eBay 2015 Annual Report Download - page 64

The significant assumptions used in our determination of amounts presented in the above table are as
follows:
• Debt amounts include the principal and interest amounts of the respective debt instruments. For
additional details related to our debt, please see “Note 11 — Debt” to the consolidated financial
statements included in this report. This table does not reflect any amounts payable under our $2 billion
revolving credit facility or $1.5 billion commercial paper program, for which no borrowings were
outstanding as of December 31, 2015.
• Lease amounts include minimum rental payments under our non-cancelable operating leases for office
facilities, fulfillment centers, as well as 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 from actual results under our existing leases, unless a substantial change in our
headcount needs requires us to expand our occupied space or exit an office facility early.
• Purchase obligation amounts include minimum purchase commitments for advertising, capital
expenditures (computer equipment, software applications, engineering development services,
construction contracts) and other goods and services entered into in the ordinary course of business.
As we are unable to reasonably predict the timing of settlement of liabilities related to unrecognized tax
benefits, net, the table does not include $416 million of such non-current liabilities included in deferred and other
tax liabilities recorded on our consolidated balance sheet as of December 31, 2015.
Liquidity and Capital Resource Requirements
As of December 31, 2015 and December 31, 2014, we had assets classified as cash and cash equivalents, as
well as short-term and long-term non-equity investments, in an aggregate amount of $8.5 billion and $12.4
billion, respectively. As of December 31, 2015, this amount included assets held in certain of our foreign
operations totaling approximately $7.0 billion. Of the $7.0 billion held by our non-U.S. subsidiaries,
approximately $4.8 billion was available for use in the U.S. without incurring additional U.S. income taxes in
excess of the amounts already accrued in our consolidated financial statements as of December 31, 2015. As of
December 31, 2015, we had not repatriated any of these funds to the U.S. and, as a result, we have not yet paid
U.S. tax on any portion of these funds. To the extent we repatriate this $4.8 billion of undistributed foreign
earnings, we estimate, based on current tax rates, that it would increase our U.S. cash by approximately $3.2
billion, net of related tax paid. The remaining amount of non-U.S. cash and cash equivalents, as well as short-
term and long-term non-equity investments, have been indefinitely reinvested and, therefore, no U.S. current or
deferred taxes have been accrued as this amount is necessary to support our planned ongoing investments in our
foreign operations. We believe our U.S. sources of cash and liquidity are sufficient to meet our business needs in
the U.S., and we do not expect that we will need to repatriate the funds we have designated as indefinitely
reinvested outside the U.S. Under current tax laws, should our plans change and we were to choose to repatriate
some or all of the funds we have designated as indefinitely reinvested, we will be required to pay U.S. income
and applicable foreign withholding taxes on those amounts during the period when such repatriation occurs.
In connection with the Distribution, we reviewed our capital allocation strategy to ensure that each of
PayPal and eBay would be well capitalized at Distribution. As part of this strategy, we contributed approximately
$3.8 billion of cash to PayPal. This contribution consisted of approximately $1.8 billion of domestic sources and
$2.0 billion of international sources.
We actively monitor all counterparties that hold our cash and cash equivalents and non-equity investments,
focusing primarily on the safety of principal and secondarily on improving yield on these assets. We diversify
our cash and cash equivalents and investments among various counterparties in order to reduce our exposure
should any one of these counterparties fail or encounter difficulties. To date, we have not experienced any
material loss or lack of access to our invested cash, cash equivalents or short-term investments; however, we can
provide no assurances that access to our invested cash, cash equivalents or short-term investments will not be
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