eBay 2002 Annual Report Download - page 117

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
Direct contribution consists of revenues less direct costs. Direct costs include speciÑc costs of net
revenues, sales and marketing expenses, and general and administrative expenses over which segment
managers have direct discretionary control, such as advertising and marketing programs, customer support
expenses, bank charges, provisions for doubtful accounts, authorized credits and transaction losses.
Expenses over which segment managers do not have discretionary control, such as site operations costs,
product development expenses, and general and administrative costs, are monitored by management
through shared cost centers and are not evaluated in the measurement of segment performance.
The U.S. segment comprises U.S. online trading platforms other than PayPal and Billpoint. The
International segment comprises our international online trading platforms. The Payments segment
comprises our global payments platform consisting of our PayPal and Billpoint subsidiaries. The Payments
amounts reÖect Billpoint's historical operations and PayPal's operations for the post-acquisition period from
October 4, 2002 through December 31, 2002. We have previously announced that we intend to discontinue
Billpoint's operations in the Ñrst half of 2003. Billpoint's operations will continue to be reÖected in the
Payments segment results until the wind-down of Billpoint's operations.
The following tables illustrate the Ñnancial performance of our new reporting segments. Additionally,
we have presented our current period Ñnancial performance on a reporting segment basis consistent with
our old reporting segments for purposes of comparison during this transition period (in thousands):
Year Ended December 31, 2000
U.S. International Payments Consolidated
Net revenues from external customersÏÏÏÏÏ $397,407 $28,978 $5,039 $431,424
Direct costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 179,635 21,747 4,044 205,426
Direct contribution ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 217,772 7,231 995 225,998
Operating expenses and indirect costs of
sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 191,004
Income from operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34,994
Interest and other income and expense, net 46,337
Interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3,374)
Impairment of certain equity investments ÏÏ Ì
Income before income taxes and minority
interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 77,957
December 31, 2000
U.S. International Payments Consolidated
Total assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,122,014 $22,762 $37,627 $1,182,403
115