eBay 2004 Annual Report Download - page 113

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
The following table summarizes the fair value and gross unrealized losses of our short-term and long-term
investments, aggregated by type of investment instrument and length of time that individual securities have
been in a continuous unrealized loss position, at December 31, 2004 (in thousands):
Less than 12 Months 12 Months or Greater Total
Gross Gross Gross
Unrealized Unrealized Unrealized
Fair Value Losses Fair Value Losses Fair Value Losses
Restricted cash and
investments ÏÏÏÏÏÏ $ 54,694 $ (559) $ 13,116 $ (191) $ 67,810 $ (750)
Corporate debt
securities ÏÏÏÏÏÏÏÏ 1,129,456 (3,521) 223,915 (1,524) $1,353,371 $ (5,045)
Government and
agency securitiesÏÏ 226,366 (1,410) 270,938 (3,755) $ 497,304 $ (5,165)
$1,410,516 $(5,490) $507,969 $(5,470) $1,918,485 $(10,960)
Our investment portfolio consists of both corporate and government securities that have a maximum
maturity of three years. The longer the duration of these securities, the more susceptible they are to changes in
market interest rates and bond yields. As yields increase, those securities purchased with a lower yield-at-cost
show a mark-to-market unrealized loss. All unrealized losses are due to changes in interest rates and bond
yields. We expect to realize the full value of all these investments upon maturity or sale. The losses on these
securities have an average duration of approximately ten months.
The estimated fair value of short and long-term investments classiÑed by date of contractual maturity at
December 31, 2004 are as follows (in thousands):
December 31,
2004
One year or lessÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 682,004
One year through two years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 853,667
Two years through three yearsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 364,286
Restricted cash and investments expiring in less than one yearÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 155,405
Restricted cash and investments expiring in one year to Ñve yearsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,156
Restricted cash and investments expiring in more than Ñve yearsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 262
Equity instruments and equity method investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 48,336
$2,105,116
During 2002 and 2003, we recorded impairment charges totaling $3.8 million, $1.2 million, respectively,
as a result of the deterioration of the Ñnancial condition of certain of our private and public equity investees
that were considered to be other than temporary. We did not record any impairment charges during 2004.
Equity method investment
On August 13, 2004, we acquired a minority ownership interest in craigslist, inc. of approximately 25%.
craigslist is an online community featuring classiÑeds and forums.
We account for the investment in craigslist using the equity method of accounting and the total
investment, including identiÑable intangible assets, deferred tax liabilities and goodwill (see ""Note 3 Ì
Business Combinations, Goodwill and Intangible Assets'' of these consolidated Ñnancial statements), is
classiÑed on our balance sheet as a long-term investment. Subsequent to the acquisition, our consolidated
111