eBay 2013 Annual Report Download - page 138

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Our computation of expected volatility is based on a combination of historical and market-based implied volatility from traded options on
our common stock. Our computation of expected life is based on historical experience of similar awards, giving consideration to the contractual
terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the
contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.
Note 16 – Income Taxes
The components of pretax income for the years ended December 31, 2013 , 2012 and 2011 are as follows:
U.S. pre-tax income for the year ended December 31, 2011 includes approximately $449 million relating to non-U.S. income
recharacterized as U.S. income due to the settlement of multiple uncertain tax positions.
The provision for income taxes is comprised of the following:
The following is a reconciliation of the difference between the actual provision for income taxes and the provision computed by applying
the federal statutory rate of 35% for 2013 , 2012 and 2011 to income before income taxes:
Year Ended December 31,
2013
2012
2011
(In millions)
United States
$
594
$
605
$
1,746
International
2,872
2,479
2,164
$
3,466
$
3,084
$
3,910
Year Ended December 31,
2013
2012
2011
(In millions)
Current:
Federal
$
455
$
327
$
518
State and local
(4
)
63
24
Foreign
190
120
122
$
641
$
510
$
664
Deferred:
Federal
$
18
$
34
$
64
State and local
(22
)
(24
)
(3
)
Foreign
(27
)
(45
)
(44
)
(31
)
(35
)
17
$
610
$
475
$
681
Year Ended December 31,
2013
2012
2011
(In millions)
Provision at statutory rate
$
1,213
$
1,080
$
1,369
Permanent differences:
Foreign income taxed at different rates
(607
)
(617
)
(1,093
)
Gain on sale of Skype
—
—
321
Change in valuation allowance
—
3
(1
)
Stock-based compensation
33
(14
)
32
State taxes, net of federal benefit
(26
)
39
21
Research and other tax credits
(43
)
1
(8
)
Divested business
21
(41
)
34
Other
19
24
6
$
610
$
475
$
681