eBay 2001 Annual Report Download - page 83

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
The estimated fair value of short and long-term investments classiÑed by date of contractual maturity
at December 31, 2001 are as follows (in thousands):
December 31,
2001
Due within one year or lessÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $199,450
Due after one year through two years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 162,642
Due after two years through three years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 97,651
Due after three years through four years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì
Restricted cash and investments expiring in less than Ñve years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 129,614
Equity investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26,705
$616,062
During the year ended December 31, 2001, we recorded impairment charges totaling $16.2 million
relating to the other than temporary impairment in the fair value of certain equity investments.
Note 6 Ì Derivative Instruments:
We entered into two interest rate swaps on June 19, 2000 and July 20, 2000, with notional amounts of
$45 million and $50 million that allow eBay to receive Öoating rate receipts based on London Interbank
OÅering Rate (""LIBOR'') in exchange for making Ñxed rate payments of approximately 7% of the
notional amount. These interest rate swaps eÅectively change the interest rate exposure on a portion of the
operating lease payments relating to eBay's corporate oÇce facilities from a Öoating rate to a Ñxed rate.
The fair value of the interest rate swaps as of December 31, 2001 was an unrealized loss of $8.2 million
and is recorded in accumulated other comprehensive loss on the balance sheet.
On January 1, 2001, we adopted Statement of Financial Accounting Standards No. 133, as amended,
and the cumulative eÅect of this change in accounting method relating to the interest rate swaps was an
immaterial gain on net income and an unrealized loss, net of tax, of approximately $2.6 million on other
comprehensive income. During the year ended December 31, 2001, the derivative losses reclassiÑed into
rent expense were oÅset by decreases in rent expense relating to the operating lease. At December 31,
2001, we expect to reclassify $3.0 million of losses, net of tax, on the interest rate swaps from accumulated
other comprehensive income to rent expense during the next twelve months.
At December 31, 2001, we had one outstanding forward foreign exchange contract to purchase Euros
equivalent to $17.7 million with a maturity date of April 2, 2002. The forward contract is used as an
economic hedge of a liability denominated in Euros. Transaction gains and losses on the contract and the
hedged liability are recognized each period in the statement of income and generally oÅset one another. As
of December 31, 2001, the fair value of the forward contract was immaterial.
79