eBay 2002 Annual Report Download - page 38

expense payments from operating expenses to interest expense as well as the recognition of depreciation
expense, within operating expenses, for our use of the buildings. We estimate that the income statement
impact of consolidating our San Jose facilities lease will consist of a charge against earnings, net of taxes,
of $5.6 million upon the adoption of FIN 46 on July 1, 2003. This charge will reÖect the accumulated
depreciation charges that would have been recorded in previous periods had consolidation of the San Jose
facilities been required. Additionally, we have not decided whether we will keep the existing Ñnancing
arrangement or purchase the San Jose facilities. Whether or not we keep the existing Ñnancing
arrangement, we anticipate recording additional annual operating expenses of $1.7 million, net of taxes, for
the recognition of depreciation expense on the buildings. In the event we purchase the San Jose facilities,
we will also pay $126.4 million, eliminate Ñnancing payments and settle our two interest rate swaps we
used to establish a Ñxed rate of interest for $95 million of our Ñnancing arrangement. During the year
ended December 31, 2002, our Ñnancing payments related to the San Jose facilities totaled $7.9 million.
At December 31, 2002, settlement of our two interest rate swaps would have resulted in a loss of
$10.9 million.
Our U.S. segment occupies approximately 434,000 square feet of commercial oÇce space in the
United States. We occupy 314,000 square feet of commercial oÇce space in San Jose, California under
the terms of our synthetic lease for our corporate headquarters. We own and occupy approximately 72,000
square feet of commercial oÇce space in Salt Lake City, Utah for our domestic customer support center.
We lease and occupy an additional 48,000 square feet of commercial oÇce space in various domestic
locations for the operations of certain U.S. subsidiaries.
Our International segment leases approximately 210,000 square feet of commercial oÇce space in
12 countries for our international operations, including the operations of our South Korean majority-owned
subsidiary.
Our Payments segment leases approximately 126,000 square feet of commercial oÇce space in the
United States and the United Kingdom. In addition, our Payments segment owns approximately 22 acres
of land near Omaha, Nebraska, on which a 115,000 square foot facility is under construction. Upon
completion, this facility will house the primary customer service operations center for our Payments
segment.
We also have lease obligations under certain other non-cancelable operating leases. Future minimum
rental payments under all non-cancelable operating leases, exclusive of the residual value guarantee on our
general oÇce facilities located in San Jose, California, at December 31, 2002 are as follows (in
thousands):
Year Ending Operating
December 31, Leases
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $16,410
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,056
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,630
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,568
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,108
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,909
Total minimum lease payments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $76,681
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