PayPal Equity Research

1 University of Oregon Investment Group
October 29h
, 2016
Technology
Covering Analyst:
Alex Marcinkowski – amarcin2@uoregon.edu
Key Statistics
52 Week Price Range
50-Day Moving Average $39.28
Estimated Beta
Dividend Yield
Market Capitalization
3-Year Revenue CAGR
Trading Statistics
Diluted Shares Outstanding (mm) 1,244
Average Volume (3-Month) 8,080,000
Institutional Ownership
Insider Ownership
EV/EBITDA (LTM)
Margins and Ratios
Gross Margin (LTM)
EBITDA Margin (LTM)
Net Margin (LTM)
Debt to Enterprise Value
$30.52 - 44.52
0.99
NA
52.22B
18.06%
19.95%
12.11%
0.00x
81%
0%
22.72x
100.00%
Investment Thesis
 PayPal’s premier market share give them a competitive advantage over
pure-play competitors, who cannot compete in scale or profitability and will
be priced out of the market in the coming years.
 PayPal’s diversification enables them to pursue growth in all facets of the
payments industry, securing their leadership position in both mobile and
online payments.
 PayPal will see monetization in their previous acquisitions of Venmo,
Braintree and Zoom; allowing them to offset margin squeeze and achieve
synergies between various products.
 PayPal has consistently proven themselves to be innovators in the electronic
payments industry, and will continue to be first-to-market with new
opportunities, like contextual commerce and PaaP.
Ticker: PYPL Rating: Overweight
Price Target: $48.60
Action Recommended: Enter Position
Current Price: $41.69
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Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16
Volume Adjusted Close 50-Day Avg 200-Day Avg
Since IPO Stock Chart
PayPal Holdings Inc.

University of Oregon Investment Group
UOIG 2
October 29th
, 2016
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
2014 2015 2016 2017 2018 2019
Total Revenue %Growth
Medium-to-
Large
Enterprise,
48.4%
Small
Business,
46.3%
Consumer,
5.3%
1620.00 1790.00
3964.00
4928.00
2346.00
2818.00
2014 2015Total Customer
Accounts
Number of Transactions
Transactions per
Account
Growth
Business Overview
Company History
PayPal was founded in 1998 as a security software company, Confinity, by Peter
Thiel, Luke Nosek, Max Levchin and Ken Howery. In 2000, Confinity merged
with X.com, an online banking company and eventually changed its name to
PayPal in 2001 following Elon Musk’s decision to focus solely on money transfer
services. PayPal IPO’d in 2002, raising $61 million, but was acquired for $1.5
billion and taken private by eBay later that year. From 2002 to 2014, PayPal grew
under eBay as its primary payment method, acquiring VeriSign, Fraud Services,
Bill Me Later (PayPal Credit), Braintree, IronPearl and Zong during this period.
In 2011, PayPal broke into the offline payments world, allowing customers to pay
with PayPal at select stores; eventually furthered by a partnership with Discover
Card enabling payments with any retailer that accepts Discover.
On September 30, 2014, PayPal announced that it would spin off from eBay, and
become a separate public company; a move led by activist investor Carl Icahn.
The spin off was completed on July 17, 2015 and the IPO date was July 20, raising
$47 billion. On July 1, 2015 PayPal acquired money transfer service Xoom for
$1.09 billion. PayPal also made several other notable 2015 acquisitions, including
Paydiant and Venmo. Additionally, PayPal launched PayPal.me in late 2015, a
service that allows secure payments to be sent via a link on traditional messaging
platforms.
PayPal is headquartered in San Jose California and has European headquarters in
Luxemburg and international headquarters in Singapore. PayPal employs 16,800
people globally, 9,800 of whom are located in the U.S and 8,000 of which work
in their customer service organization.
Business Structure
PayPal is a payments technology company that facilitates and enables digital
payments for both consumers and merchants globally. PayPal’s overarching goal
is for people to be able to access and move their money quickly and securely,
regardless of location. They provide services to business to accept payments
though websites, mobile phones, applications and retail locations. In addition,
they provide peer-to-peer payments through PayPal, Venmo, and Xoom.
Altogether, PayPal, PayPal Credit, Xoom, Venmo, and Braintree make up the
company’s proprietary payments platforms.
PayPal provides payment solutions for over 192 million active accounts in over
202 markets worldwide. PayPal products have the ability for consumers to
purchase goods, get paid for sale of goods, transfer money and withdraw money.
PayPal enables consumers to fund purchases through a bank account, PayPal
balance, PayPal Credit, or a credit or debit card. PayPal, Venmo and Xoom can
be used to send and receive money, including cross-border transactions, to friends
and family.
On the merchant facing side, merchants are offered “end-to-end” payments
solutions that authorize and settle transactions, as well as provide access to funds.
PayPal’s platform is connected to numerous global financial institutions and allow
payments regardless of where the merchant and customer are located, accepting
more than 100 currencies, allowing bank withdraws in 57 currencies and holding
balances in PayPal in 26 currencies.
Figure 1: Major Market Segmentation
Source: IBISWorld
Figure 2: Revenue Growth
Source: UOIG Spreads
Figure 3: PayPal Transaction Metrics
Source: PayPal Investor Relations

UOIG 3
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0%
3%
6%
9%
12%
-300
0
300
600
900
1200
2016 2017 2018 2019
Capital Expenditures
Change in Net Working Capital
Capital Expenditure (% of Revenue)
Braintree 2013 - $800M
Venmo 2013 - Included in Braintree Deal
Paydiant 2015- $260M
CyActive 2015 - $60M
Xoom 2015 - $890M
Modest 2015 - Unknown
Recent Acquisitions
6%
4%
3%
3%
3%
81%
Vanguard Group
FMR LLC
State Street
Carl Icahn
T Rowe Price
Total Insitutional
Shares
PayPal generates revenue by charging fees for processing transactions and other
payment-related services, based primarily on total payment volume. Additionally,
PayPal earns revenues by providing value-add services, like PayPal Credit and
Paydiant. Transactions on PayPal’s ecosystem can involve a merchant, a
consumer, the consumer’s funding source provider, and PayPal.
Products and Services
PayPal
PayPal offers merchant and consumer payment services online, on mobile phones
or in-store. PayPal enables merchants to accept and process numerous forms of
payment types through their various payment platforms. Consumers can pay with
a PayPal balance, credit card, debit card or bank balance. PayPal merchant
accounts can be set up in minutes and do not generally require new or specialized
equipment. PayPal also offers in-store payments and POS solutions to merchants,
similar to offerings by Square. Furthermore, PayPal provides merchants value add
services to help manage cash flow, invoice clients, store sensitive customer
information and integrate with Braintree.
PayPal’s digital wallet allows consumers to draw funds from a variety of sources
in one location. PayPal does not generally charge to draw and fund accounts. In
addition, PayPal offers buyer protection programs that reimburse the consumer in
the case of fraudulent activity.
Braintree
Braintree provides business with the ability to accept payments online or on
mobile phones. Its payment platform is full-stack, meaning it replaces the
traditional model of using different providers for a gateway and merchant
provider. Braintree provides customers with both a merchant account and a
payment gateway and charges a fee and set amount per transaction processed.
Braintree’s white label nature means it is device agnostic and supports seamless
payments within apps or online. Braintree is fully integrated with PayPal and other
payment types.
Venmo
Venmo is a peer-to-peer payments application that lets users send and receive
money instantly from other Venmo users. Venmo is available for both Apple and
Android devices and is linked to a user’s email address. Transfers within the same
country that are not financed with a credit card are free of charge. Venmo lets you
link a bank account or card to pay, along with your Venmo balance. Transfers
from Venmo to bank accounts are completed within one business day. Venmo
recently initiated a feature that allows users to pay merchants with Venmo in-app,
although adoption is in its early stages.
PayPal Credit
PayPal Credit, formerly Bill Me Later, allows consumers to access a revolving
line of credit though their PayPal account to pay for online. PayPal credit can be
used at nearly anywhere PayPal is accepted. PayPal makes money on the set
interest rate that consumers are charged monthly for rolling balances. PayPal
Credit functions in much the same way as a traditional credit card.
Figure 4: PayPal Historic Acquisitions
Source: Capital IQ
Figure 5: PayPal Institutional Ownership
Source: Nasdaq.com
Figure 6: CapEx and Working Capital Projections

UOIG 4
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$-
$10,000
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2010 2011 2012 2013 2014 2015 2016
Total Revenue % Growth
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2013 2014 2015 2016 Q1-3
U.S. International
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2016 2017 2018 2019 2020 2021 2022 2023 2024
EBIT FCF
Xoom
Xoom enables money transfers from U.S. customers to international family and
friends online or on mobile phones. Users can fund their transfer with a bank
account, debit or credit card and send their transfer to any bank in the recipients’
country, deposited within 1 to 2 business days. Xoom offers money transfer
services from the U.S. to 41 countries and cross border bill payment to 7 countries.
Paydiant
Paydiant is a cloud based, white label mobile wallet platform that enables
merchants and banks to create their own mobile wallet solutions under their own
brands and in their own apps. Paydiant powers payment apps for businesses like
Subway and Capital One Bank. Paydiant yields more point-of-sale volume for
PayPal and drives in-store sales for PayPal merchant partners by providing quick
and seamless payment for customers.
Revenue segments
Transaction Revenues
Transaction revenues are net transaction fees charged to consumers and merchants
based on volume of activity processed through PayPal, PayPal Credit, Venmo,
Braintree and Xoom. The revenues are based off of total payment volume, and
pricing varies among merchants and regions.
Other Value Added Services
Value add revenues are derived principally from interest and fees earned on
PayPal Credit loans portfolio, subscription fees, gateway fees, interest earned on
PayPal customer account balances, fees from Paydiant, revenue share through
partnerships and gain on sale of interest in certain consumer loans.
Industry
Overview
PayPal’s unique market positioning and myriad of different products means it
competes in several distinct yet overlapping industries. First, it competes with
other credit card processors and money transferor’s, who process financial
transactions and provide liquidity services for consumers and merchants. Major
players in this space are American Express, Visa, MasterCard and First Data Corp.
Perhaps more directly though, PayPal competes in the online payment processing
software industry. Companies in this space enable merchants and consumers to
pay, process and authorize online transactions. Major players in this space are
Square, Google and Stripe.
Outlook
The outlook of their overarching industry looks extremely promising over the
coming years. IBISWorld anticipates revenue for the Credit Card Processing and
Money Transferring industry to grow at an annualized rate of 4.4% to $72 billion
in the five years to 2021.The decline of cash and checks is a natural progression
in today’s technologically oriented society and directly correlates to growth in
electronic payments. Continued advances in mobile technology allow users to
access banking information, pay bills, and complete transactions on-the-go; a
Figure 7: PayPal EBIT & FCF Projections
Figure 8: Historical Revenue by Geography
Figure 9: Payment Industry Growth
Source: IBISWorld

UOIG 5
October 29th
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0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
0
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2014 2015 2016 2017 2018 2019
E-Commerce % Change
0
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75
80
85
90
95
100
105
2014 2015 2016 2017 2018 2019
CCI %Growth
Competition
Concentration
Life Cycle
Capital Intensity
Technology Change
Regulation
Industry Assistance
Medium
Medium
None
Barriers to Entry
High
Low
Growth
Low
significant advantage over cash and check. More specifically, technologies
produced by Apple, Google and PayPal have allowed consumers to sync credit
cards with a mobile phone for in-store purchases and have gained ground in the
credit card space at an alarming rate; and are now supported by almost all major
credit cards and banks in the United States.
Macro factors
Consumer Spending and Consumer Confidence
Consumer spending is an extremely important factor in industry demand, as
volume of purchases drives revenue for the industry. As consumers spend more
on products, PayPal and others have the opportunity to process more transactions
and experience greater transaction volume. This spending is largely influenced by
consumers’ expectations of future economic conditions, measured by consumer
confidence. Consumer confidence is expected to increase by 3% over the next 4
years, which is an opportunity for payment processors.
E-Commerce Sales
E-commerce sales represent the percentage of consumer retail purchases done
online as compared to retail stores. As PayPal conducts nearly all business online,
the growth of e-commerce means PayPal and others will process higher payment
volumes. E-commerce sales have been steadily increasing for years, and have a
5.4% expected growth from 2016-2021 according to IBISWorld. As e-commerce
continues to grow, the shift away from cash and check payments will by further
extenuated and consumers will naturally move towards electronic methods as the
primary form of payment.
Mobile Phone Usage
Mobile phone applications continue to be a growing source of revenue in the
global payments industry. Mobile payment processing represents the biggest
growth opportunity in this industry, as consumers continually use P2P transferring
services, in-store phone payment technologies and mobile shopping applications.
As more people internationally gain access to the internet and mobile phones,
more payments will be initiated via mobile applications, and less people will be
incentivized to hold cash or physical credit cards
Regulatory Environment
PayPal is not classified as a bank within the U.S. because they do not engage in
fractional reserve banking. In the U.S., PayPal is licensed as a money transmitter
and is therefore subject to some of the regulations that banks are, most notably
Regulation E consumer protections. In Europe, PayPal is registered as a bank and
is governed by Luxembourg’s banking supervisory authority. They are allowed to
conduct banking business throughout the EU. Internationally, PayPal has
permission to operate in nearly all major countries, including China and India,
with nearly identical functions to that seen in the U.S. service. Because of the
relatively new nature of this industry, increasing regulation, especially in the U.S.
could materially harm PayPal’s business. Specifically, new limits on transaction
fees or reclassification to a bank could hurt PayPal’s and the industry’s future.
Figure 10: E-commerce Growth
Source: IBISWorld
Figure 11: Industry Barriers
Source: IBISWorld
Figure 12: CCI Projection
Source: Capital IQ

UOIG 6
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0.0
0.5
1.0
1.5
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4.0
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$15,000
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$17,500
$18,000
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2017 2018 2019 2020 2021 2022
Total Revenue % Growth
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
SQ SHOP TSS V MA AXP GOOGL AAPL AMZN
29.9%
70.1%
PayPal
Others
Competition
Internal
This industry is highly competitive due to its attractive growth prospects and
strong margins. Competition from this industry occurs both internally and
externally. Internal competition among processors is focused around price, as
most operators charge a percentage of the transaction plus a set fee. Merchants
want a processor who offers competitive pricing so it does not eat into their
margins. Additionally, features like security, prominence among consumers, and
reliability are further points of differentiation.
External
Externally, firms compete with other payment forms like credit and debit cards
and bank transfers. These substitute forms of payment have been hurt by online
growth as consumers increasingly prefer one consolidated platform to hold
sensitive information. In addition, retail and in-person purchases, both of which
have been steadily declining, eliminate the need for online payment processors.
As the world increasingly shifts to electronic payment methods over cash and
check, this will spur the entrance of new competitors seeking to capitalize on this.
Most importantly, the ability to have excellent mobile and e-commerce
technology will by key to sustained success in this industry. The ability to provide
cost-effective, easy-to-use and secure platforms will be a differentiator among
firms going forward. Credit card companies like Visa have already begun to
recognize this trend and have created mobile/online payment platforms.
Barriers to entry
Barriers to entry in this industry are rapidly increasing as many firms are expected
to be forced or bought out of the market in the coming years. Due to the new
nature of the industry, there is a relatively low level of concentration,
compromised of many non-profitable firms. As these firms subside, barriers to
entry will become increasingly high. In the future, lesser known firms will
struggle to gain the acceptance and trust of merchants, meaning the barrier to entry
reinforces itself. As firms cannot gain trust without attracting a large user base of
partners, they can’t establish trust without a large user base. Therefore, small firms
won’t be able to compete and larger players will command benefits from
economies of scale and will be able to offer better pricing
Strategic Positioning
Market Share
PayPal controls much of the global market for electronic payments, accounting
for nearly one third of global market share, according to IBISWorld. Because of
this, they have built and maintained a strong client base of the biggest merchants
in the world, counting firms like Nike, eBay Alibaba and Walmart as clients. The
PayPal brand has become synonymous with online payments and is the preferred
way to pay for many consumers globally. Market share is of particular importance
in this industry because the success of PayPal depends on the universal acceptance
of their payment platform. As more merchants use their platform, it incentivizes
other merchants to follow because of the popularity of PayPal among consumers
and the fear of losing out on business to competing online sites.
Figure 13: Comparables Enterprise Value ($B)
Figure 14: Online Payment Industry Projections
Source: IBISWorld
Figure 15: PayPal Market Share
Source: Capital IQ

UOIG 7
October 29th
, 2016
PayPal Online Solutions
PaPal Credit
PayPal Working Capital
PayPal POS Solutions
PayPal Shopping
PayPal Here
Modest/PayPal Commerce
Xoom
Venmo
Paydiant
Braintree
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
2013A 2014A 2015A 2016E
EBITDA Margin EBITDA Growth
Diversification
PayPal’s acquisition and growth strategy have created a diversified business by
offering solutions across the payment ecosystem. Venmo gives them exposure to
the growing P2P payments industry, and is currently the largest and most
recognized player in this space. Braintree allows them to compete directly with
Stripe and Shopify by accepting all payment types in a white label, customizable
package. PayPal Credit competes with credit cards by allowing users to create a
revolving line of credit and Xoom is currently the most used and recognized way
to send money internationally. By diversifying their offerings, PayPal has
exposure to all elements of the electronic payments world and is not beholden to
growth in a certain area.
Financial Strength
PayPal has shown to be one of the very few players in this industry that has a track
record of making money and being consistently profitable. Their low debt and
high cash balnce allow them to aggressively pursue growth opportunities without
increasing firm risk to shareholders. PayPal has little going concern risk and can
therefore outlast or buy-out pure-play competitors. Contrast that with PayPal’s
more pure-play competitors like Shopify, Stripe, and Skril, who have shown no
ability to turn a profit and are supported by V.C. funding or their equity capital
raises, both of which are not legitimate long-term strategies to maintain
operations.
Security
PayPal is widely viewed as the most secure payment method for both consumers
and merchants. The 2015 acquistion of CyActive further enhances PayPal’s
security cababilites. Because PayPal transactions only need a login and password,
personal bank account and card info are not sent to merchants, meaning a hack to
a merchant site does not compromise consumer information. PayPal also offers
buyer protection policies in which it covers the cost of a purchased good if the
transaction meets certain criteria. The PayPal site itself is heavily encrypted and
PayPal itself offers rewards to white hat hackers for finding vulnerabilities in the
site.
Business Growth Strategies
Overall Volume Growth through Braintree
PayPal’s long term strategy is to grow its core payment processing business
through taking smaller cuts of transactions in exchange for larger overall
payment volume. Braintree is the key driver behind volume growth, possessing
payment capabilities for mobile phones and websites. Braintree provides
merchant account, payment gateway, card storage and other services in 40
countries and over 130 currencies globally. Braintree has seen volume growth of
over 100% y/y and counts Uber, AirBnB, Netflix and GitHub as clients.
Braintree’s tokenization technology is superior to competitors like Apple Pay
and Stripe as it is device agnostic, implements seamless payments and supports
Venmo and PayPal. Although Braintree’s take rate is lower than PayPal’s
because it operates as both a full stack processor and payment gateway, this is
offset by its impressive growth and synergies with other PayPal products.
Figure 16: PayPal Product Breakdown
Source: PayPal.com
Figure 17: PayPal EBITDA Margins

UOIG 8
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-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
V MA AXP PYPL TSS
Revenue Growth 2016 Revenue CAGR
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
EBIT Margin EBITDA Margin
Strategic Partnerships
PayPal has announced partnerships with MasterCard, Visa and First Data over
the past year. The First Data partnership enables PayPal’s payments products to
be used in-store by First Data’s clients and businesses. First Data has a 40%
market share in the U.S. for payment processing and will drive the availability
of PayPal at the point-of-sale. PayPal’s recent MasterCard partnership will yield
undisclosed financial incentives based on volume of MasterCard transactions
PayPal processes, and PayPal will now be able to be used at over 5 million
contactless merchant locations globally. PayPal’s Visa deal will yield similar
financial incentives and will yield non-increasing payment fees for PayPal.
Xoom and Venmo Expansion
PayPal has shown their ability to aquire new businesses, leverage their scale,
increase the user base and then monetize the service. Venmo’s payment volume
has grown at a CAGR of 138% to $4.9 billion in Q3 alone and PayPal is now
ready to cash in on Venmo’s massive user base. This year, PayPal implemted
Pay with Venmo feature that allows users to pay with in-app purchases through
their Venmo account. Merchants will pay a 2.9% transaction fee plus $0.30,
effectively monetizing the service. PayPal has also announced that they are
adding in-store payments to both their mobile apps as soon as 2017.
Xoom is PayPal’s next acquistion money-maker; a service that lets users send
money internationally, charging between $5-10 for the exchange and the
difference in the exchange rate. Xoom has now been integrated into PayPal’s
platform, meaning the potential user base has increased exponentially to all
PayPal account holders. In addition, Xoom’s services can now be expanded to
all of PayPal’s 200+ markets globally. PayPal projects Xoom will add $200
million to revenue for 2016, and higher margins in their Xoom buiness going
forward, offsetting some transaction margin squeeze.
Long-Term Product Innovation
PayPal has shown continued initiative to expand and even re-create the
electronic payments industry. PayPal aims to expand mobile shopping by being
a merchant services solution that powers merchant apps. PayPal wants to
provide an unbranded platform that is technology agnostic and can process any
payment type. Their Paydiant acquisition directly supports this long term vision
and will create innovation in mobile wallet technology.
Perhaps most importantly, PayPal is also the first mover in the contextual
commerce field. Contextual commerce is the idea that allows merchants to
implement buying opportunities into natural online activities. Braintree acts as
the enabler of contextual commerce and has already begun to work, along with
their subsidiary, Modest, with social media platforms. Braintree has the
capabilities to power PayPal’s contextual commerce platform and leverage
PayPal’s 14 million merchants and 190 million customers
Management and Employee Relations
Dan Schulman – President and CEO
Dan Schulman joined PayPal in 2014 to lead the PayPal through and after their
split with eBay. He served as the Group President of Enterprise Growth at
American Express Company from August 2010 to September 30, 2014. At
American Express, he was responsible for the its global strategy to expand
Figure 18: Selected Comparables Revenue
Figure 19: Selected Comps Margin Analysis
Figure 20: PayPal Value Proposition
Source: PayPal Investor Relations

UOIG 9
October 29th
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Prepaid Card
Services
7.0%
Check
Processing
15.0%
ACH
Products
18.0%
Credit Card
Services
22.0%
Debit Card
Services
38.0%
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
2014 2015
Salary Stock-Based Other
Corporate
Data security
40%
Security
Threat
Protection
40%
Cost
Reductionand
Risk
Management
20%
alternative mobile and online payment services, He has a record of high
performance in the consumer-marketing arena and almost two decades of
experience in the wireless industry. Total 2015 Compensation = $14,444,941.
John Rainey – CFO and Senior VP
John Rainey has been CFO and Senior Vice President of PayPal Holdings, Inc.
since August 24, 2015. John has an extensive background in corporate finance,
treasury, financial planning and analysis, tax, investor relations, strategic planning
and risk. He served as the Chief Financial Officer and Executive Vice President
of United Continental Holdings, Inc. from April 2012 to July 30, 2015. Total 2015
Compensation = $10,682,546.
William Ready – COO and Executive VP
William Ready has been the Chief Operating Officer and Executive Vice
President at PayPal Holdings, Inc. since September 30, 2016 and served as its
Global Head of Product & Engineering and Senior Vice President since
September 15, 201. Mr. Ready serves as a Senior Advisor at Silversmith Capital
Partners. He has in-depth knowledge of both the payments and technology space,
having built and grown multiple cutting edge payments companies. Total 2014
Compensation = $31,378,935.
Sripada Shivananda – CTO and Executive VP
Sripada Shivananda has been the Chief Technology Officer and Senior Vice
President at PayPal Holdings, Inc. since April 1, 2016. Mr. Shivananda served as
Vice President of Global Platform & Infrastructure at PayPal Holdings, Inc. He
served as Vice President of Platform & Infrastructure - eBay Marketplaces at
eBay Inc. from 2010 to 2015.
Management Guidance
Management guidance has been historically accurate, leaning on the conservative
side; with slight average over performance of expectations. Management provides
yearly and quarterly guidance on many metrics, including free cash flow, revenue,
operating margin and EPS among others. Management has typically hit these
targets within a reasonable level of error. PayPal also places heavy emphasis on
non-GAAP metrics, for which they also provide for. Management guidance was
factored into revenue projections and margin calculations.
Portfolio Strategy
PayPal operates as a large-cap financial technology company. Given its size,
PayPal cannot be pitched to the Alumni Fund. The Tall Firs Portfolio is currently
underweight large-cap and overweight technology. Given PayPal’s financial
exposure, a currently underweight sector, it is being pitched to Tall Firs as a large-
cap stock that can help increase the portfolio’s exposure to financials. In addition,
the analyst conviction, risk profile and growth of PayPal signify a fit for the
DADCO portfolio. Therefore, it is being pitched as a buy for DADCO as well.
Figure 21: Primary Electronic Payment Methods
Source: IBISWorld
Figure 22: Executive Compensation
Source: Morningstar
Figure 23: Corp. Concerns of Online Processing
8
Source: IBISWorld

UOIG 10
October 29th
, 2016
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Large Cap Mid Cap Small cap
IVW Tall Firs
Multiple Implied Price Weight
EV/Revenue $56.23 0.00%
EV/Gross Profit $86.88 0.00%
EV/EBIT $29.30 0.00%
EV/EBITDA $58.82 100.00%
EV/(EBITDA-Capex) $55.49 0.00%
Market Cap/Net Income = P/E $41.33 0.00%
Price Target $58.82
Current Price 43.22
Undervalued 36.09%
32%
14%
5%
41%
5%
3%
IME
TMT
Healthcare
Consumer
Financial
Cash
Recent News
PayPal's Long-Term Outlook Helps Validate a Questioned Growth Strategy
– TheStreet
Though its results and short-term guidance weren't particularly strong, PayPal
was more upbeat than ever about its ability to deliver strong long-term growth in
a changing online payments landscape, and managed to soothe some margin
concerns along the way. With investors taking the long view, that has shares
flying to their highest levels since the online payments giant split from eBay last
year.
Catalysts
Upside
 PayPal has ideal market positioning in the online and mobile payments
industry, going forward they will benefit from increased economies of scale
and increased barriers to entry in the industry.
 PayPal’s former acquisitions will continue to drive growth and become
monetized, diversifying PayPal’s offerings and ensuring innovation in a
rapidly changing industry.
 PayPal’s strategic partnerships show willingness to work with and profit from
larger competitors and a desire to expand into POS activities.

Downside
 Changing regulations or potential litigation, specifically in the U.S., could
hurt margins and force PayPal to restructure their business model.
 Encroachment by larger competitors like Amazon, Apple and Visa into the
mobile payments space could adversely affect growth and margins.
 Divergence from PayPal’s core business could result in lack of direction by
management and a fragmented business that cannot realize potential
synergies between products.
Comparable Analysis
I valued Visa’s common stock using comparable companies that, collectively,
best represent PayPal’s services, market positioning and future growth. As PayPal
is extremely diversified, almost no pure-play competitors exist, and I therefore
separated comparable into 3 baskets. The first being e-commerce and mobile
payment processors. I selected companies for this basket based on capital
structure, growth and likeness of services. The second basket is credit card
companies that compete with PayPal as alternative methods of payment. Selection
within this category was based on market size, singularity of offerings, capital
structure and future growth. The final basket is comprised of diversified tech
companies that offer services that compete with PayPal’s core business. Selection
for this basket is based on market size, threat of competing service and reasonable
future growth.
Square Inc. - SQ (10%)
“Square, Inc. develops and provides payment processing, point-of-sale (POS),
financial, and marketing services worldwide. It provides Square Register, a POS
Figure 24: Tall Firs Weightings
Source: UOIG Drive
Figure 25: Tall Firs Weightings
Source: UOIG Drive
Figure 26: Comparables Weighting

UOIG 11
October 29th
, 2016
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Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
Adjusted Close 50-Day Avg 200-Day Avg
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Weighted Average PayPal
software application for iOS and Android; Square Analytics that shows its sellers
how their businesses are performing; and Square Reader for magnetic stripe cards,
EMV chip cards, and NFC, which connects wirelessly to mobile devices. The
company also offers Square Stand that transforms an iPad into a POS terminal;
Square Cash, a peer-to-peer payments service. Square was founded in 2009 and
is headquartered in San Francisco, California.” – Capital IQ
Total System Services Inc. - TSS (10%)
“Total System Services, Inc. provides payment processing, merchant, and related
payment services to financial and nonfinancial institutions in the United States,
Europe, Canada, Mexico, and internationally. The company offers account
processing and output services, including processing the card application,
initiating service for the cardholder, processing card transaction for the issuing
retailer or financial institution, and accumulating the account’s transactions.,
Georgia.” – Capital IQ
Visa Inc. - V (15%)
“Visa Inc., a payments technology company, operates an open-loop payments
network worldwide. The company facilitates commerce through the transfer of
value and information among financial institutions, merchants, consumers,
businesses, and government entities. It operates VisaNet, a processing network
that enables authorization, clearing, and settlement of payment transactions.” –
Capital IQ
MasterCard Inc. - MA (15%)
“MasterCard Incorporated, a technology company, provides transaction
processing and other payment-related products and services in the United States
and internationally. It facilitates the processing of payment transactions, including
authorization, clearing, and settlement, as well as delivers related products and
services. The company also offers value-added services, such as loyalty and
reward programs, and information and consulting services.” – Capital IQ
American Express Company - AXP (15%)
“American Express Company provides charge and credit payment card products
and travel-related services to consumers and businesses worldwide. The
company’s products and services include charge and credit card products;
network services; expense management products and services; travel-related
services; and stored value/prepaid products.” – Capital IQ
Alphabet Inc. - GOOGL (15%)
“Alphabet Inc., through its subsidiaries, provides online advertising services in
the United States, the United Kingdom, and rest of the world. The company offers
performance and brand advertising services. It operates through Google and Other
Bets segments.” – Capital IQ
Apple Inc. - AAPL (10%)
“Apple Inc. designs, manufactures, and markets mobile communication and
media devices, personal computers, and portable digital music players to
consumers, small and mid-sized businesses, education, and enterprise and
government customers worldwide. The company also sells related software,
Figure 27: Visa 5 Year Stock Chart
Source: Yahoo! Finance
Figure 28: Multiple Comparison
Figure 29: Credit Card Comparables

UOIG 12
October 29th
, 2016
$0.00
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$900.00
Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16
Adjusted Close 50-Day Avg 200-Day Avg
0.00%
5.00%
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15.00%
20.00%
25.00%
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0.0
100,000.0
200,000.0
300,000.0
400,000.0
500,000.0
600,000.0
2013A 2014A 2015A 2016E 2017E 2018E
TPV Growth % Growth
Revenue $10,848
EBIT $1,532
Net Income $1,368
Operaing Cash Flow $2,023
NWC $4,232
FCF $765
EBITDA $2,258
services, accessories, networking solutions, and third-party digital content and
applications.” – Capital IQ
Amazon Inc. – AMZN (15%)
“Amazon.com, Inc. engages in the retail sale of consumer products in North
America and internationally. The company sells merchandise and content
purchased for resale from vendors, as well as those offered by third-party sellers
through retail. The company was founded in 1994 and is headquartered in Seattle,
Washington.” – Capital IQ
Discounted Cash Flow Analysis
In order to evaluate the intrinsic value of PayPal, I constructed a DCF analysis
with a projection period through a 2024 fiscal year. After determining enterprise
value, debt (less non-operating cash) was subtracted and divided by diluted shares
outstanding to obtain an implied price.
Revenue Model
PayPal breaks their revenue out into 2 segments, transaction and value add
services. Unfortunately, PayPal does not give illumination on revenue by service
or product line. Therefore, revenue was forecast for both segments through 2019
based on recently released management guidance, which has been historically
accurate. Following 2019, revenue growth is trended down towards the terminal
year at close to 9% as the firm becomes larger but has expansion opportunities in
a still growing industry and pursues international growth.
Working Capital
Working capital was calculated as current assets (excluding cash and short term
investments) less comprehensive current liabilities. PayPal’s historical
receivables and payables associated with eBay were set to zero as PayPal does not
break out this working capital item after their split in 2015. Accounts receivable
and payable were kept near historical averages, projected based off days sales
outstanding. Loans and interest receivable represent receivables from consumers
under PayPal Credit and working capital advances to small and medium sized
businesses through PayPal Working Capital. Loans and interest receivable were
kept near historical averages based on days sales outstanding. Funds receivable
hand customer accounts and funds payable and amounts due to customers are
offsetting accounts representing the balances in customer accounts and timing
differences in transfers to and from accounts. As they are offsetting, this has no
material effect on the valuation, but was projected to increase off of days sales
outstanding as mean customer account values rise.
Beta
The final beta used in the valuation is .99. This was calculated as a weighted
average of PayPal’s historical beta, adjusted for cash, a representative ETF beta,
and a weighted comparables beta. A beta of essentially 1 is reasonable given
PayPal’s size and financial exposure; their current individual beta is higher due to
lack of data points and a short trading period. As time goes on, I fully expect their
individual beta to move closer to 1.
Figure 30: PayPal TPV Growth
Figure 31: AMZN 5 Year Stock Chart
Source: Yahoo! Finance
Figure 32: 2016 PayPal Analyst Estimates

UOIG 13
October 29th
, 2016
2025E 2026E 2027E 2028E 2029E
$4,245.57 $4,820.86 $5,304.56 $5,650.25 $5,819.76
2055.79 2158.33 2195.80 2162.53 2059.44
17.07% 13.55% 10.03% 6.52% 3.00%
Intermediate Growth Rate
Type Equity Beta Cash Adjusted SE Weighting
1Year Daily Beta 1.22 1.25 0.10 0.00%
Since IPO Daily 1.18 1.21 0.09 15.00%
Since IPO Weekly 1.31 1.34 0.20 0.00%
Since IPO Monthly (14Data Points) 1.13 1.16 0.39 0.00%
1Year Comps 0.96 0.96 NA 50.00%
1Year ETF 0.93 0.93 0.06 35.00%
FinalCash Adjusted Beta 0.99
Undervalued/(Overvalued)
Terminal Growth Rate
2.0% 2.5% 3.0% 3.5% 4.0%
0.80 24.51% 32.48% 42.14% 54.08% 69.21%
0.90 8.92% 14.85% 21.89% 30.36% 40.76%
1.00 (3.65%) 0.86% 6.12% 12.33% 19.78%
1.10 (13.99%) (10.49%) (6.47%) (1.80%) 3.70%
1.20 (22.61%) (19.86%) (16.73%) (13.14%) (8.99%)
AdjustedBeta
Transaction Expense
Transaction expense represents PayPal’s largest cost and is therefore crucial in
the valuation. This expense consists of the costs PayPal incurs to accept the
funding source of a customer’s payment. As PayPal recently inked partnerships
with Visa and MasterCard, 2 of the costlier funding options, their transaction
expense is poised to increase in the coming years as there is some margin squeeze.
Although some of this will be offset by the changing of PayPal’s revenue mix if
they can monetize higher margin activities like Xoom and Venmo. As such,
transaction expense is forecast to increase slightly relative to historical averages.
Transaction & Loan Losses
Transaction and loan losses consist of costs associated with fraud protection,
chargebacks and losses on the loans receivable balance. Losses are forecast to
increase as PayPal focuses on growing its PayPal Credit operations and maintains
its buyer protection programs.
Depreciation and Amortization
The majority of PayPal’s PP&E and intangible assets are hardware and software
equipment, meaning they are depreciated on a 1 to 3-year time table. Given the
high rate of historical deprecation based on net beginning PP & E, I kept this the
same given their ongoing investments in quickly depreciating assets.
Tax Rate
PayPal’s tax rate has been historically lower than the U.S. due to their significant
amount of revenue that is recognized internationally. As PayPal has stated that
they do not intend to repatriate earnings, and instead invest them internationally,
their tax rate should remain relatively the same into perpetuity. If the geography
mix stays relatively constant, then assuming a lower tax rate for PayPal is a
reasonable assumption. Analyst estimates and management guidance both purport
this assumption.
Capital Expenditures
Purchases of PP&E mainly represent investments in hardware, servers and
computers. PayPal gives very little illumination on this line item and the specifics
of capital expenditures. Therefore, I projected based on percent of revenue with a
slight decline as PayPal reaches maturity and tailors off reinvestment into new
services.
Recommendation
PayPal’s fundamental undervaluation warrants a buy for both the Tall Firs and
DADCO Portfolios. Their strong upside catalysts, market position and product
diversification in a rapidly expanding industry mean they will soon realize higher
valuation levels.
Figure 33: PayPal Intermediate Growth Rate
Figure 34: PayPal Beta
Figure 35: Price Sensitivity

UOIG 14
University of Oregon Investment Group October 29th
, 2016
Comparables Analysis PYPL SQ SHOP TSS V MA AXP GOOGL AAPL AMZN
PayPal Holdings,
Inc. Sqaure Inc. Shopify Inc.
Total System
Services Inc. Visa Inc. Mastercard Inc.
American
Express
Company Alphabet Inc. Apple Inc. Amazon, Inc.
Stock Characteristics Max Min Median Weight Avg. 5.00% 0.00% 10.00% 15.00% 15.00% 10.00% 20.00% 10.00% 15.00%
Current Price $818.36 $11.15 $81.92 $337.76 $41.69 $11.15 $41.35 $50.09 $81.92 $103.60 $66.93 $817.35 $114.51 $818.36
Beta 1.50 0.79 1.11 1.02 1.00 NM 1.50 1.30 1.15 1.15 0.79 0.97 1.07 1.07
Size
Short-Term Debt 3,500.00 - - 1,233.89 - - - 45.86 - - 2,343.00 3,225.00 3,500.00 -
Long-Term Debt 68,939.00 - 3,597.59 16,827.11 - - - 3,597.59 15,879.00 3,306.00 50,649.00 1,995.00 68,939.00 8,212.00
Cash and Cash Equivalent 33,767.00 110.07 5,887.00 12,111.45 1,369.00 342.44 110.07 465.32 5,887.00 5,176.00 33,767.00 16,549.00 18,237.00 12,521.00
Non-Controlling Interest - - - - - - - - - - - - - -
Preferred Stock - - - - - - - - - - - - - -
Diluted Basic Shares 5,490.95 67.98 494.97 1,264.45 1,240.77 175.04 67.98 185.89 1,899.57 1,082.68 927.39 368.44 5,490.95 494.97
Market Capitalization 628,768.91 3,762.21 114,267.77 289,593.26 51,727.77 4,382.60 3,762.21 9,311.08 177,152.34 114,267.77 62,070.27 574,430.52 628,768.91 405,066.55
Enterprise Value 682,970.91 3,652.14 112,397.77 295,542.80 50,358.77 4,040.17 3,652.14 12,489.21 187,144.34 112,397.77 81,295.27 563,101.52 682,970.91 400,757.55
Growth Expectations
% Revenue Growth 2016E 79.31% (47.00%) 9.99% 12.25% 17.30% (47.00%) 79.31% 51.54% 8.50% 9.99% (2.35%) 17.43% (7.74%) 27.96%
% Revenue Growth FWRD CAGR 50.76% (5.30%) 13.20% 12.52% 17.11% (5.30%) 50.76% 23.03% 13.20% 10.84% 0.57% 15.60% 1.37% 23.74%
% EBITDA Growth 2016E 43.44% (14.66%) 9.28% 14.76% 9.11% NM NM 24.29% 7.39% 9.28% 5.51% 21.14% (14.66%) 43.44%
% EBITDA Growth FWRD CAGR 328.26% (1.14%) 13.94% 15.56% 2.00% 17.05% 328.26% 13.94% 13.34% 11.69% 5.87% 17.91% (1.14%) 36.72%
% EPS Growth 2016E 368.80% (10.52%) 8.60% 64.30% 11.26% 117.54% NM (8.63%) (6.98%) 6.41% 10.78% 20.14% (10.52%) 368.80%
% EPS Growth FWRD CAGR 143.20% 3.26% 12.70% 30.99% 21.61% NM NM 9.13% 14.47% 12.70% 4.95% 18.48% 3.26% 143.20%
Profitability Margins
Gross Margin 100.00% 34.20% 67.39% 63.13% 100.00% 83.58% 52.58% 34.20% 81.60% 71.00% 100.00% 67.39% 39.07% 35.01%
EBIT Margin 65.84% (28.92%) 27.76% 31.22% 14.13% (28.92%) (3.65%) 14.51% 65.84% 53.33% 32.27% 34.08% 27.76% 3.50%
EBITDA Margin 69.28% (0.40%) 32.90% 38.22% 20.81% 3.53% (0.40%) 24.17% 69.28% 57.39% 34.80% 40.81% 32.90% 11.32%
Net Margin 38.15% (29.62%) 16.81% 19.17% 12.61% (29.62%) (10.17%) 7.90% 38.15% 37.40% 16.81% 21.98% 21.38% 2.07%
Credit Metrics
Interest Expense $1,623.00 - $160.33 $490.64 - - - $111.38 $404.71 $88.83 $1,623.00 $160.33 $1,421.00 $460.01
Debt/EV 0.65 - 0.03 0.13 - - - 0.29 0.08 0.03 0.65 0.01 0.11 0.02
Leverage Ratio 4.75 - 0.54 1.35 - - - 3.58 1.52 0.54 4.75 0.15 1.02 0.53
Interest Coverage Ratio 223.85 - 25.78 70.59 - - - 9.14 25.78 68.70 6.87 223.85 49.92 33.69
Operating Results - 2016
Revenue $215,624.95 $367.99 $15,060.18 $67,202.88 $10,847.68 $671.55 $367.99 $4,212.11 $15,060.18 $10,633.72 $32,047.01 $87,940.52 $215,624.95 $136,924.73
Gross Profit $84,244.67 $193.49 $12,289.11 $33,820.37 $10,847.68 $561.28 $193.49 $1,440.54 $12,289.11 $7,549.94 $32,047.01 $59,263.12 $84,244.67 $47,937.35
EBIT $59,867.23 ($194.21) $5,671.46 $16,122.50 $1,532.70 ($194.21) ($13.43) $611.10 $9,915.24 $5,671.46 $10,342.33 $29,970.62 $59,867.23 $4,786.79
EBITDA $70,937.50 ($1.47) $10,433.15 $20,294.96 $2,257.57 $23.73 ($1.47) $1,017.96 $10,433.15 $6,102.47 $11,153.00 $35,889.85 $70,937.50 $15,497.46
Net Income $46,091.76 ($198.89) $3,976.93 $10,922.20 $1,367.76 ($198.89) ($37.41) $332.88 $5,745.70 $3,976.93 $5,386.29 $19,333.03 $46,091.76 $2,840.34
Capital Expenditures $12,275.42 $7.14 $498.76 $4,436.47 $721.94 $7.14 $23.81 $52.16 $498.76 $224.42 $1,198.00 $10,230.17 $12,275.42 $6,193.65
Multiples
EV/Revenue 12.43x 2.54x 6.02x 6.34x 4.64x 6.02x 9.92x 2.97x 12.43x 10.57x 2.54x 6.40x 3.17x 2.93x
EV/Gross Profit 18.88x 2.54x 8.67x 9.96x 4.64x 7.20x 18.88x 8.67x 15.23x 14.89x 2.54x 9.50x 8.11x 8.36x
EV/EBIT 32.86x (271.94x) 18.79x 25.05x 32.86x (20.80x) (271.94x) 20.44x 18.87x 19.82x 7.86x 18.79x 11.41x 83.72x
EV/EBITDA 170.26x (2,484.45x) 15.69x 23.90x 22.31x 170.26x (2,484.45x) 12.27x 17.94x 18.42x 7.29x 15.69x 9.63x 25.86x
EV/(EBITDA-Capex) 243.53x (144.47x) 18.84x 31.99x 32.79x 243.53x (144.47x) 12.93x 18.84x 19.12x 8.17x 21.94x 11.64x 43.07x
Market Cap/Net Income = P/E 37.82x (100.57x) 27.97x 40.48x 37.82x (22.04x) (100.57x) 27.97x 30.83x 28.73x 11.52x 29.71x 13.64x 142.61x
Appendix 1 – Relative Valuation

UOIG 15
, 2016
Discounted Cash Flow Analysis Q1 Q2 Q3 Q4
2013A 2014A 2015A 03/31/2016A 06/30/2016A 9/30/2016A 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
Total Revenue 6,727.00$ 8,025.00$ 9,248.00$ 2,544.00$ 2,650.00$ 2,667.00$ 2,986.68$ 10,847.68$ 12,712.82$ 14,888.42$ 17,424.37$ 20,366.06$ 23,469.23$ 26,659.31$ 29,845.11$ 32,497.86$
% YoY Growth 18.81% 19.30% 15.24% 19.05% 15.37% 0.64% 11.99% 17.30% 17.19% 17.11% 17.03% 16.88% 15.24% 13.59% 11.95% 8.89%
Transaction Expense 1,835.00$ 2,170.00$ 2,610.00$ 752.00$ 810.00$ 830.00$ 929.49$ 3,321.49$ 3,906.58$ 4,591.51$ 5,392.77$ 6,325.63$ 7,315.30$ 8,338.99$ 9,368.36$ 10,236.83$
% of Revenue 27.28% 27.04% 28.22% 29.56% 30.57% 31.12% 31.12% 30.62% 30.73% 30.84% 30.95% 31.06% 31.17% 31.28% 31.39% 31.50%
Transaction and Loan Losses 502.00 646.00 809.00 255.00 255.00 271.00 309.46 1,090.46 1,285.89 1,515.26 1,784.25 2,098.20 2,432.57 2,779.88 3,130.74 3,429.32
% of Revenue 7.46% 8.05% 8.75% 10.02% 9.62% 10.16% 10.36% 10.05% 10.11% 10.18% 10.24% 10.30% 10.36% 10.43% 10.49% 10.55%
Customer Support and Operations 950.00 1,055.00 1,220.00 296.00 318.00 325.00 378.27 1,317.27 1,533.54 1,784.01 2,073.86 2,407.61 2,755.58 3,108.70 3,456.19 3,737.25
% of Revenue 14.12% 13.15% 13.19% 11.64% 12.00% 12.19% 12.67% 12.14% 12.06% 11.98% 11.90% 11.82% 11.74% 11.66% 11.58% 11.50%
Sales and Marketing 791.00 998.00 985.00 233.00 250.00 233.00 260.93 976.93 1,113.03 1,266.17 1,438.15 1,629.88 1,819.38 1,999.84 2,163.99 2,274.85
% of Revenue 11.76% 12.44% 10.65% 9.16% 9.43% 8.74% 8.74% 9.01% 8.76% 8.50% 8.25% 8.00% 7.75% 7.50% 7.25% 7.00%
Product Development 727.00 890.00 947.00 195.00 209.00 215.00 240.77 859.77 1,015.54 1,198.64 1,413.70 1,665.10 1,933.48 2,212.95 2,496.05 2,738.22
% of Revenue 10.81% 11.09% 10.24% 7.67% 7.89% 8.06% 8.06% 7.93% 7.99% 8.05% 8.11% 8.18% 8.24% 8.30% 8.36% 8.43%
General and Administrative 378.00 482.00 560.00 231.00 261.00 261.00 271.20 1,024.20 1,173.39 1,342.69 1,534.51 1,750.47 1,967.52 2,178.54 2,375.71 2,518.09
% of Revenue 5.62% 6.01% 6.06% 9.08% 9.85% 9.79% 9.08% 9.44% 9.23% 9.02% 8.81% 8.60% 8.38% 8.17% 7.96% 7.75%
Depreciation and Amortization 453.00 516.00 608.00 175.00 176.00 184.00 189.87 724.87 724.87 771.79 849.64 949.43 1,066.82 1,191.57 1,316.03 1,433.69
% of Beginning PP&E (net) 52.80% 60.14% 45.24% 13.02% 13.09% 13.03% 13.09% 49.44% 49.44% 49.44% 49.44% 49.44% 49.44% 49.44% 49.44% 49.44%
Restructuring - - 48.00 - - - - - - - - - - - - -
% of Revenue - - 0.52% - - - - - - - - - - - - -
Earnings Before Interest & Taxes 1,091.00$ 1,268.00$ 1,461.00$ 407.00$ 371.00$ 348.00$ 406.70$ 1,532.70$ 1,959.98$ 2,418.35$ 2,937.49$ 3,539.73$ 4,178.57$ 4,848.84$ 5,538.05$ 6,129.61$
% Revenue 16.22% 15.80% 15.80% 16.00% 14.00% 13.05% 13.62% 14.13% 15.42% 16.24% 16.86% 17.38% 17.80% 18.19% 18.56% 18.86%
Other Income (Expense) Net (7.00)$ (7.00)$ 27.00$ 15.00$ 9.00$ 12.00$ -$ 36.00$ -$ -$ -$ -$ -$ -$ -$ -$
% Revenue 0.10% 0.09% 0.29% 0.59% 0.34% 1.00% 1.00% 0.33% - - - - - - - -
Earnings Before Taxes 1,084.00 1,261.00 1,488.00 422.00 380.00 360.00 406.70 1,568.70 1,959.98 2,418.35 2,937.49 3,539.73 4,178.57 4,848.84 5,538.05 6,129.61
% Revenue 16.11% 15.71% 16.09% 16.59% 14.34% 13.50% 13.62% 14.46% 15.42% 16.24% 16.86% 17.38% 17.80% 18.19% 18.56% 18.86%
Income Tax Expense (Benefit) 129.00 842.00 260.00 57.00 57.00 37.00 49.93 200.93 273.57 365.33 477.51 616.07 775.26 955.33 1,154.75 1,348.51
Effective Tax Rate (Benefit) 11.90% 66.77% 17.47% 13.51% 15.00% 10.28% 12.28% 12.81% 13.96% 15.11% 16.26% 17.40% 18.55% 19.70% 20.85% 22.00%
Net Income 955.00$ 419.00$ 1,228.00$ 365.00$ 323.00$ 323.00$ 356.76$ 1,367.76$ 1,686.41$ 2,053.01$ 2,459.98$ 2,923.66$ 3,403.31$ 3,893.51$ 4,383.31$ 4,781.09$
Net Margin 14.20% 5.22% 13.28% 14.35% 12.19% 12.11% 11.95% 12.61% 13.27% 13.79% 14.12% 14.36% 14.50% 14.60% 14.69% 14.71%
Add Back: Depreciation and Amortization 453.00$ 516.00$ 608.00$ 175.00$ 176.00$ 184.00$ 189.87$ 724.87$ 724.87$ 771.79$ 849.64$ 949.43$ 1,066.82$ 1,191.57$ 1,316.03$ 1,433.69$
Add Back: Interest Expense*(1-Tax Rate) - - - - - - - - - - - - - - - -
Operating Cash Flow 1,408.00$ 935.00$ 1,836.00$ 540.00$ 499.00$ 507.00$ 546.63$ 2,092.63$ 2,411.28$ 2,824.80$ 3,309.62$ 3,873.09$ 4,470.13$ 5,085.08$ 5,699.33$ 6,214.78$
% Revenue 20.93% 11.65% 19.85% 21.23% 18.83% 19.01% 18.30% 19.29% 18.97% 18.97% 18.99% 19.02% 19.05% 19.07% 19.10% 19.12%
Current Assets 12,695.00$ 15,335.00$ 17,237.00$ 17,201.00$ 18,500.00$ 19,073.00$ 20,365.16$ 20,365.16$ 24,006.99$ 28,395.36$ 33,559.60$ 39,608.30$ 46,084.70$ 52,850.10$ 59,726.92$ 65,646.74$
% Revenue 188.72% 191.09% 186.39% 676.14% 698.11% 715.15% 681.87% 187.74% 188.84% 190.72% 192.60% 194.48% 196.36% 198.24% 200.12% 202.00%
Current Liabilities 11,261.00 13,283.00 13,617.00 14,362.00 15,223.00 15,616.00 16,919.25 16,919.25 19,976.24 23,592.27 27,865.76 32,892.50 38,309.42 44,006.57 49,839.97 54,928.57
% Revenue 167.40% 165.52% 147.24% 564.54% 574.45% 585.53% 566.49% 155.97% 157.13% 158.46% 159.92% 161.51% 163.23% 165.07% 167.00% 169.02%
Net Working Capital 1,434.00$ 2,052.00$ 3,620.00$ 2,839.00$ 3,277.00$ 3,457.00$ 3,445.92$ 3,445.92$ 4,030.75$ 4,803.09$ 5,693.84$ 6,715.80$ 7,775.27$ 8,843.53$ 9,886.95$ 10,718.17$
% Revenue 21.32% 25.57% 39.14% 111.60% 123.66% 129.62% 115.38% 31.77% 31.71% 32.26% 32.68% 32.98% 33.13% 33.17% 33.13% 32.98%
Change in Working Capital $618.00 $1,568.00 ($781.00) $438.00 $180.00 ($11.08) ($174.08) $584.83 $772.34 $890.75 $1,021.96 $1,059.48 $1,068.25 $1,043.42 $831.22
Capital Expenditures 391.00 492.00 722.00 133.00 201.00 183.00 204.94 721.94 819.76 929.25 1,051.47 1,186.85 1,319.14 1,443.28 1,554.01 1,624.89
% Revenue 5.81% 6.13% 7.81% 5.23% 7.58% 6.86% 6.86% 6.66% 6.45% 6.24% 6.03% 5.83% 5.62% 5.41% 5.21% 5.00%
Acquisitions 731.00 2.00 1,225.00 19.00 - - - 19.00 - - - - - - - -
% Revenue 10.87% 0.02% 13.25% 0.75% - - - 0.18% - - - - - - - -
Unlevered Free Cash Flow 286.00$ (177.00)$ (1,679.00)$ 1,169.00$ (140.00)$ 144.00$ 352.78$ 1,525.78$ 1,006.69$ 1,123.22$ 1,367.40$ 1,664.28$ 2,091.52$ 2,573.55$ 3,101.91$ 3,758.67$
Discounted Free Cash Flow 345.80$ 910.97$ 938.34$ 1,054.58$ 1,184.95$ 1,374.74$ 1,561.64$ 1,737.66$ 1,943.82$
FCF Growth (34.02%) 11.58% 21.74% 21.71% 25.67% 23.05% 20.53% 21.17%
Discount Period 0.25 1.25 2.25 3.25 4.25 5.25 6.25 7.25 8.25
Reinvestment Rate 41.52% 206.96% 132.29% (120.61%) 136.31% 78.00% 43.09% 32.73% 66.22% 69.32% 68.78% 68.03% 65.19% 62.30% 59.40% 54.37%
EBITDA 1,544.00$ 1,784.00$ 2,069.00$ 582.00$ 547.00$ 532.00$ 596.57$ 2,257.57$ 2,684.85$ 3,190.13$ 3,787.13$ 4,489.16$ 5,245.39$ 6,040.41$ 6,854.08$ 7,563.30$
EBITDA Margin 22.95% 22.23% 22.37% 22.88% 20.64% 19.95% 19.97% 20.81% 21.12% 21.43% 21.73% 22.04% 22.35% 22.66% 22.97% 23.27%
EBITDA Growth 15.54% 15.98% 25.70% (0.18%) 10.14% 3.75% 9.11% 18.93% 18.82% 18.71% 18.54% 16.85% 15.16% 13.47% 10.35%
Appendix 2 – Discounted Cash Flows Valuation

UOIG 16
, 2016
Revenue Model Segment Q1 Q2 Q3 Q4
($ in Millions) 2013A 2014A 2015A 03/31/2016A 06/30/2016A 9/30/2016A 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
Transaction Revenues 5,992.00$ 7,107.00$ 8,128.00$ 2,238.00$ 2,323.00$ 2,314.00$ 2,669.16$ 9,544.16$ 11,196.96$ 13,127.10$ 15,379.54$ 17,994.07$ 20,765.15$ 23,630.74$ 26,513.69$ 28,899.93$
% Growth - 18.61% 14.37% 16.93% 17.92% 17.00% 18.00% 17.42% 17.32% 17.24% 17.16% 17.00% 15.40% 13.80% 12.20% 9.00%
% of Total Revenue 89.07% 88.56% 87.89% 87.97% 87.66% 86.76% 89.37% 87.98% 88.08% 88.17% 88.26% 88.35% 88.48% 88.64% 88.84% 88.93%
Other VAS 735.00 918.00 1,120.00 306.00 327.00 353.00 317.52 1,303.52 1,515.85 1,761.31 2,044.82 2,371.99 2,704.07 3,028.56 3,331.42 3,597.93
% Growth - 24.90% 22.00% 37.22% - 8.00% 8.00% 16.39% 16.29% 16.19% 16.10% 16.00% 14.00% 12.00% 10.00% 8.00%
% of Total Revenue 10.93% 11.44% 12.11% 12.03% 12.34% 13.24% 10.63% 12.02% 11.92% 11.83% 11.74% 11.65% 11.52% 11.36% 11.16% 11.07%
Total Revenue 6,727.00$ 8,025.00$ 9,248.00$ 2,544.00$ 2,650.00$ 2,667.00$ 2,986.68$ 10,847.68$ 12,712.82$ 14,888.42$ 17,424.37$ 20,366.06$ 23,469.23$ 26,659.31$ 29,845.11$ 32,497.86$
% Growth 18.81% 19.30% 15.24% 19.05% 15.37% 18.11% 16.85% 17.30% 17.19% 17.11% 17.03% 16.88% 15.24% 13.59% 11.95% 8.89%
Revenue Model Geography Q1 Q2 Q3 Q4
($ in Millions 2013A 2014A 2015A 03/31/2016A 06/30/2016A 9/30/2016E 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
U.S. 3,240.00$ 3,877.00$ 4,640.00$ 1,343.00$ 1,407.00$ 1,436.00$ 1,536.86$ 5,722.86$ 6,337.50$ 7,317.85$ 8,442.33$ 9,725.06$ 11,042.58$ 12,356.94$ 13,624.68$ 14,608.21$
% Growth - 19.66% 19.68% 30.39% 20.26% 26.19% 18.04% 23.34% 10.74% 15.47% 15.37% 15.19% 13.55% 11.90% 10.26% 7.22%
% of Total Revenue 48.16% 48.31% 50.17% 52.79% 53.09% 53.84% 51.46% 52.76% 49.85% 49.15% 48.45% 47.75% 47.05% 46.35% 45.65% 44.95%
U.K. 949.00 1,155.00 1,191.00 307.00 318.00 298.00 370.10 1,293.10 1,693.95 1,939.17 2,217.20 2,530.42 2,845.58 3,152.39 3,439.56 3,647.79
% Growth - 21.71% 3.12% 10.83% 11.19% 1.36% 10.81% 8.57% 31.00% 14.48% 14.34% 14.13% 12.45% 10.78% 9.11% 6.05%
% of Total Revenue 14.11% 14.39% 12.88% 12.07% 12.00% 11.17% 12.39% 11.92% 13.32% 13.02% 12.72% 12.42% 12.12% 11.82% 11.52% 11.22%
Other Countries 2,538.00 2,993.00 3,417.00 894.00 925.00 933.00 1,079.72 3,831.72 4,681.37 5,631.39 6,764.83 8,110.58 9,581.07 11,149.98 12,780.87 14,241.86
% Growth - 17.93% 14.17% 7.71% 9.99% 12.95% 17.36% 12.14% 22.17% 20.29% 20.13% 19.89% 18.13% 16.38% 14.63% 11.43%
% of Total Revenue 37.73% 37.30% 36.95% 35.14% 34.91% 34.98% 36.15% 35.32% 36.82% 37.82% 38.82% 39.82% 40.82% 41.82% 42.82% 43.82%
Total Revenue 6,727.00$ 8,025.00$ 9,248.00$ 2,544.00$ 2,650.00$ 2,667.00$ 2,986.68$ 10,847.68$ 12,712.82$ 14,888.42$ 17,424.37$ 20,366.06$ 23,469.23$ 26,659.31$ 29,845.11$ 32,497.86$
% Growth 18.81% 19.30% 15.24% 19.05% 15.37% 18.11% 16.85% 17.30% 17.19% 17.11% 17.03% 16.88% 15.24% 13.59% 11.95% 8.89%
Revenue Model Drivers Q1 Q2 Q3 Q4
2013A 2014A 2015A 3/31/2016A 06/30/2016A 9/30/2016E 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
Active Customer Accounts 143.00 162.00 179.00 184.00 188.00 192.00 196.00 196.00 215.06 252.42 297.94 369.17 446.36 526.30 604.76 676.78
% Growth - 13.29% 10.49% 11.52% 11.24% 10.98% 9.50% 9.50% 9.73% 17.37% 18.03% 23.91% 20.91% 17.91% 14.91% 11.91%
Number of Payment Transactions 3,261.00 3,964.00 4,928.00 1,414.00 1,448.00 1,512.00 1,880.05 6,254.05 7,936.93 10,072.64 12,783.04 15,839.27 19,151.03 22,580.70 25,947.16 29,037.08
% Growth - 21.56% 24.32% 25.91% 24.72% 24.34% 24.34% 26.91% 26.91% 26.91% 26.91% 23.91% 20.91% 17.91% 14.91% 11.91%
Payment Transactions per Active Account 22.90 24.50 27.50 28.40 29.40 30.20 33.90 33.90 36.90 39.90 42.90 42.90 42.90 42.90 42.90 42.90
% Growth - 6.99% 12.24% 8.81% 12.64% 12.27% 12.27% 23.29% 8.85% 8.13% 7.52% - - - - -
Total TPV 185,606.00$ 234,635.00$ 281,764.00$ 81,056.00$ 86,208.00$ 87,403.00$ 102,173.20$ 356,840.20$ 447,229.69$ 560,515.31$ 702,496.77$ 859,367.97$ 1,025,488.29$ 1,192,955.89$ 1,351,983.15$ 1,491,650.07$
% Growth - 26.42% 20.09% 28.62% 27.75% 25.33% 25.33% 26.65% 25.33% 25.33% 25.33% 22.33% 19.33% 16.33% 13.33% 10.33%
Percent of Cross-Border TPV 24.00% 24.00% 21.00% 24.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00%
Revenue Model by Segment (PayPal)
Revenue Model by Geography (Illustrative)
Revenue Model Drivers for Segments
(Illustrative)
Appendix 3 – Revenue Model

UOIG 17
, 2016
Working Capital Model Q1 Q2 Q3 Q4
2013A 2014A 2015A 03/31/2016A 06/30/2016A 9/30/2016A 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
Total Revenue 6,727.00$ 8,025.00$ 9,248.00$ 2,544.00$ 2,650.00$ 2,667.00$ 2,986.68$ 10,847.68$ 12,712.82$ 14,888.42$ 17,424.37$ 20,366.06$ 23,469.23$ 26,659.31$ 29,845.11$ 32,497.86$
Current Assets
Accounts Recievable 52.00$ 65.00$ 137.00$ 159.00$ 167.00$ 187.00$ 192.65$ 192.65$ 223.67$ 259.49$ 300.82$ 348.24$ 397.42$ 447.04$ 495.53$ 534.21$
Days Sales Outstanding A/R 2.82 2.96 5.41 5.69 5.73 6.38 5.93 6.48 6.42 6.36 6.30 6.24 6.18 6.12 6.06 6.00
% of Revenue 0.77% 0.81% 1.48% 6.25% 6.30% 7.01% 6.45% 1.78% 1.76% 1.74% 1.73% 1.71% 1.69% 1.68% 1.66% 1.64%
Loans and Interesst Recievable 2,789.00 3,586.00 4,184.00 4,224.00 4,507.00 4,815.00 4,835.12 4,835.12 5,567.68 6,520.50 7,631.14 8,919.48 10,278.53 11,675.65 13,070.90 14,232.69
% of Revenue 41.46% 44.69% 45.24% 166.04% 170.08% 180.54% 161.89% 44.57% 43.80% 43.80% 43.80% 43.80% 43.80% 43.80% 43.80% 43.80%
Funds Recievable and Customer Accounts 9,277.00 10,612.00 12,261.00 12,232.00 13,034.00 13,320.00 14,496.38 14,496.38 17,259.80 20,530.84 24,399.20 28,952.46 33,864.10 39,035.26 44,336.04 48,969.38
% of Revenue 137.91% 132.24% 132.58% 480.82% 491.85% 499.44% 485.37% 133.64% 135.77% 137.90% 140.03% 142.16% 144.29% 146.42% 148.55% 150.68%
Notes and Recievables from eBay 310.00 694.00 - - - - - - - - - - - - - -
Days Recievables Outstanding 16.82 31.57 - - - - - - - - - - - - - -
% of Revenue 4.61% 8.65% - - - - - - - - - - - - - -
Prepaid Expenses and Others 267.00 378.00 655.00 586.00 792.00 751.00 841.02 841.02 955.84 1,084.53 1,228.44 1,388.12 1,544.65 1,692.15 1,824.44 1,910.46
% of Revenue 3.97% 4.71% 7.08% 23.03% 29.89% 28.16% 28.16% 7.75% 7.52% 7.28% 7.05% 6.82% 6.58% 6.35% 6.11% 5.88%
Total Current Assets ######### 15,335.00$ 17,237.00$ 17,201.00$ 18,500.00$ 19,073.00$ 20,365.16$ 20,365.16$ 24,006.99$ 28,395.36$ 33,559.60$ 39,608.30$ 46,084.70$ 52,850.10$ 59,726.92$ 65,646.74$
% of Revenue 188.72% 191.09% 186.39% 676.14% 698.11% 715.15% 681.87% 187.74% 188.84% 190.72% 192.60% 194.48% 196.36% 198.24% 200.12% 202.00%
Current Liabilities
Accounts Payable 73.00$ 115.00$ 145.00$ 158.00$ 169.00$ 174.00$ 188.21$ 188.21$ 220.57$ 258.31$ 302.31$ 353.35$ 407.19$ 462.53$ 517.81$ 563.83$
Days Payable Outstanding 3.96 5.23 5.72 5.65 5.80 5.94 5.80 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33
% of Revenue 1.09% 1.43% 1.57% 6.21% 6.38% 6.52% 6.30% 1.73% 1.73% 1.73% 1.73% 1.73% 1.73% 1.73% 1.73% 1.73%
Funds Payable and Amounts due to Customers 9,277.00 10,612.00 12,261.00 13,032.00 13,834.00 14,120.00 15,296.38 15,296.38 18,059.80 21,330.84 25,199.20 29,752.46 34,664.10 39,835.26 45,136.04 49,769.38
Days Sales Outstanding 503.36 482.66 483.92 466.16 475.05 481.78 471.18 514.69 518.52 522.94 527.86 533.22 539.11 545.40 552.01 558.99
% of Revenue 137.91% 132.24% 132.58% 512.26% 522.04% 529.43% 512.15% 141.01% 142.06% 143.27% 144.62% 146.09% 147.70% 149.42% 151.23% 153.15%
Notes and Payables to eBay 1,103.00 1,093.00 - - - - - - - - - - - - - -
Days Sales Outstanding 59.85 49.71 - - - - - - - - - - - - - -
% of Revenue 16.40% 13.62% - - - - - - - - - - - - - -
Accrued Expenses 771.00 1,434.00 1,179.00 1,145.00 1,181.00 1,272.00 1,390.78 1,390.78 1,644.27 1,942.49 2,293.05 2,703.19 3,141.59 3,598.74 4,062.52 4,460.34
% of Revenue 11.46% 17.87% 12.75% 45.01% 44.57% 47.69% 46.57% 12.82% 12.93% 13.05% 13.16% 13.27% 13.39% 13.50% 13.61% 13.73%
Income Taxes Payable 37.00 29.00 32.00 27.00 39.00 50.00 43.88 43.88 51.60 60.64 71.20 83.50 96.55 110.04 123.59 135.02
% of Revenue 0.55% 0.36% 0.35% 1.06% 1.47% 1.87% 1.47% 0.40% 0.41% 0.41% 0.41% 0.41% 0.41% 0.41% 0.41% 0.42%
Total Current Liabilities ######### 13,283.00$ 13,617.00$ 14,362.00$ 15,223.00$ 15,616.00$ 16,919.25$ 16,919.25$ 19,976.24$ 23,592.27$ 27,865.76$ 32,892.50$ 38,309.42$ 44,006.57$ 49,839.97$ 54,928.57$
% of Revenue 167.40% 165.52% 147.24% 564.54% 574.45% 585.53% 566.49% 155.97% 157.13% 158.46% 159.92% 161.51% 163.23% 165.07% 167.00% 169.02%
Appendix 4 – Working Capital Model

UOIG 18
, 2016
Discounted Free Cash Flow Assumptions Considerations
Tax Rate 22.00% Terminal Growth Rate 3.00%
Risk Free Rate 1.88% Terminal Value 102,389 Avg. Industry Debt / Equity 16.76%
Beta 1.00 PV of Terminal Value 35,507 Avg. Industry Tax Rate 22.73%
Market Risk Premium 6.45% Sum of PV Free Cash Flows 21,974 Current Reinvestment Rate 78.00%
% Equity 100.00% Firm Value 57,481 Reinvestment Rate in Year 2024E 54.37%
% Debt 0.00% Total Debt 0 Implied Return on Capital in Perpetuity 5.52%
Cost of Debt 0.00% Cash & Cash Equivalents 1,369 Terminal Value as a % of Total 61.8%
CAPM 8.32% Highly Liquid Investments 3,719 Implied 2015A EBITDA Multiple 27.8x
WACC 8.32% Non-Operating Cash & Investments 4,070 Implied Multiple in Year 2024E 4.7x
Terminal Risk Free Rate 2.69% Operating Liquidity Estimate 1,018 Free Cash Flow Growth Rate in Year 2029E 3%
Terminal CAPM 9.13% Market Capitalization 61,551 Terminal Year CAPEX % of Revenue 5%
Terminal WACC 9.13% Fully Diluted Shares 1,241
Implied Price 49.61
Current Price 41.69
Undervalued 18.99%
Method Implied Price Weight
Discounted Cash Flow 49.61 80%
Forward Comparables 44.59 20%
Implied Price 48.60
Current Price 41.69
Undervalued 16.58%
Appendix 5 – Discounted Cash Flows Valuation Assumptions

UOIG 19
, 2016
Implied Price Undervalued/(Overvalued)
Terminal Growth Rate Terminal Growth Rate
2.0% 2.5% 3.0% 3.5% 4.0% 2.0% 2.5% 3.0% 3.5% 4.0%
0.80 24.13 24.08 24.03 23.98 23.93 0.80 38.15% 46.39% 56.33% 68.56% 83.96%
0.90 24.70 24.65 24.60 24.55 24.50 0.90 21.83% 27.99% 35.26% 43.99% 54.66%
1.00 25.16 25.11 25.05 25.00 24.95 1.00 8.62% 13.32% 18.78% 25.21% 32.90%
1.10 25.53 25.48 25.42 25.37 25.31 1.10 (2.26%) 1.39% 5.58% 10.44% 16.13%
1.20 25.84 25.79 25.73 25.68 25.62 1.20 (11.36%) (8.48%) (5.21%) (1.47%) 2.85%
2.0% 2.5% 3.0% 3.5% 4.0% 2.0% 2.5% 3.0% 3.5% 4.0%
0.13 29.86 30.98 32.29 33.83 35.66 0.13 (28.38%) (25.68%) (22.55%) (18.86%) (14.46%)
0.11 35.46 36.88 38.53 40.48 42.81 0.11 (14.95%) (11.54%) (7.57%) (2.90%) 2.68%
0.09 42.54 44.35 46.45 48.93 51.89 0.09 2.03% 6.37% 11.42% 17.37% 24.47%
0.07 51.55 53.86 56.55 59.72 63.51 0.07 23.65% 29.20% 35.65% 43.25% 52.33%
0.05 63.10 66.07 69.52 73.59 78.45 0.05 51.34% 58.47% 66.75% 76.51% 88.17%
2.0% 2.5% 3.0% 3.5% 4.0% 2.00% 2.50% 3.00% 3.50% 4.00%
1343.00 41.90 43.72 45.83 48.32 51.29 1343.00 .51% 4.87% 9.93% 15.90% 23.03%
1293.00 43.52 45.41 47.60 50.19 53.27 1293.00 4.40% 8.92% 14.18% 20.38% 27.79%
1243.00 45.27 47.24 49.52 52.21 55.42 1243.00 8.60% 13.30% 18.78% 25.22% 32.93%
1193.00 47.17 49.22 51.59 54.39 57.74 1193.00 13.15% 18.05% 23.75% 30.47% 38.50%
1143.00 49.23 51.37 53.85 56.77 60.27 1143.00 18.10% 23.22% 29.17% 36.18% 44.56%
Market Risk Premium Market Risk Premium
4.5% 5.5% 6.5% 7.0% 7.5% 4.50% 5.50% 6.45% 7.00% 7.50%
0.13 39.89 35.28 32.29 30.94 29.90 0.13 (4.31%) (15.38%) (22.55%) (25.77%) (28.28%)
0.11 48.17 42.32 38.53 36.83 35.51 0.11 15.54% 1.52% (7.57%) (11.65%) (14.82%)
0.09 58.71 51.27 46.45 44.29 42.60 0.09 40.83% 22.99% 11.42% 6.23% 2.19%
0.07 72.22 62.72 56.55 53.79 51.64 0.07 73.24% 50.44% 35.65% 29.01% 23.86%
0.05 89.64 77.43 69.52 65.96 63.21 0.05 115.02% 85.74% 66.75% 58.23% 51.61%
WACC
WACC
AdjustedBeta
AdjustedBeta
DilutedShares
DilutedShares
WAAC
WAAC
Appendix 6 –Sensitivity Analysis

UOIG 20
, 2016
Final Beta Weightings Beta Estimates
Type Equity Beta Cash Adjusted SE Weighting ESTIMATE BETA
1 Year Daily Beta 1.21 1.32 0.11 0.00% PayPal 1-Y Regression 1.32
Since IPO Daily 1.18 1.28 0.09 15.00% PayPal IPO Regression 1.18
Since IPO Weekly 1.32 1.43 0.22 0.00% Hamada - ETF 0.93
Since IPO Monthly (14 Data Points) 1.06 1.15 0.41 0.00% Hamada - Comps 0.96
1 Year Comps 0.96 0.96 NA 50.00%
1 Year ETF 0.93 0.93 0.06 35.00%
Final Cash Adjusted Beta 1.00
1 Year Daily - Comparables 1 Year Daily - ETF
Hamada Beta Hamada Beta
Company Equity Beta SE Weighting D/E Tax Rate Cash as % of FV Unlevered Beta ETF Equity Beta SE D/E Tax Rate Cash as % of FV Unlevered Beta
Sqaure Inc. NM NM 0.00% 0.00 0.00% 7.81% NM IPAY 0.95 0.06 28.87% 30.00% 6.44% 0.84
Shopify Inc. 1.50 0.19 0.00% 0.00 0.00% 2.93% 1.50 Unlevered Beta - - 0.84
Total System Services Inc. 1.30 0.11 10.00% 0.39 33.89% 3.59% 1.03 Industry Statistics 18.87% 18.75% 4.22%
Visa Inc. 1.15 0.06 15.00% 0.09 29.43% 3.05% 1.08 Levered IPAY Beta 0.93
Mastercard Inc. 1.15 0.06 15.00% 0.03 28.75% 4.40% 1.13
American Express Company 0.79 0.09 10.00% 0.85 34.01% 29.35% 0.50
Alphabet Inc. 0.97 0.07 20.00% 0.01 20.40% 2.85% 0.96
Apple Inc. 1.07 0.09 10.00% 0.12 25.40% 2.60% 0.98
Amazon, Inc. 1.07 0.11 20.00% 0.02 32.70% 3.03% 1.06
Weight Average Unlevered Beta 0.16 28.68% 5.85% 0.99
PayPal Holdings, Inc. 0.00 12.81% 2.65%
Levered PayPal Holdings, Inc. Beta 0.96
Damodaran's Site
Link
PYPL IPO DATE - 7/20/2015
Appendix 7 –Beta

UOIG 21
, 2016
Income Statement 2013A 2014A 2015A 03/31/2016A 06/30/2016A 9/30/2016A 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
($ in Millions) Q1 Q2 Q3 Q4
Net Sales 6,727.0$ 8,025.0$ 9,248.0$ 2,544.0$ 2,650.0$ 2,667.0$ 2,986.7$ 10,847.7$ 12,712.8$ 14,888.4$ 17,424.4$ 20,366.1$ 23,469.2$ 26,659.3$ 29,845.1$ 32,497.9$
Operating Expenses
Transaction Expense 1,835.0$ 2,170.0$ 2,610.0$ 752.0$ 810.0$ 830.0$ 929.5$ 3,321.5$ 3,906.6$ 4,591.5$ 5,392.8$ 6,325.6$ 7,315.3$ 8,339.0$ 9,368.4$ 10,236.8$
% of Revenue 27.3% 27.0% 28.2% 29.6% 30.6% 31.1% 31.1% 30.6% 30.7% 30.8% 30.9% 31.1% 31.2% 31.3% 31.4% 31.5%
% of Revenue 7.5% 8.0% 8.7% 10.0% 9.6% 10.2% 10.4% 10.1% 10.1% 10.2% 10.2% 10.3% 10.4% 10.4% 10.5% 10.6%
Customer Support and Operations 950.0 1,055.0 1,220.0 296.0 318.0 325.0 378.3 1,317.3 1,533.5 1,784.0 2,073.9 2,407.6 2,755.6 3,108.7 3,456.2 3,737.3
% of Revenue 14.1% 13.1% 13.2% 11.6% 12.0% 12.2% 12.7% 12.1% 12.1% 12.0% 11.9% 11.8% 11.7% 11.7% 11.6% 11.5%
Sales and Marketing 791.0 998.0 985.0 233.0 250.0 233.0 260.9 976.9 1,113.0 1,266.2 1,438.2 1,629.9 1,819.4 1,999.8 2,164.0 2,274.9
% of Revenue 11.8% 12.4% 10.7% 9.2% 9.4% 8.7% 8.7% 9.0% 8.8% 8.5% 8.3% 8.0% 7.8% 7.5% 7.3% 7.0%
Product Development 727.0 890.0 947.0 195.0 209.0 215.0 240.8 859.8 1,015.5 1,198.6 1,413.7 1,665.1 1,933.5 2,212.9 2,496.1 2,738.2
% of Revenue 10.8% 11.1% 10.2% 7.7% 7.9% 8.1% 8.1% 7.9% 8.0% 8.1% 8.1% 8.2% 8.2% 8.3% 8.4% 8.4%
General and Administrative 378.0 482.0 560.0 231.0 261.0 261.0 271.2 1,024.2 1,173.4 1,342.7 1,534.5 1,750.5 1,967.5 2,178.5 2,375.7 2,518.1
% of Revenue 5.6% 6.0% 6.1% 9.1% 9.8% 9.8% 9.1% 9.4% 9.2% 9.0% 8.8% 8.6% 8.4% 8.2% 8.0% 7.7%
% of Beginning PP&E (net) 52.8% 60.1% 45.2% 13.0% 13.1% 13.0% 13.1% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4%
Restructuring - - 48.0 - - - - - - - - - - - - -
% of Revenue - - .5% - - - - - - - - - - - - -
Total Operating Expenses 5,636.0 6,757.0 7,787.0 2,137.0 2,279.0 2,319.0 2,580.0 9,315.0 10,752.8 12,470.1 14,486.9 16,826.3 19,290.7 21,810.5 24,307.1 26,368.3
Operating Income 1,091.0$ 1,268.0$ 1,461.0$ 407.0$ 371.0$ 348.0$ 406.7$ 1,532.7$ 1,960.0$ 2,418.3$ 2,937.5$ 3,539.7$ 4,178.6$ 4,848.8$ 5,538.1$ 6,129.6$
Other Income (Expense) Net (7.0) (7.0) 27.0 15.0 9.0 12.0 - 36.0 - - - - - - - -
Income before Taxes 1,084.0$ 1,261.0$ 1,488.0$ 422.0$ 380.0$ 360.0$ 406.7$ 1,568.7$ 1,960.0$ 2,418.3$ 2,937.5$ 3,539.7$ 4,178.6$ 4,848.8$ 5,538.1$ 6,129.6$
Income Tax Expense (Benefit) 129.0 842.0 260.0 57.0 57.0 37.0 49.9 200.9 273.6 365.3 477.5 616.1 775.3 955.3 1,154.7 1,348.5
Effective Tax Rate (Benefit) 11.9% 66.8% 17.5% 13.5% 15.0% 10.3% 12.3% 12.8% 14.0% 15.1% 16.3% 17.4% 18.6% 19.7% 20.9% 22.0%
Net Income (Loss) 955.0$ 419.0$ 1,228.0$ 365.0$ 323.0$ 323.0$ 356.8$ 1,367.8$ 1,686.4$ 2,053.0$ 2,460.0$ 2,923.7$ 3,403.3$ 3,893.5$ 4,383.3$ 4,781.1$
Net Margin 14.2% 5.2% 13.3% 14.3% 12.2% 12.1% 11.9% 12.6% 13.3% 13.8% 14.1% 14.4% 14.5% 14.6% 14.7% 14.7%
Appendix 8 –3 Statement

UOIG 22
, 2016
Balance Sheet - Assets 2013A 2014A 2015A 3/31/2016A 06/30/2016A 9/30/2016E 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
Assets
Current Assets:
Cash & Equivalents 1,604.0$ 2,201.0$ 1,393.0$ 2,583.0$ 2,018.0$ 1,369.0$ 1,789.8$ 1,789.8$ 3,151.3$ 4,650.9$ 6,418.8$ 8,511.0$ 11,057.7$ 14,113.2$ 17,722.0$ 22,005.6$
Short-term Investments 321.0 29.0 2,018.0 2,184.0 2,939.0 3,719.0 3,719.0 3,719.0 3,719.0 3,719.0 3,719.0 3,719.0 3,719.0 3,719.0 3,719.0 3,719.0
Accounts Receivable 52.0 65.0 137.0 159.0 167.0 187.0 192.6 192.6 223.7 259.5 300.8 348.2 397.4 447.0 495.5 534.2
Loans and Interest Receivable (Net) 3,099.0 3,586.0 4,184.0 4,224.0 4,507.0 4,815.0 4,835.1 4,835.1 5,567.7 6,520.5 7,631.1 8,919.5 10,278.5 11,675.7 13,070.9 14,232.7
Funds Receivable and Customer Accounts 9,277.0 10,612.0 12,261.0 12,232.0 13,034.0 13,320.0 14,496.4 14,496.4 17,259.8 20,530.8 24,399.2 28,952.5 33,864.1 39,035.3 44,336.0 48,969.4
Notes and Receivables from eBay - 694.0 - - - - - - - - - - - - - -
Prepaid Expenses and other Current Assets 267.0 378.0 655.0 586.0 792.0 751.0 841.0 841.0 955.8 1,084.5 1,228.4 1,388.1 1,544.6 1,692.1 1,824.4 1,910.5
Total Current Assets 14,620.0 17,565.0 20,648.0 21,968.0 23,457.0 24,161.0 25,873.9 25,873.9 30,877.3 36,765.2 43,697.4 51,838.3 60,861.4 70,682.3 81,167.9 91,371.3
Non-Current Assets
Long-term Investments 196.0 31.0 2,348.0 1,661.0 1,315.0 1,339.0 1,339.0 1,339.0 1,339.0 1,339.0 1,339.0 1,339.0 1,339.0 1,339.0 1,339.0 1,339.0
PP&E, net 858.0 922.0 1,344.0 1,345.0 1,412.0 1,451.0 1,466.1 1,466.1 1,561.0 1,718.4 1,920.2 2,157.7 2,410.0 2,661.7 2,899.7 3,090.9
Goodwill 3,187.0 3,189.0 4,069.0 4,071.0 4,069.0 4,068.0 4,068.0 4,068.0 4,068.0 4,068.0 4,068.0 4,068.0 4,068.0 4,068.0 4,068.0 4,068.0
Intangible Assets, net 258.0 156.0 358.0 320.0 281.0 245.0 245.0 245.0 245.0 245.0 245.0 245.0 245.0 245.0 245.0 245.0
Other Assets 41.0 54.0 114.0 105.0 97.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0
% of Revenue .6% .7% 1.2% 4.1% 1.0% 1.0% 1.0% .8% .9% .9% .9% .9% .9% .9% .9% .9%
Total Long Term Assets 4,540.0 4,352.0 8,233.0 7,502.0 7,174.0 7,195.0 7,210.1 7,210.1 7,305.0 7,462.4 7,664.2 7,901.7 8,154.0 8,405.7 8,643.7 8,834.9
Total Assets 19,160.0$ 21,917.0$ 28,881.0$ 29,470.0$ 30,631.0$ 31,356.0$ 33,084.0$ 33,084.0$ 38,182.3$ 44,227.6$ 51,361.6$ 59,739.9$ 69,015.4$ 79,088.0$ 89,811.6$ 100,206.2$
Liabilities
Current Liabilities:
Accounts Payable 73.0$ 115.0$ 145.0$ 158.0$ 169.0$ 174.0$ 188.2$ 188.2$ 220.6$ 258.3$ 302.3$ 353.3$ 407.2$ 462.5$ 517.8$ 563.8$
Funds Payable and Amounts due to Customers 9,445.0 10,612.0 12,261.0 13,032.0 13,834.0 14,120.0 15,296.4 15,296.4 18,059.8 21,330.8 25,199.2 29,752.5 34,664.1 39,835.3 45,136.0 49,769.4
Notes and Payables to eBay 1,103.0 1,093.0 - - - - - - - - - - - - - -
Accrued Expenses and Other 603.0 1,434.0 1,179.0 1,145.0 1,181.0 1,272.0 1,390.8 1,390.8 1,644.3 1,942.5 2,293.0 2,703.2 3,141.6 3,598.7 4,062.5 4,460.3
Income Taxes Payable 37.0 29.0 32.0 27.0 39.0 50.0 43.9 43.9 51.6 60.6 71.2 83.5 96.5 110.0 123.6 135.0
Total Current Liabilities 11,261.0 13,283.0 13,617.0 14,362.0 15,223.0 15,616.0 16,919.2 16,919.2 19,976.2 23,592.3 27,865.8 32,892.5 38,309.4 44,006.6 49,840.0 54,928.6
Long Term Liabilities:
Deferred Tax Liability and Others 509.0 386.0 1,505.0 1,510.0 1,591.0 1,548.0 1,548.0 1,548.0 1,854.5 2,161.0 2,467.5 2,774.0 3,080.5 3,387.0 3,693.5 4,000.0
Total Long-Term Liabilities 509.0 386.0 1,505.0 1,510.0 1,591.0 1,548.0 1,548.0 1,548.0 1,854.5 2,161.0 2,467.5 2,774.0 3,080.5 3,387.0 3,693.5 4,000.0
Total Liabilities 11,770.0$ 13,669.0$ 15,122.0$ 15,872.0$ 16,814.0$ 17,164.0$ 18,467.2$ 18,467.2$ 21,830.7$ 25,753.3$ 30,333.3$ 35,666.5$ 41,389.9$ 47,393.6$ 53,533.5$ 58,928.6$
Stockholders' Equity
Net Parent Investment 7,451.0$ 8,138.0$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Treasury Stock - - - (596.0) (896.0) (945.0) (945.0) (945.0) (1,045.0) (1,145.0) (1,245.0) (1,345.0) (1,445.0) (1,545.0) (1,645.0) (1,745.0)
Additional Paid in Capital - - 13,100.0 13,188.0 13,305.0 13,419.0 13,526.0 13,526.0 13,674.4 13,844.2 14,038.2 14,259.5 14,508.3 14,783.8 15,084.2 15,402.6
Retained Earnings - - 668.0 1,033.0 1,356.0 1,679.0 2,035.8 2,035.8 3,722.2 5,775.2 8,235.2 11,158.8 14,562.1 18,455.6 22,838.9 27,620.0
Accumulated Other Comprehensive Income (Loss) (61.0) 110.0 (9.0) (27.0) 52.0 39.0 - - - - - - - - - -
Total Equity 7,390.0 8,248.0 13,759.0 13,598.0 13,817.0 14,192.0 14,616.8 14,616.8 16,351.5 18,474.3 21,028.4 24,073.4 27,625.5 31,694.4 36,278.2 41,277.7
Total Liabilities & Shareholders' Equity 19,160.0$ 21,917.0$ 28,881.0$ 29,470.0$ 30,631.0$ 31,356.0$ 33,084.0$ 33,084.0$ 38,182.3$ 44,227.6$ 51,361.6$ 59,739.9$ 69,015.4$ 79,088.0$ 89,811.6$ 100,206.2$
Appendix 8 –3 Statement (Cont.)

UOIG 23
, 2016
Statement of Cash Flows 8 2014A 2015A 3/31/2016A 06/30/2016A 9/30/2016E 12/31/2016E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E
Cash Flows From Operations
Net Earnings (Loss) 955.0$ 419.0$ 1,228.0$ 365.0$ 323.0$ 323.0$ 356.8$ 1,367.8$ 1,686.4$ 2,053.0$ 2,460.0$ 2,923.7$ 3,403.3$ 3,893.5$ 4,383.3$ 4,781.1$
Adjustments
% of Beginning PP&E - 60.1% 54.9% 12.9% 13.1% 13.1% 13.1% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4% 49.4%
Stock Based Compensation 253.0 299.0 346.0 95.0 111.0 107.0 107.0 420.0 148.4 169.8 194.0 221.3 248.8 275.5 300.4 318.4
% of Sales, General and Administrative 13.8% 13.8% 13.3% 12.6% 13.7% 12.9% 11.5% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6%
Deferred Income Taxes 52.0 680.0 127.0 22.0 66.0 (17.0) - 71.0 - - - - - - - -
Excess Tax Benefits from Stock Comp (76.0) (41.0) (26.0) (1.0) (31.0) (4.0) (8.0) (44.0) (45.8) (47.6) (49.5) (51.5) (53.5) (55.7) (57.9) (60.2)
Gain on Loans Receivable for Sale - - (40.0) (6.0) (6.0) (5.0) - (17.0) - - - - - - - -
Changes in Assets and Liabilities
Accounts receivable 1.0$ (13.0)$ (22.0)$ (22.0)$ (8.0)$ (20.0)$ (5.6)$ (55.6)$ (31.0)$ (35.8)$ (41.3)$ (47.4)$ (49.2)$ (49.6)$ (48.5)$ (38.7)$
Receivables from eBay 79.0 (24.0) 121.0 - - - - - - - - - - - - -
Changes in Loans Receivable Held for Sale - - 14.0 6.0 6.0 5.0 - 17.0 - - - - - - - -
Transaction Loss Allowance (304.0) (414.0) (493.0) - - - - - - - - - - - - -
Other Current and Non-Current Assets (62.0) (38.0) (384.0) - - - - - - - - - - - - -
Accounts Payable (13.0) 42.0 12.0 13.0 9.0 6.0 14.2 42.2 32.4 37.7 44.0 51.0 53.8 55.3 55.3 46.0
Payable to eBay 43.0 (2.0) (217.0) - - - - - - - - - - - - -
Income Taxes Payable 41.0 37.0 40.0 (5.0) 42.0 14.0 (6.1) 44.9 7.7 9.0 10.6 12.3 13.0 13.5 13.6 11.4
Other Current and Non-Currents 69.0 113.0 423.0 (158.0) (247.0) (64.0) (319.7) (788.7) (840.7) (1,039.2) (1,271.1) (1,541.2) (1,844.2) (2,163.8) (2,492.8) (2,811.0)
Net cash Provided by Operating Activities 1,993.0$ 2,220.0$ 2,546.0$ 738.0$ 696.0$ 801.0$ 637.8$ 2,872.8$ 2,968.1$ 3,434.0$ 3,980.5$ 4,615.9$ 5,271.4$ 5,940.2$ 6,600.1$ 7,110.0$
Cash Flows from Investing Activities
Purchases of PP&E (391.0)$ (492.0)$ (722.0)$ (133.0)$ (201.0)$ (183.0)$ (204.9)$ (721.9)$ (819.8)$ (929.2)$ (1,051.5)$ (1,186.9)$ (1,319.1)$ (1,443.3)$ (1,554.0)$ (1,624.9)$
% of Revenue 5.8% 6.1% 7.8% 5.2% 7.6% 6.9% 6.9% 6.7% 6.4% 6.2% 6.0% 5.8% 5.6% 5.4% 5.2% 5.0%
Proceeds from sale of PP&E - - 26.0 - - - - - - - - - - - - -
Changes in Principal Loans Receivable (793.0) (1,023.0) (819.0) (120.0) (356.0) (408.0) (20.1) (904.1) (732.6) (952.8) (1,110.6) (1,288.3) (1,359.1) (1,397.1) (1,395.2) (1,161.8)
Purchases of Investments (610.0) (76.0) (7,542.0) (4,091.0) (6,118.0) (6,775.0) - (16,984.0) - - - - - - - -
Maturities and Sales of Investments 320.0 409.0 3,318.0 4,196.0 5,139.0 5,279.0 - 14,614.0 - - - - - - - -
Acquisitions (Net of Cash) (731.0) (2.0) (1,225.0) (19.0) - - - (19.0) - - - - - - - -
Funds Receivable and Customer Accounts - - - 492.0 (270.0) 398.0 (1,176.4) (556.4) (2,763.4) (3,271.0) (3,868.4) (4,553.3) (4,911.6) (5,171.2) (5,300.8) (4,633.3)
Notes and Receivables from eBay 484.0 (362.0) 575.0 - - - - - - - - - - - - -
Net Cash used by Investing Activities (1,721.0)$ (1,546.0)$ (6,389.0)$ 325.0$ (1,806.0)$ (1,689.0)$ (1,401.4)$ (4,571.4)$ (4,315.7)$ (5,153.1)$ (6,030.5)$ (7,028.5)$ (7,589.8)$ (8,011.6)$ (8,250.0)$ (7,420.0)$
Cash Flows from Financing Activities
Proceeds from Issuance of Common Stock -$ -$ 75.0$ 6.0$ 51.0$ 1.0$ -$ 58.0$ -$ -$ -$ -$ -$ -$ -$ -$
Purchases of Treasury Stock - - - (596.0) (300.0) (49.0) - (945.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0)
Excess Tax Benefits from Stock-Comp 76.0 41.0 26.0 1.0 31.0 4.0 8.0 44.0 45.8 47.6 49.5 51.5 53.5 55.7 57.9 60.2
Contributions from (to) eBay (28.0) (71.0) 3,858.0 - - - - - - - - - - - - -
Tax Withholdings related to RSU and RSA Awards - - (18.0) (15.0) (79.0) (1.0) - (95.0) - - - - - - - -
Repayments borrowings under financing (133.0) (21.0) (862.0) (21.0) - - - (21.0) - - - - - - - -
Funds Receivable and Customer Accounts (1,653.0) (1,335.0) (1,649.0) - - - - - - - - - - - - -
Funds Payable and due to Customers 1,653.0 1,335.0 1,649.0 738.0 841.0 283.0 1,176.4 3,038.4 2,763.4 3,271.0 3,868.4 4,553.3 4,911.6 5,171.2 5,300.8 4,633.3
Net Cash (Used) Provided by Financing Activities (85.0)$ (51.0)$ 3,079.0$ 113.0$ 544.0$ 238.0$ 1,184.4$ 2,079.4$ 2,709.2$ 3,218.6$ 3,817.9$ 4,504.7$ 4,865.2$ 5,126.8$ 5,258.7$ 4,593.5$
Effect of Exchange Rates on Cash 3.0 (26.0) (44.0) 14.0 1.0 1.0 - 16.0 - - - - - - - -
Net( Decrease) increase in cash and cash equivalents 190.0 597.0 (808.0) 1,190.0 (565.0) (649.0) 420.8 396.8 1,361.6 1,499.5 1,767.9 2,092.2 2,546.8 3,055.5 3,608.8 4,283.6
Cash and cash equivalents at Beginning of Period 1,414.0 1,604.0 2,201.0 1,393.0 2,583.0 2,018.0 1,369.0 1,393.0 1,789.8 3,151.3 4,650.9 6,418.8 8,511.0 11,057.7 14,113.2 17,722.0
Cash and cash equivalents at End of Period 1,604.0$ 2,201.0$ 1,393.0$ 2,583.0$ 2,018.0$ 1,369.0$ 1,789.8$ 1,789.8$ 3,151.3$ 4,650.9$ 6,418.8$ 8,511.0$ 11,057.7$ 14,113.2$ 17,722.0$ 22,005.6$
Appendix 8 –3 Statement (Cont.)

UOIG 24
, 2016
Appendix 9 – Sources
ECB Online
EDGAR Database
Hoover’s
IBISWorld
Marketwatch
Morningstar
NASDAQ
PayPal Earnings Calls
PayPal Investor Relations
PayPal Press Releases
PayPal SEC Filings
S&P Capital IQ
University of Oregon Presentation Materials
Yahoo! Finance

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