Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that involve expectations, plans or intentions (such as those relating to future business, future results of operations or financial condition, inflationary pressure, foreign exchange rate volatility and geopolitical events, such as the ongoing war in Ukraine, new or planned features or services, or management strategies). You can generally identify these forward-looking statements by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in “Part I – Item 1A: Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”), as well as in our unaudited condensed consolidated financial statements, related notes, and the other information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission (“SEC”). We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the unaudited condensed consolidated financial statements and the related notes included in this report.

When we refer to “we,” “our,” “us” or “eBay” in this Quarterly Report on Form 10-Q, we mean the current Delaware corporation (eBay Inc.) and its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

OVERVIEW

Business

eBay Inc. is a global commerce leader, which includes our Marketplace platforms. Founded in 1995 in San Jose, California, eBay is one of the world’s largest and most vibrant marketplaces for discovering great value and unique selection. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity. Our technologies and services are designed to provide buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere. In 2023, we are focused on our strategic playbook — to understand the customer and their needs; build experiences they will love, at scale; and tell our story in new and different ways.

In 2022, and extending into the first quarter of 2023, we experienced reduced traffic in most markets resulting from geopolitical events, inflationary pressure, foreign exchange rate volatility and lower consumer confidence. These factors negatively impacted discretionary consumer spending, are uncertain in duration and we expect them to continue during 2023.

Presentation

In addition to the corresponding measures under generally accepted accounting principles (“GAAP”), management uses non-GAAP measures in reviewing our financial results. The foreign exchange neutral (“FX-Neutral”), or constant currency, net revenue amounts discussed below are non-GAAP financial measures and are not in accordance with, or an alternative to, measures prepared in accordance with GAAP. Accordingly, the FX-Neutral information appearing in the following discussion of our results of operations should be read in conjunction with the information provided below in “Non-GAAP Measures of Financial Performance,” which includes reconciliations of FX-Neutral financial measures to the most directly comparable GAAP measures. We calculate the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts.

Quarter Highlights

Net revenues increased 1% to $2,510 million during the three months ended March 31, 2023 compared to the same period in 2022 primarily due to the investment in focus categories and higher take rate as a result of the expansion of payment services and promoted listing products. The increase in net revenues was partially offset by a reduction in traffic in most markets resulting from geopolitical events, inflationary pressure, foreign exchange rate volatility and lower consumer confidence during the three months ended March 31, 2023. FX-Neutral net revenues (as defined above) increased 3% during the three months ended March 31, 2023 compared to the same period in 2022. Operating margin decreased to 22.2% for the three months ended March 31, 2023 compared to 27.9% for the same period in 2022.

We generated cash flow from continuing operating activities of $841 million during the three months ended March 31, 2023 compared to $629 million in the same period in 2022.

We recorded unrealized gains of $198 million in aggregate in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income during the three months ended March 31, 2023 compared to $2,291 million of unrealized losses recorded during the same period in 2022.

In January 2023, we repaid debt of $1.2 billion consisting of the floating rate and 2.750% senior notes.

During the three months ended March 31, 2023, we paid $242 million cash for the purchase of common stock and paid $134 million in cash dividends.

In April 2023, we declared a quarterly cash dividend of $0.25 per share of common stock to be paid on June 16, 2023 to stockholders of record as of June 1, 2023.

RESULTS OF OPERATIONS

We have one reportable segment to reflect the way management and our chief operating decision maker (“CODM”) review and assess performance of the business. Our reportable segment is Marketplace, which includes our online marketplace located at www.ebay.com, its localized counterparts and the eBay suite of mobile apps. The accounting policies of our segment are the same as those described in “Note 1 — The Company and Summary of Significant Accounting Policies” in our condensed consolidated financial statements included elsewhere in this report.

Net Revenues

Beginning in the fourth quarter of 2022, we present revenues generated from our Marketplace GMV and from non-GMV based businesses as “Net revenues” in order to more closely align our presentation of net revenues with how our business is operated. We formerly presented such amounts as “Net transaction revenues” and “Marketing services and other (MS&O) revenues,” and those line items for such prior periods have been conformed to current period presentation. Consolidated net revenues are unchanged.

Net revenues primarily include final value fees, feature fees, fees to promote listings, payment service fees, listing fees, and store subscription fees from sellers on our platforms. Our net revenues also include revenues from the sale of advertisements, revenue sharing arrangements and shipping fees. Our net revenues are reduced by incentives, including discounts, coupons and rewards, provided to our customers.

The following table presents net revenues for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023						2022						% Change
Net revenues			$	2,510					$	2,483					1		%

Seasonality

We expect transaction activity patterns on our platforms to trend with general consumer buying patterns and expect that these trends will continue. As we introduce and scale new products throughout the year, we expect net revenues to fluctuate. In addition, macroeconomic conditions, including the impact of COVID-19, disrupted seasonal patterns in net revenues, particularly in the first quarter of 2021. The following table presents our total net revenues and the sequential quarterly movements of these net revenues for the periods indicated (in millions, except percentages):

			Quarter Ended
			March 31						June 30						September 30						December 31
2021
Net revenues			$	2,638					$	2,668					$	2,501					$	2,613
% change from prior quarter			6		%				1		%				(6)		%				4		%
2022
Net revenues			$	2,483					$	2,422					$	2,380					$	2,510
% change from prior quarter			(5)		%				(2)		%				(2)		%				5		%
2023
Net revenues			$	2,510					$	—					$	—					$	—
% change from prior quarter			—		%

Net Revenues by Geography

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. The following table presents net revenues by geography for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023						2022						% Change
U.S.			$	1,261					$	1,226					3		%
Percentage of net revenues			50		%				49		%
International			1,249						1,257						(1)		%
Percentage of net revenues			50		%				51		%
Total net revenues			$	2,510					$	2,483					1		%

Our commerce platforms operate globally, resulting in certain revenues that are denominated in foreign currencies, primarily the British pound and euro. Year-over-year appreciation or depreciation of the U.S. dollar may have a material impact to our financial results, and we have seen and could continue to see elevated foreign currency volatility in the future. Through our hedging programs, we actively monitor foreign currency volatility and attempt to mitigate the risk. As shown in the table above, we generate approximately half of our net revenues internationally. Because of these factors, we are subject to the risks related to doing business in foreign countries as discussed in “Part I - Item 1A: Risk Factors” of the 2022 Form 10-K.

Net revenues included $29 million of hedging gains during the three months ended March 31, 2023 as compared to $6 million of hedging gains during the same period in 2022. Foreign currency movements relative to the U.S. dollar had an unfavorable impact of $45 million on net revenues during the three months ended March 31, 2023 compared to an unfavorable impact of $58 million on net revenues during the same period in 2022. The effect of foreign currency exchange rate movements during the three months ended March 31, 2023 compared to the same period in 2022 was primarily attributable to the strengthening of the U.S. dollar against the British pound and euro.

Key Operating Metrics

Gross Merchandise Volume (“GMV”) and take rate are significant factors that we believe affect our net revenues.

GMV consists of the total value of all paid transactions between users on our platforms during the applicable period inclusive of shipping fees and taxes. Despite GMV’s divergence from revenue, we still believe that GMV provides a useful measure of the overall volume of paid transactions that flow through our platforms in a given period.

Take rate is defined as net revenues divided by GMV and represents net revenues as a percentage of overall volume on our platforms. We believe that take rate provides a useful measure of our ability to monetize volume through marketplace services on our platforms in a given period. We use take rate to identify key revenue drivers on our marketplace.

The following table presents net revenues, GMV and take rate for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,												% Change
			2023						2022						As Reported						FX-Neutral
			(In millions, except percentages)
Net revenues (1)			$	2,510					$	2,483					1		%				3		%
Supplemental data:
GMV			$	18,410					$	19,409					(5)		%				(2)		%
Take rate (2)			13.63		%				12.79		%				0.84		%

(1) Net revenues were net of $29 million and $6 million hedging gains during the three months ended March 31, 2023 and 2022, respectively.

(2) Take rate is defined as net revenues divided by GMV, as discussed above.

Net revenues increased primarily due to the investment in focus categories and higher take rate as a result of the expansion of payment services and promoted listing products. The increase in net revenues was partially offset by a reduction in traffic in most markets resulting from geopolitical events, inflationary pressure, foreign exchange rate volatility and lower consumer confidence, which negatively impacted discretionary consumer spending during the three months ended March 31, 2023.

Net revenues increased despite GMV decreasing during the three months ended March 31, 2023 compared to 2022 primarily due to the benefit of a higher take rate during the same period, as discussed above. We expect the divergence between net revenues and GMV to continue through the year. Despite GMV’s divergence from net revenues, we still believe the metric provides a useful measure of overall volume of paid transactions that flow through the platform in a given period.

Cost of Net Revenues

Cost of net revenues represents costs associated with customer support, site operations and payment processing. Significant components of these costs primarily consist of employee compensation including stock-based compensation, contractor costs, facilities costs, depreciation of equipment and amortization expense, bank transaction fees, credit card interchange and assessment fees, authentication costs, shipping costs and digital services tax. The following table presents cost of net revenues for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023						2022						% Change
Cost of net revenues			$	700					$	689					2		%
Percentage of net revenues			28		%				28		%

Cost of net revenues, net of immaterial hedging activities, increased during the three months ended March 31, 2023 compared to 2022 primarily driven by a $14 million increase related to the expansion of authentication services, a $13 million increase related to the launch of eBay International Shipping, and an $11 million increase in customer support costs, partially offset by a $12 million decrease in payment processing costs incurred and the $12 million favorable impact of foreign currency movements relative to the U.S. dollar.

Operating Expenses

The following table presents operating expenses for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023						2022						% Change
Sales and marketing			$	511					$	478					7		%
Percentage of net revenues			20		%				19		%
Product development			352						301						17		%
Percentage of net revenues			14		%				12		%
General and administrative			297						226						31		%
Percentage of net revenues			12		%				9		%
Provision for transaction losses			84						96						(13)		%
Percentage of net revenues			3		%				4		%
Amortization of acquired intangible assets			8						1						**
Total operating expenses			$	1,252					$	1,102					14		%

** Not meaningful

Foreign currency movements relative to the U.S. dollar had a favorable impact of $30 million on operating expenses during the three months ended March 31, 2023 compared to 2022. There was no hedging activity within operating expenses.

Sales and Marketing

Sales and marketing expenses primarily consist of advertising and marketing program costs (both online and offline), employee compensation including stock-based compensation, certain user coupons and rewards, contractor costs, facilities costs and depreciation on equipment. Online marketing expenses represent traffic acquisition costs in various channels such as paid search, affiliates marketing and display advertising. Offline advertising primarily includes brand campaigns and buyer/seller communications.

The increase in sales and marketing expenses during the three months ended March 31, 2023 compared to the same period in 2022 was primarily due to a $25 million increase in online and offline advertising expenses and an $18 million increase in employee related spend, partially offset by lower professional service spend of $8 million.

Product Development

Product development expenses primarily consist of employee compensation including stock-based compensation, contractor costs, facilities costs and depreciation on equipment. Product development expenses are net of required capitalization of major platform and other product development efforts, including the development and maintenance of our technology platform. Our top technology priorities include the implementation of our strategic plan including payment intermediation capabilities, improved seller tools and buyer experiences.

The increase in product development expenses during the three months ended March 31, 2023 compared to the same period in 2022 was primarily due to an increase in employee related costs.

Capitalized internal use and platform development costs were $31 million and $32 million in the three months ended March 31, 2023 and 2022, respectively. These costs are primarily reflected as a cost of net revenues when amortized in future periods.

General and Administrative

General and administrative expenses primarily consist of employee compensation including stock-based compensation, contractor costs, facilities costs, depreciation of equipment, employer payroll taxes on stock-based compensation, legal expenses, restructuring, insurance premiums and professional fees. Our legal expenses, including those related to various ongoing legal proceedings, may fluctuate substantially from period to period.

The increase in general and administrative expenses during the three months ended March 31, 2023 compared to 2022 was primarily due to $42 million of restructuring costs that did not occur in 2022, a $14 million increase in employee related costs, and a $10 million increase in professional service costs.

Provision for Transaction Losses

Provision for transaction losses primarily consists of transaction loss expense associated with our buyer protection programs, losses from our managed payments services, fraud and bad debt expense associated with our accounts receivable balance. We expect our provision for transaction losses to fluctuate depending on many factors, including changes to our protection programs and the impact of regulatory changes.

The decrease in provision for transaction losses during the three months ended March 31, 2023 compared to 2022 was primarily due to $14 million lower bad debt expense.

Gain (Loss) on Equity Investments and Warrant, Net

Gain (loss) on equity investments and warrant, net primarily consists of gains and losses related to our various types of equity investments, including our equity investments in Adevinta, KakaoBank and Gmarket, and gains and losses due to changes in fair value of the warrant received from Adyen. The following table presents gain (loss) on equity investments and warrant, net for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023						2022						% Change
Unrealized change in fair value of equity investment in Adevinta			$	174					$	(1,643)					111		%
Unrealized change in fair value of equity investment in Adyen			—						(80)						**
Unrealized change in fair value of equity investment in Gmarket			(11)						(182)						(94)		%
Unrealized change in fair value of equity investment in KakaoBank			(3)						(91)						(97)		%
Change in fair value of warrant			38						(115)						(133)		%
Realized change in fair value of shares sold in Adyen			—						(166)						**
Realized change in fair value of shares sold in KakaoBank			—						(8)						**
Gain (loss) on other investments			—						(6)						**
Total gain (loss) on equity investments and warrant, net			$	198					$	(2,291)					**
Percentage of net revenues			8		%				(92)		%

** Not meaningful

The change in gain (loss) on equity investments and warrant, net during the three months ended March 31, 2023 compared to the same period in 2022 was primarily driven by the change in the fair value of our equity investments in Adevinta, Gmarket, KakaoBank and warrant.

Interest and Other, Net

Interest and other, net primarily consists of interest earned on cash, cash equivalents and investments, as well as foreign exchange transaction gains and losses, gain/loss on acquisitions or disposals and interest expense, consisting of interest charges on any amounts borrowed and commitment fees on unborrowed amounts under our credit agreement and interest expense on our outstanding debt securities and commercial paper, if any. The following table presents interest and other, net for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023						2022						% Change
Total interest and other, net			$	(26)					$	(50)					(48)		%
Percentage of net revenues			(1)		%				(2)		%

Interest income increased $34 million during the three months ended March 31, 2023 compared to 2022 due to higher yields on corporate debt and government and agency securities in a higher interest rate environment. We expect this trend to continue throughout 2023.

Interest expense increased $6 million during the three months ended March 31, 2023 compared to 2022 primarily due to higher rates offset by lower average notional on outstanding debt during 2023. In 2023, we repaid two tranches of senior notes at substantially lower interest rates than the senior notes that were issued during the fourth quarter of 2022. As a result, we expect continued upward pressure on interest expense throughout 2023.

Income Tax Provision

The following table presents provision for income taxes for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023						2022
Income tax provision (benefit)			$	161					$	(310)
Effective tax rate			22.1		%				18.8		%

The increase in our effective tax rate for the three months ended March 31, 2023 compared to the same period in 2022 was primarily due to the decrease in proportion of non-deductible losses on investments to total income (loss) from continuing operations before taxes.

We are regularly under examination by tax authorities both domestically and internationally. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations, although we cannot assure you that this will be the case given the inherent uncertainties in these examinations. Due to the ongoing tax examinations, it is generally impractical to determine the amount and timing of these adjustments. However, we expect several tax examinations to close within the next twelve months. See “Note 14 — Income Taxes” to the condensed consolidated financial statements included in this report for more information on estimated settlements within the next twelve months.

Non-GAAP Measures of Financial Performance

To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles, we use FX-Neutral net revenues, which are non-GAAP financial measures. Management uses the foregoing non-GAAP measures in reviewing our financial results. We define FX-Neutral net revenues as net revenues minus the exchange rate effect. We define exchange rate effect as the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts, excluding hedging activity.

These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these

non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. These measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

These non-GAAP measures are provided to enhance investors’ overall understanding of our current financial performance and its prospects for the future. Specifically, we believe these non-GAAP measures provide useful information to both management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook. In addition, because we have historically reported certain non-GAAP results to investors, we believe that the inclusion of these non-GAAP measures provide consistency in our financial reporting.

The following tables present a reconciliation of FX-Neutral GMV and FX-Neutral net revenues (each as defined below) to our reported GMV and net revenues for the periods indicated (in millions, except percentages):

			Three Months Ended March 31,
			2023																		2022						% Change
			As Reported						Exchange Rate Effect (1)(3)						FX-Neutral (2)						As Reported						As Reported						FX-Neutral
GMV			$	18,410					$	(604)					$	19,014					$	19,409					(5)		%				(2)		%
Net Revenues			$	2,510					$	(45)					$	2,555					$	2,483					1		%				3		%

(1) We define exchange rate effect as the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts excluding hedging activity.

(2) We define FX-Neutral GMV as GMV minus the exchange rate effect. We define the non-GAAP financial measures of FX-Neutral net revenues as net revenues minus the exchange rate effect.

(3) Net revenues were net of $29 million and $6 million hedging gains during the three months ended March 31, 2023 and 2022, respectively.

Liquidity and Capital Resources

Cash Flows

			Three Months Ended March 31,
			2023						2022
			(In millions)
Net cash provided by (used in):
Continuing operating activities			$	841					$	629
Continuing investing activities			701						1,772
Continuing financing activities			(1,388)						(1,952)
Effect of exchange rates on cash, cash equivalents and restricted cash			5						(18)
Net increase in cash, cash equivalents and restricted cash - discontinued operations			—						(16)
Net increase (decrease) in cash, cash equivalents and restricted cash			$	159					$	415

Continuing Operating Activities

Our operating cash flows arise primarily from cash received from our customers on our platforms offset by cash payments for sales and marketing, employee compensation and payment processing expenses.

Cash provided by continuing operating activities of $841 million in the three months ended March 31, 2023 compared to cash provided by continuing operating activities of $629 million in the three months ended March 31, 2022 was primarily attributable to working capital movements and changes in non-cash items during the three months ended March 31, 2023 compared to the same period in 2022.

Continuing Investing Activities

Cash provided by continuing investing activities of $701 million in the three months ended March 31, 2023 was primarily attributable to proceeds of $4,404 million from the maturities and sales of investments, partially offset by cash paid for investments of $3,543 million and property and equipment of $132 million.

The largely offsetting effects of purchases of investments and maturities and sale of investments results from the management of our investments. As our immediate cash needs change, purchase and sale activity will fluctuate.

Continuing Financing Activities

Cash used in continuing financing activities of $1,388 million in the three months ended March 31, 2023 was primarily attributable to debt repayments of $1,150 million related to the redemption of our floating rate and 2.750% senior notes due 2023, cash paid to repurchase $242 million of common stock, and $134 million paid in cash dividends, partially offset by net funds receivable and payable activity of $229 million.

The positive effect of exchange rate movements on cash, cash equivalents and restricted cash was due to the weakening of the U.S. dollar against other currencies during the three months ended March 31, 2023 compared to the same period in 2022.

Liquidity and Capital Resource Requirements

As of March 31, 2023 and December 31, 2022, we had assets classified as cash and cash equivalents, as well as short-term and long-term non-equity investments from continuing operations, in an aggregate amount of $5.0 billion and $5.9 billion, respectively. We believe that our cash, cash equivalents and short-term and long-term investments, together with cash expected to be generated from operations, borrowings available under our credit agreement and commercial paper program, and our access to capital markets, will be sufficient to satisfy our material cash requirements over the next 12 months and for the foreseeable future.

However, geopolitical and macroeconomic events including the war in Ukraine, inflationary pressure, foreign exchange volatility and global economic uncertainty have caused material disruptions in both U.S. and international financial markets and economies and are uncertain in duration. The future impact of these events cannot be predicted with certainty and have increased, and may continue to increase, our borrowing costs and other costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity, and we cannot assure that we will have access to external financing at times and on terms we consider acceptable, or at all, or that we will not experience other liquidity issues going forward.

Senior Notes

In January 2023, we redeemed the $1.2 billion aggregate principal amount of the floating rate and 2.750% senior notes due 2023. Total cash consideration paid was $1.2 billion, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

As of March 31, 2023, we had fixed-rate senior notes outstanding for an aggregate principal amount of $7.8 billion, with none payable within 12 months. The net proceeds from the issuances of these senior notes are used for general corporate purposes, including, among other things, capital expenditures, share repurchases, repayment of indebtedness and possible acquisitions.

Commercial Paper

We have a commercial paper program pursuant to which we may issue commercial paper notes in an aggregate principal amount at maturity of up to $1.5 billion outstanding at any time with maturities of up to 397 days from the date of issue. As of March 31, 2023, there were no commercial paper notes outstanding.

Credit Agreement

In March 2020, we entered into a credit agreement that provides for an unsecured $2 billion five-year credit facility. We may also, subject to the agreement of the applicable lenders, increase commitments under the revolving credit facility by up to $1 billion. Funds borrowed under the credit agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes. As of March 31, 2023, no borrowings were outstanding under our $2 billion credit agreement.

Credit Ratings

As of March 31, 2023, we were rated investment grade by Standard and Poor’s Financial Services, LLC (long-term rated BBB+, short-term rated A-2, with a stable outlook) and Moody’s Investor Service (long-term rated Baa1, short-term rated P-2, with a stable outlook). We disclose these ratings to enhance the understanding of our sources of liquidity and the effects of our ratings on our costs of funds. Our borrowing costs depend, in part, on our credit ratings and any actions taken by these credit rating agencies to lower our credit ratings, as described above, will likely increase our borrowing costs.

We were in compliance with all financial covenants in our outstanding debt instruments for the three months ended March 31, 2023. For additional details related to our debt, please see “Note 9 — Debt” to the condensed consolidated financial statements included in this report.

Income Taxes

As of March 31, 2023, our assets classified as cash and cash equivalents, and short-term and long-term non-equity investments included assets held in certain of our foreign operations totaling approximately $2.5 billion. As we repatriate these funds to the U.S., we will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes on those amounts during the period when such repatriation occurs. We have accrued deferred taxes for the tax effect of repatriating the funds to the U.S.

For additional details related to our income taxes, please see “Income Tax Provision” in our Results of Operations above and “Note 14 — Income Taxes” to the condensed consolidated financial statements included in this report.

Stock Repurchases

Our stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of our common stock to reduce our outstanding share count. Any share repurchases under our stock repurchase programs will be funded from our working capital or other financing alternatives.

We expect, subject to market conditions and other uncertainties, to continue making opportunistic and programmatic repurchases of our common stock. However, our stock repurchase programs may be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash.

During the three months ended March 31, 2023, we repurchased approximately $250 million of our common stock under our stock repurchase programs. As of March 31, 2023, a total of approximately $2.6 billion remained available for future repurchases of our common stock under our stock repurchase programs. See “Note 12 — Stockholders’ Equity” to the condensed consolidated financial statements included in this report for more information about our stock repurchase programs.

Dividends

The Company paid a total of $134 million and $129 million in cash dividends during the three months ended March 31, 2023 and 2022, respectively. In April 2023, our Board of Directors declared a cash dividend of $0.25 per share of common stock to be paid on June 16, 2023 to stockholders of record as of June 1, 2023.

Other Capital Resource Requirements

We actively monitor all counterparties that hold our cash and cash equivalents and non-equity investments, focusing primarily on the safety of principal and secondarily on improving yield on these assets. We diversify our cash and cash equivalents and investments among various counterparties in order to reduce our exposure should any one of these counterparties fail or encounter difficulties. To date, we have not experienced any material loss or lack of access to our invested cash, cash equivalents or short-term investments; however, we can provide no assurances that access to our invested cash, cash equivalents or short-term investments will not be impacted by adverse conditions in the financial markets, including, without limitation, as a result of the impact of geopolitical events, inflationary pressure, lower consumer spending and foreign exchange rate volatility. At any point in time we have funds in our operating accounts and customer accounts that are deposited and invested with third party financial institutions.

We have a cash pooling arrangement with a financial institution for cash management purposes. As of March 31, 2023, we had a total of $168 million in aggregate cash deposits and no cash withdrawals held within the financial institution under the cash pooling arrangement. See “Note 11 — Commitments and Contingencies” to the condensed consolidated financial statements included in this report for more information about our cash pooling arrangement.

We have entered into various indemnification agreements and, in the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations. It is not possible to determine the maximum potential loss under these various indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively. See “Note 11 — Commitments and Contingencies” to the condensed consolidated financial statements included in this report for more information about our indemnification provisions.