eBay 2013 Annual Report Download - page 128

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 11 – Commitments and Contingencies
Commitments
As of December 31, 2013 , approximately $15.5 billion
of unused credit was available to Bill Me Later accountholders. While this amount
represents the total unused credit available, we have not experienced, and do not anticipate, that all of our Bill Me Later accountholders will
access their entire available credit at any given point in time. In addition, the individual lines of credit that make up this unused credit are subject
to periodic review and termination by the chartered financial institution that is the issuer of Bill Me Later credit products based on, among other
things, account usage and customer creditworthiness. When a consumer makes a purchase using a Bill Me Later credit product, the chartered
financial institution extends credit to the consumer, funds the extension of credit at the point of sale and advances funds to the merchant. We
subsequently purchase the consumer receivables related to the consumer loans, and as result of that purchase, bear the risk of loss in the event of
loan defaults. However, we subsequently sell a participation interest in the entire pool of consumer loans to the chartered financial institution that
extended the consumer loans. Although the chartered financial institution continues to own each customer account, we own and bear the risk of
loss on the related consumer receivables, less the participation interest held by the chartered financial institution, and Bill Me Later is responsible
for all servicing functions related to the customer account balances. As of December 31, 2013, the total outstanding balance of this pool of
consumer loans was $2.9 billion , of which the chartered financial institution owns a participation interest of $65 million , or 2.25% of the total
outstanding balance of consumer receivables at that date.
Lease Arrangements
We have lease obligations under certain non-cancelable operating leases. Future minimum rental payments under our non-cancelable
operating leases at December 31, 2013 are as follows:
Rent expense in the years ended December 31, 2013 , 2012 and 2011 totaled $152 million , $152 million and $131 million , respectively.
Litigation and Other Legal Matters
Overview
We are involved in legal proceedings on an ongoing basis. If we believe that a loss arising from such matters is probable and can be
reasonably estimated, we accrue the estimated liability in our financial statements. If only a range of estimated losses can be determined, we
accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better
estimate than any other amount, we accrue the low end of the range. Amounts accrued for legal proceedings for which we believe a loss is
probable were not material for the year ended December 31, 2013. Except as otherwise noted, we have concluded that reasonably possible losses
arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our accruals are also not
material. For those proceedings in which an unfavorable outcome is reasonably possible but not probable, we have disclosed an estimate of the
reasonably possible loss or range of losses or we have concluded that an estimate of the reasonably possible loss or range of losses arising
directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are not material. If we cannot estimate the
probable or reasonably possible loss or range of losses arising from a legal proceeding, we have disclosed that fact.
In assessing the materiality of a legal proceeding, we evaluate, among other factors, the amount of monetary damages claimed, as well as
the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require
F-29
Leases
(In millions)
2014
$
110
2015
101
2016
76
2017
59
2018
40
Thereafter
53
Total minimum lease payments
$
439