EBAY INC, 10-K filed on 2/1/2016
Annual Report
v3.3.1.900
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2015
Jan. 27, 2016
Jun. 30, 2015
Document and Entity Information [Abstract]      
Entity Registrant Name EBAY INC    
Entity Trading Symbol EBAY    
Entity Central Index Key 0001065088    
Document Type 10-K    
Document Period End Date Dec. 31, 2015    
Amendment Flag false    
Document Fiscal Year Focus 2015    
Document Fiscal Period Focus FY    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer Yes    
Entity Current Reporting Status Yes    
Entity Voluntary Filer No    
Entity Filer Category Large Accelerated Filer    
Entity Common Stock, Shares Outstanding   1,178,705,177  
Entity Public Float     $ 67,436,299,797
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CONSOLIDATED BALANCE SHEET - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
Current assets:    
Cash and cash equivalents $ 1,832 $ 4,105
Short-term investments 4,299 3,730
Accounts receivable, net 619 600
Other current assets 1,154 1,048
Current assets of discontinued operations 0 17,048
Total current assets 7,904 26,531
Long-term investments 3,391 5,736
Property and equipment, net 1,554 1,486
Goodwill 4,451 4,671
Intangible assets, net 90 133
Other assets 395 207
Long-term assets of discontinued operations 0 6,368
Total assets 17,785 45,132
Current liabilities:    
Short-term debt 0 850
Accounts payable 349 107
Accrued expenses and other current liabilities 1,736 3,830
Deferred revenue 106 108
Income taxes payable 72 125
Current liabilities of discontinued operations 0 12,511
Total current liabilities 2,263 17,531
Deferred and other tax liabilities, net 2,092 522
Long-term debt 6,779 6,777
Other liabilities 75 79
Long-term liabilities of discontinued operations 0 317
Total liabilities $ 11,209 $ 25,226
Commitments and contingencies (Note 13)
Stockholders' equity:    
Common stock, $0.001 par value; 3,580 shares authorized; 1,184 and 1,224 shares outstanding $ 2 $ 2
Additional paid-in capital 14,538 13,887
Treasury stock at cost, 443 and 384 shares (16,203) (14,054)
Retained earnings 7,713 18,900
Accumulated other comprehensive income 526 1,171
Total stockholders' equity 6,576 19,906
Total liabilities and stockholders' equity $ 17,785 $ 45,132
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CONSOLIDATED BALANCE SHEET (Parentheticals) - $ / shares
shares in Millions
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]    
Common stock - par value (in usd per share) $ 0.001 $ 0.001
Common stock - shares authorized 3,580 3,580
Common stock - shares outstanding 1,184 1,224
Treasury stock - shares 443 384
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CONSOLIDATED STATEMENT OF INCOME - USD ($)
shares in Millions, $ in Millions
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Statement [Abstract]      
Net revenues $ 8,592 $ 8,790 $ 8,257
Cost of net revenues 1,771 1,663 1,492
Gross profit 6,821 7,127 6,765
Operating expenses:      
Sales and marketing 2,267 2,442 2,144
Product development 923 983 915
General and administrative 1,122 889 880
Provision for transaction losses 271 262 236
Amortization of acquired intangible assets 41 75 136
Total operating expenses 4,624 4,651 4,311
Income from operations 2,197 2,476 2,454
Interest and other, net 209 39 117
Income from continuing operations before income taxes 2,406 2,515 2,571
Provision for income taxes (459) (3,380) (504)
Income (loss) from continuing operations 1,947 (865) 2,067
Income (loss) from discontinued operations, net of income taxes (222) 911 789
Net income $ 1,725 $ 46 $ 2,856
Income (loss) per share - basic:      
Continuing operations (in usd per share) $ 1.61 $ (0.69) $ 1.60
Discontinued operations (in usd per share) (0.18) 0.73 0.60
Net income per share - basic (in usd per share) 1.43 0.04 2.20
Income (loss) per share - diluted:      
Continuing operations (in usd per share) 1.60 (0.69) 1.58
Discontinued operations (in usd per share) (0.18) 0.73 0.60
Net income per share - diluted (in usd per share) $ 1.42 $ 0.04 $ 2.18
Weighted average shares:      
Basic (in shares) 1,208 1,251 1,295
Diluted (in shares) 1,220 1,251 1,313
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Comprehensive Income [Abstract]      
Net income $ 1,725 $ 46 $ 2,856
Other comprehensive income (loss), net of reclassification adjustments:      
Foreign currency translation gain (loss) (431) (323) 208
Unrealized gains (losses) on investments, net (187) 108 234
Tax (expense) benefit on unrealized gains (losses) on investments, net 56 (37) (93)
Unrealized gains (losses) on hedging activities, net (65) 274 (51)
Tax (expense) benefit on unrealized gains (losses) on hedging activities, net (6) (7) 2
Other comprehensive income (loss), net of tax (633) 15 300
Comprehensive income $ 1,092 $ 61 $ 3,156
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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($)
shares in Millions, $ in Millions
Total
Common stock
Additional paid-in capital
Treasury stock at cost
Retained earnings
Accumulated Other Comprehensive Income
Stockholders' equity, beginning of period at Dec. 31, 2012   $ 2 $ 12,062 $ (8,053) $ 15,998 $ 856
Common stock, beginning of year (in shares) at Dec. 31, 2012   1,294        
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Common stock issued   $ 0        
Common stock issued (in shares)   25        
Common stock repurchased/forfeited   $ 0        
Common stock repurchased/forfeited (in shares)   (25)        
Common stock and stock-based awards issued and assumed     440      
Tax withholdings related to net share settlements of restricted stock awards and units     (267)      
Stock-based compensation     572      
Stock-based awards tax impact     224      
Common stock repurchased       (1,343)    
Net income $ 2,856       2,856  
Change in unrealized gains (losses) on investments           234
Change in unrealized gains (losses) on cash flow hedges           (51)
Foreign currency translation adjustment           208
Tax benefit (provision) on above items           (91)
Distribution of PayPal         0 0
Common stock, end of period (in shares) at Dec. 31, 2013   1,294        
Stockholders' equity, end of period at Dec. 31, 2013 23,647 $ 2 13,031 (9,396) 18,854 1,156
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Common stock issued   $ 0        
Common stock issued (in shares)   18        
Common stock repurchased/forfeited   $ 0        
Common stock repurchased/forfeited (in shares)   (88)        
Common stock and stock-based awards issued and assumed     298      
Tax withholdings related to net share settlements of restricted stock awards and units     (252)      
Stock-based compensation     693      
Stock-based awards tax impact     117      
Common stock repurchased       (4,658)    
Net income $ 46       46  
Change in unrealized gains (losses) on investments           108
Change in unrealized gains (losses) on cash flow hedges           274
Foreign currency translation adjustment           (323)
Tax benefit (provision) on above items           (44)
Distribution of PayPal         0 0
Common stock, end of period (in shares) at Dec. 31, 2014 1,224 1,224        
Stockholders' equity, end of period at Dec. 31, 2014 $ 19,906 $ 2 13,887 (14,054) 18,900 1,171
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Common stock issued   $ 0        
Common stock issued (in shares)   19        
Common stock repurchased/forfeited   $ 0        
Common stock repurchased/forfeited (in shares) (59) (59)        
Common stock and stock-based awards issued and assumed     230      
Tax withholdings related to net share settlements of restricted stock awards and units     (245)      
Stock-based compensation     576      
Stock-based awards tax impact     90      
Common stock repurchased $ (2,100)     (2,149)    
Net income $ 1,725       1,725  
Change in unrealized gains (losses) on investments           (187)
Change in unrealized gains (losses) on cash flow hedges           (65)
Foreign currency translation adjustment           (431)
Tax benefit (provision) on above items           50
Distribution of PayPal         (12,912) (12)
Common stock, end of period (in shares) at Dec. 31, 2015 1,184 1,184        
Stockholders' equity, end of period at Dec. 31, 2015 $ 6,576 $ 2 $ 14,538 $ (16,203) $ 7,713 $ 526
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CONSOLIDATED STATEMENT OF CASH FLOWS
$ in Millions
12 Months Ended
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Dec. 31, 2013
USD ($)
Cash flows from operating activities:      
Net income $ 1,725 $ 46 $ 2,856
(Income) loss from discontinued operations, net of income taxes 222 (911) (789)
Adjustments:      
Provision for transaction losses 271 262 236
Depreciation and amortization 687 682 660
Stock-based compensation 379 344 298
Gain on sale of investments (195) (12) (75)
Deferred income taxes (32) 2,744 (33)
Excess tax benefits from stock-based compensation (74) (75) (112)
Changes in assets and liabilities, net of acquisition effects      
Accounts receivable (105) 51 (89)
Other current assets (143) (36) (367)
Other non-current assets 143 (3) (105)
Accounts payable 226 81 (13)
Accrued expenses and other liabilities (202) (81) 274
Deferred revenue 9 4 2
Income taxes payable and other tax liabilities (34) 132 189
Net cash provided by continuing operating activities 2,877 3,228 2,932
Net cash provided by discontinued operating activities 1,156 2,449 2,063
Net cash provided by operating activities 4,033 5,677 4,995
Cash flows from investing activities:      
Purchases of property and equipment (668) (622) (678)
Purchases of investments (6,744) (8,752) (6,889)
Maturities and sales of investments 6,781 8,115 3,622
Acquisitions, net of cash acquired (24) (55) (138)
Repayment of note receivable and sale of related equity investments 0 0 485
Other (18) (11) (22)
Net cash used in continuing investing activities (673) (1,325) (3,620)
Net cash used in discontinued investing activities (2,938) (1,348) (2,392)
Net cash used in investing activities (3,611) (2,673) (6,012)
Cash flows from financing activities:      
Proceeds from issuance of common stock 221 300 437
Repurchases of common stock (2,149) (4,658) (1,343)
Excess tax benefits from stock-based compensation 74 75 112
Tax withholdings related to net share settlements of restricted stock awards and units (245) (252) (267)
Proceeds from issuance of long-term debt, net 0 3,482 0
Repayment of debt (850) 0 (400)
Other (11) 6 30
Net cash used in continuing financing activities (2,960) (1,047) (1,431)
Net cash provided by (used in) discontinued financing activities (1,594) 25 77
Net cash (used in) provided by financing activities (4,554) (1,022) (1,354)
Effect of exchange rate changes on cash and cash equivalents (364) (148) 48
Net increase (decrease) in cash and cash equivalents (4,496) 1,834 (2,323)
Cash and cash equivalents at beginning of period 6,328 4,494 6,817
Cash and cash equivalents at end of period 1,832 6,328 4,494
Less: Cash and cash equivalents of discontinued operations - Enterprise 0 29 47
Less: Cash and cash equivalents of discontinued operations - PayPal 0 2,194 1,599
Cash and cash equivalents of continuing operations at end of period 1,832 4,105 2,848
Supplemental cash flow disclosures:      
Cash paid for interest 175 99 99
Cash paid for income taxes $ 256 $ 343 $ 466
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The Company and Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2015
Accounting Policies [Abstract]  
The Company and Summary of Significant Accounting Policies
The Company and Summary of Significant Accounting Policies

The Company

eBay Inc. is a global commerce leader, including our Marketplace, StubHub and Classifieds platforms. Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts and the eBay mobile apps. Our StubHub platforms include our online ticket platform located at www.stubhub.com and the StubHub mobile apps. Our Classifieds platforms include a collection of brands such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Classifieds and others. 

On July 17, 2015, we completed the distribution of 100% of the outstanding common stock of PayPal Holdings, Inc. ("PayPal") to our stockholders (the "Distribution"), pursuant to which PayPal became an independent company. Beginning in the third quarter of 2015, PayPal's financial results for periods prior to the Distribution have been reflected in our consolidated statement of income, retrospectively, as discontinued operations. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year consolidated balance sheet are classified as discontinued operations. Pursuant to the terms of the separation and distribution agreement entered into between us and PayPal on June 26, 2015, upon Distribution, assets related to the PayPal business were transferred to, and liabilities related to the PayPal business were retained or assumed by, PayPal. See "Note 4 - Discontinued Operations" for additional information.

During the second quarter of 2015, our Board of Directors ("Board") approved a plan to sell the businesses underlying our former Enterprise segment ("Enterprise"). As a result, the Enterprise financial results were reflected in our consolidated statement of income, retrospectively, as discontinued operations beginning in the second quarter of 2015. On July 16, 2015, we signed a definitive agreement to sell Enterprise and on November 2, 2015, the sale closed. As a result, the related assets and liabilities associated with the discontinued operations in the prior year consolidated balance sheet are classified as discontinued operations. See "Note 4 - Discontinued Operations" for additional information.

When we refer to “we,” “our,” “us” or “eBay” in this document, we mean the current Delaware corporation (eBay Inc.) and its California predecessor, as well as all of our consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill and the recoverability of intangible assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates.

Principles of consolidation and basis of presentation

The accompanying financial statements are consolidated and include the financial statements of eBay Inc., our wholly and majority-owned subsidiaries and variable interest entities (“VIE”) where we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest. A qualitative approach is applied to assess the consolidation requirement for VIEs. Investments in entities where we hold at least a 20% ownership interest and have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investees' results of operations is included in interest and other, net and our investment balance is included in long-term investments. Investments in entities where we hold less than a 20% ownership interest are generally accounted for using the cost method of accounting, and our share of the investees' results of operations is included in our consolidated statement of income to the extent dividends are received.

We have evaluated all subsequent events through the date the financial statements were issued.

Revenue recognition

We generate net transaction revenues primarily from final value fees and listing fees paid by sellers. Final value fee revenues are recognized at the time that the transaction is successfully closed, while listing fee revenues are recognized ratably over the estimated period of the listing. An auction transaction is considered successfully closed when at least one buyer has bid above the seller's specified minimum price or reserve price, whichever is higher, at the end of the transaction term.

Our marketing services revenues are derived principally from the sale of advertisements, revenue sharing arrangements, classifieds fees, marketing service fees and lead referral fees. Our advertising revenues are derived principally from the sale of online advertisements. The duration of our advertising contracts has ranged from one week to five years, but is generally one week to one year. Advertising revenues on contracts are recognized as “impressions” (i.e., the number of times that an advertisement appears in pages viewed by users of our platforms) are delivered, or as “clicks” (which are generated each time users on our platforms click through our advertisements to an advertiser's designated website) are provided to advertisers. For contracts with minimum monthly or quarterly advertising commitments where the fee and commitments are fixed throughout the term, we recognize revenue ratably over the term of the agreement. We also may enter into arrangements to purchase services from certain customers and if the service is not considered an identifiable benefit that is separable from the customer's purchase of our services or for which we cannot reasonably estimate fair value, the fees paid to the customer is recorded as a reduction in revenue. Some of our advertising contracts consist of multiple elements which generally include a blend of various impressions and clicks as well as other marketing deliverables. Where neither vendor-specific objective evidence nor third-party evidence of selling price exists, we use management's best estimate of selling price (BESP) to allocate arrangement consideration on a relative basis to each element. BESP is generally based on the selling prices of the various elements when they are sold to customers of a similar nature and geography on a stand-alone basis or estimated stand-alone pricing when the element has not previously been sold on a stand-alone basis. These estimates are generally based on pricing strategies, market factors and strategic objectives. Revenues related to revenue sharing arrangements are recognized based on revenue reports received from our partners, provided that collectability is reasonably assured. Revenues related to fees for listing items on our Classifieds platforms are recognized over the estimated period of the classified listing. Lead referral fee revenue is generated from lead referral fees based on the number of times users click through to a merchant's website from our platforms. Lead referral fees are recognized in the period in which a user clicks through to the merchant's website.

Our other revenues are derived principally from contractual arrangements with third parties that provide services to our users. Revenues from contractual arrangements with third parties are recognized as the contracted services are delivered to end users.

To drive traffic to our platforms, we provide incentives to our users in the form of coupons and buyer and seller rewards. These incentives are generally treated as reductions in revenue.

Internal use software and platform development costs

Direct costs incurred to develop software for internal use and platform development costs are capitalized and amortized over an estimated useful life of one to five years. During the years ended December 31, 2015 and 2014, we capitalized costs, primarily related to labor and stock-based compensation, of $136 million and $144 million, respectively. Amortization of previously capitalized amounts was $110 million, $115 million and $103 million for 2015, 2014 and 2013, respectively. Costs related to the design or maintenance of internal use software and platform development are expensed as incurred.

Advertising expense

We expense the costs of producing advertisements at the time production occurs and expense the cost of communicating advertisements in the period during which the advertising space or airtime is used, in each case as sales and marketing expense. Internet advertising expenses are recognized based on the terms of the individual agreements, which are generally over the greater of the ratio of the number of impressions delivered over the total number of contracted impressions, on a pay-per-click basis, or on a straight-line basis over the term of the contract. Advertising expense totaled $1.0 billion, $1.0 billion and $844 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Stock-based compensation

We have equity incentive plans under which we grant equity awards, including stock options, restricted stock units, performance-based restricted stock units, and performance share units, to our directors, officers and employees. We primarily issue restricted stock units. We determine compensation expense associated with restricted stock units based on the fair value of our common stock on the date of grant. We determine compensation expense associated with stock options based on the estimated grant date fair value method using the Black-Scholes valuation model. We generally recognize compensation expense using a straight-line amortization method over the respective vesting period for awards that are ultimately expected to vest. Accordingly, stock-based compensation expense for 2015, 2014 and 2013 has been reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors as well as trends of actual option forfeitures. We recognize a benefit from stock-based compensation in equity to the extent that an incremental tax benefit is realized by following the ordering provisions of the tax law. In addition, we account for the indirect effects of stock-based compensation on the research tax credit and the foreign tax credit through our consolidated statement of income.

Provision for transaction losses

Provision for transaction losses consists primarily of losses resulting from our customer protection programs, fraud and bad debt expense associated with our accounts receivable balance. Provisions for these items represent our estimate of actual losses based on our historical experience and many other factors including changes to our customer protection programs, the impact of regulatory changes as well as economic conditions.

Income taxes

We account 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 our 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.

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

Cash and cash equivalents

Cash and cash equivalents are short-term, highly liquid investments with original maturities of three months or less when purchased and are mainly comprised of bank deposits, certificates of deposit and commercial paper.

Allowance for doubtful accounts and authorized credits

We record our allowance for doubtful accounts based upon our assessment of various factors. We consider historical experience, the age of the accounts receivable balances, current economic conditions and other factors that may affect our customers' ability to pay. The allowance for doubtful accounts and authorized credits was $84 million and $86 million at December 31, 2015 and 2014, respectively.

Investments

Short-term investments, which may include marketable equity securities, time deposits, certificates of deposit, government bonds and corporate debt securities with original maturities of greater than three months but less than one year when purchased, are classified as available-for-sale and are reported at fair value using the specific identification method. Unrealized gains and losses are excluded from earnings and reported as a component of other comprehensive income (loss), net of related estimated tax provisions or benefits.

Long-term investments may include marketable government bonds and corporate debt securities, time deposits, certificates of deposit and cost and equity method investments. Debt securities are classified as available-for-sale and are reported at fair value using the specific identification method. Unrealized gains and losses on our available-for-sale investments are excluded from earnings and reported as a component of other comprehensive income (loss), net of related estimated tax provisions or benefits.

Certain time deposits are classified as held to maturity and recorded at amortized cost. Our equity method investments are primarily investments in privately held companies. Our consolidated results of operations include, as a component of interest and other, net, our share of the net income or loss of the equity method investments. Our share of investees' results of operations is not significant for any period presented. Our cost method investments consist of investments in privately held companies and are recorded at cost. Amounts received from our cost method investees were not material to any period presented.

We assess whether an other-than-temporary impairment loss on our investments has occurred due to declines in fair value or other market conditions. With respect to our debt securities, this assessment takes into account the severity and duration of the decline in value, our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, and whether we expect to recover the entire amortized cost basis of the security (that is, whether a credit loss exists).

Property and equipment

Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally, one to three years for computer equipment and software, up to thirty years for buildings and building improvements, the shorter of five years or the term of the lease for leasehold improvements and three years for furniture, fixtures and vehicles.
 
Goodwill and intangible assets

Goodwill is tested for impairment at a minimum on an annual basis. Goodwill is tested for impairment at the reporting unit level. A qualitative assessment can be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. The fair values of the reporting units are estimated using income and market approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow method, a form of the income approach, uses expected future operating results and a market participant discount rate. The market approach uses comparable company prices and other relevant information generated by market transactions (either publicly traded entities or merger and acquisitions) to develop pricing metrics to be applied to historical and expected future operating results of our reporting units. Failure to achieve these expected results, changes in the discount rate or market pricing metrics may cause a future impairment of goodwill at the reporting unit. We conducted our annual impairment test of goodwill as of August 31, 2015 and 2014. Additionally, we evaluated impairment based on the significant activities regarding the Distribution and Enterprise divestiture during the year. See “Note 4 - Discontinued Operations” for further detail. As a result of this test, we determined that no further adjustment to the carrying value of goodwill for any reporting units was required. 

Intangible assets consist of purchased customer lists and user base, marketing related, developed technologies and other intangible assets, including patents and contractual agreements. Intangible assets are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from one to eight years. No significant residual value is estimated for intangible assets.

Impairment of long-lived assets

We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate. In 2015, 2014 and 2013, no impairment was noted.

Foreign currency
 
Most of our foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues, costs and expenses are translated into U.S. dollars using daily exchange rates if the transaction is recorded in our accounting systems on a daily basis, and otherwise using average exchange rates for the period. Gains and losses resulting from the translation of our consolidated balance sheet are recorded as a component of accumulated other comprehensive income.

Gains and losses from foreign currency transactions are recognized as interest and other, net.

Derivative instruments

We use derivative financial instruments, primarily forwards and swaps, to hedge certain foreign currency and interest rate exposures. We may also use other derivative instruments not designated as hedges, such as forwards used to hedge foreign currency balance sheet exposures. We do not use derivative financial instruments for trading purposes. See “Note 9 - Derivative Instruments” for a full description of our derivative instrument activities and related accounting policies.

Concentration of credit risk

Our cash, cash equivalents, accounts receivable and derivative instruments are potentially subject to concentration of credit risk. Cash and cash equivalents are placed with financial institutions that management believes are of high credit quality. Our accounts receivable are derived from revenue earned from customers. In each of the years ended December 31, 2015, 2014 and 2013, no customer accounted for more than 10% of net revenues. Our derivative instruments expose us to credit risk to the extent that our counterparties may be unable to meet the terms of the agreements.

Recent Accounting Pronouncements

In 2014, the FASB issued new guidance related to reporting discontinued operations. This new standard raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The new standard is now effective. The standard impacted the presentation of Enterprise during the second quarter of 2015 and PayPal during the third quarter of 2015 related to the financial statement presentation of assets held for sale and discontinued operations and required additional disclosures as presented in "Note 4 - Discontinued Operations."

In 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.

In 2015, the FASB issued new guidance related to consolidations. The new standard amends the guidelines for determining whether certain legal entities should be consolidated and reduces the number of consolidation models. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are evaluating the impact, if any, of adopting this new accounting guidance on our consolidated financial statements.

In 2015, the FASB issued new guidance related to presentation of debt issuance costs. The new standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

In 2015, the FASB issued new guidance related to accounting for fees paid in a cloud computing arrangement. The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are evaluating the impact, if any, of adopting this new accounting guidance on our consolidated financial statements.

In 2015, the FASB issued new guidance related to business combinations. The new guidance requires that adjustments made to provisional amounts recognized in a business combination be recorded in the period such adjustments are determined, rather than retrospectively adjusting previously reported amounts. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are evaluating the impact, if any, of adopting this new accounting guidance on our consolidated financial statements.

In 2015, the FASB issued new guidance related to balance sheet classification of deferred taxes. The new guidance requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. We early adopted this guidance on a prospective basis as of December 31, 2015. See "Note 17 - Income Taxes" for additional information.

In 2016, the FASB issued new guidance related accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements.
v3.3.1.900
Net Income (loss) Per Share
12 Months Ended
Dec. 31, 2015
Earnings Per Share [Abstract]  
Net Income (loss) Per Share
Net Income (loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted net income (loss) per share by application of the treasury stock method. The calculation of diluted net income (loss) per share excludes all anti-dilutive common shares. The following table sets forth the computation of basic and diluted net income (loss) per share for the periods indicated:
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
(In millions, except per share amounts)
Numerator:
 
 
 
 
 
Income (loss) from continuing operations
$
1,947

 
$
(865
)
 
$
2,067

Income (loss) from discontinued operations, net of income taxes
(222
)
 
911

 
789

Net income
$
1,725

 
$
46

 
$
2,856

Denominator:
 
 
 
 
 
Weighted average shares of common stock - basic
1,208

 
1,251

 
1,295

Dilutive effect of equity incentive awards
12

 

 
18

Weighted average shares of common stock - diluted
1,220

 
1,251

 
1,313

Income (loss) per share - basic:
 
 
 
 
 
Continuing operations
$
1.61

 
$
(0.69
)
 
$
1.60

Discontinued operations
(0.18
)
 
0.73

 
0.60

Net income per share - basic
$
1.43

 
$
0.04

 
$
2.20

Income (loss) per share - diluted:
 
 
 
 
 
Continuing operations
$
1.60

 
$
(0.69
)
 
$
1.58

Discontinued operations
(0.18
)
 
0.73

 
0.60

Net income per share - diluted
$
1.42

 
$
0.04

 
$
2.18

Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive
2

 
54

 
4

v3.3.1.900
Business Combinations and Divestitures
12 Months Ended
Dec. 31, 2015
Business Combinations [Abstract]  
Business Combinations and Divestitures
Business Combinations and Divestitures

Our acquisition and divestiture activity in 2015, 2014 and 2013, was as follows:

2015 Divestiture Activity

During 2015, we completed the Distribution of PayPal and the sale of Enterprise. See "Note 4 - Discontinued Operations" for additional information.

2014 Acquisition Activity

During 2014, we completed three acquisitions for aggregate purchase consideration of approximately $58 million, consisting primarily of cash. The allocation of the aggregate purchase consideration resulted in net liabilities of approximately $1 million, purchased intangible assets of $29 million and goodwill of $30 million. The consolidated financial statements include the operating results of the acquired businesses since the respective dates of the acquisitions. Pro forma results of operations have not been presented because the effect of the acquisitions was not material to our financial results.

2013 Acquisition Activity

During 2013, we completed four acquisitions for aggregate purchase consideration of approximately $148 million, consisting primarily of cash. The allocation of the aggregate purchase consideration resulted in net liabilities of approximately $15 million, purchased intangible assets of approximately $51 million and goodwill of approximately $112 million. The consolidated financial statements include the operating results of the acquired businesses since the respective dates of the acquisitions. Pro forma results of operations have not been presented because the effect of the acquisitions was not material to our financial results.

2013 Divestiture Activity

In 2013, a note receivable received as consideration of a previously divested business was repaid and our investments in RueLaLa and ShopRunner were sold for total cash proceeds of approximately $485 million. This transaction resulted in a net gain of approximately $75 million, which has been recognized in interest and other, net in our consolidated statement of income.
v3.3.1.900
Discontinued Operations
12 Months Ended
Dec. 31, 2015
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Discontinued Operations

On June 26, 2015, our Board approved the separation of PayPal through the Distribution. To consummate the Distribution, our Board declared a pro rata dividend of PayPal Holdings, Inc. common stock to eBay’s stockholders of record as of the close of business on July 8, 2015 (the "Record Date"). Each eBay stockholder received one (1) share of PayPal Holdings, Inc. common stock for every share of eBay common stock held at the close of business on the Record Date. The Distribution occurred on July 17, 2015. Immediately following the Distribution, PayPal became an independent, publicly traded company and is listed on The NASDAQ Stock Market under the ticker “PYPL.” eBay continues to trade on The NASDAQ Stock Market under the ticker “EBAY.” We have classified the results of PayPal as discontinued operations in our consolidated statement of income for all periods presented. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year consolidated balance sheet are classified as discontinued operations. In connection with the Distribution, we reviewed our capital allocation strategy to ensure that each of PayPal and eBay would be well capitalized at Distribution. As part of this strategy, we contributed approximately $3.8 billion of cash to PayPal.

During the second quarter of 2015, our Board approved a plan to sell Enterprise. Based on the expected sales proceeds, we recorded a goodwill impairment of $786 million in the second quarter of 2015. On July 16, 2015, we signed a definitive agreement to sell Enterprise for $925 million and on November 2, 2015, the sale closed. We recorded a loss of $35 million upon closing included within income (loss) from discontinued operations, net of income taxes. We have classified the results of Enterprise as discontinued operations in our consolidated statement of income for all periods presented. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year consolidated balance sheet are classified as discontinued operations.

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of PayPal and Enterprise:
 
December 31,
2014
 
(In millions)
PayPal current assets classified as discontinued operations
$
16,795

Enterprise current assets classified as discontinued operations
253

Current assets of discontinued operations
$
17,048

 
 
PayPal long-term assets classified as discontinued operations
$
4,506

Enterprise long-term assets classified as discontinued operations
1,862

Long-term assets of discontinued operations
$
6,368

 
 
PayPal current liabilities classified as discontinued operations
$
12,137

Enterprise current liabilities classified as discontinued operations
374

Current liabilities of discontinued operations
$
12,511

 
 
PayPal long-term liabilities classified as discontinued operations
$
243

Enterprise long-term liabilities classified as discontinued operations
74

Long-term liabilities of discontinued operations
$
317



The financial results of PayPal and Enterprise are presented as income (loss) from discontinued operations, net of income taxes in our consolidated statement of income. The following table presents financial results of PayPal and Enterprise:
 
Year Ended
December 31,
 
2015 (1)
 
2014
 
2013
 
 
 
 
PayPal income from discontinued operations, net of income taxes
$
516

 
$
1,024

 
$
926

Enterprise loss from discontinued operations, net of income taxes
(738
)
 
(113
)
 
(137
)
Income (loss) from discontinued operations, net of income taxes
$
(222
)
 
$
911

 
$
789

 
(1)
Includes PayPal financial results from January 1, 2015 to July 17, 2015 and Enterprise financial results from January 1, 2015 to November 2, 2015.

The following table presents cash flows of PayPal and Enterprise:
 
Year Ended
December 31,
 
2015 (1)
 
2014
 
2013
 
 
 
 
PayPal net cash provided by discontinued operating activities
$
1,252

 
$
2,280

 
$
1,913

Enterprise net cash provided by (used in) discontinued operating activities
(96
)
 
169

 
150

Net cash provided by discontinued operating activities
$
1,156

 
$
2,449

 
$
2,063

 
 
 
 
 
 
PayPal net cash used in discontinued investing activities
$
(3,725
)
 
$
(1,218
)
 
$
(2,221
)
Enterprise net cash provided by (used in) discontinued investing activities
787

 
(130
)
 
(171
)
Net cash used in discontinued investing activities
$
(2,938
)
 
$
(1,348
)
 
$
(2,392
)
 
 
 
 
 
 
PayPal net cash provided by (used in) discontinued financing activities (2)
$
(1,594
)
 
$
40

 
$
76

Enterprise net cash used in discontinued financing activities

 
(15
)
 
1

Net cash provided by (used in) discontinued financing activities
$
(1,594
)
 
$
25

 
$
77

(1)
Includes PayPal financial results from January 1, 2015 to July 17, 2015 and Enterprise financial results from January 1, 2015 to November 2, 2015.
(2)    Includes $1.6 billion of PayPal cash and cash equivalents as of July 17, 2015.

PayPal

The financial results of PayPal through the Distribution are presented as income (loss) from discontinued operations, net of income taxes on our consolidated statement of income. The following table presents financial results of PayPal:
 
Year Ended
December 31,
 
2015 (1)
 
2014
 
2013
 
 
 
 
Net revenues
$
4,793

 
$
7,895

 
$
6,640

Cost of net revenues
1,918

 
3,140

 
2,696

Gross profit
2,875

 
4,755

 
3,944

Operating expenses:
 
 
 
 
 
Sales and marketing
534

 
1,027

 
794

Product development
527

 
879

 
712

General and administrative
741

 
892

 
724

Provision for transaction and loan losses
418

 
688

 
551

Amortization of acquired intangible assets
30

 
53

 
41

Total operating expenses
2,250

 
3,539

 
2,822

Income from operations of discontinued operations
625

 
1,216

 
1,122

Interest and other, net
1

 
(7
)
 
(7
)
Income from discontinued operations before income taxes
626

 
1,209

 
1,115

Provision for income taxes
(110
)
 
(185
)
 
(189
)
Income from discontinued operations, net of income taxes
$
516

 
$
1,024

 
$
926

 
(1)    Includes PayPal financial results from January 1, 2015 to July 17, 2015.

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of PayPal:
 
December 31,
2014
 
(In millions)
Carrying amounts of assets included as part of discontinued operations:
 
Cash and cash equivalents
$
2,194

Short-term investments
39

Accounts receivable, net
51

Loans and interest receivable, net
3,600

Funds receivable and customer accounts
10,545

Other current assets
366

Current assets classified as discontinued operations
16,795

Long-term investments
31

Property and equipment, net
1,113

Goodwill
3,136

Intangible assets, net
172

Other assets
54

Long-term assets classified as discontinued operations
4,506

Total assets classified as discontinued operations in the consolidated balance sheet
$
21,301

 
 
Carrying amounts of liabilities included as part of discontinued operations:
 
Accounts payable
$
115

Funds receivable and customer accounts
10,545

Accrued expenses and other current liabilities
1,448

Income taxes payable
29

Current liabilities classified as discontinued operations
12,137

Deferred and other tax liabilities, net
197

Other liabilities
46

Long-term liabilities classified as discontinued operations
243

Total liabilities classified as discontinued operations in the consolidated balance sheet
$
12,380


 



Enterprise

The financial results of Enterprise are presented as income (loss) from discontinued operations, net of income taxes on our consolidated statement of income. The following table presents financial results of Enterprise:
 
Year Ended
December 31,
 
2015 (1)
 
2014
 
2013
 
 
 
 
Net revenues
$
904

 
$
1,217

 
$
1,150

Cost of net revenues
654

 
929

 
848

Gross profit
250

 
288

 
302

Operating expenses:
 
 
 
 
 
Sales and marketing
95

 
118

 
122

Product development
91

 
138

 
141

General and administrative
118

 
62

 
99

Provision for transaction losses
12

 
8

 
4

Amortization of acquired intangible assets
70

 
140

 
141

Goodwill impairment
786

 

 

Total operating expenses
1,172

 
466

 
507

Loss from operations of discontinued operations
(922
)
 
(178
)
 
(205
)
Interest and other, net
1

 
(15
)
 
(15
)
Pretax loss on disposal of the discontinued operation
(35
)
 

 

Loss from discontinued operations before income taxes
(956
)
 
(193
)
 
(220
)
Income tax benefit
218

 
80

 
83

Loss from discontinued operations, net of income taxes
$
(738
)
 
$
(113
)
 
$
(137
)
 
(1)    Includes Enterprise financial results from January 1, 2015 to November 2, 2015.

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of Enterprise:
 
December 31,
2014
 
(In millions)
Carrying amounts of assets included as part of discontinued operations:
 
Cash and cash equivalents
$
29

Short-term investments
1

Accounts receivable, net
146

Other current assets
77

Current assets classified as discontinued operations
253

Long-term investments
10

Property and equipment, net
303

Goodwill
1,287

Intangible assets, net
259

Other assets
3

Long-term assets classified as discontinued operations
1,862

Total assets classified as discontinued operations in the consolidated balance sheet
$
2,115

 
 
Carrying amounts of liabilities included as part of discontinued operations:
 
Accounts payable
$
179

Accrued expenses and other current liabilities
115

Deferred revenue
80

Current liabilities classified as discontinued operations
374

Deferred and other tax liabilities, net
73

Other liabilities
1

Long-term liabilities classified as discontinued operations
74

Total liabilities classified as discontinued operations in the consolidated balance sheet
$
448

v3.3.1.900
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Goodwill and Intangible Assets

Goodwill

The following table presents goodwill balances and adjustments to those balances for the years ended December 31, 2015 and 2014:
 
December 31,
2013
 
Goodwill Acquired
 
Adjustments
 
December 31,
2014
 
Goodwill
Acquired
 
Adjustments
 
December 31,
2015
 
(In millions)
Goodwill
$
4,855

 
30

 
(214
)
 
$
4,671

 
23

 
(243
)
 
$
4,451



The adjustments to goodwill during the year ended December 31, 2015 and December 31, 2014 were due primarily to foreign currency translation.
We conducted our annual impairment test of goodwill as of August 31, 2015. As of December 31, 2015, we determined that no impairment of the carrying value of goodwill for any reporting units was required.

Intangible Assets

The components of identifiable intangible assets are as follows: 
 
December 31, 2015
 
December 31, 2014
 
Gross Carrying Amount  
 
Accumulated Amortization 
 
Net Carrying Amount
 
Weighted Average Useful Life (Years)
 
Gross Carrying Amount 
 
Accumulated Amortization 
 
Net Carrying Amount
 
Weighted Average Useful Life (Years)
 
(In millions, except years)
Intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer lists and user base
$
419

 
$
(399
)
 
$
20

 
5
 
$
434

 
$
(407
)
 
$
27

 
5
Marketing related
594

 
(570
)
 
24

 
5
 
642

 
(596
)
 
46

 
5
Developed technologies
238

 
(215
)
 
23

 
4
 
237

 
(195
)
 
42

 
4
All other
157

 
(134
)
 
23

 
4
 
144

 
(126
)
 
18

 
4
 
$
1,408

 
$
(1,318
)
 
$
90

 
 
 
$
1,457

 
$
(1,324
)
 
$
133

 
 

  
Amortization expense for intangible assets was $66 million, $120 million and $175 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Expected future intangible asset amortization as of December 31, 2015 is as follows (in millions):
Fiscal years:
 
2016
$
47

 
2017
33

 
2018
10

 
2019

 
2020

 
Thereafter

 
 
$
90

v3.3.1.900
Segments
12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
Segments
Segments

We have one operating and reportable segment. Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. During the second quarter of 2015, we classified the results of Enterprise, formerly our Enterprise segment, as discontinued operations in our consolidated statement of income for all periods presented. During the third quarter of 2015, we have classified the results of PayPal, formerly our Payments segment, as discontinued operations in our consolidated statement of income for all periods presented. See "Note 4 - Discontinued Operations" for additional information.

The following table sets forth the breakdown of net revenues by type:
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
(In millions)
Net Revenues by Type:
 
 
 
 
 
Net transaction revenues:
 
 
 
 
 
Marketplace
$
6,103

 
$
6,351

 
$
5,900

StubHub
725

 
629

 
653

Total net transaction revenues
6,828

 
6,980

 
6,553

Marketing services and other revenues:
 
 
 
 
 
Marketplace
1,078

 
1,103

 
1,090

Classifieds
703

 
716

 
621

Corporate and other
(17
)
 
(9
)
 
(7
)
Total marketing services and other revenues
1,764

 
1,810

 
1,704

Total net revenues
$
8,592

 
$
8,790

 
$
8,257



The following table summarizes the allocation of net revenues based on geography:  
 
Year Ended December 31,
 
2015
  
2014
  
2013
 
(In millions)
Net revenues by Geography:
 
 
 
 
 
U.S.
$
3,624

  
$
3,525

  
$
3,419

United Kingdom
1,403

  
1,464

  
1,290

Germany
1,310

  
1,511

  
1,466

Rest of world
2,255

  
2,290

  
2,082

Total net revenues
$
8,592

 
$
8,790

 
$
8,257


The following table summarizes the allocation of long-lived tangible assets based on geography:  
 
December 31,
 
2015
  
2014
 
(In millions)
Long-lived tangible assets by Geography:
 
 
 
U.S.
$
1,668

  
$
1,578

International
116

  
132

Total long-lived tangible assets
$
1,784

  
$
1,710



Net revenues are attributed to U.S. and international geographies primarily based upon the country in which the seller, platform that displays advertising, other service provider, or customer, as the case may be, is located. Long-lived assets attributed to the U.S. and international geographies are based upon the country in which the asset is located or owned.
v3.3.1.900
Investments
12 Months Ended
Dec. 31, 2015
Investments [Abstract]  
Investments
Investments
At December 31, 2015 and 2014, the estimated fair value of our short-term and long-term investments classified as available for sale, are as follows:
 
December 31, 2015
 
Gross
Amortized
Cost
  
Gross
Unrealized
Gains
  
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
(In millions)
Short-term investments:
 
  
 
  
 
 
 
Restricted cash
$
28

  
$

  
$

 
$
28

Corporate debt securities
3,302

  
1

  
(16
)
 
3,287

Government and agency securities
55

  

  

 
55

Equity instruments
9

 
920

 

 
929

 
$
3,394

  
$
921

  
$
(16
)
 
$
4,299

Long-term investments:
 
  
 
  
 
 
 
Corporate debt securities
3,327

  
7

  
(67
)
 
3,267

 
$
3,327

  
$
7

  
$
(67
)
 
$
3,267

 
 
December 31, 2014
 
Gross
Amortized
Cost
  
Gross
Unrealized
Gains
  
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
(In millions)
Short-term investments:
 
  
 
  
 
 
 
Restricted cash
$
19

  
$

  
$

 
$
19

Corporate debt securities
2,519

  
1

  
(1
)
 
2,519

Government and agency securities
3

  

  

 
3

Time deposits and other
152

  

  

 
152

Equity instruments
9

 
1,028

 

 
1,037

 
$
2,702

 
$
1,029

 
$
(1
)
 
$
3,730

Long-term investments:
 
  
 
  
 
 
 
Corporate debt securities
5,319

  
18

  
(18
)
 
5,319

Government and agency securities
232

  
1

  

 
233

 
$
5,551

  
$
19

  
$
(18
)
 
$
5,552



At December 31, 2015 and 2014, we held no time deposits classified as held to maturity.

At December 31, 2015, investment securities in a continuous loss position for greater than 12 months had an estimated fair value and unrealized loss of $769 million and $40 million respectively. We had no material long-term or short-term investments that have been in a continuous unrealized loss position for more than 12 months as of December 31, 2014. As of December 31, 2015, these securities had a weighted average remaining duration of approximately 12 months. Refer to "Note 19 - Accumulated Other Comprehensive Income" for amounts reclassified to earnings from unrealized gains and losses.
 
Our fixed-income investment portfolio consists of predominantly investment grade corporate debt securities and government and agency securities that have a maximum maturity of 8 years. The corporate debt and government and agency securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We regularly review investment securities for other-than-temporary impairment using both qualitative and quantitative criteria. We presently do not intend to sell any of the securities in an unrealized loss position and expect to realize the full value of all these investments upon maturity or sale. Restricted cash is held primarily in interest bearing accounts for letters of credit related primarily to our global sabbatical program and various lease arrangements.
The estimated fair values of our short-term and long-term investments classified as available for sale by date of contractual maturity at December 31, 2015 are as follows:  
 
December 31,
2015
 
(In millions)
One year or less (including restricted cash of $28)
$
3,370

One year through two years
1,190

Two years through three years
1,464

Three years through four years
547

Four years through five years
59

Five years through six years

Six years through seven years

Seven years through eight years
6

Eight years through nine years

Nine years through ten years

 
$
6,636



Equity and cost method investments
We have made multiple equity and cost method investments which are reported in long-term investments on our consolidated balance sheet. As of December 31, 2015 and 2014, our equity and cost method investments totaled $124 million and $184 million, respectively. During the second quarter of 2015, we sold our equity interest in craigslist, Inc. During the third quarter of 2015, we sold a portion of our equity interest in Jasper Infotech Private Limited (Snapdeal) and our entire interest in Baixing Holdings Limited. The resulting gains are recorded in interest and other, net on our consolidated statement of income.
v3.3.1.900
Fair Value Measurement of Assets and Liabilities
12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
Fair Value Measurement of Assets and Liabilities
Fair Value Measurement of Assets and Liabilities

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014:
 Description
Balances as of December 31, 2015
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1) 
 
Significant Other
Observable Inputs
(Level 2)
 
(In millions)
Assets:
 
 
 
 
 
Cash and cash equivalents
$
1,832

 
$
1,664

 
$
168

Short-term investments:
 
 
 
 
 
Restricted cash
28

 
28

 

Corporate debt securities
3,287

 

 
3,287

Government and agency securities
55

 

 
55

Equity instruments
929

 
929

 

Total short-term investments
4,299

 
957

 
3,342

Derivatives
97

 

 
97

Long-term investments:
 
 
 
 
 
Corporate debt securities
3,267

 

 
3,267

Total long-term investments
3,267

 

 
3,267

Total financial assets
$
9,495

 
$
2,621

 
$
6,874

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
Derivatives
$
25

 
$

 
$
25


Description
Balances as of December 31, 2014
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1) 
 
Significant Other
Observable Inputs
(Level 2)
 
(In millions)