8/11/2019 eBay Investor Deck Final
1/18
Investor Presentation
September 30, 2014
8/11/2019 eBay Investor Deck Final
2/18
1
This communication contains forward-looking statements relating to, among other things, the planned separation of eBay Inc.s Marketplaces andPayPal businesses and the future performance of eBay Inc. and its consolidated subsidiaries that are based on the company's current expectations,forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, the completion and timing of any such
separation, the future performance of the Marketplaces and PayPal businesses on a standalone business if the separation is completed, and the futuregrowth of mobile payments and mobile commerce. Actual results could differ materially from those predicted or implied and reported results should notbe considered as an indication of future performance. There is no assurance as to the timing of the spin-off or whether it will be completed. Otherfactors that could cause or contribute to such differences include, but are not limited to: whether the operational, marketing and strategic benefits of theseparation can be achieved; whether the costs and expenses of the separation can be controlled within expectations; changes in political, business andeconomic conditions, any European, Asian or general economic downturn or crisis (including any economic disruption or sanctions related to Ukraineor Russia) and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates; our need to successfully react to theincreasing importance of mobile payments and mobile commerce and the increasing social aspect of commerce; our ability to dea l with the increasinglycompetitive ecommerce environment, including competition for sellers from other trading sites and other means of selling, and competition for buyersfrom other merchants, online and offline; changes to capital allocation or management of operating cash; our need to manage an increasingly largeenterprise with a broad range of businesses of varying degrees of maturity and in many different geographies; the effect of management changes andbusiness initiatives; our need and ability to manage other regulatory, tax and litigation risks as services are offered in more jurisdictions and applicablelaws become more restrictive; any changes to product offerings; the competitive, regulatory, payment card association-related and other risks specificto PayPal and Bill Me Later, especially as PayPal continues to expand geographically and introduce new products and as new laws and regulationsrelated to financial services companies come into effect; our ability to t imely upgrade and develop technology systems, infrastructure and customerservice capabilities at reasonable cost; our ability to maintain site stability and performance on all sites while adding new products and features in atimely fashion; and our ability to profitably integrate, manage and grow businesses that have been acquired or may be acquired in the future. Theforward-looking statements in this communication do not include the potential impact of any acquisitions or divestitures that may be announced and/orcompleted after the date hereof.
More information about factors that could affect our operating results is included under the captions Risk Factors and Management's Discussion andAnalysis of Financial Condition and Results of Operations in eBay Inc.s most recent annual report on Form 10-K and subsequent quarterly reports onForm 10-Q, copies of which may be obtained by visiting the eBay Inc. Investor Relations website at http://investor.ebayinc.comor the SECs website atwww.sec.gov. All information in this communication is as of the date hereof. Undue reliance should not be placed on the forward-looking statements inthis communication, which are based on information available to eBay Inc. on the date hereof. eBay Inc. assumes no obligation to update suchstatements, except as required by law.
Forward-Looking Statements
http://investor.ebayinc.com/http://www.sec.gov/http://www.sec.gov/http://investor.ebayinc.com/8/11/2019 eBay Investor Deck Final
3/18
2
Table of Contents
The Announcement and Journey
The Decision Framework
Two Great Businesses
Transaction Details
8/11/2019 eBay Investor Deck Final
4/18
3
The Announcement
eBays board has approved a plan to separate eBay into two independent
publicly-traded companies
The transaction creates two pure-play industry leaders, each withsignificant scale and reach, in commerce and payments
Led by two world-class management teams, eBay and PayPal will carryforward our focus on innovation and strong commitment to our customers
A tax-free spin is expected to be completed in the second half of 2015,subject to market, regulatory and certain other conditions
eBay
Global Commerce
Leader LTM Revenue: $9.9bn
10% YoY Revenue Growth
Segment Margin: 35%
PayPal
Global Payments
Leader
LTM Revenue: $7.2bn
19% YoY Revenue Growth
Segment Margin: 25%
Note: eBay metrics includes Marketplaces and Enterprise segments. Last Twelve Months from Q3 2013 to Q2 2014.
8/11/2019 eBay Investor Deck Final
5/18
4
Weve Built A Powerful Company
$B
PayPalAcquired
Revenue
$ 0.61$ 0.22 $ 1.05 $ 1.71 $ 1.73 $ 2.36Non-GAAP
EPS
PayPal
eBay
25%
Note: CAGRs calculated from 2002 to Last Twelve Months. Last Twelve Months from Q3 2013 to Q2 2014.
$ 2.83
CAGR
46%
26%
$0.1 $0.7 $ 1.4$ 2.4
$ 3.4$ 5.6
$ 7.2
$ 1.2
$ 3.3
$ 6.0
$ 8.5
$ 9.2
$ 14.1
$ 17.0
2002 2004 2006 2008 2010 2012 Last Twelve
Months
8/11/2019 eBay Investor Deck Final
6/18
5
$ 30
$ 145
2008 Last Twelve
Months
BuyerProtection
That Benefited from Mutually Reinforcing Effects, andCreated a Growth Business Off-eBay
Flywheel Effects on-eBay Helped PayPal Grow Off-
eBay
Today, Off-eBay Greater
than 70% of PayPal Volume
MoreGMV
Users
Share ofCheckout
Volume MoreTPV
EasyCheckout
Credit
Cross-BorderTrade
DATATransactionBehavioral
CustomerRisk
$B $B
CAGR: 33%
Merchant Services TPV
Note: CAGRs calculated from 2008 to Last Twelve Months. Last Twelve Months from Q3 2013 to Q2 2014.
Off-eBay Merchant Services
On-eBay
% Off-eBay
49 % 71%
$ 30
$ 145
$ 30
$ 58
$ 60
$ 203
2008 Last Twelve
Months
8/11/2019 eBay Investor Deck Final
7/18
6
Leading to Thoughtful Portfolio Analysis Over Time
Careful consideration of corporate structure over long periodwith board
Keen eye on industry landscapes
Refined situational and operational analysis
On-going dialogue with broad group of investors
8/11/2019 eBay Investor Deck Final
8/18
8/11/2019 eBay Investor Deck Final
9/18
8
Two Powerful Industry Leaders
Business Overview
Marketplaces: Connectingcommerce globally
Enterprise: Solutions forretailers to compete in an omni-channel world
The way to pay across online,mobile and offline
Key Brands
Competitive Position Commerce leader with unique
capabilities across productselection, global distributionand omni-channel technology
Payments leader withunmatched paymentsplatform, global scale andrisk management
8/11/2019 eBay Investor Deck Final
10/18
9
6072
92
119
145
180
203
3040
57
78
97
125
145
2008 2009 2010 2011 2012 2013 Last
Twelve
Months
33%
Creating the Defining Pure Play Online Payments Leader
The Only Digital Payments Platform With Scale
A Pre-eminent Global Growth Platform
Note: CAGRs calculated from 2008 to Last Twelve Months. Last Twelve Months from Q3 2013 to Q2 2014.
The digitization ofpayments has arrived
PayPal is the unquestionedtechnology and paymentsleader
Unique global scale, trusted
brand, and risk platform Accelerating volume growth
with massive opportunitiesacross online, offline, andmobile
Strategically positioned at
the center of the dynamicpayments landscape
with Tremendous Opportunity
25%
Off-eBay TPV
TPV
CAGR
$B
8/11/2019 eBay Investor Deck Final
11/18
10
World Class LeadersPost Separation
Devin WenigChief Executive
Officer, eBay
Dan SchulmanChief ExecutiveOfficer, PayPal
President of eBay Marketplaces sinceSeptember 2011
CEO of Thomson Reuters Markets from April2008 to August 2011
Senior Vice President and CFO of eBayMarketplaces
7 years at eBay, 5 years as Marketplaces CFO 15 years at GE
Senior Vice President and CFO of PayPal Joined as CFO of PayPal in 2010 CFO of Sitel Worldwide, BJC Healthcare 20 years at GE
Scott SchenkelChief Financial
Officer, eBay
Patrick DupuisActing
Chief FinancialOfficer, PayPal
Joined eBay in 2014, formerly EnterpriseGrowth Group President at American Express
Senior Executive and CEO Roles at AT&T,Sprint, Priceline, Virgin Mobile
8/11/2019 eBay Investor Deck Final
12/18
11
Leadership of the integrated portfolio until separation
Best positioned to provide unbiased, informed, and objective separation
decisions: operating agreements, capital structure, governancewhileminimizing business unit distractions
Continuing guidance through board role at one or both of eBay and PayPal
Bob Swan
Chief Financial Officer, eBay
John Donahoe
Chief Executive Officer, eBay
Leadership to Maximize Value to All Shareholders
8/11/2019 eBay Investor Deck Final
13/18
Transaction Details
8/11/2019 eBay Investor Deck Final
14/18
13
Two Compelling Financial Profiles
Transaction Volume(LTM)
Transaction VolumeGrowth (LTM)
Revenue (LTM)
Revenue Growth(LTM)
Segment Margin
Global Installed Base
$9.9B $7.2B10% 19%
35% 25%
Rare combination of growth,margins and free cash flow
Leading online paymentscompany with accelerating growth
$203BTPV$85BGMV + GMS
Note: eBay metrics includes Marketplaces and Enterprise segments. Last Twelve Months from Q3 2013 to Q2 2014.
149MActive buyers
152MActive accounts
13% 26%
New
8/11/2019 eBay Investor Deck Final
15/18
14
Mutual Benefits Can Be Optimized with OperatingAgreements and Capital Structure Decisions
Scale andGrowth
Data InnovationLow CostFunding
Addressed with OperatingAgreements
Addressed withAppropriate
Capital Structure
Today, PayPal benefits from
from eBays
users and GMVfrom eBaysTransactions
enabled byeBays platform
from eBaysBalance Sheet
8/11/2019 eBay Investor Deck Final
16/18
15
Transaction Overview
TransactionStructure Tax-free spinoff to eBay shareholders
Timing Separation expected to be completed in the second half of 2015
Subject to market, regulatory and certain other conditions
Key Steps toCompletion
ClosingConditions
Final approval by eBay board of directors Favorable opinion and/or rulings on tax-free nature of transaction
Effectiveness of Form-10 registration statement filed with the SEC
Other customary conditions
Operating Agreements /Transition Services Agreement
Organizational Structure
Stand-alone FinancialStatements / Audits
SECReview Process Board Approval
Capital Structure
8/11/2019 eBay Investor Deck Final
17/18
16
Separation Details
Both companies will be capitalized with strong balance sheetswith expected investment grade ratings
Current debt is expected to remain at new eBay
Both companies are expected to incur one-time charges relatedto the transaction preceding the separation
Minimal cost dis-synergies are anticipated on an ongoing basis
CapitalStructure
Cost ofSeparation
Optimize historical mutual benefits; minimize dis-synergies,position business unit for success
Will put in place long-term, arms-length operating agreements
Key terms to include presence, take rate, IP, data-sharing, andmechanisms to amend the agreement
OperatingAgreements
8/11/2019 eBay Investor Deck Final
18/18
17
Transformational Milestone
Accelerating pace of change in payments and commerce separationbest positions each business to capitalize on growth opportunities
Makes us more agile and focused to bring targeted innovation
Reflects confidence we can preserve relationships and avoid dis-
synergies through arms-length operating agreements
Enables optimal capital structures to match specific business unitneeds
Provides investors direct exposure to pure play commerce andpayments businesses
A Time for Focus and Agility to Compete and Win
Recommended