eBay 2009 Annual Report Download - page 112

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Our fixed-income investment portfolio consists of corporate debt securities, government securities and time
deposits that have a maximum maturity of five years. The corporate debt and government securities that we
invest in are generally deemed to be low risk, based on their credit rating from the major rating agencies. The
longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond
yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized
loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize
the full value of all these investments upon maturity or sale. As of December 31, 2009, these securities have an
average remaining duration of approximately 13 months. Restricted cash is held primarily in money market funds
and interest bearing accounts for letters of credit related primarily to various lease arrangements.
The estimated fair values of short and long-term investments classified by date of contractual maturity at
December 31, 2009 are as follows (in thousands):
December 31,
2009
One year or less (including restricted cash of $29,123) .......................... $ 943,986
One year through two years ............................................... 327,194
Two years through three years (including restricted cash of $826) ................. 316,293
Three years through four years ............................................. 51,785
Four year through five years (including restricted cash of $158) ................... 13,839
$1,653,097
Equity and cost method investments
We have made multiple equity and cost method investments in privately held companies which are reported
in long-term investments on our consolidated balance sheet. As of December 31, 2008 and 2009 our equity and
cost method investments in privately held companies totaled $100.7 million and $672.7 million, respectively.
Note 8—Fair Value Measurement of Assets and Liabilities
The following table summarizes our financial assets and liabilities measured at fair value on a recurring
basis as of December 31, 2008 (in thousands):
Description
Balance as of
December 31,
2008
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable Inputs
(Level 2)
Assets:
Cash and cash equivalents:
Bank deposits and money market funds ......... $3,188,928 $3,188,928 $ —
Total cash and cash equivalents .................... 3,188,928 3,188,928 —
Short-term investments:
Restricted cash ............................. 21,258 21,258 —
Equity instruments .......................... 133,349 133,349 —
Time deposits .............................. 4,129 — 4,129
Corporate debt securities ..................... 4,998 — 4,998
Total short-term investments ...................... 163,734 154,607 9,127
Derivatives .................................... 71,149 — 71,149
Long-term restricted cash ........................ 5,461 5,461 —
Long-term time deposits ......................... 52 — 52
Total financial assets ............................ $3,429,324 $3,348,996 $80,328
Liabilities:
Derivatives .................................... $ 13,154 $ — $13,154
104