eBay 2003 Annual Report Download - page 116

eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
Note 9 Ì Operating Lease Arrangements:
We also have lease obligations under certain other non-cancelable operating leases. Future minimum
rental payments under our non-cancelable operating leases, at December 31, 2003, are as follows (in
thousands):
Year ending Operating
December 31, Leases
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 22,765
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,556
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,693
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,724
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,661
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 44,361
Total minimum lease paymentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $115,760
Lease payments related to our corporate headquarters in San Jose, California are estimated based on
market interest rates (LIBOR) at December 31, 2003, adjusted to reÖect our two interest rate swaps and
certain collateral assumptions. We entered into two interest rate swaps on June 19, 2000 and July 20, 2000
to reduce the impact of changes in interest rates on a portion of the Öoating rate operating lease for this
facility. See ""Note 6 Ì Derivative Instruments.''
Rent expense in the years ended December 31, 2001, 2002 and 2003, totaled $5.7 million,
$3.6 million, and $8.6 million, excluding payments under our consolidated facilities lease, respectively.
Note 10 Ì Purchase and Sale of Properties or Property Interests:
From time to time and in the ordinary course of business, we elect to sell real estate properties
previously held for lease, or purchase properties or property interests for future rental. During 2002, we
sold interests in nine real estate properties related to our ButterÑelds subsidiary for approximately
$21.8 million in cash and recognized gains of $10.6 million. No real estate properties were sold during
2003.
Note 11 Ì Commitments and Contingencies:
Litigation and Other Legal Matters
In April 2001, our European subsidiaries, eBay GmbH and eBay International AG, were sued by
Montres Rolex S.A. and certain of its aÇliates in the regional court of Cologne, Germany. The suit
subsequently was transferred to the regional court in Dusseldorf, Germany. Rolex alleged that our
subsidiaries were infringing Rolex's trademarks as a result of users selling counterfeit Rolex-branded
watches through our German website. The suit also alleged unfair competition. Rolex sought an order
forbidding the sale of Rolex watches on the website as well as damages. In December 2002, a trial was
held in the matter and the court ruled in favor of eBay on all causes of action. Rolex appealed the ruling
to the Higher Regional Court of Dusseldorf and the appeal was heard on October 30, 2003. On
February 26, 2004, the court rejected Rolex's appeal and ruled in our favor. If it so chooses, Rolex may
appeal the ruling to the German Federal Supreme Court.
In September 2001, a complaint was Ñled by MercExchange LLC against us, our Half.com subsidiary
and ReturnBuy, Inc. in the U.S. District Court for the Eastern District of Virginia (No. 2:01-CV-736)
alleging infringement of three patents (relating to online auction technology, multiple database searching
and electronic consignment systems) and seeking a permanent injunction and damages (including treble
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