us to change our business practices.

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We are subject to patent litigation.

We have repeatedly been sued for allegedly infringing other parties’ patents. We are a defendant in a number of patent suits and have been notified of several other potential patent disputes. We expect that we will increasingly be subject to patent infringement claims because, among other reasons:

• our products and services continue to expand in scope and complexity;

• we continue to expand into new businesses, including through acquisitions; and

• the universe of patent owners who may claim that we, any of the companies that we have acquired, or our customers infringe their patents, and the aggregate number of patents controlled by such patent owners, continues to increase.

Such claims may be brought directly against us and/or against our customers whom we may indemnify either because we are contractually obligated to do so or we choose to do so as a business matter. We believe that an increasing number of these claims against us and other technology companies have been, and continue to be, initiated by third parties whose sole or primary business is to assert such claims. In addition, we have seen significant patent disputes between operating companies in some technology industries. Patent claims, whether meritorious or not, are time-consuming and costly to defend and resolve, and could require us to make expensive changes in our methods of doing business, enter into costly royalty or licensing agreements, make substantial payments to satisfy adverse judgments or settle claims or proceedings, or cease conducting certain operations, which would harm our business.

We are exposed to fluctuations in interest rates.

Some of our borrowings bear interest at floating rates and we have entered into agreements intended to convert the interest rate on some of our fixed rate debt instruments to floating rates. To the extent that prevailing rates increase, our interest expense under these debt instruments will increase.

Investments in both fixed-rate and floating-rate interest-earning instruments carry varying degrees of interest rate risk. The fair market value of our fixed-rate investment securities may be adversely impacted due to a rise in interest rates. In general, fixed-rate securities with longer maturities are subject to greater interest-rate risk than those with shorter maturities. While floating rate securities generally are subject to less interest-rate risk than fixed-rate securities, floating-rate securities may produce less income than expected if interest rates decrease and may also suffer a decline in market value if interest rates increase. Due in part to these factors, our investment income may decline or we may suffer losses in principal if securities are sold that have declined in market value due to changes in interest rates. In addition, relatively low interest rates limit our investment income. Fluctuations in interest rates that increase the cost of our current or future indebtedness, cause the market value of our assets to decline or reduce our investment income could adversely affect our financial results.

Our tickets business is subject to regulatory, competitive and other risks that could harm this business.

Our tickets business, which includes StubHub, is subject to numerous risks, including:

• Some jurisdictions, in particular jurisdictions outside the United States, prohibit the resale of event tickets (anti-scalping laws) at prices above the face value of the tickets or at all, or highly regulate the resale of tickets, and new laws and regulations or changes to existing laws and regulations imposing these or other restrictions could limit or inhibit our ability to operate, or our users’ ability to continue to use, our tickets business.

• Regulatory agencies or courts may claim or hold that we are responsible for ensuring that our users comply with these laws and regulations.

• In many jurisdictions, our tickets business depends on commercial partnerships with event organizers or licensed ticket vendors, which we must develop and maintain on acceptable terms for our tickets business to be successful.

• Our tickets business is subject to seasonal fluctuations and the general economic and business conditions that impact the sporting events and live entertainment industries.

• A portion of the tickets inventory sold by sellers on the StubHub platform is processed by StubHub in digital form. Systems failures, security breaches, theft or other disruptions that result in the loss of such sellers’ tickets inventory, could result in significant costs and a loss of consumer confidence in our tickets business.

• Lawsuits alleging a variety of causes of actions have in the past, and may in the future, be filed against StubHub and eBay by venue owners, competitors, ticket buyers, and unsuccessful ticket buyers. Such lawsuits could result in significant costs and require us to change our business practices in ways that negatively affect our tickets business.

• Our tickets business also faces significant competition from a number of sources, including ticketing service companies, event organizers, ticket brokers, and online and offline ticket resellers. Some ticketing service companies, event organizers, and professional sports teams have begun to issue event tickets through various forms of electronic

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ticketing systems that are designed to restrict or prohibit the transferability (and by extension, the resale) of such event tickets either to favor their own resale affiliates or to discourage resale or restrict resale of season tickets to a preferred, designated website. Ticketing service companies have also begun to use market-based pricing strategies or dynamic pricing to charge much higher prices, and impose additional restrictions on transferability, for premium tickets.

• Some sports teams have threatened to revoke the privileges of season ticket owners if they resell their tickets through a platform that is not affiliated with, or approved by, such sports teams. In March 2015, StubHub filed suit against Ticketmaster and the Golden State Warriors, alleging antitrust and various state law violations arising out of the defendants’ restrictive ticketing practices, which include prohibiting the resale of Warriors tickets on StubHub or any other non-Ticketmaster secondary exchange.

The listing or sale by our users of items that allegedly infringe the intellectual property rights of rights owners, including pirated or counterfeit items, may harm our business.

The listing or sale by our users of unlawful, counterfeit or stolen goods or unlawful services, or sale of goods or services in an unlawful manner, has resulted and may continue to result in allegations of civil or criminal liability for unlawful activities against us (including the employees and directors of our various entities) involving activities carried out by users through our services. In a number of circumstances, third parties, including government regulators and law enforcement officials, have alleged that our services aid and abet violations of certain laws, including laws regarding the sale of counterfeit items, laws restricting or prohibiting the transferability (and by extension, the resale) of digital goods (e.g., event tickets, books, music and software), the fencing of stolen goods, selective distribution channel laws, customs laws, distance selling laws, anti-scalping laws with respect to the resale of tickets, and the sale of items outside of the United States that are regulated by U.S. export controls. For example:

• In Turkey, local prosecutors and courts are investigating our liability for allegedly illegal actions by users of our Turkish Marketplace business (GittiGidiyor). In accordance with local law and custom, they have indicted one or more members of the board of directors of our local Turkish subsidiary. We intend to defend vigorously against any such actions and a growing number of these cases have been dismissed by the relevant courts.

• In August 2012, we were informed that U.S. listings of footwear with religious imagery were visible on our local Indian site and we immediately removed these listings. In September 2012, a criminal case was registered against us in India in regard to these listings, and we are challenging the prosecution of this case.

In addition, allegations of infringement of intellectual property rights, including but not limited to counterfeit items, have resulted in threatened and actual litigation from time to time by rights owners, including the following luxury brand owners: Tiffany & Co. in the United States; Rolex S.A. and Coty Prestige Lancaster Group GmbH in Germany; Louis Vuitton Malletier and Christian Dior Couture in France; and L’Oréal SA, Lancôme Parfums et Beauté & Cie, and Laboratoire Garnier & Cie in several European countries. Plaintiffs in these and similar suits seek, among other remedies, injunctive relief and damages. Statutory damages for copyright or trademark violations could range up to $150,000 per copyright violation and $2,000,000 per trademark violation in the United States, and may be even higher in other jurisdictions. In the past, we have paid substantial amounts in connection with resolving certain trademark and copyright suits. These and similar suits may also force us to modify our business practices in a manner that increases costs, lowers revenue, makes our websites and mobile platforms less convenient to customers, and requires us to spend substantial resources to take additional protective measures or discontinue certain service offerings in order to combat these practices. In addition, we have received significant media attention relating to the listing or sale of illegal or counterfeit goods, which could damage our reputation, diminish the value of our brand names, and make users reluctant to use our products and services.

We are subject to risks associated with information disseminated through our services.

Online services companies may be subject to claims relating to information disseminated through their services, including claims alleging defamation, libel, breach of contract, invasion of privacy, negligence, copyright or trademark infringement, among other things. The laws relating to the liability of online services companies for information disseminated through their services are subject to frequent challenges both in the United States and foreign jurisdictions. Any liabilities incurred as a result of these matters could require us to incur additional costs and harm our reputation and our business.

Our potential liability to third parties for the user-provided content on our sites, particularly in jurisdictions outside the United States where laws governing Internet transactions are unsettled, may increase. If we become liable for information provided by our users and carried on our service in any jurisdiction in which we operate, we could be directly harmed and we may be forced to implement new measures to reduce our exposure to this liability, including expending substantial resources or discontinuing certain service offerings, which could harm our business.

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Changes to our programs to protect buyers and sellers could increase our costs and loss rate.

Our eBay Money Back Guarantee program represents the means by which we compensate users who believe that they have been defrauded, have not received the item that they purchased or have received an item different from what was described. We expect to continue to receive communications from users requesting reimbursement or threatening or commencing legal action against us if no reimbursement is made. Our liability for these sort of claims is slowly beginning to be clarified in some jurisdictions and may be higher in some non-U.S. jurisdictions than it is in the United States. Litigation involving liability for any such third-party actions could be costly and time consuming for us, divert management attention, result in increased costs of doing business, lead to adverse judgments or settlements or otherwise harm our business. In addition, affected users will likely complain to regulatory agencies that could take action against us, including imposing fines or seeking injunctions.

We may be unable to adequately protect or enforce our intellectual property rights, or third parties may allege that we are infringing their intellectual property rights.

We believe the protection of our intellectual property, including our trademarks, patents, copyrights, domain names, trade dress, and trade secrets, is critical to our success. We seek to protect our intellectual property rights by relying on applicable laws and regulations in the United States and internationally, as well as a variety of administrative procedures. We also rely on contractual restrictions to protect our proprietary rights when offering or procuring products and services, including confidentiality and invention assignment agreements entered into with our employees and contractors and confidentiality agreements with parties with whom we conduct business.

However, effective intellectual property protection may not be available in every country in which our products and services are made available, and contractual arrangements and other steps we have taken to protect our intellectual property may not prevent third parties from infringing or misappropriating our intellectual property or deter independent development of equivalent or superior intellectual property rights by others. Trademark, copyright, patent, domain name, trade dress and trade secret protection is very expensive to maintain and may require litigation. We must protect our intellectual property rights and other proprietary rights in an increasing number of jurisdictions, a process that is expensive and time consuming and may not be successful in every jurisdiction. Also, we may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. We have licensed in the past, and expect to license in the future, certain of our proprietary rights, such as trademarks or copyrighted material, to others. These licensees may take actions that diminish the value of our proprietary rights or harm our reputation. Any failure to adequately protect or enforce our intellectual property rights, or significant costs incurred in doing so, could materially harm our business.

As the number of products in the software industry increases and the functionality of these products further overlap, and as we acquire technology through acquisitions or licenses, we may become increasingly subject to infringement claims, including patent, copyright, and trademark infringement claims. Litigation may be necessary to determine the validity and scope of the patent and other intellectual property rights of others. The ultimate outcome of any allegation is uncertain and, regardless of the outcome, any such claim, with or without merit, may be time-consuming, result in costly litigation, divert management’s time and attention from our business, require us to stop selling, delay roll-out, or redesign our products, or require us to pay substantial amounts to satisfy judgments or settle claims or lawsuits or to pay substantial royalty or licensing fees, or to satisfy indemnification obligations that we have with some of our customers. Our failure to obtain necessary license or other rights, or litigation or claims arising out of intellectual property matters, may harm our business.

Failure to deal effectively with fraudulent activities on our platforms would increase our loss rate and harm our business, and could severely diminish merchant and consumer confidence in and use of our services.

We face risks with respect to fraudulent activities on our platforms and periodically receive complaints from buyers and sellers who may not have received the goods that they had contracted to purchase or payment for the goods that a buyer had contracted to purchase. In some European and Asian jurisdictions, buyers may also have the right to withdraw from a sale made by a professional seller within a specified time period. While we can, in some cases, suspend the accounts of users who fail to fulfill their payment or delivery obligations to other users, we do not have the ability to require users to make payment or deliver goods, or otherwise make users whole other than through its buyer protection program, which in the United States we refer to as the eBay Money Back Guarantee. Although we have implemented measures to detect and reduce the occurrence of fraudulent activities, combat bad buyer experiences and increase buyer satisfaction, including evaluating sellers on the basis of their transaction history and restricting or suspending their activity, there can be no assurance that these measures will be effective in combating fraudulent transactions or improving overall satisfaction among sellers, buyers, and other participants. Additional measures to address fraud could negatively affect the attractiveness of our services to buyers or sellers, resulting in a

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reduction in the ability to attract new users or retain current users, damage to our reputation, or a diminution in the value of our brand names.

We have substantial indebtedness, and we may incur substantial additional indebtedness in the future, and we may not generate sufficient cash flow from our business to service our indebtedness. Failure to comply with the terms of our indebtedness could result in the acceleration of our indebtedness, which could have an adverse effect on our cash flow and liquidity.

We have a substantial amount of outstanding indebtedness and we may incur substantial additional indebtedness in the future, including under our commercial paper program and revolving credit facility or through public or private offerings of debt securities. Our outstanding indebtedness and any additional indebtedness we incur may have significant consequences, including, without limitation, any of the following:

• requiring us to use a significant portion of our cash flow from operations and other available cash to service our indebtedness, thereby reducing the amount of cash available for other purposes, including capital expenditures and acquisitions;

• our indebtedness and leverage may increase our vulnerability to downturns in our business, to competitive pressures, and to adverse changes in general economic and industry conditions;

• adverse changes in the ratings assigned to our debt securities by credit rating agencies will likely increase our borrowing costs;

• our ability to obtain additional financing for working capital, capital expenditures, acquisitions, share repurchases or other general corporate and other purposes may be limited; and

• our flexibility in planning for, or reacting to, changes in our business and our industry may be limited.

Our ability to make payments of principal of and interest on our indebtedness depends upon our future performance, which will be subject to general economic conditions, industry cycles and financial, business and other factors affecting our consolidated results of operations and financial condition, many of which are beyond our control. If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required to, among other things:

• repatriate funds to the United States at substantial tax cost;

• seek additional financing in the debt or equity markets;

• refinance or restructure all or a portion of our indebtedness;

• sell selected assets; or

• reduce or delay planned capital or operating expenditures.

Such measures might not be sufficient to enable us to service our debt. In addition, any such financing, refinancing or sale of assets might not be available on economically favorable terms or at all.

Our revolving credit facility and the indenture pursuant to which certain of our outstanding debt securities were issued contain, and any debt instruments we enter into in the future may contain, financial and other covenants that restrict or could restrict, among other things, our business and operations. If we fail to pay amounts due under, or breach any of the covenants in, a debt instrument, then the lenders would typically have the right to demand immediate repayment of all borrowings thereunder (subject in certain cases to grace or cure period). Moreover, any such acceleration and required repayment of or default in respect of any of our indebtedness could, in turn, constitute an event of default under other debt instruments, thereby resulting in the acceleration and required repayment of that other indebtedness. Any of these events could materially adversely affect our liquidity and financial condition.

A downgrade in our credit ratings could materially adversely affect our business.

Some of our outstanding indebtedness has received credit ratings from certain rating agencies.  Such ratings are limited in scope and do not purport to address all risks relating to an investment in those debt securities, but rather reflect only the view of each rating agency at the time the rating was issued. The credit ratings assigned to our debt securities could change based upon, among other things, our results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and there can be no assurance that such ratings will not be lowered, suspended or withdrawn entirely by a rating agency or placed on a so-called “watch list” for a possible downgrade or assigned a negative ratings outlook if, in any rating agency’s judgment, circumstances so warrant. Moreover, these credit ratings are not recommendations to buy, sell or hold any of our debt securities. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade or have been assigned a negative

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outlook, would likely increase our borrowing costs, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and could harm our business.

Our credit ratings were downgraded as a result of the distribution of 100% of the outstanding common stock of PayPal to our stockholders (the “Distribution”), pursuant to which PayPal became an independent company. As of January 1, 2014, our long-term debt and short-term funding were rated investment grade by Standard and Poor’s Financial Services, LLC (long-term rated A, short-term rated A-1, with a stable outlook), Moody’s Investor Service (long-term rated A2, short-term rated P-1, with a stable outlook), and Fitch Ratings, Inc. (long-term rated A, short-term rated F-1, with a stable outlook). All of these credit rating agencies lowered their ratings in connection with the Distribution, which occurred on July 17, 2015. Since July 20, 2015, we have been rated investment grade by Standard and Poor’s Financial Services, LLC (long-term rated BBB+, short-term rated A-2, with a stable outlook), Moody’s Investor Service (long-term rated Baa1, short-term rated P-2, with a stable outlook), and Fitch Ratings, Inc. (long-term rated BBB, short-term rated F-2, with a stable outlook). We disclose these ratings to enhance the understanding of our sources of liquidity and the effects of these ratings on our costs of funds. Our borrowing costs depend, in part, on our credit ratings and any further actions taken by these credit rating agencies to lower our credit ratings, as described above, will likely increase our borrowing costs. 

Our business and users may be subject to sales tax and other taxes.

The application of indirect taxes (such as sales and use tax, value-added tax (VAT), goods and services tax, business tax and gross receipt tax) to ecommerce businesses and to our users is a complex and evolving issue. Many of the fundamental statutes and regulations that impose these taxes were established before the adoption and growth of the Internet and ecommerce. In many cases, it is not clear how existing statutes apply to the Internet or ecommerce. In addition, governments are increasingly looking for ways to increase revenues, which has resulted in discussions about tax reform and other legislative action to increase tax revenues, including through indirect taxes. There are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain.

We do not collect taxes on the goods or services sold by users of our services. However, some jurisdictions have implemented, or may implement, laws that require remote sellers of goods and services to collect and remit taxes on sales to customers located within the jurisdiction. In particular, the Streamlined Sales Tax Project (an ongoing, multi-year effort by U.S. state and local governments to pursue federal legislation that would require collection and remittance of sales tax by out-of-state sellers) could allow states that meet certain simplification and other criteria to require out-of-state sellers to collect and remit sales taxes on goods purchased by in-state residents. The adoption of such legislation could result in a use tax collection responsibility for certain of our sellers. This collection responsibility and the additional costs associated with complex use tax collection, remittance and audit requirements would make selling on our websites and mobile platforms less attractive for small business retailers and would harm our business, and the proliferation of state legislation to expand sales and use tax collection on Internet sales could adversely affect some of our sellers and indirectly harm our business.

Several proposals have been made at the U.S. state and local levels that would impose additional taxes on the sale of goods and services over the Internet. These proposals, if adopted, could substantially impair the growth of ecommerce and our brands, and could diminish our opportunity to derive financial benefit from our activities. While the U.S. federal government’s moratorium on state and local taxation of Internet access or multiple or discriminatory taxes on ecommerce has been temporarily extended, this moratorium does not prohibit federal, state or local authorities from collecting taxes on our income or from collecting certain taxes that were in effect prior to the enactment of the moratorium and/or one of its extensions.

From time to time, some taxing authorities in the United States have notified us that they believe we owe them certain taxes imposed on our services. These notifications have not resulted in any significant tax liabilities to date, but there is a risk that some jurisdiction may be successful in the future, which would harm our business.

Similar issues exist outside of the United States, where the application of VAT or other indirect taxes on ecommerce providers is complex and evolving. While we attempt to comply in those jurisdictions where it is clear that a tax is due, some of our subsidiaries have, from time to time, received claims relating to the applicability of indirect taxes to our fees. We have been paying VAT on fees charged to certain of our users in the European Union based on the service provider’s location. On January 1, 2015, changes to the rules determining the place of supply (and thus the country of taxation) for all European Union based providers of electronically supplied services were implemented that require that we pay VAT based on the residence or normal place of business of our customers. These changes may result in our paying a higher rate of VAT on such fees. Additionally, we pay input VAT on applicable taxable purchases within the various countries in which we operate. In most cases, we are entitled to reclaim this input VAT from the various countries. However, because of our unique business model, the application of the laws and rules that allow such reclamation is sometimes uncertain. A successful assertion by one or more countries that we are not entitled to reclaim VAT could harm our business.

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In certain jurisdictions, we collect and remit indirect taxes on our fees and pay taxes on our purchases of goods and services. However, tax authorities may raise questions about our calculation, reporting and collection of taxes and may ask us to remit additional taxes, as well as the proper calculation of such taxes. Should any new taxes become applicable or if the taxes we pay are found to be deficient, our business could be harmed.

A taxing authority may seek to impose a tax collection, reporting or record-keeping obligation on companies that engage in or facilitate ecommerce. For example, the U.S. Internal Revenue Service (IRS) now requires that certain payments to sellers be reported to the sellers and the IRS on an annual basis. Any failure by us to meet these requirements could result in substantial monetary penalties and other sanctions and could harm our business. Taxing authorities may also seek to impose tax collection or reporting obligations based on the location of the product or service being sold or provided in an ecommerce transaction, regardless of where the respective users are located. Some jurisdictions could assert that we are responsible for tax on the underlying goods or services sold on our sites. Imposition of a record keeping or tax collecting requirement could decrease seller activity on our sites and would harm our business. Tax authorities may also require us to help ensure compliance by our users by promulgating legislation regulating professional sellers, including tax reporting and collection requirements. In addition, we have periodically received requests from tax authorities in many jurisdictions for information regarding the transactions of large classes of sellers on our sites, and in some cases we have been legally obligated to provide this data. The imposition of any requirements on us to disclose transaction records for all or a class of sellers to tax or other regulatory authorities or to file tax forms on behalf of any sellers, especially requirements that are imposed on us but not on alternative means of ecommerce, and any use of those records to investigate, collect taxes from or prosecute sellers, could decrease seller activity on our sites and harm our business.

We may have exposure to greater than anticipated tax liabilities.

The determination of our worldwide provision for income taxes and other tax liabilities requires estimation and significant judgment, and there are many transactions and calculations where the ultimate tax determination is uncertain. Like many other multinational corporations, we are subject to tax in multiple U.S. and foreign tax jurisdictions and have structured our operations to reduce our effective tax rate. Our determination of our tax liability is always subject to audit and review by applicable domestic and foreign tax authorities, and we are currently undergoing a number of investigations, audits and reviews by taxing authorities throughout the world, including with respect to our business structure. Any adverse outcome of any such audit or review could harm our business, and the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made. While we have established reserves based on assumptions and estimates that we believe are reasonable to cover such eventualities, these reserves may prove to be insufficient.

In addition, our future income taxes could be adversely affected by a shift in our jurisdictional earning mix, by changes in the valuation of our deferred tax assets and liabilities, as a result of gains on our foreign exchange risk management program, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.

In light of continuing fiscal challenges in certain U.S. states and in many countries in Europe, various levels of government are increasingly focused on tax reform and other legislative action to increase tax revenue, including corporate income taxes. For example, the economic downturn reduced tax revenues for United States federal and state governments, and a number of proposals to increase taxes from corporate entities have been implemented or are being considered at various levels of government. These include a number of proposals to modify the U.S. federal income tax laws applicable to companies, like ours, operating in multiple U.S. and foreign jurisdictions which, if enacted, could materially increase our effective tax rate. A number of U.S. states have attempted to increase corporate tax revenues by taking an expansive view of corporate presence to attempt to impose corporate income taxes and other direct business taxes on companies that have no physical presence in their state, and taxing authorities in foreign jurisdictions may take similar actions. Many U.S. states are also altering their apportionment formulas to increase the amount of taxable income or loss attributable to their state from certain out-of-state businesses. Similarly, in Europe, and elsewhere in the world, there are various tax reform efforts underway designed to ensure that corporate entities are taxed on a larger percentage of their earnings. Companies that operate over the Internet, such as eBay, are a target of some of these efforts. If more taxing authorities are successful in applying direct taxes to Internet companies that do not have a physical presence in their respective jurisdictions, this could increase our effective tax rate.

We may be subject to sales reporting and record-keeping obligations.

One or more states, the U.S. federal government or foreign countries may seek to impose reporting or record-keeping obligations on companies that engage in or facilitate ecommerce. Such an obligation could be imposed by legislation intended

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to improve tax compliance (and legislation to such effect has been contemplated by several states and a number of foreign jurisdictions) or if one of our companies was ever deemed to be the legal agent of the users of our services by a jurisdiction in which it operates. Certain of our companies are required to report to the Internal Revenue Service (IRS) on customers subject to U.S. income tax who receive more than $20,000 in payments and more than 200 payments in a calendar year. As a result, we are required to request tax identification numbers from certain payees, track payments by tax identification number and, under certain conditions, withhold a portion of payments and forward such withholding to the IRS. We have modified our systems to meet these requirements and expect increased operational costs and changes to our user experience in connection with complying with these reporting obligations. Any failure by us to meet these requirements could result in substantial monetary penalties and other sanctions and could harm our business.

Our business is subject to online security risks, including security breaches and cyberattacks.

Our businesses involve the storage and transmission of users’ personal financial information. In addition, a significant number of our users authorize us to bill their payment card accounts directly for all transaction and other fees charged by us. An increasing number of websites, including those owned by several other large Internet and offline companies, have disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their websites or infrastructure. The techniques used to obtain unauthorized access, disable, or degrade service, or sabotage systems, change frequently, may be difficult to detect for a long time, and often are not recognized until launched against a target. Certain efforts may be state sponsored and supported by significant financial and technological resources and therefore may be even more difficult to detect. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. Unauthorized parties may also attempt to gain access to our systems or facilities through various means, including hacking into our systems or facilities, fraud, trickery or other means of deceiving our employees, contractors and temporary staff. A party that is able to circumvent our security measures could misappropriate our or our users’ personal information, cause interruption or degradations in our operations, damage our computers or those of our users, or otherwise damage our reputation. In addition, our users have been and likely will continue to be targeted by parties using fraudulent “spoof” and “phishing” emails to misappropriate user names, passwords, payment card numbers, or other personal information or to introduce viruses or other malware through “trojan horse” programs to our users’ computers. Our information technology and infrastructure may be vulnerable to cyberattacks or security incidents and third parties may be able to access our users’ proprietary information and payment card data that are stored on or accessible through our systems. Any security breach at a company providing services to us or our users could have similar effects.

In May 2014, we publicly announced that criminals were able to penetrate and steal certain data, including user names, encrypted user passwords and other non-financial user data. Upon making this announcement, we required all buyers and sellers on our platform to reset their passwords in order to log into their account. The breach and subsequent password reset have negatively impacted the business. In July 2014, a putative class action lawsuit was filed against us for alleged violations and harm resulting from the breach. The lawsuit was recently dismissed with leave to amend. In addition, we have received requests for information and are subject to investigations regarding this incident from numerous regulatory and other government agencies across the world.

We may also need to expend significant additional resources to protect against security breaches or to redress problems caused by breaches. These issues are likely to become more difficult and costly as we expand the number of markets where we operate. Additionally, our insurance policies carry low coverage limits, which may not be adequate to reimburse us for losses caused by security breaches and we may not be able to fully collect, if at all, under these insurance policies.

Systems failures or cyberattacks and resulting interruptions in the availability of or degradation in the performance of our websites, applications, products or services could harm our business.

Our systems may experience service interruptions or degradation due to of hardware and software defects or malfunctions, computer denial-of-service and other cyberattacks, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses, or other events. Our systems are also subject to break-ins, sabotage and intentional acts of vandalism. Some of our systems are not fully redundant and our disaster recovery planning is not sufficient for all eventualities.

We have experienced and will likely continue to experience system failures, denial of service attacks and other events or conditions from time to time that interrupt the availability or reduce the speed or functionality of our websites and mobile applications. These events have resulted and likely will result in loss of revenue. A prolonged interruption in the availability or reduction in the speed or other functionality of our websites and mobile applications could materially harm our business. Frequent or persistent interruptions in our services could cause current or potential users to believe that our systems are unreliable, leading them to switch to our competitors or to avoid our sites, and could permanently harm our reputation and

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brands. Moreover, to the extent that any system failure or similar event results in damages to our customers or their businesses, these customers could seek significant compensation from us for their losses and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address. We also rely on facilities, components and services supplied by third parties and our business may be materially adversely affected to the extent these components or services do not meet our expectations or these third parties cease to provide the services or facilities. In particular, a decision by any of our third party hosting providers to close a facility that we use could cause system interruptions and delays, result in loss of critical data and cause lengthy interruptions in our services. We do not carry business interruption insurance sufficient to compensate us for losses that may result from interruptions in our service as a result of systems failures and similar events.

Acquisitions, dispositions, joint ventures, and strategic investments could result in operating difficulties and could harm our business.

We have acquired a significant number of businesses of varying size and scope, technologies, services, and products and have recently distributed 100% of the outstanding common stock of PayPal to our stockholders, pursuant to which PayPal became an independent company, and sold our Enterprise business. We also expect to continue to evaluate and consider a wide array of potential strategic transactions as part of our overall business strategy, including business combinations, acquisitions, and dispositions of businesses, technologies, services, products, and other assets, as well as strategic investments and joint ventures. .

These transactions may involve significant challenges and risks, including:

• the potential loss of key customers, merchants, vendors and other key business partners of the companies we acquire, or dispose of, following and continuing after announcement of our transaction plans;

• declining employee morale and retention issues affecting employees of companies that we acquire or dispose of, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or the direction of the acquired or disposed business;

• difficulty making new and strategic hires of new employees;

• diversion of management time and a shift of focus from operating the businesses to the transaction, and in the case of an acquisition, integration and administration;

• the need to provide transition services to a disposed of company, which may result in the diversion of resources and focus;

• the need to integrate the operations, systems (including accounting, management, information, human resource and other administrative systems), technologies, products and personnel of each acquired company, which is an inherently risky and potentially lengthy and costly process;

• the inefficiencies and lack of control that may result if such integration is delayed or not implemented, and unforeseen difficulties and expenditures that may arise as a result;

• the need to implement or improve controls, procedures and policies appropriate for a larger public company at companies that prior to acquisition may have lacked such controls, procedures and policies or whose controls, procedures and policies did not meet applicable legal and other standards;

• risks associated with our expansion into new international markets;

• derivative lawsuits resulting from the acquisition or disposition;

• liability for activities of the acquired or disposed of company before the transaction, including intellectual property and other litigation claims or disputes, violations of laws, rules and regulations, commercial disputes, tax liabilities and other known and unknown liabilities and, in the case of dispositions, liabilities to the acquirors of those businesses under contractual provisions such as representations, warranties and indemnities;

• the potential loss of key employees following the transaction;

• the acquisition of new customer and employee personal information by us or a third party acquiring assets or businesses from us, which in and of itself may require regulatory approval and or additional controls, policies and procedures and subject us to additional exposure; and

• our dependence on the acquired business’ accounting, financial reporting, operating metrics and similar systems, controls and processes and the risk that errors or irregularities in those systems, controls and processes will lead to errors in our consolidated financial statements or make it more difficult to manage the acquired business.

At any given time we may be engaged in discussions or negotiations with respect to one or more of these types of transactions and any of these transactions could be material to our financial condition and results of operations. In addition, it may take us longer than expected to fully realize the anticipated benefits of these transactions, and those benefits may ultimately be smaller than anticipated or may not be realized at all, which could adversely affect our business and operating results. Any acquisitions or dispositions may also require us to issue additional equity securities, spend our cash, or incur debt

55

(and increased interest expense), liabilities, and amortization expenses related to intangible assets or write-offs of goodwill, which could adversely affect our results of operations and dilute the economic and voting rights of our stockholders.

We have made certain investments, including through joint ventures, in which we have a minority equity interest and/or lack management and operational control. The controlling joint venture partner in a joint venture may have business interests, strategies, or goals that are inconsistent with ours, and business decisions or other actions or omissions of the controlling joint venture partner or the joint venture company may result in harm to our reputation or adversely affect the value of our investment in the joint venture. Our strategic investments may also expose us to additional risks. Any circumstances, which may be out of our control, that adversely affect the value of our investments, or cost resulting from regulatory action or lawsuits in connection with our investments, could harm our business or negatively impact our financial results.

Our success largely depends on key personnel. Because competition for our key employees is intense, we may not be able to attract, retain, and develop the highly skilled employees we need to support our business. The loss of senior management or other key personnel could harm our business.

Our future performance depends substantially on the continued services of our senior management and other key personnel, including key engineering and product development personnel, and our ability to attract, retain, and motivate key personnel. Competition for key personnel is intense, especially in the Silicon Valley where our corporate headquarters are located, and we may be unable to successfully attract, integrate, or retain sufficiently qualified key personnel. In making employment decisions, particularly in the Internet and high-technology industries, job candidates often consider the value of the equity awards they would receive in connection with their employment and fluctuations in our stock price may make it more difficult to attract, retain, and motivate employees. In addition, we do not have long-term employment agreements with any of our key personnel and do not maintain any “key person” life insurance policies. The loss of the services of any of our senior management or other key personnel, or our inability to attract highly qualified senior management and other key personnel, could harm our business.

Problems with or price increases by third parties who provide services to us or to our sellers could harm our business.

A number of third parties provide services to us or to our sellers. Such services include seller tools that automate and manage listings, merchant tools that manage listings and interface with inventory management software, storefronts that help our sellers list items and shipping providers that deliver goods sold on our platform, among others. Financial or regulatory issues, labor issues (e.g., strikes, lockouts, or work stoppages), or other problems that prevent these companies from providing services to us or our sellers could harm our business.

Price increases by, or service terminations, disruptions or interruptions at, companies that provide services to us and our sellers and clients could also reduce the number of listings on our platforms or make it more difficult for our sellers to complete transactions, thereby harming our business. Some third parties who provide services to us or our sellers may have or gain market power and be able to increase their prices to us without competitive constraint. In addition, the U.S. Postal Service, which is facing ongoing fiscal challenges, has instituted postal rate increases and announced that it is considering closing thousands of local post offices and ending Saturday mail delivery. While we continue to work with global carriers to offer our sellers a variety of shipping options and to enhance their shipping experience, postal rate increases may reduce the competitiveness of certain sellers’ offerings, and postal service changes could require certain sellers to utilize alternatives which could be more expensive or inconvenient, which could in turn decrease the number of transactions on our sites, thereby harming our business.

We have outsourced certain functions to third-party providers, including some customer support and product development functions, which are critical to our operations. If our service providers do not perform satisfactorily, our operations could be disrupted, which could result in user dissatisfaction and could harm our business.

There can be no assurance that third parties who provide services directly to us or our sellers will continue to do so on acceptable terms, or at all. If any third parties were to stop providing services to us or our sellers on acceptable terms, including as a result of bankruptcy, we may be unable to procure alternatives from other third parties in a timely and efficient manner and on acceptable terms, or at all.

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Our developer platforms, which are open to merchants and third-party developers, subject us to additional risks.

We provide third-party developers with access to application programming interfaces, software development kits and other tools designed to allow them to produce applications for use, with a particular focus on mobile applications. There can be no assurance that merchants or third-party developers will develop and maintain applications and services on our open platforms on a timely basis or at all, and a number of factors could cause such third-party developers to curtail or stop development for our platforms. In addition, our business is subject to many regulatory restrictions. It is possible that merchants and third-party developers who utilize our development platforms or tools could violate these regulatory restrictions and we may be held responsible for such violations, which could harm our business.

The Distribution may not achieve some or all of the anticipated benefits and may adversely affect our business.

We may not realize some or all of the anticipated benefits from the Distribution and the Distribution may in fact adversely affect our business. As an independent, publicly traded company, we will be a smaller, less diversified company with a narrower business focus and may be more vulnerable to changing market conditions, which could materially and adversely affect our business, financial condition and results of operations. Separating the businesses may also eliminate or reduce synergies or economies of scale that existed prior to the Distribution, which could harm our business.

We could incur significant liability if the Distribution is determined to be a taxable transaction.

We have received an opinion from outside tax counsel to the effect that the Distribution qualifies as a transaction that is described in Sections 355 and 368(a)(1)(D) of the Internal Revenue Code. The opinion relies on certain facts, assumptions, representations and undertakings from PayPal and us regarding the past and future conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, representations or undertakings are incorrect or not satisfied, our shareholders and we may not be able to rely on the opinion of tax counsel and could be subject to significant tax liabilities. Notwithstanding the opinion of tax counsel we have received, the IRS could determine on audit that the Distribution is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion. If the Distribution is determined to be taxable for U.S. federal income tax purposes, our shareholders that are subject to U.S. federal income tax and we could incur significant U.S. federal income tax liabilities.

We may be exposed to claims and liabilities as a result of the Distribution.

We entered into a separation and distribution agreement and various other agreements with PayPal to govern the Distribution and the relationship of the two companies going forward. These agreements provide for specific indemnity and liability obligations and could lead to disputes between us and PayPal. The indemnity rights we have against PayPal under the agreements may not be sufficient to protect us. In addition, our indemnity obligations to PayPal may be significant and these risks could negatively affect our results of operations and financial condition.

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Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

Stock repurchase activity during the three months ended March 31, 2016 was as follows:

Period Ended	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Dollar Value that May Yet be Purchased Under the Programs (1)
January 31, 2016	10,020,640	$	24.78	10,020,640	$	1,587,915,175
February 29, 2016	32,231,928	$	23.32	32,231,928	$	836,234,777
March 31, 2016	—	$	—	—	$	836,234,777
	42,252,568			42,252,568

(1) In January 2015, our Board authorized an additional $2 billion stock repurchase program, with no expiration from the date of authorization. In June 2015, our Board authorized an additional $1 billion stock repurchase program, with no expiration from the date of authorization. The stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, in addition, subject to market conditions and other factors, to make opportunistic repurchases of our common stock to reduce 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.

During the three months ended March 31, 2016, we repurchased approximately $1.0 billion of our common stock under our stock repurchase programs. As of March 31, 2016, a total of approximately $836 million remained available for future repurchases of our common stock under our June 2015 repurchase program. For further details, please see “Part I, Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Stock Repurchases.”

We expect, subject to market conditions and other uncertainties, to continue making opportunistic repurchases of our common stock. However, 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. 

Item 3: Defaults Upon Senior Securities

Not applicable.

Item 4: Mine Safety Disclosures

Not applicable.

Item 5: Other Information

Not applicable.

Item 6: Exhibits

The information required by this Item is set forth in the Index of Exhibits that follows the signature page of this Quarterly Report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		eBay Inc.
		Principal Executive Officer:
		By:	/s/ Devin N. Wenig
			Devin N. Wenig
			President and Chief Executive Officer
Date:	April 26, 2016
		Principal Financial Officer:
		By:	/s/ Scott F. Schenkel
			Scott F. Schenkel
			Senior Vice President, Chief Financial Officer
Date:	April 26, 2016
		Principal Accounting Officer:
		By:	/s/ Brian J. Doerger
			Brian J. Doerger
			Vice President, Chief Accounting Officer
Date:	April 26, 2016

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INDEX TO EXHIBITS

Exhibit 3.01(1)	Amended and Restated Bylaws of Registrant, effective March 15, 2016.
Exhibit 4.01(2)	Officers’ Certificate dated February 29, 2016.
Exhibit 4.02(3)	Officers’ Certificate dated March 9, 2016.
Exhibit 4.03(2)	Form of 6.00% Note due 2056.
Exhibit 4.04(3)	Form of 2.500% Note due 2018.
Exhibit 4.05(3)	Form of 3.800% Note due 2022.
Exhibit 10.01+	Amended and Restated eBay Inc. Change in Control Severance Plan for Key Employees.
Exhibit 10.02+	Amended and Restated eBay Inc. SVP and Above Standard Severance Plan.
Exhibit 10.03+	Offer letter dated September 2, 2014 between Registrant and Steve Fisher.
Exhibit 10.04+	Offer letter dated April 2, 2015 between Registrant and Marie Oh Huber.
Exhibit 10.05+	Offer letter dated April 3, 2015 between Registrant and Harry Lawton.
Exhibit 10.06+	Form of Performance Based Restricted Stock Unit Award Agreement under Registrant's 2008 Equity Incentive Award Plan.
Exhibit 12.01	Statement regarding computation of ratio of earnings to fixed charges.
Exhibit 31.01	Certification of Registrant’s Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.02	Certification of Registrant’s Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.01	Certification of Registrant’s Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.02	Certification of Registrant’s Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

+Indicates a management contract or compensatory plan or arrangement.

(1) Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2016 and incorporated herein by reference.


(2) Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 29, 2016 and incorporated herein by reference.


(3) Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2016 and incorporated herein by reference.

EX-10.01

Exhibit 10.01

EBAY INC. CHANGE IN CONTROL SEVERANCE PLAN

FOR KEY EMPLOYEES

AND

SUMMARY PLAN DESCRIPTION

AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2016

1. PURPOSE OF THE PLAN

The purpose of the eBay Inc. Change in Control Severance Plan for Key Employees (the “Plan”) is to encourage the full attention and dedication of those employees at and above the level of Vice President, and certain eBay Inc. Fellows as may be selected by the Plan Administrator, in light of the distractions a change in control may cause, and otherwise to provide severance benefits designed to give financial assistance to any Eligible Participants upon their separation from eBay Inc. or any of its participating subsidiaries or affiliates under the conditions described herein during any Change in Control Period (as such term is defined below).

2. DEFINITIONS/GENERAL RULES

Definitions

Accrued Benefits– means prompt payment by the Company to an Eligible Participant of (a) any accrued but unpaid base salary through the last day of employment, (b) any unreimbursed expenses incurred through the last day of employment subject to the Eligible Participant’s prompt delivery to the Company of all required documentation of such expenses pursuant to applicable employer policies, (c) all other vested payments, benefits or fringe benefits to which the Eligible Participant is entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant (excluding any other severance plan, policy or program) of the Company or any of its affiliates in accordance with the terms of such plan, program or grant, including any unpaid annual bonus under the Company Employee Incentive Plan or applicable successor plan (the “eIP”) for any prior fiscal year when it otherwise would have been paid (see Section 4, eIP, below).

Board – means the Board of Directors of the Company.

Cause – means (a) an Eligible Participant’s failure to attempt in good faith to substantially perform his or her assigned duties, other than failure resulting from his or her death or incapacity due to physical or mental illness or impairment, which is not remedied within thirty (30) days after receipt of written notice from the Company specifying such failure; (b) an Eligible Participant’s indictment for, conviction of or plea of nolo contendere to any felony (or any other crime involving fraud, dishonesty or moral turpitude); or (c) an Eligible Participant’s commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company, except good faith expense account disputes.

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Change in Control – means “change in control” as defined in the Company Equity Incentive Award Plan under which the Company is then granting equity awards, as the same shall be in effect from time to time. The Compensation Committee of the Board shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.

Change in Control Period – means the period that begins ninety (90) days prior to the closing date of, and ends twenty-four (24) months following a Change in Control.

Company – means eBay Inc. and after a Change in Control, any Successor Entity.

Company Equity Awards – means incentive awards granted (or deemed granted for accounting purposes) to an Eligible Participant on shares of common stock of the Company (“Stock”) and, after a Change in Control, any common equity of any Successor Entity, pursuant to the Company Equity Incentive Plan or otherwise, including without limitation any stock options, performance-based restricted stock units, and restricted stock units.

Disability – means “disability” within the meaning of the long-term disability plan by which the Eligible Participant is covered as of his or her Separation Date.

Effective Date – means January 1, 2016 with respect to this amended and restated plan. This Plan was originally effective immediately following the distribution of shares of stock of PayPal Holdings, Inc. by the Company to the shareholders of the Company. Except as otherwise provided by the Company, in writing, this Plan replaces all prior plans, programs, and arrangements providing change in control severance benefits to eligible employees, except to the extent such benefits are provided in an Individual Agreement, as defined below.

Eligible Employee – means an individual who meets all of the eligibility requirements set forth in Section 3 (Eligibility), and is not otherwise excluded from such eligibility requirements.

Eligible Participant – means any Eligible Employee holding a position that is at or above the level of Vice President, and certain Company Fellows, in each case as may be selected by the Plan Administrator in its sole discretion to participate in this Plan at any one of the levels specified in the CIC Severance Pay Guidelines attached to this Plan as the Plan Administrator shall, in its sole discretion, designate.

Employer – means the Company and any subsidiary or affiliate of the Company whose voting equity is, directly or indirectly, at least 50.1% owned by the Company.

Good Reason–means:

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(A) for any Eligible Participant who is designated by the Plan Administrator as a Tier 1 (Direct Report) or a Tier 2 (SVP/Certain VP), as identified in Appendix C: (i) a material reduction in the Eligible Participant’s annual total target cash compensation (which is comprised of his or her annual base salary rate and annual target bonus opportunity under the eIP); (ii) a material reduction in the Eligible Participant’s reporting relationship and/or diminution in his or her scope of responsibilities; or (iii) a relocation of the Eligible Participant’s principal workplace location by more than thirty-five (35) miles, in any case of the foregoing without such Eligible Participant’s written consent.

(B) for any Eligible Participant who is designated by the Plan Administrator as a Tier 3 (VP/Fellow), as identified in Appendix C: (i) a material reduction in the Eligible Participant’s annual total target cash compensation (which is comprised of his or her annual base salary rate and annual target bonus opportunity under the eIP); or (ii) a relocation of the Eligible Participant’s principal workplace location by more than thirty-five (35) miles, in any case of the foregoing without such Eligible Participant’s written consent.

In addition, in any case of an occurrence described in subsection (A) or subsection (B) of this definition with respect to a given Eligible Participant, the Eligible Participant will be deemed to have given such consent to any of the condition(s) described in any of the applicable subsections of this definition if the Eligible Participant does not provide written notice to the Company of such Good Reason event(s) within sixty (60) days from the first occurrence of such Good Reason event(s), following which the Company shall have thirty (30) days to cure such event, and to the extent the Company has not cured such Good Reason event(s) during the 30-day cure period, the Eligible Participant must terminate his/her employment for Good Reason no later than one hundred twenty (120) days following the occurrence of such Good Reason event(s) by providing the Company at least thirty (30) days’ prior written notice of termination, which may run concurrently with the Company’s cure period.

Make-Good Payment – means the sum total of an Eligible Participant’s unpaid cash “make-good” awards, if any, that the Eligible Participant has received in connection with his or her employment with the Company.

Plan Administrator – means the Compensation Committee of the Board or such other person or committee appointed from time to time by the Compensation Committee of the Board to administer the Plan.

Premium Payment – means the product of (a) an Eligible Participant’s monthly premium payment for health insurance continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for himself or herself (and his or her eligible dependents) under the Company health plan in which he or she participates immediately prior to the Separation Date, or similar monthly payment for employees outside the U.S., if applicable; (b) the multiple of Premium Payment (as identified in Appendix A) applicable to such Eligible Participant; and (c) two (2). The Company shall withhold such amounts from payments under this Plan as it determines

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necessary to fulfill any applicable federal, state, or local wage or compensation withholding requirements. A more detailed description of the Premium Payment follows in Section 4 (Severance Benefits).

Salary Amount – means the product of: (a) an Eligible Participant’s annual base salary in effect upon the occurrence of the Separation Date (as in effect immediately prior to the Change in Control without considering bonuses, back-pay or other awards, or Company contributions to any employee plans); and (b) the multiple of Salary Amount (as identified in Appendix A) applicable to such Eligible Participant.

Separation Date – means the effective date of the Eligible Participant’s Separation from Service.

Separation from Service– means, except as provided in subsections (A) and (B) below, an employee’s termination from employment (whether by retirement or resignation from or discharge by the Company).

(A) A Separation from Service shall be deemed to have occurred if an employee and the Company reasonably anticipate, based on the facts and circumstances, that the employee will not provide any additional services for an Employer after a certain date; provided, however, that if any payments or benefits that may be provided under this Plan constitute deferred compensation within the meaning of Section 409A of the Code, a Separation from Service also shall be deemed to have occurred in the event that the level of bona fide services performed by the employee after a certain date will permanently decrease to no more than 20% of the average level of bona fide services performed by the employee over the immediate preceding 36-month period.

(B) Notwithstanding the foregoing, for purposes of this Plan, an employee’s employment relationship is treated as continuing intact while the employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with an Employer under an applicable statute or by contract. For purposes of this Plan, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the employee will return to perform services for an Employer. If the period of leave exceeds six months and the employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period due to such employee’s Disability, in which case such employee shall not be an Eligible Participant except as otherwise provided in Section 3 of this Plan.

The definition of “Separation from Service” shall at all times be interpreted in accordance with the terms of Treasury Regulations Section 1.409A-1(h) and any guidance issued thereunder.

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Severability – means the provisions of the Plan are severable. If any provision of the Plan is deemed legally or factually invalid or unenforceable to any extent or in any application, then the remainder of the provisions of the Plan, except to such extent or in such application, shall not be affected, and each and every provision of the Plan shall be valid and enforceable to the fullest extent and in the broadest application permitted by law.

Severance Bonus Amount – means the product of: (a) an Eligible Participant’s target annual bonus opportunity as provided under the eIP, calculated assuming target Company and individual performance had been achieved for the bonus year in which the Separation Date occurs; and (b) the multiple of Severance Bonus Amount (as identified in Appendix A) applicable to such Eligible Participant.

Successor Entity– means “successor entity” as defined in the Company Equity Incentive Award Plan, as the same shall be in effect from time to time.

General Rules

Amendment and Termination – The Company shall be under no obligation to continue this Plan for any period of time. The Plan Administrator, in its sole discretion, reserves the right to modify, amend, or terminate this Plan (including any of the CIC Severance Pay Guidelines, form of Separation Agreement and/or Schedule of Designated Eligible Participants attached to this Plan), in whole or in part, at any time and for any or no reason with respect to any employee or all employees at any time prior to his, her or their receipt of any Severance Benefits under Section 4 of this Plan; provided, however, that in no event shall this Plan be terminated, or modified or amended in any manner that is adverse to any Eligible Participants at any time during the Change in Control Period nor to any Eligible Participant who is receiving payments or benefits under this Plan as a result of a Qualifying Termination occurring during a Change in Control Period. Such foregoing prohibition shall not require that all Eligible Participants receive the same Salary Amount, Severance Bonus Amount, Premium Payment, treatment of Company Equity Awards or other additional payments and benefits that the Plan Administrator may in its sole discretion choose to provide to any given Eligible Employee.

Benefits Non-Assignable–Benefits under the Plan may not be anticipated, assigned or alienated. The exception being if an employee becomes eligible and dies before payment is made, the heirs will be entitled to the payment.

Governing Laws–The provision of the Plan shall be construed, administered and enforced according to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent applicable, according to applicable Federal law or the laws of the State of California.

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No Right to Continued Employment– Neither the Plan nor any action taken with respect to it shall confer upon any person the right to continue in the employ of the Company or any of its subsidiaries or affiliates. Company employees shall continue to be employed “at-will,” as defined under applicable law.

Funding – The Company will make all payments under the Plan, and pay all expenses of the Plan, from its general assets. Nothing contained in this Plan shall give any eligible employee any right, title, or interest in any property of the Company or any of its affiliates.

3. ELIGIBILITY

General Eligibility

The benefits under this Plan are limited to employees of the Employer who satisfy each of the following conditions, as determined by the Plan Administrator in its sole discretion:

• Are classified as Eligible Participants, whether or not based in the United States of America (“USA”) or paid through the payroll system based in the USA;

• Are terminated involuntarily without Cause by an Employer; or terminate voluntarily for Good Reason, in either such case during a Change in Control Period (either such event, a “Qualifying Termination”);

• Are actively at work through the last day of work designated by Employer, unless the employee is absent due to an approved absence from work (including leave under the Family and Medical Leave Act) or unless otherwise designated by his or her agreement with the Employer;

• Execute and do not revoke a Separation Agreement and Release in a form attached to this Plan as Appendix B (with only those changes as may be required to maintain such a form to be compliant with applicable law) within the period specified by Plan Administrator or its delegates (the “Separation Agreement”); and

• Return all property of any Employer and settle satisfactorily all expenses owed to Employer and any of its subsidiaries or affiliates.

Exclusions from Eligibility

Unless the Plan Administrator provides otherwise in writing, the following employees are NOT eligible to receive benefits under this Plan:

• Any employee who is eligible to receive severance payments and/or benefits under an individual employment letter agreement or other agreement between such employee and the Company under circumstances that would otherwise give rise to a right to receive payments and benefits under this Plan (any such agreement, an “Individual

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Agreement”); except, if the total present value, as of the Separation Date, of the aggregate amount of all payments and benefits payable under any Individual Agreement that covers an employee who is not subject to income taxation in the USA is less than the total present value of the aggregate amount of all payments and benefits that would be payable to him or her under Section 4 of this Plan, then the employee shall not be excluded from eligibility to participate in this Plan with respect to any additional amount payable under this Plan.

• In the case of an involuntary termination of employment, any Eligible Participant who terminates employment prior to the stated Separation Date as set forth in his or her Separation Agreement;

• Any Eligible Participant whose employment is terminated for any of the following reasons:

o Resignation or other voluntary termination of employment, other than for Good Reason as provided in this Plan;

o Death or Disability; except as expressly otherwise provided in Section 4 of this Plan; or

o Termination for Cause.

4. SEVERANCE BENEFITS

• Salary Amount

The Salary Amount payable to an Eligible Participant will be determined in accordance with Appendix A, subject to the reductions set forth below; provided, however, that the Plan Administrator, in its sole discretion, and on a case-by-case basis, may increase (but not decrease, except as provided below) the Salary Amount payable to an Eligible Participant.

• Severance Bonus Amount

The Severance Bonus Amount payable to an Eligible Participant will be determined in accordance with Appendix A, subject to the reductions set forth below; provided, however, that the Plan Administrator, in its sole discretion, and on a case-by-case basis, may increase (but not decrease, except as provided below) the Severance Bonus Amount payable to an Eligible Participant.

• Reduction of Salary Amount and Severance Bonus Amount

Unless Employer, in its sole discretion, provides otherwise in writing, the Salary Amount and Severance Bonus Amount payable to an Eligible Participant shall be reduced as follows:

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The Salary Amount and Severance Bonus Amount will be reduced by any outstanding debt owed by the employee to Employer or any of its affiliates, where permitted by law, including but not limited to loans granted by Employer, advanced commissions, bonuses, vacation pay, salary and/or expenses.

In addition, Salary Amount and Severance Bonus Amount will be inclusive of, and not be in addition to, any severance or termination payments that may be required to be paid by statute or other governmental mandate of the laws of a country outside of the USA.

In the event of a Change in Control, where an accounting firm designated by the Company determines that (x) the aggregate amount of the payments and benefits that (but for the application of this paragraph) would be payable to an Eligible Participant under this Plan and/or any other plan, policy or arrangement of the Company or of its affiliates, exceeds (y) the greatest amount of payments and benefits that could be paid or provided to the Eligible Participant without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Eligible Participant shall either (1) pay the Excise Tax and receive all such payments and benefits as may be payable to him or her, or (2) only receive the aggregate amount of such payments and benefits payable or to be provided to the Eligible Participant that would not exceed the greatest amount of payments and benefits that could be paid or provided to the Eligible Participant without giving rise to any liability for any Excise Tax (such reduced amount of payments and benefits, the “Reduced Benefit Amount”), whichever of the two courses of action in clause (1) or clause (2) hereof produces the greatest after-tax benefit to the Eligible Participant. In the event the Reduced Benefit Amount is paid, the reduction in such payments or benefits pursuant to the immediately preceding sentence shall be made in the following order: (1) by reducing the Salary Amount, and then (2) by reducing the Severance Bonus Amount, and then (3) by reducing the Premium Payment, and then (4) by reducing the accelerated vesting of any then outstanding performance-vested Company Equity Awards, in reverse order of their scheduled vesting dates, and then (5) by reducing the accelerated vesting of any then outstanding time-vested Company Equity Awards, in reverse order of their scheduled vesting dates.

• Payment of Salary Amount and Severance Bonus Amount

The Company will pay the Salary Amount and Severance Bonus Amount in a lump sum. Payment will be made as soon as practicable after the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than sixty (60) days following the Eligible Participant’s Separation Date; provided that if the Separation Date occurs within the 90-day period prior to the date of the Change in Control, then the Salary Amount and Severance Bonus Amount shall be paid within sixty (60) days after the date of the Change in Control and shall be reduced by any similar severance payments made prior to such payment date under any other severance plan or agreement, including the Company’s SVP and Above Standard Severance Plan.

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Other Severance Benefits

• Premium Payment

Eligible Participants employed by the Company in the USA (and their eligible dependents) who participate in a Company health insurance plan and who are eligible to continue to participate in such plan under COBRA, will receive a Premium Payment in the form of a lump sum cash payment. Payment will be made as soon as practicable after the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than sixty (60) days following the Eligible Participant’s Separation Date; provided that if the Separation Date occurs within the 90-day period prior to the date of the Change in Control, then the Premium Payment shall be paid within sixty (60) days after the date of the Change in Control and shall be reduced by any similar severance payments made prior to such payment date under any other severance plan or agreement, including the Company’s SVP and Above Standard Severance Plan.

Eligible Participants employed by the Company outside of the USA (and their eligible dependents) shall be eligible for medical and dental insurance coverage that is comparable to such coverage provided to such individuals immediately prior to the Separation Date, with such coverage to be provided for the period beginning with the Separation Date and running through a number of full calendar months equal to the multiple of Premium Payment (as identified in Appendix A) applicable to such Eligible Participant, to the extent permissible under applicable local law. If, and to the extent, the Eligible Participant is obligated to pay all or a portion of the premiums for such continuation coverage, the Eligible Employee will receive a Premium Payment calculated in the manner described above.

• eIP

The Eligible Participant will be eligible to receive the amount of the eIP bonus that he or she otherwise would have earned and been paid (using his or her accrued eligible compensation under the eIP through the last day of employment) in respect of the fiscal year of the Company in which his or her Separation Date occurs, calculated assuming target Company and individual performance had been achieved in such year.

The Company will pay the eIP bonus amount determined above in a lump sum. Payment will be made as soon as practicable after the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than sixty (60) days following the Eligible Participant’s Separation Date; provided that if the Separation Date occurs within the 90-day period prior to the date of the Change in Control, then the eIP bonus amount shall be paid within sixty (60) days after the date of the Change in Control and shall be reduced by any similar severance payments made prior to such payment

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date under any other severance plan or agreement, including the Company’s SVP and Above Standard Severance Plan.

• Company Equity Awards

Effective immediately prior to the Separation Date or, if the Separation Date occurs within the 90-day period prior to the date of the Change in Control, immediately prior to the date of the Change in Control, the following provisions shall apply to the Eligible Participant’s Company Equity Awards that are outstanding and unvested as of the date prior to the Eligible Participant’s Separation Date:

(A) All unvested Company Equity Awards that vest solely based on the continued service of the Eligible Participant (including any restricted stock units that have been or are scheduled to be granted in respect of any completed performance period), will be treated as though immediately vested on the Eligible Participant’s Separation Date; and

(B) If the Eligible Participant’s Separation Date occurs prior to the end of the performance period applicable to a Company Equity Award, then such award shall be deemed to have been earned at the target level of performance applicable to such Company Equity Award.

All such Company Equity Awards shall be settled in a lump sum, through the vesting of shares of Stock, through the payment of cash in lieu of vesting shares of Stock, or a combination thereof as determined in the discretion of the Plan Administrator, as soon as practicable, but not more than sixty (60) days, after such Company Equity Awards become vested pursuant to subsection (A) or subsection (B) above. In the event the Company elects to settle any such awards through the payment of cash in lieu of vesting shares of Stock, the Company will pay the Eligible Participant a lump sum cash amount equal to the value of all of the Company Equity Awards that are treated as though vested in accordance with the foregoing subsections (with such value calculated based on the Valuation Assumptions).

For purposes of the foregoing, the term “Valuation Assumptions” means, collectively, the following assumptions: (x) each share of common equity underlying an award has a value equal to the average of the closing prices of Company (or, after the Change in Control, the applicable Successor Entity) common stock as reported on the NASDAQ Global Select Market (or any other exchange on which the common equity is traded) for the period of 10 consecutive trading days ending on (and including) the last trading day prior to the Separation Date and (y) any Company stock options that the Eligible Participant holds that are outstanding and unvested immediately prior to the Separation Date will be valued based on their spread (i.e., the positive difference, if any, of the value of each share of Company (or, after the Change in Control, the applicable Successor Entity) common equity underlying the stock option, as determined pursuant to clause (x) above, less the per share exercise price of such stock option).

• Make-Good Payment

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The Make-Good Payment shall be paid in a lump sum and subject to the same terms as Salary Amount, as set forth above, except to the extent payment is required to be delayed in accordance with Section 409A of the Code.

• Death and Disability

Notwithstanding anything else in this Plan or Company Equity Award agreement to the contrary, upon the occurrence of an Eligible Participant’s death or Disability in the Change in Control Period, all unvested Company Equity Awards that are unvested as of the date prior to the Eligible Participant’s death or Disability shall be treated in the same manner as if the Eligible Participant had experienced a Qualifying Termination pursuant to subsections (A) and (B) under “Company Equity Awards”, above, except all references to the term “Separation Date” shall refer to the date of the Eligible Participant’s death or Disability, such that all such awards shall be settled in a lump sum, through the vesting of shares of Stock, through the payment of cash in lieu of vesting shares of Stock, or a combination thereof as determined in the discretion of the Plan Administrator, as soon as practicable after the date of the Eligible Participant’s death or Disability (or, if later, the date of the Change in Control), but not later than sixty (60) days following such date. In the event the Company elects to settle any such awards through the payment of cash in lieu of vesting shares of Stock, the Company will pay the Eligible Participant a lump sum cash amount equal to the value of all of the Company Equity Awards that are treated as though vested in accordance with the foregoing subsections (with such value calculated based on the Valuation Assumptions).

• Accrued Benefits

The Company shall make payment or otherwise provide all Accrued Benefits when due. Such obligation shall not be subject to the Eligible Participant’s execution of a Separation Agreement.

5. RIGHT TO TERMINATE BENEFITS

Notwithstanding anything in this Plan to the contrary, in the event that:

• Employer determines that an Eligible Participant or Eligible Employee has breached any of the terms and conditions set forth in any agreement executed by the employee as a condition to receiving benefits under this Plan (i.e., the Separation Agreement), THEN

• Employer shall have the right to terminate the benefits payable under this Plan at any time. Further, the Eligible Participant shall be obligated to return to the Employer any benefits paid to such employee: (i) due to the employee’s breach of the terms and conditions set forth in any agreement executed by such employee or (ii) due to any overpayments of benefits paid under this Plan to such employee.

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6. ADMINISTRATION OF THE PLAN

The Plan Administrator shall have sole authority and discretion to administer and construe the terms of this Plan. Without limiting the generality of the foregoing, the Plan Administrator shall have the following powers and duties:

• To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;

• To amend and terminate the Plan as defined in, and in accordance with, Section 2;

• To interpret the Plan, its interpretation thereof to be final and conclusive on all persons claiming benefits under the Plan;

• To decide all questions concerning the Plan, including the eligibility of any person to participate in, and receive benefits under, the Plan; and

• To appoint and/or retain such employees, agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan.

7. CLAIMS PROCEDURE

The Plan Administrator reviews and authorizes payment of severance benefits for those employees who qualify under the provisions of the Plan. No claim forms need be submitted. Questions regarding payment of severance benefits under the Plan should be directed to the Plan Administrator.

If an employee believes he or she is not receiving severance payments and benefits hereunder which are due, the employee should file a written claim for the benefits with the Plan Administrator. A decision on whether to grant or deny the claim will be made within ninety (90) days following receipt of the claim. If more than ninety (90) days is required to render a decision, the employee will be notified in writing of the reasons for delay. In any event, however, a decision to grant or deny a claim will be made by not later than one hundred eighty (180) days following the initial receipt of the claim.

If the claim is denied, in whole or in part, the employee will receive a written explanation containing the following information:

• The specific reason(s) for the denial, including a reference to the Plan provisions on which the denial is based;

• A description of any additional material or information necessary for the employee to perfect the claim and an explanation of why such material or information is necessary; and

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• A description of the Plan's review procedures and the time limits applicable to such procedures, including a statement of the employee's right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review.

If the employee wishes to appeal this denial, the employee may write within sixty (60) days after receipt of the notification of denial. The claim will then be reviewed by the Plan Administrator, and the employee will receive written notice of the final decision within sixty (60) days after the request for review. If more than sixty (60) days are required to render a decision, the employee will be notified in writing of the reasons for delay. In any event, however, the employee will receive a written notice of the final decision within one hundred twenty (120) days after the request for review.

As part of the Plan's appeal process, the employee shall be afforded:

• The opportunity to submit written comments, documents, records, and other information relating to the claim for benefits;

• Upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the employee's claim for benefits; and

• A review that takes into account all comments, documents, records and other information submitted by the employee relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

If the decision on appeal is upheld, in whole or in part, the employee will receive a written explanation containing the following information:

• The specific reason(s) for the decision, including a reference to the Plan provisions on which the decision is based;

• A statement that the employee is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records and other information relevant to the employee's claim for benefits; and

• A statement of the employee's right to bring an action under Section 502(a) of ERISA.

No legal action for benefits under this Plan may be brought unless the action is commenced within one (1) year from the date of the final decision on appeal has been made. No person may bring an action for any alleged wrongful denial of Plan benefits in a court of law unless the claims procedures set forth above are exhausted and a final determination is made. If the employee or other interested person challenges a decision, a review by the court of law will be limited to the facts, evidence and issues presented during the claims procedure set forth above. Facts and evidence that become known to the employee or other interested person after having exhausted the claims procedure must be brought to the attention of the Plan

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Administrator for reconsideration of the claims determination. Issues not raised with the Plan Administrator will be deemed waived.

8. SECTION 409A

Amounts payable under this Plan shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9) (Separation Pay Plans) or Treasury Regulation Section 1.409A-1(b)(4) (Short-Term Deferrals) and exempt from Section 409A of the Code as a result of such reliance. To the extent that the Plan Administrator determines that the Company will pay severance benefits in a form other than a lump sum, any installment or monthly payment to which an employee is entitled under this Plan shall be considered a separate and distinct payment. In addition, (i) no amount payable hereunder shall be payable unless the employee’s termination of employment constitutes a Separation from Service and (ii) if the employee is deemed at the time of his or her separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the termination benefits to which Eligible Participant is entitled under this Plan is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the employee’s termination benefits shall not be provided to the employee prior to the earlier of (A) the expiration of the six-month period measured from the Eligible Participant’s Separation Date or (B) the date of the employee’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 8 shall be paid in a lump sum to the employee without interest, and any remaining payments due under this Plan shall be paid as otherwise provided herein. The determination of whether the employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his or her Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto). To the extent applicable, if payment of an amount under the Plan could be paid in one of two calendar years subject to the delivery of the Separation Agreement and it is determined that payment of such amount in the earlier of such two years could constitute noncompliance with Section 409A of the Code, then such amount shall be paid in the later of such two (2) years.

9. STATEMENT OF ERISA RIGHTS

Eligible Participants in this Plan are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA provides that all plan Eligible Participants shall be entitled to:

• Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the plan and a copy of the latest annual report(Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

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• Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the plan and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The administrator may make a reasonable charge for the copies.

• Obtain a complete list of the Employers sponsoring the Plan upon written request to the    Plan Administrator.

• Receive a summary of the Plan’s annual financial report, if any. The Plan Administrator is required by law to furnish each Eligible Participant with a copy of this summary annual report.

Prudent Actions by Plan Fiduciaries

In addition to creating rights for plan Eligible Participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of all Plan Eligible Participants and beneficiaries. No one, including any Employer, any union, or any other person, may fire an employee or otherwise discriminate against him or her in any way to prevent them from obtaining a benefit under this Plan or exercising their rights under ERISA.

Enforce Your Rights

If an employee’s claim for a severance benefit is denied or ignored, in whole or in part, he or she has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps an employee can take to enforce the above rights. For instance, if he or she requests a copy of plan documents or the latest annual report from the plan and does not receive them within thirty (30) days, he or she may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay him or her up to $110 a day until he or she receives the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If an employee has a claim for benefits which is denied or ignored, in whole or in part, he or she may file suit in a state or Federal court. In addition, if he or she disagrees with the Plan’s decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, he or she may file suit in Federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if an employee is discriminated against for asserting his or her rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If an employee is successful the court may order the person he or she has sued to pay these costs and fees. If the employee loses, the court may order him or her to pay these costs and fees, for example, if it finds the claim is frivolous.

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10. ASSISTANCE WITH QUESTIONS

If an employee has any questions about the Plan, he or she should contact the Plan Administrator. If he or she has any questions about this statement or about his or her rights under ERISA, or if he or she needs assistance in obtaining documents from the Plan Administrator, he or she should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. An employee may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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ADMINISTRATIVE INFORMATION
REQUIRED BY ERISA

Plan Sponsor and Plan Administrator, including address and telephone	eBay Inc. Compensation Committee of the Board of Directors of the Company 2145 Hamilton Ave San Jose, CA 95125-5905 (408) 375-7400
Name and address of person designated as agent for service of process:	Marie Oh Huber Senior Vice President, Legal Affairs, General Counsel and Secretary eBay Inc. 2145 Hamilton Ave San Jose, CA 95125-5905 (408) 375-7400
Basis on which Plan records are kept:	Calendar Year - January 1 to December 31
Type of Plan:	Unfunded welfare benefit severance plan
Plan Number:	888
EIN:	770430924

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Appendix A

CIC Severance Pay Guidelines

Under the Plan, Eligible Participants are entitled to: (i) the Salary Amount; (ii) Severance Bonus Amount and (iii) the Premium Payment, to be calculated based on the multiples identified below as applying to the Tier for which the Eligible Participant has been selected.

Salary Amount, Severance Bonus Amount, and Premium Payment Calculations	Tier 1: SVP Direct Reports	Tier 2: SVPs/ Certain VPs	Tier 3: VPS/ Fellows
Multiple of Salary Amount	2.0x	1.0x	0.5x
Multiple of Severance Bonus Amount	2.0x	1.0x	0.5x
Multiple of Premium Payment	24	12	6

The Company will pay the Salary Amount, Severance Bonus Amount, and the Premium Payment in accordance with the terms of the Plan to which this Appendix A is attached.

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Appendix B

Form of Separation Agreement

[On file with the Company]

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Appendix C(1)

Schedule of Designated Eligible Participants, as of the Effective Date

Tier 1: Direct Reports:

Senior Vice Presidents who are direct reports to the Chief Executive Officer

Tier 2: SVPs/Certain VPs:

Senior Vice Presidents not designated as Tier 1 Employees

Vice Presidents who are specifically selected by the Compensation Committee to participate in this Plan as Tier 2 Employees

Tier 3: VPs/Fellows:

All Vice Presidents not designated as Tier 2 Employees

Fellows

(1) This Schedule is subject to change, from time to time, in the discretion of the Plan Administrator.

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EX-10.02

Exhibit 10.02

EBAY INC. SVP AND ABOVE STANDARD SEVERANCE PLAN

AND

SUMMARY PLAN DESCRIPTION
AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2016

1. PURPOSE OF THE PLAN

The purpose of the eBay Inc. SVP and Above Standard Severance Plan (the “Plan”) is to encourage the full attention and dedication of certain officers at and above the level of Senior Vice President by providing severance benefits designed to give financial assistance to any Eligible Participants upon their separation from eBay Inc. or any of its participating subsidiaries or affiliates under the conditions described herein, upon certain terminations of employment occurring outside the occurrence of any Change in Control Period (as such term is defined below).

2. DEFINITIONS/GENERAL RULES

Definitions

Accrued Benefits– means (a) prompt payment by the Company to an Eligible Participant of any accrued but unpaid base salary through the last day of employment, (b) prompt payment by the Company to an Eligible Participant of any unreimbursed expenses incurred through the last day of employment subject to the Eligible Participant’s prompt delivery to the Company of all required documentation of such expenses pursuant to applicable employer policies, (c) all other vested payments, benefits or fringe benefits to which the Eligible Participant is entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant (excluding any other severance plan, policy or program) of the Company or any of its affiliates in accordance with the terms of such plan, program or grant, including any unpaid annual bonus under the Company Employee Incentive Plan or applicable successor plan (the “eIP”)) for any prior fiscal year when it otherwise would have been paid (see Section 4, eIP, below).

Board – means the Board of Directors of the Company.

Cause – means (a) an Eligible Participant’s failure to attempt in good faith to substantially perform his or her assigned duties, other than failure resulting from his or her death or incapacity due to physical or mental illness or impairment, which is not remedied within thirty (30) days after receipt of written notice from the Company specifying such failure; (b) an Eligible Participant’s indictment for, conviction of or plea of nolo contendere to any felony (or any other crime involving fraud, dishonesty or moral turpitude); or (c) an Eligible Participant’s commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company, except good faith expense account disputes.

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Change in Control – means “change in control” as defined in the Company Equity Incentive Award Plan under which the Company is then granting equity awards, as the same shall be in effect from time to time.

Change in Control Period – means the period that begins ninety (90) days prior to the closing date of, and ends twenty-four (24) months following, a Change in Control.

Company – means eBay Inc. and, after a Change in Control, any Successor Entity.

Company Equity Awards – means incentive awards granted (or deemed granted for accounting purposes) to an Eligible Participant on shares of common stock of the Company (“Stock”), including without limitation any stock options, performance-based restricted stock units, and restricted stock units.

Disability – means “disability” within the meaning of the long-term disability plan by which the Eligible Participant is covered as of his or her Separation Date.

Effective Date – means January 1, 2016 with respect to this amended and restated Plan. This Plan was originally effective immediately following the distribution of the shares of stock of PayPal Holdings, Inc. by the Company to the shareholders of the Company. Except as otherwise provided by the Company, in writing, this Plan replaces all prior plans, programs, and arrangements providing severance type benefits to eligible employees upon a Qualifying Termination occurring outside of a Change in Control Period, except to the extent such benefits are provided in an Individual Agreement, as defined below.

Eligible Employee – means an individual who meets all of the eligibility requirements set forth in Section 3 (Eligibility), and is not otherwise excluded from such eligibility requirements.

Eligible Participant – means any Eligible Employee holding a position that is at or above the level of Senior Vice President who is designated as eligible to participate in this Plan as set forth on Appendix C attached to this Plan, as the Plan Administrator may, in its sole discretion, from time to time, designate.

Employer – means the Company and any subsidiary or affiliate of the Company whose voting equity is, directly or indirectly, at least 50.1% owned by the Company.

Make-Good Payment – means the sum total of an Eligible Participant’s unpaid cash “make-good” awards, if any, that the Eligible Participant has received in connection with his or her employment with the Company.

Plan Administrator – means the Compensation Committee of the Board or such other person or committee appointed from time to time by the Compensation Committee of the Board to administer the Plan.

Premium Payment – means the product of (a) an Eligible Participant’s monthly premium payment for health insurance continuation coverage under the Consolidated Omnibus

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Budget Reconciliation Act of 1985, as amended (“COBRA”) for himself or herself (and his or her eligible dependents) under the Company health plan in which he or she participates immediately prior to the Separation Date, or similar monthly payment for employees outside the U.S., if applicable, (b) the multiple of Premium Payment (as identified in Appendix A) applicable to such Eligible Participant; and (c) two (2). The Company shall withhold such amounts from payments under this Plan as it determines necessary to fulfill any applicable federal, state, or local wage or compensation withholding requirements. A more detailed description of the amount of the Premium Payment that will be paid to an Eligible Participant follows in Section 4 (Severance Benefits).

Salary Amount – means the product of (a) an Eligible Participant’s annual base salary in effect upon the occurrence of the Separation Date, without considering bonuses, back-pay or other awards, or Company contributions to any employee plans; and (b) the multiple of Salary Amount (as identified in Appendix A) applicable to such Eligible Participant.

Separation Date– means the effective date of the Eligible Participant’s Separation from Service.

Separation from Service– means, except as provided in subsections (A) and (B) below, an employee’s termination from employment (whether by retirement or resignation from or discharge by the Company).

(A)    A Separation from Service shall be deemed to have occurred if an employee and the Company reasonably anticipate, based on the facts and circumstances, that the employee will not provide any additional services for an Employer after a certain date; provided, however, that if any payments or benefits that may be provided under this Plan constitute deferred compensation within the meaning of Section 409A of the Code, a Separation from Service also shall be deemed to have occurred in the event that the level of bona fide services performed by the employee after a certain date will permanently decrease to no more than 20% of the average level of bona fide services performed by the employee over the immediate preceding 36-month period.

(B)    Notwithstanding the foregoing, for purposes of this Plan, an employee’s employment relationship is treated as continuing intact while the employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with an Employer under an applicable statute or by contract. For purposes of this Plan, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the employee will return to perform services for an Employer. If the period of leave exceeds six months and the employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately

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following such six-month period due to such employee’s Disability, in which case such employee shall not be an Eligible Participant except as otherwise provided in Section 3 of this Plan.

The definition of “Separation from Service” shall at all times be interpreted in accordance with the terms of Treasury Regulations Section 1.409A-1(h) and any guidance issued thereunder.

Severability – means the provisions of the Plan are severable. If any provision of the Plan is deemed legally or factually invalid or unenforceable to any extent or in any application, then the remainder of the provisions of the Plan, except to such extent or in such application, shall not be affected, and each and every provision of the Plan shall be valid and enforceable to the fullest extent and in the broadest application permitted by law.

Severance Bonus Amount – means the product of (a) an Eligible Participant’s target annual bonus opportunity as provided under the eIP calculated assuming target Company performance had been achieved for the bonus year in which the Separation Date occurs; and (b) the multiple of Severance Bonus Amount (as identified in Appendix A) applicable to such Eligible Participant.

Successor Entity -- means “successor entity” as such term is defined in the Company Equity Incentive Award Plan, as the same shall be in effect from time to time.

General Rules

Amendment and Termination – The Company shall be under no obligation to continue this Plan for any period of time. The Plan Administrator, in its sole discretion, reserves the right to modify, amend, or terminate this Plan (including any of the Standard Severance Pay Guidelines, form of Separation Agreement and/or Schedule of Designated Participants attached to this Plan), in whole or in part, at any time and for any or no reason with respect to any employee or all employees at any time prior to his, her or their receipt of Severance Benefits provided under Section 4 of this Plan; provided, however, that in no event shall this Plan be terminated, or modified or amended in any manner that is adverse to any Eligible Participants at any time during the thirty-six (36) months following the Effective Date nor to any Eligible Participant who is receiving payments or benefits under this Plan as a result of a Qualifying Termination. Such foregoing prohibition shall not require that all Eligible Participants receive the same Salary Amount, Severance Bonus Amount, Premium Payment, treatment of Company Equity Awards or other additional payments and benefits that the Plan Administrator may in its sole discretion choose to provide to any given Eligible Employee.

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Benefits Non-Assignable–benefits under the Plan may not be anticipated, assigned or alienated. The exception being if an employee becomes eligible and dies before payment is made, the heirs will be entitled to the payment.

Governing Laws–the provision of the Plan shall be construed, administered and enforced according to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent applicable, according to applicable Federal law or the laws of the State of California.

No Right to Continued Employment– neither the Plan nor any action taken with respect to it shall confer upon any person the right to continue in the employ of the Company or any of its subsidiaries or affiliates. Company employees shall continue to be employed “at-will,” as defined under applicable law.

Funding – the Company will make all payments under the Plan, and pay all expenses of

the Plan, from its general assets. Nothing contained in this Plan shall give any eligible employee any right, title, or interest in any property of the Company or any of its affiliates.

3. ELIGIBILITY

General Eligibility

The benefits under this Plan are limited to employees of the Employer who satisfy each of the following conditions, as determined by the Plan Administrator in its sole discretion:

• Are classified as Eligible Participants, whether or not based in the United States of America (“USA”) or paid through the payroll system based in the USA.

• Are terminated involuntarily without Cause by an Employer other than during any Change in Control Period (such event, a “Qualifying Termination”).

• Are actively at work through the last day of work designated by Employer, unless the employee is absent due to an approved absence from work (including leave under the Family and Medical Leave Act) or unless otherwise designated by his or her agreement with the Employer.

• Execute and do not revoke a Separation Agreement and Release in a form attached to this Plan as Appendix B (with only those changes as may be required to maintain such a form to be compliant with applicable law) within the period specified by Plan Administrator or its delegates (the “Separation Agreement”); and,

• Return all property of any Employer and settle satisfactorily all expenses owed to Employer and any of its subsidiaries or affiliates.

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Exclusions from Eligibility

Unless the Plan Administrator provides otherwise in writing, the following employees are NOT eligible to receive benefits under this Plan:

• Any employee who is eligible to receive severance payments and/or benefits under an individual employment letter agreement or other agreement between such employee and the Company under circumstances that would otherwise give rise to a right to receive payments and benefits under this Plan (any such agreement, an “Individual Agreement”); except, if the total present value, as of the Separation Date, of the aggregate amount of all payments and benefits payable under any Individual Agreement that covers an employee who is not subject to income taxation in the USA is less than the total present value of the aggregate amount of all payments and benefits that would be payable to him or her under Section 4 of this Plan, then the employee shall not be excluded from eligibility to participate in this Plan with respect to any additional amount payable under this Plan;

• Any Eligible Participant who terminates employment prior to the stated Separation Date as set forth in his or her Separation Agreement;

• Any Eligible Participant whose employment is terminated for any of the following reasons:

◦ Resignation or other voluntary termination of employment;

◦ Death or Disability; except as expressly otherwise provided in Section 4 of this Plan; or

◦ Termination for Cause.

4. SEVERANCE BENEFITS

• Salary Amount

The Salary Amount payable to an Eligible Participant will be determined in accordance with Appendix A, subject to the reductions set forth below; provided, however, that the Plan Administrator, in its sole discretion, and on a case-by-case basis, may increase (but not decrease, except as provided below) the Salary Amount payable to an Eligible Participant.

• Severance Bonus Amount

The Severance Bonus Amount payable to an Eligible Participant will be determined in accordance with Appendix A, subject to the reductions set forth below; provided, however, that the Plan Administrator, in its sole discretion, and on a case-by-case basis,

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may increase (but not decrease, except as provided below) the Severance Bonus Amount payable to an Eligible Participant.

• Reduction of Salary Amount and Severance Bonus Amount

Unless Employer, in its sole discretion, provides otherwise in writing, the Salary Amount and Severance Bonus Amount payable to an Eligible Participant shall be reduced as follows:

The Salary Amount and Severance Bonus Amount will be reduced by any outstanding debt owed by the employee to Employer or any of its affiliates, where permitted by law, including but not limited to loans granted by Employer, advanced commissions, bonuses, vacation pay, salary and/or expenses.

In addition, Salary Amount and Severance Bonus Amount will be inclusive of, and not be in addition to, any severance or termination payments that may be required to be paid by statute or other governmental mandate of the laws of a country outside of the USA.

• Payment of Salary Amount and Severance Bonus Amount

The Company will pay the Salary Amount and Severance Bonus Amount in a lump sum. Payment will be made as soon as practicable after the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than sixty (60) days following the Eligible Participant’s Separation Date.

Other Severance Benefits

• Premium Payment

Eligible Participants employed by the Company in the USA (and their eligible dependents) who participate in a Company health insurance plan and who are eligible to continue to participate in such plan under COBRA will receive a Premium Payment in the form of a lump sum cash payment.

Payment will be made as soon as practicable after the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than sixty (60) days following the Eligible Participant’s Separation Date.

Eligible Participants employed by the Company outside of the USA (and their eligible dependents) shall be eligible for medical and dental insurance coverage that is comparable to such coverage provided to such individuals immediately prior to the Separation Date, with such coverage to be provided for the period beginning with the Separation Date and running through a number of full calendar months equal to the multiple of Premium Payment (as identified in Appendix A) applicable to such Eligible

7

Participant, to the extent permissible under applicable local law. If, and to the extent, the Eligible Participant is obligated to pay all or a portion of the premiums for such continuation coverage, the Eligible Employee will receive a Premium Payment calculated in the manner described above.

• eIP

The Eligible Participant will be eligible to receive a prorated portion of the eIP bonus, if any, that he or she otherwise would have earned and been paid (using his or her accrued eligible compensation under the eIP through the last day of employment) in respect of the fiscal year of the Company in which his or her Separation Date occurs, based on the actual performance of the Company for the full year, with such prorated portion calculated based on the period of time during such fiscal year that the Eligible Participant was employed, relative to the full fiscal year, and based on the achievement by the Company of the applicable performance target(s) for such year.

Additionally, Eligible Participants who remain employed through the end of a given fiscal year but who experience a Qualifying Termination prior to the payment date of eIP bonuses for such year will remain eligible to receive a full eIP bonus, also based on the achievement by the Company of the applicable performance target(s) for such year. In all cases, Eligible Participants who are eligible to receive payments of his or her eIP bonus will be paid based on target individual performance, to the extent applicable.

Any payment under the eIP will be made, in a lump sum, at the time when the Company pays bonuses under the applicable bonus plan to employees (and in no event later than March 15 of the year following the year in which the Qualifying Termination occurs).

• Company Equity Awards

Effective immediately prior to the Separation Date, all Company Equity Awards that are outstanding and unvested as of the date prior to the Eligible Participant’s Separation Date and:

(A) vest solely based on the continued service of the Eligible Participant (including any restricted stock units that have been or are scheduled to be granted in respect of any completed performance period) will become immediately vested on the Eligible Participant’s Separation Date as to the portion of such Company Equity Awards that would have otherwise become vested pursuant to their ordinary vesting schedule within the twelve (12) calendar months (including any partial month in which the Qualifying Termination occurs) following the Separation Date; and

(B) vest subject to the achievement of performance targets over a given performance period (“performance-based awards”) then any such Company Equity Awards shall remain outstanding and eligible to vest, based solely on the achievement of the applicable Company performance targets for any relevant performance period

8

that ends on or before the first anniversary of the Eligible Participant’s Separation Date; and to the extent such performance targets are determined (in a manner compliant with the requirements of Section 162(m) of the Code) to have been achieved following the completion of any such performance period, the Eligible Participant shall, upon the date of such determination (the “PBRSUVesting Determination Date”), be treated as though immediately vested in that percentage of the resulting amount of such Company Equity Awards that would, on or prior to such first anniversary, have otherwise become vested pursuant to the ordinary vesting schedule that would have applied to such Company Equity Awards.

All such Company Equity Awards shall be settled in a lump sum, through the vesting of shares of Stock, through the payment of cash in lieu of vesting shares of Stock, or a combination thereof as determined in the discretion of the Plan Administrator, as soon as practicable after (x) for any Company Equity Awards that become vested pursuant to subsection (A) above the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than sixty (60) days following the Eligible Participant’s Separation Date; and (y) for any Company Equity Awards that are treated as though vested pursuant to subsection (B) above, promptly following the PBRSU Vesting Determination Date (but in no event later than the last day of the calendar year in which the PBRSU Vesting Determination Date occurs). In the event the Company elects to settle any such awards through the payment of cash in lieu of vesting shares of Stock, the Company will pay the Eligible Participant a lump sum cash amount equal to the value of all of the Company Equity Awards that are treated as though vested in accordance with the foregoing subsections (with such value calculated based on the Valuation Assumptions).

For purposes of the foregoing, the term “Valuation Assumptions” means, collectively, the following assumptions: (x) each share of common equity underlying an award has a value equal to the average of the closing prices of Company common stock as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the last trading day prior to (I) for any Company Equity Awards that are treated as though vested pursuant to subsection (A) above, or pursuant to the provisions under “Death and Disability”, below, the Separation Date and (II) for any Company Equity Awards that are treated as though vested pursuant to subsection (B) above, the PBRSU Vesting Determination Date, and (y) any Company stock options that the Eligible Participant holds that are outstanding immediately prior to the Separation Date will be valued based on their spread (i.e., the positive difference, if any, of the value of each share of Company.

• Make-Good Payments

The Make-Good Payment shall be paid in a lump sum and subject to the same terms as Salary Amount as set forth above, except to the extent payment is required to be delayed in accordance with Section 409A of the Code.

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• Death and Disability

Notwithstanding anything else in this Plan or Company Equity Award agreement to the contrary, upon the occurrence of an Eligible Employee’s death or Disability (other than during the Change in Control Period), all unvested Company Equity Awards that are unvested as of the date prior to the Eligible Participant’s death or Disability shall vest solely based on the continued service of the Eligible Participant (including any restricted stock units that have been or are scheduled to be granted in respect of any completed performance period), will become immediately vested on the Eligible Participant’s date of death or Disability as to the portion of such Company Equity Awards that would have otherwise become vested pursuant to their ordinary vesting schedule within the twenty-four (24) calendar months (including any partial month in which such event occurs) following the date of such event.

For purposes of the foregoing, if the Eligible Participant’s date of death or Disability occurs prior to the end of the performance period applicable to a Company Equity Award, then such award shall be deemed to have been earned at the target level of performance applicable to such Company Equity Award.

All such awards shall be settled in a lump sum, through the vesting of shares of Stock, through the payment of cash in lieu of vesting shares of Stock, or a combination thereof as determined in the discretion of the Plan Administrator, as soon as practicable after the date of the Eligible Participant’s death or Disability, but not later than sixty (60) days following such date. In the event the Company elects to settle any such awards in cash, the Company will pay the Eligible Participant a lump sum cash amount equal to the value of all of the Company Equity Awards that are treated as vested in accordance with the foregoing subsections (with such value calculated based on the Valuation Assumptions).

• Accrued Benefits

The Company shall make payment or otherwise provide all Accrued Benefits when due. Such obligation shall not be subject to the Eligible Participant’s execution of a Separation Agreement.

5. RIGHT TO TERMINATE BENEFITS

Notwithstanding anything in this Plan to the contrary, in the event that:

• Employer determines that an Eligible Participant or Eligible Employee has breached any of the terms and conditions set forth in any agreement executed by the employee as a condition to receiving benefits under this Plan (i.e., the Separation Agreement), THEN

• Employer shall have the right to terminate the benefits payable under this Plan at any time. Further, the Eligible Participant shall be obligated to return to the Employer any

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benefits paid to such employee: (i) due to the employee’s breach of the terms and conditions set forth in any agreement executed by such employee or (ii) due to any overpayments of benefits paid under this Plan to such employee.

6. ADMINISTRATION OF THE PLAN

The Plan Administrator shall have sole authority and discretion to administer and construe the terms of this Plan. Without limiting the generality of the foregoing, the Plan Administrator shall have the following powers and duties:

• To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;

• To amend and terminate the Plan as defined in, and in accordance with, Section 2;

• To interpret the Plan, its interpretation thereof to be final and conclusive on all persons claiming benefits under the Plan;

• To decide all questions concerning the Plan, including the eligibility of any person to participate in, and receive benefits under, the Plan; and

• To appoint and/or retain such employees, agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan.

7. CLAIMS PROCEDURE

The Plan Administrator reviews and authorizes payment of severance benefits for those employees who qualify under the provisions of the Plan. No claim forms need be submitted. Questions regarding payment of severance benefits under the Plan should be directed to the Plan Administrator.

If an employee believes he or she is not receiving severance payments and benefits hereunder which are due, the employee should file a written claim for the benefits with the Plan Administrator. A decision on whether to grant or deny the claim will be made within ninety (90) days following receipt of the claim. If more than ninety (90) days is required to render a decision, the employee will be notified in writing of the reasons for delay. In any event, however, a decision to grant or deny a claim will be made by not later than one hundred eighty (180) days following the initial receipt of the claim.

If the claim is denied, in whole or in part, the employee will receive a written explanation containing the following information:

• The specific reason(s) for the denial, including a reference to the Plan provisions on which the denial is based;

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• A description of any additional material or information necessary for the employee to perfect the claim and an explanation of why such material or information is necessary; and

• A description of the Plan's review procedures and the time limits applicable to such procedures, including a statement of the employee's right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review.

If the employee wishes to appeal this denial, the employee may write within sixty (60) days after receipt of the notification of denial. The claim will then be reviewed by the Plan Administrator, and the employee will receive written notice of the final decision within sixty (60) days after the request for review. If more than sixty (60) days are required to render a decision, the employee will be notified in writing of the reasons for delay. In any event, however, the employee will receive a written notice of the final decision within one hundred twenty (120) days after the request for review.

As part of the Plan's appeal process, the employee shall be afforded:

• The opportunity to submit written comments, documents, records, and other information relating to the claim for benefits;

• Upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the employee's claim for benefits; and

• A review that takes into account all comments, documents, records and other information submitted by the employee relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

If the decision on appeal is upheld, in whole or in part, the employee will receive a written explanation containing the following information:

• The specific reason(s) for the decision, including a reference to the Plan provisions on which the decision is based;

• A statement that the employee is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records and other information relevant to the employee's claim for benefits; and

• A statement of the employee's right to bring an action under Section 502(a) of ERISA.

No legal action for benefits under this Plan may be brought unless the action is commenced within one (1) year from the date of the final decision on appeal has been made. No person may bring an action for any alleged wrongful denial of Plan benefits in a court of law unless the claims procedures set forth above are exhausted and a final determination is made. If the employee or other interested person challenges a decision, a review by the court of law will be

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limited to the facts, evidence and issues presented during the claims procedure set forth above. Facts and evidence that become known to the employee or other interested person after having exhausted the claims procedure must be brought to the attention of the Plan Administrator for reconsideration of the claims determination. Issues not raised with the Plan Administrator will be deemed waived.

8. SECTION 409A

Amounts payable under this Plan shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9) (Separation Pay Plans) or Treasury Regulation Section 1.409A-1(b)(4) (Short-Term Deferrals) and exempt from Section 409A of the Code as a result of such reliance. To the extent that the Plan Administrator determines that the Company will pay severance benefits in a form other than a lump sum, any installment or monthly payment to which an employee is entitled under this Plan shall be considered a separate and distinct payment. In addition, (i) no amount payable hereunder shall be payable unless the employee’s termination of employment constitutes a Separation from Service and (ii) if the employee is deemed at the time of his or her separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the termination benefits to which Eligible Participant is entitled under this Plan is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the employee’s termination benefits shall not be provided to the employee prior to the earlier of (A) the expiration of the six-month period measured from the Eligible Participant’s Separation Date or (B) the date of the employee’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 8 shall be paid in a lump sum to the employee without interest, and any remaining payments due under this Plan shall be paid as otherwise provided herein. The determination of whether the employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his or her Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto). To the extent applicable, if payment of an amount under the Plan could be paid in one of two calendar years subject to the delivery of the Separation Agreement and it is determined that payment of such amount in the earlier of such two years could constitute noncompliance with Section 409A of the Code, then such amount shall be paid in the later of such two years.

9. STATEMENT OF ERISA RIGHTS

Eligible Participants in this Plan are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA provides that all plan Eligible Participants shall be entitled to:

• Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the plan and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor

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and available at the Public Disclosure Room of the Employee Benefits Security Administration.

• Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the plan and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The administrator may make a reasonable charge for the copies.

• Obtain a complete list of the Employers sponsoring the Plan upon written request to the Plan Administrator.

• Receive a summary of the Plan’s annual financial report, if any. The Plan Administrator is required by law to furnish each Eligible Participant with a copy of this summary annual report.

Prudent Actions by Plan Fiduciaries

In addition to creating rights for plan Eligible Participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of all Plan Eligible Participants and beneficiaries. No one, including any Employer, any union, or any other person, may fire an employee or otherwise discriminate against him or her in any way to prevent them from obtaining a benefit under this Plan or exercising their rights under ERISA.

Enforce Your Rights

If an employee’s claim for a severance benefit is denied or ignored, in whole or in part, he or she has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps an employee can take to enforce the above rights. For instance, if he or she requests a copy of plan documents or the latest annual report from the plan and does not receive them within thirty (30) days, he or she may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay him or her up to $110 a day until he or she receives the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If an employee has a claim for benefits which is denied or ignored, in whole or in part, he or she may file suit in a state or Federal court. In addition, if he or she disagrees with the Plan’s decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, he or she may file suit in Federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if an employee is discriminated against for asserting his or her rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If an employee is successful the court may order the person he or she has sued to pay these costs and fees. If the employee

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loses, the court may order him or her to pay these costs and fees, for example, if it finds the claim is frivolous.

10. ASSISTANCE WITH QUESTIONS

If an employee has any questions about the Plan, he or she should contact the Plan Administrator. If he or she has any questions about this statement or about his or her rights under ERISA, or if he or she needs assistance in obtaining documents from the Plan Administrator, he or she should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. An employee may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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ADMINISTRATIVE INFORMATION
REQUIRED BY ERISA

Plan Sponsor and Plan Administrator, including address and telephone	eBay Inc. Compensation Committee of the Company Board of Directors 2145 Hamilton Ave San Jose, CA 95125-5905 (408) 375-7400
Name and address of person designated as agent for service of process:	Marie Oh Huber Senior Vice President, Legal Affairs, General Counsel and Secretary eBay Inc. 2145 Hamilton Ave San Jose, CA 95125-5905 (408) 375-7400
Basis on which Plan records are kept:	Calendar Year - January 1 to December 31
Type of Plan:	Unfunded welfare benefit severance plan
Plan Number:	889
EIN:	770430924

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Appendix A

Standard Severance Pay Guidelines

Under the Plan, Eligible Participants are entitled to: (i) the Salary Amount, (ii) the Severance Bonus Amount and (iii) the Premium Payment, to be calculated based on the multiples identified below.

Salary Amount, Severance Bonus Amount and Premium Payment Calculations	Eligible Participants
Multiple of Salary Amount	1.0x
Multiple of Severance Bonus Amount	1.0x
Multiple of Premium Payment	12x

The Company will pay the Salary Amount, the Severance Bonus Amount and the Premium Payment in accordance with the terms of the Plan to which this Appendix A is attached.

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Appendix B

Form of Separation Agreement

[On file with the Company]

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Appendix C(1)

Schedule of Designated Eligible Participants, as of the Effective Date

All Senior Vice Presidents

(1) This Schedule is subject to change, from time to time, in the discretion of the Plan Administrator.

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EX-10.03

Exhibit 10.03

September 2, 2014

Steve Fisher

Dear Steve:

eBay Inc. (“eBay” or the “Company”) is pleased to offer you the exempt position of Senior Vice President, Chief Technology Officer, Marketplaces at a bi-weekly salary of $24,038.47, which is equivalent to an annualized salary of $625,000.22.

You will be eligible to participate in the eBay Incentive Plan (eIP) with an annual bonus based on individual achievement as well as company performance. The annual bonus period is from January 1 through December 31. Your target bonus for the eIP is 75% of your annual base salary, pro-rated based on the eligible earnings paid while you are employed in an eIP eligible position during the annual bonus period. There is no guarantee any eIP bonus will be paid, and any actual bonus will be determined after the end of the annual bonus period based on your eligible earnings as defined in the eIP. To be eligible to receive any eIP bonus, you must be employed on or before the first business day of the fourth quarter and you must be employed on the date the bonus is paid. Based on your anticipated start date, your eligibility to participate in the eIP will begin on your start date. The payment of any bonus is at eBay’s sole and absolute discretion and subject to the terms and conditions of the eIP. eBay reserves the right, in its sole discretion, to amend, change or cancel the eIP at any time.

You will be entitled to a supplemental cash payment in the amount of $200,000 (less deductions and applicable taxes) for each of the next four years, subject to your continued employment on each date of payment. The supplemental cash payments will be made in February 2015, 2016, 2017 and 2018, subject to your continued employment on the date of payment.

It will be recommended to the Board of Directors of eBay Inc. that you be granted (a) a stock option to purchase shares of eBay’s common stock, (b) an award of restricted stock units (“RSUs”), and (c) a target award of performance-based restricted stock units (“PBRSUs”), as described in the following paragraphs. The grants described below are denominated as a U.S. dollar value. For the stock option grant, the number of shares of eBay common stock subject to the option will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this paragraph), multiplying the resultant total by three (3), and rounding up to the nearest whole number of shares of eBay common stock. For the RSU award, the number of shares to be granted will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this paragraph) and rounding up to the nearest whole number of shares of eBay common stock. For the target PBRSU award, the number of shares subject to the target award will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this paragraph) and rounding up to the nearest whole number of shares of eBay common stock. The “Average eBay Closing Price” shall be calculated based on the average of the closing prices of eBay common stock in U.S.

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dollars as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the last trading day prior to the date of grant.

In accordance with the methodology above, it will be recommended to the Board of Directors of eBay that you be granted a stock option to purchase eBay’s common stock valued at USD $800,000, subject to the terms and conditions of eBay’s current stock plans (the “Plans”) as well as the terms and conditions of the stock option agreement (which will be provided to you as soon as practicable after the grant date). The exercise price for the stock option will be no less than the fair market value of eBay’s common stock, as determined according to the Plans, on the grant date. Generally, the stock option will vest and become exercisable (assuming your continued employment with an eBay company on each vesting date) over four years as follows: 25% of the shares subject to the stock option will vest one year after the commencement of your employment and an additional 1/48th of the shares subject to the stock option will vest each month thereafter.

It will also be recommended to the Board of Directors of eBay that you be granted an award of RSUs valued at USD $1,200,000 to be granted under the Plans as well as the terms and conditions of the RSU agreement (which will be provided to you as soon as practicable after the grant date). Generally, the RSUs will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) over four years at the rate of 25% a year on each anniversary of the date of grant, subject to applicable taxes and withholdings.

It will also be recommended to the Board of Directors of eBay that you be granted a target award of PBRSUs valued at USD $2,000,000 to be granted under the Plans as well as the terms and conditions of the PBRSU agreement (which will be provided to you as soon as practicable after the grant date). The PBRSUs will cover performance over the period January 1, 2014 through December 31, 2015. The target award will be applied only to this performance period. The actual amount of the award will be determined based on Company performance and will be subject to the terms and conditions of the performance plan approved by the Compensation Committee. PBRSUs earned based on Company performance for the two year period will be granted in early 2016 and will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) as follows: 50% of the shares subject to the award on or about March 1, 2016 (the “Initial Vest Date”) and the remaining 50% of the shares on the first anniversary of the Initial Vest Date, subject to necessary withholding for applicable taxes.

In addition, it will be recommended to the Board of Directors of eBay that you be granted a supplemental award of RSUs valued at USD $8,000,000 (“Supplemental Grant 1”) to be granted under the Plans as well as the terms and conditions of the RSU agreement (which will be provided to you as soon as practicable after the grant date). Generally, the RSUs of Supplemental Grant 1 will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) over four years at the rate of 25% a year on each anniversary of the date of grant, subject to applicable taxes and withholdings.

Subject to the terms of the Company’s equity plan, you will be eligible to participate in eBay’s focal equity grant program beginning in 2015, with an annual aggregate target grant value of at least $2,500,000.  The aggregate target grant value and form of award will be determined by eBay and approved by the Board of Directors.

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All employees are subject to eBay’s Insider Trading Agreement, which outlines the procedures and guidelines governing securities trades by company personnel. You will be provided with a copy of eBay’s Insider Trading Agreement. Please review the Agreement carefully, execute the certification and submit it to eBay’s human resources department.

You will be eligible to receive an equity make-good payment of $2,000,000 (less deductions and applicable taxes) in recognition of the value of the equity that would have vested at your current employer in 2014 had you remained employed through the applicable vesting dates. This payment will be paid within two pay periods of your start date.

In addition, you will be eligible to receive an equity make-good payment of $2,500,000 (less deductions and applicable taxes) in partial recognition of the value of the equity that would have vested at your current employer in 2015 had you remained employed through the applicable vesting dates. This payment will be paid in or around the month of the first anniversary of your start date.

You will be also entitled to the benefits that eBay customarily makes available to employees in positions comparable to yours. Please refer to the benefit plan documents for more details, including eligibility. eBay reserves the right, in its sole discretion, to amend, change or cancel the benefits at any time.

You will be eligible to accrue 20 days of Paid Time Off (“PTO”) per year.

Under federal immigration laws, the Company is required to verify each new employee’s identity and legal authority to work in the United States. Accordingly, please be prepared to furnish appropriate documents satisfying those requirements; this offer of employment is conditioned on submission of satisfactory documentation. You will be provided with a list of the required documents.

Your employment at the Company is “at-will” and either you or the Company may terminate your employment at any time, with or without cause or advance notice. The at-will nature of the employment relationship can only be changed by written agreement signed by eBay’s SVP of Human Resources. Other terms, conditions, job responsibilities, compensation and benefits may be adjusted by the Company from time to time in its sole discretion.

All of us at eBay are very excited about you joining our team and look forward to a beneficial and fruitful relationship. However, should any dispute arise with respect to your employment or the termination of that employment, we both agree that such dispute shall be conclusively resolved by final, binding and confidential arbitration rather than by a jury court or administrative agency. The Company will bear those expenses unique to arbitration. Please review the enclosed Mutual Arbitration Agreement carefully.

As a condition of your employment, you must complete both the Mutual Arbitration Agreement and the enclosed Employee Proprietary Information and Inventions Agreement prior to commencing employment. These agreements address important obligations to the Company, both during and after your employment; therefore, please read both agreements carefully before signing them and submitting them to eBay’s human resources department. If you should have any questions about either agreement, please contact me.

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This offer letter, the Mutual Arbitration Agreement, the Employee Proprietary Information and Inventions Agreement as well as all other enclosed required documents, contain the entire agreement with respect to your employment. Should you have any questions with regard to any of the items indicated above, please call me. Kindly indicate your consent to this offer letter by signing copies of this letter and returning it to me. All other documents requiring your signature must be submitted either in hard copy of electronically prior to your start date, including but not limited to the Mutual Arbitration Agreement, the Employee Proprietary Information and Inventions Agreement, and the Insider Trading Agreement certification.

This offer is contingent upon the results of your background verification and reference checks. Upon your signature below, this will become our binding agreement with respect to your employment and its terms merging and superseding in their entirety all other or prior offers, agreements and communications, whether written or oral, by you and the Company as to the specific subjects of this letter.

We are excited at the prospect of you joining our team. We look forward to having you on board!

Very truly yours,

/s/ Robin J. Colman

Robin J. Colman

Vice President, Compensation, Benefits and M&A

eBay Inc.

ACCEPTED:

/s/ Steve Fisher

Steve Fisher

September 7, 2014

Date

Anticipated Start Date: September 29, 2014

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EX-10.04

Exhibit 10.04

April 2, 2015

Marie Oh Huber

Dear Marie:

eBay Inc. (“eBay” or the “Company”) is pleased to offer you the exempt position of Senior Vice President, General Counsel, eBay, at a bi-weekly salary of $23,461.54, which is equivalent to an annualized salary of $610,000.04. You will report to the General Counsel of eBay Inc. until the spin-off of PayPal and to the CEO of eBay effective as of the spin-off.

You will be eligible to participate in the eBay Incentive Plan (eIP) with an annual bonus based on individual achievement as well as company performance. The annual bonus period is from January 1 through December 31. Your target bonus for the eIP is 100% of your annual base salary, pro-rated based on the eligible earnings paid while you are employed in an eIP eligible position during the annual bonus period. There is no guarantee any eIP bonus will be paid, and any actual bonus will be determined after the end of the annual bonus period based on your eligible earnings as defined in the eIP. To be eligible to receive any eIP bonus, you must be employed on or before the first business day of the fourth quarter and you must be employed on the date the bonus is paid. The payment of any bonus is subject to the terms and conditions of the eIP. eBay reserves the right, in its sole discretion, to amend, change or cancel the eIP at any time.

You will also be eligible to receive a one-time make-good bonus payment of $135,000 (less deductions and applicable taxes). The make-good payment will be made within two pay periods of your start date.

Following commencement of your employment with eBay, in accordance with eBay’s publicly disclosed equity grant policies, you will be granted (a) a stock option to purchase shares of eBay’s common stock, (b) an award of restricted stock units (“RSUs”), and (c) a target award of performance-based restricted stock units (“PBRSUs”), as described in the following paragraphs, all to be granted under the Company’s 2008 Equity Incentive Plan (the “Plan”). The grants described below are denominated as a U.S. dollar value. For the stock option grant, the number of shares of eBay common stock subject to the option will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this paragraph), multiplying the resultant total by three (3), and rounding up to the nearest whole number of shares of eBay common stock. For the RSU award, the number of shares to be granted will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this paragraph) and rounding up to the nearest whole number of shares of eBay common stock. For the target PBRSU award, the number of

shares subject to the target award will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described

1

in this paragraph) and rounding up to the nearest whole number of shares of eBay common stock. The “Average eBay Closing Price” shall be calculated based on the average of the closing prices of eBay common stock in U.S. dollars as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the last trading day prior to the date of grant.

In accordance with the methodology above, you will be granted a stock option to purchase eBay’s common stock valued at USD $600,000, subject to the terms and conditions of the Plan as well as the terms and conditions of the stock option agreement (which will be provided to you as soon as practicable after the grant date and shall be consistent with the publicly disclosed form of option agreement under the Plan). The exercise price for the stock option will be no less than the fair market value of eBay’s common stock, as determined according to the Plans, on the grant date. Generally, the stock option will vest and become exercisable (assuming your continued employment with an eBay company on each vesting date) over four years as follows: 25% of the shares subject to the stock option will vest one year after the commencement of your employment and an additional 1/48th of the shares subject to the stock option will vest each month thereafter.

You will be granted an award of RSUs valued at USD $900,000 to be granted under the Plans well as the terms and conditions of the RSU agreement (which will be provided to you as soon as practicable after the grant date and shall be consistent with the publicly disclosed form of RSU agreement under the Plan). Generally, the RSUs will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) over four years at the rate of 25% a year on each anniversary of the date of grant, subject to applicable taxes and withholdings.

You will be granted a target award of PBRSUs valued at USD $1,500,000 to be granted under the Plan as well as the terms and conditions of the PBRSU agreement (which will be provided to you as soon as practicable after the grant date and shall be consistent with the publicly disclosed form of PBRSU agreement under the Plan). The PBRSUs will cover performance over the period January 1, 2015 through December 31, 2016. The target award will be applied only to this performance period. The actual amount of the award will be determined based on Company performance and will be subject to the terms and conditions of the performance plan approved by the Compensation Committee. PBRSUs earned based on Company performance for the two year period will be granted in early 2017 and will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) as follows: 50% of the shares subject to the award on or about March 1, 2017 (the “Initial Vest Date”) and the remaining 50% of the shares on the first anniversary of the Initial Vest Date, subject to necessary withholding for applicable taxes.

In addition, you will be granted a supplemental award of RSUs valued at USD $2,000,000 to be granted under the Plan as well as the terms and conditions of the RSU agreement (which will be provided to you as soon as practicable after the grant date and shall be consistent with the publicly disclosed form of RSU agreement under the Plan). Generally, the RSUs will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) over four years at the rate of 25% a year on each anniversary of the date of grant, subject to applicable taxes and withholdings.

You will be eligible to receive a one-time 2015 Equity Make-good payment of $2,000,000 in cash (less deductions and applicable taxes). The 2015 Equity Make-good payment will be made in or around November 2015, subject to your continued employment on the date of payment. In the event that your

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employment is involuntarily terminated for Cause or you resign other than for Good Reason prior to completion of one year of service from your start date, the Equity Make-good payment is fully refundable to the Company. If your employment is involuntarily terminated for Cause or you resign other than for Good Reason after one year, but prior to the third anniversary from your start date, your repayment obligation will be reduced by 1/36^th for every full month of active employment. No repayment of the 2015 Equity Make-good payment will be required for termination after three years of employment with the Company.

You will be eligible to receive a one-time 2016 Equity Make-good payment of $1,000,000 in cash (less deductions and applicable taxes). The 2016 Equity Make-good payment will be made in or around November 2016, subject to your continued employment on the date of payment. In the event that your employment is involuntarily terminated for Cause or you resign other than for Good Reason after the 2016 Equity Make-good payment is made, but prior to the third anniversary from your start date, your repayment obligation will be reduced by 1/36^th for every full month of active employment. No repayment of the 2016 Equity Make-good payment will be required for termination after three years of employment with the Company.

Subject to the terms of the Plan (or any successor Company equity plan), you will be eligible to receive annual equity compensation grants under eBay’s Focal review process beginning in 2016. We commit to you that your annual equity compensation grants will be valued at a minimum of $2,400,000 in 2016, 2017 and 2018, in each case in a mix of equity compensation vehicles comparable to similarly situated executive officers.  Subject to the foregoing commitment, the aggregate target grant value and form of award will be determined by eBay and approved by the Compensation Committee of the Board of Directors.

All employees are subject to eBay’s Insider Trading Agreement, which outlines the procedures and guidelines governing securities trades by company personnel. You will be provided with a copy of eBay’s Insider Trading Agreement. Please review the Agreement carefully, execute the certification and submit it to eBay’s human resources department.

You will be also entitled to the benefits that eBay customarily makes available to employees in positions comparable to yours. Please refer to the benefit plan documents for more details, including eligibility. eBay reserves the right, in its sole discretion, to amend, change or cancel the benefits at any time.

You will be eligible to accrue 20 days of Paid Time Off (“PTO”) per year.

Your employment with the Company is “at –will” and either you or the Company may terminate your employment at any time, with or without cause or advance notice. The at-will nature of the employment relationship can only be changed by written agreement signed by eBay’s Chief Executive Officer.

Severance Protections.

Although your employment with the Company shall be “at-will” as set forth above, you may be entitled to severance protection in certain circumstances, as described below, subject in all instances to you executing and not revoking the Company’s standard form of release (which shall

3

also contain customary exceptions for your continued indemnification and coverage under D&O policies, exclusions for vested benefits under retirement and welfare benefit plans and equity incentive plans, and reasonable post-employment cooperation covenants (but for the avoidance of doubt no restrictive covenants or other covenants imposing limitations on your post-employment activities (the “Release”) within 60 days of your termination of employment, with such amounts or benefits to be paid and/or provided as of the date the Release becomes irrevocable, provided that if the 60-day time period following your termination of employment spans two calendar years, they shall be provided as of the later of the date the Release becomes irrevocable or the first calendar day of the calendar year following the year in which your employment terminates.

Prior to the Spin-Off; Termination Outside a Change in Control Period. If, prior to the Spin-Off and outside a Change in Control Period (as defined below), your employment is involuntarily terminated by the Company other than for Cause (as defined below) or if you voluntarily resign for Good Reason (as defined below), then the Company shall provide you with (a) the Accrued Benefits (as defined below) and (b) a lump sum severance payment, payable not later than 30 days after you execute a release of claims against the Company (the “Release”) and any revocation period has expired (which, if such payment date could straddle two calendar years, must occur in the later calendar year), in an amount equal to the sum of:

(i) two times the sum of (a) your Annual Base Salary (as defined below) and (b) your Bonus Amount (as defined below);

(ii) any Make-good Cash Payments that are owed to you pursuant to the terms of this Letter and have not yet been paid as of the date of your termination of employment; and

(iii) notwithstanding any election you may have made to defer any portion of any RSUs or PBRSUs, a cash amount equal to the value of any eBay equity awards that are outstanding and unvested as of the date of your termination of employment (including your voluntary resignation due to a Spin Failure Good Reason (as defined in the definition of “Good Reason” below), or because your employment was involuntarily terminated by the Company other than for Cause during the 30-day period ending on, or the 60-day period beginning on, the date that a Spin Failure Good Reason occurs) which, but for such termination, otherwise would have become vested pursuant to their respective vesting schedules within 24 months following the date of such termination (with such value calculated based on the Valuation Assumptions)(or, if such termination occurs before the date of grant of the options, RSUs, and PBRSUs set forth in the 5^th, 6^th, 7^th, and 8^th paragraphs of this letter, you will instead receive one half of the cash amounts referenced in such paragraphs, totaling $2,500,000).

On and After the Spin-Off; Termination Outside a Change in Control Period. If, on or after the Spin-Off and outside a Change in Control Period, your employment as General Counsel is terminated by the Company without Cause or if you voluntarily resign for Good Reason, then the Company shall provide you with (a) the Accrued Benefits and (b) a lump sum severance payment, payable not later than 30 days after you execute a Release and any revocation period has expired (which, if such payment date could straddle two calendar years, must occur in the later calendar year), in an amount equal to the sum of:

(i) (X) in the event that your employment is terminated on or before the one year anniversary of the date of the commencement of your employment, two times the sum of (a) your Annual Base Salary and (b) your Bonus Amount; (Y) in the event that your employment is terminated following the one year anniversary date of the commencement of your employment but on or before the two year

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anniversary of the date of the commencement of your employment, 1.5 times the sum of (a) your Annual Base Salary and (b) your Bonus Amount; and (Z) in the event that your employment is terminated following the two year anniversary of the date of the commencement of your employment, one times the sum of (a) your Annual Base Salary and (b) your Bonus Amount; and

(ii) any Make-good Cash Payments that are owed to you pursuant to the terms of this Letter and have not yet been paid as of the date of your termination of employment; and

(iii) notwithstanding any election you may have made to defer any portion of any RSUs or PBRSUs, a cash amount equal to the value of any other eBay equity awards that are outstanding and unvested as of the date of your termination of employment which, but for such termination, otherwise would have become vested pursuant to their respective vesting schedules within 12 months following the date of such termination (with such value calculated based on the Valuation Assumptions).

Termination During a Change in Control Period. If, during a Change in Control Period, your employment as General Counsel is terminated by the Company without Cause or if you voluntarily resign for Good Reason, then the Company shall provide you with (a) the Accrued Benefits and (b) a lump sum severance payment, payable not later than 30 days after you execute the Release and any revocation period has expired (which, if such payment date could straddle two calendar years, must occur in the later calendar year), in an amount equal to the sum of:

(i) two times the sum of (a) your Annual Base Salary and (b) your Bonus Amount;

(ii) any Make-good Cash Payments that are owed to you pursuant to the terms of this Letter and have not yet been paid as of the date of your termination of employment; and

(iii) notwithstanding any election you may have made to defer any portion of any RSUs or PBRSUs, a cash amount equal to the value of all then unvested eBay equity awards that are outstanding and unvested as of the date of termination of employment (with such value calculated based on the Valuation Assumptions)(or, if such termination occurs before the date of grant of the options, RSUs, and PBRSUs set forth in the 5^th, 6^th, 7^th, and 8^th paragraphs of this letter, you will instead receive ½ of the cash amounts referenced in such paragraphs, totaling $2,500,000)”.

Special Treatment of Equity Awards on Death/Permanent Disability.In the event that your employment with eBay terminates due to your death or disability (within the meaning of eBay’s long-term disability plan), within thirty (30) days after the date of such termination of employment, you will receive a cash payment equal to the value of any eBay equity awards that were outstanding and unvested as of the date of such termination which, but for such termination, otherwise would have become vested pursuant to their respective vesting schedules within 24 months following the date of such termination (with such value calculated based on the Valuation Assumptions)(or, if such termination occurs before the date of grant of the options, RSUs, and PBRSUs set forth in the 5^th, 6^th, 7^th, and 8^th paragraphs of this letter, you will instead receive ½ of the cash amounts referenced in such paragraphs, totaling $2,500,000).

Tax and Other Matters.

Section 409A. The Company may withhold from any amounts payable to you such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. It is intended that the payments and benefits provided under this Letter shall comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Section

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409A”) and the regulations relating thereto, or an exemption to Section 409A, and this Letter shall be interpreted accordingly. Any payments or benefits that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception. Each payment under this Letter will be treated as a separate payment for purposes of Section 409A. Notwithstanding anything to the contrary herein, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Letter providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Letter, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean separation from service. If you become entitled to a payment of nonqualified deferred compensation as a result of your termination of employment and at such time you are a “specified employee” (within the meaning of Section 409A and as determined in accordance with the methodology established by the Company as in effect on your date of termination), such payment will be postponed to the extent necessary to satisfy Section 409A, and any amounts so postponed will be paid in a lump sum on the first business day that is six months and one day after your separation from service (or any earlier date of your death). If the compensation and benefits provided under this Letter would subject you to taxes or penalties under Section 409A, the Company and you will cooperate diligently to amend the terms of this Letter to avoid such taxes and penalties, to the extent possible under applicable law.

Change in Control Golden Parachute Excise Taxes. In the event of a Change in Control, where an accounting firm designated by the Company determines that the aggregate amount of the payments and benefits that (but for the application of this paragraph) would be payable to you under this Letter agreement or any other plan, policy or arrangement of the Company and any of their affiliates, exceeds the greatest amount of payments and benefits that could be paid or provided to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then you may elect either to (1) pay the Excise Tax and receive all such payments and benefits as may be payable to you, or (2) only receive the aggregate amount of such payments and benefits payable or to be provided to you that would not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax and other taxes that would otherwise be payable by you (such reduced amount of payments and benefits, the “Reduced Benefit Amount”). In the event you elect to receive the Reduced Benefit Amount, however, the reduction in such payments or benefits pursuant to the immediately preceding sentence shall be made in the following order: (1) by reducing severance payments based on your Annual Base Salary and Bonus Amount, if any is then payable, and then (2) by reducing amounts in respect of any equity-based awards (first in the form of cash payments, if any are due hereunder, then in respect of any vesting of any such awards hereunder, and only thereafter in respect of any vesting of any such awards under any other plan or arrangement).

Definitions.

“Accrued Benefits” means (a) prompt payment of any accrued but unpaid annual base salary through the last day of employment, (b) prompt payment of any unreimbursed expenses incurred through the last day of employment subject to your prompt delivery of all required documentation of such expenses pursuant to applicable employer policies, (c) all other vested payments, benefits or fringe benefits to which you are entitled under the terms of any applicable compensation

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arrangement or benefit, equity or fringe benefit plan or program or grant (excluding any other severance plan, policy or program) or this Letter in accordance with the terms of such plan, program or grant, including any unpaid bonus for any prior fiscal year when it otherwise would have been paid, and (d) a prorated portion of the eIP bonus, if any, that you otherwise would have earned and been paid in respect of the fiscal year in which your employment terminates based on the actual performance of the company for the full year, with such prorated portion calculated based on the period of time during such fiscal year that you were employed, relative to the full fiscal year and only based on the company performance element of the bonus (such prorated eIP bonus amount, if any, the “Prorated Bonus”). You will receive your Prorated Bonus on the date that all other participants in the eIP receive their eIP bonuses in respect of such fiscal year.

“Annual Base Salary” will mean an amount equal to $610,000 (or such greater amount as in effect immediately prior to your termination date).

“Bonus Amount” will mean an amount equal to 100% of your Annual Base Salary (or such greater amount as may be established as your target bonus payment immediately prior to your termination date).

“Cause” shall mean (a) your failure to attempt in good faith to substantially perform your assigned duties, other than failure resulting from your death or incapacity due to physical or mental illness or impairment, which is not remedied within 30 days after receipt of written notice from the Company specifying such failure; (b) your indictment for, conviction of or plea of nolo contedere to any felony (or any other crime involving fraud, dishonesty or moral turpitude); or (c) your commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company, except good faith expense account disputes.

“Change in Control” shall mean, for purposes of this Letter, a “Change in Control” as such term is defined in the Plan or, following the Spin-Off, as such term may be defined (if different) under any successor equity incentive plan.

“Change in Control Period” means the period that begins 90 days prior to, and ends 24 months following, a “Change in Control.”

“Good Reason” means, without your written consent, any of the following events, whereafter you resign your employment within the periods provided below:

(a) either: (i) the effective date of the Spin-Off does not occur on or before October 1, 2016, in which case you shall have until December 1, 2016 to resign for “Good Reason;” or (ii) the Spin-Off does occur on or before October 1, 2016 and you are not named to be the General Counsel of the publicly traded company effective as of the Spin-Off (either of the events described in this clause (a), a “Spin Failure Good Reason”); or

(b) following the Spin-Off, the Company experiences a Change in Control, after which you are no longer the General Counsel reporting to the CEO of a publicly traded company, in which case you shall have thirty (30) days following such Change in Control within which to resign for “Good Reason”: or

(c) (i) a material reduction in your annual base salary; (ii) a material reduction in your annual target bonus opportunity; (iii) (x) prior to the Spin-Off, a material reduction in your authority,

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duties or responsibilities as General Counsel, eBay Marketplaces (which would include your failure to report to the General Counsel of eBay with a dotted line relationship with the President of eBay Marketplaces), but (y) on and after the Spin-Off, a material reduction in your authority, duties or responsibilities as General Counsel of eBay, Inc. (which would include your failure to report to the CEO of a publicly traded company); (iv) following a Change in Control, a requirement by the Company that you relocate your primary office to a location that is more than 35 miles from the location of your primary office immediately prior to the Change in Control; or (v) any other material breach by the Company of this Letter. You will be deemed to have given consent to the condition(s) described in any of clauses (i) through (v) of this paragraph (c) if you do not provide written notice to the Company of such Good Reason event(s) within 60 days from the first occurrence of such Good Reason event(s), following which the Company shall have 30 days to cure such event, and to the extent the Company has not cured such Good Reason event(s) during the 30-day cure period, you must terminate your employment for Good Reason no later than 60 days following the occurrence of such Good Reason event(s) by providing the Company 30 days’ prior written notice of termination, which may run concurrently with the Company’s cure period.

“Valuation Assumptions” means, collectively, the following assumptions: (x) each share of eBay common stock underlying an award has a value equal to the average of the closing prices of eBay common stock as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the last trading day prior to the date of your termination of employment, (y) if the date of your termination of employment occurs during the performance period with respect to an award of PBRSUs whose target value has been established prior to the date of your termination of employment, but whose number of shares of eBay common stock that would be subject to such award based on achievement of applicable performance targets has not yet been granted, then any such award shall be deemed to have been earned and granted assuming achievement of target performance in respect of the applicable performance period immediately prior to such date of termination and (z) any Options that you hold that are outstanding immediately prior to the date of your termination of employment will be valued based on their spread (i.e., the positive difference, if any, of the value of each share of eBay) common stock underlying the Option, as determined pursuant to clause (x) above), less the per share exercise price of such Option).

Under federal immigration laws, the Company is required to verify each new employee’s identity and legal authority to work in the United States. Accordingly, please be prepared to furnish appropriate documents satisfying those requirements; this offer of employment is conditioned on submission of satisfactory documentation. Enclosed is a list of the required documents.

All of us at eBay are very excited about you joining our team and look forward to a beneficial and fruitful relationship. However, should any dispute arise with respect to your employment or the termination of that employment, we both agree that such dispute shall be conclusively resolved by final, binding and confidential arbitration rather than by a jury court or administrative agency. The Company will bear those expenses unique to arbitration. Please review the enclosed Mutual Arbitration Agreement carefully.

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As a condition of your employment, you must complete both the Mutual Arbitration Agreement and the enclosed Employee Proprietary Information and Inventions Agreement prior to commencing employment. These agreements address important obligations to the Company, both during and after your employment; therefore, please read both agreements carefully before signing them and submitting them to eBay’s human resources department. If you should have any questions about either agreement, please contact me.

This offer letter, the Mutual Arbitration Agreement, the Employee Proprietary Information and Inventions Agreement as well as all other enclosed required documents, contain the entire agreement with respect to your employment. Should you have any questions with regard to any of the items indicated above, please call me. Kindly indicate your consent to this offer letter by signing copies of this letter and returning it to me. All other documents requiring your signature must be submitted prior to your start date, including but not limited to the Mutual Arbitration Agreement, the Employee Proprietary Information and Inventions Agreement, and the Insider Trading Agreement certification.

Upon your signature below, this will become our binding agreement with respect to your employment and its terms merging and superseding in their entirety all other or prior offers, agreements and communications, whether written or oral, by you and the Company as to the specific subjects of this letter.

We are excited at the prospect of you joining our team. We look forward to having you on board!

Very truly yours,

/s/ Beth Axelrod

Beth Axelrod

Senior Vice President, Human Resources

eBay Inc.

ACCEPTED:

/s/ Marie Oh Huber

Marie Oh Huber            

April 2, 2015

Date

Anticipated Start Date: May 1, 2015

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EX-10.05

Exhibit 10.05

April 3, 2015

Harry A. Lawton

Dear Hal:

eBay Inc. (“eBay” or the “Company”) is pleased to offer you the exempt position of Senior Vice President, North America, eBay Marketplaces, at a bi-weekly salary of $25,000.00, which is equivalent to an annualized salary of $650,000.00.

You will be eligible to participate in the eBay Incentive Plan (eIP) with an annual bonus based on individual achievement as well as company performance. The annual bonus period is from January 1 through December 31. Your target bonus for the eIP is 75% of your annual base salary, pro-rated based on the eligible earnings paid while you are employed in an eIP eligible position during the annual bonus period. There is no guarantee any eIP bonus will be paid, and any actual bonus will be determined after the end of the annual bonus period based on your eligible earnings as defined in the eIP. To be eligible to receive any eIP bonus, you must be employed on or before the first business day of the fourth quarter and you must be employed on the date the bonus is paid. The payment of any bonus is subject to the terms and conditions of the eIP. eBay reserves the right, in its sole discretion, to amend, change or cancel the eIP at any time.

You will be entitled to a supplemental cash payment in the amount of $300,000 (less deductions and applicable taxes) for each of the next three years. The first payment will be made within two pay periods of your start date. The second and third payments will be made on or around the first and second anniversaries of your start date, subject to your continued employment on the date of payment.

You will also be eligible to receive a one-time make-good bonus payment of $130,000 (less deductions and applicable taxes). The make-good payment will be made within two pay periods of your start date.

It will be recommended to the Board of Directors of eBay Inc. that you be granted (a) a stock option to purchase shares of eBay’s common stock, (b) an award of restricted stock units (“RSUs”), and (c) a target award of performance-based restricted stock units (“PBRSUs”), as described in the following paragraphs. The grants described below are denominated as a U.S. dollar value. For the stock option grant, the number of shares of eBay common stock subject to the option will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this paragraph), multiplying the resultant total by three (3), and rounding up to the nearest whole number of shares of eBay common stock. For the RSU award, the number of shares to be granted will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this

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paragraph) and rounding up to the nearest whole number of shares of eBay common stock. For the target PBRSU award, the number of shares subject to the target award will be determined by dividing the U.S. dollar value of the award by the Average eBay Closing Price (as described in this paragraph) and rounding up to the nearest whole number of shares of eBay common stock. The “Average eBay Closing Price” shall be calculated based on the average of the closing prices of eBay common stock in U.S. dollars as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the last trading day prior to the date of grant.

In accordance with the methodology above, it will be recommended to the Board of Directors of eBay that you be granted a stock option to purchase eBay’s common stock valued at USD $600,000, subject to the terms and conditions of eBay’s current stock plans (the “Plans”) as well as the terms and conditions of the stock option agreement (which will be provided to you as soon as practicable after the grant date). The exercise price for the stock option will be no less than the fair market value of eBay’s common stock, as determined according to the Plans, on the grant date. Generally, the stock option will vest and become exercisable (assuming your continued employment with an eBay company on each vesting date) over four years as follows: 25% of the shares subject to the stock option will vest one year after the commencement of your employment and an additional 1/48th of the shares subject to the stock option will vest each month thereafter.

It will also be recommended to the Board of Directors of eBay that you be granted an award of RSUs valued at USD $900,000 to be granted under the Plans as well as the terms and conditions of the RSU agreement (which will be provided to you as soon as practicable after the grant date). Generally, the RSUs will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) over four years at the rate of 25% a year on each anniversary of the date of grant, subject to applicable taxes and withholdings.

It will also be recommended to the Board of Directors of eBay that you be granted a target award of PBRSUs valued at USD $1,500,000 to be granted under the Plans as well as the terms and conditions of the PBRSU agreement (which will be provided to you as soon as practicable after the grant date). The PBRSUs will cover performance over the period January 1, 2015 through December 31, 2016. The target award will be applied only to this performance period. The actual amount of the award will be determined based on Company performance and will be subject to the terms and conditions of the performance plan approved by the Compensation Committee. PBRSUs earned based on Company performance for the two year period will be granted in early 2017 and will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) as follows: 50% of the shares subject to the award on or about March 1, 2017 (the “Initial Vest Date”) and the remaining 50% of the shares on the first anniversary of the Initial Vest Date, subject to necessary withholding for applicable taxes.

In addition, it will be recommended to the Board of Directors of eBay that you be granted a supplemental award of RSUs valued at USD $3,000,000 to be granted under the Plans as well as the terms and conditions of the RSU agreement (which will be provided to you as soon as practicable after the grant date). Generally, the RSUs will vest and become non-forfeitable (assuming your continued employment with an eBay company on each vesting date) over four years at the rate of 25% a year on each anniversary of the date of grant, subject to applicable taxes and withholdings.

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Subject to the terms of the Plan (or any successor Company equity plan), you will be eligible to receive annual equity compensation grants under eBay’s Focal review process beginning in 2016.  Subject to the foregoing commitment, the aggregate target grant value and form of award will be determined by eBay and approved by the Compensation Committee of the Board of Directors.

All employees are subject to eBay’s Insider Trading Agreement, which outlines the procedures and guidelines governing securities trades by company personnel. You will be provided with a copy of eBay’s Insider Trading Agreement. Please review the Agreement carefully, execute the certification and submit it to eBay’s human resources department.

You will be eligible to receive a one-time Equity Make-good payment of $2,500,000 in cash (less deductions and applicable taxes). The Equity Make-good payment will be made within two pay periods of your start date. In the event that your employment is involuntarily terminated for Cause (as defined below) or you resign other than for Good Reason (as defined below) prior to completion of one year of service from your start date, the Equity Make-good payment is fully refundable to the Company. If your employment is involuntarily terminated for Cause or you resign other than for Good Reason after one year, but prior to the third anniversary from your start date, your repayment obligation will be reduced by 1/36^th for every full month of active employment. No repayment of the Equity Make-good payment will be required for termination after three years of employment with the Company.

You will be entitled to receive a Housing Assistance/Transition payment of $1,200,000 (less deductions and applicable taxes), paid within two pay periods your start date. In the event that your employment ceases for reason of Cause (as defined below) or you resign other than for Good Reason (as defined below) prior to completion of one year of service from your start date, the payment is fully refundable to the Company. If your employment ceases for reasons of cause or resignation after one year of service, but prior to the second anniversary from your start date, your repayment obligation for the Housing Assistance/Transition payment will be reduced by 1/24th for every full month of active employment. No repayment would be required for termination after two years of employment with the Company.

The Company will provide reasonable temporary housing suitable for you and for your family in the Bay Area and will cover the cost of weekly commuting from your home in Georgia and the Bay area for six months. The Company will also provide assistance related to your purchase of a home in the Bay area and shipment of household goods from Georgia to the Bay area under the terms of eBay’s relocation assistance program for executives. The Company will provide a tax gross up in connection with the cost of travel, housing and relocation expenses to the extent applicable. The details of the commuting, temporary housing and relocation arrangements are covered in a separate letter.

You will be also entitled to the benefits that eBay customarily makes available to employees in positions comparable to yours. Please refer to the benefit plan documents for more details, including eligibility. eBay reserves the right, in its sole discretion, to amend, change or cancel the benefits at any time.

You will be eligible to accrue 20 days of Paid Time Off (“PTO”) per year.

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Your employment with the Company is “at-will” and either you or the Company may terminate your employment at any time, with or without cause or advance notice. The at-will nature of the employment relationship can only be changed by written agreement signed by eBay’s Chief Executive Officer.

Severance Protections.

Although your employment with the Company shall be “at-will” as set forth above, you may be entitled to severance protection in certain circumstances, as described below, subject in all instances to you executing and not revoking the Company’s standard form of release (which shall also contain customary exceptions for your continued indemnification and coverage under D&O policies, exclusions for vested benefits under retirement and welfare benefit plans and equity incentive plans, and reasonable post-employment cooperation covenants (but for the avoidance of doubt no restrictive covenants or other covenants imposing limitations on your post-employment activities (the “Release”) within 60 days of your termination of employment, with such amounts or benefits to be paid and/or provided as of the date the Release becomes irrevocable, provided that if the 60-day time period following your termination of employment spans two calendar years, they shall be provided as of the later of the date the Release becomes irrevocable or the first calendar day of the calendar year following the year in which your employment terminates.

Prior to the Spin-Off; Termination Outside a Change in Control Period. If, prior to the Spin-Off and outside a Change in Control Period (as defined below), your employment is involuntarily terminated by the Company other than for Cause (as defined below) or if you voluntarily resign for Good Reason (as defined below), then the Company shall provide you with (a) the Accrued Benefits (as defined below) and (b) a lump sum severance payment, payable not later than 30 days after you execute a release of claims against the Company (the “Release”) and any revocation period has expired (which, if such payment date could straddle two calendar years, must occur in the later calendar year), in an amount equal to the sum of:

(i) two times the sum of (a) your Annual Base Salary (as defined below) and (b) your Bonus Amount (as defined below);

(ii) any Make-good Cash Payments that are owed to you pursuant to the terms of this Letter and have not yet been paid as of the date of your termination of employment; and

(iii) notwithstanding any election you may have made to defer any portion of any RSUs or PBRSUs, a cash amount equal to the value of any eBay equity awards that are outstanding and unvested as of the date of your termination of employment (including your voluntary resignation due to a Spin Failure Good Reason (as defined in the definition of “Good Reason” below), or because your employment was involuntarily terminated by the Company other than for Cause during the 30-day period ending on, or the 60-day period beginning on, the date that a Spin Failure Good Reason occurs) which, but for such termination, otherwise would have become vested pursuant to their respective vesting schedules within 24 months following the date of such termination (with such value calculated based on the Valuation Assumptions).

On and After the Spin-Off; Termination Outside a Change in Control Period. If, on or after the Spin-Off and outside a Change in Control Period, your employment as SVP, North America, eBay is terminated by the Company without Cause or if you voluntarily resign for Good Reason, then the Company shall provide you with (a) the Accrued Benefits and (b) a lump sum severance payment, payable not later than 30 days after you execute a Release and any revocation period has expired

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(which, if such payment date could straddle two calendar years, must occur in the later calendar year), in an amount equal to the sum of:

(i) (X) in the event that your employment is terminated on or before the one year anniversary of the date of the commencement of your employment, two times the sum of (a) your Annual Base Salary and (b) your Bonus Amount; (Y) in the event that your employment is terminated following the one year anniversary date of the commencement of your employment but on or before the two year anniversary of the date of the commencement of your employment, 1.5 times the sum of (a) your Annual Base Salary and (b) your Bonus Amount; and (Z) in the event that your employment is terminated following the two year anniversary of the date of the commencement of your employment, one times the sum of (a) your Annual Base Salary and (b) your Bonus Amount; and

(ii) any Make-good Cash Payments that are owed to you pursuant to the terms of this Letter and have not yet been paid as of the date of your termination of employment; and

(iii) notwithstanding any election you may have made to defer any portion of any RSUs or PBRSUs, a cash amount equal to the value of any other eBay equity awards that are outstanding and unvested as of the date of your termination of employment which, but for such termination, otherwise would have become vested pursuant to their respective vesting schedules within 12 months following the date of such termination (with such value calculated based on the Valuation Assumptions).

Termination During a Change in Control Period. If, during a Change in Control Period, your employment as SVP, North America, eBay is terminated by the Company without Cause or if you voluntarily resign for Good Reason, then the Company shall provide you with (a) the Accrued Benefits and (b) a lump sum severance payment, payable not later than 30 days after you execute the Release and any revocation period has expired (which, if such payment date could straddle two calendar years, must occur in the later calendar year), in an amount equal to the sum of:

(i) two times the sum of (a) your Annual Base Salary and (b) your Bonus Amount;

(ii) any Make-good Cash Payments that are owed to you pursuant to the terms of this Letter and have not yet been paid as of the date of your termination of employment; and

(iii) notwithstanding any election you may have made to defer any portion of any RSUs or PBRSUs, a cash amount equal to the value of all then unvested eBay equity awards that are outstanding and unvested as of the date of termination of employment (with such value calculated based on the Valuation Assumptions).

Special Treatment of Equity Awards on Death/Permanent Disability.In the event that your employment with eBay terminates due to your death or disability (within the meaning of eBay’s long-term disability plan), within thirty (30) days after the date of such termination of employment, you will receive a cash payment equal to the value of any eBay equity awards that were outstanding and unvested as of the date of such termination which, but for such termination, otherwise would have become vested pursuant to their respective vesting schedules within 24 months following the date of such termination (with such value calculated based on the Valuation Assumptions).

Tax and Other Matters.

Section 409A. The Company may withhold from any amounts payable to you such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. It is intended that the payments and benefits provided under this Letter shall comply

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with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and the regulations relating thereto, or an exemption to Section 409A, and this Letter shall be interpreted accordingly. Any payments or benefits that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception. Each payment under this Letter will be treated as a separate payment for purposes of Section 409A. Notwithstanding anything to the contrary herein, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Letter providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Letter, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean separation from service. If you become entitled to a payment of nonqualified deferred compensation as a result of your termination of employment and at such time you are a “specified employee” (within the meaning of Section 409A and as determined in accordance with the methodology established by the Company as in effect on your date of termination), such payment will be postponed to the extent necessary to satisfy Section 409A, and any amounts so postponed will be paid in a lump sum on the first business day that is six months and one day after your separation from service (or any earlier date of your death). If the compensation and benefits provided under this Letter would subject you to taxes or penalties under Section 409A, the Company and you will cooperate diligently to amend the terms of this Letter to avoid such taxes and penalties, to the extent possible under applicable law.

Change in Control Golden Parachute Excise Taxes. In the event of a Change in Control, where an accounting firm designated by the Company determines that the aggregate amount of the payments and benefits that (but for the application of this paragraph) would be payable to you under this Letter agreement or any other plan, policy or arrangement of the Company and any of their affiliates, exceeds the greatest amount of payments and benefits that could be paid or provided to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then you may elect either to (1) pay the Excise Tax and receive all such payments and benefits as may be payable to you, or (2) only receive the aggregate amount of such payments and benefits payable or to be provided to you that would not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax and other taxes that would otherwise be payable by you (such reduced amount of payments and benefits, the “Reduced Benefit Amount”). In the event you elect to receive the Reduced Benefit Amount, however, the reduction in such payments or benefits pursuant to the immediately preceding sentence shall be made in the following order: (1) by reducing severance payments based on your Annual Base Salary and Bonus Amount, if any is then payable, and then (2) by reducing amounts in respect of any equity-based awards (first in the form of cash payments, if any are due hereunder, then in respect of any vesting of any such awards hereunder, and only thereafter in respect of any vesting of any such awards under any other plan or arrangement).

Definitions.

“Accrued Benefits” means (a) prompt payment of any accrued but unpaid annual base salary through the last day of employment, (b) prompt payment of any unreimbursed expenses incurred through the last day of employment subject to your prompt delivery of all required documentation of such expenses pursuant to applicable employer policies, (c) all other vested payments, benefits or

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fringe benefits to which you are entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant (excluding any other severance plan, policy or program) or this Letter in accordance with the terms of such plan, program or grant, including any unpaid bonus for any prior fiscal year when it otherwise would have been paid, and (d) a prorated portion of the eIP bonus, if any, that you otherwise would have earned and been paid in respect of the fiscal year in which your employment terminates based on the actual performance of the company for the full year, with such prorated portion calculated based on the period of time during such fiscal year that you were employed, relative to the full fiscal year and only based on the company performance element of the bonus (such prorated eIP bonus amount, if any, the “Prorated Bonus”). You will receive your Prorated Bonus on the date that all other participants in the eIP receive their eIP bonuses in respect of such fiscal year.

“Annual Base Salary” will mean an amount equal to $650,000 (or such greater amount as in effect immediately prior to your termination date).

“Bonus Amount” will mean an amount equal to 75% of your Annual Base Salary (or such greater amount as may be established as your target bonus payment immediately prior to your termination date).

“Cause” shall mean (a) your failure to attempt in good faith to substantially perform your assigned duties, other than failure resulting from your death or incapacity due to physical or mental illness or impairment, which is not remedied within 30 days after receipt of written notice from the Company specifying such failure; (b) your indictment for, conviction of or plea of nolo contedere to any felony (or any other crime involving fraud, dishonesty or moral turpitude); or (c) your commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company, except good faith expense account disputes.

“Change in Control” shall mean, for purposes of this Letter, a “Change in Control” as such term is defined in the Plan or, following the Spin-Off, as such term may be defined (if different) under any successor equity incentive plan.

“Change in Control Period” means the period that begins 90 days prior to, and ends 24 months following, a “Change in Control.”

“Good Reason” means, without your written consent, any of the following events, whereafter you resign your employment within the periods provided below:

(a) the effective date of the Spin-Off does not occur on or before October 1, 2016, in which case you shall have until December 1, 2016 to resign for “Good Reason;” or

(b) (i) a material reduction in your annual base salary; (ii) a material reduction in your annual target bonus opportunity; (iii) (x) prior to the Spin-Off, a material reduction in your authority, duties or responsibilities as SVP, North America, eBay Marketplaces (which would include your failure to report to the President of eBay Marketplaces), but (y) on and after the Spin-Off, a material reduction in your authority, duties or responsibilities as SVP, North America, eBay (which would include your failure to report to the CEO of a publicly traded company); (iv) following a Change in Control, a requirement by the Company that you relocate your primary office to a location that is more than 35 miles from the location of your primary office immediately prior to the Change in

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Control; or (v) any other material breach by the Company of this Letter. You will be deemed to have given consent to the condition(s) described in any of clauses (i) through (v) of this paragraph (b) if you do not provide written notice to the Company of such Good Reason event(s) within 60 days from the first occurrence of such Good Reason event(s), following which the Company shall have 30 days to cure such event, and to the extent the Company has not cured such Good Reason event(s) during the 30-day cure period, you must terminate your employment for Good Reason no later than 60 days following the occurrence of such Good Reason event(s) by providing the Company 30 days’ prior written notice of termination, which may run concurrently with the Company’s cure period.

“Valuation Assumptions” means, collectively, the following assumptions: (x) each share of eBay common stock underlying an award has a value equal to the average of the closing prices of eBay common stock as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the last trading day prior to the date of your termination of employment, (y) if the date of your termination of employment occurs during the performance period with respect to an award of PBRSUs whose target value has been established prior to the date of your termination of employment, but whose number of shares of eBay common stock that would be subject to such award based on achievement of applicable performance targets has not yet been granted, then any such award shall be deemed to have been earned and granted assuming achievement of target performance in respect of the applicable performance period immediately prior to such date of termination and (z) any Options that you hold that are outstanding immediately prior to the date of your termination of employment will be valued based on their spread (i.e., the positive difference, if any, of the value of each share of eBay common stock underlying the Option, as determined pursuant to clause (x) above, less the per share exercise price of such Option).

Under federal immigration laws, the Company is required to verify each new employee’s identity and legal authority to work in the United States. Accordingly, please be prepared to furnish appropriate documents satisfying those requirements; this offer of employment is conditioned on submission of satisfactory documentation. Enclosed is a list of the required documents.

All of us at eBay are very excited about you joining our team and look forward to a beneficial and fruitful relationship. However, should any dispute arise with respect to your employment or the termination of that employment, we both agree that such dispute shall be conclusively resolved by final, binding and confidential arbitration rather than by a jury court or administrative agency. The Company will bear those expenses unique to arbitration. Please review the enclosed Mutual Arbitration Agreement carefully.

As a condition of your employment, you must complete both the Mutual Arbitration Agreement and the enclosed Employee Proprietary Information and Inventions Agreement prior to commencing employment. These agreements address important obligations to the Company, both during and after your employment; therefore, please read both agreements carefully before signing them and submitting them to eBay’s human resources department. If you should have any questions about either agreement, please contact me.

This offer letter, the Mutual Arbitration Agreement, the Employee Proprietary Information and Inventions Agreement, as well as all other enclosed required documents, contain the entire agreement

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with respect to your employment. Should you have any questions with regard to any of the items indicated above, please call me. Kindly indicate your consent to this offer letter by signing copies of this letter and returning it to me. All other documents requiring your signature must be submitted prior to your start date, including but not limited to the Mutual Arbitration Agreement, the Employee Proprietary Information and Inventions Agreement, and the Insider Trading Agreement certification.

Upon your signature below, this will become our binding agreement with respect to your employment and its terms merging and superseding in their entirety all other or prior offers, agreements and communications, whether written or oral, by you and the Company as to the specific subjects of this letter.

We are excited at the prospect of you joining our team. We look forward to having you on board!

Very truly yours,

/s/ Robin J. Colman

Robin J. Colman

Vice President, Compensation, Benefits and M&A

eBay Inc.

ACCEPTED:

/s/ Harry Lawton

Harry Lawton    

April 7, 2015

Date

Anticipated Start Date: May 11, 2015

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EX-10.06

Exhibit 10.06

eBay Inc.

2065 Hamilton Ave.

San Jose, CA 95125 U.S.A.

Company Tax ID:77-0430924

Performance Based Restricted Stock Unit Award Grant Notice (“Grant Notice”)

and Performance Based Restricted Stock Unit Award Agreement

%%FIRST_NAME%-% %%LAST_NAME%-%        Award Number: %%AWARD_NUMBER%-%

%%ADDRESS_LINE_1%-%                Plan:          2008

%%ADDRESS_LINE_2%-%                Type:          PBRSU

%%ADDRESS_LINE_3%-%

%%CITY%-%, %%STATE%-% %%ZIPCODE%-%

%%COUNTRY%-%

Effective as of %%GRANT_DATE%-% (the “Grant Date”), eBay Inc., a Delaware corporation (the “Company”), pursuant to its 2008 Equity Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the individual named above (“Participant”) an award of Performance Based Restricted Stock Units (“PBRSUs”) with respect to %%TARGET_NUMBER%-% shares of Stock at the target level of performance (the “Target Shares”) specified in Appendix A hereto (“Appendix A”). This Performance Based Restricted Stock Unit Award (the “Award”) is subject to all of the terms and conditions set forth in this Grant Notice, the Performance Based Restricted Stock Unit Award Agreement attached hereto as Exhibit A (the “Agreement”) (including without limitation the performance-based vesting conditions set forth in Appendix A), the special provisions for Participant’s country, if any, attached hereto as Exhibit B and the Plan, all of which are incorporated herein by reference. The number of shares of Stock (“Shares”) Participant will be eligible to receive pursuant to the Award, if any, may increase or decrease from the Target Shares based on the Company’s actual performance and Participant’s continued service, as set forth in Appendix A. Any capitalized terms used in this Grant Notice without definition shall have the meanings ascribed to such terms in the Plan.

Subject to Participant’s continuous service with the Company or a Subsidiary and Section 16 of the Agreement, Participant will vest in a number of PBRSUs on the vesting date(s) set forth in Appendix A (the “Vesting Date(s)”), if any, determined based on the extent to which the performance goals set forth in Appendix A (the “Performance Goals”) are achieved during the performance period beginning and ending on the dates set forth in Appendix A (the “Performance Period”). Any portion of the Shares subject to the Award that do not vest based on the achievement of the Performance Goals and Participant’s continued service shall be forfeited by Participant and cancelled by the Company. Achievement of the Performance Goals shall be determined and certified by the Compensation Committee of the Board of Directors of the Company (the “Committee”) in writing prior to the settlement of the Award. For the avoidance of doubt, all vesting is subject to Participant’s continued service with the Company or a Subsidiary through the Vesting Date(s).

By Participant’s signature and the Company’s signature below, Participant agrees to be bound by the terms and conditions of the Plan and this Grant Notice which includes Exhibit A (the Agreement) and Exhibit B (the special provisions for Participant’s country, if any). Participant has reviewed and fully understands all provisions of the Plan and this Grant Notice in their entirety, including Exhibits A and B, and has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Company upon any questions arising under the Plan and this Grant Notice, including Exhibits A and B.

	%%GRANT_DATE%-%
eBay Inc.	Date
%%FIRST_NAME%-% %%LAST_NAME%-%, the Participant	Date

EXHIBIT A

TO PERFORMANCE BASED RESTRICTED STOCK UNIT AWARD GRANT NOTICE

EBAY INC. PERFORMANCE BASED RESTRICTED STOCK UNIT AWARD AGREEMENT

Pursuant to the Performance Based Restricted Stock Unit Award Grant Notice (the “Grant Notice”) to which this Performance Based Restricted Stock Unit Award Agreement (the “Agreement”) is attached, eBay Inc., a Delaware corporation (the “Company”) has granted to Participant an award of Performance Based Restricted Stock Units (“PBRSUs”) under the Company’s 2008 Equity Incentive Award Plan, as amended from time to time (the “Plan”), with respect to a number of Shares as set forth in the Grant Notice.

GENERAL

1.Definitions. Any capitalized terms used in this Agreement without definition shall have the meanings ascribed to such terms in the Plan or the Grant Notice, as applicable.

2.Incorporation of Terms of Plan. The Award is subject to the terms and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

AGREEMENT

1.Grant of the PBRSUs. As set forth in the Grant Notice, as of the Grant Date (as defined in the Grant Notice), the Company hereby grants to Participant the number of PBRSUs based on the shares of Stock (“Shares”) set forth in the Grant Notice, subject to all the terms and conditions in the Grant Notice (including Appendix A, this Exhibit A and Exhibit B) and the Plan. The number of PBRSUs specified in the Grant Notice reflects the target number of Shares (the “Target Shares”) that may be earned by Participant. The number of Shares Participant will be eligible to receive pursuant to the Award, if any, may increase or decrease from the Target Shares based on the Company’s actual performance and Participant’s continued service. No Shares shall be issued to Participant until the time set forth in Section 2. Prior to actual issuance of any Shares, such PBRSUs will represent an unsecured obligation of the Company, payable only from the general assets of the Company.

2.Issuance of Stock. Shares shall be issued to Participant on or as soon as administratively practicable following each vesting date as set forth in the Grant Notice (each, a “Vesting Date”) (and in no event later than 2½ months following the calendar year of the applicable Vesting Date), subject to Section 3 hereof; provided, that Participant has not experienced a Termination of Service on or prior to each such Vesting Date. After each such Vesting Date, the Company shall promptly cause to be issued (either in book-entry form or otherwise) to Participant or Participant’s beneficiaries, as the case may be, Shares with respect to PBRSUs that become vested on such Vesting Date. No fractional Shares shall be issued under this Agreement. The vesting of the PBRSUs shall cease immediately upon a Termination of Service, as further described in Section 8(j) below, and any unvested PBRSUs awarded by this Agreement and the Grant Notice shall be forfeited upon such Termination of Service.

3.Responsibility for Taxes. Participant acknowledges that, regardless of any action taken by the Company and/or Participant’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant as a result of participation in the Plan (“Tax-Related Items”), is and remains Participant’s responsibility and may exceed the amount (if any)

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withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting, settlement, release or cancellation of the PBRSUs, the issuance of Shares upon settlement of the PBRSUs, the subsequent sale of Shares acquired pursuant such issuance and the receipt of any dividends, and (b) do not commit to and are under no obligation to structure the terms of the Award or any aspect of the PBRSUs to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant has become subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy the Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer (or their respective agents), at their discretion and pursuant to such procedures as they may specify from time to time, to satisfy the obligations with regard to the Tax-Related Items by one or a combination of the following:

(i) withholding a net number of otherwise issuable vested Shares having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and/or the Employer pursuant to the terms and conditions of the Plan or other applicable withholding rates; and/or

(ii) arranging for the Company-designated broker to sell on the market a portion of the otherwise issuable vested Shares that have an aggregate market value sufficient to pay the Tax-Related Items (a “Sell to Cover”), on Participant’s behalf and at Participant’s direction pursuant to this authorization; and/or

(iii) withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer; and/or

(iv) requiring Participant to make a payment in cash (or cash equivalent) to the Company or the Employer;

provided, however, that if Participant is an executive officer, within the meaning of Section 16 of the Exchange Act, then the obligations with regard to the Tax-Related Items shall be satisfied by withholding a net number of otherwise issuable vested Shares upon the relevant taxable or tax withholding event, as applicable, as described in clause (i) above, unless the use of such withholding method would result in adverse consequences under applicable tax or securities law or accounting principles, in which case the obligations with regard to the Tax-Related Items shall be satisfied by the method described in clause (ii) above.

No fractional Shares will be sold to cover or withheld to cover Tax-Related Items. The Company may withhold or account for Tax-Related Items by considering maximum applicable rates in which case Participant will receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent amount in Shares. If the obligation for Tax-Related Items is satisfied by withholding a number of Shares as described in (ii) above, for tax purposes Participant will be deemed to have been issued the full number of Shares subject to the vested PBRSUs, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items. The Company may refuse to issue or deliver the

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Shares or refuse to deliver the proceeds of the sale of Shares if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

4.Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

5.Conditions to Issuance of Certificates. Notwithstanding any other provision of this Agreement, the Company shall not be required to issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions: (a) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (b) the completion of any registration or other qualification of the Shares under any U.S. state or federal or non-U.S. law or under rulings or regulations of the U.S. Securities and Exchange Commission or other governmental regulatory body (including any applicable non-U.S. governmental regulatory body), which the Company shall, in its sole and absolute discretion, deem necessary and advisable, (c) the obtaining of any approval or other clearance from any U.S. state or federal or non-U.S. governmental agency that the Company shall, in its absolute discretion, determine to be necessary or advisable and (d) the lapse of any such reasonable period of time following the date the PBRSUs vest as the Company may from time to time establish for reasons of administrative convenience.

6.Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.

7.Award Not Transferable. This Award and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this Award, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this Award and the rights and privileges conferred hereby immediately will become null and void.

8.Nature of Grant. In accepting the Award, Participant acknowledges, understands and agrees that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended or terminated by the Company at any time, to the extent permitted by the Plan;

(b)the grant of the PBRSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of PBRSUs, or benefits in lieu of PBRSUs, even if PBRSUs have been granted in the past;

(c)all decisions with respect to future grants of PBRSUs, if any, will be at the sole discretion of the Company;

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(d)Participant is voluntarily participating in the Plan;

(e)the grant of the PBRSUs and Participant’s participation in the Plan shall not create a right to employment or service or be interpreted as forming an employment or service contract with the Company, the Employer or any Subsidiary and shall not interfere with the ability of the Company, the Employer or any Subsidiary to terminate Participant’s employment or service relationship (if any);

(f)the PBRSUs and any Shares subject to the PBRSUs are not intended to replace any pension rights or compensation;

(g)the PBRSUs and any Shares subject to the PBRSUs, and the income and value of same, are not part of normal or expected compensation or salary for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, pension or retirement or welfare benefits or similar mandatory payments;

(h)the future value of the Shares subject to the PBRSUs is unknown, indeterminable and cannot be predicted with certainty;

(i)no claim or entitlement to compensation or damages shall arise from forfeiture of the PBRSUs resulting from Participant ceasing to provide services to the Company, the Employer or any Subsidiary (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or providing services or the terms of Participant’s employment agreement or service contract, if any) and in consideration of the grant of the PBRSUs to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company, the Employer or any Subsidiary, waives his or her ability, if any, to bring any such claim, and releases the Company, the Employer and any Subsidiary from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claims;

(j)in the event of Participant’s Termination of Service (whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or providing services or the terms of Participant’s employment agreement or service contract, if any), unless otherwise determined by the Company, Participant’s right to vest in the PBRSUs, if any, will terminate effective as of the date that Participant is no longer actively providing services and will not be extended by any notice period (e.g., active service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or providing services or the terms of Participant’s employment agreement or service contract, if any); the Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the PBRSUs; and

(k)neither the Company, the Employer nor any Subsidiary will be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States dollar that may affect the value of the PBRSUs or any amounts due to Participant pursuant to the vesting of the PBRSUs or the subsequent sale of any Shares acquired under the Plan.

9.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding participation in the Plan, or Participant’s acquisition or sale of Shares. Participant is hereby advised to consult with his or her own personal tax, legal

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and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

10.Insider Trading Restrictions/Market Abuse Laws.  Participant acknowledges that he or she is subject to any applicable Company insider trading policy. In addition, depending on his or her country of residence, Participant may be subject to additional insider trading restrictions and/or market abuse laws, which may affect his or her ability to acquire or sell Shares or rights to Shares (e.g., PBRSUs) under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant's country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy.  Participant acknowledges that it is Participant’s responsibility to comply with any applicable Company insider trading policy and any additional restrictions that may apply due to local insider trading restrictions or market abuse laws. Participant is advised to speak to his or her personal legal advisor regarding any applicable local insider trading restrictions or market abuse laws.

11.Data Privacy. Participant hereby voluntarily consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other PBRSU grant materials by and among, as applicable, the Employer, the Company and any Subsidiary for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.

Participant understands that the Company, the Employer and any Subsidiary may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all PBRSUs or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Personal Data”).

Participant understands that Personal Data will be transferred to E*Trade Corporate Financial Services, Inc. and/or its affiliates (“E*Trade”) or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of Personal Data may be located in the United States or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Participant’s country. Participant authorizes the Company, E*Trade and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Personal Data, in electronic or other form, for the purpose of implementing, administering and managing his or her participation in the Plan, including any requisite transfer of such Personal Data as may be required to a broker or other third party with whom Participant may elect to deposit any Shares received upon vesting of the PBRSUs. Participant understands that he or she may request a list with the names and addresses of any potential recipients of Personal Data by contacting Participant’s regional human resources (“MyHR”) representative. Participant understands that Personal Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that he or she may, at any time, request access to Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her MyHR representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her

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consent, Participant’s employment status or service with the Employer will not be adversely affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant PBRSUs or other equity awards to Participant or administer or maintain such awards. Therefore,Participant understands that refusal or withdrawal of consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her MyHR representative.

12.Electronic Delivery and Participation. The Company may, in its sole discretion, decide to deliver any documents related to the PBRSUs or future PBRSUs granted under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

13.Language. If Participant has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

14.Governing Law and Choice of Venue. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of the Grant Notice (including this Agreement and the special provisions for Participants outside the U.S. attached hereto as Exhibit B), regardless of the law that might be applied under such state’s conflict of laws principles.

For purposes of litigating any dispute that arises directly or indirectly in respect of this Award, the parties hereby submit to and consent to the jurisdiction of the State of California and agree that such litigation shall be conducted in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed.

15.Conformity to U.S. Securities Laws. Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the U.S. Securities and Exchange Commission, including without limitation Rule 16b-3 under the Exchange Act. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Awards are granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

16.Award Subject to Clawback. The Award and any cash payment or Shares delivered pursuant to the Award are subject to forfeiture, recovery by the Company or other action pursuant to any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

17.Amendment, Modification and Termination. To the extent permitted by the Plan, the Grant Notice (including this Agreement and Exhibit B) may be wholly or partially amended or otherwise modified or terminated at any time or from time to time by the Committee or the Board, provided, that, except as

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may otherwise be provided by the Plan, no amendment, modification or termination of this Agreement shall adversely effect the Award in any material way without the prior written consent of Participant.

18.Notices. Notices required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the post by certified mail, or its non-U.S. equivalent, with postage and fees prepaid, addressed to Participant at his or her address shown in the Company records, and to the Company at its principal executive office.

19.Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, and to the extent permissible under local law, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.

20.Compliance in Form and Operation.This Agreement and the PBRSUs are intended to comply with Section 409A of the Code and the Treasury Regulations thereunder (“Section 409A”) and shall be interpreted in a manner consistent with that intention, to the extent Participant is or becomes subject to U.S. federal income taxation. Notwithstanding any other provisions of this Agreement or the Grant Notice, the Company reserves the right, to the extent the Company deems necessary or advisable, if Participant is or becomes subject to U.S. federal income taxation, and without any obligation to do so or to indemnify Participant for any failure to do so, to unilaterally amend the Plan and/or this Agreement to ensure that all PBRSUs are awarded in a manner that qualifies for exemption from or complies with Section 409A, provided, however, that the Company makes no representation that the PBRSUs will comply with or be exempt from Section 409A and makes no undertaking to preclude Section 409A from applying to the PBRSUs.

21.Exhibit B. The Award shall be subject to any special provisions set forth in Exhibit B of the Grant Notice for Participant’s country, if any. If Participant relocates to one of the countries included in Exhibit B of the Grant Notice prior to any Vesting Date or while holding Shares issued upon vesting of the PBRSUs, the special provisions for such country shall apply to Participant, to the extent the Company determines that the application of such provisions is advisable or necessary for legal or administrative reasons. Exhibit B of the Grant Notice constitutes part of this Agreement.

22.Imposition of Other Requirements. The Company reserves the right to impose other requirements on the PBRSUs and on any Shares issued upon vesting of the PBRSUs, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

23.Entire Agreement: Severability. The Plan and the Grant Notice (including Exhibit B) are incorporated herein by reference. The Plan and the Grant Notice (including this Agreement and Exhibit B) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. If any provision of the Plan or the Grant Notice (including this Agreement and Exhibit B) is determined to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

24.Waiver. Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant or any other participant.

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APPENDIX A

TO PERFORMANCE BASED RESTRICTED STOCK UNIT AWARD GRANT NOTICE

Performance-Based Vesting Conditions

1.Performance Period. The Performance Period with respect to which the achievement of the Performance Goals is measured and determined shall commence on January 1, _____ and end on December 31, _________.

2.Vesting of PBRSUs and Settlement of Shares. As soon as reasonably practicable following the completion of the Performance Period, the Committee shall determine, as of the completion of the Performance Period, the extent to which the Performance Goals set forth below have been achieved. Subject to Participant’s continuous service with the Company or a Subsidiary through the Vesting Date(s) set forth below, and subject to Section 16 of the Agreement, Participant will vest in a number of PBRSUs determined based on the extent to which the Performance Goals are achieved during the Performance Period (“Earned PBRSUs”). [FOR SVPs: Participant will vest in 50% of the Earned PBRSUs on March 15, _______ and 50% of the Earned PBRSUs on March 15, ______ (each such date, a “Vesting Date”).][FOR CEO & CFO: Participant will vest in 100% of the Earned PBRSUs on March 15, ______ (the “Vesting Date”).]

Any portion of the Shares subject to the Award that do not vest based on the achievement of the Performance Goals and Participant’s continued service shall be forfeited by Participant and cancelled by the Company. Attainment of the Performance Goals shall be determined and certified by the Committee in writing prior to the settlement of the Award. In no event shall the Company deliver any Shares to Participant later than 2½ months following the calendar year in which the applicable portion of the Award vests.

3.Calculation of Earned PBRSUs and Performance Goals. Subject to the terms of the Grant Notice (including the Agreement) and the Plan, 50% of the Award shall be based on the FX-Neutral Revenue (as defined below) during the Performance Period and 50% of the Award shall be based on the Non-GAAP Operating Margin Dollars (as defined below) during the Performance Period as set forth below. The percentage of the Award earned with respect to each of the Performance Goals shall be determined using straight-line interpolation between the specified performance levels. None of the Shares subject to the PBRSUs with respect to a Performance Goal shall be earned for performance below the “threshold” performance level.

a.FX-Neutral Revenue Performance Goal

Performance Levels	Performance Goal: FX-Neutral Revenue	Percentage of Target Shares Earned
Threshold	[●]	25%

A-8

Target	[●]	50%
Maximum	[●]	100%

b.Non-GAAP Operating Margin Dollars Performance Goal

Performance Levels	Performance Goal: Non-GAAP Operating Margin Dollars	Percentage of Target Shares Earned
Threshold	[●]	25%
Target	[●]	50%
Maximum	[●]	100%

c.ROIC Modifier. The number of Shares in respect of the PBRSUs determined pursuant to Sections 3(a) and 3(b) above shall be adjusted in accordance with the schedule set forth below based on the ROIC (as defined below) during the Performance Period.

ROIC	Adjustment in Shares Eligible for Vesting
	20% reduction in Shares eligible for vesting
	No adjustment
	20% increase in Shares eligible for vesting

A-9

4.Definitions(1). For the purpose of this Appendix A, the following terms shall be defined as follows:

a.“FX-Neutral Revenue” shall mean [●].

b.“Non-GAAP Operating Margin Dollars” shall mean [●].

c.“ROIC” shall mean [●].

(1) Performance goals, including definitions, may change from performance period to performance period in accordance with the terms of the eBay Inc. 2008 Equity Incentive Award Plan.

A-10

EX-12.01

Exhibit 12.01

eBay Inc.

Computation of Ratio of Earnings to Fixed Charges

(In millions, except ratio data)

	Three Months Ended March 31,
	2015		2016
Income from Continuing Operations Before Income Taxes, Noncontrolling Interest and Income/Loss of Equity Method Investees	540		600
Add: Fixed Charges (1)	43		49
Earnings (2)	583		649
Fixed Charges (1)	43		49
Ratio of Earnings to Fixed Charges	13.6	x	13.2	x

(1) Fixed Charges consist of interest expense and our estimate of an appropriate portion of rentals representative of the interest factor. The estimate of interest within rental expense is estimated to be one-third of rental expense.

(2) Earnings consist of income before income taxes, noncontrolling interest and equity in gains or losses of equity method investees plus Fixed Charges.

EX-31.01

Exhibit 31.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER,

AS REQUIRED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

I, Devin N. Wenig, certify that:

1. I have reviewed this report on Form 10-Q of eBay Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Devin N. Wenig

Devin N. Wenig

President and Chief Executive Officer

(Principal Executive Officer)

Date: April 26, 2016

EX-31.02

Exhibit 31.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER,

AS REQUIRED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

I, Scott F. Schenkel, certify that:

1. I have reviewed this report on Form 10-Q of eBay Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Scott F. Schenkel

Scott F. Schenkel

Senior Vice President, Chief Financial Officer

(Principal Financial Officer)

Date: April 26, 2016

EX-32.01

Exhibit 32.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER,

AS REQUIRED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

I, Devin N. Wenig, hereby certify pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(i) The accompanying quarterly report on Form 10-Q for the year ended March 31, 2016 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of eBay Inc.

/s/ Devin N. Wenig

Devin N. Wenig

President and Chief Executive Officer

(Principal Executive Officer)

Date: April 26, 2016

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of this report.

EX-32.02

Exhibit 32.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER,

AS REQUIRED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

I, Scott F. Schenkel, hereby certify pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(i) The accompanying quarterly report on Form 10-Q for the year ended March 31, 2016 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of eBay Inc.

/s/ Scott F. Schenkel

Scott F. Schenkel

Senior Vice President, Chief Financial Officer

(Principal Financial Officer)

Date: April 26, 2016

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of this report.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 22, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	EBAY INC
Entity Trading Symbol	EBAY
Entity Central Index Key	0001065088
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filer	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,148,904,240

XML

CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 2,686	$ 1,832
Short-term investments	5,327	4,299
Accounts receivable, net	599	619
Other current assets	1,091	1,154
Total current assets	9,703	7,904
Long-term investments	3,370	3,391
Property and equipment, net	1,497	1,554
Goodwill	4,519	4,451
Intangible assets, net	82	90
Other assets	437	365
Total assets	19,608	17,755
Current liabilities:
Short-term debt	6	0
Accounts payable	275	349
Accrued expenses and other current liabilities	1,651	1,736
Deferred revenue	115	106
Income taxes payable	60	72
Total current liabilities	2,107	2,263
Deferred and other tax liabilities, net	2,080	2,092
Long-term debt	9,030	6,749
Other liabilities	74	75
Total liabilities	$ 13,291	$ 11,179
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 3,580 shares authorized; 1,143 and 1,184 shares outstanding	$ 2	$ 2
Additional paid-in capital	14,627	14,538
Treasury stock at cost, 486 and 443 shares	(17,204)	(16,203)
Retained earnings	8,207	7,713
Accumulated other comprehensive income	685	526
Total stockholders’ equity	6,317	6,576
Total liabilities and stockholders’ equity	$ 19,608	$ 17,755

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock - par value (usd per share)	$ 0.001	$ 0.001
Common stock - shares authorized	3,580,000,000	3,580,000,000
Common stock - shares outstanding	1,143,000,000	1,184,000,000
Treasury stock - shares	486,000,000	443,000,000

XML

CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Net revenues	$ 2,137	$ 2,061
Cost of net revenues	477	411
Gross profit	1,660	1,650
Operating expenses:
Sales and marketing	538	519
Product development	239	221
General and administrative	209	302
Provision for transaction losses	52	69
Amortization of acquired intangible assets	8	10
Total operating expenses	1,046	1,121
Income from operations	614	529
Interest and other, net	(23)	10
Income from continuing operations before income taxes	591	539
Provision for income taxes	(109)	(90)
Income from continuing operations	482	449
Income from discontinued operations, net of income taxes	0	177
Net income	$ 482	$ 626
Income per share - basic:
Continuing operations (in usd per share)	$ 0.42	$ 0.37
Discontinued operations (in usd per share)	0.00	0.14
Net income per share - basic (usd per share)	0.42	0.51
Income per share - diluted:
Continuing operations (in usd per share)	0.41	0.37
Discontinued operations (in usd per share)	0.00	0.14
Net income per share - diluted (in usd per share)	$ 0.41	$ 0.51
Weighted average shares:
Basic (in shares)	1,159	1,216
Diluted (in shares)	1,170	1,229

XML

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 482	$ 626
Other comprehensive income (loss), net of reclassification adjustments:
Foreign currency translation gain (loss)	154	(265)
Unrealized gains (losses) on investments, net	23	(22)
Tax benefit (expense) on unrealized gains (losses) on investments, net	(21)	9
Unrealized gains (losses) on hedging activities, net	3	89
Tax benefit (expense) on unrealized gains (losses) on hedging activities, net	0	2
Other comprehensive income (loss), net of tax	159	(191)
Comprehensive income (loss)	$ 641	$ 435

XML

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 482	$ 626
Income from discontinued operations, net of income taxes	0	(177)
Adjustments:
Provision for transaction losses	52	69
Depreciation and amortization	167	160
Stock-based compensation	88	93
Changes in assets and liabilities, and other, net of acquisition effects	(148)	(270)
Net cash provided by continuing operating activities	641	501
Net cash provided by discontinued operating activities	0	650
Net cash provided by operating activities	641	1,151
Cash flows from investing activities:
Purchases of property and equipment	(158)	(96)
Purchases of investments	(2,935)	(2,420)
Maturities and sales of investments	2,030	2,019
Other	(12)	(1)
Net cash used in continuing investing activities	(1,075)	(498)
Net cash used in discontinued investing activities	0	(226)
Net cash used in investing activities	(1,075)	(724)
Cash flows from financing activities:
Proceeds from issuance of common stock	7	38
Repurchases of common stock	(1,001)	(1,000)
Excess tax benefits from stock-based compensation	1	20
Tax withholdings related to net share settlements of restricted stock units and awards	(8)	(51)
Proceeds from issuance of long-term debt, net	2,216	0
Other	7	0
Net cash provided by (used in) continuing financing activities	1,222	(993)
Net cash provided by discontinued financing activities	0	8
Net cash provided by (used) in financing activities	1,222	(985)
Effect of exchange rate changes on cash and cash equivalents	66	(297)
Net increase (decrease) in cash and cash equivalents	854	(855)
Cash and cash equivalents at beginning of period	1,832	6,328
Cash and cash equivalents at end of period	2,686	5,473
Less: Cash and cash equivalents of discontinued operations	0	2,367
Cash and cash equivalents of continuing operations at end of period	2,686	3,106
Supplemental cash flow disclosures:
Cash paid for interest	73	74
Cash paid for income taxes	$ 31	$ 101

XML

The Company and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

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, including our Marketplace, StubHub and Classifieds platforms. Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts and the eBay mobile apps. Our StubHub platforms include our online ticket platform located at www.stubhub.com and the StubHub mobile apps. Our Classifieds platforms include a collection of brands such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Classifieds and others. 

When we refer to “we,” “our,” “us” or “eBay” in this document, we mean the current Delaware corporation (eBay Inc.) and its California predecessor, as well as all of our consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

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, 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 using the cost method of accounting, and our share of the investees’ results of operations is included in our condensed consolidated statement of income to the extent dividends are received.

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, 2015. 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 fair presentation of the condensed consolidated financial statements for interim periods.

Recent Accounting Pronouncements

In 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. In 2016, the FASB issued additional guidance to clarify the implementation guidance. We are evaluating the impact of adopting the new accounting guidance on our consolidated financial statements.

In 2015, the FASB issued new guidance related to presentation of debt issuance costs. The new standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We adopted this standard retrospectively in the first quarter of 2016. The balance sheet as of December 31, 2015 was retrospectively adjusted, which resulted in reductions to other assets of $30 million and long-term debt of $30 million.

In 2016, the FASB issued new guidance related to accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

In 2016, the FASB issued new guidance related to accounting for leases. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

In 2016, the FASB issued new guidance to revise aspects of stock-based compensation guidance which include income tax consequences, classification of awards as equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

XML

Net Income Per Share

3 Months Ended

Mar. 31, 2016

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 periods indicated:

	Three Months Ended March 31,
	2016		2015
	(In millions, except per share amounts)
Numerator:
Income from continuing operations	$	482	$	449
Income from discontinued operations, net of income taxes	—		177
Net income	$	482	$	626
Denominator:
Weighted average shares of common stock - basic	1,159		1,216
Dilutive effect of equity incentive awards	11		13
Weighted average shares of common stock - diluted	1,170		1,229
Income per share - basic:
Continuing operations	$	0.42	$	0.37
Discontinued operations	—		0.14
Net income per share - basic	$	0.42	$	0.51
Income per share - diluted:
Continuing operations	$	0.41	$	0.37
Discontinued operations	—		0.14
Net income per share - diluted	$	0.41	$	0.51
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive	6		4

XML

Discontinued Operations

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On June 26, 2015, our Board approved the separation of PayPal through the distribution of 100% of the outstanding common stock of PayPal Holdings, Inc. ("PayPal") to our stockholders (the "Distribution"). To consummate the Distribution, our Board declared a pro rata dividend of PayPal Holdings, Inc. common stock to eBay’s stockholders of record as of the close of business on July 8, 2015 (the “Record Date”). Each eBay stockholder received one (1) share of PayPal Holdings, Inc. common stock for every share of eBay common stock held at the close of business on the Record Date. The Distribution occurred on July 17, 2015. Immediately following the Distribution, PayPal became an independent, publicly traded company and is listed on The NASDAQ Stock Market under the ticker “PYPL.” eBay continues to trade on The NASDAQ Stock Market under the ticker “EBAY.” We have classified the results of PayPal as discontinued operations in our consolidated statement of income for all periods presented. In connection with the Distribution, we reviewed our capital allocation strategy to ensure that each of PayPal and eBay would be well capitalized at Distribution. Pursuant to the terms of the separation and distribution agreement entered into between us and PayPal on June 26, 2015, upon Distribution, assets related to the PayPal business were transferred to, and liabilities related to the PayPal business were retained or assumed by, PayPal. As part of this strategy, we contributed approximately $3.8 billion of cash to PayPal in 2015.

During the second quarter of 2015, our Board approved a plan to sell the businesses underlying our former Enterprise segment (“Enterprise”). Based on the expected sales proceeds, we recorded a goodwill impairment of $786 million in the second quarter of 2015. On July 16, 2015, we signed a definitive agreement to sell Enterprise for $925 million and on November 2, 2015, the sale closed. We recorded a loss of $35 million upon closing included within income from discontinued operations, net of income taxes. We have classified the results of Enterprise as discontinued operations in our condensed consolidated statement of income for all periods presented.

The financial results of PayPal and Enterprise are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. The following table presents the combined financial results of PayPal and Enterprise for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016			2015
	(In millions)
Net revenues	$	—		$	2,387
Cost of net revenues	—			1,039
Gross profit	—			1,348
Operating expenses:
Sales and marketing	—			275
Product development	—			264
General and administrative	(2		)	363
Provision for transaction and loan losses	—			195
Amortization of acquired intangible assets	—			48
Total operating expenses	(2		)	1,145
Income from operations of discontinued operations	2			203
Interest and other, net	—			(2		)
Income from discontinued operations before income taxes	2			201
Provision for income taxes	(2		)	(24		)
Income from discontinued operations, net of income taxes	$	—		$	177

XML

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill

The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2016:

	December 31, 2015		Goodwill Acquired		Adjustments		March 31, 2016
	(In millions)
Goodwill	$	4,451	$	6	$	62	$	4,519

The adjustments to goodwill during the three months ended March 31, 2016 were due primarily to foreign currency translation.

Intangible Assets

The components of identifiable intangible assets are as follows: 

	March 31, 2016								December 31, 2015
	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)
	(In millions, except years)
Intangible assets:
Customer lists and user base	$	425	$	(408	)	$	17	5	$	419	$	(399	)	$	20	5
Marketing related	608		(586		)	22		5	594		(570		)	24		5
Developed technologies	244		(221		)	23		4	238		(215		)	23		4
All other	157		(137		)	20		4	157		(134		)	23		4
	$	1,434	$	(1,352	)	$	82		$	1,408	$	(1,318	)	$	90

Amortization expense for intangible assets was $12 million and $16 million for the three months ended March 31, 2016 and 2015, respectively.

Expected future intangible asset amortization as of March 31, 2016 is as follows (in millions):

Fiscal years:
Remaining 2016	$	35
2017	35
2018	11
2019	1
2020	—
Thereafter	—
	$	82

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Segments

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segments

Segments

We have one operating and reportable segment. Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

The following table sets forth the breakdown of net revenues by type for the periods presented:

	Three Months Ended March 31,
	2016		2015
	(In millions)
Net Revenues by Type:
Net transaction revenues:
Marketplace	$	1,500	$	1,536
StubHub	177		132
Total net transaction revenues	1,677		1,668
Marketing services and other revenues:
Marketplace	274		235
Classifieds	186		162
Corporate and other	—		(4		)
Total marketing services and other revenues	460		393
Total net revenues	$	2,137	$	2,061

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Investments

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Investments

Investments

At March 31, 2016 and December 31, 2015, the estimated fair value of our short-term and long-term investments classified as available for sale, were as follows:

	March 31, 2016
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Short-term investments:
Restricted cash	$	25	$	—	$	—		$	25
Corporate debt securities (1)	4,349		2		(56		)	4,295
Government and agency securities	50		—		—			50
Equity instruments	9		948		—			957
	$	4,433	$	950	$	(56	)	$	5,327
Long-term investments:
Corporate debt securities (1)	3,266		16		(42		)	3,240
	$	3,266	$	16	$	(42	)	$	3,240

(1) At March 31, 2016 investment securities with a fair value and an unrealized foreign exchange loss of $1.1 billion and $55 million, respectively, were held by a foreign subsidiary in which the U.S. Dollar is not the functional currency.

	December 31, 2015
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Short-term investments:
Restricted cash	$	28	$	—	$	—		$	28
Corporate debt securities	3,302		1		(16		)	3,287
Government and agency securities	55		—		—			55
Equity instruments	9		920		—			929
	$	3,394	$	921	$	(16	)	$	4,299
Long-term investments:
Corporate debt securities	3,327		7		(67		)	3,267
	$	3,327	$	7	$	(67	)	$	3,267

At March 31, 2016, investment securities in a continuous loss position for greater than 12 months had an estimated fair value and unrealized loss of $485 million and $35 million, respectively. At December 31, 2015, investment securities in a continuous loss position for greater than 12 months had an estimated fair value and unrealized loss of $769 million and $40 million, respectively. Refer to “Note 14 - 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 at March 31, 2016 are as follows:

	March 31, 2016
	(In millions)
One year or less (including restricted cash of $25)	$	4,369
One year through two years	1,476
Two years through three years	1,482
Three years through four years	242
Four years through five years	36
Five years through six years	—
Six years through seven years	—
Seven years through eight years	5
Eight years through nine years	—
Nine years through ten years	—
	$	7,610

Equity and cost method investments

We have made multiple equity and cost method investments which are reported in long-term investments on our condensed consolidated balance sheet. As of March 31, 2016 and December 31, 2015, our equity and cost method investments totaled $130 million and $124 million, respectively.

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Fair Value Measurement of Assets and Liabilities

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement of Assets and Liabilities

Fair Value Measurement of Assets and Liabilities

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015:

Description	Balance as of March 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	2,686	$	2,156	$	530
Short-term investments:
Restricted cash	25		25		—
Corporate debt securities	4,295		—		4,295
Government and agency securities	50		—		50
Equity instruments	957		957		—
Total short-term investments	5,327		982		4,345
Derivatives	190		—		190
Long-term investments:
Corporate debt securities	3,240		—		3,240
Total long-term investments	3,240		—		3,240
Total financial assets	$	11,443	$	3,138	$	8,305
Liabilities:
Derivatives	$	62	$	—	$	62

Description	Balance as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	1,832	$	1,664	$	168
Short-term investments:
Restricted cash	28		28		—
Corporate debt securities	3,287		—		3,287
Government and agency securities	55		—		55
Equity instruments	929		929		—
Total short-term investments	4,299		957		3,342
Derivatives	97		—		97
Long-term investments:
Corporate debt securities	3,267		—		3,267
Total long-term investments	3,267		—		3,267
Total financial assets	$	9,495	$	2,621	$	6,874
Liabilities:
Derivatives	$	25	$	—	$	25

Our financial assets and liabilities are valued using market prices on both active markets (level 1) and less active markets (level 2). 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. 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. We did not have any transfers of financial instruments between valuation levels during the three months ended March 31, 2016.

Cash and cash equivalents are short-term, highly liquid investments with original or remaining maturities of three months or less when purchased and are comprised primarily of bank deposits, certificates of deposit and commercial paper.

In addition, we had cost and equity method investments of approximately $130 million and $124 million included in long-term investments on our condensed consolidated balance sheet at March 31, 2016 and December 31, 2015, respectively.

Our derivative instruments vary in duration depending on contract type. Our foreign exchange derivative contracts are primarily short-term in nature, generally one month to one year in duration. Certain foreign currency contracts designated as cash flow hedges may have a duration of up to 18 months. The duration of our interest rate derivative contracts match the duration of the fixed rate notes due 2019, 2021 and 2024.

As of March 31, 2016 and December 31, 2015, we held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities.

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.

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Derivative Instruments

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Summary of 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. Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. To further limit credit risk, we also enter into collateral security arrangements related to certain interest rate derivative instruments whereby collateral is posted between counterparties if the fair value of the derivative instrument exceeds certain thresholds. Additional collateral would be required in the event of a significant credit downgrade by either party.

Foreign Exchange Contracts

We transact business in various foreign currencies and have significant international revenues as well as costs denominated in foreign currencies, which subjects us to foreign currency risk. We use foreign currency exchange contracts, primarily short-term in nature, generally one month to one year in duration but with maturities up to 18 months, to reduce the volatility of cash flows primarily related to forecasted revenues, expenses, assets and liabilities denominated in foreign currencies. 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. For derivative instruments that are designated as cash flow hedges, the effective portion of the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. We evaluate the effectiveness of our foreign exchange contracts on a quarterly basis. We do not use any foreign exchange contracts for trading purposes.

For our derivative instruments designated as cash flow hedges, the amounts recognized in earnings related to the ineffective portion were not material in each of the periods presented, and we did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. As of March 31, 2016, we have estimated that approximately $42 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.

Interest Rate Contracts

In connection with the July 2014 issuance of our fixed rate notes due 2019, 2021 and 2024, we entered into certain interest rate swap agreements that have 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. We have designated these swap agreements as qualifying hedging instruments and are accounting for them as fair value hedges. These transactions are characterized as fair value hedges for financial accounting purposes because they protect us against changes in the fair value of certain of our fixed rate borrowings due to benchmark interest rate movements. Changes in the fair values of these interest rate swap agreements are recognized in other assets or other liabilities with a corresponding increase or decrease in long-term debt. Each quarter we pay interest based on LIBOR plus a spread to the counterparty and on a semi-annual basis receive interest from the counterparty per the fixed rate of these senior notes. The net amount is recognized as interest expense in interest and other, net. The ineffective portion of the unrealized gains and losses on these contracts, if any, is recorded immediately in earnings. We evaluate the effectiveness of our contracts on a quarterly basis. We do not use any interest rate swap agreements for trading purposes.

For our derivative instruments designated as fair value hedges, the amounts recognized in earnings related to the ineffective portion were not material in each of the periods presented, and we did not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness.

Fair Value of Derivative Contracts

The fair values of our outstanding derivative instruments as of March 31, 2016 and December 31, 2015 were as follows:

	Balance Sheet Location	March 31, 2016		December 31, 2015
		(In millions)
Derivative Assets:
Foreign exchange contracts designated as cash flow hedges	Other Current Assets	$	54	$	42
Foreign exchange contracts not designated as hedging instruments	Other Current Assets	32		14
Interest rate contracts designated as fair value hedges	Other Assets	104		41
Total derivative assets		$	190	$	97
Derivative Liabilities:
Foreign exchange contracts designated as cash flow hedges	Other Current Liabilities	$	12	$	1
Foreign exchange contracts not designated as hedging instruments	Other Current Liabilities	50		24
Total derivative liabilities		$	62	$	25
Total fair value of derivative instruments		$	128	$	72

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, 2016, the potential effect of rights of set-off associated with the foreign exchange contracts discussed above would be an offset to both assets and liabilities by $56 million, resulting in net derivative assets and derivative liabilities of $30 million and $6 million, respectively. We are not required to pledge, nor are we entitled to receive, collateral related to our foreign exchange derivative transactions. As of March 31, 2016, we had neither pledged nor received collateral related to our interest rate derivative transactions.

Effect of Derivative Contracts on Accumulated Other Comprehensive Income

The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2016 and December 31, 2015, and the impact of these derivative contracts on accumulated other comprehensive income for the three months ended March 31, 2016: 

	December 31, 2015		Amount of gain (loss) recognized in other comprehensive income (effective portion)		Amount of gain (loss) reclassified from accumulated other comprehensive income to earnings (effective portion)		March 31, 2016
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	36	$	19	$	16	$	39

The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2015 and December 31, 2014, and the impact of these derivative contracts on accumulated other comprehensive income for the three months ended March 31, 2015:

	December 31, 2014		Amount of gain (loss) recognized in other comprehensive income (effective portion)		Amount of gain (loss) reclassified from accumulated other comprehensive income to earnings (effective portion)		March 31, 2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	41	$	45	$	20	$	66

Effect of Derivative Contracts on Condensed Consolidated Statement of Income

The following table provides the location in our financial statements of the recognized gains or losses related to our foreign exchange derivative instruments: 

	Three Months Ended March 31,
	2016			2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues and operating expenses	$	4		$	20
Foreign exchange contracts designated as cash flow hedges recognized in interest and other, net	12			—
Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net	(2		)	16
Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income	$	14		$	36

The following table provides the location in our financial statements of the recognized gains or losses related to our interest rate derivative instruments: 

	Three Months Ended March 31,
	2016			2015
	(In millions)
Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net	$	63		$	37
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net	(63		)	(37		)
Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income	$	—		$	—

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:

	March 31,
	2016		2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	1,542	$	489
Foreign exchange contracts not designated as hedging instruments	2,864		2,256
Interest rate contracts designated as fair value hedges	2,400		2,400
Total	$	6,806	$	5,145

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Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Debt

Debt

The following table summarizes the carrying value of our outstanding debt:

	Coupon		As of			Effective		As of			Effective
	Rate		March 31, 2016			Interest Rate		December 31, 2015			Interest Rate
	(In millions, except percentages)
Long-Term Debt
Floating Rate Notes:
Senior notes due 2017	LIBOR plus 0.20%		$	450		0.651	%	$	450		0.586	%
Senior notes due 2019	LIBOR plus 0.48%		400			0.853	%	400			0.825	%
Fixed Rate Notes:
Senior notes due 2017	1.350	%	1,000			1.456	%	1,000			1.456	%
Senior notes due 2018	2.500	%	750			2.775	%	—			—	%
Senior notes due 2019	2.200	%	1,150			2.346	%	1,150			2.346	%
Senior notes due 2020	3.250	%	500			3.389	%	500			3.389	%
Senior notes due 2021	2.875	%	750			2.993	%	750			2.993	%
Senior notes due 2022	3.800	%	750			3.989	%	—			—	%
Senior notes due 2022	2.600	%	1,000			2.678	%	1,000			2.678	%
Senior notes due 2024	3.450	%	750			3.531	%	750			3.531	%
Senior notes due 2042	4.000	%	750			4.114	%	750			4.114	%
Senior notes due 2056	6.000	%	750			6.547	%	—			—	%
Total senior notes			9,000					6,750
Hedge accounting fair value adjustments			104					41
Unamortized discount and debt issuance costs			(74		)			(42		)
Total long-term debt			$	9,030				$	6,749
Short-Term Debt
Other indebtedness			6					—
Total short-term debt			6					—
Total Debt			$	9,036				$	6,749

Senior Notes

In the three months ended March 31, 2016, we issued senior unsecured notes, or senior notes, in an aggregate principal amount of $2.25 billion. This consists of $750 million aggregate principal amount of 2.500% fixed rate notes due 2018, $750 million aggregate principal amount of 3.800% fixed rate notes due 2022 and $750 million aggregate principal amount of 6.000% fixed rate notes due 2056.

The floating rate notes are not redeemable prior to maturity. On and after March 1, 2021, we may redeem some or all of the 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 notes) occurs with respect to the 2.500% fixed rate notes due 2018, the 3.800% fixed rate notes due 2022 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.

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 debt 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.

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, during the three months ended March 31, 2016 and 2015 was approximately $50 million and $45 million, respectively. At March 31, 2016, the estimated fair value of these senior notes was approximately $8.9 billion.

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.

Commercial Paper

We have an up to $1.5 billion commercial paper program pursuant to which we may issue commercial paper notes with maturities of up to 397 days from the date of issue in an aggregate principal amount at maturity of up to $1.5 billion outstanding at any time. As of March 31, 2016, there were no commercial paper notes outstanding.

Credit Agreement

As of March 31, 2016, 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 therefore maintain $1.5 billion of 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. As a result, at March 31, 2016, $500 million of borrowing capacity was available for other purposes permitted by the credit agreement. The credit agreement includes customary representations, warranties, affirmative and negative covenants, including financial covenants, events of default and indemnification provisions in favor of the banks. The negative covenants include restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to certain exceptions. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio. The events of default include the occurrence of a change of control (as defined in the credit agreement) with respect to us.

We were in compliance with all covenants in our outstanding debt instruments for the three-month period ended March 31, 2016.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

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 arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are 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 10, 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, 2016. Except as otherwise noted for the proceedings described in this Note 10, 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.

Litigation

In March 2015, StubHub filed suit against Ticketmaster and the Golden State Warriors, alleging antitrust and various state law violations arising out of the defendants’ restrictive ticketing practices, which include prohibiting the resale of Warriors tickets on StubHub or any other non-Ticketmaster secondary exchange (StubHub, Inc. v. Golden State Warriors, LLC et al, N.D. Cal. No. 3:15-cv-01436). StubHub filed a First Amended Complaint on June 30, 2015. The defendants filed a Motion to Dismiss the Amended Complaint which was granted in November 2015. StubHub is appealing this decision.

Regulatory Proceedings

In May 2014, we publicly announced that criminals were able to penetrate our network and steal certain data, including user names, encrypted user passwords and other non-financial user data. Upon making this announcement, we required all buyers and sellers on our platform to reset their passwords in order to login to their account. In addition to making this public announcement, we proactively approached a number of regulatory and governmental bodies, including those with the most direct supervisory authority over our data privacy and data security programs, to specifically inform them of the incident and our actions to protect our customers in response. Certain of those regulatory agencies have requested us to provide further, more detailed information regarding the incident, and we believe that we have fully cooperated in all of those requests. To date, we have not been informed by any regulatory authority of an intention to bring any enforcement action arising from this incident; however, in the future we may be subject to fines or other regulatory action. In addition, in July 2014, a putative class action lawsuit was filed against us for alleged violations and harm resulting from the incident. The lawsuit was dismissed with leave to amend.

General Matters

Other 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 will increasingly 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 our companies 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 prices, rules, policies or agreements. Further, the number and significance of these disputes and inquiries are increasing 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 going forward. 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 the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations, including our standard marketing, promotions and application-programming-interface license agreements. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by a third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In certain cases, we have agreed to provide indemnification for intellectual property infringement. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively. 

Off-Balance Sheet Arrangements

As of March 31, 2016, 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, 2016, we had a total of $1.4 billion in cash withdrawals offsetting our $1.4 billion in Aggregate Cash Deposits held within the financial institution under the cash pooling arrangement.

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Stock Repurchase Programs

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Stock Repurchase Programs

Stock Repurchase Programs

In January 2015, our Board authorized an additional $2 billion stock repurchase program, with no expiration from the date of authorization. In June 2015, our Board authorized an additional $1 billion stock repurchase program, with no expiration from the date of authorization. The 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 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.  

The stock repurchase activity under our stock repurchase programs during the three months ended March 31, 2016 is summarized as follows:

	Shares Repurchased	Average Price per Share (1)		Value of Shares Repurchased	Remaining Amount Authorized
	(In millions, except per share amounts)
Balance as of January 1, 2016					$	1,836
Repurchase of shares of common stock	42	$	23.67	1,000	(1,000		)
Balance as of March 31, 2016					$	836

(1) Excludes broker commissions.

As of March 31, 2016, a total of approximately $836 million remained available for future repurchases of our common stock under our June 2015 stock repurchase program. These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. No repurchased shares of common stock have been retired.

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Stock-Based Plans

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Plans

Stock-Based Plans

Stock Option Activity

The following table summarizes stock option activity for the three months ended March 31, 2016:  

	Options
	(In millions)
Outstanding as of January 1, 2016	7
Granted and assumed	—
Exercised	—
Forfeited/expired/canceled	(1	)
Outstanding as of March 31, 2016	6

Restricted Stock Unit Activity

The following table summarizes restricted stock unit (“RSU”) activity for the three months ended March 31, 2016:  

	Units
	(In millions)
Outstanding as of January 1, 2016	36
Awarded and assumed	1
Vested	(1	)
Forfeited	—
Outstanding as of March 31, 2016	36

The weighted average grant date fair value for RSUs awarded during the period was $23.31 per share.

Stock-Based Compensation Expense

The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2016 and 2015 was as follows:

	Three Months Ended March 31,
	2016		2015
	(In millions)
Cost of net revenues	$	7	$	8
Sales and marketing	21		24
Product development	31		29
General and administrative	29		32
Total stock-based compensation expense	$	88	$	93
Capitalized in product development	$	3	$	3

Stock Option Valuation Assumptions

We calculated the fair value of each stock option award on the date of grant using the Black-Scholes option pricing model. The following weighted average assumptions were used for the three months ended March 31, 2015:  

	Three Months Ended March 31,
	2015
Risk-free interest rate	1.46	%
Expected life (in years)	4.4
Dividend yield	—	%
Expected volatility	27	%

An immaterial amount of stock options were granted during the three months ended March 31, 2016.

Our computation of expected volatility is based on a combination of historical and market-based implied volatility from traded options on our common stock. Our computation of expected life is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

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Income Taxes

3 Months Ended

Mar. 31, 2016

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 2003 to 2013 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 certain tax years after 2002 include, among others, the U.S. (Federal and California), France, Germany, Italy, Korea, Israel, Switzerland, Singapore, United Kingdom and Canada.

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. However, 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.

On July 27, 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion related 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. At this time, the U.S. Department of the Treasury has not withdrawn the requirement to include stock-based compensation from its regulations. 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, 2016. We will continue to monitor ongoing developments and potential impacts to our consolidated financial statements.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2016:

	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains on Investments			Foreign Currency Translation			Estimated tax (expense) benefit			Total
	(In millions)
Beginning balance	$	36	$	845		$	(45	)	$	(310	)	$	526
Other comprehensive income (loss) before reclassifications	19		18			154			(21		)	170
Amount of gain (loss) reclassified from accumulated other comprehensive income	16		(5		)	—			—			11
Net current period other comprehensive income	3		23			154			(21		)	159
Ending balance	$	39	$	868		$	109		$	(331	)	$	685

The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2015:

	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains on Investments			Foreign Currency Translation			Estimated tax (expense) benefit			Total
	(In millions)
Beginning balance	$	168	$	1,029		$	334		$	(360	)	$	1,171
Other comprehensive income (loss) before reclassifications	159		(23		)	(265		)	7			(122		)
Amount of gain (loss) reclassified from accumulated other comprehensive income	70		(1		)	—			—			69
Net current period other comprehensive income	89		(22		)	(265		)	7			(191		)
Ending balance	$	257	$	1,007		$	69		$	(353	)	$	980

The following table provides details about reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2016 and 2015:

Details about Accumulated Other Comprehensive Income Components	Affected Line Item in the Statement of Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income
		Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Gains (losses) on cash flow hedges - foreign exchange contracts	Cost of net revenues	$	2		$	6
	Sales and marketing	—			1
	Product development	2			11
	General and administrative	—			2
	Interest and other, net	12			—
	Total, from continuing operations before income taxes	16			20
	Provision for income taxes	—			—
	Total, from continuing operations net of income taxes	16			20
	Total, from discontinued operations net of income taxes	—			50
	Total, net of income taxes	16			70
Unrealized gains (losses) on investments	Interest and other, net	(5		)	(1		)
	Total, before income taxes	(5		)	(1		)
	Provision for income taxes	—			—
	Total, net of income taxes	(5		)	(1		)
Total reclassifications for the period	Total, net of income taxes	$	11		$	69

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Restructuring

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

In January 2015, at a regular meeting of our Board, our Board approved a plan to implement a strategic reduction of our existing global workforce. As a result, we reduced our workforce globally. The reduction was completed in the first half of 2015. The restructuring costs are aggregated in general and administrative expenses in the condensed consolidated statement of income.

No restructuring costs were recognized during the three months ended March 31, 2016. $60 million of restructuring costs were recognized during the three months ended March 31, 2015. No liability remained at March 31, 2016 for these restructuring costs.

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The Company and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

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, 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 using the cost method of accounting, and our share of the investees’ results of operations is included in our condensed consolidated statement of income to the extent dividends are received.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. In 2016, the FASB issued additional guidance to clarify the implementation guidance. We are evaluating the impact of adopting the new accounting guidance on our consolidated financial statements.

In 2015, the FASB issued new guidance related to presentation of debt issuance costs. The new standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We adopted this standard retrospectively in the first quarter of 2016. The balance sheet as of December 31, 2015 was retrospectively adjusted, which resulted in reductions to other assets of $30 million and long-term debt of $30 million.

In 2016, the FASB issued new guidance related to accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

In 2016, the FASB issued new guidance related to accounting for leases. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

In 2016, the FASB issued new guidance to revise aspects of stock-based compensation guidance which include income tax consequences, classification of awards as equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

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Net Income Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of basic and diluted net income per share

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

	Three Months Ended March 31,
	2016		2015
	(In millions, except per share amounts)
Numerator:
Income from continuing operations	$	482	$	449
Income from discontinued operations, net of income taxes	—		177
Net income	$	482	$	626
Denominator:
Weighted average shares of common stock - basic	1,159		1,216
Dilutive effect of equity incentive awards	11		13
Weighted average shares of common stock - diluted	1,170		1,229
Income per share - basic:
Continuing operations	$	0.42	$	0.37
Discontinued operations	—		0.14
Net income per share - basic	$	0.42	$	0.51
Income per share - diluted:
Continuing operations	$	0.41	$	0.37
Discontinued operations	—		0.14
Net income per share - diluted	$	0.41	$	0.51
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive	6		4

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Financial results of discontinued operations

The financial results of PayPal and Enterprise are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. The following table presents the combined financial results of PayPal and Enterprise for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016			2015
	(In millions)
Net revenues	$	—		$	2,387
Cost of net revenues	—			1,039
Gross profit	—			1,348
Operating expenses:
Sales and marketing	—			275
Product development	—			264
General and administrative	(2		)	363
Provision for transaction and loan losses	—			195
Amortization of acquired intangible assets	—			48
Total operating expenses	(2		)	1,145
Income from operations of discontinued operations	2			203
Interest and other, net	—			(2		)
Income from discontinued operations before income taxes	2			201
Provision for income taxes	(2		)	(24		)
Income from discontinued operations, net of income taxes	$	—		$	177

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill balances and adjustments by reportable segment

The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2016:

	December 31, 2015		Goodwill Acquired		Adjustments		March 31, 2016
	(In millions)
Goodwill	$	4,451	$	6	$	62	$	4,519

Schedule of identifiable intangible assets

The components of identifiable intangible assets are as follows: 

	March 31, 2016								December 31, 2015
	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)
	(In millions, except years)
Intangible assets:
Customer lists and user base	$	425	$	(408	)	$	17	5	$	419	$	(399	)	$	20	5
Marketing related	608		(586		)	22		5	594		(570		)	24		5
Developed technologies	244		(221		)	23		4	238		(215		)	23		4
All other	157		(137		)	20		4	157		(134		)	23		4
	$	1,434	$	(1,352	)	$	82		$	1,408	$	(1,318	)	$	90

Schedule of future intangible asset amortization

Expected future intangible asset amortization as of March 31, 2016 is as follows (in millions):

Fiscal years:
Remaining 2016	$	35
2017	35
2018	11
2019	1
2020	—
Thereafter	—
	$	82

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Segments (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Schedule of financial performance of reportable segments

The following table sets forth the breakdown of net revenues by type for the periods presented:

	Three Months Ended March 31,
	2016		2015
	(In millions)
Net Revenues by Type:
Net transaction revenues:
Marketplace	$	1,500	$	1,536
StubHub	177		132
Total net transaction revenues	1,677		1,668
Marketing services and other revenues:
Marketplace	274		235
Classifieds	186		162
Corporate and other	—		(4		)
Total marketing services and other revenues	460		393
Total net revenues	$	2,137	$	2,061

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Investments (Tables)

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Fair value of short and long-term investments classified as available for sale

At March 31, 2016 and December 31, 2015, the estimated fair value of our short-term and long-term investments classified as available for sale, were as follows:

	March 31, 2016
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Short-term investments:
Restricted cash	$	25	$	—	$	—		$	25
Corporate debt securities (1)	4,349		2		(56		)	4,295
Government and agency securities	50		—		—			50
Equity instruments	9		948		—			957
	$	4,433	$	950	$	(56	)	$	5,327
Long-term investments:
Corporate debt securities (1)	3,266		16		(42		)	3,240
	$	3,266	$	16	$	(42	)	$	3,240

(1) At March 31, 2016 investment securities with a fair value and an unrealized foreign exchange loss of $1.1 billion and $55 million, respectively, were held by a foreign subsidiary in which the U.S. Dollar is not the functional currency.

	December 31, 2015
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Short-term investments:
Restricted cash	$	28	$	—	$	—		$	28
Corporate debt securities	3,302		1		(16		)	3,287
Government and agency securities	55		—		—			55
Equity instruments	9		920		—			929
	$	3,394	$	921	$	(16	)	$	4,299
Long-term investments:
Corporate debt securities	3,327		7		(67		)	3,267
	$	3,327	$	7	$	(67	)	$	3,267

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 at March 31, 2016 are as follows:

	March 31, 2016
	(In millions)
One year or less (including restricted cash of $25)	$	4,369
One year through two years	1,476
Two years through three years	1,482
Three years through four years	242
Four years through five years	36
Five years through six years	—
Six years through seven years	—
Seven years through eight years	5
Eight years through nine years	—
Nine years through ten years	—
	$	7,610

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Fair Value Measurement of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of fair value of assets and liabilities measured on a recurring basis

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015:

Description	Balance as of March 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	2,686	$	2,156	$	530
Short-term investments:
Restricted cash	25		25		—
Corporate debt securities	4,295		—		4,295
Government and agency securities	50		—		50
Equity instruments	957		957		—
Total short-term investments	5,327		982		4,345
Derivatives	190		—		190
Long-term investments:
Corporate debt securities	3,240		—		3,240
Total long-term investments	3,240		—		3,240
Total financial assets	$	11,443	$	3,138	$	8,305
Liabilities:
Derivatives	$	62	$	—	$	62

Description	Balance as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	1,832	$	1,664	$	168
Short-term investments:
Restricted cash	28		28		—
Corporate debt securities	3,287		—		3,287
Government and agency securities	55		—		55
Equity instruments	929		929		—
Total short-term investments	4,299		957		3,342
Derivatives	97		—		97
Long-term investments:
Corporate debt securities	3,267		—		3,267
Total long-term investments	3,267		—		3,267
Total financial assets	$	9,495	$	2,621	$	6,874
Liabilities:
Derivatives	$	25	$	—	$	25

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of fair value of outstanding derivative instruments

The fair values of our outstanding derivative instruments as of March 31, 2016 and December 31, 2015 were as follows:

	Balance Sheet Location	March 31, 2016		December 31, 2015
		(In millions)
Derivative Assets:
Foreign exchange contracts designated as cash flow hedges	Other Current Assets	$	54	$	42
Foreign exchange contracts not designated as hedging instruments	Other Current Assets	32		14
Interest rate contracts designated as fair value hedges	Other Assets	104		41
Total derivative assets		$	190	$	97
Derivative Liabilities:
Foreign exchange contracts designated as cash flow hedges	Other Current Liabilities	$	12	$	1
Foreign exchange contracts not designated as hedging instruments	Other Current Liabilities	50		24
Total derivative liabilities		$	62	$	25
Total fair value of derivative instruments		$	128	$	72

Impact of derivative contracts on accumulated other comprehensive income

The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2016 and December 31, 2015, and the impact of these derivative contracts on accumulated other comprehensive income for the three months ended March 31, 2016: 

	December 31, 2015		Amount of gain (loss) recognized in other comprehensive income (effective portion)		Amount of gain (loss) reclassified from accumulated other comprehensive income to earnings (effective portion)		March 31, 2016
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	36	$	19	$	16	$	39

The following table summarizes the activity of derivative contracts that qualify for hedge accounting as of March 31, 2015 and December 31, 2014, and the impact of these derivative contracts on accumulated other comprehensive income for the three months ended March 31, 2015:

	December 31, 2014		Amount of gain (loss) recognized in other comprehensive income (effective portion)		Amount of gain (loss) reclassified from accumulated other comprehensive income to earnings (effective portion)		March 31, 2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	41	$	45	$	20	$	66

Recognized gains or losses related to derivative instruments

The following table provides the location in our financial statements of the recognized gains or losses related to our foreign exchange derivative instruments: 

	Three Months Ended March 31,
	2016			2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues and operating expenses	$	4		$	20
Foreign exchange contracts designated as cash flow hedges recognized in interest and other, net	12			—
Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net	(2		)	16
Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income	$	14		$	36

The following table provides the location in our financial statements of the recognized gains or losses related to our interest rate derivative instruments: 

	Three Months Ended March 31,
	2016			2015
	(In millions)
Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net	$	63		$	37
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net	(63		)	(37		)
Total gain (loss) recognized from interest rate derivative contracts in the condensed consolidated statement of income	$	—		$	—

Notional amounts of outstanding derivatives

The following table provides the notional amounts of our outstanding derivatives:

	March 31,
	2016		2015
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$	1,542	$	489
Foreign exchange contracts not designated as hedging instruments	2,864		2,256
Interest rate contracts designated as fair value hedges	2,400		2,400
Total	$	6,806	$	5,145

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Debt (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Carrying value of outstanding debt

The following table summarizes the carrying value of our outstanding debt:

	Coupon		As of			Effective		As of			Effective
	Rate		March 31, 2016			Interest Rate		December 31, 2015			Interest Rate
	(In millions, except percentages)
Long-Term Debt
Floating Rate Notes:
Senior notes due 2017	LIBOR plus 0.20%		$	450		0.651	%	$	450		0.586	%
Senior notes due 2019	LIBOR plus 0.48%		400			0.853	%	400			0.825	%
Fixed Rate Notes:
Senior notes due 2017	1.350	%	1,000			1.456	%	1,000			1.456	%
Senior notes due 2018	2.500	%	750			2.775	%	—			—	%
Senior notes due 2019	2.200	%	1,150			2.346	%	1,150			2.346	%
Senior notes due 2020	3.250	%	500			3.389	%	500			3.389	%
Senior notes due 2021	2.875	%	750			2.993	%	750			2.993	%
Senior notes due 2022	3.800	%	750			3.989	%	—			—	%
Senior notes due 2022	2.600	%	1,000			2.678	%	1,000			2.678	%
Senior notes due 2024	3.450	%	750			3.531	%	750			3.531	%
Senior notes due 2042	4.000	%	750			4.114	%	750			4.114	%
Senior notes due 2056	6.000	%	750			6.547	%	—			—	%
Total senior notes			9,000					6,750
Hedge accounting fair value adjustments			104					41
Unamortized discount and debt issuance costs			(74		)			(42		)
Total long-term debt			$	9,030				$	6,749
Short-Term Debt
Other indebtedness			6					—
Total short-term debt			6					—
Total Debt			$	9,036				$	6,749

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Stock Repurchase Programs (Tables)

3 Months Ended

Mar. 31, 2016

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, 2016 is summarized as follows:

	Shares Repurchased	Average Price per Share (1)		Value of Shares Repurchased	Remaining Amount Authorized
	(In millions, except per share amounts)
Balance as of January 1, 2016					$	1,836
Repurchase of shares of common stock	42	$	23.67	1,000	(1,000		)
Balance as of March 31, 2016					$	836

(1) Excludes broker commissions.

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Stock-Based Plans (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock option activity

The following table summarizes stock option activity for the three months ended March 31, 2016:  

	Options
	(In millions)
Outstanding as of January 1, 2016	7
Granted and assumed	—
Exercised	—
Forfeited/expired/canceled	(1	)
Outstanding as of March 31, 2016	6

Schedule of restricted stock unit activity

The following table summarizes restricted stock unit (“RSU”) activity for the three months ended March 31, 2016:  

	Units
	(In millions)
Outstanding as of January 1, 2016	36
Awarded and assumed	1
Vested	(1	)
Forfeited	—
Outstanding as of March 31, 2016	36

Schedule of stock-based compensation expense

The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2016 and 2015 was as follows:

	Three Months Ended March 31,
	2016		2015
	(In millions)
Cost of net revenues	$	7	$	8
Sales and marketing	21		24
Product development	31		29
General and administrative	29		32
Total stock-based compensation expense	$	88	$	93
Capitalized in product development	$	3	$	3

Stock option valuation assumptions

The following weighted average assumptions were used for the three months ended March 31, 2015:  

	Three Months Ended March 31,
	2015
Risk-free interest rate	1.46	%
Expected life (in years)	4.4
Dividend yield	—	%
Expected volatility	27	%

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Changes in accumulated balances of other comprehensive income

The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2016:

	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains on Investments			Foreign Currency Translation			Estimated tax (expense) benefit			Total
	(In millions)
Beginning balance	$	36	$	845		$	(45	)	$	(310	)	$	526
Other comprehensive income (loss) before reclassifications	19		18			154			(21		)	170
Amount of gain (loss) reclassified from accumulated other comprehensive income	16		(5		)	—			—			11
Net current period other comprehensive income	3		23			154			(21		)	159
Ending balance	$	39	$	868		$	109		$	(331	)	$	685

The following table summarizes the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2015:

	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains on Investments			Foreign Currency Translation			Estimated tax (expense) benefit			Total
	(In millions)
Beginning balance	$	168	$	1,029		$	334		$	(360	)	$	1,171
Other comprehensive income (loss) before reclassifications	159		(23		)	(265		)	7			(122		)
Amount of gain (loss) reclassified from accumulated other comprehensive income	70		(1		)	—			—			69
Net current period other comprehensive income	89		(22		)	(265		)	7			(191		)
Ending balance	$	257	$	1,007		$	69		$	(353	)	$	980

Reclassifications out of accumulated other comprehensive income

The following table provides details about reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2016 and 2015:

Details about Accumulated Other Comprehensive Income Components	Affected Line Item in the Statement of Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income
		Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Gains (losses) on cash flow hedges - foreign exchange contracts	Cost of net revenues	$	2		$	6
	Sales and marketing	—			1
	Product development	2			11
	General and administrative	—			2
	Interest and other, net	12			—
	Total, from continuing operations before income taxes	16			20
	Provision for income taxes	—			—
	Total, from continuing operations net of income taxes	16			20
	Total, from discontinued operations net of income taxes	—			50
	Total, net of income taxes	16			70
Unrealized gains (losses) on investments	Interest and other, net	(5		)	(1		)
	Total, before income taxes	(5		)	(1		)
	Provision for income taxes	—			—
	Total, net of income taxes	(5		)	(1		)
Total reclassifications for the period	Total, net of income taxes	$	11		$	69

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The Company and Summary of Significant Accounting Policies - (Details) - Accounting Standards Update 2015-03 $ in Millions	Dec. 31, 2015 USD ($)
Other Assets
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Debt issuance costs, adjustment for retrospective adoption	$ (30)
Long-term Debt
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Debt issuance costs, adjustment for retrospective adoption	$ 30

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Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator:
Income from continuing operations	$ 482	$ 449
Income from discontinued operations, net of income taxes	0	177
Net income	$ 482	$ 626
Denominator:
Weighted average shares of common stock - basic	1,159	1,216
Dilutive effect of equity incentive awards (in shares)	11	13
Weighted average shares of common stock - diluted	1,170	1,229
Income per share - basic:
Continuing operations (in usd per share)	$ 0.42	$ 0.37
Discontinued operations (in usd per share)	0.00	0.14
Net income per share - basic (usd per share)	0.42	0.51
Income per share - diluted:
Continuing operations (in usd per share)	0.41	0.37
Discontinued operations (in usd per share)	0.00	0.14
Net income per share - diluted (in usd per share)	$ 0.41	$ 0.51
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive (in shares)	6	4

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Discontinued Operations - Narrative (Details) - USD ($) $ in Millions		3 Months Ended	7 Months Ended
	Nov. 02, 2015	Jun. 30, 2015	Jul. 16, 2015	Jul. 17, 2015
Discontinued Operations, Disposed Of By Means Other Than Sale, Spinoff | PayPal
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents distributed to Paypal			$ 3,800
Discontinued Operations, Disposed Of By Means Other Than Sale, Spinoff | Common Stock | PayPal
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Spinoff, Distribution of outstanding common stock to existing stockholders, percentage				100.00%
Number of Paypal shares distributed for every share of eBay				1
Discontinued Operations, Disposed of by Sale | Enterprise
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill impairment		$ 786
Loss on sale of Enterprise	$ 35
Discontinued Operations, Held-for-sale | Enterprise
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal consideration			$ 925

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Discontinued Operations - Financial Results of Discontinued Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating expenses:
Income from discontinued operations, net of income taxes	$ 0	$ 177
Discontinued Operations
Financial Results
Net revenues	0	2,387
Cost of net revenues	0	1,039
Gross profit	0	1,348
Operating expenses:
Sales and marketing	0	275
Product development	0	264
General and administrative	(2)	363
Provision for transaction and loan losses	0	195
Amortization of acquired intangible assets	0	48
Total operating expenses	(2)	1,145
Income from operations of discontinued operations	2	203
Interest and other, net	0	(2)
Income from discontinued operations before income taxes	2	201
Provision for income taxes	(2)	(24)
Income from discontinued operations, net of income taxes	$ 0	$ 177

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Goodwill and Intangible Assets - Goodwill Balances and Adjustments (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Goodwill
Beginning Balance	$ 4,451
Goodwill Acquired	6
Adjustments	62
Ending Balance	$ 4,519

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Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Intangible Assets:
Gross Carrying Amount	$ 1,434		$ 1,408
Accumulated Amortization	(1,352)		(1,318)
Intangible Assets, Net	82		90
Amortization expense	12	$ 16
Customer lists and user base
Intangible Assets:
Gross Carrying Amount	425		419
Accumulated Amortization	(408)		(399)
Intangible Assets, Net	$ 17		$ 20
Weighted Average Useful Life (Years)	5 years		5 years
Marketing related
Intangible Assets:
Gross Carrying Amount	$ 608		$ 594
Accumulated Amortization	(586)		(570)
Intangible Assets, Net	$ 22		$ 24
Weighted Average Useful Life (Years)	5 years		5 years
Developed technologies
Intangible Assets:
Gross Carrying Amount	$ 244		$ 238
Accumulated Amortization	(221)		(215)
Intangible Assets, Net	$ 23		$ 23
Weighted Average Useful Life (Years)	4 years		4 years
All other
Intangible Assets:
Gross Carrying Amount	$ 157		$ 157
Accumulated Amortization	(137)		(134)
Intangible Assets, Net	$ 20		$ 23
Weighted Average Useful Life (Years)	4 years		4 years

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Goodwill and Intangible Assets - Intangible Asset Amortization Expense, Fiscal Year Maturity (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fiscal years:
Remaining 2016	$ 35
2017	35
2018	11
2019	1
2020	0
Thereafter	0
Intangible Assets, Net	$ 82	$ 90

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Segments (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) segment	Mar. 31, 2015 USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment	1
Number of reportable segments | segment	1
Segment Reporting Information [Line Items]
Total net transaction revenues	$ 1,677	$ 1,668
Total marketing services and other revenues	460	393
Total net revenues	2,137	2,061
Marketplace
Segment Reporting Information [Line Items]
Total net transaction revenues	1,500	1,536
Total marketing services and other revenues	274	235
StubHub
Segment Reporting Information [Line Items]
Total net transaction revenues	177	132
Classifieds
Segment Reporting Information [Line Items]
Total marketing services and other revenues	186	162
Corporate and other
Segment Reporting Information [Line Items]
Total marketing services and other revenues	$ 0	$ (4)

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Investments - Available-For-Sale Securities (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Investment securities in a continuous loss position for greater than 12 months, estimated fair value	$ 485	$ 769
Investment securities in a continuous loss position for greater than 12 months, estimated fair value, unrealized loss	35	40
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
One year or less (including restricted cash of $25)	4,369
One year through two years	1,476
Two years through three years	1,482
Three years through four years	242
Four years through five years	36
Five years through six years	0
Six years through seven years	0
Seven years through eight years	5
Eight years through nine years	0
Nine years through ten years	0
Estimated Fair Value	7,610
Corporate debt securities | Subsidiary | Non-US
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract]
Gross Unrealized Losses	(55)
Estimated Fair Value	1,100
Short-term Investments
Schedule of Available-for-sale Securities [Line Items]
Restricted cash	25	28
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract]
Gross Amortized Cost	4,433	3,394
Gross Unrealized Gains	950	921
Gross Unrealized Losses	(56)	(16)
Estimated Fair Value	5,327	4,299
Short-term Investments | Corporate debt securities
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract]
Gross Amortized Cost	4,349	3,302
Gross Unrealized Gains	2	1
Gross Unrealized Losses	(56)	(16)
Estimated Fair Value	4,295	3,287
Short-term Investments | Government and agency securities
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract]
Gross Amortized Cost	50	55
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	50	55
Short-term Investments | Equity instruments
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract]
Gross Amortized Cost	9	9
Gross Unrealized Gains	948	920
Gross Unrealized Losses	0	0
Estimated Fair Value	957	929
Long-Term Investment
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract]
Gross Amortized Cost	3,266	3,327
Gross Unrealized Gains	16	7
Gross Unrealized Losses	(42)	(67)
Estimated Fair Value	3,240	3,267
Long-Term Investment | Corporate debt securities
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract]
Gross Amortized Cost	3,266	3,327
Gross Unrealized Gains	16	7
Gross Unrealized Losses	(42)	(67)
Estimated Fair Value	$ 3,240	$ 3,267

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Investments - Cost and Equity Method Investments (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Long-Term Investment
Schedule of Equity Method Investments [Line Items]
Cost and equity method investments included in long-term investments	$ 130	$ 124

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Fair Value Measurement of Assets and Liabilities - Financial Assets and Liabilities Measured at Fair Value, Recurring and Nonrecurring (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Assets:
Derivatives	$ 190	$ 97
Liabilities:
Derivatives	6
Short-term Investments
Assets:
Investments	5,327	4,299
Long-term Investments
Assets:
Investments	3,240	3,267
Corporate debt securities | Short-term Investments
Assets:
Investments	4,295	3,287
Corporate debt securities | Long-term Investments
Assets:
Investments	3,240	3,267
Equity instruments | Short-term Investments
Assets:
Investments	957	929
Recurring
Assets:
Cash and cash equivalents	2,686	1,832
Total financial assets	11,443	9,495
Recurring | Short-term Investments
Assets:
Investments	5,327	4,299
Recurring | Other Current Assets
Assets:
Derivatives	190	97
Recurring | Long-term Investments
Assets:
Investments	3,240	3,267
Recurring | Other Current Liabilities
Liabilities:
Derivatives	62	25
Recurring | Restricted cash | Short-term Investments
Assets:
Investments	25	28
Recurring | Corporate debt securities | Short-term Investments
Assets:
Investments	4,295	3,287
Recurring | Corporate debt securities | Long-term Investments
Assets:
Investments	3,240	3,267
Recurring | Government and agency securities | Short-term Investments
Assets:
Investments	50	55
Recurring | Equity instruments | Short-term Investments
Assets:
Investments	957	929
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Cash and cash equivalents	2,156	1,664
Total financial assets	3,138	2,621
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term Investments
Assets:
Investments	982	957
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Current Assets
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) | Other Current Liabilities
Liabilities:
Derivatives	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Restricted cash | Short-term Investments
Assets:
Investments	25	28
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 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity instruments | Short-term Investments
Assets:
Investments	957	929
Recurring | Significant Other Observable Inputs (Level 2)
Assets:
Cash and cash equivalents	530	168
Total financial assets	8,305	6,874
Recurring | Significant Other Observable Inputs (Level 2) | Short-term Investments
Assets:
Investments	4,345	3,342
Recurring | Significant Other Observable Inputs (Level 2) | Other Current Assets
Assets:
Derivatives	190	97
Recurring | Significant Other Observable Inputs (Level 2) | Long-term Investments
Assets:
Investments	3,240	3,267
Recurring | Significant Other Observable Inputs (Level 2) | Other Current Liabilities
Liabilities:
Derivatives	62	25
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	4,295	3,287
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | Long-term Investments
Assets:
Investments	3,240	3,267
Recurring | Significant Other Observable Inputs (Level 2) | Government and agency securities | Short-term Investments
Assets:
Investments	50	55
Recurring | Significant Other Observable Inputs (Level 2) | Equity instruments | Short-term Investments
Assets:
Investments	$ 0	$ 0

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Fair Value Measurement of Assets and Liabilities - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Designated as Hedging Instrument | Minimum | Foreign Exchange Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative contract duration	1 month
Designated as Hedging Instrument | Maximum | Foreign Exchange Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative contract duration	1 year
Cash Flow Hedging | Designated as Hedging Instrument | Foreign Exchange Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative contract duration	18 months
Long-Term Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost and equity method investments included in long-term investments	$ 130	$ 124

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Derivative Instruments - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Jul. 31, 2014
Derivative [Line Items]
Net derivative gains to be reclassified into earnings within the next 12 months	$ 42
Offset asset	56
Offset liability	56
Net derivative assets	30
Net derivative liabilities	$ 6
Foreign Exchange Contract | Designated as Hedging Instrument | Cash Flow Hedging
Derivative [Line Items]
Derivative contract duration	18 months
Interest Rate Swap | Designated as Hedging Instrument | Fair Value Hedging
Derivative [Line Items]
Derivative liability	$ 2,400	$ 2,400
Minimum | Foreign Exchange Contract | Designated as Hedging Instrument
Derivative [Line Items]
Derivative contract duration	1 month
Maximum | Foreign Exchange Contract | Designated as Hedging Instrument
Derivative [Line Items]
Derivative contract duration	1 year

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Derivative Instruments - Fair Value of Derivative Contracts (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative assets	$ 190	$ 97
Derivative liabilities	62	25
Total fair value of derivative instruments	128	72
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative assets	32	14
Foreign Exchange Contract | Not Designated as Hedging Instrument | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	50	24
Cash Flow Hedging | Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative assets	54	42
Cash Flow Hedging | Foreign Exchange Contract | Designated as Hedging Instrument | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	12	1
Fair Value Hedging | Interest Rate Contract | Designated as Hedging Instrument | Other Assets
Derivatives, Fair Value [Line Items]
Derivative assets	$ 104	$ 41

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Derivative Instruments - Derivatives in Accumulated Other Comprehensive Income (Details) - Designated as Hedging Instrument - Foreign Exchange Contract - Cash Flow Hedging - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Effect of derivative Contracts on Accumulated Other Comprehensive Income
Beginning balance	$ 36	$ 41
Amount of gain (loss) recognized in other comprehensive income (effective portion)	19	45
Amount of gain (loss) reclassified from accumulated other comprehensive income to earnings (effective portion)	16	20
Ending balance	$ 39	$ 66

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Derivative Instruments - Effect of Derivative Contracts on Condensed Consolidated Statement of Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Foreign Exchange Contract
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income	$ 14	$ 36
Foreign Exchange Contract | Cost of Net Revenues and Operating Expenses | 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	4	20
Foreign Exchange Contract | Interest and Other, Net | 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	12	0
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	(2)	16
Interest Rate Contract | Interest and Other, Net | Designated as Hedging Instrument | Fair Value Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized from derivative contracts in the condensed consolidated statement of income	0	0
Gain (loss) from interest rate contracts designated as fair value hedges recognized in interest and other, net	63	37
Gain (loss) from hedged items attributable to hedged risk recognized in interest and other, net	$ (63)	$ (37)

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Derivative Instruments - Notional Amounts of Derivatives Outstanding (Details) - USD ($) $ in Millions	Mar. 31, 2016	Mar. 31, 2015
Derivatives, Fair Value [Line Items]
Notional amount	$ 6,806	$ 5,145
Foreign Exchange Contract | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount	2,864	2,256
Cash Flow Hedging | Foreign Exchange Contract | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount	1,542	489
Fair Value Hedging | Interest Rate Contract | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount	$ 2,400	$ 2,400

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Debt - Carrying Value of Outstanding Debt (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Long-Term Debt
Hedge accounting fair value adjustments	$ 104	$ 41
Unamortized discount and debt issuance costs	(74)	(42)
Total long-term debt	9,030	6,749
Short-Term Debt
Other indebtedness	6	0
Short-term debt	6	0
Total Debt	9,036	6,749
Senior Notes
Long-Term Debt
Total senior notes	9,000	6,750
Senior Notes | Floating rate, Senior notes due 2017
Long-Term Debt
Total senior notes	$ 450	$ 450
Effective interest rate	0.651%	0.586%
Senior Notes | Floating rate, Senior notes due 2019
Long-Term Debt
Total senior notes	$ 400	$ 400
Effective interest rate	0.853%	0.825%
Senior Notes | 1.350% Senior notes due 2017
Long-Term Debt
Coupon rate, fixed rate notes	1.35%
Total senior notes	$ 1,000	$ 1,000
Effective interest rate	1.456%	1.456%
Senior Notes | 2.500% Senior notes due 2018
Long-Term Debt
Coupon rate, fixed rate notes	2.50%
Total senior notes	$ 750	$ 0
Effective interest rate	2.775%	0.00%
Senior Notes | 2.200% Senior notes due 2019
Long-Term Debt
Coupon rate, fixed rate notes	2.20%
Total senior notes	$ 1,150	$ 1,150
Effective interest rate	2.346%	2.346%
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 | 2.875% Senior notes due 2021
Long-Term Debt
Coupon rate, fixed rate notes	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	$ 0
Effective interest rate	3.989%	0.00%
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 | 3.450% Senior notes due 2024
Long-Term Debt
Coupon rate, fixed rate notes	3.45%
Total senior notes	$ 750	$ 750
Effective interest rate	3.531%	3.531%
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	$ 0
Effective interest rate	6.547%	0.00%
LIBOR | Senior Notes | Floating rate, Senior notes due 2017
Long-Term Debt
Coupon rate, floating rate notes	0.20%
LIBOR | Senior Notes | Floating rate, Senior notes due 2019
Long-Term Debt
Coupon rate, floating rate notes	0.48%

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Debt - Senior Notes (Details) - USD ($)		3 Months Ended
	Mar. 31, 2016	Mar. 31, 2016	Mar. 31, 2015	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		$ 2,400,000,000
Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount	$ 2,250,000,000.00	2,250,000,000.00
Redemption price, percentage, in the event of change of control	101.00%
Interest expense		50,000,000	$ 45,000,000
Fair value of long-term debt	$ 8,900,000,000	8,900,000,000
Senior Notes | 2.500% Senior notes due 2018
Debt Instrument [Line Items]
Aggregate principal amount	$ 750,000,000	$ 750,000,000
Coupon rate, fixed rate notes	2.50%	2.50%
Senior Notes | 3.800% Senior notes due 2022
Debt Instrument [Line Items]
Aggregate principal amount	$ 750,000,000	$ 750,000,000
Coupon rate, fixed rate notes	3.80%	3.80%
Senior Notes | 6.000% Senior notes due 2056
Debt Instrument [Line Items]
Aggregate principal amount	$ 750,000,000	$ 750,000,000
Coupon rate, fixed rate notes	6.00%	6.00%
Redemption price, percentage	100.00%

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Debt - Commercial Paper and Credit Agreement (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)
Line of Credit
Debt Instrument [Line Items]
Amount outstanding	$ 0
Maximum borrowing capacity	2,000,000,000
Remaining borrowing capacity	500,000,000
Commercial Paper
Debt Instrument [Line Items]
Commercial paper program	$ 1,500,000,000
Debt term	397 days
Borrowing capacity reserved, commercial paper	$ 1,500,000,000.0
Amount outstanding	$ 0

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Commitments and Contingencies (Details) $ in Billions	Mar. 31, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Pooling arrangement withdrawals	$ 1.4
Pooling arrangement deposits	$ 1.4

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Stock Repurchase Programs - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended		3 Months Ended
	Jun. 30, 2015	Jan. 31, 2015	Mar. 31, 2016	Dec. 31, 2015
Equity, Class of Treasury Stock [Line Items]
Stock repurchase remaining amount authorized			$ 836	$ 1,836
Treasury shares retired (in shares)			0
Stock Repurchase Program January 2015
Equity, Class of Treasury Stock [Line Items]
Authorization of additional plan		$ 2,000
Stock Repurchase Program June 2015
Equity, Class of Treasury Stock [Line Items]
Authorization of additional plan	$ 1,000

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Stock Repurchase Programs - Summary of Stock Repurchase Activity (Details) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Equity [Abstract]
Shares Repurchased (in shares) | shares	42
Average Price per Share (in usd per share) | $ / shares	$ 23.67
Value of Shares Repurchased	$ 1,000
Shares Repurchased, Remaining Amount Authorized
Beginning balance	1,836
Repurchase of shares of common stock	(1,000)
Ending balance	$ 836

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Stock-Based Plans - Stock Option Activity (Details) - Stock Options shares in Millions	3 Months Ended
	Mar. 31, 2016 shares
Stock Option Activity
Stock options outstanding, beginning of period (in shares)	7
Granted and assumed (in shares)	0
Exercised (in shares)	0
Forfeited/expired/canceled (in shares)	(1)
Stock options outstanding, end of period (in shares)	6

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Stock-Based Plans - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) shares in Millions	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Restricted Stock Unit Activity
Restricted stock options outstanding, beginning of period (in shares)	36
Awarded and assumed (in shares)	1
Vested (in shares)	(1)
Forfeited (in shares)	0
Restricted stock options outstanding, end of period (in shares)	36
Weighted average grant date fair value (usd per share) | $ / shares	$ 23.31

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Stock-Based Plans - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 88	$ 93
Cost of net revenues
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	7	8
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	21	24
Product development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	31	29
Capitalized in product development	3	3
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 29	$ 32

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Stock-Based Plans - Valuation Assumptions (Details)	3 Months Ended
	Mar. 31, 2015
Weighted Average Assumptions [Abstract]
Risk-free interest rate	1.46%
Expected life (in years)	4 years 4 months 24 days
Dividend yield	0.00%
Expected volatility	27.00%

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Accumulated Other Comprehensive Income - Changes in Accumulated Balances of Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss), Tax
Accumulated other comprehensive income (loss), estimated tax (expense) benefit, beginning balance	$ (310)	$ (360)
Other comprehensive income (loss) before reclassifications, tax	(21)	7
Amount of gain (loss) reclassified from accumulated other comprehensive income, tax	0	0
Net current period other comprehensive income, tax	(21)	7
Accumulated other comprehensive income (loss), estimated tax (expense) benefit, ending balance	(331)	(353)
Accumulated Other Comprehensive Income (Loss), Net of Tax
Beginning balance	6,576
Other comprehensive income (loss) before reclassifications	170	(122)
Amount of gain (loss) reclassified from accumulated other comprehensive income	11	69
Other comprehensive income (loss), net of tax	159	(191)
Ending balance	6,317
Accumulated other comprehensive income
Accumulated Other Comprehensive Income (Loss), Net of Tax
Beginning balance	526	1,171
Ending balance	685	980
Unrealized Gains (Losses) on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss), Before Tax
Accumulated other comprehensive income (loss), before tax, beginning balance	36	168
Other comprehensive income (loss), before reclassifications, before tax	19	159
Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax	16	70
Net current period other comprehensive income , before tax	3	89
Accumulated other comprehensive income (loss), before tax, ending balance	39	257
Unrealized Gains on Investments
Accumulated Other Comprehensive Income (Loss), Before Tax
Accumulated other comprehensive income (loss), before tax, beginning balance	845	1,029
Other comprehensive income (loss), before reclassifications, before tax	18	(23)
Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax	(5)	(1)
Net current period other comprehensive income , before tax	23	(22)
Accumulated other comprehensive income (loss), before tax, ending balance	868	1,007
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss), Before Tax
Accumulated other comprehensive income (loss), before tax, beginning balance	(45)	334
Other comprehensive income (loss), before reclassifications, before tax	154	(265)
Amount of gain (loss) reclassified from accumulated other comprehensive income, before tax	0	0
Net current period other comprehensive income , before tax	154	(265)
Accumulated other comprehensive income (loss), before tax, ending balance	$ 109	$ 69

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Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of net revenues	$ (477)	$ (411)
Sales and marketing	(538)	(519)
Product development	(239)	(221)
General and administrative	(209)	(302)
Interest and other, net	(23)	10
Income from continuing operations before income taxes	591	539
Provision for income taxes	(109)	(90)
Income from continuing operations	482	449
Total, from discontinued operations net of income taxes	0	177
Net income	482	626
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	11	69
Unrealized Gains on Investments | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest and other, net	(5)	(1)
Income from continuing operations before income taxes	(5)	(1)
Provision for income taxes	0	0
Net income	(5)	(1)
Foreign Exchange Contract | Unrealized Gains (Losses) on Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of net revenues	2	6
Sales and marketing	0	1
Product development	2	11
General and administrative	0	2
Interest and other, net	12	0
Income from continuing operations before income taxes	16	20
Provision for income taxes	0	0
Income from continuing operations	16	20
Total, from discontinued operations net of income taxes	0	50
Net income	$ 16	$ 70

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Restructuring (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring and Related Activities [Abstract]
Restructuring costs	$ 0	$ 60,000,000
Accrued liability	$ 0