eBay 2002 Annual Report Download - page 110
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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
The following table sets forth the computation of basic and diluted net income per share for the
periods indicated (in thousands, except per share amounts):
Year Ended December 31,
2000 2001 2002
Numerator:
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 48,294 $ 90,448 $249,891
Denominator:
Weighted average common sharesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 266,826 272,567 287,680
Weighted average restricted common stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (15,050) (3,596) (184)
Denominator for basic calculation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 251,776 268,971 287,496
Weighted average eÅect of dilutive securities:
WarrantsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 93 Ì Ì
Weighted average restricted common stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,050 3,596 184
Employee stock options ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,427 8,028 5,140
Denominator for diluted calculation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 280,346 280,595 292,820
Net income per share:
Basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.19 $ 0.34 $ 0.87
Diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.17 $ 0.32 $ 0.85
Note 3 Ì Business Combinations, Goodwill and Intangible Assets
During 2001 and 2002, we completed a number of purchase acquisitions that are summarized as
follows (in thousands):
Post Net IdentiÑable Deferred Aggregate
Acquisition Acquisition Tangible Intangible Tax Unearned Minority Purchase
Company Name Date Ownership Assets Assets Liabilities Compensation Goodwill Interest Price
Internet Auction ÏÏ February 2001 50.1% $ 67,670 $ 9,000 $ (3,600) $ Ì $ 82,691 $(33,834) $ 121,927
iBazar ÏÏÏÏÏÏÏÏÏÏ May 2001 100% 4,696 2,140 (856) Ì 119,606 Ì 125,586
Billpoint ÏÏÏÏÏÏÏÏ January 2002 100% 6,643 1,750 (700) Ì 35,848 Ì 43,541
EachNetÏÏÏÏÏÏÏÏ March 2002 38% 9,379 2,280 (912) Ì 19,253 Ì 30,000
NeoComÏÏÏÏÏÏÏÏ April 2002 100% 1,446 165 (66) Ì 9,760 Ì 11,305
PayPal ÏÏÏÏÏÏÏÏÏ October 2002 100% 104,965 277,000 (34,958) 9,943 1,135,554 Ì 1,492,504
eBay Australia
and New
Zealand ÏÏÏÏÏÏ October 2002 100% 444 4,650 (1,860) Ì 62,266 Ì 65,500
Total ÏÏÏÏÏÏÏÏÏÏÏ $195,243 $296,985 $(42,952) $9,943 $1,464,978 $(33,834) $1,890,363
Tangible net assets were valued at their respective carrying amounts as we believe that these amounts
approximated their current fair values at the respective acquisition dates. The valuation of identiÑable
intangible assets acquired was based on management's estimates using a valuation report prepared by an
independent third-party valuation consultant. Such assets consist of developed technologies, customer lists,
trade names and other acquired intangible assets including contractual agreements. IdentiÑable intangible
assets are amortized using the straight-line method over the estimated useful lives of three years to seven
years. We believe the straight-line method of amortization best represents the distribution of the economic
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