eBay 2002 Annual Report Download - page 114

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
quarter of 2003. During the fourth quarter of 2002, we discontinued PayPal's online gaming payment
processing. During the year ended December 31, 2002, revenues generated from PayPal's online gambling
payment processing, including revenues generated prior to our acquisition of PayPal on October 3, 2002,
represented 6% of PayPal's total revenues for 2002. Included in the PayPal purchase price allocation as of
December 31, 2002 is $38.5 million of acquisition related accrued expenses related primarily to the
elimination of redundant contracts. Additional costs related to the integration plan will be accounted for as
charges to our income statement or adjustment to the purchase price allocation in accordance with
SFAS No. 146, ""Accounting for Costs Associated with Exit or Disposal Activities'' and EITF Issue
Number 95-3, ""Recognition of Liabilities in Connection with a Business Combination.''
Acquisition of Remaining Equity Interest in eBay Australia & New Zealand Pty Ltd.
In October 2002, we acquired the remaining 50% interest in our eBay Australia & New Zealand joint
venture held by ecorp Limited in a purchase acquisition for approximately $65.5 million in cash. This
acquisition increased our ownership of this entity to 100%. The results of operations of eBay Australia and
New Zealand have been included in our Consolidated Financial Statements since October 2002.
Sale of ButterÑelds, Kruse and Certain Real Estate Properties
During 2002 we sold our ButterÑelds and Kruse subsidiaries as well as several real estate properties
we acquired as a result of our 1999 acquisition of ButterÑelds. During the year ended December 31, 2002,
we recognized an aggregate gain of $17.1 million, which is reported in other income.
Pro forma Ñnancial information
The following unaudited pro forma Ñnancial information presents the combined results of eBay,
Internet Auction, iBazar, and PayPal as if the acquisitions had occurred as of the beginning of 2001 and
2002, respectively, after applying certain adjustments, including amortization of goodwill and other
acquisition related transactions (in thousands except per share amounts):
Year ended
December 31,
2001 2002
(unaudited)
Net revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $857,290 $1,377,771
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(62,007) $ 231,316
Net income (loss) per share:
BasicÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (0.21) $ 0.76
Diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (0.21) $ 0.74
The pro forma Ñnancial information does not necessarily reÖect the results of operations that would
have occurred had eBay, Internet Auction, iBazar, and PayPal constituted a consolidated entity during
such periods. See ""Note 1 Ì The Company and Summary of SigniÑcant Accounting Policies, Recent
Accounting Pronouncements.''
112