eBay 2015 Annual Report Download - page 65

impacted by adverse conditions in the financial markets. At any point in time we have funds in our operating
accounts and customer accounts that are deposited and invested with third party financial institutions.
We believe that our existing cash, cash equivalents and short-term and long-term investments, together with
cash expected to be generated from operations, borrowings available under our credit agreement and commercial
paper program, and our access to capital markets, will be sufficient to fund our operating activities, anticipated
capital expenditures and stock repurchases for the foreseeable future.
Off-Balance Sheet Arrangements
As of December 31, 2015, we had no off-balance sheet arrangements that have, or are reasonably likely to
have, a current or future material effect on our consolidated financial condition, results of operations, liquidity,
capital expenditures or capital resources.
We have a cash pooling arrangement with a financial institution for cash management purposes. This
arrangement allows for cash withdrawals from the financial institution based upon our aggregate operating cash
balances held within the same financial institution (“Aggregate Cash Deposits”). This arrangement also allows us
to withdraw amounts exceeding the Aggregate Cash Deposits up to an agreed-upon limit. The net balance of the
withdrawals and the Aggregate Cash Deposits are used by the financial institution as a basis for calculating our
net interest expense or income under the arrangement. As of December 31, 2015, we had a total of $2.4 billion in
cash withdrawals offsetting our $2.4 billion in Aggregate Cash Deposits held within the financial institution
under the cash pooling arrangements.
Indemnification Provisions
We entered into a separation and distribution agreement and various other agreements with PayPal to govern
the separation and relationship of the two companies going forward. These agreements provide for specific
indemnity and liability obligations and could lead to disputes between us and PayPal, which may be significant.
In addition, the indemnity rights we have against PayPal under the agreements may not be sufficient to protect us
and our indemnity obligations to PayPal may be significant.
In the ordinary course of business, we have included limited indemnification provisions in certain of our
agreements with parties with which we have commercial relations, including our standard marketing, promotions
and application-programming-interface license agreements. Under these contracts, we generally indemnify, hold
harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in
connection with claims by a third party with respect to our domain names, trademarks, logos and other branding
elements to the extent that such marks are applicable to our performance under the subject agreement. In certain
cases, we have agreed to provide indemnification for intellectual property infringement. It is not possible to
determine the maximum potential loss under these indemnification provisions due to our limited history of prior
indemnification claims and the unique facts and circumstances involved in each particular provision. To date,
losses recorded in our consolidated statement of income in connection with our indemnification provisions have
not been significant, either individually or collectively.
Critical Accounting Policies, Judgments and Estimates
General
The preparation of our consolidated financial statements and related notes requires us to make judgments,
estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and
related disclosure of contingent assets and liabilities. We have based our estimates on historical experience and
on various other assumptions that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily
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