eBay 2006 Annual Report Download - page 60

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as such amounts are a function of our stock price, the number of options outstanding and the decisions by employees
to exercise stock options. In general, we expect proceeds from stock option exercises to increase during periods in
which our stock price has increased relative to historical levels. In July 2006, our Board authorized the repurchase of
up to $2.0 billion of the company’s common stock within two years from the date of authorization. During 2006, we
repurchased approximately 54.5 million shares of our common stock at an average price of $30.56 per share for an
aggregate purchase price of $1.7 billion. As of December 31, 2006, $0.3 billion remained available for further
purchases under this program. In January 2007, our Board authorized, and the Company announced, an expansion
of the stock repurchase program to provide for the repurchase of up to an additional $2.0 billion of our common
stock over the next two years. Share repurchases under our repurchase program may take a variety of forms,
including structured stock repurchase programs and other derivative transactions. We expect to continue to
repurchase our common stock in 2007, thereby impacting financing cash flows.
The positive effect of exchange rates on cash and cash equivalents during 2006 and 2004 was due to the
weakening of the U.S. dollar against other foreign currencies, primarily the Euro. The negative effect of exchange
rates on cash and cash equivalents during 2005 was due to the strengthening of the U.S. dollar against other foreign
currencies, primarily the Euro.
In November 2006, we entered into a credit agreement which provides for an unsecured $1 billion five-year
revolving credit facility. Loans under the credit agreement will bear interest at either (i) LIBOR plus a margin
ranging from 0.25 percent to 0.45 percent or (ii) a formula based on the prime rate or on the federal funds effective
rate. Subject to certain conditions stated in the credit agreement, we may borrow, prepay and reborrow amounts
under the credit facility at any time during the term of the credit agreement. Funds borrowed under the credit
agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes.
In February 2007, we borrowed against the line of credit in the amount of $160 million.
We believe that existing cash, cash equivalents and investments of approximately $3.5 billion, together with
cash generated from operations and cash available through the existing credit agreement, will be sufficient to fund
our operating activities, capital expenditures, stock repurchases and other obligations for the foreseeable future.
Commitments and Contingencies
We have certain fixed contractual obligations and commitments that include future estimated payments.
Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in
actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of
payments. We have presented below a summary of the most significant assumptions used in our determination of
amounts presented in the tables, in order to assist in the review of this information within the context of our
consolidated financial position, results of operations, and cash flows. The following table summarizes our fixed
contractual obligations and commitments (in thousands):
Payments Due By Year Ending December 31,
Operating
Leases
Purchase
Obligations Total
2007 ............................................ $ 44,178 $180,633 $224,811
2008 ............................................ 41,536 64,908 106,444
2009 ............................................ 35,637 29,436 65,073
2010 ............................................ 29,476 16,396 45,872
2011 ............................................ 25,420 19,347 44,767
Thereafter ........................................ 102,094 — 102,094
$278,341 $310,720 $589,061
Operating lease amounts include minimum rental payments under our non-cancelable operating leases for
office facilities, as well as limited computer and office equipment that we utilize under lease arrangements. The
amounts presented are consistent with contractual terms and are not expected to differ significantly, unless a
substantial change in our headcount needs requires us to exit an office facility early or expand our occupied space.
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