eBay 2008 Annual Report Download - page 67

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Liquidity and Capital Resources
Cash Flows
2006 2007 2008
Year Ended December 31,
(in thousands)
Consolidated Cash Flow Data:
Net cash provided by (used in):
Operating activities ............................ $2,247,791 $2,641,109 $ 2,881,995
Investing activities ............................. 228,853 (693,146) (2,057,346)
Financing activities ............................ (1,260,687) (693,392) (1,673,851)
Effect of exchange rates on cash and cash equivalents . . 133,255 303,828 (183,061)
Net increase (decrease) in cash and cash equivalents.... $1,349,212 $1,558,399 $(1,032,263)
Operating Activities
We generated cash from operating activities in amounts greater than net income in 2006, 2007 and 2008, due
primarily to non-cash charges to earnings and tax benefits from stock-based compensation. Non-cash charges to
earnings included depreciation and amortization on our long-term assets, stock-based compensation and the
provision for transaction and loan losses. Non-cash charges in 2007 also included a $1.4 billion goodwill
impairment charge (including the $530.3 million earn out settlement payment).
Cash paid for income taxes in 2006, 2007 and 2008 was $179.2 million, $363.0 million and $366.8 million,
respectively.
Investing Activities
The net cash used in investing activities in 2008 and 2007 was due primarily to cash paid for acquisitions and
the purchase of property and equipment, which was offset in 2007 by cash generated by the sale of investments. The
net cash provided by investing activities in 2006 reflected the cash generated from the sale of investments offset by
the purchase of property and equipment. Purchases of property and equipment, net totaled $565.9 million in 2008,
$454.0 million in 2007, and $515.4 million in 2006, related primarily to purchases of computer equipment and
software to support our site operations, customer support and international expansion. Cash expended for
acquisitions, net of cash acquired, totaled approximately $1.4 billion in 2008, $863.6 million in 2007, and
$45.5 million in 2006. In 2008, acquisition activity of $1.4 billion consisted primarily of the acquisition of Fraud
Sciences, Den Bla
˚Avis and BilBasen and Bill Me Later. In 2007, acquisition activity primarily consisted of a
$530.3 million earn out settlement payment related to our 2005 Skype acquisition and our acquisition of StubHub.
In 2006, we acquired Tradera.com.
Financing Activities
The net cash flows used in financing activities of $1.7 billion in 2008 were due primarily to the repurchase of
approximately 80.6 million shares of our common stock for an aggregate purchase price of approximately
$2.2 billion and the repayment of a bank obligation of $434.0 million assumed in the Bill Me Later acquisition,
offset by the proceeds from stock option exercises totaling $135.1 million and $800.0 million of net proceeds from
borrowings under our credit agreement. The net cash flows used in financing activities of $693.4 million in 2007
were due primarily to the repurchase of approximately 44.6 million shares of our common stock for an aggregate
purchase price of approximately $1.5 billion, offset by the proceeds from stock option exercises totaling
$507.0 million and $200.0 million of net proceeds from borrowings under our credit agreement. The net cash
flows used in financing activities of $1.3 billion in 2006 were due primarily to the repurchase of approximately
54.5 million shares of our common stock for an aggregate purchase price of approximately $1.7 billion, offset by the
proceeds from stock option exercises totaling $313.5 million. Prior to 2006, we had not repurchased our common
stock under a stock repurchase program.
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