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Microsoft Excel LibreOffice Calc


Analysis of Income Taxes

Difficulty: Advanced


Income Tax Accounting Policy

eBay accounts for income taxes using an asset and liability approach, which requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the financial statements or tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence.

eBay reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. eBay recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

eBay has accounted for the tax effects of The Tax Cuts and Jobs Act, enacted on December 22, 2017, on a provisional basis. The accounting for certain income tax effects is incomplete, but eBay has determined reasonable estimates for those effects. eBay's reasonable estimates are included in the financial statements as of December 31, 2017. eBay expects to complete the accounting during the one year measurement period from the enactment date.

Source: 10-K (filing date: 2018-02-05).


Income Tax Expense (Benefit)

eBay Inc., income tax expense (benefit), continuing operations

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Federal hidden hidden hidden hidden hidden
State and local hidden hidden hidden hidden hidden
Foreign hidden hidden hidden hidden hidden
Current hidden hidden hidden hidden hidden
Federal hidden hidden hidden hidden hidden
State and local hidden hidden hidden hidden hidden
Foreign hidden hidden hidden hidden hidden
Deferred hidden hidden hidden hidden hidden
Provision (benefit) for income taxes hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. eBay Inc.'s current increased from 2015 to 2016 and from 2016 to 2017.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. eBay Inc.'s deferred declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Provision (benefit) for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. eBay Inc.'s provision (benefit) for income taxes declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Effective Income Tax Rate (EITR)

eBay Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Federal statutory tax rate hidden hidden hidden hidden hidden
Effective income tax rate hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. eBay Inc.'s effective income tax rate declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Components of Deferred Tax Assets and Liabilities

eBay Inc., components of deferred tax assets and liabilities

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net operating loss, capital loss and credits hidden hidden hidden hidden hidden
Accruals and allowances hidden hidden hidden hidden hidden
Stock-based compensation hidden hidden hidden hidden hidden
Amortizable tax basis in intangibles hidden hidden hidden hidden hidden
Net unrealized losses hidden hidden hidden hidden hidden
Net deferred tax assets hidden hidden hidden hidden hidden
Valuation allowance hidden hidden hidden hidden hidden
Deferred tax assets hidden hidden hidden hidden hidden
Unremitted foreign earnings hidden hidden hidden hidden hidden
Acquisition-related intangibles hidden hidden hidden hidden hidden
Depreciation and amortization hidden hidden hidden hidden hidden
Available-for-sale securities hidden hidden hidden hidden hidden
Other hidden hidden hidden hidden hidden
Deferred tax liabilities hidden hidden hidden hidden hidden
Net deferred tax assets and liabilities hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

Item Description The company
Net deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. eBay Inc.'s net deferred tax assets increased from 2015 to 2016 and from 2016 to 2017.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. eBay Inc.'s deferred tax assets increased from 2015 to 2016 and from 2016 to 2017.
Net deferred tax assets and liabilities Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. eBay Inc.'s net deferred tax assets and liabilities increased from 2015 to 2016 but then slightly declined from 2016 to 2017.

Analyst Adjustments: Removal of Deferred Taxes

eBay Inc., adjustments to financial data

USD $ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Adjustment to Total Assets
Total assets (as reported) hidden hidden hidden hidden hidden
Less: Noncurrent deferred tax assets, net hidden hidden hidden hidden hidden
Total assets (adjusted) hidden hidden hidden hidden hidden
Adjustment to Stockholders' Equity
Stockholders' equity (as reported) hidden hidden hidden hidden hidden
Less: Net deferred tax assets (liabilities) hidden hidden hidden hidden hidden
Stockholders' equity (adjusted) hidden hidden hidden hidden hidden
Adjustment to Net Income (loss)
Net income (loss) (as reported) hidden hidden hidden hidden hidden
Add: Deferred income tax expense (benefit) hidden hidden hidden hidden hidden
Net income (loss) (adjusted) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).


eBay Inc., Financial Data: Reported vs. Adjusted


Adjusted Ratios: Removal of Deferred Taxes (Summary)

eBay Inc., adjusted ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net Profit Margin
Reported net profit margin hidden hidden hidden hidden hidden
Adjusted net profit margin hidden hidden hidden hidden hidden
Total Asset Turnover
Reported total asset turnover hidden hidden hidden hidden hidden
Adjusted total asset turnover hidden hidden hidden hidden hidden
Financial Leverage
Reported financial leverage hidden hidden hidden hidden hidden
Adjusted financial leverage hidden hidden hidden hidden hidden
Return on Equity (ROE)
Reported ROE hidden hidden hidden hidden hidden
Adjusted ROE hidden hidden hidden hidden hidden
Return on Assets (ROA)
Reported ROA hidden hidden hidden hidden hidden
Adjusted ROA hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. eBay Inc.'s adjusted net profit margin improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. eBay Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
eBay Inc.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. eBay Inc.'s adjusted ROE improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. eBay Inc.'s adjusted ROA improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

eBay Inc., Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (USD $ in millions)
Net income (loss) hidden hidden hidden hidden hidden
Net revenues hidden hidden hidden hidden hidden
Ratio
Net profit margin1 hidden hidden hidden hidden hidden
Adjusted for Deferred Taxes
Selected Financial Data (USD $ in millions)
Adjusted net income (loss) hidden hidden hidden hidden hidden
Net revenues hidden hidden hidden hidden hidden
Ratio
Adjusted net profit margin2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 Net profit margin = 100 × Net income (loss) ÷ Net revenues
= 100 × hidden ÷ hidden = hidden

2 Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Net revenues
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. eBay Inc.'s adjusted net profit margin improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (USD $ in millions)
Net revenues hidden hidden hidden hidden hidden
Total assets hidden hidden hidden hidden hidden
Ratio
Total asset turnover1 hidden hidden hidden hidden hidden
Adjusted for Deferred Taxes
Selected Financial Data (USD $ in millions)
Net revenues hidden hidden hidden hidden hidden
Adjusted total assets hidden hidden hidden hidden hidden
Ratio
Adjusted total asset turnover2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 Total asset turnover = Net revenues ÷ Total assets
= hidden ÷ hidden = hidden

2 Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. eBay Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (USD $ in millions)
Total assets hidden hidden hidden hidden hidden
Stockholders' equity hidden hidden hidden hidden hidden
Ratio
Financial leverage1 hidden hidden hidden hidden hidden
Adjusted for Deferred Taxes
Selected Financial Data (USD $ in millions)
Adjusted total assets hidden hidden hidden hidden hidden
Adjusted stockholders' equity hidden hidden hidden hidden hidden
Ratio
Adjusted financial leverage2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 Financial leverage = Total assets ÷ Stockholders' equity
= hidden ÷ hidden = hidden

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders' equity
= hidden ÷ hidden = hidden

Ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
eBay Inc.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (USD $ in millions)
Net income (loss) hidden hidden hidden hidden hidden
Stockholders' equity hidden hidden hidden hidden hidden
Ratio
ROE1 hidden hidden hidden hidden hidden
Adjusted for Deferred Taxes
Selected Financial Data (USD $ in millions)
Adjusted net income (loss) hidden hidden hidden hidden hidden
Adjusted stockholders' equity hidden hidden hidden hidden hidden
Ratio
Adjusted ROE2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 ROE = 100 × Net income (loss) ÷ Stockholders' equity
= 100 × hidden ÷ hidden = hidden

2 Adjusted ROE = 100 × Adjusted net income (loss) ÷ Adjusted stockholders' equity
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. eBay Inc.'s adjusted ROE improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Selected Financial Data (USD $ in millions)
Net income (loss) hidden hidden hidden hidden hidden
Total assets hidden hidden hidden hidden hidden
Ratio
ROA1 hidden hidden hidden hidden hidden
Adjusted for Deferred Taxes
Selected Financial Data (USD $ in millions)
Adjusted net income (loss) hidden hidden hidden hidden hidden
Adjusted total assets hidden hidden hidden hidden hidden
Ratio
Adjusted ROA2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 ROA = 100 × Net income (loss) ÷ Total assets
= 100 × hidden ÷ hidden = hidden

2 Adjusted ROA = 100 × Adjusted net income (loss) ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. eBay Inc.'s adjusted ROA improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.