eBay 2009 Annual Report Download - page 71

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our organizational objectives, the operational and tax efficiency of our corporate structure, as well as the long-
term cash flows and cash needs of our different businesses. These transactions may impact our overall tax rate
and/or result in additional cash tax payments. The impact in any period may be significant. These transactions
may be complex in nature and the impact of such transactions on future periods may be difficult to estimate. In
2009, we completed a legal entity restructuring. The tax impact of this restructuring is included in our 2009
provision for income taxes. We expect that the restructuring transaction will result in a cash payment for taxes in
the first quarter of 2010 of approximately $207.4 million.
Liquidity and Capital Resources
Cash Flows
Year Ended December 31,
2007 2008 2009
(In thousands)
Consolidated Cash Flow Data:
Net cash provided by (used in):
Operating activities ..................................... $2,641,329 $ 2,881,995 $ 2,908,086
Investing activities ..................................... (693,146) (2,057,346) (1,149,383)
Financing activities ..................................... (693,612) (1,673,851) (945,656)
Effect of exchange rates on cash and cash equivalents ......... 303,828 (183,061) (2,157)
Net increase (decrease) in cash and cash equivalents .......... $1,558,399 $(1,032,263) $ 810,890
Operating Activities
We generated cash from operating activities in amounts greater than net income in 2007, 2008 and 2009,
due primarily to non-cash charges to earnings. 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 items in 2009 and 2007 also included a $1.4 billion gain on the sale of Skype and a $1.4 billion
goodwill impairment charge (including a $530.3 million earn out settlement payment discussed below),
respectively.
Cash paid for income taxes in 2007, 2008 and 2009 was $363.0 million, $366.8 million and $342.2 million,
respectively.
Investing Activities
The net cash used in investing activities of $1.1 billion in 2009 was due primarily to cash paid for
acquisition activities, investment activity and the purchases of property and equipment, partially offset by
proceeds from the sale of Skype. 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. In 2009 we sold our majority interest in Skype, resulting in cash proceeds,
net of cash retained by Skype, of $1.8 billion. Cash expended for acquisitions, net of cash acquired, totaled
approximately $1.2 billion in 2009, $1.4 billion in 2008 and $863.6 million in 2007. In 2009, we acquired
Gmarket. In 2008, we acquired Fraud Sciences, Den Blå 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 as well as the acquisition of StubHub. Purchases of property and equipment, net totaled
$567.1 million in 2009, $565.9 million in 2008, and $454.0 million in 2007, related primarily to purchases of
computer equipment and software to support our site operations, customer support and international expansion.
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