eBay 2006 Annual Report Download - page 99

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Certain transactions that result in overdrafts are included in the transaction loss reserve and are recorded as an
offset to other current assets. As of December 31, 2005 and December 31, 2006, these balances were $30.0 million
and $47.5 million, respectively.
2005 2006
December 31,
(In thousands)
Accumulated other comprehensive income
Foreign currency translation ................................... $108,308 $696,458
Unrealized gains on investments................................ (8,848) (521)
Unrealized gains on cash flow hedges ........................... 194 —
Estimated tax benefit on above items ............................ 3,476 260
$103,130 $696,197
Note 8 — Commitments and Contingencies:
Lease Arrangements
We have lease obligations under certain other non-cancelable operating leases. Future minimum rental
payments under our non-cancelable operating leases, at December 31, 2006, are as follows (in thousands):
Year Ending December 31,
Operating
Leases
2007 ............................................................... $ 44,178
2008 ............................................................... 41,536
2009 ............................................................... 35,637
2010 ............................................................... 29,476
2011 ............................................................... 25,420
Thereafter ........................................................... 102,094
Total minimum lease payments .......................................... $278,341
Rent expense in the years ended December 31, 2004, 2005 and 2006 totaled $7.7 million, $14.4 million, and
$25.8 million respectively. As a result of various subleasing arrangements that we have entered into, we are
expecting approximately $9.4 million in sublease income through 2012. There were no material capital leases at
December 31, 2005 and 2006.
Line of Credit
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 Bank of America, or Agent’s, 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 of eBay and its subsidiaries. We entered into the credit agreement in order to enhance
our financial flexibility. As of December 31, 2006, we had not borrowed any funds under the credit agreement.
Litigation and Other Legal Matters
In April 2001, two of our European subsidiaries, eBay GmbH and eBay International AG, were sued by
Montres Rolex S.A. and certain of its affiliates in the regional court of Cologne, Germany. The suit subsequently
95
eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)