eBay 2012 Annual Report Download - page 129

eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
receivable and customer accounts,” with an associated liability under “Funds payable and amounts due to customers.” Following this change,
PayPal now holds all customer balances (both in the U.S. and internationally) as direct claims against PayPal. At December 31, 2012 , U.S.
PayPal customer funds represented $3.3 billion of the $8.1 billion balance of funds receivable and customer accounts on our consolidated
balance sheet.
Note 13 – Related Party Transactions
We have entered into indemnification agreements with each of our directors, executive officers and certain other officers. These
agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may
become subject as a result of their affiliation with us.
All contracts with related parties are at rates and terms that we believe are comparable with those that could be entered into with
independent third parties. There were no material related party transactions in 2012 . As of December 31, 2012 , there were no significant
amounts payable to or amounts receivable from related parties.
Note 14 – Stockholders' Equity
Preferred Stock
We are authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series; to establish the
number of shares included within each series; to fix the rights, preferences and privileges of the shares of each wholly unissued series and any
related qualifications, limitations or restrictions; and to increase or decrease the number of shares of any series (but not below the number of
shares of a series then outstanding) without any further vote or action by our stockholders. At December 31, 2012 and 2011 , there were 10
million shares of $0.001 par value preferred stock authorized for issuance, and no shares issued or outstanding.
Common Stock
Our Certificate of Incorporation, as amended, authorizes us to issue 3.6 billion shares of common stock.
Note 15 – Stock Repurchase Program
In September 2010, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $2 billion of
our common stock, with no expiration from the date of authorization. In June 2012, our Board of Directors authorized an additional stock
repurchase program that provides for the repurchase of up to an additional $2 billion of our common stock, with no expiration from the date of
authorization. These stock repurchase programs are intended to offset the impact of dilution from our equity compensation programs. The stock
repurchase activity under these stock repurchase program during 2012 is summarized as follows:
(1) Stock repurchase activity excludes broker commissions.
These repurchased shares were recorded as treasury stock and were accounted for under the cost method. No repurchased shares have been
retired.
As of December 31, 2012 , we had repurchased the full amount of stock permitted under the 2010 stock repurchase
program and approximately $2.0 billion remained for further repurchases of our common stock under the 2012 stock repurchase program.
Our stock repurchase programs may be limited or terminated at any time without prior notice. Stock repurchases under these programs
may be made through a variety of open market and privately negotiated transactions, including structured stock repurchase transactions or other
derivative transactions, at times and in such amounts as management deems appropriate and will be funded from our working capital or other
financing alternatives. The timing and actual number of shares repurchased
Shares
Repurchased
Average Price
per Share
(1)
Value of Shares
Repurchased
Remaining
Amount
Authorized
(In millions, except per share amounts)
Balance at January 1, 2012
35
$
31.55
$
1,119
$
881
Authorization of additional plan in June 2012
2,000
Repurchase of common stock
22
40.50
898
(898
)
Balance at December 31, 2012
57
$
35.00
$
2,017
$
1,983