eBay 2002 Annual Report Download - page 39

Minimum annual repayments on notes payable and capital leases at December 31, 2002 are as follows
(in thousands):
Year ending
December 31, Total
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 4,145
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,513
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,478
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 616
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,192
$17,944
Marketing Agreements
From time to time and in the ordinary course of business, we enter into arrangements to purchase
online and oÉine promotions. Such arrangements typically involve minimum purchase commitments with
terms ranging from several months to Ñve years.
AOL interactive marketing agreement
In April 2002, we amended our Interactive Marketing Agreement with AOL Time Warner, Inc., or
AOL. AOL attained certain performance goals in the contract year ending March 23, 2003, and extended
the amended agreement for an additional year, through March 23, 2004. Under the terms of the amended
agreement, we will pay AOL for its advertising services on a new user performance basis, up to a
maximum of $15 million. We are recognizing these fees as sales and marketing expense as such services
are provided. From time to time, we have also entered into incremental, discretionary purchases of
advertising from AOL. Discretionary purchases totaled $1.4 million during 2000, $8.5 million during 2001,
and $7.6 million during 2002.
In the event that AOL's advertising services during the year achieve certain speciÑed performance
goals, AOL has the right to extend the term of the amended agreement through March 23, 2005. Our
Ñnancial obligation for this renewal year, if any, will also be determined on a new user performance basis
and will amount to a maximum of $10.0 million.
Disney marketing agreement
In February 2000, we entered a four-year marketing agreement with The Walt Disney Company, or
Disney, to provide us with online and oÉine advertising and promotions and develop a co-branded version
of our online service. Subject to certain Disney performance obligations, we were obligated to pay a
minimum of $30 million to Disney over the four-year term of the agreement. In August 2001, we
amended the terms of the initial agreement and agreed to purchase a minimum of $23.0 million in online
and oÉine promotions through September 2004. We also committed to provide Disney with online
advertising on the eBay.com website valued at $3.5 million. Through December 31, 2002, we have
recognized $16.9 million in sales and marketing expense associated with the amended agreement.
Microsoft marketing and services agreements
During 2001, we entered into a series of marketing and services agreements with Microsoft that
obligate us to purchase online advertising promotions, software and related services through September
2003, totaling $8 million. In addition, Microsoft has agreed to purchase online advertising and other
services from us totaling $7 million over a three-year period ending June 2004. Through December 31,
2002, we have recognized $4.3 million in sales and marketing expenses for advertising services received,
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